As filed with the Securities and Exchange Commission on January 24, 2025.

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S‑1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

Aurion Biotech, Inc.

(Exact name of registrant as specified in its charter)

     Delaware
(State or other jurisdiction of 
incorporation or organization)

     2836
(Primary Standard Industrial
Classification Code Number)

     87-3040662
(I.R.S. Employer
Identification Number)

    

     701 Pike Street, Suite 2225
Seattle, Washington 98101
206-210-0058
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

    

     Gregory D. Kunst, M.B.A.
Chief Executive Officer
701 Pike Street, Suite 2225
Seattle, Washington 98101
206-210-0058
(Name, address, including zip code, and telephone number, including area code, of agent for service)

    

Copies to:

     Mitchell S. Bloom
Edwin M. O’Connor
Adam V. Johnson
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
617-570-1000

     Jonathan M. Sparks, J.D., Ph.D.
Aurion Biotech, Inc.
701 Pike Street, Suite 2225
Seattle, Washington 98101
206-210-0058

     Nathan Ajiashvili 
Alison Haggerty
Latham & Watkins LLP
1271 Avenue of the Americas
New York, New York 10020
212-906-1200

    

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

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

The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated January 24, 2025

Preliminary prospectus

Common Stock

This is an initial public offering of shares of common stock of Aurion Biotech, Inc. We are offering shares of our common stock to be sold in this offering. The initial public offering price is expected to be between $ and $ per share.

Prior to this offering, there has been no public market for our common stock. We have applied to list our common stock on the New York Stock Exchange under the symbol “AURN,” and this offering is contingent upon obtaining such approval.

We are an “emerging growth company” and a “smaller reporting company” as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements.


	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds to Aurion Biotech, Inc., before expenses	$	$

(1)

See the section titled “Underwriting” for a description of the compensation payable to the underwriters.

We have granted the underwriters an option for a period of 30 days to purchase up to an additional shares of our common stock.

Investing in our common stock involves a high degree of risk. See the section titled “Risk Factors” beginning on page 19.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about , 2025.


J.P. Morgan	BofA Securities	Piper Sandler	Wells Fargo Securities

, 2025

TABLE OF CONTENTS


		Page
PROSPECTUS SUMMARY		1
THE OFFERING		13
SUMMARY CONSOLIDATED FINANCIAL DATA		16
RISK FACTORS		19
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		100
MARKET, INDUSTRY AND OTHER DATA		102
USE OF PROCEEDS		103
DIVIDEND POLICY		105
CAPITALIZATION		106
DILUTION		108
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		111
BUSINESS		129
MANAGEMENT		187
EXECUTIVE COMPENSATION		196
DIRECTOR COMPENSATION		209
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		211
PRINCIPAL STOCKHOLDERS		215
DESCRIPTION OF CAPITAL STOCK		218
SHARES ELIGIBLE FOR FUTURE SALE		225
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON‑U.S. HOLDERS OF OUR COMMON STOCK		227
UNDERWRITING		232
LEGAL MATTERS		245
EXPERTS		245
WHERE YOU CAN FIND ADDITIONAL INFORMATION		245
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

Neither we nor any of the underwriters have authorized anyone to provide you with information that is different than the information or make any representations other than those contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor the underwriters take any responsibility for, and cannot provide any assurance as to the reliability of, any other information that others may give you. The information contained in this prospectus or in any applicable free writing prospectus is accurate only as of the date of this prospectus or such free writing prospectus, as applicable, regardless of the time of delivery of this prospectus or any such free writing prospectus or of any sale of the securities offered hereby. Our business, operating results, financial condition and prospects may have changed since that date.

This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. Neither we nor any of the underwriters have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons who have come into possession of this prospectus in a jurisdiction outside the United States are required to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus. It does not contain all the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus, before making an investment decision. In this prospectus, unless the context requires otherwise, all references to “we,” “our,” “us,” “Aurion,” and the “Company” refer to Aurion Biotech, Inc. and its consolidated subsidiaries.

Overview

We are a clinical-stage biotechnology company committed to developing and commercializing disease-modifying, regenerative therapies to restore vision to millions of patients worldwide. We are advancing a single administration, allogeneic cell therapy to treat vision loss due to corneal endothelial diseases. In Japan, our first-generation cell therapy product, HCEC-1, received regulatory and reimbursement approval, and launched commercially in September 2024 under the marketed name Vyznova. Our next-generation product candidate, AURN001, is an improved formulation designed to be mechanistically identical to Vyznova and to provide enhanced benefits, including manufacturing scalability and extended shelf life. We believe AURN001 has the potential to serve as a first-line therapy for patients with corneal edema secondary to corneal endothelial dysfunctions. AURN001 has been developed leveraging data generated globally across five completed clinical trials in 154 procedures in 130 subjects, including four trials evaluating HCEC-1 and one trial evaluating AURN001. Across these completed trials, subjects experienced clinically meaningful and sustained improvements in anatomical and functional measures of corneal health, central corneal thickness (“CCT”) and best corrected visual acuity (“BCVA”), respectively. In addition, we have completed enrollment and dosed 97 subjects in a Phase 1/2 clinical trial for AURN001 in the United States and Canada, and 12-month data from this trial is expected in the second half of 2025.

Background and Market Opportunity

Corneal blindness is the fourth leading cause of vision loss globally, according to the World Health Organization. Corneal endothelial disease, a significant cause of corneal blindness, is characterized by the loss of corneal endothelial cells, which is typically the result of genetic diseases such as Fuchs dystrophy, a slow-progressing bilateral disease, or trauma sustained from cataract or glaucoma surgery or failed transplants, among other etiologies. Prevalence of Fuchs dystrophy in individuals over 30 years old worldwide is estimated to be approximately 300 million people, and in individuals over 40 years old in the United States is estimated to be approximately 6.5 million people. Incidence of corneal endothelial trauma sustained from cataract or glaucoma surgery is estimated to occur in between 6% and 11% of such procedures. Symptoms of corneal endothelial disease may include blurred vision; glare and halos when staring at bright lights, driving in the rain or being in the sun; difficulty with night driving; overall discomfort and, in some cases, severe pain due to swelling of the cornea (corneal edema). If left untreated, patients’ symptoms will inevitably worsen over time and may eventually lead to significant loss of vision, including blindness.

To our knowledge, there are currently no approved pharmacological therapies indicated for the treatment of corneal endothelial disease. For early-stage patients, current treatments consist of topical therapies, including hypertonic solutions and ointments, which provide limited symptomatic relief and do not impact disease progression. For advanced patients, disease-modifying treatments are limited to invasive, complex surgical corneal transplants, consisting of full-thickness penetrating keratoplasty (“PK”) or partial thickness endothelial keratoplasty (“EK”). EK has two forms, which are Descemets stripping automated endothelial keratoplasty (“DSEK”) and Descemets membrane endothelial keratoplasty (“DMEK”). Limitations of these procedures include shortages of healthy donor tissue, surgical complexity, a limited number of qualified corneal specialists trained to perform these complex and time-consuming transplants, transplant immunogenicity (rejection), graft dislocation and the potential need for re-grafting.

We believe that a significant portion of the patient population remains underserved by currently available treatment options for several reasons. First, there is a sizeable gap between the number of

healthy donor corneas available for transplant and the number of patients in need; according to a survey published in JAMA Ophthalmology, there is only one healthy donor cornea available for every 70 diseased eyes globally. The quality of available donor corneas is highly dependent on the donor’s age and medical condition, and current donor corneas are generally from older donors. Second, DSEK and DMEK can be challenging, complex, time-consuming surgeries that we believe are only performed by a limited number of corneal specialist ophthalmic surgeons. Third, the U.S. reimbursement to ophthalmologists performing these procedures is typically limited to a fixed fee that does not account for variations in the length or complexity of the EK procedure, nor the number of required follow-up patient visits. We believe the poor economic incentives for physicians to perform these operations have not encouraged additional physicians to learn these techniques. Finally, for patients, corneal transplantation may be invasive and time-consuming, which has driven some patients to resist treatment entirely. In the United States, only approximately 48,000 eyes are treated annually with PK or EK. According to a recent analysis of U.S. electronic medical records (“EMRs”) performed by IQVIA (the “IQVIA analysis”), only 11% of eyes diagnosed with corneal endothelial disease within a seven-year window actually undergo treatment with DSEK or DMEK, which suggests that there are approximately 1.8 million diagnosed-but-not-yet-treated eyes in the United States alone. Together, we believe that these factors explain the significant unmet need for patients with corneal endothelial disease in the United States and globally, illustrating the large market opportunity for treating corneal blindness.

According to the IQVIA analysis, approximately 225,000 eyes aged 20 years or older are diagnosed annually with corneal endothelial dystrophies. Based on this EMR data, along with physician interviews and our payor research regarding treatment reimbursement, we estimate the incident total addressable market to be nearly $8 billion annually in the United States alone. In Europe, we estimate the number of eyes diagnosed with corneal endothelial dystrophies to be at least equivalent to, if not greater than, that number in the United States based on the overall population size, demographics and procedure wait times due to the lack of readily available donor corneal tissue. This highlights an even larger potential annual addressable market opportunity for us globally. Moreover, although diagnosis codes do not specify disease severity, the IQVIA analysis likely included primarily moderate to severe patients, as the patient encounters occurred at tertiary care facilities (which are, generally, destinations for sicker patients). Based on the potential advantages of AURN001, we believe we can further expand the market opportunity by addressing the needs of less severe patients with corneal endothelial dystrophies. However, as AURN001 is in the early stages of U.S. clinical trial development, it will take several years to continue to develop and commercialize AURN001. If we are successful in obtaining regulatory approval, there is no guarantee as to the total addressable market for AURN001 at or after that time or of our ability to manufacture AURN001 in sufficient volume to supply the total addressable market.

Our Solution: AURN001

We believe that AURN001 is the first therapy with established clinical proof of concept for the treatment of corneal edema secondary to corneal endothelial dysfunction. AURN001 is comprised of neltependocel, which is composed of allogeneic, universal, fully differentiated human corneal endothelial cells, and Y-27632, a Rho-associated, coiled-coil containing protein kinase (“ROCK”) inhibitor. Treatment with AURN001 does not require donor matching or genetic engineering. The novel combination of the allogeneic human corneal endothelial cells and the ROCK inhibitor is intended to replenish the endothelial cells that are lost or damaged due to corneal endothelial dysfunction. Upon administration into the patient eye’s anterior chamber, AURN001’s cells re-form the endothelial monolayer and attach to the back of the cornea, aided by Y-27632, which is designed to enable rapid cell engraftment.

Across the five completed clinical trials treating 130 subjects, subjects received AURN001 in the fifth trial and our first-generation cell therapy product HCEC-1 (now marketed as Vyznova) in the first four trials. During these completed trials, subjects experienced clinically meaningful improvements in both the anatomical endpoint of CCT and the functional endpoint of BCVA. Our first three trials were completed in Japan, and our subsequent two trials were completed in El Salvador. The data generated from our five completed trials was submitted to the FDA as clinical evidence to support the initiation of our Phase 1/2 clinical trial for AURN001; however, we intend to rely on our current and future clinical trials, including our Phase 1/2 clinical trial, to seek approval from the FDA for AURN001. Moreover, the regulatory approval of Vyznova in Japan does not guarantee that we will be able to obtain or maintain regulatory approval for

AURN001 in the United States or any other jurisdiction.

AURN001 received both Breakthrough Therapy Designation (“BTD”) and Regenerative Medicines Advanced Therapy Designation (“RMAT”) from the U.S. Food and Drug Administration (the “FDA”) for the treatment of corneal edema secondary to corneal endothelial dysfunction. Such designations provide potential benefits, including increased interaction and communication with the FDA to discuss the development plan for AURN001. However, such designations may not lead to a faster development or regulatory review or approval process and do not increase the likelihood that AURN001 will receive FDA approval.

Clinical Data

Overview

Generally, the magnitude of anatomical and functional benefit was positively correlated with the baseline severity of disease. With all dose combinations of neltependocel and Y-27632 across the five completed clinical trials, mean decreases (i.e., improvements) from baseline in CCT were 103 microns at Month 1, 137 microns at Month 3, 148 microns at Month 6 and 178 microns at Month 12. The proportion of subjects who had a three-line improvement in logarithmic minimum angle of resolution (“LogMAR”) (0.3 LogMAR) in mean BCVA was 48% at Month 1, 69% at Month 3, 73% at Month 6 and 84% at Month 12. Three lines of improved vision as measured by LogMAR in BCVA is a clinical endpoint the FDA has accepted as clinically meaningful and has been used in the study of therapeutic candidates by third parties for other ocular diseases, including macular degeneration.

As published in The New England Journal of Medicine and Ophthalmology, our two-year and five-year follow-up results from our first 11 subjects treated in our first-in-human (“FIH”) Japanese clinical trial (the “FIH clinical trial”) showed that HCEC-1 demonstrated sustained clinical activity and durability with the mean CCT and BCVA remaining within the typical normal range of healthy corneas and subjects maintained good visual acuity for five years. We continue to see the long-term effects in subjects in Japan who have completed over nine years of follow-up.

Safety data generated across our five completed clinical trials showed that neltependocel and Y-27632 were generally well tolerated and no drug-related, ocular or systemic serious adverse events (“SAEs”) were observed. Most of the ocular treatment-emergent adverse events (“TEAEs”) were mild or moderate in severity and were resolved with standard therapy. Across all five clinical trials, cases of increased intraocular pressure (“IOP”) were generally transient and suspected to be related to the use of concomitant corticosteroid therapy. There were no discontinuations or withdrawals related to our drug product. We believe these clinical results underscore AURN001’s potential for the treatment of corneal edema secondary to corneal endothelial dysfunction given the long-term safety and tolerability data generated to date.

Based on our clinical data generated to date, we believe AURN001 could provide significant advantages to address this potential blockbuster market opportunity, which, in the pharmaceutical industry, is often used to describe a product that generates annual sales of at least $1.0 billion:

•

Abundant supply of corneal endothelial cells expands addressable patient population. From a single donor, we believe we have the potential to manufacture corneal endothelial cells to treat more than 1,000 recipient eyes, and we believe we can continue to scale this cell expansion in the future. Furthermore, we believe that this supply of donor cells provides healthcare providers with the ability to potentially address less severe cases of corneal endothelial disease.

•

Straightforward procedure to perform. We believe our cell therapy procedure is designed to be considerably less complex, easier to learn and more efficient to perform than corneal transplantation. We believe we can implement a training program to significantly expand the current corneal specialist provider base in the United States to include an additional approximately 8,000 cataract surgeons, glaucoma specialists and other anterior segment ophthalmologists.

•

Attractive physician economics. Our cell therapy procedure is designed to allow for a faster learning curve for physicians and more efficient utilization of the outpatient operating room. In addition, we believe that AURN001 may be classified as a Medicare Part B

injectable in the United States, which is typically reimbursed at 106% of the average sales price, making it potentially more financially attractive to physicians, if approved.

•

Less onerous post-operative recovery for patients. Post-operative recovery for cell therapy typically involves patients lying face down for three hours, as compared to patients typically lying on their backs for up to three days for corneal endothelial transplant procedures.

AURN001 is built upon years of research and investment. Starting in the early 2000s, inventor Professor Shigeru Kinoshita, M.D., Ph.D., developed a method at Kyoto Prefectural University of Medicine (“KPUM”) for expanding allogeneic corneal endothelial cells in vitro and demonstrated that an injection of these cells into the anterior chamber improved vision in patients with severe vision impairment due to corneal endothelial disease. The FIH clinical trial was initiated in 2013 by Professor Kinoshita and colleagues at KPUM, and we licensed the intellectual property from Professor Kinoshita and KPUM in 2020. We believe the results from the FIH clinical trial serve as the first clinical proof of concept of an allogeneic cell therapy for corneal endothelial disease and laid the foundation for potentially transforming the treatment of corneal endothelial disease.

We continue to refine innovative, efficient, scalable and proprietary manufacturing processes for our drug substance and formulation. Our ongoing investments, expertise, proprietary analytical development and process development have allowed us to make substantial improvements in manufacturing. We have also tested and validated new processes and methods for higher-scale drug substance production, broadly acceptable excipients and extended shelf-life drug product, and are in the process of transferring such processes to our contract development manufacturing organizations (“CDMOs") in the United States and Japan, where Good Manufacturing Practices ("GMP") test runs will further qualify and validate these processes and methods. Our current allogeneic cell expansion method has the potential to generate more than 1,000 doses of AURN001 from a single donor. We intend to continue to scale cell expansion, extend shelf-life and further decrease our production costs to meet worldwide demand. As such, we believe that our ability to increase the scale of corneal endothelial cell production is a sustainable competitive differentiator.

Our current clinical development plan is summarized in the chart below. Our first-generation cell therapy product, Vyznova, received regulatory approval from Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”) and reimbursement approval from the Ministry of Health, Labour and Welfare (“MHLW”). In September 2024, we independently launched Vyznova in Japan on a limited basis due to initial manufacturing constraints. Vyznova leverages an early-stage cell expansion technology. We have since made substantial chemistry, manufacturing and controls (“CMC”) innovations to augment production scale, and we are seeking approval of a supplemental New Drug Application (“sJNDA”) from the MHLW as we seek to scale up the manufacturing process for Vyznova in Japan. We plan to optimize our revenue growth in Japan by increasing our therapeutic product production and by expanding our physician outreach.

In the United States and Canada, we are currently conducting a Phase 1/2 trial to assess the efficacy, safety and tolerability of AURN001 for the treatment of corneal edema secondary to corneal endothelial dysfunction (the “CLARA clinical trial”). Enrollment and dosing for this trial have been completed and 12-month data from this trial is expected in the second half of 2025. In October 2024, we commenced a pilot clinical trial in El Salvador to assess the safety and efficacy of a cryopreserved formulation of AURN001 in 25 subjects. 12-month data from this pilot clinical trial is expected to be available in the first quarter of 2026.

Our Product and Product Candidates

Preliminary Topline Data from Our CLARA Clinical Trial

In December 2024, we announced preliminary 6-month topline data from our CLARA clinical trial. The primary endpoint is the proportion of subjects with a >15-letter improvement (three-line gain) from baseline in BCVA at six months. Key secondary endpoints included (i) change from baseline in BCVA and in CCT at six months and (ii) safety and tolerability.

As of December 15, 2024, 97 subjects have been randomized at U.S. and Canadian sites to each of the following five arms:

•

AURN001: 1.0 × 106 neltependocel + 100 µM Y-27632 (“high” cell dose,” 20 subjects)

•

AURN001: 5.0 × 105 neltependocel + 100 µM Y-27632 (“medium” cell dose, 19 subjects)

•

AURN001: 2.5 × 105 neltependocel + 100 µM Y-27632 (“low” cell dose, 19 subjects)

•

100 μM Y-27632 alone (21 subjects)

•

1.0 × 106 neltependocel alone (18 subjects)

For the primary endpoint, a dose-dependent response was observed in each of the three AURN001 arms. Although the CLARA clinical trial was not powered to show statistical significance, a statistically significant improvement was observed in the high-dose AURN001 arm (50.0%, p=0.020), as compared to the Y-27632-only arm (14.3%) (using the full analysis set (“FAS”) population, and Last Observation Carried Forward (“LOCF”) and Least Squares (“LS”) mean statistical analyses (as described herein)).

Proportion of Subjects with a ≥ 15-Letter (ETDRS) Improvement from Baseline in BCVA at Six Months (FAS)

* CLARA clinical trial was not powered to show statistical significance. Statistical analyses are descriptive.

Change in BCVA at six months, a key secondary endpoint, demonstrated a statistically significant improvement for the high-dose AURN001 arm (p=0.002), as compared to the Y-27632-only arm (using the FAS population, and LOCF and LS mean statistical analyses). Additionally, a dose response was observed in the three AURN001 arms for both mean BCVA at 6 months and the LS mean change from baseline in BCVA at 6 months.


Mean BCVA (ETDRS) at Six Months(1)		LS Mean Change from Baseline in BCVA (ETDRS) at Six Months(2)

* CLARA clinical trial was not powered to show statistical significance. Statistical analyses are descriptive.

(1) Mean BCVA reflects FAS, LOCF

(2) For change from baseline (“CFB”), LS mean, and Difference are calculated using the Analysis of Covariance (“ANCOVA”)

Change in CCT at six months, a key secondary endpoint, demonstrated a statistically significant improvement for the high-dose AURN001 arm (p=0.012), as compared to the Y-27632-only arm (using the full analysis set population and LOCF and LS Mean statistical analyses).


Mean CCT at Six Months(1)		LS Mean Change from Baseline in CCT at Six Months(2)

* CLARA clinical trial was not powered to show statistical significance. Statistical analyses are descriptive.

(1) Mean BCVA reflects FAS, LOCF

(2) For CFB, LS mean, and Difference are calculated using the ANCOVA

Doses from all five treatment arms were generally well tolerated with favorable safety profiles. There was no dose relationship observed in frequency or types of adverse events (“AEs”). There were no ocular serious adverse events (“SAEs”) reported. There were two non-ocular SAEs (hip fracture and femur fracture) reported. The most frequently reported (>3%) ocular treatment-emergent adverse events (“TEAEs”) were ocular hypertension (9%), conjunctival hemorrhage (5%), eye pain (4%), and cystoid macular edema (3%). There were no graft rejections noted in this trial. The most frequently reported non-ocular TEAE was COVID-19 (3%).

Our Team and Investors

Our leadership team and board of directors have significant experience discovering, developing and commercializing therapies, particularly for ocular diseases. Our Chief Executive Officer, Greg Kunst, brings over 20 years of life science leadership, including significant experience developing ophthalmic products and therapies. Prior to serving as our Chief Executive Officer, Mr. Kunst served as Vice President of Global Marketing at Glaukos Corporation (NYSE: GKOS) and as a global marketing director at Alcon Inc. (NYSE: ALC) (together with Alcon Research, LLC, "Alcon"). Our President and Chief Medical Officer, Michael H. Goldstein, M.D., M.B.A., is an ophthalmologist trained in cornea/external diseases. Dr. Goldstein was in charge of the cornea service at Tufts University (“Tufts”) and still sees corneal patients at Tufts. His deep experience in biotechnology extends back to his time at Applied Genetic Technologies Corp. and Eleven Biotherapeutics, Inc., and most recently at Ocular Therapeutix, Inc. (NASDAQ: OCUL) where he served as President, Ophthalmology and Chief Medical Officer. Arnaud Lacoste, M.B.A., Ph.D. our Chief Scientific Officer, previously spent 12 years at Novartis AG (NYSE: NVS) ("Novartis") where he directed cell and gene therapy research and development programs and built iPSC, CAR-T and ophthalmology cell therapy platforms. Prior to Novartis, Dr. Lacoste was the Director of Rockefeller University’s stem cell facility and was Co-founder and Chief Scientific Officer of iNseron Inc. Other members of our management team have held various roles at Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN), GE Global Research Company Ltd., Seagen Inc. and Bausch & Lomb Corporation (NYSE: BLCO).

We have raised approximately $165 million from Alcon and leading healthcare investors, including Deerfield Management Company, L.P., Petrichor Healthcare Capital Management and Falcon Vision LLC (an investment entity of certain funds advised by Kohlberg Kravis Roberts & Co. L.P.). Prospective investors should not rely on the investment decisions of our existing investors, as these investors may have different risk tolerances and in certain cases received their shares in prior offerings at prices lower than the price offered to the public in this offering. See the sections titled “Certain Relationships and Related Person Transactions” and “Principal Stockholders” for more information.

Our Strategy

Our mission is to develop disease-modifying, regenerative therapies to restore vision to millions of patients. We plan to pursue our mission through the following strategies:

•

Advance clinical development and seek regulatory approval of AURN001 in the United States to improve treatment options for patients with corneal endothelial diseases.

•

Establish our own sales organization to commercialize AURN001 in the United States.

•

Expand the physician provider network to treat corneal endothelial disease beyond corneal specialists to include cataract surgeons and glaucoma specialists to address the high unmet need.

•

Scale our capabilities by proactively investing in our manufacturing and supply chain to support continual development and commercialization of AURN001.

•

Continue to expand our commercial activities in Japan.

•

Develop, acquire or in-license additional product candidates and capabilities that enhance our potential to become a leading cell therapy ophthalmology company.

Preliminary Balance of Cash and Cash Equivalents

We estimate that we had cash, cash equivalents and restricted cash of approximately $50.5 million as of December 31, 2024.

Our actual consolidated financial results as of and for the year ended December 31, 2024 are not yet available. Our financial closing procedures for the year ended December 31, 2024 are not yet complete and, as a result, our final results upon completion of those procedures may differ materially from this preliminary estimate. The preliminary consolidated financial data presented above as of December 31, 2024 is not a comprehensive statement of our financial position or operating results; reflects our preliminary estimate based on information available as of the date of this prospectus; and is subject to change, and those changes may be material. Accordingly, you should not place undue reliance upon this preliminary estimate. This estimate should not be viewed as a substitute for full financial statements prepared in accordance with generally accepted accounting principles in the U.S. and these estimates are not necessarily indicative of the results to be achieved for the stated period, or any other period. We do not undertake any obligation to publicly update or revise this preliminary estimate, except as required by law. See “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus for a discussion of certain factors that could result in differences between this preliminary unaudited estimate and the actual results.

The preliminary consolidated financial data presented above has been prepared by, and is the responsibility of, our management. Our independent registered public accounting firm, Ernst & Young LLP, has not audited, reviewed, compiled or performed any procedures, and does not express an opinion or any other form of assurance, with respect to any of such data. This information should be read in

conjunction with our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for prior periods in this prospectus.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors.” If any of these risks or uncertainties actually occur, our business, financial condition or results of operations could be materially and adversely affected. In such case, the trading price of our common stock would likely decline, and you could lose all or part of your investment. The following is a summary of the principal risks we face:

•

We are a clinical-stage biotechnology company with a limited operating history and have incurred significant losses since our inception, and we anticipate that we will continue to incur substantial losses for the foreseeable future. We have only one product approved for sale in Japan, which may make it difficult for you to evaluate our current business and predict our future success and viability;

•

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

•

We are substantially dependent on the success of our product candidate, AURN001, which is currently in clinical trials in the United States. If we are unable to complete development of, obtain approval for or commercialize AURN001 in the United States or other jurisdictions in a timely manner, our business will likely be harmed;

•

We are early in our development efforts for our product candidate, AURN001. If we are unable to successfully develop, receive regulatory approval for and commercialize AURN001 or successfully develop any other product candidate or experience significant delays in doing so, our business will be substantially harmed;

•

The regulatory approval processes of the FDA, EMA and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for AURN001 we will be unable to generate product revenue and our business will be substantially harmed;

•

We may be unable to obtain U.S. or foreign regulatory approvals beyond approval for Vyznova in Japan and, as a result, may be unable to commercialize AURN001 or any other product or product candidates;

•

The manufacturing process for any products that we may develop is subject to the FDA or comparable foreign authority approval process, and we currently, and will need to continue to, contract with manufacturers who can meet our and all applicable FDA or comparable foreign authority requirements on an ongoing basis;

•

We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct certain aspects of our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize AURN001 and our business could be substantially harmed;

•

sufficient quantities of AURN001 or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts;

•

We currently depend, and expect to continue to be dependent, on a limited number of manufacturers for the supply of Vyznova and AURN001 and any delay in manufacturing or termination of our supplier agreements would hurt our business;

•

Even if approved, AURN001 may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success;

•

We expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations;

•

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

•

We depend on intellectual property rights licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

Our risk factors are not guarantees that no such conditions exist as of the date of this prospectus and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

Channels for Disclosure of Information

Investors, the media and others should note that, following the effectiveness of the registration statement of which this prospectus forms a part, we intend to announce material information to the public through filings with the Securities and Exchange Commission (“SEC”), the investor relations page on our website, press releases, public conference calls and webcasts.

The information disclosed by the foregoing channels could be deemed to be material information. However, information disclosed through these channels does not constitute part of this prospectus and is not incorporated by reference herein.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Corporate Information

We were originally incorporated in Delaware in July 2016 under the name SightLife Surgical, Inc. In October 2021, we separated our cell therapy business from our tissue business and operated as CorneaX, Inc. until April 2022, when we spun off our tissue business from CorneaGen Inc. and changed our name to Aurion Biotech, Inc. Our principal executive offices are located at 701 Pike Street, Suite 2225, Seattle, Washington 98101. Our telephone number is 206-210-0058. Our website is www.aurionbiotech.com. Information contained on, or that can be accessed through, our website is not a part of, and is not incorporated into, this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

We use Aurion, the Aurion logo, Vyznova and other marks as trademarks in the United States and other countries. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent

under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). As such, we may take advantage of reduced disclosure and other requirements otherwise generally applicable to public companies, including:

•

presentation of only two years of audited financial statements and related financial disclosure, in addition to any required unaudited interim financial statements, with corresponding reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus;

•

exemption from the requirement to have our registered independent public accounting firm attest to management’s assessment of our internal control over financial reporting;

•

exemption from compliance with the requirement of the Public Company Accounting Oversight Board (“PCAOB”), regarding the communication of critical audit matters in the auditor’s report on the financial statements;

•

reduced disclosure about our executive compensation arrangements; and

•

exemption from the requirement to hold non‑binding advisory votes on executive compensation or to obtain stockholder approval of golden parachute arrangements not previously approved.

We may take advantage of these exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year in which we have at least $1.235 billion in annual revenue, (ii) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (iv) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

As a result of this status, we have taken advantage of reduced reporting requirements in this prospectus and may elect to take advantage of other reduced reporting requirements in our future filings with the SEC. In particular, in this prospectus, we have provided only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations, and we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies unless it otherwise irrevocably elects not to avail itself of this exemption. We have elected to use this extended transition period for complying with new or revised accounting standards until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our consolidated financial statements may not be comparable to the financial statements of companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company” as defined in Rule 12b‑2 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). We will remain a smaller reporting company until the last day of the fiscal year in which the aggregate market value of our common stock that is held by non‑affiliates is at least $250.0 million or the last day of the fiscal year in which we have at

least $100.0 million in revenue and the aggregate market value of our common stock that is held by non‑affiliates is at least $700.0 million (in each case, with respect to the aggregate market value of our common stock held by non-affiliates, as measured as of the last business day of the second quarter of such fiscal year). If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10‑K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

THE OFFERING


Common stock offered by us	shares.

Underwriters’ option to purchase additional shares from us	shares.

Common stock to be outstanding immediately after this offering	shares (or shares if the underwriters exercise their option to purchase additional shares in full).

Use of proceeds	We estimate that the net proceeds from the sale of shares of our common stock in this offering will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares in full), based upon the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for the following purposes: (i) approximately $ million to fund the clinical development of our cell therapy product candidate, AURN001, (ii) approximately $ million to optimize our manufacturing capabilities, (iii) approximately $ million to fund the clinical development of our cryopreserved formulation of AURN001 and (iv) the remainder for our other research and development activities, as well as for working capital and other general corporate purposes. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time. See the section titled “Use of Proceeds.”

Risk factors	Investing in our common stock involves a high degree of risk. See the section titled “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed New York Stock Exchange ("NYSE”) trading symbol	“AURN”

The number of shares of common stock that will be outstanding immediately after this offering is based on shares of our common stock outstanding as of September 30, 2024, after giving effect to the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 20,140,146 shares of our common stock and conversion of our outstanding subordinated convertible promissory notes (the “Notes”), together with accrued and unpaid interest, into an aggregate of shares of common stock, and excludes:

•

3,362,085 shares of common stock issuable upon the exercise of outstanding options as of September 30, 2024, with a weighted-average exercise price of $7.32 per share;

•

76 shares of common stock issuable upon the exercise of outstanding warrants as of September 30, 2024, under our 2017 Equity Incentive Plan (the “2017 Plan”), with a weighted-average exercise price of $4,171.05 per share;

•

61,246 shares of common stock reserved for future issuance under our 2017 Plan as of September 30, 2024, which number of shares will be added to the shares of our common stock to be reserved under our 2025 Equity Incentive Plan (the “2025 Plan”) upon its effectiveness, at which time we will cease granting awards under our 2017 Plan;

•

shares of common stock reserved for future issuance under our 2025 Plan, which will become effective on the business day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part; and

•

shares of common stock reserved for future issuance under our 2025 Employee Stock Purchase Plan (the “ESPP”), which will become effective on the business day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part.

The 2025 Plan and the ESPP each provide for annual automatic increases in the number of shares of our common stock reserved thereunder, and the 2025 Plan also provides for increases to the number of shares of our common stock that may be granted thereunder based on shares under the 2017 Plan that expire, are forfeited or are repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefit and Equity Compensation Plans.”

Except as otherwise indicated, all information in this prospectus assumes or gives effect to the following:

•

a 1-for-1.395 reverse stock split of our common stock, which we effected on December 18, 2024 and a corresponding adjustment to the ratio at which our convertible preferred stock will convert into common stock;

•

a 1-for- reverse stock split of our common stock, which will become effective prior to the completion of this offering;

•

the conversion of all outstanding shares of our redeemable convertible preferred stock outstanding as of September 30, 2024 into an aggregate of 20,140,146 shares of common stock upon the closing of this offering;

•

the conversion of the Notes, together with accrued and unpaid interest, outstanding as of September 30, 2024 into an aggregate of shares of common stock, at a 20% discount to the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus. Upon the closing of this offering, if the actual initial public offering price is not equal to the midpoint of the price range on the cover page of this prospectus (the “Midpoint Price”), the number of shares of common stock into which the Notes will convert upon completion of this offering will differ from that set forth above. A $1.00 decrease in the assumed initial public offering price of $ per share, which is the Midpoint Price, would increase the number of shares of common stock issuable upon the conversion of the outstanding Notes by an aggregate of shares. A $1.00 increase in the assumed initial public offering price of $ per share, which is the Midpoint Price, would decrease the number of shares of common stock issuable upon the conversion of the outstanding Notes by an aggregate of shares. Following the closing of this offering, the actual shares of common stock to be issued will be based on the amount of accrued and unpaid interest then outstanding and the actual initial public offering price;

•

no exercise of outstanding options or warrants described above;

•

the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering, and the adoption of our amended and restated bylaws, which will become effective upon the effectiveness of the registration statement of which this prospectus forms a part; and

•

no exercise of the underwriters’ option to purchase additional shares.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables set forth a summary of our consolidated financial data as of, and for the periods ended on, the dates indicated. The consolidated statements of operations data for the years ended December 31, 2023 and 2022 are derived from our audited consolidated financial statements and related notes included elsewhere in this prospectus. The consolidated statements of operations data for the nine months ended September 30, 2024 and 2023, and the consolidated balance sheet data as of September 30, 2024, are derived from our unaudited interim condensed consolidated financial statements and related notes to be included elsewhere in this prospectus. We have prepared the unaudited interim condensed consolidated financial statements on a basis substantially consistent with our audited consolidated financial statements as of and for the year ended December 31, 2023, and the unaudited interim condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the financial information set forth in those unaudited interim condensed consolidated financial statements. You should read this data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results. The summary consolidated financial data in this section are not intended to replace, and are qualified in their entirety by, the consolidated financial statements and related notes included elsewhere in this prospectus.

Consolidated Statements of Operations Data:


	Year Ended December 31,						Nine Months Ended September 30
	2023			2022				2024			2023
	(in thousands, except for share and per share data)						(in thousands, except for share and per share data)
Revenue	$	—		$	—		$	657		$	—
Operating expenses:
Cost of revenue		—			—			1,654			—
Research and development(1)		34,823			24,568			32,122			24,996
General and administrative(1)		12,526			10,003			14,518			9,617
Total operating expenses		47,349			34,571			48,294			34,613
Loss from operations		(47,349	)		(34,571	)		(47,637	)		(34,613)
Other income (expense):
Interest income		1,904			182			1,310			1,320
Interest expense		—			—			(795	)		—
Change in fair value of derivative liabilities		—			983			(263	)		—
Change in fair value of convertible notes		—			—			(339	)
Loss on extinguishment of convertible notes		—			(831	)		—			—
Loss before income taxes		(45,445	)		(34,237	)		(47,724	)		(33,293)
Income taxes		(101	)		(2	)		(14	)		(73)
Net loss from continuing operations		(45,546	)		(34,239	)		(47,738	)		(33,366)
Net loss from discontinued operations		—			(1,446	)		—			—
Net loss		(45,546	)		(35,685	)		(47,738	)		(33,366)
Other comprehensive gain (loss):
Unrealized loss on foreign currency translation		(59	)		(1,345	)		112			(70)
Total other comprehensive gain (loss)		(59	)		(1,345	)		112			(70)
Comprehensive loss	$	(45,605	)	$	(37,030	)	$	(47,626	)	$	(33,436)
Net loss per share – basic and diluted:
Net loss per share from continuing operations attributable to common stockholders	$	(565	)	$	(10,830	)	$	(243	)	$	(552)
Net loss per share from discontinued operations		—			(448	)		—			—
Net loss per share attributable to common stockholders	$	(565	)	$	(11,278	)	$	(243	)	$	(552)
Weighted average number of shares used to compute basic and diluted net loss per share	80,645			3,231				196,481			60,483
Pro forma net loss per share, basic and diluted(2)
Weighted average number of shares used to compute pro forma basic and diluted net loss per share(2)				$						$

(1)

Stock-based compensation expense was recorded in operating expenses as follows:


	Year Ended December 31,				Nine Months Ended September 30,
	2023		2022		2024			2023
	(in thousands)				(in thousands)
Research and development	$	1,102	$	575	$	906	$	876
General and administrative		2,622		1,815		2,845		1,872
Total stock-based compensation	$	3,724	$	2,390	$	3,751	$	2,748

(2)

Gives effect to (i) the conversion of all outstanding shares of our redeemable convertible preferred stock into shares of our common stock and (ii) the conversion of all outstanding Notes, together with accrued and unpaid interest, into shares of common stock, at a 20% discount to the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus and (iii) the change in fair value of the derivative liability related to the success fee owed to our lenders upon completion of an initial public offering in accordance with the terms of our line of credit. Unaudited pro forma net loss per share attributable to common stockholders does not include the shares expected to be sold and related proceeds to be received in this offering. Unaudited pro forma net loss per share attributable to common stockholders for the nine months ended September 30, 2024 and the year ended December 31, 2023 was calculated using the weighted-average number of shares of common stock outstanding as of such date, including the pro forma effect of the conversion of all outstanding shares of our convertible preferred stock into shares of our common stock, as if such conversion had occurred at the beginning of the period, or their issuance dates, if later.

Consolidated Balance Sheet Data:


		As of September 30, 2024
	Actual			Pro Forma(1)	Pro Forma As Adjusted(2)
	(in thousands)
Cash and cash equivalents	$	52,065		$	$
Working capital(3)		39,670
Total assets		70,345
Convertible notes at fair value		33,413
Line of credit		23,500
Total liabilities		76,109
Redeemable convertible preferred stock		214,775
Total stockholders’ equity (deficit)		(220,539	)

(1)

The pro forma consolidated balance sheet data gives effect to (a) the conversion of our outstanding shares of redeemable convertible preferred stock into an aggregate of 20,140,146 shares of common stock as of September 30, 2024, which will occur upon the closing of this offering, (b) the conversion of our outstanding Notes, together with accrued and unpaid interest, into an aggregate of shares of common stock as of September 30, 2024, at a 20% discount to an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, which will occur upon the closing of this offering, (c) the filing of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering, and (d) the payment of a success fee of $ to our lenders in accordance with the terms of our line of credit and the resulting settlement of the derivative liability of $ with a net impact of $ to our accumulated deficit (see Note 9 to our unaudited interim condensed consolidated financial statements as of September 30, 2024 and December 31, 2023 and for the nine month periods ended September 30, 2024 and 2023). If the actual initial public offering price is not equal to the Midpoint Price, the number of shares of common stock into which the Notes will convert upon completion of this offering will differ from that set forth above. A $1.00 decrease in the Midpoint Price would increase the number of shares of common stock issuable upon the conversion of the Notes by an aggregate of shares. A $1.00 increase in the Midpoint Price would decrease the number of shares of common stock issuable upon the conversion of the Notes by an aggregate of shares. Following the closing of this offering, the actual shares of common stock to be issued will be based on the amount of accrued interest then outstanding and the actual initial public offering price.

(2)

Reflects, on a pro forma as adjusted basis, the pro forma adjustments described in footnote (1) above and the issuance and sale by us of shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease, as applicable, each of our cash and cash equivalents, working capital, total assets and total stockholders’ equity (deficit) by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares offered by us would increase or decrease, as applicable, each of our cash and cash equivalents, working capital, total assets and total stockholders’ equity (deficit) by approximately $ million, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

(3)

Working capital is defined as current assets less current liabilities.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before making an investment decision, you should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus. Our business, operating results, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, operating results, financial condition and prospects could be adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment. Our Risk Factors are not guarantees that no such conditions exist as of the date of this prospectus and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See the section titled “Special Note Regarding Forward-Looking Statements” appearing elsewhere in this prospectus.

Risks Related to Our Business and Industry and the Development of Our Product Candidate

We are a clinical-stage biotechnology company with a limited operating history upon which you can evaluate our business and prospects. Although we have approval for an allogeneic cell therapy to treat corneal endothelial disease in Japan, we have no products approved for commercial sale in other jurisdictions and have not generated any significant revenue from product sales. We have not yet demonstrated our ability to obtain marketing approvals in jurisdictions outside of Japan, manufacture a commercial-scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. As a result, it may be more difficult for you to accurately predict our future success or viability.

In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by clinical-stage biotechnology companies in rapidly evolving fields. We also may need to transition from a company with a research focus to a company capable of supporting commercial activities. If we do not adequately address these risks and difficulties or successfully make such a transition, our business will likely suffer.

The success of our business depends primarily upon our ability to successfully develop and commercialize our product candidate, AURN001. We will continue to incur significant research and development and other expenses related to our preclinical and clinical development and ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. Net losses, negative cash flows and expected future losses have had, and will continue to have, an adverse effect on our stockholders’ deficit and working capital. We have incurred operating losses in each year since our inception. Our net losses were $47.7 million and $33.4 million for the nine months ended September 30, 2024 and 2023, respectively, and $45.5 million and $35.7 million for the years ended December 31, 2023 and 2022, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $205.6 million and $157.8 million, respectively. Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. Moreover, our net losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

To date, we have devoted substantially all of our resources and efforts to organizing and staffing our company, business planning, discovering, identifying and developing potential product candidates, securing intellectual property rights and conducting preclinical studies and clinical trials of our first-generation cell therapy product, Vyznova, which has been approved for commercial sale in Japan, and our second-generation product candidate, AURN001. In addition, to market Vyznova in Japan and AURN001 in any jurisdictions in which we may receive marketing approval, we will incur significant sales, marketing and manufacturing expenses. Once we are a public company, we will incur additional costs associated with operating as a public company. As a result, we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Because of the numerous risks and uncertainties associated with developing biotechnology products, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis.

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

•

seek regulatory approvals for AURN001 or any future product candidates that successfully complete clinical trials;

•

undertake additional clinical and manufacturing work to support updates and changes to AURN001, including any such changes we pursue after obtaining initial regulatory approval;

•

hire additional clinical, quality control, medical, scientific and other technical personnel to support the clinical development of AURN001 and any future product candidates;

•

experience an increase in headcount as we expand our research and development organization and market development and commercial planning activities;

•

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

•

identify, acquire and develop additional product candidates;

•

change or add additional contract development manufacturing organizations (“CDMOs”) or suppliers;

•

develop a commercial organization capable of sales, marketing and distribution of any products for which we obtain marketing approval in markets where we intend to commercialize;

•

achieve market acceptance of our products, including Vyznova and, if approved, AURN001 and any future product candidates;

•

maintain, expand and protect our intellectual property portfolio;

•

make milestone, royalty or other payments due under any license agreements;

•

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

•

experience delays or encounter issues with any of the above.

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

In its report on our consolidated financial statements for the year ended December 31, 2023, our independent registered public accounting firm included an explanatory paragraph that expressed substantial doubt about our ability to continue as a going concern. Our current cash level and current operating plans raise substantial doubt about our ability to continue as a going concern. In addition, our future consolidated financial statements may include similar qualifications about our ability to continue as a going concern. Our consolidated financial statements were prepared assuming that we will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to meet our current operating costs, we will need to seek additional financing or modify or cease our operational plans. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

Our future success is dependent on our ability to timely complete clinical trials, obtain marketing approval for and successfully commercialize AURN001 in the United States and the European Union (the “EU”). While we have received regulatory and reimbursement approval for our cell therapy product, Vyznova, in Japan, we have not received regulatory approval for any other product candidate, including AURN001, in any jurisdiction. We are investing significant efforts and financial resources in the research and development of AURN001, a combination product candidate consisting of a biologic and small molecule drug. We completed enrollment of a Phase 1/2 clinical trial for the proposed indication of corneal edema secondary to corneal endothelial dysfunction. AURN001 will require additional clinical development, evaluation of clinical, preclinical and manufacturing activities, marketing approval from government regulators, substantial investment and significant marketing efforts before we can generate any revenues from product sales. We are not permitted to market or promote Vyznova outside of Japan or any other product or product candidate in any jurisdiction unless and until we receive marketing approval from the U.S. Food and Drug Administration (“FDA”), the European Medicines Agency (the “EMA”) or comparable foreign regulatory authorities, and we may never receive such marketing approvals.

Our ability to generate revenue and achieve profitability depends significantly on several factors, including, but not limited to, the following:

•

the successful and timely initiation, enrollment and completion of clinical trials of AURN001 with favorable results, including our current Phase 1/2 clinical trial, and the costs associated with such trials, including any unforeseen costs we may incur as a result of manufacturing or clinical trial delays;

•

the initiation and successful patient enrollment and completion of additional clinical trials on a timely basis;

•

our ability to establish and maintain relationships with clinical sites for the clinical development, both in the United States and internationally, of AURN001;

•

the frequency and severity of adverse events in the clinical trials;

•

our ability to leverage clinical data from previously completed clinical trials utilizing earlier versions or different formulations of AURN001, including Vyznova and AURN001 manufactured through different processes, to support approval of the version of AURN001 for which we plan to seek marketing approval;

•

the efficacy, safety and tolerability profiles that are satisfactory to the FDA, the EMA or any comparable foreign regulatory authority for marketing approval;

•

timely receipt of marketing approvals from applicable regulatory authorities for AURN001, including our ability to submit and obtain approval for a sJNDA in Japan;

•

our ability to make any required post-marketing approval commitments to applicable regulatory authorities;

•

our ability to develop and complete the associated technology transfer of an efficient and scalable manufacturing process for AURN001, including obtaining finished products that are appropriately packaged for sale;

•

our ability to establish and maintain commercially viable supply and manufacturing relationships with third parties that can successfully export/import our products and provide adequate amounts and quality of products and services to support clinical development and meet the market demand for AURN001 or any future product candidates, if approved;

•

the successful commercial launch of Vyznova and, if approved, AURN001, including the development of a commercial infrastructure, whether in-house or with one or more collaborators;

•

a continued acceptable safety profile following any marketing approval of AURN001;

•

commercial acceptance of Vyznova and, if approved, AURN001 by patients, the medical community and third-party payors;

•

our ability to obtain, maintain and expand patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;

•

our ability to protect our rights in our intellectual property portfolio;

•

our ability to defend against third-party interference or infringement claims, if any;

•

negotiation of favorable terms in any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize AURN001;

•

our ability to obtain coverage and adequate reimbursement by hospitals, government and third-party payors for Vyznova, and, if approved, AURN001 or any future product candidates that we may develop;

•

our ability to address any competing therapies and technological and market developments;

•

our ability to attract, hire and retain qualified personnel; and

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identification, assessment and development of new product candidates, and the factors discussed above with respect to any such new product candidates.

We do not have complete control over these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to our intellectual property rights and the manufacturing, marketing, distribution and sales efforts of any future collaborator. We may never be successful in achieving our objectives and, even if achieved, we may never generate revenue that is significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable may decrease the value of our company and could impair our ability to maintain or further our research and development efforts, raise additional necessary capital, grow our business and continue our operations.

We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial partners, which may prevent us from completing our clinical trials or commercializing AURN001 on a timely or profitable basis, if at all. We expect manufacturing AURN001 to be particularly complex as it will require processing donor tissue and culturing sufficient passages of cells of consistent quality and potency, which may introduce additional challenges in manufacturing either by us or our commercial partners. Additionally, the manufacturing process for AURN001 is lengthy, requiring a significant lead time, and any delays in manufacturing could impact our ability to release drug product and complete clinical trials on our projected timelines or meet patient demand, if AURN001 is approved. Furthermore, should we need to secure additional or different manufacturing partners, we anticipate that AURN001’s limited shelf life and lengthy manufacturing process may complicate our ability to secure additional manufacturers capable of producing AURN001 in a timely and reliable manner. See “—We currently depend, and expect to continue to be dependent, on a limited number of manufacturers for the supply of Vyznova and AURN001 and any delay in manufacturing or termination of our supplier agreements would hurt our business.”

Moreover, any changes in methods of product candidate manufacturing or formulation may result in additional costs or delay. As product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development activities, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. For example, in response to our ongoing work to manufacture additional commercial supply in Japan, we are planning to optimize the manufacturing process used to manufacture AURN001, and later to develop a cryopreserved version of AURN001, and we continue to seek improvements in the manufacturing efficiency of AURN001 to yield additional cells from donor materials. Although we have aligned with the FDA on plans for analytical comparability assays between the drug product used in our Phase 1/2 trial and planned Phase 3 trials for AURN001, our planned analytical comparability testing may not be sufficient. In addition, any additional changes in the manufacturing process or facilities during clinical development will require further comparability testing to bridge earlier clinical data obtained from any product candidates produced under earlier manufacturing methods or formulations, and any changes we plan to make to an approved product will also require approval by the applicable regulator in that jurisdiction before implementation. Such regulators may disagree with our plans to demonstrate comparability between versions of our product candidate during clinical development. This could delay our clinical trial and product candidate development, and could require additional clinical trials, including bridging studies, to demonstrate consistent and continued safety and efficacy.

Outside of Japan, we have not previously submitted a biologics license application (“BLA”) to the FDA or similar approval filings to a comparable foreign regulatory authority for any product candidate. A BLA or other similar regulatory application must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure and potent for each desired indication. The BLA or other relevant regulatory filing must also include significant information regarding the chemistry, manufacturing and controls for the product. We cannot be certain that AURN001 will be successful in clinical trials or receive regulatory approval, and if we do not receive regulatory approval for AURN001, we may not be able to continue our operations. Even if we successfully obtain regulatory approval to market AURN001, our revenue will depend, in part, upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights, the availability of competitive

products, the availability of sufficient third-party reimbursement and the adoption of our product by physicians, as well as our ability to manufacture product needed to meet the level of patient demand.

We are early in our development efforts for our product candidate, AURN001. Our assumptions about the development potential of AURN001 are based entirely on the data generated from previously completed clinical trials utilizing earlier versions or different formulations of AURN001, including Vyznova and AURN001 manufactured through different processes. We have not, as a company, completed any clinical trials of the current formulation of AURN001 to date.

AURN001 will require substantial additional investment, clinical development, regulatory review, approval in one or more jurisdictions and significant marketing efforts before we could recognize any revenue from product sales, if ever. Given our early stage of development, it may take several years before we can sufficiently demonstrate the safety and efficacy of AURN001 to warrant approval for commercialization, if we can do so at all. We may also observe materially and adversely different safety results as we continue to conduct our clinical trials, including our current Phase 1/2 clinical trial.

We do not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to our intellectual property rights and the manufacturing, marketing, distribution and sales efforts of any future collaborator. If we were to experience a negative outcome or result with respect to one or more of these factors or be unable to resolve any related issue in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize the product candidates we develop, which would materially harm our business. If we do not receive marketing approvals for our product candidate or any future product candidate we develop or if we experience delays in such approvals, we may not be able to continue our operations.

There is no assurance we will be able to successfully and timely complete development of the current formulation of AURN001 and obtain regulatory approval. If we are unable to develop, or obtain marketing approval for, or, if approved, successfully commercialize AURN001 or any other product candidate, our business, financial condition, results of operations and prospects could be materially harmed.

There is currently no FDA-approved allogeneic cell therapy to treat corneal endothelial disease, and our development of AURN001 may never lead to a marketable product in the United States.

There is currently no FDA-approved allogeneic cell therapy to treat corneal endothelial disease in the United States. We have not received regulatory approval for AURN001 and cannot be certain that our approach will lead to the development of an approvable or marketable product, alone or in combination with other therapies in jurisdictions outside of Japan, where we received approval from Japan’s Minister of Health, Labour and Welfare (the “Minister”) for Vyznova. We may not succeed in demonstrating safety and efficacy of AURN001 in our ongoing clinical trial or in larger-scale clinical trials.

Advancing AURN001 creates significant challenges for us, including:

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obtaining marketing approval, as the FDA, EMA and other regulatory authorities have never approved an allogeneic cell therapy to treat corneal endothelial disease;

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if AURN001 is approved, educating medical personnel regarding the potential efficacy and safety benefits, as well as the challenges, of incorporating AURN001 into existing treatment regimens, including in combination with other treatments for corneal endothelial disease;

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establishing the sales and marketing capabilities upon obtaining any marketing approvals to gain market acceptance; and

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obtaining favorable coverage and reimbursement decisions for AURN001.

Our long-term prospects depend in part upon discovering, developing and commercializing additional product candidates, which may fail in development or suffer delays that adversely affect such additional product candidates’ commercial viability.

Our future operating results may be dependent on our ability to successfully discover, develop, commercialize and obtain regulatory approval for product candidates beyond AURN001. A product candidate can unexpectedly fail at any stage of preclinical and clinical development. The historical failure rate for product candidates is high due to risks relating to safety, efficacy, clinical execution, changing standards of medical care and other unpredictable variables. The results from preclinical testing or early clinical trials of a product candidate may not be predictive of the results that will be obtained in later stage clinical trials of the product candidate.

The success of AURN001 and any product candidates we may develop will depend on many factors, including, but not limited to, the following:

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generation of sufficient data to support the initiation or continuation of clinical trials;

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our ability to obtain regulatory permission to initiate clinical trials;

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our ability to contract with the necessary parties to conduct clinical trials;

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successful enrollment of patients in, and the completion of, clinical trials on a timely basis;

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timely manufacture of sufficient quantities of the product candidate for use in clinical trials; and

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adverse events in clinical trials.

Even if we successfully advance any other product candidates into clinical development, such product’s success will be subject to all of the clinical, regulatory and commercial risks described elsewhere in this “Risk Factors” section. Accordingly, there are no assurances that we will ever be able to discover, develop, obtain regulatory approval of, commercialize or generate significant revenue from other product candidates.

Clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome. The outcome of earlier clinical trials may not be predictive of the success of later clinical trials. The results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities, and we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of AURN001.

Research and development of pharmaceutical products is inherently risky. We cannot give any assurance that AURN001 will receive regulatory or marketing approval, which will be necessary for commercialization. The clinical trials and manufacturing of AURN001 and any future product candidates are, and the manufacturing and marketing of Vyznova and any future products, if approved, will be,

subject to extensive and rigorous review and regulation by numerous government authorities. Before we may obtain regulatory approvals for the commercial sale of AURN001 or any future product candidates, we must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that a product candidate is both safe and effective for use in each target indication. A product candidate in a late-stage clinical trial may fail to show the desired safety, efficacy and durability profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any current or future clinical trials will be conducted as planned or completed on schedule, if at all. Failure can occur at any time during the clinical trial process. Even if our current ongoing clinical trials and any future clinical trials are completed as planned, we cannot be certain that our results will support the safety and effectiveness of AURN001 for its targeted indication or support its continued clinical development.

The results of our preclinical studies and clinical trials may not be predictive of the results of early-stage or later-stage clinical trials, and results of early clinical trials may not be predictive of the results of later-stage clinical trials. The results of clinical trials in one set of subjects may not be predictive of those obtained in another. In some instances, there can be significant variability in safety, efficacy or durability results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants.

In addition, even if such clinical trials are successfully completed, we cannot guarantee that the FDA or other comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit AURN001 for approval. Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction. To the extent that the results of the trials are not satisfactory to the FDA or other comparable foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available, to conduct additional trials in support of potential approval of AURN001 or any future product candidates. Even if we secure regulatory approval for AURN001 or any future candidates, the terms of such approval may limit the scope and use of the product candidate, which may also limit its commercial potential. Additionally, if we obtain regulatory approval for AURN001, we may need to obtain further regulatory approvals before implementing changes to the product, including changes in manufacturing methods or other specifications. For example, we seek to scale up the manufacturing process for Vyznova in Japan. When changing the manufacturing methods, manufacturing facilities or other specifications of an approved regenerative medicinal product, the marketing authorization holder of such product is required to submit a sJNDA and obtain approval of such sJNDA before marketing the product manufactured at the new facilities in accordance with the new methods or specifications. As part of its review, the PMDA will assess whether there are any concerns regarding the safety, efficacy or quality of the product, even if it is a regenerative medicine product manufactured using a modified manufacturing method, manufacturing facility or specification, and will conduct a document-based or on-site investigation regarding whether the method to control manufacturing or the quality of the product complies with the standard required by the Ministerial Ordinance on Good Gene, Cellular, and Tissue-based Products Manufacturing Practice. There is no guarantee that regulatory authorities in Japan will approve our sJNDA, and we may be required to provide further data to support our planned changes.

We may also experience issues in conducting our clinical trials that would delay or prevent us from satisfying the applicable requirements of the FDA and other regulatory authorities, including:

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obtaining regulatory authorization to commence a clinical trial;

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delays in reaching agreement with the FDA or other regulatory authorities as to the design or implementation of our clinical trials;

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delays in sufficiently developing or controlling a manufacturing process suitable for advanced clinical trials, or in establishing comparability between versions of our product candidates;

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delays in reaching, or failure to reach, agreement on acceptable terms with clinical trial sites or prospective clinical research organizations (“CROs”), the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites;

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obtaining institutional review board (“IRB”) approval at each trial site;

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inspections of clinical trial sites or operations by applicable regulatory authorities, or the imposition of a clinical hold;

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failure to perform in accordance with applicable regulatory requirements, including the FDA’s good clinical practice requirements (“GCPs”), or applicable regulatory requirements in other countries;

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manufacturing sufficient quantities of product candidate for use in clinical trials; or

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suspensions or terminations by IRBs of the institutions at which such trials are being conducted, by the Data Safety Monitoring Board (“DSMB”), for such trial or by the FDA or other regulatory authorities due to a number of factors, including those described above.

Our Phase 1/2 clinical trial of AURN001 is ongoing, and we may experience unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval or commercialize AURN001 or significantly increase the cost of such trials, including:

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changes in regulatory requirements or guidance, or receiving feedback from regulatory authorities, that requires us to modify the design of our clinical trials;

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third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

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we or our investigators might have to suspend or terminate clinical trials of AURN001 for various reasons, including non-compliance with regulatory requirements, a finding that AURN001 has undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks;

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the cost of clinical trials of AURN001, including CMC activities related to our clinical trials, may be greater than we anticipate and we may not have funds to cover the costs;

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the supply or quality of AURN001 or other materials necessary to conduct clinical trials of AURN001 may be insufficient or inadequate;

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clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs;

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regulators may revise the requirements for approving AURN001, or such requirements may not be as we anticipate; and

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any future collaborators that conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.

If we are unable to successfully complete clinical trials of AURN001 or any other product candidates we may develop, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:

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incur unplanned costs;

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be delayed in obtaining marketing approval for AURN001 or any other product candidates or not obtain marketing approval at all;

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obtain marketing approval in some countries and not in others;

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obtain marketing approval for indications or patient populations that are not as broad as intended or desired;

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obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings or a Risk Evaluation Mitigation Strategy (“REMS”);

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be subject to additional post-marketing testing requirements; or

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have regulatory authorities withdraw or suspend their approval of the product.

We cannot be certain that any future clinical trials will be successful, and any safety concerns observed in our current Phase 1/2 clinical trial or any future clinical trials could limit the prospects for regulatory approval of AURN001, which could have a material adverse effect on our business, financial condition and results of operations.

If we experience delays or difficulties in the enrollment or maintenance of patients in current or future clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. We may not be able to initiate or continue clinical trials for AURN001 if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA, EMA or comparable foreign regulatory authorities. The eligibility criteria of our clinical trials, once established, may further limit the pool of available trial participants.

If our competitors have ongoing clinical trials for product candidates similar to AURN001, patient enrollment may be affected as patients who would otherwise be eligible for our clinical trials may instead enroll in our competitors’ clinical trials. Patient enrollment for any of our current or future clinical trials may be affected by other factors, including, but not limited to, the following:

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size and nature of the patient population;

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severity of the disease under investigation;

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availability and efficacy of approved products for the disease under investigation;

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patient eligibility criteria for the trial in question as defined in the protocol;

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perceived risks and benefits of the product candidate under study;

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

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efforts to facilitate timely enrollment in clinical trials;

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patient referral practices of physicians;

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the ability to monitor patients adequately during and after treatment;

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proximity and availability of clinical trial sites for prospective patients;

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continued enrollment of prospective patients by clinical trial sites; and

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the risk that patients enrolled in clinical trials will drop out of the trials before completion.

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 AURN001 or any other product candidates we may develop and jeopardize our ability to obtain marketing approval for the sale of AURN001 or any other product candidates we may develop. 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. Additionally, if we progress to later-stage clinical trials and the FDA has issued final guidance on clinical trial diversity action plans, then following a 180-day grace period the FDA will require development of a diversity action plan to support the enrollment of a representative population of patients in a Phase 3 or other pivotal trial unless a waiver is requested and granted.

AURN001 may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products that may result in a safety profile that could inhibit regulatory approval, prevent market acceptance, limit our product’s commercial potential or result in significant negative consequences.

As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse events associated with AURN001’s use. Results of our clinical trials could reveal a high or unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by AURN001 could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. The product-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

If AURN001 is associated with undesirable side effects or has unexpected characteristics in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, we may need to interrupt, delay or abandon AURN001’s development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Any of these occurrences may prevent us from achieving or maintaining market acceptance of the product candidate and may harm our business, financial condition and prospects significantly.

Patients in our ongoing and planned clinical trials may in the future suffer significant adverse events or other side effects not observed in our preclinical studies or previous clinical trials. AURN001 may be used in pediatric populations, for which safety concerns may be particularly scrutinized by regulatory agencies. In addition, if AURN001 is used in combination with other therapies, AURN001 may exacerbate adverse events associated with the other therapies. Patients treated with AURN001 may also be undergoing surgical, radiation and chemotherapy treatments, which can cause side effects or adverse events that are unrelated to AURN001 but may still impact the success of our clinical trials. The surgical procedure used to administer AURN001 is associated with safety risks, and patients may experience adverse events when receiving AURN001. Additionally, human error in the surgical technique used in connection with AURN001 may cause side effects or adverse events that are unrelated to AURN001, but may still impact the success of AURN001. The inclusion of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the gravity of such patients’ illnesses.

If significant adverse events or other side effects are observed in any of our current or future clinical trials, or in our commercial use in Japan, we may have difficulty recruiting patients to the clinical trials, patients may drop out of our trials or we may be required to abandon the trials or our development efforts of that product candidate altogether. We, the FDA, EMA, other comparable regulatory authorities or an IRB may suspend clinical trials of a product candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to unacceptable health risks or adverse side effects. Some potential therapeutics developed in the biotechnology industry that initially showed therapeutic promise in early-stage trials have later been found to cause side effects that prevented their further development. Even if the side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance due to its tolerability versus other therapies. See “—Risks Related to the Commercialization of Our Product Candidates—Even if approved, AURN001 may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success.” Any of these developments could materially harm our business, financial condition and prospects.

Further, if AURN001 obtains marketing approval, toxicities associated with AURN001 and not seen during clinical testing may also develop after such approval and lead to a requirement to conduct additional clinical safety trials, additional contraindications, warnings and precautions being added to the product label, significant restrictions on the use of the product or the withdrawal of the product from the market. Similarly, any new or increased safety risks associated with the use of Vyznova in Japan could negatively impact our clinical development of AURN001, or require further clinical safety data to evaluate whether such issues may also impact AURN001. We cannot predict whether AURN001 will cause toxicities in humans that would preclude, or lead to the revocation of, regulatory approval based on preclinical studies or early-stage clinical trials.

Additionally, if AURN001 receives regulatory approval and we or others later identify undesirable delayed side effects caused by AURN001, a number of potentially significant negative consequences could result. Such delayed side effects might be observed during a long-term follow-up required by the FDA. For example, the FDA could require us to adopt a REMS to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to healthcare practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry. Other potentially significant negative consequences include that:

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we may be forced to suspend development of AURN001 or decide to suspend marketing or remove the product from the marketplace, if approved;

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regulatory authorities may withdraw or change their approvals of our product, Vyznova, or our product candidate, AURN001;

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regulatory authorities may require additional warnings on the label or limit access of that product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment;

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we may be required to create a medication guide outlining the risks of the product for patients or to conduct post-marketing studies;

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we may be required to change the way the product is administered;

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we may incur clinical holds or suspensions and be required to reconsent enrolled patients regarding additional risks prior to resuming clinical development;

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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; or

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the product may become less competitive, and our reputation may suffer.

Any of these events could diminish the usage or otherwise limit the commercial success of AURN001 and prevent us from achieving or maintaining market acceptance of the product candidate, if approved by applicable regulatory authorities.

We do not know whether our future clinical trials will begin on time or whether our ongoing or future clinical trials will be completed on schedule or at all.

Clinical trials can be delayed for a variety of reasons, including delays related to:

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the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies;

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our ability to obtain regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design;

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any failure or delay in reaching an agreement with clinical research organizations (“CROs”) and clinical trial sites, whose terms can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

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our ability to obtain approval from one or more IRBs;

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IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects or withdrawing their approval of the trial;

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changes to clinical trial protocol;

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clinical sites deviating from trial protocol or dropping out of a trial;

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our ability to manufacture sufficient quantities of AURN001 in a timely manner;

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subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up;

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subjects choosing an alternative treatment for the indication for which we are developing AURN001, or participating in competing clinical trials;

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lack of adequate funding to continue the clinical trial;

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subjects experiencing severe or unexpected product-related adverse effects;

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the occurrence of serious adverse events in trials of the same class of agents conducted by other companies;

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selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data;

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manufacturing challenges associated with processing donor tissue and culturing sufficient passages of cells of consistent quality and potency, including contamination and scaling challenges;

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a facility manufacturing AURN001 or any of its components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current Good Manufacturing Practice regulations (“cGMP”) or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process;

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any changes to our manufacturing process that may be necessary or desired;

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third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCPs, or other regulatory requirements;

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third-party contractors not performing data collection or analysis in a timely or accurate manner; or

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third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.

In addition, we could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by a DSMB 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 regulatory requirements or our clinical 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, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, manufacturing issues, 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 IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial. We may also face delays if we are unable to reach agreement with the FDA or comparable regulatory authorities regarding CMC matters, including methodologies for, and assessment of, comparability of manufacturing procedures and lots.

Further, conducting clinical trials in foreign countries, as we may do for AURN001, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

If we experience delays in the completion of, or termination of, any clinical trial of AURN001, the commercial prospects of AURN001 will be harmed, and our ability to generate product revenues from AURN001 will be delayed. Moreover, any delays in completing our clinical trials will increase our costs, slow down AURN001’s development and approval process and jeopardize our ability to commence product sales and generate revenues.

In addition, many of the factors that cause, or lead to, termination or suspension of, or a delay in the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. Any delays to our clinical trials that occur as a result could shorten any period during which we may have the exclusive right to commercialize AURN001, and our competitors may be able to bring products to market before we do, which may significantly reduce the commercial viability of AURN001. Any of these occurrences may harm our business, financial condition and prospects significantly.

Principal investigators for our clinical trials may serve as scientific advisors or consultants to us, which the FDA or comparable foreign regulatory authorities may conclude creates a conflict of interest.

Principal investigators for our clinical trials have and may in the future serve as scientific advisors or consultants to us from time to time and receive compensation, including stock or stock options 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. 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 AURN001.

Past and future results of any “open-label” trials may not be predictive of future clinical trial results of our product candidates.

Our clinical trials have utilized and, in the future, may utilize an “open-label” trial design. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate, an existing approved product or a placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates when studied in a controlled environment with a placebo or active control.

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

From time to time, we may publicly disclose preliminary or top-line data from our preclinical studies and clinical trials, including long-term data from prior clinical trials conducted in Japan and El Salvador, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data

related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, once additional data have been received and fully evaluated, the top-line or preliminary results that we report may differ from future results of the same studies or different conclusions or considerations may qualify such results. Top-line, initial and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the top-line, initial or preliminary data we previously published. As a result, top-line, initial and preliminary data should be viewed with caution until the final data are available.

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 patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their disease. Results may also change during the course of our clinical trials due to differences in manufacturing process. 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 common stock after this offering.

Further, others, including regulatory agencies, 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 product candidate or product and 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 investors or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line, 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, AURN001 may be harmed, which could harm our business, operating results, prospects or financial condition.

The use of fresh donor human tissue exposes us to a number of risks in the development and manufacturing of AURN001, including obtaining sufficient supplies of donor tissue and culturing cells through multiple passages to produce sufficient yields of cells of consistent quality and potency, and any issues or challenges that compromises the quality of the cells could prevent us from completing the development or gaining acceptance for commercially viable fresh cellular products derived from fresh donor tissue.

AURN001, supplied in fresh form, involves culturing cells derived from fresh donor tissue through multiple passages. Culturing cells through multiple passages is susceptible to contamination, which can delay our clinical trials and regulatory approval or result in supply disruptions. Other challenges include scaling and optimizing the yield and ensuring consistent quality and potency. Optimizing the manufacturing process and ensuring ongoing cGMP and current Good Tissue Practice (“cGTP”) compliance for a fresh cellular product candidate are critical for the development of AURN001 and, if approved, its commercial success. Room temperature controlled storage will be required for AURN001. If we or third-party distributors do not maintain effective room temperature controlled storage, then we may experience returned or unusable product, which could lead to additional manufacturing costs and delays in our ability to supply required quantities for clinical trials or commercial sale. In addition, the cost associated with such transportation services and the potentially limited pool of vendors could cause supply disruptions.

Other potential risks include securing sufficient and viable donor tissue as the starting material, potential difficulties in recruiting patients for our trials, as well as managing a multitude of legal and regulatory restrictions on the sourcing and use of donor tissue. Because the starting material for AURN001 is donor tissue, there is no guarantee that sufficient clinical supply will be available in the quantities we require or on terms that are acceptable to us. If the supply of donor tissue decreases or if businesses that collect or process donor tissue undergo changes, our ability to develop and supply AURN001 may be impaired, which could have an adverse material effect on our business.

We are exposed to a number of risks related to our supply chain for the materials required to manufacture AURN001.

Manufacturing AURN001, supplied in fresh form, is highly complex and requires sourcing suitable donor materials and timely delivery of sufficient amounts of donor materials. Many of the risks associated with the complexity of manufacturing our final products are applicable to the manufacture and supply of the raw donor tissue and culturing cells through multiple passages. In particular, donor materials and culturing cells through multiple passages are subject to inconsistency in yields, variability in characteristics, contamination, difficulties in scaling the production process and defects. Deviations in the manufacturing process could result in supply disruptions and reduced production yields for our final product.

In addition, we rely on third parties for the supply of donor materials and its processing, exposing us to similar risks of reliance on third parties. In event of a disruption with our suppliers or contractors, there can be no assurance that we will be able to quickly establish additional or replacement sources for the donor materials. A reduction or interruption in the supply of suitable donor materials, and an inability to develop alternative sources for such supply, could adversely affect our ability to manufacture AURN001 in a timely or cost-effective manner.

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

As product candidates progress through preclinical and clinical trials towards marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way to optimize yield and manufacturing batch size, minimize costs and achieve consistent quality and results. Such changes carry the risk that they will not achieve these intended objectives. For example, we are planning to develop a cryopreserved version of AURN001, although we have only conducted our clinical studies to date with a version of AURN001 that is not cryopreserved. Additionally, Vyznova, which is approved in Japan, is a different formulation of the AURN001 product that we are currently developing in the United States and which would be the version for which we would pursue FDA approval. In response to initial manufacturing constraints we have experienced in Japan, we have made changes to attempt to improve the efficiency of the manufacturing process of AURN001, and we may make further changes in the future. Any of these changes could cause AURN001 to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. Although we have aligned with the FDA on plans for analytical comparability assays between the drug product used in our Phase 1/2 trial and planned Phase 3 trials for AURN001, our planned analytical comparability testing may not be sufficient. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of AURN001 or jeopardize our ability to commercialize AURN001, if approved, and generate revenue.

We rely or will rely on third-party manufacturers, including in some jurisdictions, a single manufacturer to produce Vyznova and AURN001. Additionally, while we have and intend to enter into long-term supply agreements with these third-party manufacturers, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control and the possibility of termination or nonrenewal of the agreement by the third party could be costly or damaging to us. In addition, we do not have long-term supply agreements in place with all of the raw material suppliers for our product and product candidate, which exposes us to potential supply chain risks that could impact our ability to produce our product and product candidate in a timely manner. If our third-party manufacturers are unable to adequately produce Vyznova or AURN001, including due to supply chain issues related to ability to secure the necessary raw materials, our supply of our product and product candidate would be

significantly impacted. While we have initiated the search for additional manufacturing sources, we may not be successful in identifying or securing terms with additional manufacturing sources. Furthermore, even if we are able to identify additional manufacturing sources, regulatory authorities could also require the facilities of any new manufacturer to pass inspection before approving the change to such new manufacturer and may also require that we run additional studies if we change the manufacturing processes of our product or product candidate. Any delays in manufacturing as a result of our usage of a limited number of manufacturers, including as a result of delays in our third-party manufacturers’ regulatory approval, could significantly impact our ability to adequate supply our product and product candidate. If we are unable to adequately manufacture supply of our product and product candidate, our business, results of operations, financial condition and prospects could be materially adversely affected.

A variety of risks associated with conducting research and clinical trials abroad and, if approved, marketing AURN001 internationally, could materially adversely affect our business.

We intend to globally develop AURN001. In addition, our enrollment timelines for AURN001 depend on initiating clinical trial sites outside of the United States. Accordingly, we expect that we will be subject to additional risks related to operating in foreign countries, including, but not limited to, the following:

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differing regulatory requirements in foreign countries;

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unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

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differing standards and privacy requirements for the conduct of clinical trials;

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increased difficulties in managing the logistics and transportation of, storing and shipping product candidates produced in the United States and shipping the product candidate to patients abroad, including any difficulties related to the product candidate’s limited shelf life;

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import and export requirements and restrictions;

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economic weakness, including inflation, or political instability in particular foreign economies and markets;

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compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

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foreign taxes, including withholding of payroll taxes;

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foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in other countries;

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difficulties staffing and managing foreign operations;

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workforce uncertainty in countries where labor unrest is more common than in the United States;

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differing payor reimbursement regimes, governmental payors or patient self-pay systems, and price controls;

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potential liability under the Foreign Corrupt Practices Act (“FCPA”) or comparable foreign regulations;

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challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect or protect intellectual property rights to the same extent as the United States;

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production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

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challenges with obtaining any local supply of drugs or agents used with AURN001, which are required by certain local clinical trial sites before conducting any study; and

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business interruptions resulting from health epidemics or pandemics, or natural or man-made disasters, including earthquakes, tsunamis, fires or other medical epidemics, or geo-political actions, including war and terrorism.

These and other risks associated with conducting research and clinical trials abroad and, if approved, marketing AURN001 internationally, may materially adversely affect our ability to attain or maintain profitable operations.

Risks Related to Regulatory Approval and Other Legal Compliance Matters

To date, we have received approval from Japan’s Minister for Vyznova to treat corneal endothelial disease, and have not applied for or received approval for AURN001 in any jurisdiction. We are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA. Foreign regulatory authorities impose similar requirements. The time required to obtain approval by the FDA, EMA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other data. The U.S. Supreme Court’s July 2024 decision to overturn prior established case law giving deference to regulatory agencies’ interpretations of ambiguous statutory language has introduced uncertainty regarding the extent to which the FDA’s regulations, policies and decisions may become subject to increasing legal challenges, delays or changes. Even if we eventually complete clinical testing and receive approval of any regulatory filing for AURN001, the FDA, EMA and other comparable foreign regulatory authorities may approve AURN001 for a more limited indication or a narrower patient population than we originally requested. We have not submitted applications for, or obtained, regulatory approval for any product candidate outside of Japan, and it is possible that our existing product candidate or any product candidates we may seek to develop in the future will never obtain regulatory approval outside of Japan. In addition, although we have obtained regulatory approval for Vyznova in Japan, we are seeking approval of a sJNDA as we seek to scale up the manufacturing process for Vyznova in Japan. When changing the manufacturing methods, manufacturing facilities or other specifications of an approved regenerative medicinal product, the marketing authorization holder of such product is required to submit a sJNDA and obtain approval of such sJNDA before marketing the product manufactured at the new facilities in accordance with the new methods or specifications. As part of its review, the PMDA will assess whether there are any concerns regarding the safety, efficacy or quality of the product, even if it is a regenerative medicine product manufactured using a modified

manufacturing method, manufacturing facility or specification, and will conduct a document-based or on-site investigation regarding whether the method to control manufacturing or the quality of the product complies with the standard required by the Ministerial Ordinance on Good Gene, Cellular, and Tissue-based Products Manufacturing Practice. There is no guarantee that regulatory authorities in Japan will approve our sJNDA, and we may be required to provide further data to support our planned change.

Further, the development or regulatory approval of AURN001 may be delayed for reasons beyond our control. For example, a U.S. federal government shutdown or budget sequestration may result in significant reductions to the FDA’s budget, employees and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of AURN001 or obtain regulatory approval for AURN001. Applications for AURN001 could fail to receive regulatory approval for many reasons, including, but not limited to, the following:

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

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the FDA, EMA or other comparable foreign regulatory authorities may determine that AURN001 is not safe or effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;

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the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;

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

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the data collected from clinical trials of AURN001 may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere;

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we may be unable to demonstrate to the FDA, EMA or other comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable and that each component in our fixed-dose combination contributes to the claimed effects;

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the FDA, EMA or other comparable foreign regulatory authorities may fail to approve the CMC processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

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the approval policies or regulations of the FDA, EMA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

In addition, even if we obtain approval of AURN001, regulatory authorities may approve AURN001 for fewer or more limited indications than we request, may impose significant limitations in the form of narrow indications, warnings, or a REMS. Regulatory authorities may not approve the price we intend to charge for products we may develop, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could seriously harm our business.

The manufacturing process for any products that we may develop is subject to the FDA or comparable foreign authority approval process, and any contractors with which we contract for manufacturing must meet all applicable FDA or comparable foreign authority requirements on an ongoing basis. If we or our CDMOs are unable to reliably produce products to specifications acceptable to the FDA or comparable foreign authority, we may not obtain or maintain the approvals we need to commercialize such products. Even if we obtain regulatory approval for AURN001 in the United States or from other regulatory authorities, there is no assurance that either we or our CDMOs will be able to manufacture the approved product in accordance with requirements from the FDA or comparable foreign authority, to produce the approved product in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, suspension of production or recalls of the product candidates or marketed products, operating restriction and criminal prosecutions, delay approval of AURN001, impair commercialization efforts, increase our cost of goods, or have an adverse effect on our business, financial condition, results of operations or growth prospects. In addition, if AURN001 obtains marketing approval, we may make changes to the manufacturing process to increase manufacturing efficiency and extend the shelf life of the product, and if these changes occur after approval, we must obtain FDA approval for such changes prior to implementation. Our future success depends on our ability to manufacture our products on a timely basis with acceptable manufacturing costs, while at the same time maintaining good quality and complying with applicable regulatory requirements. An inability to do so could have a material adverse effect on our business, financial condition and results of operations. In addition, we could incur higher manufacturing costs if manufacturing processes or standards change, and we could need to replace, modify, design or build and install equipment, all of which would require additional capital expenditures. Specifically, because AURN001 may have a higher cost of goods than conventional therapies, the risk that coverage and reimbursement rates may be inadequate for us to achieve profitability may be greater.

AURN001 is a fixed-dose combination therapy product candidate, and the FDA and comparable foreign regulatory authorities may require a demonstration that each component makes a contribution to the claimed effects in addition to demonstrating that the combination is safe and effective for the intended population.

Under the FDA’s combination rule, the FDA may not file or approve an application for a fixed-dose combination product unless each component of a proposed product is shown to make a contribution to the claimed effects and the dosage of each component (amount, frequency, duration) is safe and effective for the intended population. To satisfy these requirements, the FDA typically requires a clinical factorial study, designed to assess the effects attributable to each drug in the combination product. This is particularly true when the ingredients are directed at the same sign or symptom of the disease or condition.

The FDA has accepted a variety of approaches to satisfy the combination rule. In December 2015, the FDA proposed regulations that would allow the agency to waive the requirements of the combination rule for certain drug products under particular circumstances. The FDA has not, to date, finalized these regulations, but the FDA has stated that factorial studies may be unethical (e.g., omitting a drug known to improve survival) or impractical (there may be too many components to conduct a factorial study, meaning the trial cannot be conducted). The FDA has also stated that it may be possible to use other types of clinical and preclinical data and mechanistic information available to demonstrate the contributions of the individual active ingredients to the effect of the combination. Similar requirements

may be imposed on us by the EMA in the EU and comparable foreign regulatory authorities in other jurisdictions where we intend to seek regulatory approval.

If the FDA, the EMA or other comparable foreign regulatory authorities require us to conduct one or more clinical trials to support such a demonstration, such as a factorial study, the design, duration and scope of such clinical trials will be decided upon after further discussions with those agencies and other comparable foreign regulatory authorities. As a result, we are unable to predict with certainty the estimated timing or scope of any future clinical trials we may be required to conduct to satisfy these requirements governing fixed dose combination products in various jurisdictions.

A Breakthrough Therapy designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive FDA approval.

We have obtained Breakthrough Therapy designation from the FDA for AURN001 for treatment of corneal edema secondary to corneal endothelial dysfunction, and we may seek additional Breakthrough Therapy designations for any future product candidates where we believe the clinical data support such designation. A “Breakthrough Therapy” is defined as a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug or biologic 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 product candidates that have been designated as Breakthrough Therapies, increased interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs and biologics designated as Breakthrough Therapies also receive the same benefits associated with Fast Track designation, including eligibility for rolling review of a submitted BLA, if the relevant criteria are met.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under standard FDA review procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as Breakthrough Therapies, the FDA may later decide that the product no longer meets the conditions for qualification and rescind the designation, or otherwise decide that the time period required for FDA review or approval will not be reduced.

A Regenerative Medicines Advanced Therapy (“RMAT”) Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive FDA approval.

The FDA has granted RMAT designation for AURN001 for treatment of corneal edema secondary to corneal endothelial dysfunction, and we may seek additional RMAT designations for any future product candidates. A product candidate is eligible for RMAT designation if: (i) it meets the definition of a regenerative medicine therapy, which the FDA defines as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions, (ii) the candidate is intended to treat, modify, reverse or cure a serious disease or condition and (iii) preliminary clinical evidence indicates that the candidate has the potential to address unmet medical needs for such disease or condition. RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and eligibility for rolling review and priority review of BLAs. Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or through reliance upon data obtained from a

meaningful number of sites, including through expansion to a sufficient number of sites, as appropriate. RMAT-designated product candidates that receive accelerated approval may, as appropriate, be able to fulfill their post-approval requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real-world evidence (such as electronic health records), through the collection of larger confirmatory data sets, or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.

RMAT designation is within the sole discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for RMAT designation, the FDA may disagree and instead determine not to make such designation. RMAT designation does not change the standards for product approval, and there is no assurance that such designation or eligibility for such designation will result in expedited review or approval or that the approved indication will not be narrower than the indication covered by the RMAT designation. Additionally, RMAT designation can be revoked if the product candidate fails to meet the qualifications as clinical data continue to emerge.

Even though we may apply for orphan drug designation for our product candidates, we may not be able to obtain such designations or maintain the benefits associated with orphan drug status, including orphan drug marketing exclusivity.

Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs or biologics for relatively small patient populations as orphan drugs. 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, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States. In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding for clinical trial costs, tax advantages and user-fee waivers. In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.

We may seek Orphan Drug Designations for AURN001 or other product candidates. Even if we, or any future collaborators, obtain orphan drug designation for a product candidate, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that product candidate. Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same disease or condition. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same disease or condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care, or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity. In addition, although we may seek orphan drug designation for product candidates, we may never receive such designations. Any failure to obtain, maintain or otherwise recognize the benefits of orphan drug designation for our product candidates could have a material adverse effect on our business prospects.

AURN001 is subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of our products. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must be successfully completed in the United States and in many foreign jurisdictions before a new product can be marketed. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. We cannot provide any assurance that any product candidate we may develop will progress through required clinical testing and obtain the regulatory approvals necessary for us to begin selling such product candidates.

We are conducting our current Phase 1/2 clinical trial at sites only in the United States and Canada. We have not conducted, managed or completed large-scale or pivotal clinical trials nor managed the regulatory approval process with the FDA or any other regulatory authority. The time required to obtain approvals from the FDA and other regulatory authorities is unpredictable, and requires successful completion of extensive clinical trials which typically takes many years, depending upon the type, complexity and novelty of the product candidate. The standards that the FDA and its foreign counterparts use when evaluating clinical trial data can and often change during product development, which makes it difficult to predict with any certainty how the standards will be applied. We may also encounter unexpected delays or increased costs due to new government regulations, including future legislation or administrative action, or changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.

Any delay or failure in seeking or obtaining required approvals would have a material and adverse effect on our ability to generate revenue from the particular product candidate for which we are developing and seeking approval. Furthermore, any regulatory approval to market a product may be subject to significant limitations on the approved uses or indications for which we may market the product or the labeling or other restrictions. In addition, the FDA has the authority to require a REMS as part of approving a BLA, or after approval of such submission, which may impose further requirements or restrictions on the distribution or use of an approved product. These requirements or restrictions might include limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry. These limitations and restrictions may significantly limit the size of the market for the product and affect reimbursement by third-party payors. We are also subject to numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. The foreign regulatory approval process varies among countries, and generally includes all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. Moreover, the time required to obtain approval may differ from that required to obtain FDA approval.

The FDA, EMA and other comparable foreign regulatory authorities may not accept clinical data from trials conducted in locations outside of their jurisdiction.

Other than our ongoing CLARA Phase 1/2 trial, we have conducted all of our previous clinical trials in Japan and El Salvador. Currently we plan to conduct clinical trials outside the United States, including in Europe, and we may conduct trials in other international jurisdictions in the future. The acceptance of study data by the FDA, EMA or other comparable foreign regulatory authority from clinical trials conducted outside of their respective jurisdictions may be subject to certain conditions. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice, (ii) the trials are performed by clinical investigators of recognized competence and pursuant to GCP requirements;

and (iii) the FDA is able to validate the data through an on-site inspection or other appropriate means. Additionally, the FDA’s clinical trial requirements, including the adequacy of the patient population studied and statistical powering, must be met. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA, EMA or any applicable foreign regulatory authority will accept data from trials conducted outside of its applicable jurisdiction. If the FDA, EMA or any applicable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in AURN001 not receiving approval for commercialization in the applicable jurisdiction.

Obtaining and maintaining regulatory approval of Vyznova in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of AURN001 in other jurisdictions.

Obtaining and maintaining regulatory approval of Vyznova in Japan does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. For example, although Japan’s Minister has granted marketing approval for our first-generation cell therapy product, Vyznova, the FDA, EMA and other comparable regulatory authorities in foreign jurisdictions have yet to approve the manufacturing, marketing and promotion and reimbursement of AURN001 in those countries, and may never provide such approval. A failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Obtaining foreign regulatory approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we or any future collaborator fail to comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of AURN001 will be harmed.

Even if AURN001 receives regulatory approval, it will be subject to significant post-marketing regulatory requirements and oversight.

Any regulatory approvals that we may receive for AURN001 will require the submission of reports to regulatory authorities and surveillance to monitor its safety and efficacy, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements. For example, the FDA may require a REMS in order to approve AURN001, which could entail requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or additional foreign regulatory authorities approve AURN001, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for AURN001 will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, product track and tracing, as well as ongoing compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval and adherence to commitments made in any BLA or marketing authorization application.

Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. Furthermore, under the Drug Supply Chain Security Act, for certain commercial prescription drug

products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States. In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug Marketing Act (“PDMA”), which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. Prescription drug products must also meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. If we are not able to comply with post-approval regulatory requirements, we could have the marketing approvals for any approved products withdrawn by regulatory authorities and our ability to market such products could be limited, which could adversely affect our ability to achieve or sustain profitability and we could be subject to substantial penalties. As a result, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

In addition, failure to comply with FDA, EMA and other comparable foreign regulatory requirements may subject our company to administrative or judicially imposed sanctions, including:

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delays in or the rejection of product approvals;

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restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials;

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restrictions on the products, manufacturers or manufacturing process;

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warning or untitled letters;

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civil and criminal penalties;

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injunctions;

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suspension or withdrawal of regulatory approvals;

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product seizures, detentions or import bans;

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voluntary or mandatory product recalls and publicity requirements;

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total or partial suspension of production; and

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imposition of restrictions on operations, including costly new manufacturing requirements.

The occurrence of any event or penalty described above may inhibit our ability to commercialize AURN001 and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

The FDA and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of AURN001.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability. We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. For example, certain policies in the United States may impact our business and industry, including executive actions and the issuance of Executive Orders that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities, such as implementing statutes through rulemaking, issuance of guidance and review and approval of marketing applications. It is difficult to predict how these executive actions, including Executive Orders, will be implemented, and the extent to which they may impact the FDA’s ability to exercise its regulatory authority. If these executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off‑label uses.

If AURN001 is approved and we are found to have improperly promoted off-label uses of the product, we may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as AURN001, if approved in such jurisdiction. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of AURN001, if and where approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

We may attempt to secure approval from the FDA or comparable foreign regulatory authorities through the use of accelerated approval pathways. If we are unable to obtain such approval, we may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals. Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.

We may seek accelerated approval for AURN001. Under the accelerated approval program, the FDA may grant accelerated approval to a 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. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new product over

available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product’s clinical benefit. If such post-approval studies fail to confirm the product’s clinical benefit, the FDA may withdraw its approval of the product.

Prior to seeking accelerated approval for AURN001, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit a BLA for accelerated approval or any other form of expedited development, review or approval. Similarly, there can be no assurance that after subsequent FDA feedback we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval, even if we initially decide to do so. Furthermore, if we decide to submit an application for accelerated approval for AURN001, there can be no assurance that such submission or application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for AURN001 would result in a longer time period to commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

We may face difficulties from changes to current regulations and future legislation.

Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of AURN001. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and continues to significantly impact the U.S. pharmaceutical industry. In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers, effective April 1, 2013, which, due to subsequent legislative amendments, will stay in effect through 2032 unless additional congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our products, if approved, and accordingly, our financial operations.

Moreover, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products. For example, the American Rescue Plan Act of 2021 provided that, effective January 1, 2024, Medicaid statutory rebates will no longer be capped at 100% of average manufacturer price. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business. In August 2022, Congress passed the Inflation Reduction Act of 2022 (“IRA”), which includes prescription drug provisions that have significant

implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes. The IRA permits the Department of Health and Human Services (“HHS”) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions will take effect progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. The impact of these judicial challenges as well as future legislative, executive and administrative actions and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear. The implementation of cost containment measures, including the prescription drug provisions under the IRA, as well as other healthcare reforms, may prevent us from being able to generate revenue, attain profitability, or commercialize AURN001, if approved. Complying with any new legislation and regulatory changes could be time-intensive and expensive, resulting in a material adverse effect on our business. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. These and any further changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect on our business, financial condition and results of operations.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of AURN001, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-approval testing and other requirements. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or in other jurisdictions. If we or our collaborators are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or our collaborators are not able to maintain regulatory compliance, AURN001 may lose any marketing approval that it has obtained or that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

Our relationships with healthcare professionals, clinical investigators, CROs and third-party payors in connection with our current and future business activities may be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws and government price reporting, which could expose us to, among other things, criminal sanctions, civil penalties, contractual damages, exclusion from governmental healthcare programs, reputational harm, administrative burdens and diminished profits and future earnings.

Healthcare providers and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we may obtain marketing approval. Our current and future arrangements with healthcare providers, third-party payors, customers and others may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which we research, as well as, sell, market and distribute any products for which we may obtain marketing approval. The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to:

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the federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription drug or medical device manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

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the federal false claims laws, including the False Claims Act (“FCA”), that can be enforced by private citizens through civil whistleblower or qui tam actions, and civil monetary penalties laws prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, or impose exclusions from federal health care programs or penalties for parties who engage in such prohibited conduct. Moreover, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA;

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the Federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

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the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to Centers for Medicare & Medicaid Services (“CMS”) information regarding certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including

private insurers, state laws that require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and require the registration of their sales representatives, state laws that require biotechnology companies to report information on the pricing of certain drug products and state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Pricing and rebate programs must also comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the ACA. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. Manufacturing, sales, promotion and other activities also are potentially subject to federal and state consumer protection and unfair competition laws. In addition, the distribution of pharmaceutical and/or medical device products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical or medical device products. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act as well as other applicable consumer safety requirements.

Some state laws require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. Some state laws require biotechnology companies to report information on the pricing of certain drug products.

Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve on-going substantial costs. It is possible that governmental authorities will conclude that our business practices including certain advisory agreements we have entered into with physicians who are paid, in part, in the form of stock or stock options may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations. Defending against any such actions can be costly, time consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate

the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of hazardous and flammable materials, including chemicals and biological materials. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing.

Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity. Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted, delayed or become more expensive.

Risks Related to Our Reliance on Third Parties

We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct our CMC, research and development and certain aspects of our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize AURN001 and our business could be substantially harmed.

We have relied upon and plan to continue to rely upon third parties, including independent clinical investigators and third-party CROs, to conduct our CMC, research and development and certain aspects of our preclinical studies and clinical trials, and to monitor and manage data for our ongoing preclinical and clinical programs. As such, we control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on these third parties does not relieve us of our regulatory responsibilities. We and our third-party contractors and CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for all of our products candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties or our CROs fail to comply with applicable GCPs, our clinical trials could experience clinical holds or suspensions and the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with drug product produced under cGMP and cGTP regulations. Our failure to comply with these regulations may result in clinical holds or suspensions or require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be adversely affected if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

In addition, we may rely in part on preclinical, clinical and quality data generated by CROs and other third parties for regulatory submissions for AURN001. While we have or will have agreements governing these third parties’ services, we have limited influence over such third parties’ actual performance. If these third parties do not make data available to us, or, if applicable, make regulatory submissions in a timely manner, in each case pursuant to our agreements with them, our development programs may be significantly delayed, and we may need to conduct additional studies or collect additional data independently. In either case, our development costs would increase.

Further, these investigators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to AURN001 and clinical trials. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance on our behalf. If independent investigators or CROs fail to devote sufficient resources to the development of AURN001, or if CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize AURN001. As a result, our results of operations and the commercial prospects for AURN001 would be harmed, our costs could increase and our ability to generate revenues could be delayed or precluded entirely.

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

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

We contract with third parties for the manufacture of AURN001 for our ongoing clinical trial, and expect to continue to do so for additional clinical trials and ultimately for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of AURN001 or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not currently have the infrastructure or internal capability to manufacture supplies of AURN001 for use in development and commercialization. We rely, and expect to continue to rely, on third-party manufacturers for the production of AURN001 for preclinical studies and clinical trials under the guidance of members of our organization. We do not have long-term supply agreements. If we were to experience an unexpected loss of supply of AURN001 for any reason, whether as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials.

We expect to continue to rely on third-party manufacturers for the commercial supply of AURN001 if we obtain marketing approval. We may be unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks to which we would not be subject if we manufactured the product candidate ourselves, including:

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potential inability to negotiate manufacturing and quality agreements with third parties under commercially reasonable terms;

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reduced day-to-day control over the manufacturing process for AURN001 as a result of using third-party manufacturers for all aspects of manufacturing activities;

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potential misappropriation of and reduced control over the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure;

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termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that may be costly or damaging to us or result in delays in the development or commercialization of AURN001;

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the failure of the third party to manufacture AURN001 according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over AURN001 or otherwise do not satisfactorily perform according to the terms of the agreements between us and them

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clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and

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the failure of the third party to manufacture AURN001 according to our specifications;

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the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms;

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the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;

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disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;

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international or multi-national activities that are related to business activities outside of our scope, but may have an impact on a CDMO's ability to conduct business in a manner consistent with governmental or our regulatory and ethical standards; and

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our ability to synchronize operations and standards to ensure that all aspects of manufacturing are consistent without deviations across facilities.

Should we continue to use CDMOs, we may not succeed in maintaining our relationships with our current CDMOs or establishing relationships with additional or alternative CDMOs. AURN001 may compete with other products and product candidates for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP and cGTP regulations and that are both capable of manufacturing for us and willing to do so. If our CDMOs should cease manufacturing for us, we would experience delays in obtaining sufficient quantities of AURN001 for clinical trials and, if

approved, commercial supply. Further, our CDMOs may breach, terminate, or not renew these agreements. If we were to need to find alternative manufacturing facilities it would significantly impact our ability to develop, obtain regulatory approval for or market AURN001, if approved. The commercial terms of any new arrangement could be less favorable than our existing arrangements and the expenses relating to the transfer of necessary technology and processes could be significant. Additionally, we currently rely on a single CDMO to produce AURN001 in the United States which creates additional risks that we may lose access to an adequate supply of AURN001, see the section titled “—Risks Related to Our Business and Industry and the Development of Our Product Candidate—We currently depend, and expect to continue to be dependent, on a limited number of manufacturers for the supply of Vyznova and AURN001 and any delay in manufacturing or termination of our supplier agreements would hurt our business.”

Moreover, if we are unable to manufacture or contract for a sufficient supply of AURN001 on acceptable terms, or if we encounter delays or difficulties in the scale-up of our manufacturing processes or our relationships with manufacturers, our preclinical and human clinical testing schedule would be delayed. For example, we may encounter CMC challenges in connection with the scale-up of our manufacturing processes. This in turn would delay the submission of product candidates for regulatory approval and thereby delay the market introduction and subsequent sales of any products that receive regulatory approval, which would have a material adverse effect on our business, financial condition and results of operations. As part of our development efforts to date, the CDMO we are working with in the United States has experienced delays in the manufacturing process for AURN001, and we may not be able to avoid or mitigate similar delays in the future. In addition, if AURN001 is approved for sale, our inability to manufacture or contract for a sufficient supply of such product on acceptable terms would have a material adverse effect on our business, financial condition and results of operations.

In addition, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA, EMA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of AURN001 or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain marketing approval for or market AURN001, if approved.

Even to the extent we use and continue to use CDMOs, we are ultimately responsible for the manufacture of our products and product candidates. A failure to comply with these requirements may result in regulatory enforcement actions against our manufacturers or us, including fines and civil and criminal penalties, which could result in imprisonment, suspension or restrictions of production, injunctions, delay or denial of product approval or supplements to approved products, clinical holds or termination of clinical trials, warning or untitled letters, regulatory authority communications warning the public about safety issues with the biologic, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the FCA, corporate integrity agreements, consent decrees, or withdrawal of product approval.

Our current and anticipated future dependence upon others for the manufacture of AURN001 or drugs may adversely affect our future profit margins and our ability to commercialize AURN001 in jurisdictions in which it may receive marketing approval on a timely and competitive basis.

The manufacture of AURN001 is complex and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of AURN001 for clinical trials or our products for patients, if approved, could be delayed or prevented.

Manufacturing drugs, especially in large quantities, is complex and may require the use of innovative technologies. Given that AURN001 consists of a combination of a biologic and small molecule drug, the required manufacturing processing steps could be more complex than those required by products that are solely either a small molecule drug or biologic. Each lot of an approved drug product

must undergo thorough testing for identity, strength, quality, purity, efficacy and stability. Manufacturing drugs requires facilities specifically designed for and validated for this purpose, and sophisticated quality assurance and quality control procedures are necessary. Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result in lot failures, product recalls, spoilage and complications related to the product candidate’s limited shelf life. When changes are made to the manufacturing process, we may be required to provide preclinical and clinical data showing the comparable identity, strength, quality, purity or efficacy of the products before and after such changes. If microbial, viral or other contaminations are discovered at the facilities of our manufacturer, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely harm our business. The use of biologically derived ingredients can also lead to allegations of harm, including infections or allergic reactions, or closure of product facilities due to possible contamination. If our manufacturers are unable to produce sufficient quantities for clinical trials or for commercialization as a result of these challenges, or otherwise, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all.

We rely on our contract manufacturers to process fresh donor tissue obtained from third-party suppliers to produce AURN001 for our preclinical and clinical studies and intend to continue to rely on these third parties for any clinical trials that we undertake and for our commercial supply if FDA approval is obtained. There are a limited number of suppliers for the donor materials that we use to manufacture AURN001 and there may be a need to assess alternate suppliers and contract manufacturers to prevent a possible disruption in the production of AURN001 for our clinical trials and, if approved, ultimately for commercial sale. We do not have any control over the process or timing of the acquisition of donor materials. We cannot be sure that our current suppliers will remain in business, or that they will continue to provide manufacturing services to us. In addition, the lead time needed to establish a relationship with a new supplier or manufacturer can be lengthy, and we may experience delays in meeting demand in the event a new supplier or manufacturer must be used. The time and effort to qualify a new supplier or manufacturer could result in additional costs, diversion of resources, delay in regulatory approval, or reduced manufacturing yields, any of which would negatively impact our operating results. If we or our manufacturers are unable to obtain sufficient donor materials or to produce sufficient quantities of AURN001, or there is a shortage in supply, our clinical trials or, if regulatory approval has been obtained, the commercial launch, of AURN001 may be delayed. For example, in Japan, our contract manufacturer has encountered difficulties in manufacturing Vyznova, which has limited the volume of product that we have been able to produce for patient use. See the section titled “—Risks Related to Our Business and Industry and the Development of Our Product Candidate—The use of fresh donor human tissue exposes us to a number of risks in the development and manufacturing of AURN001, including obtaining sufficient supplies of donor tissue and culturing cells through multiple passages to produce sufficient yields of cells of consistent quality and potency, and any issues or challenges that compromises the quality of the cells could prevent us from completing the development or gaining acceptance for commercially viable fresh cellular products derived from fresh donor tissue.”

Our first-generation cell therapy product, Vyznova, and our product candidate, AURN001, are temperature sensitive and may have other attributes that lead to limited shelf life. These attributes may pose risks to supply, inventory and waste management and increased cost of goods.

Our first-generation cell therapy product, Vyznova, and our product candidate, AURN001, are temperature sensitive, and we may learn that Vyznova, AURN001 or any future product candidates are less stable than desired. It is also possible that we may find that transportation conditions negatively impact product quality. Although we have made changes to AURN001 to try to address manufacturing challenges we have observed with Vyznova in Japan, both AURN001 and Vyznova have short shelf lives, and both require a lengthy manufacturing process, which has constrained and may continue to constrain our ability to meet the anticipated patient need. These challenges may require us to make further changes to the formulation or manufacturing process for Vyznova, AURN001 or any future product candidates and result in delays or interruptions to clinical or commercial supply. We are currently pursuing development of a cryopreserved version of AURN001 to extend the shelf life of AURN001, but we may not be successful in sufficiently extending shelf life to facilitate adoption of the product by healthcare providers (if approved), and regulatory authorities may not ultimately approve the manufacturing changes we are making to AURN001. In addition, the cost associated with the transportation services and the limited pool of vendors that will be required for both Vyznova and AURN001 may also add additional risks of supply disruptions.

We have established a number of analytical testing strategies, and may have to establish several more, to assess the quality of Vyznova, AURN001 or any future product candidates. We may identify gaps in our analyses that might prevent release of product or could require product withdrawal or recall. For example, new or existing impurities that have an impact on product safety, efficacy, or stability may be discovered. This may lead to an inability to release or use AURN001 or any future product candidates until the manufacturing or testing process is rectified or specifications are changed. This could potentially result in delays to the delivery of Vyznova, AURN001 or any future product candidates.

Risks Related to Our Intellectual Property

We depend on intellectual property rights licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

Our ability to develop and commercialize AURN001 is dependent on our ability to obtain, maintain and enforce issued patents, trademarks, know-how and other intellectual property and proprietary technology in the United States and other countries for AURN001 and its uses, as well as our ability to operate without infringing, misappropriating, or otherwise violating the proprietary rights of others. For example, on April 26, 2024, we entered into an Amended and Restated License Agreement with Kyoto Prefectural University of Medicine (“KPUM” and such license, the “KPUM License Agreement”), in which KPUM granted to us a worldwide, exclusive, sublicensable royalty-bearing license to three patent families relating to compositions of matter, methods of making and methods of using human corneal endothelial cells (“CECs”) in the manufacture and use of AURN001. In addition, on April 26, 2024, we entered into an Amended and Restated License Agreement with Professor Shigeru Kinoshita (the “Kinoshita License Agreement”), in which we were granted a worldwide, exclusive, sublicensable royalty-bearing license to Dr. Kinoshita’s rights in a patent family directed to the use of rho kinase (“ROCK”) inhibitors in the manufacture of AURN001 and treatment of corneal endothelial dysfunction. Although Professor Kinoshita granted exclusive rights to us under the Kinoshita License Agreement, the in-licensed patent family is co-owned with Senju Pharmaceutical Co., Ltd. (“Senju”), and the co-owner has licensed its rights in the patent family to ActualEyes, Inc. (“ActualEyes”). As a result, we cannot use this patent family to prevent ActualEyes from developing and commercializing a product covered by this patent family. Furthermore, enforcement of the patent rights in this family against another third party may require the cooperation of the co-owner and ActualEyes, and failure to obtain such cooperation may result in our lacking standing to enforce the patent rights against such third party.

The KPUM License Agreement and the Kinoshita License Agreement (collectively, the “A&R License Agreements”) impose numerous obligations, such as diligence and payment obligations. Termination of one or both of these licenses could result in the loss of significant rights and could harm our ability to develop and, if approved, commercialize AURN001, because we would no longer have a license to do so. Furthermore, the A&R License Agreements do, and future license agreements may, include provisions that impose obligations and restrictions on us. This could delay or otherwise negatively impact a transaction that we may wish to enter into. These events could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

Disputes may also arise between us and our current and future licensors regarding intellectual property subject to a license agreement, including disputes concerning:

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the scope of rights granted under the license agreement and other interpretation-related issues;

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whether and the extent to which our technology and processes infringe, misappropriate or otherwise violate intellectual property of the licensor that is not subject to the licensing agreement;

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our right to sublicense patents and other rights to third parties under collaborative development relationships;

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our right to transfer or assign the license;

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our financial or other obligations under the license agreement;

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the priority of invention of patented technology;

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our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our current and future product candidates, and what activities satisfy those diligence obligations; and

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the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our current or future licensors and us and our partners.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and, if approved, commercialize AURN001 or future product candidates.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license, as we are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize any products could suffer.

If we fail to comply with our obligations in the agreements under which we in-license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our current and future licensors, we could lose license rights that are important to our business.

We are heavily reliant upon the rights granted to us under the A&R License Agreements in which we have been granted an exclusive, royalty-bearing license to certain patent rights that are important or necessary to the development of our proprietary technology and AURN001. Termination of one or more of the A&R License Agreements or reduction or elimination of our licensed rights could lead to the loss of our ability to develop and commercialize AURN001. Further development of AURN001 may require us to

enter into additional license or collaboration agreements and we may consider similar or other types of business arrangements in the future, including strategic partnerships, in-licensing of future product candidates, strategic collaborations, joint ventures, restructurings, divestitures, acquisitions of companies, asset purchases, business combinations and investments. Our future licenses may not provide us with exclusive rights to use the licensed intellectual property and technology, or may not provide us with exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or, if approved, commercialize AURN001 and proprietary technology in the future. Additionally, the A&R License Agreements impose, and future agreements may impose, various development, diligence, commercialization and other obligations on us and require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products, in order to maintain the licenses.

In addition, the agreements under which we in-license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that we have licensed, or license in the future, prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize AURN001 or future product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Despite our best efforts, our current or future licensors might conclude that we materially breached our license agreements and might therefore terminate the license agreements, thereby removing our ability to develop and commercialize products, if approved, and technology covered by these license agreements. As a result, we may be required to cease our development and commercialization of AURN001 or future product candidates and use of our proprietary technologies covered by the patent rights owned by the licensors. Furthermore, if the in-licensed patent rights fail to provide us the intended exclusivity, competitors will have the freedom to seek regulatory approval of, and to market, products identical to ours. These events could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

In addition, the United States federal government retains certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act (the “Bayh-Dole Act”). The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. If, in the future, we own or in-license technology critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

Our intellectual property licenses with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

We currently depend, and will continue to depend, on our license agreements, including the A&R License Agreements related to AURN001. The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant

agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If any of our licenses or material relationships or any in-licenses upon which our licenses are based are terminated or breached, we may:

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lose our rights to develop and market our products;

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lose patent protection for our products;

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experience significant delays in the development or commercialization of our products;

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not be able to obtain any other licenses on acceptable terms, if at all; or

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incur liability for damages.

These risks apply to any agreements that we may enter into in the future for AURN001 or for any future product candidates. If we experience any of the foregoing, it could have a material adverse effect on our business, financial condition, results or operations and prospects.

Our commercial success depends on our ability to obtain, maintain, enforce and otherwise protect our intellectual property and proprietary technology, and if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products and product candidates similar to AURN001 and our ability to successfully develop and commercialize AURN001 may be adversely affected.

Our commercial success depends, in large part, on our ability to obtain and maintain intellectual property rights protection through issued patents and trademarks, trade secrets and other intellectual property rights and proprietary technology in the United States and other countries with respect to our technology and product candidate. If we do not adequately protect our intellectual property rights, competitors or other third parties may be able to erode, negate or preempt any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our proprietary position, we file patent applications in the United States and abroad covering improved processes for making AURN001 and expect to file patent applications covering future product candidates that are important to our business; we may in the future also license or purchase patent rights or patent applications filed by others. If we are unable to secure or maintain patent protection with respect to any proprietary products and technology we develop, our business, financial condition, results of operations and prospects could be materially harmed.

The patent application process is expensive, time-consuming and complex. We may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. Our owned patent portfolio is generally at a very early stage. In particular, we do not currently own any issued patents relating to AURN001.

We may be unable to obtain patents on certain inventions if those inventions are publicly disclosed prior to our filing a patent application covering them. We enter into standard nondisclosure and confidentiality agreements with parties who have access to our confidential information, including confidential information regarding inventions not yet disclosed in patent applications. We cannot guarantee that any of these parties will not breach these nondisclosure and confidentiality agreements and publicly disclose any of our inventions before a patent application is filed covering such inventions. If such confidential information is publicly disclosed, we may not be able to successfully patent it and consequently, we may not be able to prevent third parties from using such inventions.

Composition of matter patents for pharmaceutical and biological product candidates can provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. We cannot be certain that the claims in our or our licensors’ pending patent applications directed to AURN001 or its manufacture or use will be considered patentable by the United States Patent and Trademark Office (“USPTO”), or by patent offices in foreign countries, or that the claims in any of the issued patents we may own or license will be considered valid and enforceable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe such products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

If the scope of the patent protection we or our potential licensors obtain is not sufficiently broad, we may be unable to prevent others from developing and commercializing technology and products similar or identical to ours. The degree of patent protection we require to successfully compete in the marketplace may be unavailable or severely limited in some cases and may not adequately protect our rights or permit us to gain or keep any competitive advantage. We cannot provide any assurances that any of our in-licensed patents have, or that any of our owned or in-licensed pending patent applications that mature into issued patents will include claims with a scope sufficient to protect AURN001 or otherwise provide any competitive advantage. Other parties have developed or may develop technologies that may be related or competitive with our approach, and may have filed or may file patent applications and may have been issued or may be issued patents with claims that overlap or conflict with our patent portfolio, either by claiming the same compounds, formulations or methods or by claiming subject matter that could dominate our patent position. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Furthermore, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally twenty years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing and regulatory review of a product candidate, patents protecting a product candidate might expire before or shortly after a product candidate is commercialized. As a result, our patent portfolio may not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing products similar or identical to ours.

Even if they are unchallenged, our in-licensed patents and owned and in-licensed pending patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around our patent claims to circumvent our patent portfolio by developing a similar or alternative product candidate in a non-infringing manner. For example, a third party may develop a product candidate that provides benefits similar to AURN001 but falls outside the scope of our patent protection or license rights. If the patent protection provided by the patent and patent applications we hold or pursue with respect to such product candidate is not sufficiently broad to impede such competition, our ability to successfully commercialize AURN001 could be negatively affected, which would harm our business.

We, or any future partners, collaborators, licensors or licensees, may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, we may miss potential opportunities to strengthen our patent position.

It is possible that defects of form in the preparation or filing of our patent portfolio may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope or requests for patent term adjustments. If we or our partners, collaborators, licensors or licensees whether current or future, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our partners, collaborators, licensors or licensees are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent

rights, such patent rights could be compromised. If there are material defects in the form, preparation, prosecution or enforcement of our patent portfolio, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents. Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned or licensed patents and patent applications. We rely on our outside counsel or our licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can, in many cases, be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliant events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

The patent position of biotechnology and pharmaceutical companies carries uncertainty. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are characterized by uncertainty.

Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Assuming the other requirements for patentability are met, currently, the first to file a patent application is generally entitled to the patent. However, prior to March 16, 2013, in the United States, the first to invent was entitled to the patent. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our patent portfolio, or that we or our licensors were the first to file for patent protection of such inventions. If third parties have filed prior patent applications on inventions claimed in our patent portfolio that were filed on or before March 15, 2013, an interference proceeding in the United States can be initiated by such third parties to determine who was the first to invent any of the subject matter covered by our patent portfolio. If third parties have filed such prior applications after March 15, 2013, a derivation proceeding in the United States can be initiated by such third parties to determine whether our invention was derived from theirs.

Moreover, because the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, any patents we may own or license may be challenged in the courts or patent offices in the United States and abroad. There is no assurance that all the potentially relevant prior art relating to our patent portfolio has been found. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in our patent portfolio, or that we or our licensors were the first to file for patent protection of such inventions. If such prior art exists, it may be used to invalidate a patent, or may prevent a patent from issuing from a pending patent application. For example, such patent filings may be subject to a third-party submission of prior art to the USPTO, or to other patent offices around the world. Alternately or additionally, we may become involved in post-grant review procedures, oppositions, derivation proceedings, ex parte reexaminations, inter partes review, supplemental examinations, or interference proceedings or challenges before the USPTO or in district court in the United States, or similar proceedings in various foreign jurisdictions, including both national and regional, challenging patents or patent applications in which we have rights, including patents on which we rely to protect our business. For example, a European patent licensed to us under the KPUM License Agreement is currently being opposed in an opposition proceeding at the European Patent Office (“EPO”). We cannot be certain that this patent will not be revoked in its entirety or claims that survive the opposition will confer adequate protection to cover the manufacture of AURN001.

An adverse determination in any such challenges may result in loss of the patent or claims in the patent portfolio being narrowed, invalidated or held unenforceable, in whole or in part, or in denial of the patent application or loss or reduction in the scope of one or more claims of the patent portfolio, any of which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.

Our or our licensors’ pending and future patent applications may not result in patents being issued that protect our business, in whole or in part, or which effectively prevent others from commercializing competitive products. For example, our or our licensors’ pending and future provisional applications may never result in issued patents. A provisional patent application is not eligible to become an issued patent until, among other things, we or our licensors file a non-provisional patent application within 12 months of filing the related provisional patent application. If we or our licensors do not timely file non-provisional patent applications, we or our licensors may lose the priority dates with respect to such provisional patent applications and any patent protection on the inventions disclosed in such provisional patent applications. While we intend to timely file non-provisional patent applications relating to our current and future provisional patent applications, we cannot predict whether any of our or our licensors’ patent applications for our technology and product candidate will result in the issuance of patents that effectively protect our technology and AURN001. Further, competitors may be able to design around our patents. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries also may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our rights to the same extent or in the same manner as the laws of the United States. For example, patent laws in various jurisdictions, including jurisdictions covering significant commercial markets, such as at the EPO, China and Japan, restrict the patentability of methods of treatment of the human body more than United States law does. Such restrictions on scope and/or patentability could limit our patent protection, which could have a material adverse effect on our ability to generate revenue.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partners will be successful in protecting AURN001 by obtaining, enforcing and defending our patent rights. These risks and uncertainties include the following:

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the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance, whether intentional or not, can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case;

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patent applications may not result in any patents being issued;

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company-owned or in-licensed patents that have been issued or may be issued in the future may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;

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our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell AURN001, if approved;

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there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns;

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countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products; and

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countries other than the U.S. may, under certain circumstances, force us to grant a license under our patents to a competitor, thus allowing the competitor to compete with us in that jurisdiction or forcing us to lower the price of our drug in that jurisdiction.

Issued patents that we may own or in-license may not provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may also seek approval to market their own products similar to or otherwise competitive with our products. In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid and/or unenforceable, or that our competitors do not infringe our patents. Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

We maintain certain information as company trade secrets. This information may relate to inventions that are not patentable or not optimally protected with patents. We use commercially acceptable practices to protect this information, including, for example, limiting access to the information and requiring passwords for our computers. Additionally, we require and execute, as applicable, standard confidentiality agreements and invention assignment agreements with any third parties to whom we may provide access to the information and with our employees, consultants, scientific advisors, collaborators, vendors, contractors and advisors. We cannot provide any assurances that all such agreements have been duly executed, and third parties may still obtain this information or may come upon this or similar information independently. It is possible that technology relevant to our business will be independently developed by a person who is not a party to such a confidentiality or invention assignment agreement. If any of our trade secrets were to be independently developed by a competitor or other third party, we would have no right to prevent such competitor or third party, or those to whom they communicate such independently developed information, from using that information to compete with us. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by contract manufacturers, consultants, collaborators, vendors, advisors, former employees and current employees. Monitoring unauthorized uses and disclosures is difficult and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. Furthermore, if the parties to our confidentiality agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a consequence of such breaches or violations. Our trade secrets could otherwise become known or be independently discovered by our competitors. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating our trade secrets. If any of these events occurs or if we otherwise lose protection for our trade secrets, our business, financial condition, results of operation and prospects may be materially and adversely harmed.

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

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. The patent term of a U.S. patent may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent, or may be shortened if a patent is terminally disclaimed over another patent having an earlier expiration date. We may also be required to disclaim a portion of a patent term in order to overcome double patenting rejections from the patent office, thus potentially shortening our exclusivity period.

Given the amount of time required for the development, testing and regulatory review of a product candidate, patents protecting a product candidate might expire before or shortly after a product candidate is commercialized. As a result, our patent portfolio may not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing products similar or identical to ours. For example, our patent applications and patents in-licensed under the Kinoshita License Agreement will expire in 2028, which may be before or shortly after our U.S. regulatory approval for commercial sales, which has not yet occurred. In some countries, this expiration date may be extended by patent term extension.

Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing and regulatory review of product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized.

In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension (“PTE”), of up to five years beyond the normal expiration of the patent to compensate patent owners for loss of enforceable patent term due to the lengthy regulatory approval process. A PTE grant cannot extend the remaining term of a patent beyond a total of 14 years from the date of the product approval. Further, a PTE may only be applied once per product, and only with respect to an approved indication—in other words, only one patent (for example, covering the product itself, an approved use of said product, or a method of manufacturing said product) can receive a PTE. Moreover, the scope of protection during the period of the PTE does not extend to the full scope of the claim, but instead only to the scope of the product as approved.

The granting of such patent term extensions is not guaranteed and is subject to numerous requirements. We might not be granted an extension because of, for example, failure to apply within applicable periods, failure to apply prior to the expiration of relevant patents, failure to exercise due diligence during the testing phase or regulatory review process or any other failure to satisfy any of the numerous applicable requirements. Moreover, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our in-licensed patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to obtain approval of competing products following our patent expiration by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case. If this were to occur, it could have a material adverse effect on our ability to generate revenue.

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection for AURN001 and future product candidates, as well as on successfully defending these patents against potential third-party challenges. Our ability to protect AURN001 from unauthorized making, using, selling, offering to sell or importing by third parties is dependent on the extent to which we have rights under valid and enforceable patents that cover these activities.

The patent positions of pharmaceutical, biotechnology and other life sciences companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved and have in recent years been the subject of much litigation. Changes in either the patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Over the past decade, U.S. federal courts have increasingly invalidated pharmaceutical and biotechnology patents during litigation often based on changing interpretations of patent law. Further, the determination that a patent application or patent claim meets all the requirements for patentability is a subjective determination based on the application of law and jurisprudence. The ultimate determination by the USPTO or by a court or other trier of fact in the United States, or corresponding foreign national patent offices or courts, on whether a claim meets all requirements of

patentability cannot be assured. We cannot be certain that all third-party publications, patents and other information relevant to the patentability of our patents and applications has been identified. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our own patent portfolio.

Although we in-license patents and pending patent applications relating to AURN001 and we own two pending provisional patent applications relating to certain improvements of AURN001 and its manufacture, we cannot provide assurances that any of our patent applications will be found to be patentable, including over our own prior art publications or patent literature, or will issue as patents. Neither can we make assurances as to the scope of any claims that may issue from our pending and future patent applications nor to the outcome of any proceedings by any potential third parties that could challenge the patentability, validity or enforceability of our owned and in-licensed patent portfolio in the United States or foreign jurisdictions. Any such challenge, if successful, could limit patent protection for AURN001 or materially harm our business.

In addition to challenges during litigation, third parties can challenge the validity of our patents in the United States using post-grant review and inter partes review proceedings or opposition proceedings in Europe or other jurisdictions and our patents may be found to be invalid or unenforceable. For example, one of the Japanese patents licensed to us under the KPUM License Agreement was opposed and maintained as originally granted. In addition, a European patent in the same patent family directed to a cultured corneal endothelial cell is currently subject to an opposition proceeding at the EPO. There is a risk that the opponent may invalidate one or more of the granted claims or require an amendment of the claims in a way that may prevent us from asserting this patent against a party marketing a potentially competitive product that would have infringed the patent as originally granted. In the United States, for a patent filed March 16, 2013 or later, a petition for post-grant review can be filed by a third party in a nine-month window from issuance of the patent. A petition for inter partes review can be filed immediately following the issuance of a patent if the patent has an effective filing date prior to March 16, 2013. A petition for inter partes review can be filed after the nine-month period for filing a post-grant review petition has expired for a patent with an effective filing date of March 16, 2013 or later. Post-grant review proceedings can be brought on any ground of invalidity, whereas inter partes review proceedings can only raise an invalidity challenge based on published prior art and patents. These adversarial actions at the USPTO review patent claims without the presumption of validity afforded to U.S. patents in lawsuits in U.S. federal courts and use a lower burden of proof than used in litigation in U.S. federal courts. Therefore, it is generally considered easier for a competitor or third party to have a U.S. patent invalidated in a USPTO post-grant review or inter partes review proceeding than invalidated in a litigation in a U.S. federal court. If any of our patents are challenged by a third party in such a USPTO proceeding, there is no guarantee that we will be successful in defending the patent, which may result in a loss of the challenged patent right to us.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

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we may not be able to generate sufficient data to support full patent applications that protect the entire breadth of developments in our program;

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it is possible that one or more of our pending patent applications will not become an issued patent or, if issued, that the patent claims will not have sufficient scope to protect our technology, provide us with commercially viable patent protection or provide us with any competitive advantages;

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if our pending applications issue as patents, they may be challenged by third parties as invalid or unenforceable under United States or foreign laws;

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we may not successfully commercialize AURN001, if approved, before our relevant patents expire;

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we may not be the first to file patent applications for the inventions covered by our patent portfolio; or

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we may not develop additional proprietary technologies that are separately patentable.

In addition, to the extent that we are unable to obtain and maintain patent protection for AURN001, or in the event that such patent protection expires, it may no longer be cost-effective to extend our portfolio by pursuing additional development of AURN001 for follow-on indications.

Changes in the interpretation of patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology and pharmaceutical industries involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Patent reform legislation in the United States and other countries could increase those uncertainties and costs. For example, the Leahy-Smith America Invents Act of 2011 (the “Leahy-Smith Act”) included a number of significant changes to United States patent law, including provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents, for example, via post grant review and inter partes review proceedings at the USPTO. In addition, the Leahy-Smith Act transformed the United States patent system into a “first to file” system, in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third-party was the first to invent the claimed invention. Consequently, if a third party files a patent application in the USPTO before we file an application covering the same invention, the third party could be awarded a patent covering an invention of ours or our licensors even if we had made the invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. However, the Leahy-Smith Act and its implementation could make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business, results of operations and financial condition.

The United States Supreme Court has ruled on several patent cases, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Additionally, there have been proposals for additional changes to the patent laws of the United States and other countries that, if adopted, could impact our ability to enforce our proprietary technology. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. The U.S. Supreme Court has ruled on several patent cases in recent years; these cases often narrow the scope of patent protection available to inventions in the biotechnology and pharmaceutical spaces. For example, in Amgen Inc. v. Sanofi, the U.S. Supreme Court held that certain of Amgen Inc.’s (“Amgen”) patent claims defined a class of antibodies by their function of binding to a particular antigen and not by structure and that a skilled artisan would have to use significant trial and error to identify and make all of the molecules in that class. The U.S. Supreme Court ultimately held that Amgen failed to properly enable its patent claims. While we do not believe that any of the patents licensed by us will be found invalid based on this or other decisions, we cannot predict how future decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patents. In 2023, the Federal Circuit issued a decision in In re Cellect, LLC involving the interaction of patent term adjustment (“PTA”), terminal disclaimers and obviousness-type double patenting which may affect the

patent term of any issued patents that rely on any PTA. In 2022, Congress passed the IRA, which authorizes the Secretary of the HHS to negotiate prices directly with participating manufacturers for selected medicines covered by Medicare even if these medicines are protected by an existing patent. While we do not believe that the IRA or its effects will impact our ability to obtain patents in the near future, we cannot be certain that it will not affect our patent strategy in the long run.

Further, a new court system recently became operational in the European Union, creating a single pan-European Unitary Patent and a new European patent court for litigation involving European patents. The Unified Patent Court (“UPC”), began accepting patent cases on June 1, 2023. The UPC is a common patent court with jurisdiction over patent infringement and revocation proceedings effective for multiple member states of the European Union. The broad geographic reach of the UPC could enable third parties to seek revocation of any of our European patents in a single proceeding at the UPC rather than through multiple proceedings in each of the individual European Union member states in which the European patent is validated. Under the UPC, a successful revocation proceeding for a European patent under the UPC would result in loss of patent protection in those European Union countries. Accordingly, a single proceeding under the UPC could result in the partial or complete loss of patent protection in numerous European Union countries. Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize AURN001 and future product candidates and, resultantly, on our business, financial condition, prospects and results of operations. Moreover, the controlling laws and regulations of the UPC will develop over time and we cannot predict what the outcomes of cases tried before the UPC will be. The case law of the UPC may adversely affect our ability to enforce or defend the validity of our European patents. European patent applications now have the option, upon grant of a patent, of becoming a Unitary Patent which is subject to the jurisdiction of the UPC. In addition, conventional European patents, both already granted at the time the new system began and granted thereafter, are subject to the jurisdiction of the UPC, unless actively opted out which would default to pre-UPC enforcement mechanisms. This is a significant change to European patent practice and deciding whether to opt-in or opt-out of Unitary Patent practice entails strategic and cost considerations. It will be several years before we will understand the scope of patent rights that are recognized and the strength of patent remedies that are provided by the UPC. While we have the right to opt our patents out of the UPC over the first seven years of the court’s existence, doing so may preclude us from realizing the benefits of the UPC. Moreover, the decision whether to opt-in or opt-out of Unitary Patent status will require coordinating with co-applicants, if any, adding complexity to any such decision. We have decided to opt out certain European patents and patent applications from the UPC. However, if certain formalities and requirements are not met, our current or future European patents could be subject to the jurisdiction of the UPC. We cannot be certain that our European patents and patent applications will avoid falling under the jurisdiction of the UPC, if we decide to opt out of the UPC.

We may not be able to seek or obtain patent protection throughout the world or enforce such patent protection once obtained.

Filing, prosecuting, enforcing and defending patents protecting AURN001 and any future product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. The requirements for patentability may differ in certain countries, particularly in developing countries; thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that cover AURN001.

Moreover, our ability to protect and enforce our owned or in-licensed intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. Additionally, laws of some countries outside of the United States and Europe do not afford intellectual property protection to the same extent as the laws of the United States and Europe. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop the infringement of our own patents, if issued, and in-licensed patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

Consequently, we may not be able to prevent third parties from practicing our inventions in certain countries outside the United States and Europe or from selling or importing products made from our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop and market their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These products may compete with our product, and our owned or in-licensed patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Proceedings to enforce our patent rights, whether successful or not, could result in substantial costs and divert our efforts and resources from other aspects of our business. Further, such proceedings could put our owned or in-licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly; put our pending patent applications at risk of not issuing; and provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Furthermore, while we intend to protect our intellectual property rights in major markets for our current and future products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products, if approved. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

Geopolitical actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors. For example, the United States and foreign government actions related to Russia’s conflict in Ukraine may limit or prevent filing, prosecution and maintenance of patent applications in Russia. Government actions may also prevent maintenance of issued patents in Russia. These actions could result in abandonment or lapse of our patent or patent applications, resulting in partial or complete loss of patent rights in Russia. In addition, the Kremlin issued Decree 299 in March 2022 stating that Russian companies and individuals can use patented inventions without the owner’s permission or compensation, if the patent is held by owners from “unfriendly countries,” which includes the United States. Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia. Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. As such, we do not know the degree of future protection that we will have on our technologies and current and future product candidates. While we will endeavor to protect our technologies and current and future product candidates with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time consuming, expensive and unpredictable.

In order to protect our competitive position around AURN001, we may become involved in lawsuits to enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and which may result in our patents being found invalid or unenforceable.

Competitors may seek to commercialize products competitive with AURN001. In order to protect our competitive position, we or our licensors may become involved in lawsuits asserting infringement of our in-licensed patents or misappropriation or other violations of other of our intellectual property rights. Our or our licensors’ pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Litigation is expensive and time consuming and would likely divert the time and attention of our management and scientific personnel. There can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if

we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

If we file a patent infringement lawsuit against a perceived infringer, such a lawsuit could provoke the defendant to counterclaim that we infringe their patents and/or that the patents we seek to enforce are invalid and/or unenforceable. In patent litigation in the United States, it is commonplace for a defendant to counterclaim alleging invalidity and/or unenforceability. In any patent litigation there is a risk that a court will decide that the asserted patents are invalid or unenforceable, in whole or in part, and that we do not have the right to stop the defendant from using the invention at issue. With respect to a counterclaim of invalidity, we cannot be certain that there is no invalidating prior art of which we or our licensors and the patent examiner were unaware during prosecution. There is also a risk that, even if the validity of such patents or other intellectual property rights is upheld, the court will construe the patent claims narrowly or decide that we do not have the right to stop the other party from using the technology at issue on the grounds that our patent claims or other intellectual property rights do not cover the technology in question, or decide that the other party’s use of our or our licensors’ patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1). If any of our owned or in-licensed patents are found invalid or unenforceable, or construed narrowly, our ability to stop the other party from launching a competitive product would be materially impaired. Further, such adverse outcomes could limit our ability to assert those patents against future competitors. Loss of patent protection would have a material adverse impact on our business.

Even if we establish that a competitive product infringes any of the patents we seek to enforce, a court may decide not to grant an injunction against further infringing activity, thus allowing the competitive product to continue to be marketed by the competitor. It is difficult to obtain an injunction in U.S. litigation and a court could decide that the competitor should instead pay us a “reasonable royalty” as determined by the court, and/or other monetary damages. A reasonable royalty or other monetary damages may or may not be an adequate remedy. Loss of exclusivity and/or competition from a related product would have a material adverse impact on our business.

Litigation often involves significant amounts of public disclosures. Such disclosures could have a materially adverse impact on our competitive position or our stock prices. During U.S. litigation, we would be required to produce voluminous records related to our owned or in-licensed patents and our research and development activities in a process called discovery. The discovery process may result in the disclosure of some of our confidential information. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could adversely affect the price of our common shares.

Litigation is inherently expensive, and the outcome is often uncertain. Any litigation likely would substantially increase our operating costs and reduce our resources available for development and commercialization activities. Further, we may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. As a result, we may conclude that even if a competitor is infringing any of our patents, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our stockholders. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution.

For certain current and future in-licensed patent rights, we may not have the right to file a lawsuit for infringement and may have to rely on a licensor to enforce these rights on our behalf. If we are unable to directly assert our licensed patent rights against infringers or if a licensor does not vigorously prosecute any infringement claims on our behalf, we may have difficulty competing in certain markets where such potential infringers conduct their business, and our commercialization efforts may suffer as a result.

If we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing AURN001.

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell AURN001 and any future product candidates without infringing, misappropriating or otherwise violating the intellectual property and other proprietary rights of third parties. However, our research, development and commercialization activities may be subject to claims that we infringe, misappropriate or otherwise violate patents or other intellectual property rights owned or controlled by third parties. Third parties may have U.S. and non-U.S. issued patents and pending patent applications relating to cell compositions, methods of manufacturing such cell compositions and/or methods of use for the treatment of the disease indications for which we are developing AURN001. If any third-party patents or patent applications are found to cover AURN001, or their methods of use or manufacture, we may not be free to manufacture or market such product candidate as planned without obtaining a license, which may not be available on commercially reasonable terms, or at all.

There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to AURN001, including patent infringement lawsuits in the United States or abroad. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the composition, use or manufacture of AURN001. Third parties may assert infringement claims against us based on existing patents that they own or in-license or patents that may grant to them (or which they may in-license) in the future, regardless of the merit of such patents or infringement claims. If our defenses to such assertions of infringement were unsuccessful, we could be liable for a court-determined reasonable royalty on our existing sales and further damages to the patent owner (or licensee), such as lost profits. Such royalties and damages could be significant. If we are found to have willfully infringed the claims of a third party’s patent, the third party could be awarded treble damages and attorney’s fees. Further, unless we obtain a license to such patent, we may be precluded from commercializing the infringing product candidate. Any of the aforementioned could have a material adverse effect on our business, financial condition, results of operations and prospects.

Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain U.S. applications that will not be filed outside the U.S. can remain confidential until patents issue. In addition, unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover AURN001, future product candidates, our technologies, or the use of AURN001 or future product candidates. As such, there may be applications of others now pending or recently revived patents of which we are unaware. Identification of third-party patent rights that may be relevant to our operations is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. As a result, we may be unable to identify such patents or patent applications despite our best efforts. We cannot guarantee that any patent searches or analyses, including the identification of relevant patents, the scope of patent claims, or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of AURN001 and any future product candidates in any jurisdiction. In addition, patent applications can take many years to issue, and there may be currently pending patent applications which may later result in issued patents that any of our current or future product candidates may be accused of infringing. Even where we have a valid and enforceable patent, we may not be able to exclude others from practicing the claimed invention where the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Accordingly, third parties may assert infringement claims against us based on intellectual

property rights that exist now or arise in the future. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use or manufacture. The scope of protection afforded by a patent is subject to interpretation by the courts, and the interpretation is not always uniform. If we were sued for patent infringement, we would need to demonstrate that the relevant product or methods of using the product either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results. In addition, parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources, and we may not have sufficient resources to bring these actions to a successful conclusion.

If we are found to infringe, misappropriate or otherwise violate a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product. Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product. If we were required to obtain a license to continue to manufacture or market the infringing product, we may be required to pay substantial royalties or grant cross-licenses to our patents. Even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us; alternatively or additionally it could include terms that impede or destroy our ability to compete successfully in the commercial marketplace. We cannot assure you that any such license will be available on commercially reasonable terms, if at all. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations as a result of claims of patent infringement or violation of other intellectual property rights. We may also be required to indemnify future collaboration partners against such claims. Further, the outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of any adverse party. This is especially true in intellectual property cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing a product or force us to cease some of our business operations, which could harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could adversely affect the price of our common shares. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.

Others may challenge inventorship or claim an ownership interest in our owned or in-licensed intellectual property which could expose it to litigation and have a significant adverse effect on its prospects.

We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patent rights or other intellectual property as an inventor or co-inventor. The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views

regarding the contributions of different individuals named as inventors or the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent. Furthermore, ownership disputes may arise from alleged contributions of third parties involved in developing our current and future product candidates and may result in joint ownership of our inventions. Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership. Any disagreement over inventorship could result in our being forced to defend our determination of inventorship in a legal action which could result in substantial costs and be a distraction to our senior management and scientific personnel. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

While we typically require employees, consultants and contractors who may develop intellectual property on our behalf to execute standard agreements assigning such intellectual property to us, we may be unsuccessful in obtaining execution of assignment agreements with each party who in fact develops intellectual property that we regard as our own. Moreover, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached. In either case, we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Furthermore, individuals executing agreements with us may have preexisting or competing obligations to a third party, such as an academic institution, and thus an agreement with us may be ineffective in perfecting ownership of inventions developed by that individual. If we are unsuccessful in obtaining assignment agreements from an employee, consultant or contractor who develops intellectual property on our behalf, the employee, consultant or contractor may later claim ownership of the invention. Any disagreement over ownership of intellectual property could result in our losing ownership, or exclusive ownership, of the contested intellectual property, paying monetary damages and/or being enjoined from clinical testing, manufacturing and marketing of the affected product candidate(s). Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.

Our current or future licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the United States government, such that our licensors are not the sole and exclusive owners of the patents we in-licensed. If other third parties have ownership rights or other rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology. This could adversely affect our competitive position, business, financial condition, results of operations and prospects.

We may be subject to claims that we have wrongfully hired an employee from a competitor or by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Many of our current and former employees and our licensors’ current and former employees, including our senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies, including some which may be competitors or potential competitors. Although we take commercially reasonable steps to ensure that our employees do not use the proprietary information, know-how or trade secrets of others in their work for us, including incorporating such intellectual property into our current and future product candidates, we may be subject to claims that we or these employees have, inadvertently or otherwise, misappropriated the intellectual property of a third party, including know-how, trade secrets or other proprietary information, of any such individual’s current or former employer or client. To the extent that our employees, consultants or advisors use intellectual property rights or proprietary information owned by others in their work for us, disputes may arise as to the rights in any related or resulting know-how and inventions.

If we or any of our employees are accused of misappropriating the proprietary information, know-how or trade secrets of a third party, we may be forced to defend such claims in litigation. If we are found to have misappropriated the intellectual property rights of a third party, we may be forced to pay monetary damages, sustain reputational damage, lose key personnel, or lose valuable intellectual property rights. Further, it may become necessary for us to obtain a license from such third party to commercialize any of our current and future product candidates. Such a license may not be available on commercially reasonable terms or at all. Any of the aforementioned could materially affect the commercialization of any of our current and future product candidates. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

We may rely on trade secrets and proprietary know-how which can be difficult to trace and enforce and, if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

We may rely on trade secrets or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. We expect to rely on third parties for future manufacturing of our current and future product candidates. We also expect to collaborate with third parties on the development of our current and future product candidates and as a result must, at times, share trade secrets with our collaborators. We also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development partnerships or similar agreements.

Trade secrets or confidential know-how can be difficult to maintain as confidential. To protect this type of information against disclosure or appropriation by competitors, our policy is to require our employees, consultants, contractors and advisors to enter into standard confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with us prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. The need to share trade secrets and other confidential information, including with future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect on our business and results of operations. Enforcing a claim that a third party obtained illegally and is using trade secrets or confidential know-how is expensive, time consuming and unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets, know-how and agreement terms that address non-competition. The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets, although our agreements may contain certain limited publication rights. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators and we would have no right to prevent them from using that technology or information to compete with us. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

In addition, despite the protections we do place on our intellectual property or other proprietary rights, monitoring unauthorized use and disclosure of our intellectual property rights by employees, consultants and other third parties who have access to such intellectual property or other proprietary

rights is difficult, and we do not know whether the steps we have taken to protect our intellectual property or other proprietary rights will be adequate. Therefore, we may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by such employees, consultants, advisors or third parties, despite the existence generally of these confidentiality restrictions. These agreements may not provide meaningful protection against the unauthorized use or disclosure of our trade secrets, know-how or other proprietary information in the event the unwanted use is outside the scope of the provisions of the contracts or in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how, or other proprietary information. There can be no assurances that such employees, consultants, advisors or third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by third parties, including our competitors.

We may need to acquire or license additional intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

We have entered into licensing and collaboration arrangements and may consider similar or other types of business arrangements in the future, including strategic partnerships, in-licensing of any future product candidates, strategic collaborations, joint ventures, restructurings, divestitures, acquisitions of companies, asset purchases, business combinations and investments.

Any current transactions and future transactions that we enter into may not be successful. In particular, the success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include that:

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collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations;

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collaborators may not pursue development and commercialization of AURN001 or any future product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competing products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities;

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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with AURN001 or any future product candidates;

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a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

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we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;

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collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

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disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of AURN001 or any future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;

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collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of AURN001 or any future product candidates;

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collaborators may own or co-own intellectual property covering AURN001 or future product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and

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a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

A third party may hold intellectual property, including patent rights that are important or necessary to the development of our current and future product candidates. It may be necessary for us to use the patented or proprietary technology of one or more third parties to commercialize our current and future product candidates.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development. If we are unable to acquire such intellectual property outright, or obtain licenses to such intellectual property from such third parties when needed or on commercially reasonable terms, our ability to commercialize our current and future product candidates, if approved, would likely be delayed or we may have to abandon development of that product candidate and our business and financial condition could suffer.

In addition, any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses, or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.

Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all. These transactions may never be successful and may require significant time and attention of our management. In addition, the integration of any business that we may acquire in the future may disrupt our existing business and may be a complex, risky and costly endeavor for which we may never realize the full benefits of the acquisition. Accordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions of the nature described above, any additional transactions that we do complete could adversely affect our business, financial condition, results of operations and prospects.

If we in-license other product candidates in the future, we might become dependent on proprietary rights from third parties with respect to those product candidates. Any termination of such licenses could result in the loss of significant rights and would cause material adverse harm to our ability to develop and commercialize any product candidates subject to such licenses. Even if we are able to in-license any such necessary intellectual property, it could be on nonexclusive terms, including with respect to the use, field or territory of the licensed intellectual property, thereby giving our competitors and other third parties access to the same intellectual property licensed to us. In-licensing intellectual property rights could require us to make substantial licensing and royalty payments. Patents licensed to us could be put at risk of being invalidated or interpreted narrowly in litigation filed by or against our licensors or another licensee or in administrative proceedings. If any in-licensed patents are invalidated or held unenforceable, we may not be able to prevent competitors or other third parties from developing and commercializing competitive products.

We may not have the right to control the prosecution, maintenance, enforcement or defense of patents and patent applications that we license from third parties. In such cases, we would be reliant on the licensor to take any necessary actions. We cannot be certain that such licensor would act with our best interests in mind, or in compliance with applicable laws and regulations, or that their actions would result in valid and enforceable patents. For example, it is possible that a licensor’s actions in enforcing and/or defending a patent licensed by us may be less vigorous than had we conducted them ourselves. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our present or future licensors may have relied upon or may rely upon third-party consultants or collaborators or on funds from third parties such that our present or future licensors may not be the sole and exclusive owners of the patents we in-license. If other third parties have ownership rights to our present or future in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including:

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the scope of rights granted under the license agreement and other interpretation-related issues;

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our financial or other obligations under the license agreement;

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whether and the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement;

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our right to sublicense patent and other rights to third parties under collaborative development relationships;

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our diligence obligations with respect to the use of licensed technology in relation to our development and commercialization of our current and future product candidates and what activities satisfy those diligence obligations;

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the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and

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the priority of invention of patented technology.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected current or future product candidates.

The risks described elsewhere pertaining to our intellectual property rights also apply to the intellectual property rights that we may own or in-license now or in the future, and any failure by us or our licensors to obtain, maintain, defend and enforce these rights could have an adverse effect on our business. In some cases we may not have control over the prosecution, maintenance or enforcement of the patents that we license, and may not have sufficient ability to provide input into the patent prosecution, maintenance and defense process with respect to such patents, and potential future licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain, defend and enforce the licensed patents.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our trademarks of interest and our business may be adversely affected.

Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We rely on both registration and common law protection for our trademarks. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. During the trademark registration process, we may receive Office Actions from the USPTO objecting to the registration of our trademark. Although we would be given an opportunity to respond to those objections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. Moreover, any name we propose to use for our products in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed product names, we may be required to expend significant additional resources in an effort to identify a usable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings. This can be expensive and time-consuming, particularly for a company of our size. We may not be able to protect our rights to our trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.

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

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

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others may be able to make products that are competitive to AURN001 or any of our future product candidates that are not covered by the claims of our patent rights;

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others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our patent portfolio;

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we or any of our collaborators might not have been the first to invent the inventions covered by our patent portfolio;

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we or any of our collaborators might not have been the first to file patent applications covering certain of the patents or patent applications that we or they own or have obtained a license, or will own or will have obtained a license;

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it is possible that our owned or in-licensed pending patent applications or those that we or our collaborators may file in the future will not lead to issued patents;

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others may have access to the same intellectual property rights licensed to us on a non-exclusive basis in the future;

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

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our competitors might conduct research and development activities in countries where we do not have patent rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

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we may not develop additional proprietary technologies that are patentable;

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we cannot predict the scope of protection of any patent issuing based on our owned or in-licensed patent applications, including whether the patent applications that we may own or in-license will result in issued patents with claims that are directed to our current and future product candidates or uses thereof in the United States or in other foreign countries;

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the claims of any patent issuing based on our owned or in-licensed patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties;

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if enforced, a court may not hold that our owned or in-licensed patents are valid, enforceable and infringed;

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we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose;

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ownership of our patent portfolio may be challenged by third parties;

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the patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business;

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patent enforcement is expensive and time-consuming and difficult to predict; thus, we may not be able to enforce any of our patents against a competitor;

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the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications; and

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we may choose not to file a patent application for certain inventions, instead choosing to rely on trade secret protection, and a third party may subsequently file a patent application covering such intellectual property.

Should any of these or similar events occur, they could significantly harm our business, results of operations and prospects.

If approved, our investigational products regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway.

The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of the other company’s product.

We believe that any of our product candidates that may be approved as a biological product under a BLA, including AURN001, should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our investigational medicines to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that continue to evolve.

If competitors are able to obtain marketing approval for biosimilars referencing any of our current and future product candidates, our products may become subject to competition from such biosimilars, which would impair our ability to successfully commercialize and generate revenues from sales of such products.

Risks Related to the Commercialization of Our Product Candidates

Even if approved, AURN001 may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success.

Even if AURN001 receives regulatory approval, it may not gain adequate market acceptance among physicians, patients, healthcare payors and others in the medical community. The degree of market acceptance of AURN001, if approved, or any future approved product will depend on a number of factors, including, but not limited to:

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the efficacy and safety profile as demonstrated in clinical trials compared to alternative treatments;

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the timing of market introduction of the products as well as competitive products;

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the clinical indications for which the products are approved;

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the scope of the patient population for which the product is indicated (for example, only patients with a less serious form of the target indication);

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restrictions on the use of the product, such as boxed warnings or contraindications in labeling, or a REMS, if any, which may not be required of alternative treatments and competitor products;

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the potential and perceived advantages of the product over alternative treatments;

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the cost of treatment in relation to alternative treatments;

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the availability of coverage and adequate reimbursement, as well as pricing, by third-party payors, including government authorities;

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the availability of the approved product for use as a combination therapy;

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relative convenience and ease of administration;

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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

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the capacity of surgical centers where AURN001 would be administered to support the post-surgical rest and monitoring period that would be required for patients receiving AURN001;

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the effectiveness of sales and marketing efforts;

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unfavorable publicity relating to the products or product candidate or similar approved products or product candidates in development by third parties; and

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the approval of other new therapies for the same indications.

If AURN001 is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate or derive sufficient revenue from this product and our financial results could be negatively impacted.

If the market opportunity for AURN001 is smaller than we believe, our revenue may be adversely affected and our business may suffer.

We intend to initially focus AURN001 development on treatments for corneal endothelial disease indications. Our projections of addressable patient populations that may benefit from treatment with AURN001 is based on our estimates. These estimates, which have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations and market research, may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of corneal endothelial disease. Additionally, the potentially addressable patient population for AURN001 may not ultimately be amenable to treatment with AURN001. For example, patients with less severe corneal endothelial disease may not be as inclined to undergo treatment with AURN001 as patients with more severe disease, which may potentially limit the market opportunity for AURN001. The FDA, EMA or other regulatory authorities may also limit our proposed indication or target population. Our market opportunity may also be limited by future competitor treatments that enter the market. If any of our estimates prove to be inaccurate, the market opportunity for AURN001 could be significantly diminished and have a materially adverse impact on our business.

We have never commercialized a product prior to Vyznova, and we may lack the necessary expertise, personnel and resources to successfully commercialize and achieve market acceptance of Vyznova in Japan.

We are early in our commercialization efforts, and Vyznova is currently our only product approved for commercialization. Prior to this, our operations had been limited to organizing and staffing our company, business planning, raising capital and undertaking preclinical studies and clinical trials of our product candidates. We currently have no in-house manufacturing, distribution or supply capabilities and will rely heavily on CDMOs to achieve commercial success of Vyznova.

Factors that may affect our ability to commercialize and achieve market acceptance of Vyznova include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe Vyznova and other unforeseen costs associated with creating an independent sales and marketing organization. We may not be able to build an effective sales and marketing organization in Japan, and if we are unable to find suitable partners for the commercialization of Vyznova or achieve market acceptance, we may have difficulties generating revenue from the sale of Vyznova.

We face significant competition, and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the product candidates we develop, our commercial opportunities will be negatively impacted.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary and novel products and product candidates. While, to our knowledge, there are currently no approved pharmacological therapies indicated for corneal endothelial disease to our knowledge, our competitors are developing or may develop products, product candidates and processes competitive with AURN001. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may attempt to develop product candidates. In addition, our products may compete with off-label drugs used by physicians to treat the indications for which we seek approval. This may make it difficult for us to replace existing therapies with our products.

In particular, there is intense competition in the fields we are pursuing. We have competitors both in the United States and internationally, including established biotechnology companies, specialty pharmaceutical companies, emerging and start-up companies, universities and other research institutions. We also compete with these organizations to recruit management, scientists and clinical development personnel, which could negatively affect our level of expertise and our ability to execute our business plan. We will also face competition in establishing clinical trial sites, enrolling subjects for clinical trials and in identifying and in-licensing new product candidates. We have chosen to initially address well-validated biochemical targets, and therefore expect to face competition from existing products and products in development. Many potential competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources and commercial expertise than we do. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and manufacturing biotechnology products. These companies also have significantly greater research and marketing capabilities than we do and may also have products that are in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical and biotechnology companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we develop obsolete. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies, as well as in acquiring technologies complementary to, or necessary for, our programs. As a result of all of these factors, our competitors may succeed in obtaining approval from the FDA, EMA or other comparable foreign regulatory authorities or in discovering, developing and commercializing products in our field before we do. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less expensive than any products that we may develop.

Our competitors also may obtain marketing approval from the FDA, EMA or other comparable foreign regulatory authorities for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Even if the product candidates we develop achieve marketing approval, they may be priced at a

significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical. If we are unable to compete effectively, our opportunity to generate revenue from the sale of our products we may develop, if approved, could be adversely affected.

Our business entails a significant risk of product liability, and if we are unable to obtain sufficient insurance coverage, such inability to obtain sufficient coverage could have an adverse effect on our business and financial condition.

Our business exposes us to significant product liability risks inherent in the development, testing, manufacturing and marketing of therapeutic treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims could result in an FDA, EMA, Ministry of Health, Labour and Welfare (“MHLW”), Pharmaceuticals and Medical Devices Agency (“PMDA”) or other regulatory authority investigation of the safety and effectiveness of our products, our manufacturing processes and facilities or our marketing programs. FDA, EMA MHLW or PMDA or other regulatory authority investigations could potentially lead to a recall of our products or more serious enforcement action, limitations on the approved indications for which our products may be used or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, product liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related litigation, a diversion of management’s time and our resources and substantial monetary awards to trial participants or patients. We currently have product liability insurance that we believe is appropriate for our stage of development and may need to obtain higher levels prior to marketing AURN001, if approved. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have an adverse effect on our business and financial condition.

Any product candidates we develop may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations.

The availability and extent of coverage and adequate reimbursement by third-party payors, including government health administration authorities, private health coverage insurers, managed care organizations and other third-party payors is essential for most patients to be able to afford expensive treatments. Sales of AURN001, if approved by FDA or other regulatory authorities, will depend substantially, both in the United States and internationally, on the extent to which the costs of the product candidate will be covered and reimbursed by third-party payors. If coverage and reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize AURN001. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize an adequate return on our investment. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we may obtain marketing approval.

There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. In the United States, for example, CMS, an agency within the HHS, determines whether and to what extent a new product will be covered and reimbursed under Medicare and Medicaid, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree. However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate. As a result, the coverage determination process is often time-consuming and costly. This process will require us to provide scientific and clinical support for the use of our products to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Further, such payors are increasingly challenging the price, examining the medical necessity and reviewing the cost effectiveness of medical product candidates. There may be especially significant delays in obtaining coverage and reimbursement for newly approved products. Third-party payors may limit coverage to specific product candidates on an approved list, known as a formulary, which might not include all FDA-approved products for a particular indication. We may need to conduct expensive pharmaco-economic studies to demonstrate the medical necessity and cost effectiveness of our products. Nonetheless, AURN001 may not be considered medically necessary or cost effective. We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of therapeutics such as AURN001. In many countries, particularly the countries of the EU, medical product prices are subject to varying price control mechanisms as part of national health systems. In these countries, pricing negotiations with governmental authorities can take considerable time after a product receives marketing approval. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of AURN001 to other available therapies. In general, product prices under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for AURN001. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits. If we are unable to establish or sustain coverage and adequate reimbursement for any approved products from third-party payors, the adoption of those products and sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell those product candidates, if approved. Coverage policies and third-party payor reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we seek regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Risks Related to Our Business Operations, Employee Matters and Managing Our Growth

We expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of regulatory affairs and sales, marketing and distribution, as well as to support our public company operations. To manage these growth activities, we must continue to implement and improve our managerial, operational, quality and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. There can be no assurance that our systems, procedures and controls will be adequate to support our operations as they expand, or that we will be able to successfully implement appropriate measures consistent with our growth strategy.

Our management may need to devote a significant amount of its attention to managing these growth activities. Due to our limited financial resources, we may not be able to effectively manage the expansion or relocation of our operations, retain key employees, or identify, recruit and train additional qualified personnel. Our inability to manage the expansion or relocation of our operations effectively may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees.

Our expected growth could also require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If we are unable

to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.

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

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. Each of our executive officers may currently terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or employees. This lack of insurance means that we may not have adequate compensation for the loss of the services of these individuals.

The loss of the services of our executive officers or other key employees could impede the achievement of our development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approvals of and commercialize products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

Further, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived benefits of our stock awards decline, either because we are a public company or for other reasons, it may harm our ability to recruit and retain highly skilled employees. Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock, particularly after the expiration of applicable lock-up agreements.

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

We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, CDMOs, suppliers and vendors may engage in misconduct or other improper activities. Misconduct by these parties could include failures to comply with FDA regulations, provide accurate information to the FDA, comply with federal and state health care fraud and abuse laws and regulations, accurately report financial information or data or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Misconduct by these parties could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are

not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations.

Cyber security risks, including cyber attacks, data breaches and system vulnerabilities, could adversely affect our business and disrupt our operations.

Cyber attacks are increasing in number and sophistication and are designed to not only attack, but also to evade detection. Since the techniques used to obtain unauthorized access to systems and data, or to otherwise sabotage systems and data, change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Accidental or willful security breaches or other unauthorized access to our information systems or the systems of our third-party service providers, or the existence of computer viruses, malware (such as ransomware), or vulnerabilities in our or our third-party service providers’ data or software could expose us to a risk of information loss, business disruption, or misappropriation of proprietary and confidential information, including information relating to our products or customers or the personal information of our employees or third parties. These events could disrupt our business and result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of such information, significant remediation costs, disruption of key business operations and significant diversion of our resources, as well as fines and other sanctions resulting from any related breaches of data privacy laws and regulations, any of which could have a material adverse effect on our business, profitability and financial condition.

Risks Related to Ownership of Our Common Stock and this Offering

We do not know whether an active market will develop for our common stock or what the market price of our common stock will be, and, as a result, it may be difficult for you to sell your shares of our common stock.

We have applied to list our common stock on the New York Stock Exchange (“NYSE”) under the symbol “AURN.” However, prior to this offering, there has been no prior public trading market for our common stock. We cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of our common stock when desired or the prices that you may obtain for your shares. It is possible that in one or more future periods, our operating results and progression of our product candidate development may not meet the expectations of public market analysts and investors, and, as a result of these and other factors, the price of our common stock may fall.

The market price of our common stock may be volatile, and you could lose all or part of your investment.

The initial public offering price of our common stock will be determined through negotiation among us and the underwriters. This price does not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of our common stock following this offering. In addition, the trading price of our common stock following this offering is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to

sell your shares at or above the price you paid in this offering. Factors that could cause fluctuations in the trading price of our common stock include, but are not limited to, the following:

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price and volume fluctuations in the overall stock market from time to time;

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the timing and results of clinical trials for AURN001;

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commencement or termination of collaborations for our product development and research programs;

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failure to achieve development, regulatory or commercialization milestones under our collaborations;

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failure or discontinuation of any of our product development and research programs;

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results of preclinical studies, clinical trials or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors;

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the level of expenses related to any of our research programs, clinical development programs or AURN001 or any future product candidates that we may develop;

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the results of our efforts to develop additional product candidates beyond AURN001 or products beyond Vyznova;

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regulatory actions with respect to our product, Vyznova, or our competitors’ products;

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developments or disputes concerning patent applications, issued patents or other proprietary rights; announced or completed acquisitions of businesses, products or intellectual property by us or our competitors;

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actual or anticipated changes in the financial projections or development timelines we may provide to the public or our failure to meet those projections or timelines;

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market conditions in the biotechnology sector;

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changes in the structure of healthcare payment systems;

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sales of shares of our common stock by us or our stockholders;

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the recruitment or departure of key personnel;

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the public’s reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission (the “SEC”);

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rumors and market speculation involving us or other companies in our industry;

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fluctuations in the trading volume of our shares or the size of our public float;

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actual or anticipated changes or fluctuations in our results of operations;

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actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally;

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failure of securities analysts to maintain coverage of us, changes in actual or future expectations of investors or securities analysts or our failure to meet these estimates or the expectations of investors;

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litigation involving us, our industry or both;

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governmental or regulatory actions or audits;

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regulatory or legal developments in the United States and other countries;

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general economic conditions and trends;

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announcement or expectation of additional financing efforts;

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expiration of market stand-off or lock-up agreements; and

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changes in accounting standards, policies, guidelines, interpretations or principles.

The realization of any of the above risks or any of a broad range of other risks, including those described in this “Risk Factors” section, could have an adverse impact on the market price of our common stock.

In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

If you purchase shares of our common stock in this offering, you will suffer immediate and substantial dilution of your investment.

The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock immediately after the completion of this offering. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our pro forma as adjusted net tangible book value per share after this offering. Based on the initial public offering price of $ per share, which is the mid-point of the price range set forth on the cover of this prospectus, you will experience immediate dilution of $ per share, representing the difference between our pro forma as adjusted net tangible book value per share as of September 30, 2024 and the initial public offering price. For a further description of the dilution that you will face immediately after this offering, see the section of this prospectus titled “Dilution.”

We may not be able to satisfy the listing requirements of NYSE or obtain or maintain a listing of our common stock on NYSE.

If our common stock is listed on NYSE, we must meet certain financial and liquidity criteria to maintain such listing. If we violate NYSE’s listing requirements or fail to meet any of NYSE’s listing standards, our common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from NYSE may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.

Insiders will continue to have substantial influence over us after this offering, which could limit your ability to affect the outcome of key transactions, including a change of control.

After this offering, our directors, executive officers, holders of more than 5% of our common stock and their respective affiliates will beneficially own, in the aggregate, approximately % of the shares of our outstanding common stock, based on the number of shares outstanding as of September 30, 2024. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors, amendments of our organizational documents and approval of significant corporate transactions. They may also have interests that differ from other investors and may vote in a way with which other investors disagree, and which may be adverse to other investors’ interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our company and might affect the market price of our common stock.

Participation in this offering by our existing stockholders and their affiliated entities may reduce the public float for our common stock.

Certain of our existing stockholders and their affiliated entities may potentially participate in this offering. However, there are no assurances that they will participate in the offering to a material extent, or at all. To the extent they participate in this offering, such purchases would reduce the non-affiliate public float of our shares, meaning the number of shares of our common stock that are not held by officers, directors and principal stockholders. A reduction in the public float could reduce the number of shares that are available to be traded at any given time, thereby adversely impacting the liquidity of our common stock and depressing the price at which you may be able to sell shares of common stock purchased in this offering.

We are currently engaged in litigation against our largest stockholder, Alcon, which could adversely impact our business and financial condition, as well as our ability to consummate the initial public offering in a timely manner or at all, or could divert management’s attention and expend our resources.

We are currently engaged in litigation against our largest stockholder, Alcon. On October 28, 2024, Alcon filed a complaint against us in the Delaware Court of Chancery (the “Court”), asserting claims for declaratory relief related to Alcon’s claimed rights under our charter and a voting agreement (the “Delaware Litigation”). On November 4, 2024, we filed counterclaims against Alcon, asserting reciprocal claims for declaratory relief as to the proper interpretation of the charter and voting agreement. The Court held a trial in the Delaware Litigation on January 2, 2025 and January 14, 2025, and the parties are currently awaiting the Court’s decision. While we believe we have strong counterclaims and defenses, we cannot predict the outcome of the Delaware Litigation and a decision against us could adversely impact our business and financial condition, as well as our ability to consummate our initial public offering in a timely manner or at all.

In the event that we prevail in the Delaware Litigation in the Court, Alcon could appeal the decision to the Delaware Supreme Court. Such an appeal, if filed, could result in an adverse ruling or delay. We cannot predict the outcome of a potential appeal, and a decision in Alcon’s favor on appeal could adversely impact our ability to consummate our initial public offering. Alcon could also bring additional or similar claims against us in Delaware or in other jurisdictions. Any such claims carry the same risks of adversely impacting our business and financial condition, as well as our ability to consummate our initial public offering in a timely manner or at all.

We may be exposed to additional litigation or government investigation, even if no wrongdoing occurred and if we ultimately prevail. Continuing or additional litigation with Alcon, or responding to any related investigation or enforcement action, would be expensive and divert management’s attention and resources, which could adversely affect our business, financial condition, results of operations and cash resources.

If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they adversely change their recommendations regarding our common stock, the trading price or trading volume of our common stock could decline.

The trading market for our common stock will be influenced in part by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors. If one or more securities analysts initiate research with an unfavorable rating or downgrade our common stock, provide a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If few securities analysts commence coverage of us, or if one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets and demand for our securities could decrease, which in turn could cause the price and trading volume of our common stock to decline.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section of this prospectus titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds from this offering are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, the ultimate use of the net proceeds may vary substantially from the currently intended use. The failure by our management to apply these proceeds effectively could adversely affect our business, financial condition and results of operations. Pending the net proceeds’ use, we may invest our net proceeds in a manner that does not produce income or that loses value. Our investments may not yield a favorable return to our investors and may negatively impact the price of our common stock.

A significant portion of our total outstanding shares is restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our common stock to decline significantly, even if our business is doing well.

The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after this offering, or the perception that such sales could occur. Following the completion of this offering, based on the number of our shares of our capital stock outstanding as of September 30, 2024, we will have a total of shares of our common stock outstanding. Our directors and officers and substantially all of the holders of our equity securities have entered into market standoff agreements with us and have entered or will enter into lock-up agreements with the underwriters under which they have agreed or will agree, subject to specific exceptions described in the section of this prospectus titled “Underwriting,” not to sell any of our stock for 180 days following the date of this prospectus. We refer to such period as the lock-up period. We and certain of the underwriters may release certain stockholders from the market standoff agreements or lock-up agreements prior to the end of the lock-up period. As a result of these agreements and subject to the provisions of Rule 144 or Rule 701 under the Securities Act of 1933, as amended (the “Securities Act”), the shares of our common stock will be available for sale in the public market following the completion of this offering as follows:

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beginning on the date of this prospectus, all shares of our common stock sold in this offering will be immediately available for sale in the public market; and

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beginning 181 days after the date of this prospectus, subject to the terms of the lock-up and market standoff agreements described above, the remainder of the shares of our common

stock will be eligible for sale in the public market, subject in some cases to the volume and other restrictions of Rule 144.

Upon completion of this offering, stockholders owning an aggregate of up to shares of our common stock will be entitled, under our investors’ rights agreement, to certain rights with respect to the registration of the offer and sale of those shares under the Securities Act. In addition, we intend to file a registration statement to register shares reserved for future issuance under our equity compensation plans. Upon effectiveness of that registration statement, subject to the satisfaction of applicable vesting restrictions and the expiration or waiver of the market standoff agreements and lock-up agreements referred to above, the shares issued upon exercise of outstanding stock options will be available for immediate resale in the public market.

Sales of our common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales also could cause the trading price of our common stock to fall and make it more difficult for you to sell shares of our common stock at a time and price that you deem appropriate.

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation of our common stock, if any, will be your sole source of gains and you may never receive a return on your investment.

You should not rely on an investment in our common stock to provide dividend income. We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. Investors seeking cash dividends should not purchase our common stock. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares.

We will need to raise substantial additional capital in the future to complete the development of our product candidates and to support future commercialization efforts, and we cannot be certain that additional financing will be available on favorable terms or at all.

Historically, we have funded our operations and capital expenditures primarily through equity issuances, cash generated from our operations and debt financing for capital purchases. We believe that our existing cash and cash equivalents, together with the proceeds from this offering, will be sufficient to fund our working capital and capital expenditures through . We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect. We will need to raise substantial additional funds in the future in order to complete the development of AURN001, seek regulatory approval thereof, and to commercialize this product in the United States. Our cash and cash equivalents may be subject to potential future disruptions in access to bank deposits or lending commitments due to bank failures. Additionally, we evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing. We cannot assure you that additional financing will be available to us on favorable terms when required or at all, and this may result in a delay, reduction or termination of the development or commercialization of our product candidates. If we raise additional funds through the issuance of equity or equity-linked securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution. If we raise additional funds through the incurrence of indebtedness, then we may be subject to increased fixed payment obligations and could be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we may incur may result in terms that could be unfavorable to our equity investors.

Delaware or Washington law and provisions in our certificate of incorporation and bylaws might delay, discourage or prevent a change in control of our company or changes in our management, thereby depressing the market price of our common stock.

Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law (“DGCL”), may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws will contain provisions that may make the acquisition of our company more difficult or delay or prevent changes in control of our management. Among other things, these provisions will:

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authorize our board of directors to issues shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval;

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permit only the board of directors to establish the number of directors and fill vacancies on the board;

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establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms;

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provide that our directors may only be removed for cause;

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permit stockholders to only take actions at a duly called annual or special meeting and not by written consent;

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require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings;

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eliminate cumulative voting in the election of directors;

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prohibit stockholders from calling a special meeting of stockholders; and

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require a super-majority vote of stockholders to amend some of the provisions described above.

In addition, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring person” for a period of five years following the date on which the stockholder became an “acquiring person.”

These provisions, alone or together, could delay, discourage or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our bylaws will designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.

Our bylaws will provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. This provision would not apply to any action brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder.

Section 22 of the Securities Act establishes concurrent jurisdiction for federal and state courts over Securities Act claims. Accordingly, both state and federal courts have jurisdiction to hear such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws will also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our current or former directors, officers, stockholders or other employees, which may discourage such lawsuits against us and our current and former directors, officers, stockholders and other employees. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions. In addition, such exclusive forum provisions may impose additional litigation costs on stockholders in pursuing any such claims.

Further, the enforceability of similar exclusive forum provisions in other companies’ organizational documents have been challenged in legal proceedings, and it is possible that a court of law could rule that these types of provisions are inapplicable or unenforceable if they are challenged in a proceeding or otherwise. If a court were to find either exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur significant additional costs associated with resolving such action in other jurisdictions, all of which could harm our results of operations. Such exclusive forum provisions may also impose additional litigation costs on stockholders who assert that such provisions are not enforceable or invalid.

Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our operating results, financial condition and cash flows.

Under our certificate of incorporation, our bylaws and certain indemnification agreements to which we will be a party, we will have an obligation to indemnify our current and former directors and certain of our officers with respect to investigations and litigation. The scope of our indemnification obligations may be broader than the coverage available under our directors’ and officers’ liability insurance, or there may be insufficient coverage available. Further, in the event the directors and officers are ultimately determined not to be entitled to indemnification, we may not be able to recover any amounts we previously advanced to them. We cannot provide any assurances that future indemnification claims, including the cost of fees, penalties or other expenses, will not exceed the limits of our insurance policies, that such claims are covered by the terms of our insurance policies or that our insurance carrier will be able to cover such claims. Further, should a coverage dispute arise, we may also incur significant expenses in relation to litigating or attempting to resolve any such dispute. Accordingly, we may incur significant unreimbursed costs to satisfy our indemnification obligations, which may have a material adverse effect on our operating results, financial condition and cash flows.

Our ability to maintain our reputation is key to the success of our business, and the failure to do so may materially adversely affect our performance.

Our reputation is a valuable component of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees or by retaining, appointing or electing directors who share our core values. If our reputation is negatively affected by the actions of our employees or directors, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and, therefore, our financial condition may be materially and adversely affected.

General Risk Factors

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

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

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

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

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations and financial condition.

As a public company, we will incur substantial legal, accounting and other expenses that we did not incur as a private company, and these expenses may increase even more after we are no longer an “emerging growth company.” For example, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the rules and regulations of the SEC and the listing standards of the NYSE. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements, and we expect these rules and regulations to substantially increase our legal and financial compliance costs. For example, we expect these rules and regulations to

make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to maintain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors, particularly to serve on our audit committee and compensation committee, or as our executive officers.

In addition, we have expended, and anticipate that we will continue to expend, significant resources in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting. In that regard, we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. In addition, as a public company, we may be subject to stockholder activism, which can lead to substantial costs, distract management and impact the manner in which we operate our business in ways we cannot currently anticipate. As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be adversely affected. Even if such claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and results of operations. These increased costs and demands upon management could adversely affect our business, results of operations and financial condition.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder such agencies’ ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC, and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new products to be reviewed or approved by necessary government agencies, which would adversely affect our business. For example, in recent years, including in 2018 and 2019, the U.S. government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities. If any prolonged government shutdown or disruption occurs, including due to global health concerns or staffing shortages, the FDA or other regulatory authorities may not conduct their regular inspections, reviews or other regulatory activities in a timely manner, which could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, upon completion of this offering and in our operations as a public company, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

The EU GDPR imposes strict regulations and establishes a series of requirements regarding the collection, transfer, storage and processing of personal data. Following the UK’s withdrawal from the EU on January 31, 2020 and the end of the transitional arrangements agreed between the UK and EU as of January 1, 2021, the EU GDPR has been incorporated into UK domestic law by virtue of section 3 of the EU (Withdrawal) Act 2018 and amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (“UK GDPR” and, together with the EU GDPR, the “GDPR”). We are subject to the GDPR when carrying out clinical trials and other operations in Europe.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including strict requirements relating to processing of sensitive data (such as health data), ensuring there is a legal basis or condition to justify the processing of personal data, where required strict requirements relating to obtaining consent of individuals, disclosures about how personal information is to be used, limitations on retention of information, implementing safeguards to protect the security and confidentiality of personal data, where required providing notification of data breaches, maintaining records of processing activities, documenting data protection impact assessments where there is high risk processing and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Economic Area (the “EEA”) or the UK, including the United States (see below), and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million (£17.5 million GBP) or four percent of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. Non-compliance could also result in the imposition of orders to stop data processing activities, which could have a material adverse effect on our business, financial position and results of operations.

When subject to GDPR, we will be required to put in place mechanisms to ensure compliance, including as implemented by national laws of EU Member States which may partially deviate from the EU GDPR and impose different and more restrictive obligations from country to country. Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with our European and UK activities.

The UK GDPR and the UK Data Protection Act 2018 set out the UK’s data protection regime, which is independent from but, currently, aligned to the EU’s data protection regime. The European Commission (“EC”) has adopted an adequacy decision in respect of transfers of personal data to the UK for a four-year period (until June 27, 2025). Similarly, the UK has determined that it considers all of the EEA to be adequate for the purposes of data protection. This ensures that data flows between the UK and the EEA remain unaffected. The UK Government has also introduced a Data Protection and Digital Information Bill (the "UK Bill") into the UK legislative process with the intention for this bill to reform the UK’s data protection regime which will likely have the effect of further altering the similarities between the UK and EU data protection regime.

In addition, we will be required to ensure that we implement adequate safeguards to enable the transfer of personal data outside of the EEA or the UK, in particular to the U.S., in compliance with the GDPR. In some cases, we may rely upon the EC’s approved standard contractual clauses to legitimize transfers of personal data out of the EEA from controllers or processors established outside the EEA (and not subject to the GDPR). The UK is not subject to the EC’s standard contractual clauses but has published its own transfer mechanism, the International Data Transfer Addendum/Agreement, which enables transfers from the UK Changes with respect to any of these matters may lead to additional costs and increase our overall risk exposure. The EU and U.S. have adopted its adequacy decision for the EU U.S. Data Privacy Framework (“Framework”), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred between the EU and the U.S. is comparable to that offered in the EU. Moreover, the UK Government adopted the Data Protection (Adequacy) Regulations 2023, also referred to as the “UK-U.S. Data Bridge,” which, since 12 October 2023, allows companies to transfer personal data from the UK to the U.S. on the basis of the EU-U.S. Data Privacy Framework. This provides a further avenue to ensuring transfers to the U.S. are carried out in line with GDPR. However, the long-term validity of the Framework remains uncertain and it has already been challenged before European courts.

In the United States, there has been significant focus on privacy at the state level. Leading this effort initially was the State of California which on June 28, 2018, enacted the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020 and was amended by the California Privacy Rights Act, which went into effect on January 1, 2023. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. Additional states have passed and may in the future pass comprehensive state privacy laws that may impose additional obligations on our business. Furthermore, other states have proposed or enacted legislation that is focused on more narrow aspects of privacy. For example, a number of states have passed laws that protect biometric information and a smaller number of states have passed or are considering laws that are specifically focused upon health privacy, such as Washington’s My Health My Data Act. The My Health My Data Act imposes new state restrictions and requirements on the processing and sale of consumer health data and creates a private right of action. Data privacy laws and regulations are constantly evolving and can be subject to significant change or interpretive application. Varying and evolving jurisdictional requirements could increase the costs and complexity of our compliance efforts and require changes to how we conduct our business. The effects of state and federal privacy laws are potentially significant and may require us to modify our data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation. Violations of applicable data privacy laws can result in significant penalties. Any failure, or perceived failure, by us to comply with applicable data protection or other laws could result in proceedings, or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, and could have a material adverse effect on our business, financial condition and results of operations.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in our company and, as a result, the market price of our common stock.

As a public company, we will be required to comply with the requirements of the Sarbanes-Oxley Act, including, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers.

We are also continuing to improve our internal control over financial reporting. Pursuant to the SEC rules that implement Section 404 of the Sarbanes-Oxley Act, beginning with our second annual report on Form 10‑K after we become a public company, we will be required to make a formal assessment of the effectiveness of our internal control over financial reporting, and once we cease to be an emerging growth company, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, we will be engaging in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of our internal control over financial reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed time period or at all, that our internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.

Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would likely adversely affect the market price of our common stock. In addition, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC and other regulatory authorities.

We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including:

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presentation of only two years of audited financial statements and related financial disclosure;

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exemption from the requirement to have our registered independent public accounting firm attest to management’s assessment of our internal control over financial reporting;

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exemption from compliance with the requirement of the Public Company Accounting Oversight Board, regarding the communication of critical audit matters in the auditor’s report on the financial statements;

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reduced disclosure about our executive compensation arrangements; and

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exemption from the requirement to hold non‑binding advisory votes on executive compensation or golden parachute arrangements.

We could be an emerging growth company for up to five years following the completion of this offering, although we expect to not be an emerging growth company sooner. Our status as an emerging growth company will end as soon as any of the following takes place:

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the last day of the fiscal year in which we have at least $1.235 billion in annual revenue;

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the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates;

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the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or

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the last day of the fiscal year ending after the fifth anniversary of the completion of this offering.

In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies unless it otherwise irrevocably elects not to avail itself of this exemption. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our consolidated financial statements may not be comparable to the financial statements of companies that comply with new or revised accounting pronouncements as of public company effective dates.

We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile and may decline.

Our future ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

Since our inception, we have incurred losses and we may never achieve profitability. To the extent that we continue to generate taxable losses, under current law, our unused U.S. federal net operating losses (“NOLs”) may be carried forward to offset a portion of future taxable income, if any. As of the end of our tax year ended December 31, 2023, we had approximately $103.9 million of federal NOLs and $59.1 million of state NOLs. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as one or more stockholders or groups of stockholders who own at least five percent of the corporation’s equity increasing their equity ownership in the aggregate by more than 50 percentage points (by value) over a rolling three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. Similar rules may apply under state tax laws. Our prior equity offerings and other changes in our stock ownership may have resulted in such ownership changes in the past. In addition, we may experience ownership changes in the future as a result of this offering or subsequent shifts in our stock ownership, some of which are outside of our control. As a result, if we earn net taxable income, our ability to use our pre-change NOLs or other pre-change tax attributes to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us and could require us to pay U.S. federal income taxes earlier than would be required if such limitations were not in effect. There is a risk that due to changes under the tax law, regulatory changes or other unforeseen reasons, our existing NOLs or business tax credits could expire or otherwise be unavailable to offset future income tax liabilities. For these reasons, we may not be able to realize a tax benefit from the use of our NOLs or tax credits, even if we attain profitability.

Legislation or other changes in U.S. tax law may have a material adverse effect on our business, cash flow, financial condition, or results of operations.

The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock. For example, under Section 174 of the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the United States will be capitalized and amortized, which may have an adverse effect on our cash flow. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations. It cannot be predicted whether, when, in what form, or with what effective dates, new tax laws may be enacted, or regulations and rulings may be enacted, promulgated or issued under existing or new tax laws, which could result in an increase in our or our stockholders’ tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof. We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.

Our business activities may be subject to the FCPA, and similar anti-bribery and anti-corruption laws of other countries in which we operate, as well as U.S. and certain foreign export controls, trade sanctions and import laws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability if we violate them.

If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.

Our business activities may be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. The FCPA generally prohibits companies and their employees and third‑party intermediaries from offering, promising, giving or authorizing the provision of anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, hospitals owned and operated by the government, and doctors and other hospital employees would be considered foreign officials under the FCPA. Recently the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, disgorgement and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international activities, our ability to attract and retain employees and our business, prospects, operating results and financial condition.

In addition, our products and activities may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of our products, or our failure to obtain any required import or export authorization for our products, when applicable, could harm our international sales and adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international markets or, in some cases, prevent the export of our products to some countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the shipment of certain products and services to countries, governments and persons targeted by U.S. sanctions. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or products targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export our products to existing or potential customers with international operations. Any decreased use of our products or limitation on our ability to export or sell access to our products would likely adversely affect our business.

We may become involved in litigation that could divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages.

From time to time, we may be subject to litigation claims through the ordinary course of our business operations regarding, but not limited to, our product candidates, securities litigation, employment matters, security of patient and employee personal data, contractual relations with collaborators and licensors and intellectual property rights. In the past, securities class action litigation has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, the announcement of negative events, such as negative results from clinical trials, or periods of volatility in the market price of a company’s securities. These events may also result in or be concurrent with investigations by the SEC. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect our business and cash resources and our ability to consummate a potential strategic transaction or the ultimate value our stockholders receive in any such transaction.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include statements about:

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the timing, progress and results of our current clinical trials for our product candidates, including our current Phase 1/2 clinical trial for AURN001;

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our ability to replicate positive results from earlier clinical trials conducted by us or third parties in current or future clinical trials, including our current Phase 1/2 clinical trial for AURN001;

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our ability to demonstrate that AURN001 and any future product candidates are safe and effective for their proposed indications and our expectations around their beneficial characteristics and therapeutic effects;

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our ability to advance AURN001 and any future product candidates through applicable regulatory approval processes, including timing of INDs and any final FDA approval;

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our ability to rely on third-party manufacturers and successfully manufacture and commercialize our cell therapy product, Vyznova, and manufacture our product candidate, AURN001, for clinical trials and for commercial use if approved;

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our ability to successfully commercialize Vyznova and, if approved, AURN001, and obtain favorable pricing and reimbursement;

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the size and growth potential of the market for Vyznova, AURN001, and any other product candidates we may develop, and our ability to serve those markets;

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our ability to maintain, expand and protect our intellectual property;

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existing regulations and regulatory developments in the United States and other jurisdictions;

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general economic, industry and market conditions;

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our ability to attract, hire and retain key members of our management team and additional qualified personnel;

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our anticipated use of our existing cash and cash equivalents and the net proceeds from this offering;

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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and

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other risks and uncertainties, including those listed in the section titled “Risk Factors.”

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We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. You should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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MARKET, INDUSTRY AND OTHER DATA

This prospectus contains estimates and information concerning our industry, including market size of the markets in which we participate, that are based on various third‑party sources, industry publications and reports, as well as our own internal information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates and information. The markets in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these sources, publications and reports.

The sources of certain statistical data, estimates and forecasts contained in this prospectus include the following industry publications or reports:

IQVIA, Insights Into Endothelial Blindness, 2023.

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Clearview Healthcare Partners, Corneal Endothelial Disease Cell Therapy U.S. Assessment, 2024.

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Eye Bank Association of America, 2023 Eye Banking Statistical Report, 2023.

Except for the IQVIA and Clearview Healthcare Partners reports, none of the industry and general publications, research, studies and surveys relied upon by us or otherwise referred to in this prospectus were prepared on our behalf.

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USE OF PROCEEDS

We estimate that the net proceeds from this offering will be approximately $ million, or $ million if the underwriters exercise their option to purchase additional shares in full, assuming an initial public offering price of $ per share, which is the midpoint of price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the net proceeds to us from this offering by $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase or decrease of 1.0 million shares in the number of shares offered by us would increase or decrease, as applicable, the net proceeds to us from this offering by $ million, assuming that the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the initial public offering price or the number of shares by these amounts would have a material effect on our use of the proceeds from this offering, although it may accelerate the time when we need to seek additional capital.

We intend to use the net proceeds from this offering for the following purposes:

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approximately $ million to fund the clinical development of our cell therapy product candidate, AURN001;

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approximately $ million to optimize our manufacturing capabilities;

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approximately $ million to fund the clinical development of our cryopreserved formulation of AURN001; and

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the remainder for our other research and development activities, as well as for working capital and other general corporate purposes.

Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time.

Based upon our available cash resources and current operating plans, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our unaudited interim condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, and for the nine months ended September 30, 2024 and 2023, are issued.

Our expected use of proceeds from this offering described above represents our current intentions based on our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the actual amounts that we will spend on the uses set forth above. We expect that we will require additional funds in order to fully accomplish the specified uses of the proceeds of this offering. We believe that our existing cash and cash equivalents, together with the proceeds from this offering, will be sufficient to fund our working capital and capital expenditures through . We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect. We will need to raise substantial additional funds

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in the future in order to complete the development of AURN001, seek regulatory approval thereof, and to commercialize this product in the United States.

Moreover, the amounts and timing of our actual expenditures will depend on numerous factors, including those described in “Risk Factors” in this prospectus, as well as the amount of cash used in our operations and any unforeseen cash needs. Therefore, our actual expenditures may differ materially from the estimates described above. We may find it necessary or advisable to use the net proceeds for other purposes. In addition, a large proportion of our research and development activities are cross-program (e.g., development of manufacturing, animal experiments) and generally are not allocated to specific programs or product candidates, unlike a company in the clinical development stage. The specific allocation of the proceeds from this offering and our current cash and cash equivalents towards specific programs will depend on, among other things, results from our research and development efforts for each program, the timing and success of our preclinical studies and the timing and outcome of regulatory submissions. As a result, and due to the number of our programs currently in preclinical development, we currently are unable to specify to what stage of development the proceeds from this offering and our current cash and cash equivalents will bring any particular program.

As of the date of this prospectus, we intend to invest the net proceeds that are not used as described above in capital-preservation investments, including short-term interest-bearing debt instruments or bank deposits.

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DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cash dividends on our capital stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business. Any future determination to pay dividends will be made at the discretion of our board of directors subject to applicable laws and will depend upon, among other factors, our operating results, financial condition, contractual restrictions and capital requirements. Our future ability to pay cash dividends on our capital stock is limited by the terms of our existing credit facility and may be limited by any future debt instruments or preferred securities.

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CAPITALIZATION

The following table summarizes our cash and cash equivalents and capitalization, as of September 30, 2024:

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on an actual basis;

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on a pro forma basis to give effect to (i) the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 20,140,146 shares of common stock, which will occur upon the closing of this offering, (ii) the conversion of our outstanding Notes, together with accrued and unpaid interest, into an aggregate of shares of common stock, which will occur upon the closing of this offering, (iii) the filing of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering; and (iv) the remeasurement of our derivative liability instrument immediately before payment of a success fee, payable to our lenders in accordance with the terms of our line of credit, resulting in an estimated $ adjustment to accumulated deficit; and

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on a pro forma as adjusted basis to reflect (i) the pro forma adjustments set forth above and (ii) the issuance and sale by us of shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.


	As of September 30, 2024
		Actual				Pro Forma		Pro Forma As Adjusted(1)
	(in thousands, except share data)
Cash and cash equivalents		$	52,065		$		$
Convertible notes at fair value		$	33,413		$		$
Line of credit			23,500
Redeemable convertible preferred stock (Series A, B, B-1, C and C-1), par value $0.0001 per share, 24,679,886 authorized, 24,679,885 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted			214,775
Stockholders’ equity (deficit):
Common stock, par value $0.0001 per share, 33,185,455 shares authorized, 225,209 shares issued and outstanding, actual; shares authorized, shares issued and outstanding, pro forma; shares authorized, shares issued and outstanding, pro forma as adjusted			1
Additional paid-in capital			(13,579	)
Accumulated other comprehensive loss			(1,374	)
Accumulated deficit			(205,587	)
Total stockholders’ equity (deficit)			(220,539	)
Total capitalization		$	51,149		$		$

(1)

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, each of our cash and cash equivalents, total stockholders’ equity (deficit) and total capitalization by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated

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underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares offered by us would increase or decrease, as applicable, each of our cash and cash equivalents, total stockholders’ equity (deficit) and total capitalization by approximately $ million, assuming that the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

The number of shares of common stock that will be outstanding immediately after this offering is based on shares of our common stock outstanding as of September 30, 2024, after giving effect to the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 20,140,146 shares of our common stock and conversion of our outstanding Notes, together with accrued and unpaid interest, into an aggregate of shares of common stock, and excludes:

•

3,362,085 shares of common stock issuable upon the exercise of outstanding options as of September 30, 2024, with a weighted-average exercise price of $7.32 per share;

•

61,246 shares of common stock reserved for future issuance under the 2017 Plan, as of September 30, 2024, which number of shares will be added to the shares of our common stock to be reserved under our 2025 Plan upon its effectiveness, at which time we will cease granting awards under our 2017 Plan;

•

shares of common stock reserved for future issuance under the 2025 Plan, which will become effective on the business day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part; and

•

shares of common stock reserved for future issuance under the ESPP, which will become effective on the business day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part.

In connection with a qualified IPO (as defined in our certificate of incorporation), (i) shares of our Series A Preferred Stock, Series B Preferred Stock and Series B-1 Preferred Stock will convert into common stock on a 0.7168:1 ratio, (ii) shares of our Series C Preferred Stock will convert into common stock on an approximately 0.8534:1 ratio, (iii) shares of our Series C-1 Preferred Stock will convert into common stock on an approximately 0.8535:1 ratio, and (iv) the Notes, together with accrued and unpaid interest, will convert into common stock at a conversion price equal to 80% of the public offering price if the qualified IPO occurs prior to July 2, 2026, and at a conversion price equal to 70% of the public offering price if the qualified IPO occurs thereafter.

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

Our historical net tangible book value (deficit) as of September 30, 2024 was ($222.3 million), or ($987.01) per share. Net tangible book value (deficit) per share is determined by dividing our total tangible assets (total assets less deferred offering costs) less our total liabilities and the carrying value of our convertible preferred stock that is not included within stockholders' deficit by the number of shares of our common stock outstanding. Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma as adjusted net tangible book value per share of our common stock immediately after completion of this offering.

Our pro forma net tangible book value as of September 30, 2024 was $ million, or $ per share, based on the total number of shares of our common stock outstanding as of September 30, 2024, after giving effect to (a) the conversion of all outstanding shares of redeemable convertible preferred stock outstanding as of September 30, 2024 into an aggregate of 20,140,146 shares of common stock, (b) the conversion of our Notes including accrued and unpaid interest outstanding as of September 30, 2024 into an aggregate of shares of common stock, and (c) the remeasurement of our derivative liability instrument immediately before payment of a success fee, payable to our lenders in accordance with the terms of our line of credit, resulting in an estimated $ adjustment to accumulated deficit.

After giving effect to the sale by us of shares of our common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2024 would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $ per share to investors purchasing shares of our common stock in this offering at the assumed initial public offering price. The following table illustrates this dilution:


Assumed initial public offering price per share	$
Historical net tangible book value (deficit) per share as of September 30, 2024	$	(987.01	)
Pro forma increase in net tangible book value per share as of September 30, 2024
Pro forma net tangible book value per share as of September 30, 2024
Increase in pro forma net tangible book value per share attributable to investors purchasing shares of common stock in this offering
Pro forma as adjusted net tangible book value per share immediately after this offering
Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering	$

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share by approximately $ , and would increase or decrease, as applicable, dilution per share to new investors purchasing shares of common stock in this offering by $ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our common stock offered by us would increase or decrease, as applicable, our pro forma as adjusted net tangible book value by approximately $ per share and increase or decrease, as applicable, the dilution to new investors purchasing shares of

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common stock in this offering by $ per share, assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option in full to purchase additional shares of common stock in this offering, the pro forma as adjusted net tangible book value per share after the offering would be $ per share, the increase in the pro forma net tangible book value per share to existing stockholders would be $ per share and the pro forma as adjusted dilution to new investors purchasing common stock in this offering would be $ per share.

The following table presents, on a pro forma as adjusted basis to give effect to this offering, as of September 30, 2024, the differences between the existing stockholders and the new investors purchasing shares of our common stock in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid to us and the average price per share paid or to be paid to us at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:


	Shares Purchased		Total Consideration			Average Price Per
	Number	Percent	Amount	Percent		Share
Existing stockholders before this offering		%	$	%	$
Investors participating in this offering
Total		100.00%	$	100.00%	$

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and the total consideration paid by all stockholders by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares offered by us would increase or decrease, as applicable, total consideration paid by new investors and total consideration paid by all stockholders, by approximately $ million, assuming that the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The table above assumes no exercise of the underwriters’ option to purchase additional shares in this offering. If the underwriters’ option to purchase additional shares is exercised in full, the total number of shares of our common stock held by existing stockholders would be reduced to % of the total number of shares of our common stock outstanding after this offering, and the total number of shares of common stock held by investors purchasing shares of common stock in the offering would be increased to % of the total number of shares outstanding after this offering.

The number of shares of common stock that will be outstanding immediately after this offering is based on shares of our common stock outstanding as of September 30, 2024, after giving effect to the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 20,140,146 shares of our common stock and conversion of our outstanding Notes, together with accrued and unpaid interest, into an aggregate of shares of common stock, and excludes:

•

3,362,085 shares of common stock issuable upon the exercise of outstanding options as of September 30, 2024, with a weighted-average exercise price of $7.32 per share;

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•

76 shares of common stock issuable upon the exercise of outstanding warrants as of September 30, 2024, under our 2017 Plan, with a weighted-average exercise price of $4,171.05 per share;

•

To the extent that any outstanding options to purchase our common stock are exercised or new awards are granted under our equity compensation plans, or additional shares of our common stock are issued, there will be further dilution to investors participating in this offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with our unaudited interim condensed consolidated financial statements and related notes as of September 30, 2024 and December 31, 2023 and for the nine months ended September 30, 2024 and 2023, and our audited consolidated financial statements and related notes as of and for the years ended December 31, 2023 and 2022, and other financial information included elsewhere in this prospectus. This discussion and analysis and other parts of this prospectus contain forward-looking statements based upon our current plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, strategies, objectives, expectations, intentions and beliefs. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” and elsewhere in this prospectus, which you should carefully read to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biotechnology company committed to developing and commercializing disease-modifying, regenerative therapies to restore vision to millions of patients worldwide. We are advancing a single administration, allogeneic cell therapy to treat vision loss due to corneal endothelial diseases. In Japan, our first-generation cell therapy product, HCEC-1, received regulatory and reimbursement approval, and launched commercially in September 2024 under the marketed name Vyznova. Our next-generation product candidate, AURN001, is an improved formulation designed to be mechanistically identical to Vyznova and to provide enhanced benefits, including manufacturing scalability and extended shelf life. We believe AURN001 has the potential to serve as a first-line therapy for patients with corneal edema secondary to corneal endothelial dysfunctions. AURN001 has been developed leveraging data generated globally across five completed clinical trials in 154 procedures in 130 subjects, including four trials evaluating HCEC-1 and one trial evaluating AURN001. Across these completed trials, subjects experienced clinically meaningful and sustained improvements in anatomical and functional measures of corneal health, central corneal thickness and best corrected visual acuity, respectively. In addition, we have completed enrollment and dosed 97 subjects in a Phase 1/2 clinical trial in the United States and Canada, and 12-month topline results are expected to be available in the second half of 2025. The data generated from our five completed trials was submitted to the U.S. Food and Drug Administration (“FDA”) as clinical evidence to support the initiation of our Phase 1/2 clinical trial for AURN001; however, we intend to rely on our current and future clinical trials, including our Phase 1/2 clinical trial, to seek approval from the FDA for AURN001. Moreover, the regulatory approval of Vyznova in Japan does not guarantee that we will be able to obtain or maintain regulatory approval for AURN001 in the United States or any other jurisdiction.

AURN001 received both Breakthrough Therapy Designation (“BTD”) and Regenerative Medicines Advanced Therapy Designation (“RMAT”) from the FDA for the treatment of corneal edema secondary to corneal endothelial dysfunction. Such designations provide potential benefits, including increased interaction and communication with the FDA to discuss the development plan for AURN001. However, such designations may not lead to a faster development or regulatory review or approval process and do not increase the likelihood that AURN001 will receive FDA approval.

Although our cell therapy product, Vyznova, has been approved for sale in Japan, we are early in our commercialization and manufacturing efforts, and have not generated any significant revenue to date from that product or any other product sales or other sources and have incurred significant operating losses and negative cash flows from our operations. Our primary uses of cash to date have been conducting research and development, fundraising activities, building infrastructure, developing intellectual property, hiring personnel and providing general and administrative support for these

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operations. To date, we have funded our operations primarily through the sale of redeemable convertible preferred stock and the issuance of debt and convertible notes.

We have incurred operating losses in each year since our inception. Our net losses were $47.7 million and $33.4 million for the nine months ended September 30, 2024 and 2023, respectively, and $45.5 million and $35.7 million for the years ended December 31, 2023 and 2022, respectively. As of September 30, 2024, we had an accumulated deficit of $205.6 million. We expect our expenses and operating losses will increase substantially as we:

•

conduct our ongoing preclinical studies and ongoing and planned clinical trials;

•

utilize third parties to manufacture Vyznova, and, if approved, AURN001 and any future product candidates we may develop and related raw materials or, should we decide to do so, build and maintain a commercial-scale current Good Manufacturing Practices manufacturing facility;

•

continue our research and development activities;

•

hire additional research and development, clinical, commercial and operational personnel;

•

maintain, expand, enforce, defend and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio;

•

seek regulatory approvals for AURN001 and any future product candidates we may develop for which we successfully complete clinical trials;

•

ultimately establish a sales, marketing and distribution infrastructure to commercialize AURN001 and any therapies for which we may obtain marketing approval; and

•

incur additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and Securities and Exchange Commission (“SEC”) requirements, director and officer insurance premiums and investor relations costs.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies and our ongoing and planned clinical trials, our expenditures on other research and development activities and revenue and related cost of revenue generated from the sale of Vyznova in Japan.

As of September 30, 2024, we had cash and cash equivalents of $52.1 million. Based upon our available cash resources and current operating plans, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that our unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2024 were issued. We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect. We believe that our existing cash and cash equivalents, together with the proceeds from this offering, will be sufficient to fund our working capital and capital expenditures through . We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect. We will need to raise substantial additional funds in the future in order to complete the development of AURN001, seek regulatory approval thereof, and to commercialize this product in the United States. If we are unable to continue as a going concern, we may have to cease operations and liquidate our assets. We may receive less than the value at which those assets are carried on our audited financial statements, and investors may lose all or part of their investment. See the section titled “Use of Proceeds.”

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We have launched one cell therapy product commercially in Japan, Vyznova, and have one product candidate, AURN001, and are generally early in our development and commercialization efforts. We do not expect to generate any revenue from product sales in the United States unless and until we successfully manufacture and commercialize AURN001, or successfully manufacture and commercialize any other product candidates we may develop, which may not be for several years, if ever. If we obtain additional regulatory approvals for AURN001 or any other product candidates we may develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Furthermore, we rely, and expect to continue to rely, on contract development and manufacturing organizations (“CDMOs”) for the manufacturing of Vyznova and, if approved, AURN001. Accordingly, until such time as we can generate significant revenue from sales of AURN001 or any other product candidates we may develop, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. See “—Liquidity and Capital Resources.” However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market current or future product candidates that we would otherwise prefer to develop and market ourselves.

Components of Results of Operations

Revenue

Our cell therapy product, Vyznova, has been approved for sale in Japan, but we are early in our commercialization and manufacturing efforts. Our ability to generate significant product revenue will depend on the successful development and eventual commercialization of AURN001 or any future product candidates we may pursue and our ability to successfully market Vyznova in Japan. If we fail to complete preclinical and clinical development of our current or future product candidates or obtain regulatory approval for them, our ability to generate future revenues and our results of operations and financial position would be adversely affected.

In the third quarter of 2024, we began commercial sales of our first-generation cell therapy product, Vyznova, in Japan which received regulatory approval from Japan’s Pharmaceuticals and Medical Devices Agency and reimbursement approval from the Ministry of Health, Labour and Welfare.

Revenue is recognized from product sales when control of promised products is transferred to customers and in an amount that reflects the consideration we expect to be entitled to in exchange for those products. We typically determine transfer of control based on when the product is shipped or delivered and title passes to the customer. For revenue related to the sale of a product to qualify for recognition, we must have an enforceable contract with a customer that defines the product to be transferred and the payment terms related to those goods.

In determining the transaction price, we evaluate whether the price is subject to refund, return or other adjustments to determine the net consideration to which we expect to be entitled. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of product and collected from a customer. Revenue for our product sales has not been adjusted for the effects of a financing component as we expect, at contract inception, that the period between when we transfer control of the product and when we receive payment will be one year or less.

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Operating Expenses

Cost of Revenue

Cost of revenue includes all direct costs incurred to manufacture and deliver products to our customers. Our cell therapy product in Japan is manufactured by a third-party manufacturer. Cost of revenue includes raw materials, contracted drug product manufacturing and testing costs, as well as shipping and handling costs and license royalties incurred associated with the products sold. Cost of revenue also includes the write-down of excess, expired, or obsolete inventories and the write-off of inventories that do not meet required product specifications, if any.

Research and Development Expenses

Research and development expenses consist primarily of personnel-related costs, other internal and external costs associated with our research and development activities, our discovery and research efforts, and the preclinical and clinical development of our current and future product candidates. Our research and development expenses include:

•

personnel-related costs, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions;

•

the cost of developing and validating our manufacturing process for use in our preclinical studies and ongoing and future clinical trials;

•

external expenses, including expenses incurred under arrangements with third parties, such as sponsored research agreements, contract research organizations, consultants and our scientific advisors;

•

facility costs, depreciation and other expenses, which include direct and allocated expenses;

•

costs for laboratory supplies, research materials and reagents;

•

the cost to obtain licenses to intellectual property, and related future payments should certain development and regulatory milestones be achieved; and

•

the costs to acquire in-process research and development with no alternative future use acquired in an asset acquisition.

We expense all research and development costs in the periods in which they are incurred. Most of our research and development expenses have been related to the development and commercialization of AURN001.

We plan to substantially increase our research and development expenses for the foreseeable future as we continue to conduct our ongoing research and development activities, advance our preclinical research programs toward clinical development and conduct our current and planned clinical trials.

The timelines and costs with research and development activities are uncertain and can vary significantly for each current and future product candidate and development program due to the inherently unpredictable nature of preclinical and clinical development. We anticipate we will make determinations as to AURN001 and any future product candidates that we may develop to pursue and how much funding to direct to each program on an ongoing basis in response to preclinical and clinical results, regulatory developments and ongoing assessments as to each program’s commercial potential.

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Our future development costs may vary significantly based on various factors such as timely and successful completion of preclinical studies and ongoing and future clinical trials, positive results from our current and future clinical trials, any receipt of marketing approvals from applicable regulatory authorities, establishment and maintenance of arrangements with third parties, intellectual property updates and continued acceptable safety, tolerability and efficacy profile of any approved products.

A change in the outcome of any of these variables with respect to the development of any current or future product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate would be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to slower than expected patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits and stock-based compensation charges for those individuals in executive, legal, finance, human resources, facility operations and other administrative functions. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for auditing, accounting, tax and consulting services, office and information technology costs, insurance costs and facilities, depreciation and other general and administrative expenses, which include direct or allocated expenses for rent and maintenance of facilities and utilities.

We anticipate that our general and administrative expenses will increase for the foreseeable future to support our increased research and development activities. These increases will likely include increased costs related to the hiring of additional personnel and fees paid to outside consultants, among other expenses. We also anticipate increased expenses related to audit, accounting, legal, regulatory and tax-related services associated with maintaining compliance with SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

Results of Operations

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations (in thousands):


	Nine Months Ended September 30,						Change
	2024			2023			$			%
Revenue	$	657		$	—		$	657		n/a
Operating expenses:
Cost of revenue		1,654			—			1,654		n/a
Research and development		32,122			24,996			7,126			29	%
General and administrative		14,518			9,617			4,901			51	%
Total operating expenses		48,294			34,613			13,681			40	%
Loss from operations		(47,637	)		(34,613	)		(13,024	)		38	%
Other income (expense)		(87	)		1,320			(1,407	)		(107	%)
Loss before income taxes		(47,724	)		(33,293	)		(14,431	)		43	%
Income taxes		(14	)		(73	)		59			(81	%)
Net loss	$	(47,738	)	$	(33,366	)	$	(14,372	)		43	%

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Revenue

Revenue was $0.7 million for the nine months ended September 30, 2024 as compared to zero for the nine months ended September 30, 2023 due to product sales of Vyznova, which commenced in September 2024.

Cost of Revenue

Cost of revenue was $1.7 million for the nine months ended September 30, 2024 as compared to zero for the nine months ended September 30, 2023. The increase is due to $0.7 million in manufacturing costs, delivery fees, and royalty payments which did not occur in the prior period as we had not started commercial sales and $1.0 million in inventory write-downs which occurred primarily due to one batch not yielding any shippable units.

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):


	Nine Months Ended September 30,				Change
	2024		2023		$			%
Research and development
Personnel-related expenses	$	10,906	$	7,748	$	3,158			41	%
Contract manufacturing expenses		10,581		6,983		3,598			52	%
Clinical and pre-clinical expenses		3,301		2,706		595			22	%
Professional fees		2,294		2,557		(263	)		(10	%)
Facility-related and other expenses		5,040		5,002		38			1	%
Total research and development expenses	$	32,122	$	24,996	$	7,126			29	%

Research and development expenses were $32.1 million for the nine months ended September 30, 2024 as compared to $25.0 million for the nine months ended September 30, 2023. The increase was primarily due to an increase of $3.6 million in contract manufacturing costs for CDMOs, including pass-through costs for materials, and an increase of $3.2 million in personnel-related costs primarily due to an increase in the number of employees.

General and Administrative Expenses

General and administrative expenses were $14.5 million for the nine months ended September 30, 2024 as compared to $9.6 million for the nine months ended September 30, 2023. The increase was primarily due to an increase of $2.6 million in personnel-related costs primarily due to an increase in the number of employees, including an increase of $1.0 million in stock-based compensation expense, an increase of $1.0 million in sales and marketing costs, and an increase of $0.9 million in legal and professional costs.

Other Income (Expense)

Other expense was $0.1 million for the nine months ended September 30, 2024 as compared to other income of $1.3 million for the nine months ended September 30, 2023. The decrease primarily reflects an increase in interest expense of $0.8 million due to new borrowings on our line of credit and the change in fair value of our convertible notes at fair value and derivative liability of $0.3 million each.

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Comparison of the Years Ended December 31, 2023 and 2022

The following table summarizes our results of operations (in thousands):


	Year Ended December 31,						Change
	2023			2022			$			%
Operating expenses:
Research and development	$	34,823			24,568			10,255			42	%
General and administrative		12,526			10,003			2,523			25	%
Total operating expenses		47,349			34,571			12,778			37	%
Loss from operations		(47,349	)		(34,571	)		(12,778	)		37	%
Other income (expense):
Interest income		1,904			182			1,722			946	%
Change in fair value of derivative liabilities		-			983			(983	)	n/a
Loss on extinguishment of convertible notes		-			(831	)		831		n/a
Loss before income taxes		(45,445	)		(34,237	)		(11,208	)		33	%
Income taxes		(101	)		(2	)		(99	)	n/a
Net loss from continuing operations		(45,546	)		(34,239	)		(11,307	)		33	%
Net loss from discontinued operations		-			(1,446	)		1,446		n/a
Net loss	$	(45,546	)	$	(35,685	)	$	(9,861	)		28	%

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):


	Year Ended December 31,				Change
	2023		2022		$			%
Research and development
Personnel-related expenses	$	10,282	$	6,702	$	3,580			53	%
Contract manufacturing expenses		10,447		9,106		1,341			15	%
Clinical and pre-clinical expenses		3,948		55		3,893		n/a
Professional fees		3,526		3,554		(28	)		(1	%)
Facility-related and other expenses		6,620		5,151		1,469			29	%
Total research and development expenses	$	34,823	$	24,568	$	10,255			42	%

Research and development expenses were $34.8 million for the year ended December 31, 2023 as compared to $24.6 million for the year ended December 31, 2022. The increase was primarily due to:

•

an increase of $3.6 million in personnel-related costs, including an increase of $0.5 million in stock-based compensation expense, primarily due to an increase in the number of employees;

•

an increase of $1.3 million in contract manufacturing costs for CDMOs, including pass-through costs for materials;

•

an increase of $3.9 million in clinical and preclinical expenses associated with development of our AURN001 program; and

•

an increase of $1.5 million in facility-related and other expenses, including an increase of $1.0 million in costs to license intellectual property for our AURN001 program, an increase of $0.8 million in allocated overhead costs, offset by a decrease in other research and development costs of $0.3 million.

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General and Administrative Expenses

General and administrative expenses were $12.5 million for the year ended December 31, 2023 as compared to $10.0 million for the year ended December 31, 2022. The increase was primarily due to an increase of $1.4 million in personnel-related costs, including an increase of $0.8 million in stock-based compensation expense, and an increase of $0.9 million in legal and professional costs.

Other Income (Expense)

Interest income was $1.9 million for the year ended December 31, 2023 as compared to $0.2 million for the year ended December 31, 2022 due to an increase in interest rates and an increase in average balances. Change in fair value of derivative liabilities was zero for the year ended December 31, 2023 as compared to $1.0 million for the year ended December 31, 2022 due to remeasurement of the related financial instrument in the prior year. Loss on extinguishment of convertible notes was zero for the year ended December 31, 2023 as compared to $0.8 million for the year ended December 31, 2022 due to no similar transactions occurring during 2023.

Discontinued Operations

On April 5, 2022, we divested our business that provided corneal tissue for transplantation and tissue services to surgeons and their patients (the “Tissue Business”) by distributing the net assets to our shareholders (the “Spin-off”) through a dividend distribution, pursuant to which CorneaGen Inc. became an independent company. The historical financial results for periods prior to the distribution have been reflected in our consolidated statements of operations and comprehensive loss as discontinued operations. See Note 14 to our audited consolidated financial statements as of and for the years ended December 31, 2023 and 2022 included elsewhere in this prospectus for additional information.

Segment Information

We operate and manage our business in two reportable segments: the United States and Japan. We identify our reportable segments based on the information used by management to monitor performance and make operating decisions. We measure and assess financial performance by reviewing segment operating loss which consists of revenue and operating expenses. See Note 16 to our audited consolidated financial statements included elsewhere in this prospectus for additional information regarding our reportable segments.

Operating loss for the United States segment for the nine months ended September 30, 2024 was $44.3 million as compared to $31.2 million for the nine months ended September 30, 2023, representing an increase of $13.1 million, or 41.9%. Operating loss for the United States segment for the year ended December 31, 2023 was $42.5 million as compared to $29.4 million for the year ended December 31, 2022, representing an increase of $13.1 million or 44.7%. The increase in both periods is primarily attributable to an increase in expenses associated with the development of our lead product candidate, AURN001.

Operating loss for the Japan segment for the nine months ended September 30, 2024 was $4.0 million as compared to $3.4 million for the nine months ended September 30, 2023, representing an increase of $0.6 million, or 16.4%. The increase is primarily attributable to an increase in cost of revenue of $1.7 million offset by an increase in revenue of $0.7 million due to product sales and manufacturing costs associated with sales of Vyznova which did not occur in the prior period.

Operating loss for the Japan segment for the year ended December 31, 2023 was $4.8 million as compared to $5.2 million for the year ended December 31, 2022, representing a decrease of $0.4 million or 7.2%. The decrease is primarily due to a reduction in professional services.

Aurion Biotech, Inc. S-1