Nervgen Pharma Corp 40-F for FY2025
Nervgen Pharma Corp. (NGEN)
About this 40-F
Nervgen Pharma Corp filed this 40-F on March 31, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- 44.12M CAD
- compared with a net loss of 24.25M CAD a year earlier
- Diluted EPS
- -0.61 CAD
- compared with -0.36 CAD a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
Commission File Number
(Exact name of registrant as specified in its charter)
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(Province or other jurisdiction of incorporation or organization) |
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| (I.R.S. Employer Identification No., if applicable) |
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(Address and telephone number of registrant’s principal executive offices)
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(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
| Trading Symbol(s): |
| Name of each exchange on which registered: |
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Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
For annual reports, indicate by check mark the information filed with this form:
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Indicate the number of outstanding shares of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (s.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act. Emerging growth company.
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 13(a) of the Exchange Act.
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Auditor Name: |
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PRINCIPAL DOCUMENTS
The following documents are filed as part of this Annual Report on Form 40-F:
A. Annual Information Form
For the Annual Information Form for the year ended December 31, 2025 (the “AIF”) of NervGen Pharma Corp. (the “Registrant”), see Exhibit 99.1 of this Annual Report on Form 40-F.
B. Audited Annual Financial Statements
For the Registrant’s Audited Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024 (the “2025 Financial Statements”), including the Report of Independent Registered Public Accounting Firm with respect thereto, see Exhibit 99.2 of this Annual Report on Form 40-F.
C. Management’s Discussion and Analysis
For the Registrant’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2025 (“MD&A”), see Exhibit 99.3 of this Annual Report on Form 40-F.
CONTROLS AND PROCEDURES
A. Certifications
The required disclosure is included in Exhibits 99.5, 99.6, 99.7 and 99.8 of this Annual Report on Form 40-F.
B. Disclosure Controls and Procedures
The information provided under the heading “Disclosure Controls and Procedures and Internal Controls Over Financial Reporting” contained in the MD&A, filed as Exhibit 99.3 to this Annual Report on Form 40-F, is incorporated by reference herein.
C. Management’s Annual Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public Accounting Firm
This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Registrant’s registered public accounting firm due to a transition period established by rules of the U.S. Securities and Exchange Commission (the “Commission”) for newly public companies.
D. Changes in Internal Control over Financial Reporting
The information provided under the heading “Disclosure Controls and Procedures and Internal Controls Over Financial Reporting” contained in the MD&A, filed as Exhibit 99.3 to this Annual Report on Form 40-F, is incorporated by reference herein.
NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2025 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant’s Board of Directors (the “Board”) has determined that each member of the Audit Committee, Brian Bayley, Neil Klompas and Harold Punnett, is “independent” (as defined by Rule 10A-3 of the Exchange Act and Nasdaq Rule 5605(a)(2)) and that Mr. Klompas is an “audit committee financial expert” (as that term is defined in paragraph 8(b) of General Instruction B to Form 40-F). For a description of Mr. Klompas’ relevant experience in financial matters, see the biographical descriptions for each under “Board of Directors and Management” in the AIF, which is filed as Exhibit 99.1 to this Annual Report on Form 40-F.
CODE OF ETHICS
The Board has adopted a written code of business conduct and ethics (the “Code”) which emphasizes the importance of matters relating to honest and ethical conduct, full, fair, accurate, timely, and understandable disclosure in reports that the Registrant files with, or submits to, the Commission and in other public communications, compliance with applicable laws, rules and regulations, the prompt internal reporting of violations of the Code and accountability for adherence to the Code. All individuals representing the Registrant, including the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, are expected to abide by all applicable provisions of the Code and adhere to its principles and values when representing the Registrant to the public or performing services for, or on behalf of, the Registrant. The Board and the Audit Committee of the Board will review the effectiveness of the Code on an ongoing basis to ensure that the Registrant’s business activities are conducted in accordance with the principles and rules set out therein. A copy of the Code can be obtained from the Registrant’s website at https://nervgen.com/corporate-governance/.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information provided under the heading “Audit Committee Information - External Auditor Service Fees” by category contained in the AIF, filed as Exhibit 99.1 to this Annual Report on Form 40-F, is incorporated by reference herein.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The information provided under the heading “Audit Committee Information - Pre-Approval Policies and Procedures” contained in the AIF, filed as Exhibit 99.1 to this Annual Report on Form 40-F, is incorporated by reference herein.
OFF-BALANCE SHEET ARRANGEMENTS
The information provided under the heading “Off-Balance Sheet Arrangements” contained in the MD&A, filed as Exhibit 99.3 to this Annual Report on Form 40-F, is incorporated by reference herein.
CONTRACTUAL OBLIGATIONS
The information provided under the heading “Contractual Obligations” contained in the MD&A, filed as Exhibit 99.3 to this Annual Report on Form 40-F, is incorporated by reference herein.
IDENTIFICATION OF THE AUDIT COMMITTEE
The information provided under the heading “Audit Committee Information - Composition of the Audit Committee” contained in the AIF, filed as Exhibit 99.1 to this Annual Report on Form 40-F, is incorporated by reference herein.
DIFFERENCES IN NASDAQ AND CANADIAN CORPORATE GOVERNANCE REQUIREMENTS
The Registrant is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act and its common shares are listed on the Nasdaq Capital Market (“Nasdaq”).
Nasdaq Rule 5615(a)(3) permits a foreign private issuer to follow its home country practice in lieu of the requirements of the Rule 5600 Series, the requirement to disclose third party director and nominee compensation set forth in Rule 5250(b)(3), and the requirement to distribute annual and interim reports set forth in Rule 5250(d), provided, however, that such a Company shall: comply with the Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), the Diverse Board Representation Rule (Rule 5605(f)), the Board Diversity Disclosure Rule (Rule 5606), have an audit committee that satisfies Rule 5605(c)(3), and ensure that such audit committee’s members meet the independence requirement in Rule 5605(c)(2)(A)(ii).
The Registrant does not follow Rule 5620(c) regarding minimum quorum for meetings of shareholders and instead follows its home country practice. The Nasdaq minimum quorum requirement under Rule 5620(c) for a shareholder meeting is 33-1/3% of the outstanding shares of a company’s common voting stock. In addition, a registrant listed on Nasdaq is required to state its quorum requirement in its by-laws. Under the Registrant’s articles, quorum for a meeting of the Registrant’s shareholders is at least two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares of the Registrant entitled to be voted at the meeting. The Business Corporations Act (British Columbia) (“BCBCA”) defers to the quorum requirements in a corporation’s articles. As a result, the Registrant’s quorum requirements in respect of shareholder meetings are not prohibited by the BCBCA.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Not applicable.
FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 40-F are forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended. Please see “INTRODUCTION AND FORWARD-LOOKING STATEMENTS” in the AIF, filed as Exhibit 99.1 to this Annual Report on Form 40-F for a discussion of risks, assumptions, uncertainties and other factors that could cause actual results to vary from those forward-looking statements.
INCORPORATION BY REFERENCE
This Annual Report is incorporated by reference into the Registrant’s Registration Statement on Form F-10 (File No. 333- 292197).
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed a Form F-X in connection with the class of securities in relation to which the obligation to file this report arises.
Any change to the name or address of the Registrant’s agent for service shall be communicated promptly to the Commission by amendment to Form F-X referencing the file number of the Registrant.
Exhibit Index
Exhibit No. | Document |
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97.1 | |
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99.1 | Annual Information Form of the Registrant for the fiscal year ended December 31, 2025. |
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99.2 | Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024. |
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99.3 | |
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99.4 | |
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99.5 | |
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99.6 | |
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101.INS | Inline XBRL Instance Document. |
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101.SCH | Inline XBRL Taxonomy Schema Linkbase Document. |
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101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document. |
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101.DEF | Inline XBRL Taxonomy Definition Linkbase Document. |
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101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
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101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document. |
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104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: March 31, 2026
NERVGEN PHARMA CORP. | |
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By: | /s/ Adam Rogers |
Name: | Adam Rogers |
Title: | Chief Executive Officer |
Exhibit 97.1
Nervgen pharma corp.
COMPENSATION RECOVERY POLICY
Adopted as of January 8, 2026
NervGen Pharma Corp. (the “Company”), has adopted a Compensation Recovery Policy (this “Policy”) as described below.
1. | Overview |
This Policy sets forth the circumstances and procedures under which the Company shall recover Erroneously Awarded Compensation from Covered Persons (as defined below) in accordance with rules issued by the United States Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Nasdaq Stock Market. Capitalized terms used and not otherwise defined herein shall have the meanings given in Section 3 below.
2. | Compensation Recovery Requirement |
In the event the Company is required to prepare a Financial Restatement, the Company shall recover reasonably promptly all Erroneously Awarded Compensation with respect to such Financial Restatement.
3. | Definitions |
a. | “Applicable Recovery Period” means the three completed fiscal years immediately preceding the Restatement Date for a Financial Restatement. In addition, in the event the Company has changed its fiscal year: (i) any transition period of less than nine months occurring within or immediately following such three completed fiscal years shall also be part of such Applicable Recovery Period and (ii) any transition period of nine to 12 months will be deemed to be a completed fiscal year. |
b. | “Applicable Rules” means any rules or regulations adopted by the Exchange pursuant to Rule 10D-1 under the Exchange Act and any applicable rules or regulations adopted by the SEC pursuant to Section 10D of the Exchange Act. |
c. | “Board” means the Board of Directors of the Company. |
d. | “Committee” means the Compensation Committee of the Board or, in the absence of such committee, a majority of independent directors serving on the Board. |
e. | “Covered Person” means any Executive Officer and any other person designated by the Board or the Committee as being subject to this Policy. A person’s status as a Covered Person with respect to Erroneously Awarded Compensation shall be determined as of the time of receipt of such Erroneously Awarded Compensation regardless of the person’s current role or status with the Company (e.g., if a person began service as an Executive Officer after the beginning of an Applicable Recovery Period, that person would not be considered a Covered Person with respect to Erroneously Awarded Compensation received before the person began service as an Executive Officer, but would be considered a Covered Person with respect to Erroneously Awarded Compensation received after the person began service as an Executive Officer where such person served as an Executive Officer at any time during the performance period for such Erroneously Awarded Compensation). |
f. | “Effective Date” means January 8, 2026. |
g. | “Erroneously Awarded Compensation” means the amount of any Incentive-Based Compensation received by a Covered Person on or after the Effective Date and during the Applicable Recovery Period that exceeds the amount that otherwise would have been received by the Covered Person had such compensation been determined based on the restated amounts in a Financial Restatement, computed without regard to any taxes paid. Calculation of Erroneously Awarded Compensation with respect to Incentive-Based Compensation based on stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in a Financial Restatement, shall be based on a reasonable estimate of the effect of the Financial Restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was received, and the Company shall maintain documentation of the determination of such reasonable estimate and provide such documentation to the Exchange in accordance with the Applicable Rules. Incentive-Based Compensation is deemed received, earned or vested when the Financial Reporting Measure is attained, not when the actual payment, grant or vesting occurs. |
h. | “Exchange” means the Nasdaq Stock Market LLC. |
i. | An “Executive Officer” means any person who served the Company in any of the following roles at any time during the performance period applicable to Incentive-Based Compensation and received Incentive-Based Compensation after beginning service in any such role (regardless of whether such Incentive-Based Compensation was received during or after such person’s service in such role): the president, principal financial officer, principal accounting officer (or if there is no such accounting officer the controller), any vice president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy making function or any other person who performs similar policy making functions for the Company. Executive officers of parents or subsidiaries of the Company may be deemed executive officers of the Company if they perform such policy making functions for the Company. |
j. | “Financial Reporting Measures” mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, any measures that are derived wholly or in part from such measures (including, for example, a non-GAAP financial measure), and stock price and total shareholder return. |
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k. | “Incentive-Based Compensation” means any compensation provided, directly or indirectly, by the Company or any of its subsidiaries that is granted, earned or vested based, in whole or in part, upon the attainment of a Financial Reporting Measure and any other equity-based compensation provided by the Company or any of its subsidiaries, including, without limitation, stock options, restricted stock awards, restricted stock units and stock appreciation rights. |
l. | A “Financial Restatement” means a restatement of previously issued financial statements of the Company due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required restatement to correct an error in previously-issued financial statements that is material to the previously-issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. |
m. | “Restatement Date” means, with respect to a Financial Restatement, the earlier to occur of: (i) the date the Board concludes, or reasonably should have concluded, that the Company is required to prepare the Financial Restatement or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare the Financial Restatement. |
4. | Exception to Compensation Recovery Requirement |
The Company may elect not to recover Erroneously Awarded Compensation pursuant to this Policy if the Committee determines that recovery would be impracticable, and one or more of the following conditions, together with any further requirements set forth in the Applicable Rules, are met: (i) the direct expense paid to a third party, including outside legal counsel, to assist in enforcing this Policy would exceed the amount to be recovered, and the Company has made a reasonable attempt to recover such Erroneously Awarded Compensation; or (ii) recovery would likely cause an otherwise tax-qualified retirement plan to fail to be so qualified under applicable regulations.
6. | Tax Considerations |
To the extent that, pursuant to this Policy, the Company is entitled to recover any Erroneously Awarded Compensation that is received by a Covered Person, the gross amount received (i.e., the amount the Covered Person received, or was entitled to receive, before any deductions for tax withholding or other payments) shall be returned by the Covered Person.
7. | Method of Compensation Recovery |
The Committee shall determine, in its sole discretion, the method for recovering Erroneously Awarded Compensation hereunder, which may include, without limitation, any one or more of the following:
a. | requiring reimbursement of cash Incentive-Based Compensation previously paid; |
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b. | seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards; |
c. | cancelling or rescinding some or all outstanding vested or unvested equity-based awards; |
d. | adjusting or withholding from unpaid compensation or other set-off; |
e. | cancelling or offsetting against planned future grants of equity-based awards; and/or |
f. | any other method permitted by applicable law or contract. |
Notwithstanding the foregoing, a Covered Person will be deemed to have satisfied such person’s obligation to return Erroneously Awarded Compensation to the Company if such Erroneously Awarded Compensation is returned in the exact same form in which it was received; provided that equity withheld to satisfy tax obligations will be deemed to have been received in cash in an amount equal to the tax withholding payment made.
8. | Policy Interpretation |
This Policy shall be interpreted in a manner that is consistent with the Applicable Rules and any other applicable law. The Committee shall take into consideration any applicable interpretations and guidance of the SEC in interpreting this Policy, including, for example, in determining whether a financial restatement qualifies as a Financial Restatement hereunder. To the extent the Applicable Rules require recovery of Incentive-Based Compensation in additional circumstances besides those specified above, nothing in this Policy shall be deemed to limit or restrict the right or obligation of the Company to recover Incentive-Based Compensation to the fullest extent required by the Applicable Rules.
9. | Policy Administration |
This Policy shall be administered by the Committee; provided, however, that the Board shall have exclusive authority to authorize the Company to prepare a Financial Restatement. In doing so, the Board may rely on a recommendation of the Audit Committee of the Board. The Committee shall have such powers and authorities related to the administration of this Policy as are consistent with the governing documents of the Company and applicable law. The Committee shall have full power and authority to take, or direct the taking of, all actions and to make all determinations required or provided for under this Policy and shall have full power and authority to take, or direct the taking of, all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of this Policy that the Committee deems to be necessary or appropriate to the administration of this Policy. The interpretation and construction by the Committee of any provision of this Policy and all determinations made by the Committee under this policy shall be final, binding and conclusive.
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10. | Compensation Recovery Repayments not Subject to Indemnification |
Notwithstanding anything to the contrary set forth in any agreement with, or the organizational documents of, the Company or any of its subsidiaries, Covered Persons are not entitled to indemnification for Erroneously Awarded Compensation or for any losses arising out of or in any way related to Erroneously Awarded Compensation recovered under this Policy.
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Exhibit 99.1
ANNUAL INFORMATION FORM
FOR THE YEAR ENDED DECEMBER 31, 2025
www.nervgen.com
Unless otherwise indicated, all information in the Annual Information Form
is presented as at and for the year ended December 31, 2025
March 31, 2026
1 | |
9 | |
10 | |
13 | |
25 | |
75 | |
75 | |
77 | |
79 | |
82 | |
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82 | |
83 | |
83 | |
83 | |
83 | |
83 | |
84 | |
86 |
INTRODUCTION AND FORWARD-LOOKING STATEMENTS
The information contained in this Annual Information Form (this “AIF”) is stated as of December 31, 2025, unless otherwise indicated.
All references in this AIF to “the Company”, “NervGen”, “we”, “us”, or “our” refer to NervGen Pharma Corp. and the subsidiary through which it conducts its business, unless otherwise indicated.
All amounts are in Canadian dollars, unless otherwise indicated.
This AIF includes certain statements that are “forward-looking information” which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act and within the meaning of applicable Canadian securities legislation (collectively, the “forward-looking statements”). Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing and other information that is not historical information. These statements appear in a number of different places in this AIF and can often be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, “will”, “could”, “may”, or their negatives or other comparable words. Such forward-looking statements are necessarily based on estimates and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.
Forward-looking statements in this AIF, include, but are not limited to, statements relating to:
| ● | our expectations regarding the sufficiency of our capital resources to allow us to continue as a going concern and requirements for additional capital to execute our business strategy; |
| ● | requirements for, and the ability to obtain, future funding on favourable terms or at all, and the intended use of proceeds from financings; |
| ● | business strategy; |
| ● | expected future loss and accumulated deficit levels; |
| ● | projected financial position and estimated cash expenditure rate; |
| ● | expectations about the timing of achieving milestones and the cost of our development programs; |
| ● | estimates of the size and characteristics of the potential markets for our product candidates; |
| ● | observations and expectations regarding the effectiveness and durability of drug candidates, NVG-291 and NVG-300, and the potential benefits to patients; |
| ● | our ability to successfully develop NVG-291 and NVG-300; |
| ● | the term of NVG-291’s and NVG-300’s intellectual property protection; |
| ● | the impact of pandemics or any escalation thereof on our operations; |
| ● | plans to use and evaluate NVG-291 and other potential drug candidates in our clinical development programs; |
| ● | plans to develop additional proprietary compounds that address nervous system repair; |
| ● | expectations and intended benefits of memorandums of understanding and agreements entered into with third parties; |
| ● | expectations about the timing with respect to commencement and completion of clinical trials; |
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| ● | expectations about the timing and future plans with respect to preclinical and clinical studies; |
| ● | expectations regarding the objectives, endpoints and evaluation criteria of our ongoing clinical trials; |
| ● | expectations relating to the removal of the partial clinical trial hold initiated by the U.S. Food and Drug Administration (“FDA”); |
| ● | expectations regarding interactions with the FDA regarding future clinical development of our product candidates, including potential accelerated approval; |
| ● | expected results of toxicology studies with respect to NVG-291 and other potential drug candidates; |
| ● | expectations about our product candidates’ safety and efficacy; |
| ● | our ability to identify and secure sources of non-dilutive funding for the development of our product candidates and technologies; |
| ● | expectations regarding our ability to arrange for the manufacturing of our product candidates and technologies; |
| ● | expectations regarding the cost, progress and successful and timely completion of the various stages of the regulatory approval process; |
| ● | expectations about the potential benefits of Fast Track designation for NVG-291 in the treatment of spinal cord injury (“SCI”); |
| ● | our ability to secure strategic partnerships with larger pharmaceutical and biotechnology companies; |
| ● | strategy to acquire and develop new product candidates and technologies and to enhance the safety and efficacy of existing products and technologies; |
| ● | plans to market, sell and distribute our products and technologies, if approved; |
| ● | expectations regarding the acceptance of our products and technologies by the market, if approved; |
| ● | expectations regarding the commercial opportunities of our products |
| ● | expectations regarding the use of our products and technologies in treating diseases and medical disorders; |
| ● | our ability to retain and access appropriate staff, management, and expert advisers; |
| ● | expectations with respect to existing and future contractual obligations, corporate alliances and licensing transactions with third parties, and the receipt and timing of any payments to be made by the Company or to the Company in respect of such arrangements; and |
| ● | our strategy and ability with respect to the protection of our intellectual property. |
Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant medical, scientific, business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward-looking statements included in this AIF, we have made various material assumptions, including, but not limited to:
| ● | our ability to obtain financing on acceptable terms; |
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| ● | additional sources of funding, including grants and funding from partners; |
| ● | our ability to attract and retain skilled staff; |
| ● | favourable general business and economic conditions; |
| ● | pandemics not having a material impact on our operations; |
| ● | our future research and development plans proceeding substantially as currently envisioned; |
| ● | our ability to obtain positive results from our research and development activities, including clinical trials; |
| ● | future expenditures to be incurred by us; |
| ● | research and development and operating costs; |
| ● | our ability to find partners in the pharmaceutical industry; |
| ● | the products and technology offered by our competitors; |
| ● | the impact of competition on our operations; |
| ● | our ability to identify additional product candidates; |
| ● | our ability to obtain regulatory and other approvals to commence additional clinical trials involving current and future product candidates; |
| ● | our ability to successfully out-license or sell our future products, if any, and in-license and develop new products; |
| ● | our ability to protect patents and proprietary rights; and |
| ● | expected research and development tax credits. |
In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors, including the risks outlined herein under the heading “Risk Factors”. Certain risks and uncertainties that could cause such actual events or results expressed or implied by such forward-looking statements and information to differ materially from any future events or results expressed or implied by such statements and information include, but are not limited to, the risks and uncertainties related to the fact that:
| ● | we have a limited operating history, are early in our development efforts, and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability; |
| ● | since our inception, we have incurred significant net losses and expect to continue to incur significant net losses for the foreseeable future and we may never achieve or maintain profitability; |
| ● | we will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs or future commercialization efforts; |
| ● | we have a history of negative operating cash flow and may continue to experience negative operating cash flow; |
| ● | raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates; |
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| ● | our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be limited; |
| ● | we are substantially dependent on the success of our lead product candidate, NVG-291, the subacute cohort of which is currently in a Phase 1b/2a clinical trial for SCI (“CONNECT SCI Study”). If we are unable to complete development of, obtain approval for and commercialize NVG-291 for SCI in a timely manner, our business will be harmed; |
| ● | positive results from early preclinical studies and clinical trials of our current or future product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of our current or future product candidates. If we cannot replicate the positive results from our preclinical studies or early clinical trials of our current or future product candidates, we may be unable to successfully raise sufficient financing to develop, obtain regulatory approval for and commercialize our current or future product candidates; |
| ● | there are currently no FDA-approved products for the treatment of SCI; |
| ● | the regulatory approval processes of the FDA, EMA, Health Canada and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to commercialize our product candidates and generate product revenue and our business will be substantially harmed; |
| ● | preclinical studies and clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome. Further, we may encounter substantial delays in completing the development of our product candidates; |
| ● | our current or future product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could delay or prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences. NVG-291 for SCI is currently subject to a partial clinical hold by the FDA, and we may be unable to have the hold removed which could adversely affect development of NVG-291 and our results of operations; |
| ● | the outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA, Health Canada or other comparable foreign regulatory authorities; |
| ● | interim, “topline”, and preliminary data from our clinical trials that we announce or publish from time to time may change as more participant data becomes available and are subject to audit and verification procedures that could result in material changes in the final data; |
| ● | if we fail to develop and commercialize NVG-291 for additional indications or fail to discover, develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve our strategic objectives would be impaired; |
| ● | we may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success; |
| ● | changes in methods of product candidate manufacturing or formulation may result in additional costs or delay; |
| ● | if we are unable to successfully develop companion diagnostics or biomarkers that may be required for our therapeutic product candidates, or experience significant delays in doing so, we may not achieve marketing approval or realize the full commercial potential of our therapeutic product candidates; |
| ● | if we experience delays or difficulties in the enrollment and/or retention of participants in clinical trials, our clinical development activities could be delayed or otherwise adversely affected; |
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| ● | as an organization, we have never conducted later-stage clinical trials or submitted a new drug application, and may be unable to do so for any of our product candidates; |
| ● | 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; |
| ● | Fast Track or Breakthrough Therapy designation by the FDA may not actually lead to a faster development or regulatory review or approval process, and does not assure FDA approval of our product candidates; |
| ● | we may seek orphan drug designation for the product candidates we develop, and we may be unsuccessful or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity; |
| ● | even if approved, our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success; |
| ● | if the market opportunity for any product candidate that we develop is smaller than we believe, our revenue may be adversely affected and our business may suffer; |
| ● | if we are unable to establish sales, marketing and distribution capabilities or enter into agreements with third parties to sell or market our product candidates, we may not be successful in commercializing our product candidates that obtain regulatory approval; |
| ● | our use of third parties to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates, products, or necessary quantities of such materials on time or at an acceptable cost; |
| ● | we rely on third parties to assist in conducting our clinical trials. If they do not perform satisfactorily, we may not be able to obtain regulatory approval or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed; |
| ● | we may seek to establish collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans; |
| ● | if we enter into collaborations with third parties for the development and commercialization of our product candidates, our prospects with respect to those product candidates will depend in significant part on the success of those collaborations; |
| ● | we may be subject to claims that we or our employees, independent contractors, or consultants have wrongfully used or disclosed alleged confidential information or trade secrets; |
| ● | even if our product candidates receive regulatory approval, they will be subject to significant post marketing regulatory requirements and oversight; |
| ● | obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions; |
| ● | any product candidates we develop may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations; |
| ● | we may face difficulties from changes to current regulations and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations; |
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| ● | our relationships with healthcare professionals, clinical investigators, clinical research organizations (“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, government price reporting, and health information privacy and security laws, 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; |
| ● | failure to comply with laws, rules, regulations, policies, industry standards and contractual obligations relating to privacy, data protection and data security could adversely affect our business; |
| ● | 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; |
| ● | disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their 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; |
| ● | we are subject to certain U.S. and non-U.S. anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations. We can face serious consequences for violations; |
| ● | if we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our future licensors, we could lose license rights that are important to our business; |
| ● | our success depends on our ability to protect our intellectual property and our proprietary technologies; |
| ● | if the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected; |
| ● | intellectual property rights do not necessarily address all potential threats to our competitive advantage; |
| ● | patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time; |
| ● | others may challenge inventorship or claim an ownership interest in our intellectual property which could expose it to litigation and have a significant adverse effect on its prospects; |
| ● | 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 our product candidates; |
| ● | we may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents, which could be expensive, time consuming, and unsuccessful. Further, our issued patents or our future licensors’ patents could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad; |
| ● | we may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates; |
| ● | changes in U.S. patent law, or laws in other countries, or their interpretation could diminish the value of patents in general, thereby impairing our ability to protect our product candidates; |
| ● | we may not be able to protect or enforce our intellectual property rights throughout the world; |
| ● | if our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected; |
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| ● | if we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected, harming our business and competitive position; |
| ● | our rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of any future licenses granted to us by others; |
| ● | the patent protection and patent prosecution for some of our product candidates may be dependent on third parties; |
| ● | we depend heavily on our executive officers, principal consultants and others, and the loss of their services would materially harm our business; |
| ● | we only have a limited number of employees to manage and operate our business; |
| ● | our future growth may depend, in part, on our ability to operate internationally, where we would be subject to additional regulatory burdens and other risks and uncertainties; |
| ● | we expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations; |
| ● | the market price of our common shares (the “Common Shares”) may be volatile, and you could lose all or part of your investment; |
| ● | sales of a substantial number of shares of our Common Shares in the public market could cause our share price to fall; |
| ● | we are subject to the applicable provisions of the Sarbanes-Oxley Act of 2002, as amended (“SOX”). If we are unable to satisfy the requirements of SOX or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned; |
| ● | we do not know whether a market for our Common Shares will develop to provide you with adequate liquidity; |
| ● | we do not intend to pay dividends on our Common Shares in the foreseeable future, so any returns will be limited to the value of our Common Shares; |
| ● | 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 Shares, the trading price or trading volume of our Common Shares could decline; |
| ● | we have broad discretion in the use of the net proceeds from any offering and may not use them effectively; |
| ● | investing in our securities is speculative, and investors could lose their entire investment; |
| ● | our constating documents permit us to issue an unlimited number of Common Shares without additional shareholder approval which could result in dilution; |
| ● | the exercise of stock options and warrants could cause dilution; |
| ● | it is possible that our status with regards to whether we are a “passive foreign investment company” may change, which could have adverse U.S. federal income tax consequences for U.S. shareholders; |
| ● | it may be difficult for non-Canadian investors to obtain and enforce judgments against us because of our Canadian incorporation and presence; |
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| ● | we are subject to the informational requirements of the Exchange Act; however, as a foreign private issuer, we are subject to different U.S. securities laws and requirements than a domestic U.S. issuer, which reduces the information we are required to provide to our U.S. shareholders; |
| ● | we expect to lose our foreign private issuer status in 2027, which will likely result in significant additional costs and expenses; |
| ● | we have devoted and will continue to devote significant resources to regulatory compliance as a public entity. These resource requirements will increase now that our Common Shares are listed on the Nasdaq Stock Market LLC (“Nasdaq”); |
| ● | our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition; |
| ● | cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, contract research organizations (“CROs”), third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations; and |
| ● | we may be subject to securities litigation, which is expensive and could divert management attention. |
If one or more of these risks or uncertainties or a risk that is not currently known to us materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from those expressed or implied by forward-looking statements. The forward-looking statements represent our views as of the date of this AIF. While we may elect to update these forward-looking statements in the future, we have no current intention to do so except as to the extent required by applicable securities law. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements. We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf.
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Corporate Information
The Company was incorporated under the Business Corporations Act (British Columbia) on January 19, 2017, under the name “1104403 B.C. Ltd.”. The Company changed its name to “NervGen Pharma Corp.” on November 15, 2017.
The Company’s head office is located at 112-970 Burrard Street, Unit 1290, Vancouver, British Columbia, V6Z 2R4 and its registered and records offices are located at 1133 Melville Street, Suite 3500, The Stack, Vancouver BC V6E 4E5, Canada.
On March 15, 2019, our Common Shares began trading under the symbol “NGEN” on the TSX Venture Exchange (“TSX-V”). On May 3, 2019, our Common Shares began trading under the symbol “NGENF” on the over-the-counter OTCQB® Venture Market (“OTCQB”). On January 8, 2026, our Common Shares ceased trading on the OTCQB and began trading under the symbol “NGEN” on the Nasdaq Capital Market (“Nasdaq”). On March 16, 2026, our Common Shares ceased trading on TSX-V.
Intercorporate Relationships
The Company has two wholly owned subsidiaries: NervGen US Inc. incorporated in the State of Delaware on June 11, 2018, and NervGen Australia Pty Ltd. registered in Queensland on December 8, 2020.
The Company does not hold securities in any other corporation, partnership, trust or other corporate entity.
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GENERAL DEVELOPMENT OF THE BUSINESS
Year ended December 31, 2023
On February 14, 2023, we announced that we had completed dosing of all subjects in the NVG-291 Phase 1 clinical trial and that we planned to initiate a Phase 1b/2a clinical trial of NVG-291 in individuals with SCI in Q3 2023. The double-blind, placebo-controlled proof-of-concept Phase 1b/2a clinical trial (NCT05965700) evaluates the safety and efficacy of NVG-291 in two separate cohorts of individuals with cervical motor incomplete spinal cord injury: chronic (1-10 years post-injury) and subacute (10-49 days post-injury). We also reported that, while the data from the last male and female cohorts had not yet been unblinded, there had been no serious adverse events reported in subjects receiving NVG-291.
On April 10, 2023, we announced that we had hired Mike Kelly as our President & Chief Executive Officer (“CEO”). Mr. Kelly brought three decades of pharmaceutical experience, playing instrumental roles in the creation, development and strengthening of several companies. Concurrent with Mr. Kelly’s appointment, Mr. Radvak, Dr. Rogers and Mr. Ives stepped down from their positions of Interim CEO, Interim President and Lead Independent Director respectively but remained members of the Board. Mr. Radvak remained as Chairman of the Board.
Also in April 2023, our Chief Medical Officer Dr. Dan Mikol presented the study design for our Phase 1b/2a clinical trial of NVG-291 in SCI and summarized the safety and pharmacokinetic results from the Phase 1 trial of NVG-291 in healthy volunteers at the American Spinal Injury Association 50th Annual Scientific Meeting.
On June 27, 2023, we announced that we had been awarded a grant of up to US$3.18 million (CA$4.22 million) from Wings for Life (“WFL”), a not-for-profit SCI research foundation, under the foundation’s Accelerated Translational Program. The funding is to be provided in several milestone-based payments and will offset a portion of the direct costs of our Phase 1b/2a clinical trial for NVG-291, in individuals with SCI. Additionally, the FDA completed their review of our clinical trial protocol and determined that the study may proceed. On August 8, 2023, we announced that we received Institutional Review Board (“IRB”) approval for this study, and recruitment was initiated.
On September 25, 2023, we announced that the first subject was dosed in our Phase 1b/2a clinical trial of NVG-291 in individuals with SCI.
On October 17, 2023, we announced the appointment of John Ruffolo, Founder and Managing Partner of Maverix Private Equity, to the Company’s Board of Directors. Mr. Ruffolo previously founded OMERS Ventures, the venture capital arm of a large Ontario pension fund, and championed Canada’s technology industry as a co-founder of the Council of Canadian Innovators. Mr. Ruffolo will provide substantial expertise in finance and developing leading-edge technologies to our Board, and he also brings the very unfortunate experience of surviving a tragic accident, which resulted in severe injuries including an SCI.
On October 23, 2023, we announced that the FDA granted Fast Track designation for NVG-291 in individuals with SCI. FDA’s Fast Track program is designed to facilitate the development of drugs intended to treat serious conditions and fill unmet medical needs as part of the FDA’s goal to bring important new drugs to patients earlier. Fast Track also provides eligibility for both Priority Review, which can shorten the New Drug Application (“NDA”) review process, and for Accelerated Approval, which can allow for an earlier or faster approval based on a surrogate or intermediate clinical endpoint.
Year ended December 31, 2024
On February 15, 2024, we provided an update on the timing for enrollment and delivery of the data readout for the chronic cohort of our Phase 1b/2a clinical trial of NVG-291 in individuals with SCI. Additionally, we announced our plans to initiate a new study in which subjects completing the current trial who received placebo, would have the option to receive NVG-291 under a separate open-label protocol
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On March 28, 2024, we announced the closing of the previously announced public offering, including the full exercise of the underwriters’ over-allotment option for aggregate gross proceeds to the Company of $23,011,788 (the “March 2024 Offering”). The March 2024 Offering was made pursuant to an underwriting agreement entered into with a syndicate of underwriters led by Stifel Canada and including Canaccord Genuity Corp. and PI Financial Corp. Pursuant to the March 2024 Offering, the underwriters purchased, on a “bought deal” basis, and the Company issued 9,792,250 units at a price of $2.35 per unit including the full exercise of the underwriters’ over-allotment option. Each unit was comprised of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each whole Warrant is exercisable to acquire one Common Share for a period of 36 months following the closing of March 2024 Offering at an exercise price of $3.00 per Warrant share. In connection with the March 2024 Offering, we issued an aggregate of 170,127 broker Warrants to the underwriters. Each broker Warrant is exercisable to acquire one Common Share at the exercise price of $2.35 per Common Share for a period of 24 months from the closing date of the March 2024 Offering. The Company also paid a cash commission of $1,090,152 to the underwriters and incurred approximately $540,000 in other share issue costs related to legal and listing fees.
On May 20 and 21, 2024, our Chief Medical Officer, Dr. Dan Mikol, presented two posters at the American Spinal Injury Association (“ASIA”) 51st Annual Scientific Meeting. Dr. Mikol presented preclinical and clinical data supporting an association between improvements in motor evoked potentials (MEPs) and functional/clinical motor recovery after SCI, proposing that MEPs might be used as an efficacy biomarker in SCI proof-of-concept trials. He also provided an update on the baseline demographic and clinical characteristics of initial subjects randomized in the ongoing Phase 1b/2a clinical trial, which evaluates MEPs and other electrophysiological measures in target muscle groups as biomarkers of efficacy in addition to clinical assessments to monitor motor recovery.
On June 25, 2024, we announced our plans to initiate a preclinical test of concept evaluation of our next pipeline candidate, NVG-300, in models of ischemic stroke, amyotrophic lateral sclerosis (“ALS”) and SCI. Pending successful preclinical validation and formulation development, NVG-300 may be developed under the Biologics License Application (“BLA”) regulatory framework providing 12 years of market exclusivity post-approval. NVG-300’s composition of matter intellectual property protection is expected to extend beyond 2040. The discovery of NVG-300 is the result of a research effort initiated in 2022. NVG-300’s product and process development have progressed to successfully establish manufacturability and feasibility of high concentration liquid formulation to enable self-administration of the product in a prefilled syringe format. We own the patents to NVG-300 but may be obligated to pay licensing fees to Case Western Reserve University (“CWRU”) if NVG-300 advances to clinical trials. We have no commitments to pay licensing fees, development costs or other payment milestones unless NVG-300 advances to a Phase 1 study.
On July 22, 2024, we announced the appointment of Neil Klompas to the Board. Mr. Klompas is a seasoned pharmaceutical executive with extensive experience in high-growth companies.
On September 30, 2024, we announced that target enrollment in the chronic cohort of our Phase 1b/2a clinical trial of NVG-291 in individuals with SCI was approaching completion.
On December 20, 2024, we announced the establishment of an at-the-market equity program (the “ATM Program”), which allows the Company to issue and sell, at its discretion, up to $30,000,000 of Common Shares in the capital of the Company to the public from time to time through Stifel Nicolaus Canada Inc. (the “Agent”), until the earlier of: (i) December 19, 2026, (ii) the issuance and sale of all of the Common Shares issuable pursuant to the ATM Program, or (iii) the termination of the distribution agreement by either the Company or the Agent. As of December 31, 2025, 949,700 Common Shares have been issued under the ATM Program for gross proceeds of $2,774,227. We paid cash placement fees of $55,485 to the agents resulting in aggregate net proceeds of $2,718,742.
Year ended December 31, 2025
On January 2, 2025, we announced the completion of enrollment in the chronic cohort of our Phase 1b/2a clinical trial of NVG-291 in individuals with SCI with topline data from the chronic cohort expected in Q2 2025. We also received IRB approval for an amendment to our Phase 1b/2a clinical trial and initiated screening of subjects for the subacute cohort.
On February 6, 2025, we announced that the first subject was enrolled and dosed in the subacute cohort of our Phase 1b/2a clinical trial of NVG-291 in individuals with SCI. We also announced that we received IRB approval for an amendment focused on the subacute cohort of our Phase 1b/2a clinical trial. Key changes to the protocol were implemented to facilitate enrollment, for example, revising the timing of subacute SCI to 20 to 90 days post-injury, and to decrease the burden on study participants by reducing the number of visits and assessments.
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On March 31, 2025, we announced the initiation of an expanded access policy (“EAP”) to allow treatment use of the investigational product NVG-291 for those individuals with SCI who have participated in our clinical trials and meet specific eligibility criteria. We received a request from a physician for expanded access to NVG-291 for a subject who participated in the chronic cohort of the Phase 1b/2a clinical trial. After we submitted an expanded access protocol for NVG-291 to the FDA, the FDA informed us that the study may proceed.
We held our annual general meeting on May 6, 2025. All resolutions submitted for approval were passed by shareholders including the election of directors, appointment of auditors, and certain amendments to our existing stock option plan including an increase in the number of shares reserved for issuance.
On June 2, 2025, we announced positive topline results from chronic cohort of our Phase 1b/2a CONNECT SCI Study evaluating our lead drug candidate, NVG-291, as a potential treatment for SCI. NVG-291 met its primary endpoint, demonstrating statistically significant improvements in electrophysiological connectivity, along with positive trends across functional assessments.
On June 18, 2025, we announced the appointment of Randall Kaye, MD, to the role of Chief Medical Advisor. Dr. Kaye, a current member of NervGen’s Board of Directors and Chair of the Science Committee since 2020, brings over 30 years of highly relevant and extensive experience in central nervous system (“CNS”) therapeutic development, regulatory strategy, and medical affairs to the NervGen team.
On July 1, 2025, we announced that Daniel Mikol, MD, Ph.D., had resigned from his position as our Chief Medical Officer to pursue new opportunities. It was announced that Randall Kaye, MD, who had recently been appointed Chief Medical Advisor, would increase the scope of his role as we initiated a search for Dr. Mikol’s replacement.
In July 2025, we announced the appointment of Adam Rogers, MD as the Chair of our Board and Interim CEO, replacing Glenn Ives as Chair of the Board and Mike Kelly as President and CEO. Dr. Rogers is a biotech executive and representative of NervGen’s largest shareholder, PFP Bioscience Holdings (“PFP Biosciences”) through his role as a Principal and Managing Member of PFP Biosciences.
On August 21, 2025, we reported positive preclinical results from two U.S. Department of Defense sponsored studies, where NVG-291-R demonstrated significant functional recovery in models of traumatic hearing loss and peripheral nerve injury.
On November 19, 2025, we completed a non-brokered private placement of 4,785,674 units of the Company at a price of US$2.10 per unit for aggregate gross proceeds of US$10,049,915. Each unit consisted of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). The Warrants are valid for 36 months from the date of issuance and each Warrant is exercisable into one Common Share at an exercise price of US$2.65.
On November 24, 2025, we announced expanded clinical findings from the Phase 1b/2a CONNECT SCI Study. Participants receiving NVG-291 demonstrated functional improvements that were durable and continued to increase four weeks after the end of treatment (measured at Week 16 via the Graded Redefined Assessment of Strength, Sensibility, and Prehension (“GRASSP”)). Improvements following the conclusion of the study period were measured by blinded, IRB-approved qualitative exit interviews. NVG-291 treatment also demonstrated statistically significant reductions in reticulospinal tract hyperactivity which, together with previously reported statistically significant improvements corticospinal connectivity, provide a biological basis that supports NVG-291’s observed clinical efficacy. Additionally, we provided an update on recently completed and upcoming interactions with the FDA regarding our clinical development plans and potential regulatory pathways to support approval.
On December 12, 2025, we announced our intent to amend 5,075,000 Warrants (the “2022 Warrants”) that were issued pursuant to a private placement of units that closed on July 13, 2022 (the “July 2022 Non-Brokered Private Placement”). The proposed amendment sought solely to change the denomination of the exercise price of the 2022 Warrants from US$1.75 to the Canadian equivalent of C$2.44 to align with our functional currency and simplify the accounting treatment thereof. All other terms and conditions of the 2022 Warrants remain unchanged. The amendments to 2022 Warrants were implemented effective December 15, 2025.
On December 17, 2025, we announced that we filed a registration statement on Form F-10 (the “Registration Statement”) with the United States Securities and Exchange Commission (“SEC”) in accordance with the Multijurisdictional Disclosure System established between Canada and the United States.
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Subsequent to December 31, 2025
On January 8, 2026, we announced that the Company’s common shares had been approved for listing on the Nasdaq and began trading on the exchange under the symbol “NGEN.”
On February 9, 2026, we announced the appointment of Adam Rogers, MD, as President and CEO. Adam Rogers was previously serving as the Company’s interim CEO and remains the Chairman of the Company’s Board of Directors.
On February 12, 2026, we announced the retirement of Bill Adams, Chief Financial Officer (“CFO”), effective March 15, 2026, and that we have engaged an executive search firm to identify a successor. On February 13, 2026, we announced Adam Rogers will serve as our interim CFO, Principal Financial Officer and Principal Accounting Officer, effective on March 15, 2026.
On March 12, 2026, we announced the voluntary delisting from TSX-V. Our Common Shares ceased trading on TSX-V at the close of markets on March 16, 2026. In connection with the voluntary delisting, we terminated the previously announced ATM Program. Through December 31, 2025, we had issued 949,700 Common Shares for gross proceeds of $2,774,227 (net $2,718,742). Through March 16, 2026, we had issued an aggregate of 949,945 Common Shares for gross proceeds of $2,775,746 (net $2,720,230).
Significant Acquisitions and Dispositions
Except as set forth herein, we have not completed any significant acquisitions for which disclosure would be required under Part 8 of National Instrument 51-102 as at the date hereof.
NARRATIVE DESCRIPTION OF THE BUSINESS
Overview of the Company
Neurotraumatic and neurologic conditions impose a major global health challenge, profoundly altering the lives of millions of people worldwide. Following neurologic trauma or the progression of neurologic disorders, the body responds via natural protective mechanisms, including the upregulation of an inhibitory class of molecules known as chondroitin sulfate proteoglycans (“CSPGs”), which prevent the nervous system from repairing itself. There are currently no approved therapies available that enable the nervous system to repair itself or enable individuals to regain clinically meaningful measures of function, independence, or quality of life.
NervGen is a clinical-stage biopharmaceutical company developing first-in-class neuroreparative therapeutics for SCI and other neurotraumatic and neurologic conditions. Our principal business activity is the discovery, development and commercialization of pharmaceutical products that may enable the nervous system to repair itself, with our initial focus on SCI. We are also utilizing our intellectual property and know- how to develop our products for other related medical conditions.
Our lead drug candidate, NVG-291, is currently being evaluated in our Phase 1b/2a CONNECT SCI Study for individuals living with SCI. In June 2025, we reported positive topline data from the chronic cohort of the study. The subacute cohort is ongoing. In parallel, we are making preparations for a Phase 3 clinical trial in chronic SCI. NVG-291 has been granted Fast Track designation by the FDA and Orphan Drug Designation from the European Medicines Agency (“EMA”). We may also seek FDA Orphan Drug Designation and/or Breakthrough Therapy Designation, where appropriate, should our research indicate that such applications may assist in the development of our drug candidates.
We currently have no commercial products or services and do not generate operating revenues. The development of pharmaceutical products and the receipt of the necessary regulatory approvals required for commercialization typically involve lengthy and uncertain processes. As a result, no near-term revenues from product sales or services are expected.
Spinal Cord Injury
SCI disrupts the transmission of signals between the brain and the body, resulting in partial or complete loss of motor, sensory, and/or autonomic function (such as bladder control) below the site of injury. SCI may occur at any level of the spinal cord and can be classified as either a complete injury, involving a total loss of sensation and voluntary motor function below the injury site, or incomplete, in which partial neural signaling is preserved and limited sensory and voluntary motor function may remain below the level of injury.
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In the majority of cases, SCI results from physical trauma, including falls, motor vehicle accidents, sports-related injuries, or other traumatic events. SCI may also arise from non-traumatic causes, such as infections, surgical complications, vascular insufficiency, tumors or underlying disease processes (e.g. stroke or demyelinating disorders). According to data retrieved from the National Spinal Cord Injury Statistical Center1
| ● | approximately 312,000 Americans are living with SCI; |
| ● | approximately 18,500 new SCIs occur each year; |
| ● | the approximate average lifetime costs for people living with traumatic SCI ranges from US$1.0 million to US$6.0 million, depending on the severity of the injury and age; and |
| ● | the approximate average annual direct cost for people living with traumatic SCI after the first-year ranges from US$55,000 to US$250,000, depending on severity of the injury and age. |
The Company’s Lead Compound and License
License Overview
On June 25, 2018, we entered into a licensing agreement with CWRU granting a license (the “License”) to us to use, research, develop and commercialize certain licensed technology with therapeutic potential for SCI and other conditions associated with nervous system damage (the “Technology”). The License provides us with an exclusive worldwide right to use the Technology relating to leukocyte-common antigen related (“LAR”) family function blocking peptides in diseases and injuries and applications thereof to research, develop, make, have made, use, dispose and import licensed products for all applications. The License also grants us the right to use, develop and commercialize the Technology for all diseases and medical conditions including, but not limited to, SCI, traumatic brain injury, traumatic hearing loss, and stroke. Included in the License is U.S. Patent 9,937,242 entitled “Compositions and Methods for Inhibiting the Activity of LAR Family Phosphatases” issued by the United States Patent and Trademark Office, as well as its equivalent in other jurisdictions around the world. This patent and its equivalents in other global jurisdictions, is central to our development and commercialization of the Technology. The License also includes other patents and patent applications encompassing claims related to the use of the licensed Technology in various diseases such as Multiple Sclerosis (“MS”), Alzheimer’s Disease (“AD”), stroke, and acute myocardial ischemia.
Key License Terms
Following execution of the licensing agreement, CWRU was issued 439,000 Common Shares valued at $87,800 and paid $32,920 (U.S.$ 25,000). An additional 162,659 Common Shares valued at $81,330 were issued to CWRU on September 13, 2018. Pursuant to the licensing agreement, CWRU had a pre-emptive right to maintain its percentage ownership and participate in any further financings on the same terms as other investors until the Company completed its initial public offering.
The License has a term which expires on the latest to occur of the expiration date of the last-to-expire valid claim of any related patent, the end of the last-to-expire market exclusivity period for any licensed product or June 25, 2038.
We are required to meet certain milestones under the License and have the option to extend the date of any such milestone obligation for up to two periods of six months each upon the payment of certain prescribed fees. Should we elect not to extend the obligation or fail to meet the extended obligation date, then CWRU has the right to either terminate the License or convert the License into a non-exclusive license. The License includes a multi-step dispute resolution process, including right to arbitration to be conducted in Chicago, Illinois in accordance with the then current Licensing Agreement Rules of the American Arbitration Association.
1NSCSC: Traumatic SCI Facts and Figures at a Glance; 2026 SCI Data Sheet.
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Under the License, we have commitments to pay various annual license fees, patent costs, milestone payments and royalties on revenues, contingent on the achievement of certain development and regulatory milestones.
We are required to give a right of first preference to CWRU in respect of any clinical studies arising from any licensed products under the License.
If the License is terminated prior to us experiencing a change of control (as defined in the License), then, from the date of termination until such date of a change of control, CWRU will be granted an internal, fully paid up, perpetual, non-exclusive license to use any patents forming part of the licensed Technology for research or educational purposes.
We own the patents to NVG-300 but may be obligated to pay licensing fees to CWRU if NVG-300 advances to clinical trials. We have no commitments to pay licensing fees, development costs or other payment milestones unless NVG-300 advances to a Phase 1 study.
The Technology
NVG-291 is licensed from CWRU and based on academic studies that demonstrated the preclinical efficacy of NVG-291-R, the rodent analog of NVG-291, in animal models of SCI. These studies implicated several potential molecular and cellular mechanisms by which NVG-291-R promotes nervous system repair and functional improvement in both central and peripheral nervous system injury models. The implicated mechanisms include the promotion of neuronal sprouting, enhanced plasticity2 3 4 5 6 7 8, remyelination9 10 11 12 13 14 15, and promotion of a non-inflammatory phenotype in the microglial cells16 17 18 19.
NVG-291
Our lead drug candidate, NVG-291, is a humanized analog of NVG-291-R. NVG-291 is a 35 amino acid synthetic peptide composed of a cell-penetrating transactivator of transcription20 sequence fused to a sequence derived from the wedge domain of protein tyrosine phosphatase sigma (“PTPσ”).
NVG-291 is currently being evaluated in clinical trials as a once-daily subcutaneous injection.
2 Ham, Farrag, Soltisz, Lakes, Allen and Leipzig. Automated Gait Analysis Detects Improvements after Intracellular σ Peptide Administration in a Rat Hemisection Model of Spinal Cord Injury. Ann Biomed Eng 47, 744-753, doi:10/gftgtz (2019).
3 Lang, Cregg, DePaul, Tran, Xu, Dyck, Madalena, Brown, Weng, Li, Karimi-Abdolrezaee, Busch, Shen and Silver. Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury. Nature 518, 404-408, doi:10/gfkkr8 (2015).
4 Rink, Arnold, Wöhler, Bendella, Meyer, Manthou, Papamitsou, Sarikcioglu and Angelov. Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ. Exp Neurol 309, 148-159, doi:10/gfdh8f (2018).
5 Tran, Sundar, Yu, Lang and Silver. Modulation of Receptor Protein Tyrosine Phosphatase Sigma Increases Chondroitin Sulfate Proteoglycan Degradation through Cathepsin B Secretion to Enhance Axon Outgrowth. The Journal of Neuroscience 38, 5399-5414, doi:10/gdrsh2 (2018).
6 Luo, Wang, Zhang, You, Bedolla, Okwubido-Williams, Huang, Silver and Luo. Inhibition of CSPG receptor PTPσ promotes migration of newly born neuroblasts, axonal sprouting, and recovery from stroke. Cell Reports 40, 111137, doi:10/gqkdgz (2022).
7 Yao, Fang, Li, Ng, Liu, Leung, Song, Zhang and Chang. Modulation of the proteoglycan receptor PTPσ promotes white matter integrity and functional recovery after intracerebral hemorrhage stroke in mice. J Neuroinflammation 19, 207, doi:10/gqr8hg (2022).
8 Milton, Silver, Kwok, McClellan, Warren and Silver. Recovery of forearm and fine digit function after chronic spinal cord injury by simultaneous blockade of inhibitory matrix CSPG production and the receptor PTPσ., doi:10.1101/2022.08.01.502398 (2022).
9 Dyck, Kataria, Akbari‐ Kelachayeh, Silver and Karimi‐ Abdolrezaee. LAR and PTPσ receptors are negative regulators of oligodendrogenesis and oligodendrocyte integrity in spinal cord injury. Glia 67, 125-145, doi:10/gfkmbt (2018).
10 Li, Wong, Li, Ruven, He, Wu, Lang, Silver and Wu. Enhanced regeneration and functional recovery after spinal root avulsion by manipulation of the proteoglycan receptor PTPσ. Scientific Reports 5, 1-14, doi:10/gfkkr9 (2015).
11 Luo, Tran, Xin, Sanapala, Lang, Silver and Yang. Modulation of proteoglycan receptor PTPσ enhances MMP-2 activity to promote recovery from multiple sclerosis. Nature Communications 9, 1-16, doi:10/gfb3xm (2018).
12 Niknam, Raoufy, Fathollahi and Javan. Modulating proteoglycan receptor PTPσ using intracellular sigma peptide improves remyelination and functional recovery in mice with demyelinated optic chiasm. Molecular and Cellular Neuroscience 99, 103391, doi:10/gf4mn6 (2019).
13 Yao, Sun, Yuan, Li, Li, Tang, Leung and Wu. Targeting proteoglycan receptor PTPσ restores sensory function after spinal cord dorsal root injury by activation of Erks/CREB signaling pathway. Neuropharmacology 144, 208-218, doi:10/gfkkw7 (2019).
14 Yao, Fang, Tao, Feng, Wei, Gao, Xin, Li and Du. Modulation of proteoglycan receptor regulates RhoA/CRMP2 pathways and promotes axonal myelination. Neuroscience Letters 760, 136079, doi:10/gksprh (2021).
15 Yao, et al., “Modulation of the proteoglycan receptor PTPσ promotes white matter integrity and functional recovery after intracerebral hemorrhage stroke in mice,” (2022); Yao, et al., “Modulation of proteoglycan receptor regulates RhoA/CRMP2 pathways and promotes axonal myelination,” (2021).
16 Luo, et al., “Modulation of proteoglycan receptor PTPσ enhances MMP-2 activity to promote recovery from multiple sclerosis,” (2018).
17 Niknam, et al., “Modulating proteoglycan receptor PTPσ using intracellular sigma peptide improves remyelination and functional recovery in mice with demyelinated optic chiasm,” (2019).
18 Dyck, Kataria, Alizadeh, Santhosh, Lang, Silver and Karimi-Abdolrezaee. Perturbing chondroitin sulfate proteoglycan signaling through LAR and PTPσ receptors promotes a beneficial inflammatory response following spinal cord injury. J Neuroinflammation 15, 90, doi:10/gfv9pp (2018).
19 Yao, et al., “Modulation of the proteoglycan receptor PTPσ promotes white matter integrity and functional recovery after intracerebral hemorrhage stroke in mice,” (2022).
20 Lang. THE ROLE OF PTPσ IN REGENERATION FAILURE FOLLOWING SPINAL CORD INJURY. https://etd.ohiolink.edu/!etd.send_file?accession=case1417619755&disposition=inline, 212 (2015).
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Lead Indication - Spinal Cord Injury
The robust preclinical efficacy consistently observed in independently conducted studies across a range of animal SCI models, as well as the potential for a good safety profile, and the opportunity to treat a severely debilitating and life-threatening medical condition of high unmet need with effective pharmacologic treatment options, provide the basis for our plans to focus our current efforts on SCI. Notable NVG-291-R effects observed in the preclinical SCI studies include:
| ● | Enhanced recovery of motor function with a significant percentage of injured animals achieving nearly complete recovery21 22; |
o | NVG-291-R produced lasting improvement in locomotion after a finite period of daily injections followed by a treatment-free observation period. This therapeutic effect of NVG-291-R was maintained with an apparent trend toward further improvement after cessation of the dosing 23 24 25 26; |
| ● | NVG-291-R also produced lasting improvement in bladder functions after a finite period of daily injections27 28; |
o | All spinal cord injured animals experienced partial to near complete recovery of bladder function at the top dose tested29; |
| ● | The positive effects of NVG-291-R were observed when NVG-291-R treatment was initiated acutely (24 hours)30 31or chronically (3 months)32 following injury in the rat SCI model; and |
| ● | Similar positive results have been reported in multiple studies conducted independently by several laboratories’ SCI studies33 34 35 36 37 38. |
21 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
22 Rink, et al., “Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ,” (2018).
23 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
24 Rink, et al., “Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ,” (2018).
25 Ham, et al., “Automated Gait Analysis Detects Improvements after Intracellular σ Peptide Administration in a Rat Hemisection Model of Spinal Cord Injury,” (2019).
26 Milton, et al., “Recovery of forearm and fine digit function after chronic spinal cord injury by simultaneous blockade of inhibitory matrix CSPG production and the receptor PTPσ.,” (2022).
27 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
28 Rink, et al., “Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ,” (2018).
29 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
30 Rink, et al., “Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ,” (2018).
31 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
32 Milton, Kwok, McClellan, Saber, Lathia, Warren, Silver and Silver. Recovery of forearm and fine digit function after chronic spinal cord injury by simultaneous blockade of inhibitory matrix CSPG production and the receptor PTPσ. J Neurotrauma, doi:10.1089/neu.2023.0117 (2023).
33 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
34 Rink, et al., “Recovery after spinal cord injury by modulation of the proteoglycan receptor PTPσ,” (2018).
35 Ham, Pukale, Hamrangsekachaee and Leipzig. Subcutaneous priming of protein-functionalized chitosan scaffolds improves function following spinal cord injury. Materials Science and Engineering: C 110, 110656, doi:10/ggmbpz (2020).
36 Ham, et al., “Automated Gait Analysis Detects Improvements after Intracellular σ Peptide Administration in a Rat Hemisection Model of Spinal Cord Injury,” (2019).
37 Milton, et al., “Recovery of forearm and fine digit function after chronic spinal cord injury by simultaneous blockade of inhibitory matrix CSPG production and the receptor PTPσ.,” (2022).
38 Wang, Feng, Liu, Xie, Zhou, Zhao, Xiao and Yang. Inhibition of CSPG-PTPσ Activates Autophagy Flux and Lysosome Fusion, Aids Axon and Synaptic Reorganization in Spinal Cord Injury. Molecular Neurobiology, doi:10.1007/s12035-024-04304-3 (2024).
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Other Diseases
The potential therapeutic application of NVG-291 in medical conditions other than SCI was assessed in preclinical models of ischemic39 40 and hemorrhagic41 stroke, MS42, peripheral nerve injury43 44 45 46, ALS47 cardiac ischemia48 49 50 and demyelination51 52, including optic neuritis53. In vitro studies have shown that NVG-291-R treatment could rescue cell organelle recycling (autophagy)54 and influence synapse development55 56.
Translating the Technology from In Vitro to In Vivo
NVG-291 has been shown to alleviate the inhibitory effects of CSPGs on axonal growth in cell cultures of rodent and human neurons with effectiveness similar to that of the rodent analog, NVG-291-R57 58. Preclinical contusion and compression models of SCI in the rat are broadly viewed as preclinical mimics of the human response to injury59 and thus offer an appropriate model to test the efficacy of our technology.
Clinical Development
In 2023, we completed dosing in a Phase 1 placebo-controlled clinical trial of NVG-291 in Australia that enrolled 70 healthy adult male and female participants. The single ascending dose (“SAD”) portion of the study evaluated 37 female subjects across 6 dose cohorts, while the multiple ascending dose (“MAD”) portion of the study, evaluated 33 male and female subjects across 4 dose levels. NVG-291 was well tolerated overall with no maximum tolerated dose reached. All adverse events (“AEs”) were mild or moderate in nature with no serious adverse events reported in subjects receiving NVG-291. Injection site related AEs were the only AEs reported more frequently in NVG-291 treated subjects compared to placebo. There was no effect of NVG-291 on vital signs, electrocardiograms, laboratory studies or other clinical parameters measured in the healthy participants in this study.
39 Luo, et al., “Inhibition of CSPG receptor PTPσ promotes migration of newly born neuroblasts, axonal sprouting, and recovery from stroke,” (2022).
40 Wang, Li, Diao and Chen. Inhibition of the proteoglycan receptor PTPσ promotes functional recovery on a rodent model of preterm hypoxic-ischemic brain injury. Exp Neurol, 114564, doi:10.1016/j.expneurol.2023.114564 (2023).
41 Yao, et al., “Modulation of the proteoglycan receptor PTPσ promotes white matter integrity and functional recovery after intracerebral hemorrhage stroke in mice,” (2022).
42 Luo, et al., “Modulation of proteoglycan receptor PTPσ enhances MMP-2 activity to promote recovery from multiple sclerosis,” (2018).
43 Li, et al., “Enhanced regeneration and functional recovery after spinal root avulsion by manipulation of the proteoglycan receptor PTPσ,” (2015).
44 Yao, et al., “Targeting proteoglycan receptor PTPσ restores sensory function after spinal cord dorsal root injury by activation of Erks/CREB signaling pathway,” (2019).
45 Lv and Wu. ISP and PAP4 peptides promote motor functional recovery after peripheral nerve injury. Neural Regeneration Research 16, 1598, doi:10/ghsqgh (2021).
46 Yao, et al., “Modulation of proteoglycan receptor regulates RhoA/CRMP2 pathways and promotes axonal myelination,” (2021).
47 Zhang, Zhe, Xiujuan Fu, Noelle Wright, Weiren Wang, Yingzhi Ye, Julie Asbury, Yini Li, et al. “PTPσ-Mediated PI3P Regulation Modulates Neurodegeneration in C9ORF72-ALS/FTD.” Neuron 0, no. 0 (March 11, 2025).
48 Gardner, Wang, Lang, Cregg, Dunbar, Woodward, Silver, Ripplinger and Habecker. Targeting protein tyrosine phosphatase σ after myocardial infarction restores cardiac sympathetic innervation and prevents arrhythmias. Nature communications 6, 6235, doi:10/gfkkr7 (2015).
49 Johnsen, Olivas, Lang, Silver and Habecker. Disrupting protein tyrosine phosphatase σ does not prevent sympathetic axonal dieback following myocardial infarction. Experimental Neurology 276, 1-4, doi:10/f78b35 (2016).
50 Sedaghat, Gardner, Kabir, Ghafoori, Habecker and Tereshchenko. Correlation between the High-Frequency Content of the QRS on Murine Surface Electrocardiogram and the Sympathetic Nerves Density in Left Ventricle after Myocardial Infarction: Experimental Study. Journal of electrocardiology 50, 323-331, doi:10/f98r7w (2017).
51 Luo, et al., “Modulation of proteoglycan receptor PTPσ enhances MMP-2 activity to promote recovery from multiple sclerosis,” (2018).
52 Yao, et al., “Modulation of proteoglycan receptor regulates RhoA/CRMP2 pathways and promotes axonal myelination,” (2021).
53 Niknam, et al., “Modulating proteoglycan receptor PTPσ using intracellular sigma peptide improves remyelination and functional recovery in mice with demyelinated optic chiasm,” (2019).
54 Sakamoto, Ozaki, Ko, Tsai, Gong, Morozumi, Ishikawa, Uchimura, Nadanaka, Kitagawa, Zulueta, Bandaru, Tamura, Hung and Kadomatsu. Glycan sulfation patterns define autophagy flux at axon tip via PTPRσ-cortactin axis. Nature Chemical Biology 15, 699-709, doi:10/gf2g9b (2019).
55 Farhy-Tselnicker, van Casteren, Lee, Chang, Aricescu and Allen. Astrocyte-Secreted Glypican 4 Regulates Release of Neuronal Pentraxin 1 from Axons to Induce Functional Synapse Formation. Neuron 96, 428-445.e413, doi:10/gcf2dm (2017).
56 Hosseini, Alizadeh, Shahsavani, Chopek, Ahlfors and Karimi-Abdolrezaee. Suppressing CSPG/LAR/PTPσ Axis Facilitates Neuronal Replacement and Synaptogenesis by Human Neural Precursor Grafts and Improves Recovery after Spinal Cord Injury. The Journal of Neuroscience 42, 3096-3121, doi:10.1523/JNEUROSCI.2177-21.2022 (2022).
57 Lang, et al., “Modulation of the proteoglycan receptor PTPσ promotes recovery after spinal cord injury,” (2015).
58 Lang, “THE ROLE OF PTPσ IN REGENERATION FAILURE FOLLOWING SPINAL CORD INJURY,” (2015).
59 Sharif-Alhoseini, Khormali, Rezaei, Safdarian, Hajighadery, Khalatbari, Safdarian, Meknatkhah, Rezvan, Chalangari, Derakhshan and Rahimi-Movaghar. Animal models of spinal cord injury: a systematic review. Spinal Cord 55, 714-721, doi:10/f9mpr3 (2017).
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In September 2023, we initiated dosing in our double blind, placebo-controlled proof-of-concept Phase 1b/2a CONNECT SCI Study (NCT05965700) evaluating the safety and efficacy of NVG-291 in two separate cohorts of individuals with cervical motor incomplete SCI: chronic (1-10 years post-injury) and subacute (10-49 days post-injury and later amended to be 20-90 days post-injury), given demonstrated efficacy in preclinical models of both chronic and acute SCI. The trial is designed to evaluate the safety and efficacy of NVG-291 using electrophysiological and MRI imaging measures, functional clinical outcome measures, and blood biomarkers that together will provide comprehensive information about the extent of recovery of voluntary motor and autonomic function post-injury. Specifically, the primary objective seeks to assess changes in corticospinal connectivity of defined upper- and lower-extremity muscle groups following treatment, based on changes in MEP amplitudes. Secondary objectives evaluate changes in multiple clinical outcome assessments focusing on motor function, upper-extremity dexterity, grasping and mobility, and additional electrophysiological measurements. The cohorts are comprised of 20 subjects each and are being evaluated independently in a blinded manner as the data becomes available. The trial is being partially funded by a grant from WFL, which is being provided in several milestone-based payments and will offset a portion of the direct costs of this clinical trial. In October 2023, we received Fast Track designation from the FDA for the advancement of NVG-291 in individuals with SCI. The FDA’s Fast Track program is designed to facilitate the development and review of drugs treating serious conditions and addressing areas of high unmet medical need, helping to deliver important new therapies to patients sooner. Fast Track designation provides potential eligibility for Priority Review, which can streamline the NDA review process, and potential for Accelerated Approval, which can allow for expedited approval based on a surrogate or intermediate clinical endpoint.
In January 2025, we announced the enrollment of the final subject in the chronic cohort of our Phase 1b/2a clinical trial. In February 2025, we initiated dosing of the first subject in the subacute cohort of our Phase 1b/2a clinical trial after receiving IRB approval for an amendment focussed on facilitating enrollment in the subacute cohort. The subacute cohort of the Phase 1b/2a CONNECT SCI Study is ongoing.
In June 2025, we announced topline data from the Phase 1b/2a CONNECT SCI Study in the chronic cohort. In November 2025, we announced expanded clinical data from the Phase 1b/2a CONNECT SCI Study in the chronic cohort, showing that:
| ● | Functional gains continued to increase at Week 16, four weeks after the end of treatment. NVG-291 participants demonstrated a 2.6-fold greater mean improvement in GRASSP Total score compared to placebo participants at Week 16. |
| ● | Hand function improvements were durable and further strengthened post-treatment, with NVG-291 participants experiencing a 3.7-fold greater mean improvement in GRASSP Quantitative Prehension compared to placebo participants at Week 16. |
In addition, blinded, IRB-approved qualitative exit interviews were conducted up to 364 days after the conclusion of the study period to provide additional insight into participants’ real-world experiences.
| ● | NVG-291 participants reported more consistent, durable, and wide-ranging functional improvements than those receiving placebo, particularly in upper- and lower-limb function. |
| ● | 75% (6/8) of NVG-291 participants reported “much” or “very much” improved overall symptoms compared to 33% (3/9) of placebo participants as measured by the participant global impression of change scale. |
| ● | NVG-291 participants were more likely than placebo participants to report sustained improvements across key quality of life domains, including improved bladder control, reduced muscle spasticity, reduced reliance on medications or mobility aids, and greater physical activity tolerance. |
| ● | 67% (6/9) of NVG-291 participants reported improved bladder control compared to 22% (2/9) on placebo. |
| ● | 56% (5/9) of NVG-291 participants reported reduced muscle spasticity compared to 22% (2/9) on placebo. |
NVG-291 demonstrated statistically significant reductions in upper and lower-limb reticulospinal tract signaling, as measured by startle MEP.
| ● | Legs (tibialis anterior): 142% greater reduction of hyperactive reticulospinal tract signaling compared to placebo (p=0.0062) |
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| ● | Hands (first dorsal interosseus): 48% greater reduction of hyperactive reticulospinal tract signaling compared to placebo (p=0.0280) |
Following SCI, the reticulospinal tract becomes hyperactive, compensating for impairment of the corticospinal tract.60 When considered alongside previously reported statistically significant improvements in upper-limb corticospinal connectivity, we believe these expanded electrophysiological findings support the biological basis for NVG-291’s observed clinical efficacy and believe that the efficacy signal observed in the chronic cohort of the Phase 1b/2a CONNECT SCI Study supports the clinical advancement of NVG-291 in chronic SCI.
NVG-291 has qualified for Orphan Designation in the European Union (“EU”) and Fast Track designation by the FDA. NVG-291 may qualify for Breakthrough designation status for certain indications which could reduce regulatory time to approval and provide for preferential support through clinical development61. In the EU, Orphan Designation provides recipients with multiple incentives, including improved access to scientific advice, fee reductions, and 10 years of protection from market competition in Europe from similar medicines with similar indications following the date that the drug candidate receives marketing authorization.
The planned timing of clinical trials for other indications is being evaluated by management. We believe SCI represents a significant commercial opportunity due to the dramatic impact on quality of life, the high-cost burden to the patient and the healthcare system and the current absence of pharmacologic therapies in the market shown to promote nervous system repair and enhance clinical improvement.
Initiation of future clinical trials is subject to additional funding. The duration and cost of a clinical trial can range significantly depending on a variety of factors, including the rate of enrollment, the number of sites, the country in which the trial is conducted and the complexity of the trial.
Our clinical and other required preclinical studies will be conducted using one or more CROs, which are companies that provide outsource support to the pharmaceutical industry in the form of contracted research services.
NVG-291 is being manufactured using well-established peptide synthesis procedures by an approved CMO and we are in the process of establishing a secondary source for manufacturing. NVG-291 is a linear peptide comprised of common amino acids and has been produced previously in small quantities for research studies. Materials to be used in clinical trials are being manufactured by an approved CMO under Current Good Manufacturing Practices (“cGMP”) regulations enforced by the FDA. Several research and clinical batches of NVG-291 have been successfully manufactured.
Future Plans
We plan to work in cooperation with other parties, including academic institutions, contract laboratories and not-for-profit foundations, to conduct additional research to further the development of NVG-291 and other potential drug candidates and continue the advancement of the licensed technology, including preparation for a Phase 3 clinical trial in chronic SCI.
We also seek to identify new compounds for treatment of neurotraumatic and neurologic conditions beyond SCI. In the third quarter of 2024, we initiated a preclinical test of concept evaluation of our next pipeline candidate, NVG-300, in models of ischemic stroke and SCI. Preclinical data from a rat model of ischemic stroke showed rapid decrease in the ischemic lesion volume in animals treated with NVG-300-R. Significant effects of NVG-300-R also included improved performance in the functional memory and spatial recognition (Y-maze), and locomotor function (horizontal ladder) tests. In the preclinical model of SCI caused by thoracic contusion, animals treated with NVG-300-R or NVG-300 showed improvement in gait quality assessed by NeuroCube®, an in vivo AI platform that uses computer vision combined with bioinformatics to perform objective multivariate analysis of gait patterns.
60 Akalu et al., (2023) Physiological reports, 11(14), e15765.
61 US Food & Drug Administration. Expedited Programs for Serious Conditions –– Drugs and Biologics. (2020).
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In a U.S. Department of Defense sponsored preclinical model of traumatic hearing loss conducted by the U.S. Air Force’s 59th Medical Wing in collaboration with the Uniformed Services University, Brooke Army Medical Center, NVG-291-R was investigated as a potential novel treatment for blast-induced sensorineural hearing loss. In a rat model exposed to shock waves, either a single high-pressure blast or a series of low-pressure blasts, daily subcutaneous NVG-291-R treatment led to statistically significant improvements in hearing thresholds across all frequencies by end of study at Day 30, preventing the profound and permanent hearing loss observed in untreated animals. Blast-induced sensorineural hearing loss is a debilitating condition affecting military and civilian populations.
We believe these indications represent significant commercial opportunities: SCI, stroke, and hearing loss, due to the limited pharmacologic therapies in the market that promote nervous system repair and enhance clinical improvement in these diseases. In addition, we continue to undergo studies to further elucidate the mechanism of NVG-291’s therapeutic action.
In 2020, we engaged Michael Davis, MD, FACS, FRCS (Hon.), Colonel (Ret.), formerly Director of the U.S. Combat Casualty Care Research Program, to help us identify, prioritize and secure sources of non-dilutive funding for developing NVG-291, for treating not only our priority indication of SCI but to also bring an emphasis to finding support for important indications including traumatic brain injury (“TBI”), peripheral nerve injury and other conditions that result in nervous system damage.
We plan to continue researching secondary applications to SCI, including stroke, AD, MS, ALS, TBI, and other conditions that result in nervous system damage as our resources permit.
Additional areas of our focus include strategically building the intellectual property portfolio, and developing business partnerships with potential sublicensees, marketing partners and strategic partners.
Trends and Uncertainties
There are significant uncertainties regarding the regulatory approval, reimbursement and prices of future drugs, and the availability of financing for the purposes of pharmaceutical development. In addition, there is significant uncertainty in the Canadian-U.S. foreign exchange rate which presents a risk in that we have historically raised a significant amount of our funds in Canadian dollars and expect to be spending the funds largely in U.S. dollars. Apart from those risks, and the risk factors noted under the heading “Risk Factors”, we are not aware of any other trends, commitments, events or uncertainties that would have a material adverse effect on our business, financial condition or results of operations.
Competitive Conditions
Spinal Cord Injury
As reported by organizations searching for cures for paralysis, such as the Rick Hansen Institute or the United States National Institute of Health and the National Institute of Neurological Disorders and Stroke, there are no approved pharmacologic therapies that have been demonstrated to sustainably improve function following a SCI62. The current approach to treating SCI focuses on preventing further injury acutely, followed by rehabilitation and empowering SCI patients to live with injury as actively and productively as possible. Although there are no approved pharmacologic agents available to repair nervous system damage and allow an individual to regain key bodily functions, such as movement, bladder control, bowel control and sexual function, many companies are investigating treatments for SCI and other types of nervous system damage.
We categorize therapies currently under development as neuroprotective drugs, cellular therapies, or neuroreparative drugs.
| ● | Neuroprotective drugs63: attempt to intervene very soon after the acute injury in order to protect the injured neurons. Neuroprotective drugs must be used acutely and otherwise do not actively promote the restoration of connectivity and so are generally not considered competitive although in many cases could be complementary to NVG-291. |
62 National Institute of Neurological Disorders and Stroke. Spinal Cord Injury Information Page. (2019).
63 Ulndreaj, Badner and Fehlings. Promising neuroprotective strategies for traumatic spinal cord injury with a focus on the differential effects among anatomical levels of injury. F1000Res 6, 1907, doi:10/ggs96q (2017).
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| ● | Cellular therapies: the use of transplanted cellular therapies (such as stem cells and Schwann cells) has generated interest for their potential to promote neuro-regeneration and restoration of function in both chronic and acute SCI. However, cost, manufacturing and regulatory hurdles along with safety concerns make the clinical translation of this technology extremely challenging. Current clinical trials in this area are largely focused on evaluating safety and clinical feasibility of this technology64, 65. |
| ● | Neuroreparative drugs (such as NVG-291): act to restore lost nervous system function by promoting sprouting/regeneration of damaged axons and/or by promoting remyelination of demyelinated axons. We believe these biological mechanisms offer the greatest potential to improve function after SCI and this approach could be used in combination with cellular therapies or neuroprotective drugs, if approved alongside NVG-291 in the future. |
Companies known to be working on reparative or regenerative pharmacological drugs to treat SCI that are currently in clinical development include Eusol Biotech Co (ES-135), Nordic Life Sciences (Spinalon), AbbVie (elezanumab), University of Zurich (NG-101), Pharmazz (sovateltide) and Mitsubishi Tanabe (MT-3921). Currently, to our knowledge there has been no published data from randomized controlled clinical trials demonstrating efficacy in restoring function in SCI for any of the therapies listed above.
We are aware of potential non-pharmacological therapies being researched and developed for SCI, such as electrical stimulation using either non-invasive or implanted medical devices. However, we are not aware of any large-scale controlled clinical trials having been completed. We also believe that drug and device companies are fundamentally different businesses with different risk profiles, commercial propositions, and potential for reimbursement.
Management, with its advisors, has periodically reviewed technologies that could potentially be competitive or complementary to NVG-291 and considering various factors we believe are of greatest importance in the marketplace. These factors include strength and consistency of effect, the window of time after injury during which the drug is effective, and the degree of invasiveness associated with the drug’s administration. Based on our studies to date, we believe that the potential utility of NVG-291 used weeks, months and even years after initial SCI could offer advantages over the neuroprotective investigational drugs that require administration within ~ 48 hours or earlier after injury often in a surgical setting. Based on this information, we believe our neuroreparative technology, if successfully developed and commercialized, has the potential to provide a highly competitive therapeutic solution for SCI and potentially other forms of nervous system damage.
On an ongoing basis, we use multiple sources, including dialogue with KOLs, and databases and web searches, to survey the landscape for drug therapies for SCI. The ongoing surveys confirm that drugs currently marketed for SCI are used for alleviating symptoms such as pain, spasm and inflammation.
Competitors in this industry are also competing for available investment funds, recruitment of qualified personnel, facilities and equipment. As noted, some of our competitors are much larger companies with significantly greater resources (see “Risk Factors”).
Government Regulation
The Company’s operations and activities in Canada, the U.S. and Australia are subject to various federal, provincial, state and local laws and regulations which govern pharmaceutical development, exports, taxes, labour standards, occupational health, waste disposal, protection of the environment, safety, hazardous substances and other matters.
The majority of development activities in the next two years will occur in government certified contract organization facilities. In addition, we believe that we are, and will continue to be, in compliance in all material respects with applicable statutes and the regulations passed, and related to our operations, in Canada, the U.S. and Australia. To our knowledge, there are no current orders or directions relating to the Company with respect to the foregoing laws and regulations.
64 Donnelly, Lamanna and Boulis. Stem cell therapy for the spinal cord. Stem Cell Research & Therapy 3, 24, doi:10/ggsp7d (2012).
65 Aboody, Capela, Niazi, Stern and Temple. Translating stem cell studies to the clinic for CNS repair: current state of the art and the need for a Rosetta stone. Neuron 70, 597-613, doi:10/dq6926 (2011).
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Clinical Trials
Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with Good Clinical Practices (“GCP”), which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety, and the efficacy criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. Additionally, approval must also be obtained from each clinical trial site’s IRB or ethics committee, before the trials may be initiated, and the IRB or ethics committee must monitor the trial until completed. There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries.
The clinical investigation of a drug is generally divided into three or four phases. Although the phases are usually conducted sequentially, they may overlap or be combined.
| ● | Phase 1: the drug is introduced into healthy human subjects or with patients having a condition/disease of interest. These studies are designed to evaluate safety, dosage tolerance, metabolism and pharmacologic actions of the investigational new drug in humans, the side effects associated with increasing doses. |
| ● | Phase 2: the drug is administered to a limited patient population to evaluate dosage tolerance and optimal dosage, identify possible adverse side effects and safety risks, and preliminarily evaluate efficacy. |
| ● | Phase 3: the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites to generate enough data to statistically evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the investigational new drug product, and to provide an adequate basis for physician labeling. |
| ● | Phase 4: the drug may be further evaluated in post-approval studies typically referred to as Phase 4 clinical trials. |
Clinical trial sponsors must also report to the FDA, within certain time frames, serious and unexpected adverse reactions, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator’s brochure, or any findings from other studies or animal testing that suggest a significant risk in humans exposed to the product candidate. The FDA, the IRB or ethics committee, or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor known as a data safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated checkpoints based on access to certain data from the trial.
The clinical trial process can take years to complete, and there can be no assurance that the data collected will support FDA approval or licensure of the product. Results from one trial are not necessarily predictive of results from later trials.
Submission of an NDA or BLA to the FDA
Assuming successful completion of all required preclinical studies and clinical testing in accordance with all applicable regulatory requirements, detailed investigational new drug product information is submitted to the FDA in the form of an NDA or BLA requesting approval to market the product for one or more indications. Under federal law, the submission of most NDAs and BLAs is subject to an application user fee. Applications for orphan drug products are exempted from the NDA and BLA application user fee, unless the application includes an indication for other than a rare disease or condition.
An NDA or BLA must include all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results, as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data comes from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product and may also come from a number of alternative sources, including trials initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational new drug product to the satisfaction of the FDA.
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Once an NDA or BLA has been submitted, the FDA’s goal is to review the application within ten months after it accepts the application for filing, or, if the application relates to an unmet medical need in a serious or life-threatening indication, six months after the FDA accepts the application for filing. The review process is often significantly extended by the FDA’s requests for additional information or clarification.
Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.
The FDA is required to refer an NDA or BLA for a novel drug (in which no active ingredient has been approved in any other application) to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
The FDA’s Decision on an NDA or BLA
After the FDA evaluates the NDA or BLA and conducts inspections of manufacturing facilities where the product will be produced, the FDA will issue either an approval letter or a complete response letter (“Complete Response Letter”). An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete, and the application is not ready for approval. In order to satisfy deficiencies identified in a Complete Response Letter, additional clinical data and/or additional Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing may be required for the product candidate. Even if such additional information is submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval. The FDA could also approve the NDA or BLA with a risk evaluation and mitigation strategy, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials. Such post-market testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. New government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.
Patent Term Restoration
Depending upon the timing, duration, and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a NDA or BLA, plus the time between the submission date and the approval of that application. Only one patent applicable to an approved product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent and within 60 days of the product’s approval. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.
Environmental Regulation
The Company’s policy is to conduct its business in a way that safeguards public health and the environment. We believe that our operations are conducted in material compliance with applicable environmental laws and regulations. Since most of our development activities are outsourced, we believe our exposure to environmental risk is low.
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Specialized Skill and Knowledge
We have extensive knowledge in scientific research, clinical development and commercialization of drugs and therapies in the areas of neurology, pain, inflammation and regenerative medicine. By enlisting the support of experienced preclinical, clinical trial, regulatory and legal consultants, we are able to use expert knowledge to assist in the successful development of our products and the protection of our intellectual property. We continually evaluate our internal resources and may add talented senior professionals to our team as needed to support growth.
Employees and Consultants
As of December 31, 2025, we had eight full-time employees, one part-time employee and nine part-time consultants, including five holding MD and/or PhD degrees, and a number of other employees holding master’s degrees or CPA designations. Further, as of December 31, 2025, Dr. Adam Rogers was acting as interim CEO and is not included in the preceding headcount. Dr. Rogers holds an MD.
Our employees are not governed by a collective bargaining agreement. We depend on certain key members of our management and scientific staff and the loss of services of one or more of these persons could adversely affect the Company.
We also use consultants and outside contractors to carry on many of our activities, including preclinical testing and validation, formulation, assay development, manufacturing, clinical and regulatory affairs, toxicology and clinical trials.
Facilities
We entered into a lease agreement for a head office in Vancouver, British Columbia, for 3.83 years, effective May 1, 2022. In 2024, we entered into a sub-sublease pursuant to which we have agreed to sub-sublease our head office for a term of one (1) year, nine (9) months less two (2) days, commencing on June 1, 2024, and expiring on February 26, 2026 (the remaining term of our sublease). The sub-subtenant will pay base rent plus property taxes and operating expenses, equal to the amount owed by the Company under the sublease. The nature of the space is immaterial to our operations as operating activities related to the NVG-291 program are primarily outsourced to contractors.
Legal Proceedings
To our knowledge, there have not been any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings, those involving any third party, and governmental proceedings pending or known to be contemplated, which may have, or have had in the recent past, significant effect on our financial position or profitability.
To our knowledge, there have been no material proceedings in which any director, any member of senior management, or any of our affiliates is either a party adverse to NervGen or any of our subsidiaries or has a material interest adverse to NervGen or any of our subsidiaries.
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An investment in the Common Shares involves a high degree of risk and should be considered speculative. An investment in the Common Shares should only be undertaken by those persons who can afford the total loss of their investment. Investors should carefully consider the risks and uncertainties set forth below, as well as other information described elsewhere in this AIF. The risks and uncertainties below are not the only ones faced. Additional risks and uncertainties not presently known to us or that we believe to be immaterial may also adversely affect our business. If any of the following risks occur, our business, financial condition and results of operations could be seriously harmed, and you could lose all or part of your investment. Further, if we fail to meet the expectations of the public market in any given period, the market price of our Common Shares could decline.
Risks Related to Our Financial Position, Need for Additional Capital and Limited Operating History
We have a limited operating history, are early in our development efforts, and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.
We are a clinical stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects. We have no products approved for commercial sale and have not generated any revenue from product sales. Drug development is a highly uncertain undertaking and involves a substantial degree of risk. In September 2023, we initiated the CONNECT SCI Study evaluating NVG-291 in individuals with SCI, which is our most advanced product candidate in clinical development. To date, we have devoted substantially all of our resources and efforts to developing our product candidates, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations. We have not yet demonstrated our ability to successfully initiate or complete any pivotal clinical trials, obtain marketing approvals, 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 pharmaceutical companies in rapidly evolving fields. We also may need to transition from a company with a research and development 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 suffer.
Since our inception, we have incurred significant net losses and expect to continue to incur significant net losses for the foreseeable future and we may never achieve or maintain profitability.
We have incurred significant net losses since our inception and have financed our operations principally through equity financings. Our net loss was C$44.1 million and C$24.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of C$146.8 million. Given that our lead product candidate, NVG-291 for the treatment of SCI, is in active clinical development, and our other programs are in preclinical or discovery stages, we expect that it will be several years, if ever, before we receive approval to commercialize a product and generate revenue from product sales. Even if we succeed in receiving marketing approval for and commercializing one or more of our product candidates, we expect that we will continue to incur substantial research and development and other expenses in order to discover, develop and market additional potential products.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance, particularly since we expect our expenses to increase if and when our product candidates progress through clinical development as product candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. We expect such net losses to increase substantially as we continue our research and development of, and seek regulatory approvals for, our lead product candidates and any other current or future product candidates. Our prior losses and expected future losses have had and will continue to have an adverse effect on our working capital, our ability to fund the development of our product candidates and our ability to achieve and maintain profitability and, following the completion of any offering, the performance of our share price.
Even if we 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 would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain product approvals, diversify our offerings or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
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We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs or future commercialization efforts.
Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for our lead product candidates and advance our other programs. Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing and distribution activities. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, (the “FDA”), the European Medicines Agency, (the “EMA”), Health Canada, or other regulatory agencies to perform clinical trials or preclinical studies in addition to those that we currently anticipate. Other unanticipated costs may also arise. Because the design and outcome of our planned and anticipated preclinical studies and clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of resources and funding that will be necessary to successfully complete the development and commercialization of any product candidate we develop. We are not permitted to market or promote NVG-291 for SCI or any other indication, or any other product candidate we are developing, before we receive marketing approval from the FDA or other comparable regulatory authority.
As of December 31, 2025, we had C$22.1 million in cash and cash equivalents. There is a material uncertainty whether our existing working capital is sufficient to operate our business as a going concern for the ensuing 12 months from the date of this AIF. Our ability to continue to operate our business for the ensuing 12 months from the date of this AIF as a going concern is dependent on raising additional financing or successfully implementing measures to reduce operating costs, delay planned expenditures in our research and development programs and slow the progress in our planned clinical programs. While we have been successful in the past in obtaining financing, there can be no assurance that we will be able to obtain adequate financing, or that such financing will be on terms acceptable to us, to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may also prove to be inaccurate, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Our future capital requirements, both short- and long-term, will depend on a variety of factors, including, but not limited to:
| ● | the scope, timing, costs, rate of progress, and results of our discovery research, results from our preclinical studies including toxicology, and results of our clinical trials including later stage clinical trials; |
| ● | the number and scope of preclinical studies and clinical trials that we pursue; |
| ● | the cost, timing, and outcome of seeking and obtaining approvals by the FDA, EMA, Health Canada and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more nonclinical studies or clinical trials than those that we currently expect or for such authorities to change their requirements on studies that had previously been agreed to; |
| ● | our ability to establish licensing or collaboration agreements or other strategic agreements; |
| ● | the achievement of milestones or other developments that result in obligations under any collaboration agreements we may enter into in the future; |
| ● | the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under collaboration agreements we have entered into and may enter into in the future; |
| ● | the cost of establishing, maintaining, expanding, enforcing, and defending the scope of our intellectual property portfolio; |
| ● | the cost of acquiring, licensing, or investing in additional businesses, products, product candidates, and technologies that we may identify; |
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| ● | the cost of manufacturing or to have manufactured and our ability to manufacture sufficient, reliable, timely, and affordable supply of materials in accordance with current good manufacturing practices, or cGMP, that can be used in clinical trials and potential commercial sales; |
| ● | the cost of commercializing product candidates, if approved, whether alone or in collaboration with others; |
| ● | the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; |
| ● | the costs of building or contracting sales, marketing, and/or distribution capabilities, systems, and internal infrastructure if or when we obtain regulatory approvals for a product candidate; |
| ● | the impact of competitors’ product candidates and technological advances and other market developments; |
| ● | the expenses needed to attract and retain skilled personnel; and |
| ● | the size of the markets and degree of market acceptance of any product candidates in territories in which we receive regulatory approval, including product pricing, product coverage, and the adequacy of reimbursement by third-party payors. |
A change in the outcome of any of these factors or underlying variables with respect to the development of a product candidate or future product candidate could significantly change the costs and timing associated with the development of that product candidate. Our business plans may change in the future and we will continue to require additional capital to meet the needs of our operating expenses. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs or future commercialization efforts.
We have a history of negative operating cash flow and may continue to experience negative operating cash flow.
Since our incorporation in January 2017, we have generated negative operating cash flows. We anticipate that we will continue to have negative cash flow and we expect to continue to incur losses for the foreseeable future as we continue to research and develop, and seek regulatory clearances for our current product candidate and other potential product candidates. To the extent that we have negative operating cash flow in future periods, we may need to allocate a portion of our cash reserves to fund such negative cash flow. We may also be required to raise additional funds through the issuance of equity or debt securities. There can be no assurance that we will be able to generate a positive cash flow from our operations, that additional capital or other types of financing will be available when needed or that these financings will be on terms favourable to us.
Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, government or private party grants, debt financings, collaborations, strategic alliances, licensing arrangements, and other marketing or distribution arrangements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include rights or preferences that adversely affect your rights as a holder of Common Shares. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams or product candidates, grant licenses on terms that may not be favorable to us or commit to future payment streams. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
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Our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be limited.
We have net operating loss carryforwards in Canada, the United States and internationally which could expire unused and become unavailable to offset future income tax liabilities. The rules dealing with Canadian and U.S. federal, provincial, state, and local income taxation are constantly under review by persons involved in the legislative process and by the Canada Revenue Agency, Internal Revenue Service and the U.S. Treasury Department. Changes to tax laws, or changes in interpretations of existing laws (which changes may have retroactive application), including with respect to net operating losses and tax credits, could adversely affect us or holders of our Common Shares. In recent years, many such changes have been made and changes are likely to continue to occur in the future. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
Risks Related to the Discovery, Development and Commercialization of Our Product Candidates
We are substantially dependent on the success of our lead product candidate, NVG-291, which is currently in a Phase 1b/2a clinical trial for subacute SCI. If we are unable to complete development of, obtain approval for and commercialize NVG-291 for chronic SCI in a timely manner, our business will be harmed.
Our future success is dependent on our ability to timely complete clinical trials, the results of those trials, the results of all preclinical studies which include toxicology, our ability to manufacture product using third party partnerships and our ability to obtain marketing approval for and successfully commercialize NVG-291 for chronic SCI, our lead product candidate. We have invested, and continue to invest, significant efforts and financial resources in the research and development of NVG-291 for SCI as well as potential other indications. NVG-291 will require additional clinical development and evaluation of clinical results from those trials, preclinical studies including toxicology and manufacturing activities, regulatory submission, marketing approval from government regulators, substantial investment and significant marketing efforts before we can generate any revenues from product sales. In addition, because our lead product candidate is our most advanced product candidate, if NVG-291 for SCI encounters safety or efficacy problems, manufacturing or supply interruptions, developmental delays, regulatory issues, or other problems, our development plans and business related to other indications for NVG-291 could be significantly harmed. We are not permitted to market or promote NVG-291 for SCI or any indication, or any other product candidate we are developing, before we receive marketing approval from the FDA and comparable non-U.S. 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:
| ● | successful outcomes of and timely completion of nonclinical and clinical development of our product candidates and any future product candidates, as well as the associated costs, including any unforeseen costs we may incur as a result of nonclinical study or clinical trial delays due to any public health emergencies or other causes; |
| ● | our ability to remove or mitigate the impact of the partial clinical hold imposed by the FDA; |
| ● | the initiation and successful recruitment of subjects and completion of additional clinical trials on a timely basis; |
| ● | establishing and maintaining relationships with CROs, and clinical sites for the clinical development, both in the United States and other countries, of our product candidates and any future product candidates; |
| ● | the frequency and severity of adverse events in the clinical trials; |
| ● | the efficacy, safety and tolerability profiles that are satisfactory to the FDA, the EMA, Health Canada or any comparable foreign regulatory authority for marketing approval; |
| ● | developing complete regulatory submissions, including information related to the preclinical, clinical and CMC development of any product candidates; |
| ● | timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development; |
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| ● | completing any required post-marketing approval commitments to applicable regulatory authorities, if approved; |
| ● | developing an efficient and scalable manufacturing process for our product candidates, including obtaining finished products that are appropriately packaged for sale and meet other cGMP requirements; |
| ● | establishing and maintaining commercially viable supply, manufacturing, and distribution relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and meet the market demand for product candidates that we develop, if approved; |
| ● | successful commercial launch following any marketing approval, 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 our product candidates and compliance with any post-market safety-related requirements; |
| ● | commercial acceptance of our product candidates by patients, the medical community and third-party payors; |
| ● | identifying, assessing and developing new product candidates; |
| ● | obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and other countries; |
| ● | protecting our rights in our intellectual property portfolio; |
| ● | defending against third-party interference or infringement claims, if any; |
| ● | negotiating favorable terms in any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates; |
| ● | obtaining coverage and adequate reimbursement by hospitals, government and third-party payors for product candidates that we develop; |
| ● | addressing any competing therapies and technological and market developments; and |
| ● | attracting, hiring and retaining key personnel, including research and development personnel, quality and regulatory personnel, manufacturing and technical operations personnel and future commercial personnel. |
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 development, manufacturing, marketing, distribution, and sales efforts of any future collaborator. We may never be successful in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability.
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Positive results from early preclinical studies and clinical trials of our current or future product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of our current or future product candidates. If we cannot replicate the positive results from our preclinical studies or early clinical trials of our current or future product candidates, we may be unable to successfully raise sufficient financing to develop, obtain regulatory approval for and commercialize our current or future product candidates.
Positive results from preclinical studies and early clinical trials of our current or future product candidates, may not necessarily be predictive of the results from required later preclinical studies and clinical trials. Similarly, even if we are able to complete our planned preclinical studies or clinical trials of our current or future product candidates according to our current development timeline, the positive results from such preclinical studies and/or clinical trials of our current or future product candidates, including NVG-291, may not be replicated in subsequent preclinical studies or clinical trials. In particular, while the topline data from the chronic cohort of our ongoing Phase 1b/2a clinical trial of NVG-291 demonstrated promising efficacy signals, we do not know whether NVG-291 will perform similarly in the subacute cohort of our ongoing Phase 1b/2a clinical trial or in subsequent clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain approval from the FDA or comparable foreign regulatory authority. If we fail to produce positive results in our planned or ongoing preclinical studies or clinical trials of any of our current or future product candidates, our ability to obtain adequate financing and the development timeline and regulatory approval and commercialization prospects for such current or future product candidates, and, correspondingly, our business and financial prospects, would be materially adversely affected.
There are currently no FDA-approved products for the treatment of SCI.
There is currently no FDA-approved therapeutic for the treatment of SCI. We have not received regulatory approval for NVG-291 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. We may not succeed in demonstrating the safety and efficacy of NVG-291 in our ongoing clinical trials or in larger-scale clinical trials.
The regulatory approval processes of the FDA, EMA, Health Canada and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to commercialize our product candidates and generate product revenue and our business will be substantially harmed.
Our product candidates are 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 drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must be successfully completed in the United States and in many non-U.S. jurisdictions before a new drug 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 them.
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 take 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 drug development, which makes it difficult to predict with any certainty how they 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 drug development, clinical trials and FDA regulatory review.
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Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limited to the following:
| ● | the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials; |
| ● | the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may determine that our product candidates are not safe and 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; |
| ● | the results of our preclinical studies and clinical trials may not meet the level of statistical or clinical significance required by the FDA or the applicable non-U.S. regulatory agency for marketing approval; |
| ● | the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may not accept data generated from our preclinical studies and/or clinical trial sites, or may require that we conduct additional non-clinical or clinical trials; |
| ● | the population studied in the clinical trial may not be sufficiently broad or representative of the real-world population to assure efficacy and safety in the full population for which we seek approval; |
| ● | the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials, or may not approve the formulation, labeling or specifications of any of our current or future product candidates; |
| ● | the data collected from manufacturing and testing, preclinical studies, or clinical trials of our product candidates may not be sufficient to support the submission of a new drug application, or NDA, other submission or to obtain regulatory approval in the United States or elsewhere; |
| ● | we may be unable to demonstrate to the FDA, EMA, Health Canada or other comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; |
| ● | if an advisory committee is needed to review our marketing application submitted to the FDA, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend a conditional approval or additional non-clinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; |
| ● | the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; |
| ● | contract research organizations, or CROs, that we retain to conduct our non-clinical or clinical studies may take actions outside of our control that materially adversely impact our business operations or clinical development plans; |
| ● | the approval policies or regulations of the FDA, EMA, Health Canada or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. |
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Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market our current or future product candidates. Any such setback in our pursuit of regulatory approval would have a material adverse effect on our business and prospects. 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 drug may be subject to significant limitations on the approved uses or indications for which we may market the drug or the labeling or other restrictions. In addition, the FDA has the authority to require a risk evaluation and mitigation strategy, or REMS, as part of approving an NDA, or after approval, which may impose further requirements or restrictions on the distribution or use of an approved drug. 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 drug 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, and we have had limited interactions with foreign regulatory authorities. The foreign regulatory approval process varies among countries and may include all of the risks associated with obtaining FDA approval described above as well as risks attributable to the satisfaction of local regulations in non-U.S. jurisdictions. We may not obtain regulatory approvals in any jurisdiction on a timely basis, if at all. We may not be able to file for regulatory approvals, and, even if we file, we may not receive the necessary approvals to commercialize our products in any market, which will prevent us from marketing our products internationally and have an adverse effect on our business and financial condition. 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.
Preclinical studies and clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome. Further, we may encounter substantial delays in completing the development of our product candidates.
Before obtaining marketing approval from the FDA, EMA, Health Canada or other comparable foreign regulatory authorities for the sale of our product candidates, we must complete preclinical development and extensive clinical trials to demonstrate the safety and efficacy of our product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete and its ultimate outcome is uncertain. A failure of one or more clinical trials can occur at any stage of the process. Preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs.
We do not know whether our future clinical trials will begin on time or enroll subjects on time, or whether our ongoing and/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:
| ● | the FDA or comparable non-U.S. regulatory authorities disagreeing as to the design or implementation of our clinical studies; |
| ● | obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design; |
| ● | any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
| ● | obtaining approval from one or more institutional review boards, or IRBs; |
| ● | 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; |
| ● | changes to clinical trial protocols; |
| ● | clinical sites deviating from trial protocol or dropping out of a trial; |
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| ● | manufacturing sufficient quantities of product candidates or obtaining sufficient quantities of combination therapies for use in clinical trials; |
| ● | subjects failing to enroll or remain in our trial at the rate we expect, or failing to adhere to the clinical trial protocol or return for post-treatment follow-up; |
| ● | subjects choosing an alternative treatment for the indication for which we are developing our product candidates, or participating in competing clinical trials; |
| ● | lack of adequate funding to continue the clinical trial; |
| ● | subjects experiencing severe or unexpected drug-related adverse effects; |
| ● | occurrence of serious adverse events in trials of the same class of agents conducted by other companies; |
| ● | selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; |
| ● | a facility manufacturing our product candidates or any of their components being ordered by the FDA or comparable non-U.S. regulatory authorities to temporarily or permanently shut down or voluntarily shutting down or reducing capacity due to violations of cGMP regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; |
| ● | any changes to our manufacturing process that may be necessary or desired or additional manufacturing work required to support the stability of product candidates or verify or validate manufacturing processes; |
| ● | 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, Good Clinical Practice, or GCP, or other regulatory requirements; |
| ● | third-party contractors not performing data collection or analysis in a timely or accurate manner; or |
| ● | company employees or 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. |
Disruptions caused by public health emergencies may also increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials. We could also 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 Data Safety Monitoring Board for such trial or by the FDA or comparable non-U.S. 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, unfavorable inspection of the clinical trial operations or trial site resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects or failure to demonstrate a benefit from using a drug. 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.
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Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA, comparable non-U.S. regulatory authorities, or other government. The FDA or comparable non-U.S. 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 non-U.S. 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 non-U.S. regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. Moreover, any delays in completing our clinical trials will increase our costs, slow down our product candidate 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 our product candidates, our competitors may be able to bring products to market before we do, and the commercial viability of our product candidates could be significantly reduced. Any of these occurrences may harm our business, financial condition and prospects significantly.
Our current or future product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could delay or prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences. NVG-291 for SCI is currently subject to a partial clinical hold by the FDA, and we may be unable to have the hold removed which could adversely affect development of NVG-291 and our results of operations.
As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse events associated with the use of our product candidates. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates could cause us, an IRB, a Data Safety Monitoring Board, 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 non-U.S. regulatory authorities. For example, a partial clinical hold was placed on NVG-291 by the FDA in March 2020 when adverse dose-dependent reproductive organ toxicity results were observed in initial 7-day and 28-day preclinical animal toxicology studies. Under the partial clinical hold, we were permitted to enroll postmenopausal females in the SAD and MAD portions of the study, respectively. After we completed the preclinical studies requested by the FDA, in October 2022, the FDA amended the partial clinical hold to permit the inclusion of males and premenopausal females at certain dose levels in our Phase 1 clinical trial of NVG-291. The additional preclinical safety studies requested by the FDA will further investigate the preclinical safety margin of NVG-291, testing exposures of NVG-291 higher than those tested in the follow-up preclinical safety studies and for longer durations to enable chronic dosing greater than 3 months. These 6-month chronic toxicity preclinical studies are required to gain marketing approval but could result in unexpected negative results which could impact our ability to dose for longer durations or at higher dose levels deemed necessary for efficacy. If we are unsuccessful in removing the partial hold and we later determine that the permitted dose levels are insufficient to show clinical efficacy of NVG-291 for chronic SCI, our development of NVG-291 for SCI may be adversely affected.
If our product candidates are associated with undesirable side effects or have 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 their 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. Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial, or result in potential product liability claims. Any of these occurrences may prevent us from achieving or maintaining market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly.
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Subjects 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. In addition, if our product candidates are used in combination with other therapies, our product candidates may exacerbate adverse events associated with the therapy. Subjects treated with our product candidates may also be undergoing other treatments, which can cause side effects or adverse events that are unrelated to our product candidate, but may still impact the success of our clinical trials.
If significant adverse events or other side effects are observed in any of our current or future clinical trials, we may have difficulty recruiting participants to the clinical trials, subjects 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, Health Canada, 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. Any of these developments could materially harm our business, financial condition and prospects.
Further, if any of our product candidates obtains marketing approval, toxicities associated with such product candidates 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 drug label, significant restrictions on the use of the product or the withdrawal of the product candidate from the market. We cannot predict whether our product candidates 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.
The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA, Health Canada or other comparable foreign regulatory authorities.
Before obtaining regulatory approvals for the commercial sale of any of our product candidates, including NVG-291, we will be required to demonstrate with substantial evidence through well-controlled clinical trials that our product candidates are safe and effective for their intended uses. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Success in preclinical studies and early-stage clinical trials does not mean that future clinical trials will be successful. We do not know whether NVG-291 or our potential future product candidates will perform in current or future clinical trials as in preclinical studies or early clinical studies. Product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA, EMA, Health Canada and other comparable foreign regulatory authorities despite having progressed through preclinical studies and early-stage clinical trials.
In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the study populations, differences in and adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. Subjects treated with our product candidates may also be undergoing other treatments and may be using other approved products or investigational new drugs, which can cause side effects or adverse events that are unrelated to our product candidate. As a result, assessments of efficacy can vary widely for a given individual, and from subject to subject and site to site within a clinical trial. This subjectivity can increase the uncertainty of, and adversely impact, our clinical trial outcomes. We do not know whether any clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain marketing approval to market our product candidates. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We cannot be certain that our planned clinical trials or any other future clinical trials will be successful.
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Interim, initial, “topline,” and preliminary data from our clinical trials that we announce or publish from time to time may change as more participant data becomes available 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 topline data from our preclinical studies and clinical trials, which are 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. For example, in June 2025 we announced positive topline data from the chronic cohort of our Phase 1b/2a clinical trial of NVG-291. However, there can be no assurance that the final topline data from the trial will be consistent with such results or otherwise viewed as positive. 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, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline data should be viewed with caution until the final data are available.
From time to time, we may also disclose interim data from our clinical trials. 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 participant enrollment continues and more participant data become available. Adverse differences between preliminary or interim data and final data could significantly harm our prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our Common Shares.
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 you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
If the interim, topline, or preliminary data that we report differs from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates, may be harmed, which could harm our business, results of operations, prospects or financial condition.
If we fail to develop and commercialize NVG-291 for additional indications or fail to discover, develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve our strategic objectives would be impaired.
Although the development and commercialization of NVG-291 for the treatment of SCI is our primary focus, as part of our longer-term growth strategy, we have also conducted preclinical test of concept evaluation of NVG-300-R in animal models of stroke and SCI. We intend to evaluate internal opportunities potentially provided by NVG-291, NVG-300 or other potential product candidates, and also may choose to in-license or acquire other product candidates as well as commercial products to treat patients suffering from other disorders with significant unmet medical needs and limited treatment options. These other potential product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable non-U.S. regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives. If we are unsuccessful in identifying and developing additional product candidates, our potential for growth and achieving our strategic objectives may be impaired.
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We may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success.
We have limited financial and managerial resources. Correctly prioritizing our research and development activities is particularly important for us due to the breadth of potential product candidates and indications that we believe could be pursued. As a result, we may forgo or delay pursuit of other opportunities with others that could have had greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
As product candidates progress through clinical trials to 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 in an effort to optimize safety, efficacy, yield, minimize costs and achieve consistent quality and results. For example, the manufacturing process used to produce clinical supplies for our clinical trials may be different from that used in prior or future trials, and we may use a different supplier or contract manufacturer for commercial supplies after regulatory approval. There can be no assurance that such changes will achieve the intended objectives. These changes and any future changes we may make to any product candidates may also cause such candidates to perform differently and affect the results of future clinical trials conducted with the modified materials. Such changes or related unfavorable clinical trial results could delay initiation or completion of additional clinical trials, require the conduct of comparability bridging studies or clinical trials or the repetition of one or more studies or clinical trials, increase development costs, delay or prevent potential marketing approval and jeopardize our ability to commercialize the affected product candidates, if approved, and generate revenue. There can be no assurance that FDA, EMA, Health Canada, or comparable regulatory authorities will accept our conclusions that any such changes did not have an adverse effect on the product candidate or that such changes may negatively impact the interpretation of the study data.
If we are unable to successfully develop companion diagnostics or biomarkers that may be required for our therapeutic product candidates, or experience significant delays in doing so, we may not achieve marketing approval or realize the full commercial potential of our therapeutic product candidates.
We may develop companion diagnostics or biomarkers for our therapeutic product candidates. It is expected that, at least in some cases, regulatory authorities may require the development and regulatory approval of a companion diagnostic or biomarkers as a condition to approving a therapeutic product candidate. We have limited experience and capabilities in developing or commercializing diagnostics or biomarkers and plan to rely in large part on third parties to perform these functions. We do not currently have any agreement in place with any third party to develop or commercialize companion diagnostics or biomarkers for any of our therapeutic product candidates.
Companion diagnostics or biomarkers are subject to regulation by the FDA, EMA, Health Canada and comparable foreign regulatory authorities and may require separate regulatory approval or clearance prior to commercialization. If we, or any third parties that we engage to assist, are unable to successfully develop companion diagnostics or biomarkers for our therapeutic product candidates, or experience delays in doing so, our business may be substantially harmed.
If we experience delays or difficulties in the enrollment and/or retention of participants in clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Subject 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. In particular, for our trials in SCI, participants are difficult to enroll given the nature of their injuries and the need to travel for treatment. In the past we have encountered enrollment delays and may experience additional delays in the future. As such, we may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible subjects to participate in these trials to such trial’s conclusion as required by the FDA, EMA, Health Canada or other comparable foreign regulatory authorities. Additionally, certain clinical trials for future product candidates may be focused on indications with relatively small patient populations, which may further limit enrollment of eligible subjects or may result in slower enrollment than we anticipate. The eligibility criteria of our clinical trials, once established, may further limit the pool of available trial participants.
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Subject enrollment may also be affected if our competitors have ongoing clinical trials for product candidates that are under development for the same indications as our product candidates, and subjects who would otherwise be eligible for our clinical trials instead enroll in clinical trials of our competitors’ product candidates. Subject enrollment for any of our clinical trials may be affected by other factors, including:
| ● | size and nature of the patient population; |
| ● | the ability to enroll subjects quickly after SCI for our subacute study population; |
| ● | severity of the disease under investigation; |
| ● | availability and efficacy of approved drugs for the disease under investigation; |
| ● | subject eligibility criteria for the trial in question as defined in the protocol; |
| ● | perceived risks and benefits of the product candidate under study; |
| ● | 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; |
| ● | efforts to facilitate timely enrollment in clinical trials; |
| ● | patient referral practices of physicians; |
| ● | the ability to monitor subjects adequately during and after treatment; |
| ● | proximity and availability of clinical trial sites for potentially interested study participants; |
| ● | continued enrollment of prospective subjects by clinical trial sites; and |
| ● | the risk that subjects enrolled in clinical trials will drop out of the trials before completion. |
Our inability to enroll a sufficient number of subjects for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain marketing approval for the sale of our product candidates. Furthermore, even if we are able to enroll a sufficient number of subjects for our clinical trials, we may have difficulty maintaining enrollment of such subjects in our clinical trials.
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As an organization, we have never conducted later-stage clinical trials or submitted a new drug application, and may be unable to do so for any of our product candidates.
We are relatively early in our development efforts for our product candidates, and we will need to successfully complete pivotal clinical trials in order to seek approval from the FDA or other non-U.S. regulatory authority to market NVG-291 or any future product candidates we may develop. Carrying out clinical trials and the submission of new drug applications, or NDAs, is complicated. As an organization, we have not conducted any later stage or pivotal clinical trials, have limited experience as a company in preparing, submitting, and prosecuting regulatory filings and have not previously submitted an NDA or other applicable non-U.S. regulatory submission for any product candidate. We also plan to conduct a number of clinical trials for multiple product candidates in parallel over the next several years. This may be a difficult process to manage with our limited resources and may divert the attention of management. In addition, we cannot be certain how many clinical trials of our product candidates will be required or how such trials will have to be designed. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to regulatory submission and approval of any of our product candidates. We may require more time and incur greater costs than our competitors and may not succeed in obtaining marketing approvals of product candidates that we develop. In addition, we may need to enter into arrangements with collaborators or others to conduct, or assist us in conducting, such clinical trials and we may not be successful in entering into arrangements with third parties to conduct, or assist us with conducting such clinical trials, or may be unable to do so on terms that are favorable to us. If we engage such third parties, our product revenues and our profitability, if any, could be lower than if we were to clinically develop product candidates ourselves, we may have little control over such third parties and any of them may fail to devote the necessary resources and attention to conduct such clinical trials effectively. Failure to commence or complete, or delays in, our planned clinical trials, could prevent us from or delay us in submitting NDAs for and commercializing our product candidates.
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 rapid evolution of technologies, fierce competition and strong defense of intellectual property. Our competitors are developing or may develop products, product candidates and processes competitive with our product candidates. Any product candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future.
There are currently no approved pharmaceutical products that enable sustained improvements in function for people with SCI. There are a number of mobility assistance and neuro stimulation devices in development or approved to improve quality of life for individuals living with SCI.
There are a significant number of approved therapies for multiple sclerosis (“MS”) and fewer approved for stroke, but they all target the immune system in one way or another (immunomodulatory or immunosuppressive). There are several treatments approved for stroke, which are either preventive (antiplatelet or anticoagulant) or require acute intervention and are focused on early revascularization (e.g. tissue plasminogen activator). There are no approved therapies that promote neural repair (e.g. remyelination, plasticity) for either MS or stroke.
There are several clinical trials underway evaluating experimental treatments for SCI, stroke and MS.
Many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient recruitment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Mergers and acquisitions in the biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
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We anticipate that we will continue to face increasing competition as new therapies and combinations thereof, and related data emerge. Competitors, independently or through collaboration, are developing products that potentially directly compete with our current or future product candidates and which may either be a longer lasting or a more efficacious treatment or receive FDA or other applicable regulatory approval more rapidly than our current or future product candidates. 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 side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other applicable regulatory approval 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. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products. There are generic products currently on the market for certain of the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years. If our product candidates are approved, we expect that they will be priced at a significant premium over competitive generic products.
Inadequate funding for the FDA, the SEC and other government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner 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. Average review times at the FDA have fluctuated in recent years as a result. Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. 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 drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, in recent years, the U.S. government shut down and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities. In addition, disruptions may also result from events similar to the COVID-19 pandemic. During the COVID-19 pandemic, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications. In the event of a similar public health emergency in the future, the FDA may not be able to continue its current pace and review timelines could be extended. Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their regulatory activities.
Further, while the FDA’s review of marketing applications and other activities for new drugs and biologics is largely funded through the user fee program established under PDUFA, it remains unclear how the current administration’s reduction in force and budget cuts will impact this program and the ability of the FDA to provide guidance and review our product candidates in a timely manner. There also continues to be uncertainty as to how other measures being implemented by the current administration across the government will impact our activities and those of the FDA and its operations. For example, the potential loss of FDA personnel could lead to further disruptions and delays in FDA review of our product candidates.
If an emergency related disruption occurs, it 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. Future emergency-related disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.
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Fast Track or Breakthrough Therapy designation by the FDA may not actually lead to a faster development or regulatory review or approval process, and does not assure FDA approval of our product candidates.
We have in the past and may seek Fast Track or Breakthrough Therapy designation from the FDA for some or all of our product candidates, there is no guarantee that we will be able to obtain such designations or to maintain the benefits associated with such designations. The FDA’s Fast Track and Breakthrough Therapy designation programs are intended to expedite the development of certain qualifying product candidates intended for the treatment of serious diseases and conditions. If a product candidate is intended for the treatment of a serious or life-threatening condition and preclinical or clinical data demonstrate the product’s potential to address an unmet medical need for this condition, the sponsor may apply for FDA Fast Track designation.
A product candidate may be designated as a breakthrough therapy if it is intended, alone or in combination with one or more other drugs or biologics to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. For product candidates that have been designated as breakthrough therapies, 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 by the FDA may also be eligible for accelerated approval.
We may not experience a faster development process, review or approval compared to conventional FDA procedures for those product candidates that receive Fast Track or Breakthrough Therapy designation. A Fast Track or Breakthrough Therapy designation also does not ensure that the product candidate will receive marketing approval or that approval will be granted within any particular time frame. For example, although we have received Fast Track designation for NVG-291 in individuals with SCI, there can be no guarantee that we will receive marketing approval or that approval will be granted on an accelerated timeframe. In addition, the FDA may withdraw Fast Track or Breakthrough Therapy designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track and/or Breakthrough Therapy designation alone does not guarantee qualification for the FDA’s priority review procedures.
We may seek orphan drug designation for the product candidates we develop, and we may be unsuccessful or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
While we have in the past successfully obtained orphan drug designation for one of our product candidates, we may be unsuccessful in obtaining additional orphan designations in the future. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs and biologics for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a drug or biologic as an orphan drug if it is a drug or biologic intended to treat a rare disease or condition, which is defined as a patient population of fewer than 200,000 individuals annually 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 drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.
Similarly, in Europe, the European Commission grants orphan drug designation after receiving the opinion of the EMA Committee for Orphan Medicinal Products on an orphan drug designation application. Orphan drug designation is intended to promote the development of drugs and biologics that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in Europe and for which no satisfactory method of diagnosis, prevention or treatment has been authorized (or the product would be a significant benefit to those affected). Additionally, designation is granted for drugs and biologics intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug or biologic in Europe would be sufficient to justify the necessary investment in developing the drug or biologic. In Europe, orphan drug designation entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of the sponsor.
Generally, if a drug or biologic with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug or biologic is entitled to a period of marketing exclusivity, which precludes the EMA, or the FDA from approving another marketing application for the same drug and for the same indication during the period of exclusivity, except in limited circumstances. The applicable period is seven years in the United States and 10 years in Europe. The European exclusivity period can be reduced to six years if a drug or biologic no longer meets the criteria for orphan drug designation or if the drug or biologic is sufficiently profitable such that market exclusivity is no longer justified.
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Even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect such product candidate from competition because different therapies can be approved for the same condition and the same therapies can be approved for different conditions but used off-label. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug or biologic is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Moreover, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug or biologic to meet the needs of patients with the rare disease or condition. Orphan drug designation neither shortens the development time or regulatory review time of a drug or biologic nor gives the drug or biologic any advantage in the regulatory review or approval process. While we may seek orphan drug designation for applicable indications for our current and any future product candidates, we may never receive such designations. Even if we do receive such designation, there is no guarantee that we will enjoy the benefits of that designation.
Even if approved, our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success.
Even if our product candidates receive regulatory approval, they may not gain adequate market acceptance among physicians, patients, healthcare payors and others in the medical community. The degree of market acceptance of any of our approved product candidates will depend on a number of factors, including, but not limited to:
| ● | the efficacy and safety profile as demonstrated in clinical trials compared to alternative treatments; |
| ● | the timing of market introduction of the product candidate as well as competitive products; |
| ● | the clinical indications for which the product candidate is approved; |
| ● | restrictions on the use of our product candidates, such as boxed warnings or contraindications in labeling, or a REMS, if any, which may not be required of alternative treatments and competitor products; |
| ● | the potential and perceived advantages of product candidates over alternative treatments; |
| ● | the cost of treatment in relation to alternative treatments; |
| ● | the availability of coverage and adequate reimbursement, as well as pricing, by third-party payors, including government authorities; |
| ● | relative convenience and ease of administration; |
| ● | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; |
| ● | the effectiveness of sales and marketing efforts; |
| ● | unfavorable publicity relating to our product candidates or similar approved products or product candidates in development by third parties; and |
| ● | the approval of other new therapies for the same indications. |
If any one or more of our product candidates are 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 that product candidate and our financial results could be negatively impacted.
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If the market opportunity for any product candidate that we develop is smaller than we believe, our revenue may be adversely affected and our business may suffer.
Our estimates of the potential market opportunity for NVG-291 for the treatment of SCI as well as any other product candidates include several key assumptions based on our industry knowledge, industry publications and third-party research reports. There can be no assurance that any of these assumptions are, or will remain, accurate. If the actual market for NVG-291 for SCI or other indications, or for any other product candidate we may develop, is smaller than we expect, our revenues, if any, may be limited and it may be more difficult for us to achieve or maintain profitability.
If we are unable to establish sales, marketing and distribution capabilities or enter into agreements with third parties to sell or market our product candidates, we may not be successful in commercializing our product candidates that obtain regulatory approval.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any product candidate for which we obtain marketing approval, and for which we decide to independently commercialize, we will need to establish a sales and marketing organization or make arrangements with third parties to perform these services for each of the territories in which we may have approval to sell or market our product candidates. We may not be successful in accomplishing these required tasks.
Establishing an internal sales or marketing team with technical expertise and supporting distribution capabilities to commercialize our product candidates will be expensive and time-consuming and will require significant attention of our executive officers to manage. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize our products on our own include:
| ● | our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; |
| ● | the inability of sales personnel to obtain access to physicians; |
| ● | the lack of adequate numbers of physicians to prescribe any future products; |
| ● | the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and |
| ● | unforeseen costs and expenses associated with creating an independent sales and marketing organization. |
If we do not establish our own sales, marketing and distribution capabilities and instead enter into arrangements with third parties to perform these services, our product revenues and our profitability, if any, could be lower than if we were to market, sell and distribute any product candidates that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.
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Risks Related to Our Dependence on Third Parties
Our use of third parties to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates, products, or necessary quantities of such materials on time or at an acceptable cost.
We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and we lack the resources and the capabilities to do so. As a result, we currently rely on third parties for the development, manufacture and supply of the active pharmaceutical ingredients, or APIs, in our product candidates. We have not made large scale up batches required for commercialization and NVG-291 is a large peptide that requires specialists in manufacturing and development of which we outsource. Our current strategy is to continue to outsource all manufacturing of our product candidates to third parties.
We currently engage third-party manufacturers to provide the APIs of NVG-291 and for the final drug product formulation of NVG-291 that is being used in our current and planned clinical trials. Although we believe that there are several potential alternative manufacturers who could manufacture NVG-291, we may incur added costs and delays in identifying and qualifying any such replacement. In addition, we typically order raw materials and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements with any commercial manufacturer. There is no assurance that we will be able to timely secure needed supply arrangements on satisfactory terms, or at all. Our failure to secure these arrangements as needed could have a material adverse effect on our ability to complete the development of our product candidates or, to commercialize them, if approved. We may be unable to conclude agreements for commercial supply with third-party manufacturers, or may be unable to do so on acceptable terms. There may be difficulties in scaling up to commercial quantities and formulation of NVG-291, and the costs of manufacturing could be prohibitive.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
| ● | the failure of the third-party manufacturer to comply with applicable regulatory requirements and reliance on third-parties for manufacturing process development, regulatory compliance and quality assurance; |
| ● | manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us; |
| ● | limitations on supply availability resulting from capacity and scheduling constraints of third-parties; |
| ● | the possible breach of manufacturing agreements by third-parties because of factors beyond our control; |
| ● | the possible termination or non-renewal of the manufacturing agreements by the third-party, at a time that is costly or inconvenient to us; and |
| ● | the possible misappropriation of our proprietary information, including our trade secrets and know-how. |
If we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could delay or impair our ability to obtain regulatory approval for our products. If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA, EMA, Health Canada and other foreign regulatory authorities.
If NVG-291 for SCI or potential additional indications or any other product candidate is approved by any regulatory agency, we intend to utilize arrangements with third-party contract manufacturers for the commercial production of those products. This process is difficult and time consuming and we may face competition for access to manufacturing facilities as there are a limited number of contract manufacturers operating under cGMPs that are capable of manufacturing our product candidates. Consequently, we may not be able to reach agreement with third-party manufacturers on satisfactory terms, which could delay our commercialization.
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Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or voluntary recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates. The facilities used by our contract manufacturers to manufacture our product candidates must be evaluated by the FDA and corresponding non-U.S. regulators. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with cGMPs. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we may not be able to secure and/or maintain regulatory approval for our product manufactured at these facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA finds deficiencies or a comparable non-U.S. regulatory authority does not approve these facilities for the manufacture of our product candidates 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 regulatory approval for or market our product candidates, if approved. Contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements. Any failure to comply with cGMP requirements or other FDA, EMA, Health Canada and comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products, if approved.
The FDA, EMA, Health Canada and other foreign regulatory authorities require manufacturers to register manufacturing facilities. The FDA and corresponding non-U.S. regulators also inspect these facilities to confirm compliance with cGMPs. Contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements. Any failure to comply with cGMP requirements or other FDA, EMA, Health Canada and comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products following approval.
We rely on third parties to assist in conducting our clinical trials. If they do not perform satisfactorily, we may not be able to obtain regulatory approval or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed.
We have relied upon and plan to continue to rely on third parties, such as CROs, to conduct our clinical trials and expect to rely on these third parties to conduct clinical trials of any other product candidate that we develop. Any of these third parties may terminate their engagements with us under certain circumstances. We may not be able to enter into alternative arrangements or do so on commercially reasonable terms. In addition, there is a natural transition period when a new CRO begins work. As a result, delays may occur, which could negatively impact our ability to meet our expected clinical development timelines and harm our business, financial condition and prospects.
Further, although our reliance on these third parties for clinical development activities limits our control over these activities, we remain responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards. Moreover, the FDA requires us to comply with GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. The FDA enforces these GCPs through periodic inspections of trial sponsors, principal investigators, clinical trial sites and IRBs. If we or our third-party contractors fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our product candidates, which would delay the regulatory approval process. We cannot be certain that, upon inspection, the FDA will determine that any of our clinical trials comply with GCPs. We are also required to register certain clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
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Furthermore, the third parties conducting clinical trials on our behalf are not our employees, and except for remedies available to us under our agreements with such contractors, we cannot control whether or not they devote sufficient time, skill and resources to our ongoing development programs. These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs. If these third parties, including clinical investigators, do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates. If that occurs, we will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates. In such an event, our financial results and the commercial prospects for any product candidates that we seek to develop could be harmed, our costs could increase and our ability to generate revenues could be delayed, impaired or foreclosed.
We may seek to establish collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.
The advancement of our product candidates and development programs and the potential commercialization of our current and future product candidates will require substantial additional cash to fund expenses. For some of our programs, we may decide to collaborate with additional pharmaceutical and biotechnology companies with respect to development and potential commercialization. Likely collaborators may include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. In addition, if we are able to obtain regulatory approval for product candidates from foreign regulatory authorities, we may enter into collaborations with international biotechnology or pharmaceutical companies for the commercialization of such product candidates.
We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the potential differentiation of our product candidate from competing product candidates, design or results of clinical trials, the likelihood of approval by the FDA, EMA, Health Canada or comparable foreign regulatory authorities and the regulatory pathway for any such approval, the potential market for the product candidate, the costs and complexities of manufacturing and delivering the product to patients and the potential of competing products. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available for collaboration and whether such a collaboration could be more attractive than the one with us for our product candidate. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.
Collaborations are complex and time-consuming to negotiate and document. Further, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. Any collaboration agreements that we enter into in the future may contain restrictions on our ability to enter into potential collaborations or to otherwise develop specified product candidates. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we enter into collaborations with third parties for the development and commercialization of our product candidates, our prospects with respect to those product candidates will depend in significant part on the success of those collaborations.
We may enter into collaborations for the development and commercialization of certain of our product candidates. If we enter into such collaborations, we will have limited control over the amount and timing of resources that our collaborators will dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on any future collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. In addition, any future collaborators may have the right to abandon research or development projects and terminate applicable agreements, including funding obligations, prior to or upon the expiration of the agreed upon terms.
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Collaborations involving our product candidates pose a number of risks, including the following:
| ● | collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; |
| ● | collaborators may not perform their obligations as expected; |
| ● | collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; |
| ● | collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; |
| ● | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; |
| ● | a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; |
| ● | disagreements with collaborators, including disagreements over proprietary rights, including trade secrets and intellectual property rights, contract interpretation, or the preferred course of development might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; |
| ● | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; |
| ● | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and |
| ● | collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. |
Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If any future collaborator of ours is involved in a business combination, it could decide to delay, diminish or terminate the development or commercialization of any product candidate licensed to it by us.
We may be subject to claims that we or our employees, independent contractors, or consultants have wrongfully used or disclosed alleged confidential information or trade secrets.
We have entered into and may enter in the future into non-disclosure and confidentiality agreements to protect the proprietary positions of third parties, such as outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties. We may become subject to litigation where a third party asserts that we or our employees inadvertently or otherwise breached the agreements and used or disclosed trade secrets or other information proprietary to the third parties. Defense of such matters, regardless of their merit, could involve substantial litigation expense and be a substantial diversion of employee resources from our business. We cannot predict whether we would prevail in any such actions. Moreover, intellectual property litigation, regardless of its outcome, may cause negative publicity and could prohibit us from marketing or otherwise commercializing our product candidates and technology. Failure to defend against any such claim could subject us to significant liability for monetary damages or prevent or delay our developmental and commercialization efforts, which could adversely affect our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employees.
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Parties making claims against us may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they may have substantially greater resources. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, operating results, financial condition and prospects.
Risks Related to Legal and Regulatory Compliance Matters
Even if our product candidates receive regulatory approval, they will be subject to significant post marketing regulatory requirements and oversight.
Any regulatory approvals that we may receive for our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product candidate, 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 our product candidates, 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 non-U.S. regulatory authorities approve our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as on-going compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval. 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, Health Canada and other comparable foreign regulatory requirements may subject our company to administrative or judicially imposed sanctions, including:
| ● | delays in or the rejection of product approvals; |
| ● | restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; |
| ● | restrictions on the products, manufacturers or manufacturing process; |
| ● | warning or untitled letters; |
| ● | civil and criminal penalties; |
| ● | injunctions; |
| ● | suspension or withdrawal of regulatory approvals; |
| ● | product seizures, detentions or import bans; |
| ● | voluntary or mandatory product recalls and publicity requirements; |
| ● | total or partial suspension of production; and |
| ● | imposition of restrictions on operations, including costly new manufacturing requirements. |
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The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.
The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. 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 maintain 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. It is difficult to predict how current and future legislation, executive actions, and litigation, including the executive orders, will be implemented, and the extent to which they will impact our business, our clinical development, and the FDA’s and other agencies’ ability to exercise their regulatory authority, including the FDA’s pre-approval inspections and timely review of any regulatory filings or applications we submit to the FDA. To the extent any 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.
Moreover, the FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. For example, on September 9, 2025, the President issued a memorandum directing HHS to “ensure transparency and accuracy in DTC prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug required to be provided in prescription drug advertisements.” To that end, the FDA announced that it is initiating a rulemaking process “to eliminate the ‘adequate provision’ loophole that allows pharmaceutical advertisements to hide safety information by placing it in another format or location.” In this context, the FDA declared that it will no longer tolerate what it characterized as “deceptive practices” in prescription drug advertising and that the FDA would “aggressively deploy” its available enforcement tools, with “heightened Scrutiny” of fair balance and disclosures in social media promotions. The FDA also issued a generic “notice letter” directing companies to “remove any noncompliant advertising and bring all promotional communications into compliance.” The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant civil, criminal and administrative penalties. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue, could require us to expend significant time and resources in response and could generate negative publicity.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. For example, even if the FDA, EMA or Health Canada grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the product candidate based on their own review of its clinical development, manufacturing, marketing and promotion and reimbursement. However, 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 preclinical studies or 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 our product candidates will be harmed.
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We have conducted and may choose to conduct international clinical trials in the future. The acceptance of study data by the FDA, EMA, Health Canada 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 clinical trials outside the U.S. 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 (1) the data are applicable to the United States population and United States medical practice; (2) the trials are performed by clinical investigators of recognized competence and pursuant to current GCP requirements; and (3) the FDA is able to validate the data through an on-site inspection or other appropriate means, if the FDA deems it necessary. Additionally, the FDA’s clinical trial requirements, including the adequacy of the study 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, Health Canada or any applicable foreign regulatory authority will accept data from trials conducted outside of their applicable jurisdiction. If the FDA, EMA, Health Canada 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 our product candidates not receiving approval for commercialization in the applicable jurisdiction.
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 any of our product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of our product candidates will be covered and reimbursed by third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. 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. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is a covered benefit under its health plan; safe, effective and medically necessary; appropriate for the specific patient; and cost-effectiveness data.
Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize any product candidate for which we 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, principal decisions about reimbursement for new products reimbursed by certain federal healthcare programs are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree. In addition, 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 where coverage is available, 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 drugs. 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 drugs 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, our product candidates 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.
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Outside the United States, 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, Canada and other countries has and will continue to put pressure on the pricing and usage of therapeutics such as our product candidates. In many countries, particularly the countries of the European Union, 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 our product candidate 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 our product candidates. 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 future product candidates 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 receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
We may face difficulties from changes to current regulations and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.
Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. 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 maintain profitability.
In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. 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 governmental and private insurers, and significantly impacted the U.S. pharmaceutical industry. The ACA contained provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the U.S. Department of Health and Human Services Secretary, the HHS Secretary, as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. The ACA made several changes to the Medicaid Drug Rebate Program, including increasing the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program, extending the rebate program to individuals enrolled in Medicaid managed care organizations. The ACA also established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program. In December 2020, the CMS issued a final rule implementing significant manufacturer price reporting changes under the Medicaid Drug Rebate Program, including regulations that affect manufacturer-sponsored patient assistance programs subject to pharmacy benefit manager accumulator programs and Best Price reporting related to certain value-based purchasing arrangements. Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs was eliminated. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than they receive on the sale of products, which could have a material impact on our business.
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Since the ACA’s passage, legislative changes to the ACA have been proposed and adopted. On July 4, 2025, the annual reconciliation bill, the “One Big Beautiful Bill Act,” or OBBBA, was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA’s enhanced advanced premium tax credits, set to expire in 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. Additionally, under the sequestration required by the Budget Control Act of 2011, beginning April 1, 2013, Medicare payments to providers were reduced, which will remain in effect through 2032 unless additional Congressional action is taken. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on the Medicaid drug rebate effective January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price.
Further, there has been increasing legislative and enforcement interest in the United States aimed at increasing transparency of drug pricing, reducing the cost of prescription drugs under Medicare, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs. In particular, in August 2022, Congress passed the Inflation Reduction Act or (“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. Various industry stakeholders, including certain pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional. 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 or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved. Further, uncertainties created by the IRA and other cost containment measures may negatively impact potential investments, company valuation, royalty-based earnings, mergers and acquisitions in our industry.
As noted above, the marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status are attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
In addition, in most countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing and reimbursement vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.
Our ability to develop and market new drug products may be impacted if litigation challenging the FDA’s approval of another company’s drug continues. In April 2023, the U.S. District Court for the Northern District of Texas invalidated the approval by the FDA of mifepristone, a drug product, which was originally approved in 2000, and whose distribution is governed by various measures adopted under a REMS. The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious. In June 2024, the Supreme Court reversed and remanded that decision after unanimously finding that the plaintiffs did not have standing to bring this legal action against the FDA. On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended complaint in the district court in Texas challenging the FDA’s actions. On January 16, 2025, the district court agreed to allow these states to file an amended complaint and continue to pursue this challenge. Thereafter, on September 30, 2025, the district court declined to dismiss the case and, instead, transferred it to the federal district court in the Eastern District of Missouri. Depending on the outcome of this litigation, if it continues, our ability to develop current or future product candidates we may develop may be at risk and could be delayed, undermined or subject to protracted litigation.
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Further, we could be adversely affected by several significant administrative law cases decided by the U.S. Supreme Court in 2024. In Loper Bright Enterprises v. Raimondo, for example, the court overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or ambiguous on a particular topic. The Supreme Court stripped federal agencies of this presumptive deference and held that courts must exercise their independent judgment when deciding whether an agency such as FDA acted within its statutory authority under the Administrative Procedure Act (the “APA”). Additionally, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the court held that actions to challenge a federal regulation under the APA can be initiated within six years of the date of injury to the plaintiff, rather than the date the rule is finalized. Another decision, Securities and Exchange Commission v. Jarkesy, overturned regulatory agencies’ ability to impose civil penalties in administrative proceedings. These decisions appear to give prospective plaintiffs a personal statute of limitations to challenge longstanding agency regulations. These decisions could introduce additional uncertainty into the regulatory process and may result in additional legal challenges to actions taken by federal regulatory agencies, including the FDA and the Centers for Medicare & Medicaid Services that we rely on. In addition to potential changes to regulations as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays and other impacts, any of which could adversely impact our business and operations.
Finally, with the change in presidential administrations in 2025, there continues to be substantial uncertainty as to how, if at all, the new administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates. The uncertainty could present new challenges or potential opportunities as we navigate the clinical development and approval process for our product candidates.
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, government price reporting, and health information privacy and security laws, 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.
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 obtain marketing approval. The applicable federal, state and non-U.S. healthcare laws and regulations that may affect our ability to operate include, but are not limited to:
| ● | 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. 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 civil False Claims Act; |
| ● | the federal false claims, including the civil False Claims Act, the FCA, that can be enforced by private citizens through civil whistleblower or qui tam actions, and civil monetary penalties 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, and/or impose exclusions from federal health care programs and/or penalties for parties who engage in such prohibited conduct; |
| ● | 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; |
| ● | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations also impose obligations on covered entities such as health insurance plans, healthcare clearinghouses, and certain health care providers and their respective business associates and their covered subcontractors, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; |
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| ● | the federal Physician Payments Sunshine Act, also known as the CMS Open Payments, and its implementing regulations, which require manufacturers of covered drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members; and |
| ● | analogous state and non-U.S. 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 non-U.S. 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. |
We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, 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.
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 and/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.
The failure to comply with any of these laws or regulatory requirements subjects firms to possible legal or regulatory action. Depending on the circumstances, failure to meet applicable regulatory requirements can result in significant civil, criminal and administrative penalties, including damages, fines, disgorgement, 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, injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts.
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.
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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, as such laws and regulations may also become more complex over time. It is possible that governmental authorities will conclude that our business practices 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.
Failure to comply with laws, rules, regulations, policies, industry standards and contractual obligations relating to privacy, data protection and data security could adversely affect our business.
We collect, maintain and otherwise process a large quantity of data relating to our employees and in connection with our clinical trials, and we face risks inherent in both handling large volumes of data and in protecting the security of such data. Our data processing activities subject us to numerous laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other actual and asserted obligations relating to privacy, data protection and data security. Our actual or perceived failure to comply with any such actual or alleged obligations could result in enforcement actions and other claims, demands and proceedings that may negatively impact our revenue, as well as expose ourselves to criminal sanctions, civil penalties, contractual damages, exclusion from governmental healthcare programs, reputational harm, administrative burdens and diminished profits and future earnings. In Canada, where we are headquartered, federal and provincial legislation impose strict requirements for the processing of personal data of individuals, with substantial penalties for noncompliance. In the United States, both federal and various state governments have adopted, or are considering, laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about individuals. Many of the state laws differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. In addition, on June 28, 2018, the State of California enacted the California Consumer Privacy Act, the CCPA, which went into effect on January 1, 2020 and was amended by the California Privacy Rights Act of 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches. Although the CCPA exempts some data processed in the context of clinical trials and exempts protected health information, as defined by HIPAA, the CCPA increases compliance costs and potential liability with respect to other personal data we maintain about California residents. Similar laws have been enacted in several other states, such as Virginia, Connecticut, Colorado, Utah, Iowa, Indiana, Montana, Tennessee, Florida, Oregon, Delaware, Texas and New Jersey, and proposed in other states and at the federal level. In addition to these consumer privacy laws, in April 2023, the state of Washington enacted the My Health My Data Act, which went into effect in March 2024. This new law imposes strict requirements on the collection, use and processing of health-related information that is not subject to HIPAA, and provides for a private right of action. The Washington law adds additional complexity to our existing compliance obligations and may increase our potential liability relating to our collection and processing of health-related information.
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Outside of the United States, certain foreign jurisdictions, including the European Economic Area, EEA, and the United Kingdom have laws and regulations which are more restrictive in certain respects than those in the United States. For instance, the collection and use of personal data, including health data, in the EEA is governed by the General Data Protection Regulation, in the UK by the UK General Data Protection Regulation, (collectively “GDPR”). The GDPR, and national implementing legislation in EEA member states and the United Kingdom, impose a strict data protection compliance regime which tightens existing European Union data protection principles, creates new obligations for companies and new rights for individuals. Actual or alleged failure to comply with the GDPR may result in regulatory inquiries and other proceedings by regulatory authorities and, in certain cases, private individuals and may result in substantial fines and other administrative penalties, restrictions upon our data processing activities and other liabilities. The GDPR may increase our responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms to address the GDPR’s requirements. We may incur liabilities, expenses, costs, and other operational losses under the GDPR and local laws of nations included within the EEA, the UK, and other regions in connection with any measures we take to comply with them. Working to comply with the GDPR and other laws and regulations to which we are subject in the EEA, UK, and other regions outside the United States relating to privacy, data protection and data security 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 activities in those regions, and our business could be adversely affected.
Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information or impose other obligations or restrictions in connection with our use, retention and other processing of information, and we may otherwise face contractual restrictions applicable to our use, retention, and other processing of information. Claims that we have violated individuals’ privacy rights, failed to comply with laws, regulations, contractual obligations or other actual or asserted obligations relating to privacy, data protection or data security, even if resolved in our favor, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
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 contract with third parties to perform laboratory work and 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.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their 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.
Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
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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, accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. Changes in the leadership of the FDA and other federal agencies and other policies implemented by the federal administration may lead to changes in the operations of the FDA, which may have a material impact on the industry and our clinical development plans.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. If a prolonged government shutdown occurs or if a significant number of federal employees are laid off or leave federal agencies, it 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 ability to advance clinical development of our product candidates.
In addition, government funding of the Securities and Exchange Commission 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. If a prolonged government shutdown or other disruption occurs, or if global health or other concerns continue to prevent regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities in a timely manner, it 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, 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.
We are subject to certain U.S. and non-U.S. anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations. We can face serious consequences for violations.
Among other matters, U.S. and non-U.S. anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, (collectively, the “Trade Laws”), prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. We also expect our non-U.S. activities to increase in time. We currently engage third parties for clinical trials and research and development activities and have obtained, or intend to obtain, necessary permits, licenses, patent registrations, and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if we do not explicitly authorize or have prior knowledge of such activities.
Risks Related to Our Intellectual Property
If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our future licensors, we could lose license rights that are important to our business.
We are developing NVG-291 pursuant to the license agreement with CWRU and may develop other early stage preclinical or discovery drug candidates. We are subject to a number of risks associated with our agreement with Case Western, including the risk that Case Western may terminate the license agreement upon the occurrence of certain specified events. The license agreement requires, among other things, that we make certain payments and use reasonable commercial efforts to meet certain business, preclinical, clinical and regulatory milestones. If we fail to comply with any of these obligations or otherwise breach this or similar agreements, the licensor may have the right to terminate the license in whole. Loss of our rights to the licensed intellectual property from Case Western or any similar license granted to us in the future, or the exclusivity rights provided therein, can harm our financial condition and operating results.
Disputes may arise between us and our future licensors regarding intellectual property subject to a license agreement, including:
| ● | 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 on intellectual property of the licensor that is not subject to the licensing agreement; |
| ● | our right to sublicense patents and other rights to third parties; |
| ● | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
| ● | our right to transfer or assign the license; |
| ● | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our future licensors and us and our partners; and |
| ● | the priority of invention of patented technology. |
In addition, the agreements under which we 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 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 the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
In spite of our best efforts, our 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 and technology covered by these license agreements. If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, products identical to ours including upon expiration of any applicable regulatory exclusivity. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
Our success depends on our ability to protect our intellectual property and our proprietary technologies.
Our commercial success depends in part on our ability to obtain and maintain patent and other intellectual property protection for our product candidates, proprietary technologies, and their uses as well as our ability to operate without infringing upon the proprietary rights of others, and maintain trade secret protection of technologies.
We generally seek to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates, proprietary technologies, and their uses that are important to our business. We also seek to protect our proprietary position by acquiring or in-licensing relevant issued patents or pending applications from third parties.
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We currently own or in-license issued and pending patents directed to the composition of the product candidates that we have thus far developed. Composition of matter patents for pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to their method of use or production process. However, we cannot be certain that any claims in our patent applications directed to the composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office, or the USPTO, or by patent offices in countries outside the U.S., or that, if issued, the claims in any such patents, if challenged, will be adjudicated to be not invalid and enforceable by courts and administrative bodies in the U.S. or other countries. Further, if issued, any composition of matter patents covering our product candidates may expire at such a date that competitors may not be prevented from developing, making and marketing a product identical to our product candidates after expiration of any applicable regulatory exclusivities. Method of use patents protect the use of a product for the specified method or indication. This type of patent does not prevent a competitor from making and marketing a product identical to our product candidate for an indication that is outside the scope of the patented methods of use. Moreover, even if competitors do not actively promote their product for indications covered by our patents, clinicians may prescribe these competitor products “off-label” for uses that are covered by our method of use patents. 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. To establish our proprietary position, we own and have in-licensed certain intellectual property rights, and we and our licensors have filed and may file provisional and non-provisional patent applications in the U.S. or abroad relating to our product candidates and certain technologies that are important to our business.
Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from such applications, and then only to the extent the issued claims cover the technology. There can be no assurance that our patent applications or the patent applications of our future licensors will result in patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our and our future licensors’ proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. These uncertainties and/or limitations in our ability to properly protect the intellectual property rights relating to our product candidates could have a material adverse effect on our financial condition and results of operations.
We cannot be certain that the claims in our U.S. pending patent applications, corresponding patent applications and patent applications in certain non-U.S. territories, or those of our future licensors, will be considered patentable by the USPTO, courts in the United States or by the patent offices and courts in other countries, nor can we be certain that the claims in our future issued patents will not be found invalid or unenforceable if challenged.
The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future collaborators will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:
| ● | the USPTO and various other governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; |
| ● | patent applications may not result in any patents being issued; |
| ● | patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; |
| ● | our competitors, many of whom may have substantially greater resources than we do and many of whom may 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 our potential product candidates; |
| ● | there may be significant pressure on the U.S. government and other 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; and |
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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 non-U.S. competitors a better opportunity to create, develop and market competing product candidates. |
The patent prosecution process is also expensive and time-consuming, and we and any future licensors may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner or in all jurisdictions where protection may be commercially advantageous. It is also possible that we or any future licensors will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
In addition, although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected.
The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications and those of our future licensors may not result in patents being issued which protect our product candidates or which effectively prevent others from commercializing competitive product candidates.
Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications we own or in-license in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents that we own or in-license may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties. Consequently, we do not know whether our product candidates will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents or the patents of our future licensors by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents or the patents of our future licensors may be challenged in the courts or patent offices in the United States and abroad. We may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant review and inter partes review, or other similar proceedings challenging our owned patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Moreover, our patents or the patents of our future licensors may become subject to post-grant challenge proceedings, such as oppositions in a patent office outside of the U.S., that challenge our priority of invention or other features of patentability with respect to our patents and patent applications and those of our future licensors. Such challenges may result in loss of patent rights, loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, 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 product candidates. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection provided by our patents and patent applications or the patents and patent applications of our future licensors is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
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Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
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. For example:
| ● | others may be able to develop products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license; |
| ● | we or our future licensors or collaborators might not have been the first to make the inventions covered by the issued patents or patent application that we own or license; |
| ● | we or our future licensors or collaborators might not have been the first to file patent applications covering certain of our inventions; |
| ● | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; |
| ● | it is possible that the pending patent applications we own or license will not lead to issued patents; |
| ● | issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; |
| ● | our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
| ● | we may not develop additional proprietary technologies that are patentable; |
| ● | the patents of others may have an adverse effect on our business; and |
| ● | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
Should any of these events occur, it could significantly harm our business, results of operations and prospects.
Patent terms may be inadequate to protect our competitive position on our products 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. 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 new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension). 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 or otherwise 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 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.
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Others may challenge inventorship or claim an ownership interest in our intellectual property which could expose it to litigation and have a significant adverse effect on its prospects.
A third party or former employee or collaborator may claim an inventorship or ownership interest in one or more of our or our licensors’ patents or other proprietary or intellectual property rights. A third party could bring legal actions against us and seek monetary damages and/or enjoin clinical testing, manufacturing and marketing of the affected product or products. While we are presently unaware of any claims or assertions by third parties with respect to our patents or other intellectual property, we cannot guarantee that a third party will not assert a claim or an interest in any of such patents or intellectual property. If we or our licensors 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, intellectual property that is important to our product candidates. Further, regardless of the outcome, if we become involved in any litigation, it could consume a substantial portion of our resources, and cause a significant diversion of effort by our technical and management personnel.
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 our product candidates.
Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidate without infringing 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 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 compounds, methods of manufacturing compounds and/or methods of use for the treatment of the disease indications for which we are developing our product candidates. If any third-party patents or patent applications are found to cover our product candidates or their methods of use or manufacture, we may not be free to manufacture or market our product candidates 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 our products candidates, including patent infringement lawsuits in the US or abroad, as well as interference, derivation, inter partes review, and post-grant proceedings before the USPTO and opposition or other proceedings before corresponding patent offices outside of the U.S. 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 our product candidates. We cannot guarantee that any of our patent searches or analyses including, but not limited to, 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 patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing. 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 our product candidates, products or methods 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.
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If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or 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 candidate or product. If we were required to obtain a license to continue to manufacture or market the affected product, we may be required to pay substantial royalties or grant cross-licenses to our patents. We cannot, however, assure you that any such license will be available on acceptable 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. 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. Furthermore, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors 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. In addition, we could be found liable for 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 our product candidates 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. 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.
We may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents, which could be expensive, time consuming, and unsuccessful. Further, our issued patents or our future licensors’ patents could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.
Competitors may infringe our intellectual property rights. To prevent infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in a patent infringement proceeding, a court may decide that a patent we own or in-license is not valid, is unenforceable and/or is not infringed. If we or any of our potential future collaborators were to initiate legal proceedings against a third party to enforce a patent directed at one of our product candidates, the defendant could counterclaim that our patent or the patent of our future licensors is invalid and/or unenforceable in whole or in part. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include patent ineligibility, an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, lack of sufficient written description, non-enablement, indefiniteness, and/or obviousness-type double patenting. Grounds for an unenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution with intent to deceive the USPTO.
Our patent rights may be subject to priority, validity, inventorship, ownership and enforceability disputes. Third parties may also raise similar invalidity claims before the USPTO or patent offices abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review or inter partes review, derivation proceedings, and equivalent proceedings in other jurisdictions (e.g., opposition proceedings). The outcome following legal assertions of invalidity and/or unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our future licensors, and the patent examiners are unaware during prosecution. There is also no assurance that there is not prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim in our patents and patent applications or the patents and patent applications of our future licensors, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our technology or platform, or any product candidates that we may develop. Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.
In addition, if the breadth or strength of protection provided by our patents and patent applications or the patents and patent applications of our future licensors is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
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Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other legal proceedings relating to our intellectual property rights, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or other proceedings.
In addition, the issuance of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent us from marketing our own patented product and practicing our own patented technology.
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates.
We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are or will be complete or thorough, nor can we be certain that we have identified or will identify each and every third-party patent and pending patent application in the United States and abroad that is relevant to or necessary for the commercialization of our current and future products and product candidates in any jurisdiction. Patent applications in the United States and elsewhere are not published until 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. Therefore, patent applications covering our product candidates could have been filed by others without our knowledge. The scope of a patent claim is determined by the interpretation of the law, the words of a patent claim, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending patent application may be incorrect, which may negatively impact our ability to market our products. We may incorrectly determine that our products or product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending patent application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and we may incorrectly conclude that a third-party patent is invalid and unenforceable or not infringed. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products and product candidates. If we fail to identify and correctly interpret relevant patents, we may be subject to infringement claims. Also, because the claims of published patent applications can change between publication and patent grant, there may be published patent applications that may ultimately issue with claims that we infringe. As the number of competitors in the market grows and the number of patents issued in this area increases, the possibility of patent infringement claims escalates. Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters, notices or “invitations to license,” or may be the subject of claims that our products and business operations infringe or violate the intellectual property rights of others. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates that are held to be infringing. We might, if possible, also be forced to redesign product candidates or services so that we no longer infringe the third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
Changes in U.S. patent law, or laws in other countries, or their interpretation could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the pharmaceutical industry involve a high degree of technological and legal complexity. Therefore, obtaining and enforcing pharmaceutical patents is costly, time consuming and inherently uncertain. Changes in either the patent laws or in the interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property and may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. We cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents. In addition, Congress or other non-U.S. legislative bodies may pass patent reform legislation that is unfavorable to us.
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Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act, the America Invents Act, enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application would be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This requires us to be cognizant of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors are the first to either (i) file any patent application related to our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our patents or patent applications.
The America Invents Act also included several significant changes that affect the way patent applications are prosecuted and also affect patent litigation. These include allowing third party protests and submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO-administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our owned and in-licensed patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. An adverse determination in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.
U.S. law relating to the patentability of certain inventions in the life sciences is uncertain and rapidly changing, which may adversely impact our existing patents or our ability to obtain patents in the future. The U.S. Supreme Court and federal courts have ruled on several patent cases in recent years that impact the scope of patentability of certain inventions or discoveries related to the life sciences, including both narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. The trend of these decisions along with resulting changes in patentability requirements being implemented by the USPTO could make it increasingly difficult for us to obtain and maintain patents on our products, and could jeopardize or otherwise reduce patent term, reduce the scope of, or invalidate or render unenforceable our patent rights. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
For example, the U.S. Supreme Court recently held in Amgen v. Sanofi (2023) that a functionally claimed overly broad genus claim without sufficient data support was invalid for failing to comply with the enablement requirement of the Patent Act. As such, our patent rights with functional claims may be vulnerable to third party challenges seeking to invalidate these claims for lacking enablement or adequate support in the specification. Additionally, other decisions in prior years found that patent claims that recite laws of nature are not themselves patentable unless those patent claims have sufficient additional features that provide practical assurance that the processes are genuine inventive applications of those laws rather than patent drafting efforts designed to monopolize the law of nature itself. What constitutes a “sufficient” additional feature is uncertain. Depending on future actions and/or decisions by the U.S. Congress, the U.S. federal courts, the USPTO, or similar authorities in other jurisdictions, 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 the patents we might obtain or license in the future.
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In 2012, the European Union Patent Package, the EU Patent Package, regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (“UPC”) for litigation involving European patents. The EU Patent Package was implemented on June 1, 2023. As a result, all European patents, including those issued prior to ratification of the EU Patent Package, now by default automatically fall under the jurisdiction of the UPC. It is uncertain how the UPC will impact granted European patents in the biotechnology and pharmaceutical industries. Our European patent applications, if issued, could be challenged in the UPC. During the first seven years of the UPC’s existence, the UPC legislation allows a patent owner to opt its European patents out of the jurisdiction of the UPC. We may decide to opt out our future European patents from the UPC, but doing so may preclude us from realizing the benefits of the UPC. Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunction. Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and product candidates due to increased competition and, resultantly, on our business, financial condition, prospects and results of operations.
We may not be able to protect or enforce our intellectual property rights throughout the world.
Although we have pending patent applications in the United States and other countries, filing, prosecuting and defending patents and trademarks on all of our planned products 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. In addition, the laws of some countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States or from selling or importing our patented products in and into other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates, and our patents, the patents of our future licensors, or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of many foreign countries do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our patents or our future licensors’ patents or marketing of competing products in violation of our proprietary rights. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents or the patents of our future licensors at risk of being invalidated or interpreted narrowly and our patent applications or the patent applications of our future licensors at risk of not issuing and could 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. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected. In addition, geo-political actions in the United States and in other countries (such as the Russia and Ukraine conflict) could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any future licensors and the maintenance, enforcement or defense of our issued patents which could impair our competitive intellectual property position.
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If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
We intend to use registered or unregistered trademarks or trade names to brand and market ourselves and our products. Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among 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. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.
If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected, harming our business and competitive position.
In addition, we rely on the protection of our trade secrets, including unpatented know-how, technology and other proprietary information to maintain our competitive position. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in the market.
Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions assignment agreements with employees, consultants and advisors, we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced, and our competitive position would be harmed. If we are unable to prevent disclosure of the intellectual property related to our technologies to third parties, we may not be able to establish or maintain a competitive advantage in our market, which would harm our ability to protect our rights and have a material adverse effect on our business. If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.
Our rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of any future licenses granted to us by others.
We may enter into license agreements in the future with others to advance our existing or future research or allow commercialization of our existing or future product candidates. These licenses may not provide 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 commercialize our technology and products in the future.
In addition, subject to the terms of any such license agreements, we may not have the right to control the preparation, filing, prosecution, maintenance, enforcement, and defense of patents and patent applications covering the technology that we license from third parties. In such an event, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent with the best interests of our business. If our future licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications, or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our future product candidates that are subject of such licensed rights could be adversely affected.
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Our future licensors may rely on third-party consultants or collaborators or on funds from third parties such that our future licensors are not the sole and exclusive owners of the patents we in-license. If other third parties have ownership rights to our 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.
It is possible that we may be unable to obtain licenses at a reasonable cost or on reasonable terms, if at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results of operations, and prospects significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, manufacturing methods, product candidates, or future methods or products resulting in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.
The patent protection and patent prosecution for some of our product candidates may be dependent on third parties.
While we normally seek to obtain the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates, there may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates are controlled by our future licensors or collaboration partners. If any of our future licensors or collaboration partners fail to prosecute, maintain and enforce such patents and patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents covering our product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products. In addition, even where we have the right to control patent prosecution of patents and patent applications we have licensed to and from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensees, our future licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.
Risks Related to Employee Matters, Managing Our Growth and Other Risks Related to Our Business
We depend heavily on our executive officers, principal consultants and others, and the loss of their services would materially harm our business.
Our success depends, and will likely continue to depend, upon our ability to hire and retain the services of our current executive officers, principal consultants and others, including our President and Chief Executive Officer, our Chief Medical Advisor, and our Chief Financial Officer. We have entered into employment or consulting agreements with each of the key members of our executive, scientific and operating staff, but they may terminate their employment with us at any time. The loss of their services might impede the achievement of our discovery research, preclinical development, manufacturing and technical operations and commercialization objectives.
Our ability to compete in the biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. Our industry has experienced a high rate of turnover of management personnel in recent years. Replacing executive officers or other 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 develop, gain regulatory approval of and commercialize products successfully.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key employees 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.
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We rely on consultants and advisors, including scientific, regulatory, financial and clinical advisors, to assist us in formulating our research and development and commercialization strategy and capitalization plans. Our consultants and advisors may be employed by other entities and may have commitments under consulting or advisory contracts with those entities that may limit their availability to us. If we are unable to continue to attract and retain highly qualified personnel, our ability to develop and commercialize our product candidates will be limited.
We only have a limited number of employees to manage and operate our business.
As of December 31, 2025, we had 9 full or part-time employees. Our focus on the development of NVG-291 for SCI and the future development of NVG-300 requires us to optimize cash utilization and to manage and operate our business in a highly efficient manner. We cannot assure you that we will be able to hire and/or retain adequate staffing levels to develop NVG-291 for SCI or any other indication or to develop NVG-300 or other exploratory drug candidates or run our operations and/or to accomplish all of the objectives that we otherwise would seek to accomplish.
Our future growth may depend, in part, on our ability to operate internationally, where we would be subject to additional regulatory burdens and other risks and uncertainties.
Our future growth may depend, in part, on our ability to develop and commercialize our programs in international markets for which we may rely on collaboration with third parties. Doing business internationally involves a number of risks, including:
| ● | multiple, conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; |
| ● | potential failure to obtain regulatory approvals for the sale or use of our product candidates in various countries; |
| ● | difficulties in managing foreign operations; |
| ● | complexities associated with managing government payer systems, multiple payer-reimbursement regimes or self-pay systems; |
| ● | logistics and regulations associated with shipping products, including infrastructure conditions and transportation delays; |
| ● | limits on our ability to penetrate international markets if we or our collaborators do not execute successfully; |
| ● | financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable, and exposure to foreign currency exchange rate fluctuations; |
| ● | reduced protection for intellectual property rights, or lack of them in certain jurisdictions, forcing more reliance on our trade secrets, if available; |
| ● | natural disasters, political and economic instability, including wars, terrorism and political unrest, including the military conflict between Russia and Ukraine and the war between Israel and Hamas, increasing hostilities within the Middle East, public health emergencies, including pandemics, boycotts, curtailment of trade and other business restrictions; |
| ● | uncertainty regarding tariffs and the potential for tariffs to trigger a global trade war; and |
| ● | failure to comply with the Foreign Corrupt Practices Act, including its books and records provisions and its anti-bribery provisions, by maintaining accurate information and control over sales activities. |
Any of these risks, if encountered, could have a material adverse effect on our financial condition, results of operations and cash flows.
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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 and financial systems, and continue to recruit and train additional qualified personnel. 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 of our operations, retain key employees, or identify, recruit and train additional qualified personnel. Our inability to manage the expansion 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.
Risks Related to Ownership of Our Securities
The market price of our Common Shares may be volatile, and you could lose all or part of your investment.
The trading price of our Common Shares is likely to continue 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 Shares since you might be unable to sell your shares at or above the price you paid in any offering. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this AIF, factors that could cause fluctuations in the trading price of our Common Shares include the following:
| ● | the timing and results of preclinical studies and clinical trials of our product candidates, those conducted by third parties or those of our competitors; |
| ● | the success of competitive products or announcements by potential competitors of their product development efforts; |
| ● | regulatory actions with respect to our products or our competitors’ products; |
| ● | actual or anticipated changes in our growth rate relative to our competitors; |
| ● | regulatory or legal developments in the United States, Canada and other countries; |
| ● | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
| ● | the recruitment or departure of key personnel; |
| ● | announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments; |
| ● | the public’s reaction to our press releases, other public announcements and filings; |
| ● | actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; |
| ● | fluctuations in the valuation of companies perceived by investors to be comparable to us; |
| ● | market conditions in the pharmaceutical and biotechnology sector; |
| ● | changes in the structure of healthcare payment systems; |
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| ● | share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; |
| ● | announcement or expectation of additional financing efforts; |
| ● | sales of our Common Shares by us, our insiders or our other shareholders; |
| ● | the impact of any natural disasters or public health emergencies, including pandemics; |
| ● | general economic, political, industry and market conditions including the impact of increasing inflation; |
| ● | rumors and market speculation involving us or other companies in our industry; |
| ● | litigation involving us, our industry or both; |
| ● | expiration of market stand-off or lock-up agreements; and |
| ● | 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 Shares.
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.
Sales of a substantial number of shares of our Common Shares in the public market could cause our share price to fall.
Sales of a substantial number of shares of our Common Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Shares and could impair our ability to raise capital through the sale of additional equity securities. In the future, we may issue additional Common Shares or other equity or debt securities convertible into Common Shares in connection with a financing, acquisition, litigation settlement, employee arrangement or otherwise. Any such issuance could result in substantial dilution to our existing shareholders and could cause our share price to decline.
We are subject to the applicable provisions of SOX. If we are unable to satisfy the requirements of SOX, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned.
We are subject to certain of the requirements of SOX. Section 404 of SOX (“Section 404”) requires companies subject to the reporting requirements of the U.S. securities laws to complete a comprehensive evaluation of its internal controls over financial reporting. To comply with this statute, we will be required to document and test our internal control procedures and our management will be required to assess and issue a report concerning the Company’s internal controls over financial reporting. Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), we would be classified as an “emerging growth company” and be exempt from certain reporting requirements, including the independent auditor attestation requirements of Section 404(b) of SOX. Under this exemption, our independent auditor will not be required to attest to and report on management’s assessment of our internal controls over financial reporting during a five-year transition period. We will need to prepare for compliance with Section 404 by strengthening, assessing and testing our system of internal controls to provide the basis for the report. However, the continuous process of strengthening our internal controls and complying with Section 404 is complicated and time-consuming.
Furthermore, we believe that our business will grow both domestically and internationally, in which case our internal controls will become more complex and will require significantly more resources and attention to ensure our internal controls remain effective overall. During the course of our testing, management may identify material weaknesses or significant deficiencies, which may not be remedied in a timely manner to meet the deadline imposed by SOX. If management cannot favorably assess the effectiveness of our internal controls over financial reporting, or our independent registered public accounting firm identifies material weaknesses in our internal controls, investor confidence in our financial results may weaken, and the market price of our securities may suffer.
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We do not know whether a market for our Common Shares will develop to provide you with adequate liquidity.
The Common Shares are currently listed only on Nasdaq. If an active trading market does not develop in the United States, you may have difficulty selling any of the Common Shares that you buy over a U.S. exchange. The Company cannot predict the extent to which investor interest in the Company will lead to the development of an active trading market on the Nasdaq or otherwise, or how liquid that market might become.
We do not intend to pay dividends on our Common Shares in the foreseeable future, so any returns will be limited to the value of our Common Shares.
We have never declared or paid any cash dividends on our Common Shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to shareholders will therefore be limited to any appreciation in the value of their shares.
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 Shares, the trading price or trading volume of our Common Shares could decline.
The trading market for our Common Shares 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 Shares, provide a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about our business, our Common Shares 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 Shares to decline.
We have broad discretion in the use of the net proceeds from any offering and may not use them effectively.
Our management will have broad discretion in the application of the net proceeds from any offering, and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from any offering, their ultimate use may vary substantially from their 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 their 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 Shares.
Investing in our securities is speculative, and investors could lose their entire investment.
An investment in our securities is speculative and may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an investment in our securities.
Our constating documents permit us to issue an unlimited number of Common Shares without additional shareholder approval which could result in dilution.
Our notice of articles and articles permit us to issue an unlimited number of Common Shares. We anticipate that we will, from time to time, issue additional Common Shares in the future. Subject to the requirements of Nasdaq, we will not be required to obtain the approval of shareholders for the issuance of additional Common Shares. Any further issuances of Common Shares will result in immediate dilution to existing shareholders and may have an adverse effect on the value of their shareholdings.
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The exercise of stock options and warrants could cause dilution.
The exercise of stock options, outstanding Warrants and the subsequent resale of such Common Shares in the public market, could adversely affect the prevailing market price of the Common Shares and our ability to raise equity capital in the future at a time and price which it deems appropriate. We may also enter into commitments in the future which would require the issuance of additional Common Shares and we expect to grant additional stock options. Any Common Share issuances from treasury will result in immediate dilution to existing shareholders.
It is possible that our status with regards to whether we are a “passive foreign investment company,” may change which could have adverse U.S. federal income tax consequences for U.S. shareholders.
U.S. investors should be aware that we believe we will not be classified as a passive foreign investment company, or PFIC, during the tax year ended December 31, 2025, however based on current business plans and financial expectations, we expect that we could be a PFIC in future tax years. If we are a PFIC for any year during a U.S. shareholder’s holding period of the Common Shares, then such U.S. shareholder will generally be required to treat any gain realized upon a disposition of the Common Shares, or any so-called “excess distribution” received on the Common Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election, QEF Election, or a “mark-to-market” election with respect to the Common Shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the shareholder’s adjusted tax basis therein. Each U.S. shareholder should consult its own tax advisors regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership and disposition of the Common Shares.
It may be difficult for non-Canadian investors to obtain and enforce judgments against us because of our Canadian incorporation and presence.
We are a corporation existing under the laws of the Province of British Columbia, Canada. Several of our directors and officers, and several of the experts are residents of Canada, and all or a substantial portion of their assets, and a substantial portion of the Company’s assets, are located outside the U.S. Consequently, although we have appointed an agent for service of process in the U.S., it may be difficult for holders of our securities who reside in the U.S. to effect service within the U.S. upon those directors and officers, and the experts who are not residents of the U.S. It may also be difficult for holders of our securities who reside in the U.S. to realize in the U.S. upon judgments of courts of the U.S. predicated upon our civil liability and the civil liability of our directors, officers and experts under the U.S. federal securities laws. Investors should not assume that Canadian courts would (i) enforce judgments of U.S. courts obtained in actions against the Company or such directors, officers or experts predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or “blue sky” laws of any state or jurisdiction of the U.S. or (ii) enforce, in original actions, liabilities against us or such directors, officers or experts predicated upon the U.S. federal securities laws or any securities or “blue sky” laws of any state or jurisdiction of the U.S.. In addition, the protections afforded by Canadian securities laws may not be available to investors in the U.S.
We are subject to the informational requirements of the Exchange Act; however, as a foreign private issuer, we are subject to different U.S. securities laws and requirements than a domestic U.S. issuer, which reduces the information we are required to provide to our U.S. shareholders.
We are subject to the informational requirements of the Exchange Act; however, we are a foreign private issuer under applicable U.S. federal securities laws and, therefore, we are not required to comply with all the periodic disclosure and current reporting requirements of the Exchange Act, as amended, and related rules and regulations. As a result, we do not file the same reports that a U.S. domestic issuer would file with the SEC, although we are required to file with or furnish to the SEC the continuous disclosure documents that we are required to file in Canada under Canadian securities laws. In addition, our officers, directors and principal shareholders are exempt from the “short swing” profit recovery provisions of Section 16 of the Exchange Act. In addition, as a foreign private issuer, we would be exempt from the proxy rules under the Exchange Act.
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We expect to lose our foreign private issuer status in 2027, which will likely result in significant additional costs and expenses.
While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We do not expect to qualify as foreign private issuer as of the next determination on June 30, 2026, which will require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2027, which are more detailed and extensive than the requirements for foreign private issuers and have shorter deadlines, including with respect to annual and quarterly reports. In particular, Form 10-Q requires quarterly financial statements subject to auditor review.
The regulatory and compliance obligations and costs to us under U.S. securities laws as a U.S. domestic issuer will likely be significantly more than the obligations and costs we currently incur as a foreign private issuer. Once we lose our foreign private issuer status, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required under current SEC and Nasdaq rules to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers and exemptions from procedural requirements related to the solicitation of proxies.
We have devoted, and will continue to devote significant resources to regulatory compliance as a public entity. These resource requirements will increase now that we have successfully listed our Common Shares onto Nasdaq.
As a public company, we incur significant legal, accounting and other expenses. Legal, accounting and other expenses associated with public company reporting requirements have increased significantly in recent years. We anticipate that costs may continue to increase with corporate governance related requirements, including, without limitation, requirements under National Instrument 52-109 — Certification of Disclosure in Issuers’ Annual and Interim Filings, National Instrument 52-110 — Audit Committees, National Instrument 58-101 — Disclosure of Corporate Governance Practices, SOX, as well as rules adopted, and to be adopted, by the SEC, and the Nasdaq.
Our management and other personnel have devoted, and will continue to devote, a substantial amount of time to regulatory compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. For example, these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.
Our testing, or any subsequent testing by its independent auditor, may in the future reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. We will incur substantial accounting expense and expend significant management efforts to comply with internal control over financial reporting requirements. Moreover, if we are not able to comply with these requirements in a timely manner or if it or its independent auditor identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our Common Shares could decline, and we could be subject to sanctions or investigations by applicable securities regulatory authorities, which would require additional financial and management resources.
General Risks
Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability 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, Health Canada or other regulatory authority investigation of the safety and effectiveness of our product candidates, our manufacturing processes and facilities or our marketing programs. FDA, EMA, Health Canada or other regulatory authority investigations could potentially lead to a recall of our product candidates or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, 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 any of our product candidates, if approved. Any insurance we have
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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.
Cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, contract research organizations, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.
We, our collaborators, our CROs, third-party logistics providers, distributors and other contractors and consultants utilize information technology, or IT, systems and networks to process, transmit and store electronic information in connection with our business activities. As use of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks or other means, and deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk to the security of our, our collaborators’, our CROs’, third-party logistics providers’, distributors’ and other contractors’ and consultants’ systems and networks, and the confidentiality, availability and integrity of our data. There can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects. Similarly, there can be no assurance that our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting our clinical and other data that is stored on their systems. Any cyber-attack, data breach or destruction or loss of data could result in a violation of applicable U.S., Canadian and international privacy, data protection and other laws, and subject us to litigation and governmental investigations and proceedings by federal, state, provincial and local regulatory entities in the United States and Canada and by international regulatory entities, resulting in exposure to material civil and/or criminal liability. Further, our general liability insurance and corporate risk program may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that maybe imposed; and could have a material adverse effect on our business and prospects. For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. In addition, we may suffer reputational harm or face litigation or adverse regulatory action as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection measures.
We may be subject to securities litigation, which is expensive and could divert management attention.
The market price of our Common Shares may be volatile and, in the past, companies that have experienced volatility in the market price of their share have been subject to securities class action litigation. This risk is especially relevant for us because biotechnology and pharmaceutical companies have experienced significant share price volatility in recent years and we may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
There are no restrictions in the Company’s articles preventing us from paying dividends. We have not declared or paid any dividends since our incorporation. The directors of the Company anticipate that we will retain all future earnings and other cash resources for the future operation and development of our business, and accordingly, do not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends will be at the discretion of the Board of the Directors after taking into account many factors, including the Company’s operating results, financial condition and current and anticipated cash assets.
Common Shares
The authorized share capital of the Company consists of an unlimited number of Common Shares of which 80,930,871 Common Shares are issued and outstanding as fully paid and non-assessable as at the date hereof.
Each Common Share carries one vote at all meetings of shareholders, is entitled to receive dividends as and when declared by the directors and is entitled to a pro-rata share of the remaining property and assets of the Company distributable to the holders of the Common Shares upon any liquidation, dissolution or winding up of the Company.
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Stock Options
The Company has a share option plan which authorizes the Company to grant up to 14,197,529 options to acquire Common Shares to directors, officers, employees and consultants of the Company or any of its subsidiaries. The exercise price of options granted under the plan must be greater than or equal to the fair market value of the Common Shares on the date the option is granted. The options are generally exercisable for three to ten years from the date of grant. As at the date hereof, there were options outstanding for 9,034,291 and options exercisable for 7,501,358 Common Shares outstanding.
Retention Securities
In connection with the appointment of Michael Kelly as President and CEO (former) on April 10, 2023, we granted 590,000 retention securities (the “Retention Securities”) to Mr. Kelly, each exercisable into one Common Share at a price of $1.78 per share for a period of 10 years and that vest equally every month over a three-year period, which remain outstanding. The Retention Securities were granted outside of the Company’s stock option plan, as an inducement grant to Mr. Kelly becoming the President and CEO of the Company pursuant to Section 6.4 of TSX-V Policy 4.4 – Security Based Compensation (“Policy 4.4”). As at the date hereof, there were retention securities outstanding and exercisable for 491,667 Common Shares outstanding.
Warrants
As of the date of this AIF, there were 11,043,479 Warrants outstanding with a weighted average exercise price of $2.88 and expiry dates ranging from March 28, 2027 to November 19, 2028. The 5,075,000 outstanding 2022 Warrants issued pursuant to the July 2022 Non-Brokered Private Placement were issued with an exercise price denominated in U.S. dollars. On December 12, 2025, the Company amended the terms of the 2022 Warrants to change the denomination of the exercise price from US$1.75 to $2.44. The 3,575,647 outstanding Warrants issued pursuant to the March 2024 Offering are governed by a warrant indenture (the “2024 Warrant Indenture”) entered into between the Company and Computershare Trust Company of Canada, dated March 28, 2024. The 2,392,832 outstanding Warrants issued pursuant to the November 2025 Non-Brokered Private Placement are exercisable in U.S. dollars. The warrant certificates representing the Warrants include customary adjustment provisions relating to the number of securities issuable and the exercise price per security in the event of material transactions or capital reorganization events that would affect the Common Shares (such as a subdivision or consolidation of the Common Shares, the issuance of other securities convertible into Common Shares or payment of an in-kind dividend or distribution) or would be a fundamental change to the Company (including a reclassification of Common Shares or completion of a material corporate transaction).
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Trading Price and Volume
Our Common Shares were listed on the TSX-V under the trading symbol NGEN and ceased trading on the TSX-V on March 16, 2026. Our Common Shares are listed on the Nasdaq under the trading symbol NGEN. Prior to listing on Nasdaq in January 2026, our Common Shares traded on the OTCQB under the trading symbol NGENF. The following table sets forth, for the calendar periods indicated, the high and low trading prices and composite volume of trading of our Common Shares as reported on the TSX-V and OTCQB respectively.
TSX-V | | | | | | |
| | Monthly High Price | | Monthly Low Price | | Monthly |
Month | | (C$) | | (C$) | | Volume |
January 2025 | | 3.36 | | 2.80 | | 905,200 |
February 2025 |
| 3.07 |
| 2.70 |
| 603,300 |
March 2025 |
| 2.97 |
| 2.58 |
| 749,000 |
April 2025 |
| 3.35 |
| 2.75 |
| 1,271,300 |
May 2025 |
| 7.05 |
| 2.96 |
| 4,730,400 |
June 2025 |
| 5.90 |
| 2.57 |
| 4,977,800 |
July 2025 |
| 4.30 |
| 3.25 |
| 1,610,100 |
August 2025 |
| 3.76 |
| 2.71 |
| 1,894,800 |
September 2025 |
| 4.03 |
| 3.23 |
| 1,048,000 |
October 2025 |
| 4.88 |
| 3.30 |
| 2,656,700 |
November 2025 |
| 6.45 |
| 3.20 |
| 2,636,200 |
December 2025 |
| 7.60 |
| 5.34 |
| 2,438,800 |
OTCQB | | | | | | |
| | Monthly High Price | | Monthly Low Price | | Monthly |
Month | | (US$) | | (US$) | | Volume |
January 2025 | | 2.33 | | 1.94 | | 1,104,400 |
February 2025 |
| 2.13 |
| 1.88 |
| 803,400 |
March 2025 |
| 2.08 |
| 1.80 |
| 1,101,800 |
April 2025 |
| 2.34 |
| 1.95 |
| 1,703,800 |
May 2025 |
| 5.10 |
| 2.14 |
| 6,549,200 |
June 2025 |
| 4.45 |
| 1.50 |
| 6,444,100 |
July 2025 |
| 3.14 |
| 2.39 |
| 2,201,700 |
August 2025 |
| 2.73 |
| 1.95 |
| 2,030,600 |
September 2025 |
| 2.90 |
| 2.31 |
| 1,128,500 |
October 2025 |
| 3.63 |
| 2.35 |
| 4,118,500 |
November 2025 |
| 4.62 |
| 2.28 |
| 2,578,100 |
December 2025 |
| 5.47 |
| 3.80 |
| 2,588,000 |
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Prior Sales
The Company has issued the following Common Shares, or securities that are convertible or exchangeable into Common Shares, during the year ended December 31, 2025:
Date of Issue | | Security | | Number | | Exercise Price | |
January 27, 2025 | | Stock Options | | 175,000 | | $ | 2.82 |
February 18, 2025 | | Stock Options | | 627,200 | | $ | 2.97 |
March 14, 2025 |
| Stock Options |
| 545,000 | | $ | 2.74 |
May 16, 2025 |
| Stock Options |
| 600,000 | | $ | 4.00 |
July 7, 2025 |
| Stock Options |
| 200,000 | | $ | 3.55 |
September 1, 2025 |
| Stock Options |
| 100,000 | | $ | 3.61 |
September 18, 2025 |
| Stock Options |
| 102,500 | | $ | 3.65 |
November 19, 2025 |
| Common Shares |
| 4,785,674 | |
| * |
November 19, 2025 |
| Warrants |
| 2,392,832 | |
| *US$2.65 |
* | On November 19, 2025, the Company closed a non-brokered private placement of 4,785,674 units of the Company at a price of US$2.10 per unit, for aggregate gross proceeds of US$10,049,915. Each unit consisted of one common share and one-half of one Warrant. Each whole Warrant is exercisable into one common share at a price of US$2.65 per common share until November 19, 2028. |
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BOARD OF DIRECTORS AND MANAGEMENT
The following are the names and municipalities of residence of each of the directors and officers of the Company, the positions and offices held with the Company, their respective principal occupations within the five preceding years and the number and percentage of Common Shares beneficially held by each of them as of the date hereof. Each director will hold office until the Company’s next annual meeting of the shareholders, unless his or her office is earlier vacated in accordance with the Business Corporations Act (British Columbia) or the Articles of the Company.
Name, | Positions with the | Principal Occupation(s) for Past 5 Years | Number and |
J. Craig Thompson California, USA | Lead Director April 13, 2022 | CEO, Cerevance since April 2022, President and CEO, Neurana Pharmaceuticals from June 2018 to April 2022; President and CEO, Anthera Pharmaceuticals from January 2016 to June 2018. | — (0.00%) |
Krista L. McKerracher Florida, USA | Director September 9, 2021 | Founder, FIG Advisory LLC from September 2017; VP, Head of Hemoglobinopathy Programs at CRISPR Therapeutics from November 2017 to October 2019; Vice President & Global Program Franchise Head, Novartis Oncology from February 2008 to July 2017. | 47,758 (0.06%) |
Harold M. Punnett1 British Columbia, Canada | Director January 19, 2017 | Retired since March, 2024; previously self-employed dentist and sole owner of Dr. Harold Punnett, Inc. | 1,175,532 (1.45%) |
Randall E. Kaye New York, USA | Director October 26, 2020 | Consultant: Hanson Drug Company LLC. Chief Medical Officer of Longboard Pharmaceuticals from March 2022 to January 2025; Chief Medical Officer of Neurana Pharmaceutical from September 2019 to March 2022; Chief Medical Officer of Click Therapeutics from September 2018 to September 2019. | 160,000 (0.20%) |
Brian E. Bayley1 British Columbia, Canada | Director May 16, 2018 | President and Executive Chairman of Earlston Management Corp., a private management company; and Executive Chairman of Earlston Investments Corp. | 565,000 (0.70%) |
Adam H. Rogers Florida, USA | Interim CFO March 15, 2026 President, CEO February 9, 2026 Director and Chairman July 13, 2022 | Interim CFO of NervGen since March 15, 2026, President and CEO of NervGen since February 2026, interim CEO of NervGen from July 2025 to February 2026, Principal of PFP Biosciences Holdings from 2022; Interim President of NervGen from September 2022 to April 2023; Founder (2010) and CEO of Hemera Biosciences from November 2017; Assistant Professor of Ophthalmology of New England Eye Center from July 2000 to June 2020. | 14,708,6732 (18.17%) |
Gianni (John) Ruffolo Ontario, Canada | Director October 13, 2023 | Founder & Managing Partner of Maverix Private Equity from January 2019; Chief Executive Officer of OMERS Ventures from January 2011 to December 2018. | 70,392 (0.09%) |
Neil A. Klompas1 British Columbia, Canada | Director July 22, 2024 | President and CEO of Augurex Life Sciences Corp. since August 2024; President and Chief Operating Officer of Zymeworks Inc. from February 2022 to June 2023, Chief Financial Officer & Executive VP, Business Operations of Zymeworks Inc. from September 2019 to February 2022, Chief Financial Officer of Zymeworks Inc. from March 2007 to September 2019. | — (0.00%) |
Notes:
| (1) | Member of the Company’s Audit Committee. |
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| (2) | Includes 10,000,000 Common Shares held by PFP Biosciences Holdings LLC for which Dr. Rogers serves as Managing Member, 3,831,530 Common Shares held by The Paul & Phyllis Fireman Charitable Foundation, which is associated with PFP Biosciences Holdings LLC, 857,143 shares held by the Paul Fireman 2006 Revocable Trust, which is affiliated with PFP Biosciences Holdings LLC, and 20,000 Common Shares personally owned. |
Biographies of Executive Officers and Directors
J. Craig Thompson – Mr. Thompson joined Cerevance as CEO and as a member of the Board in April 2022. Prior to Cerevance Mr. Thompson was at Neurana Pharmaceuticals as President & CEO and as a member of the board of directors from June 2018 to April 2022. Prior to Neurana, Mr. Thompson was President & CEO of Anthera Pharmaceuticals, Inc. His previous biotech experience includes Chief Operating Officer for Tetraphase Pharmaceuticals, Inc. and Chief Commercial Officer for Trius Therapeutics, Inc. where he was involved in the $700M+ acquisition of Trius Therapeutics, Inc. by Cubist Pharmaceuticals, Inc., as well as a partnership with Bayer Pharma AG. Prior to Trius Therapeutics Inc., Mr. Thompson served in various global and U.S. roles at Pfizer Inc., including Therapeutic Group Leader of Allergy, Respiratory, Pulmonary Vascular Disease and Inflammation; and ultimately served as Vice President of Marketing for Pfizer’s Specialty Care Business Unit. Previous to Pfizer Inc., Mr. Thompson served in positions of increasing responsibility at Merck & Co., Inc., including the European partnership with Schering Plough.
Mr. Thompson holds a Bachelor’s of Commerce degree from McMaster University and an MBA from the University of Notre Dame.
Krista L. McKerracher – Ms. McKerracher is a biopharmaceutical leader, Board member, and strategic advisor with over 40 years’ experience in both large global pharmaceutical and small biotech companies. Her last corporate role was VP, Head of Hemoglobinopathy Programs at CRISPR Therapeutics where she and her team took the first CRISPR gene-edited product into the clinic. Prior to CRISPR Therapeutics she was VP & Global Program Franchise Head at Novartis where she led a global cross-functional development team. She also held series of commercial roles over 14 years at the Johnson & Johnson family of companies. Ms. McKerracher is currently Founder of FIG Advisory LLC focused on advising early stage companies on strategy and business development. Additionally, she is Board Chair of Genialis, a private precision oncology company and serves on Advisory Boards to Cureleads and BioAxone Biosciences and is a mentor at Springboard, an incubator for female led healthcare and technology companies.
Ms. McKerracher holds a BSc in Applied Health Studies from the University of Waterloo and an MBA from the Schulich School of Business at York University.
Harold M. Punnett – Dr. Punnett is a retired member of the Canadian Dental Association, College of Dental Surgeons of British Columbia, and the British Columbia Dental Association. Dr. Punnett is an experienced angel investor and has previously acted as a director of two public issuers. A co-founder and current Board member of NervGen, he has a passion for helping those with spinal cord injuries and nerve related challenges.
Dr. Punnett holds a Doctor of Dental Medicine degree from the University of British Columbia.
Randall E. Kaye, M.D., M.P.H. – Dr. Kaye is a physician-executive with more than three decades of leadership experience in neuroscience and rare disease drug development across public and private biopharmaceutical companies. He currently advises biotechnology companies on clinical development strategy, regulatory positioning, and corporate growth initiatives. Most recently, Dr. Kaye served as Chief Medical Officer of Longboard Pharmaceuticals, where he led the clinical development and regulatory strategy for the company’s CNS portfolio, including programs targeting rare developmental and epileptic encephalopathies. He played a central leadership role in advancing the company’s pipeline and contributed to the successful US$2.6 billion acquisition of Longboard by Lundbeck A/S. Previously, Dr. Kaye served as Chief Medical Officer at Neurana Pharmaceuticals, Click Therapeutics, Axsome Therapeutics, and Avanir Pharmaceuticals, leading clinical development programs across multiple neuroscience indications, including epilepsy, mood disorders, ALS, and other central nervous system conditions. Earlier in his career, he held senior clinical leadership roles at Scios Inc., InterMune, and Pfizer Inc., contributing to global development programs and regulatory submissions.
Dr. Kaye earned his M.D., M.P.H., and B.S. degrees from George Washington University and completed a Research Fellowship at Harvard Medical School.
Brian E. Bayley – Mr. Bayley serves as the President and Executive Chairman of Earlston Management Corp. (a private management company) and Executive Chairman of Earlston Investments Corp. (a private merchant bank). Previously, Mr. Bayley was a director and Resource Lending Advisor for Sprott Resource Lending Corp. (formerly Quest Capital Corp.), a Toronto Stock Exchange and NYSE American listed resource lending corporation. He has held active senior management positions in both private and public natural resource companies and has over 30 years of public issuer experience, both as an officer and a director.
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Mr. Bayley holds an MBA from Queen’s University. He is also a director and officer of several other public companies.
Adam H. Rogers – Dr. Rogers was appointed interim CFO of the Company effective March 15, 2026. Dr. Rogers was the interim CEO of NervGen Pharma Corp from July 2025 until he was appointed President and CEO of the Company in February 2026. Dr. Rogers previously served as interim President of NervGen Pharma Corp from September 2022 to April 2023. Dr. Rogers is a Principal of Boston based PFP Biosciences Holdings and a board-certified ophthalmologist specializing in diseases and surgery of the retina and vitreous. Dr. Rogers co-founded Hemera Biosciences in 2010, a clinical stage gene therapy biotech company targeting dry age-related macular degeneration. He assumed the role of CEO in 2017 and oversaw all aspects of the company until the Hemera assets were acquired in December 2020 by Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson. From 2001 to 2020 he served as an Assistant Professor of Ophthalmology at the New England Eye Center of Tufts Medical Center (Boston, MA). Dr. Rogers has published 29 articles in peer reviewed journals and co-authored two textbooks and numerous chapters in major ophthalmic textbooks. Since 2007 he has served on the board of One Family Inc., an organization whose mission is to end homelessness in Massachusetts. He is a member of the Emory University Board of Trustees.
Dr. Rogers has a MD from Emory College and Emory University School of Medicine.
Gianni (John) Ruffolo – Mr. Ruffolo is the Founder and Managing Partner of Maverix Private Equity (“Maverix”), a private equity firm focused on innovation-enabled growth and disruption investment strategies. Mr. Ruffolo chairs the Investment Committee, guides the strategy of the firm, is deeply involved with fundraising and sourcing and leading investment opportunities, particularly within the technology and life sciences industries. Mr. Ruffolo is also the Founder of OMERS Ventures and Co-Founder and Vice Chair of the Council of Canadian Innovators. Before joining OMERS, in addition to being a Partner at Deloitte, Mr. Ruffolo was their Global Thought Leader, Global Tax Leader, and Canadian Industry Leader for their Technology, Media, and Telecommunications (TMT) practice, and a member of the Board of Directors. Mr. Ruffolo serves as a board member across both profit and non-profit sectors, collaborating with organizations including KODE Labs, Raptor Maps, Viral Nation, CIBC Foundation, Rick Hansen Foundation, Toronto International Film Festival (TIFF), Investigative Journalism Foundation and Schulich School of Business Dean’s Global Council.
Mr. Ruffolo holds a BBA, Accounting degree from York University. He is a Fellow of the Chartered Professional Accountants of Ontario.
Neil A. Klompas – Mr. Klompas, is an experienced life sciences and healthcare sector executive and board member. He is currently the President and Chief Executive Officer, and a member of the Board of Directors, of Augurex Life Sciences Corp. Prior to Augurex, he served as Chief Financial Officer, and later President and Chief Operating Officer of Zymeworks Inc. During his time with the company, he oversaw finance and operations, leading the execution of the company’s initial public offering on the NYSE and TSX. Prior to Zymeworks, Mr. Klompas worked with KPMG LLP as part of the Pharmaceutical, Biotech & Medical Devices M&A Transaction Services practice in Princeton, NJ, and with KPMG LLP in the life sciences assurance practice based in Vancouver. Mr. Klompas serves on the Board of Directors of HTuO Biosciences and InMed Pharmaceuticals, and has served as Board Chair for Ovensa Inc., and as the Chair of the Audit Committee and Special Committee of Liminal Biosciences Inc. until its acquisition in 2023.
Mr. Klompas holds BSc in Microbiology & Immunology from the University of British Columbia and is a Chartered Professional Accountant, CA.
Shareholdings of Directors and Executive Officers
As at the date hereof, the directors and executive officers of the Company as a group beneficially own, directly or indirectly, or exercise control or direction over 16,883,175 or approximately 20.9% of the number of issued and outstanding Common Shares.
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CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS
Cease Trade Orders
To the knowledge of the Company, no director or executive officer of the Company is, or within the ten years prior to the date hereof has been, a director, chief executive officer, or chief financial officer, of any company (including the Company) that was subject to (a) a cease trade order; (b) an order similar to a cease trade order; or (c) an order that denied the relevant company access to any exemption under securities laws, that was in effect for a period of more than thirty consecutive days, issued while that person was acting in such capacity or issued thereafter but resulted from an event that occurred while that person was acting in such capacity.
Bankruptcies
To the knowledge of the Company, no director or executive officer or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company is, or within the ten years prior to the date hereof has been, a director or executive officer of any company (including the Company) that, while that person was acting in such capacity or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
To the knowledge of the Company, no director or executive officer or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company has, within the ten years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement, or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold that person’s assets.
Penalties and Sanctions
No director or executive officer of the Company, or a shareholder holding a sufficient number of securities of NervGen to affect materially the control of the Company has been subject to (a) any penalties or sanctions imposed by a court relating to securities laws or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
All of the above disclosure also applies to any personal holding companies of any of the persons referred to above.
NervGen’s directors are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board, any director in a conflict must disclose his interest and abstain from voting on such matter. To the best of our knowledge, and other than as disclosed in the following paragraph, there are no known existing or potential conflicts of interest among the Company or its subsidiaries, its directors and officers or other members of management or of any proposed promoter, director, officer or other member of management as a result of their outside business interests.
Some of NervGen’s directors and officers serve as directors and officers of other private and public companies (including pharma development companies). Additionally, some of NervGen’s directors and officers are engaged and will continue to be engaged in the search for additional business opportunities on behalf of other corporations (including pharma development companies), and situations may arise where these directors and officers may be serving another corporation with interests that are in direct competition with the Company. In the event of any conflicts of interest, such conflicts must be disclosed to the Company and dealt with in accordance with the provisions of the Business Corporations Act (British Columbia).
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
There are no existing or contemplated material legal proceedings to which NervGen or a subsidiary of NervGen is a party or of which any of their respective property is the subject matter and no such proceedings known to NervGen is contemplated. NervGen has not had any material penalties or sanctions imposed against it by any legal or regulatory authorities.
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INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Except as otherwise set out herein, there are no material interests, direct or indirect, of any director, executive officer, person who beneficially owns, or controls or directs, directly or indirectly, more than 10% of the outstanding Common Shares, or any known associates or affiliates of such persons, in any transaction within the last three completed financial years or during the current financial year which has materially affected or is reasonably expected to materially affect the Company.
On July 13, 2022, we closed the July 2022 Non-Brokered Private Placement of 10,150,000 units of the Company at a price of US$1.50 per unit, for aggregate gross proceeds of US$15,225,000. In connection with the July 2022 Non-Brokered Private Placement, PFP Biosciences Holdings, acquired 17% of the outstanding Common Shares. Affiliates of PFP Bioscience Holdings purchased an additional 2,879,149 units and 1,809,524 units in the March 2024 and November 2025 Offerings, respectively, and currently, together these entities hold 18.2% of the outstanding Common Shares. Adam Rogers, MD, serves as Managing Member of PFP Biosciences Holdings.
The registrar and transfer agent for the Common Shares is Computershare Investor Services Inc. in Vancouver, British Columbia. The Company and Computershare Investor Services Inc. have entered into an agreement dated September 16, 2018, known as the Transfer Agent, Registrar and Dividend Disbursing Agent Agreement, governing their respective rights and duties pertaining to this relationship.
The Company is not party to any material contract that was entered into either (1) in the last completed fiscal year, or (2) before the most recently completed fiscal year but that is still in effect as of the date hereof, except for contracts entered into in the ordinary course of business and as set out below.
| 1. | The License for the Technology (see “Narrative Description of the Business – The Company’s Lead Compound and License – License Overview”); and |
| 2. | The 2024 Warrant Indenture governing the terms of the Warrants issued pursuant to the March 2024 Offering (see “Share Capital – Warrants”). |
| 3. | Employment agreement dated February 9, 2026 between Dr. Adam Rogers and NervGen US Inc. |
The Company’s auditor, KPMG LLP, has audited the Company’s financial statements for the years ended December 31, 2025 and 2024. KPMG LLP has confirmed that they are independent with respect to the Company within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations, and also that they are independent accountants with respect to the Company under all relevant U.S. professional and regulatory standards.
Additional information about us may be found under our profile on SEDAR+ at www.sedarplus.ca. Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities, options to purchase securities and securities authorized for issuance under equity compensation plans, is contained in our Management Information Circular for our most recent annual meeting of shareholders. Additional information may also be found in our audited financial statements and related management’s discussion and analysis for our most recently completed financial year.
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audit committee information
a)Audit Committee Charter
See Appendix 1 attached hereto.
b)Composition of the Audit Committee
The Audit Committee consists of three directors – Neil Klompas (Chair and Financial Expert), Brian E. Bayley and Dr. Harold M. Punnett. All members of the Audit Committee are considered to be independent and financially literate within the meaning of National Instrument 52-110 – Audit Committees.
c)Relevant Education and Experience
The relevant education and experience of each member of the Audit Committee is provided above, under the heading “Directors and Officers”. All of the Audit Committee members are independent of management of the Company as required by Canadian Securities laws and Nasdaq rules, and each member is financially literate in that each has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. Each individual has experience managing a company at senior roles and, in those roles, reviewing financial statements and reports.
d)Audit Committee Oversight
At no time since the commencement of the Company’s most recently completed financial period was a recommendation made of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.
e)Reliance on Certain Exemptions
At no time since the commencement of the Company’s most recently completed financial period has the Company relied on the following exemptions under NI 52-110: section 2.4 (De Minimis Non-Audit Services), subsection 6.1.1(4) (Circumstances Affecting the Business or Operations of the Venture Issuer), subsection 6.1.1(5) (Events Outside Control of Member), subsection 6.1.1(6) (Death, Incapacity or Resignation) or in whole or in part, granted under Part 8 of NI 52-110 (Exemptions).
f)Pre-Approval Policies and Procedures
The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services, as described in the Audit Committee Charter attached hereto as Appendix 1 to this Schedule A.
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g)External Auditor Service Fees
Financial Year Ending | Audit Fees(1) | Audit Related Fees(2) | Tax Fees(3) | Securities | All Other Fees(5) |
December 31, 2025(6) | $347,365 | Nil | $88,378 | $245,850 | Nil |
December 31, 2024(6) | $258,140 | Nil | $96,537 | $115,951 | Nil |
Notes:
| 1. | “Audit Fees” include, where applicable, fees necessary to perform the annual audit and the quarterly review of the Company’s consolidated financial statements. |
| 2. | “Audit Related Fees” include, where applicable, services that are traditionally performed by the auditor. These audit-related services include employee benefits audits, due diligence assistance, accounting consultants on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation. |
| 3. | “Tax Fees” include, where applicable, fees for all tax services other than those included in “Audit Fees” and “Audit Related Fees”. This category includes fees for tax compliance, tax planning and tax advice. Tax planning and tax advice includes Assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities. |
| 4. | Fees pertain to services rendered in connection with securities offerings, including the review of preliminary and final short form prospectus and prospectus supplement and other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings. |
| 5. | “All Other Fees” includes, where applicable, all other non-audit services. |
| 6. | All fees in the table above were pre-approved by the audit committee pursuant to the pre-approval policies. |
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AUDIT COMMITTEE CHARTER
Effective September 26, 2018, revised on February 23, 2022 and March 19, 2026, the Board adopted the following as the Audit Committee’s Charter.
Purpose
The Audit Committee (the “Audit Committee”) assists the Board of Directors (the “Board”) of NervGen Pharma Corp. (“NervGen” or the “Company”) in fulfilling its oversight responsibilities in relation to the following:
| i. | the integrity of the Company’s financial statements; |
| ii. | the Company’s compliance with legal and regulatory requirements; |
| iii. | the qualifications, independence and performance of the Company’s independent auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company (the “External Auditors”); |
| iv. | the performance of the Company’s internal audit function; and |
| v. | the preparation of the report required by applicable securities regulators to be included in the Company’s annual proxy statement. |
Composition and Process
The Audit Committee shall be composed of a minimum of three members of the Board of Directors, each of whom are independent. An independent director, as defined in National Instrument 52-110 - Audit Committees (“NI 52-110”) and Rule 5605(a)(2) under the Listing Rules of The Nasdaq Stock Market, is a director who has no direct or indirect material relationship which could, in the view of the Company’s Board of Directors, be reasonably expected to interfere with the exercise of a member’s independent judgment or as otherwise determined to be independent in accordance with NI 52-110 or other applicable laws, regulations, rules and guidelines. The Board may remove members of the Audit Committee at any time, with or without cause.
| (a) | Members shall serve one-year terms and may serve consecutive terms, which are encouraged to ensure continuity of experience. Resignation or removal of a Director from the Board, for whatever reason, shall automatically constitute resignation or removal, as applicable, from the Audit Committee. Vacancies, for whatever reason, may be filled only by the Board. |
| (b) | The chairperson (the “Chair”) shall be designated by the Board; provided, that if the Board does not so designate a Chair, the Audit Committee shall choose one of its members to be its Chair by majority vote. |
| (c) | All members of the Audit Committee shall be financially literate. Financial literacy is the ability to read and understand a balance sheet, income statement and cash flow statement that present a breadth and level of complexity comparable to the Company’s financial statements. At least one member of the Audit Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or comparable experience or background that results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. One or more members of the Audit Committee may qualify as an “audit committee financial expert” under the rules promulgated by applicable securities regulations. |
| (d) | A member of the Audit Committee may not, other than as a member of the Audit Committee, the Board or any other committee established by the Board, receive directly or indirectly any consulting, advisory or other compensatory fee from the Company. |
86
| (e) | The Chairperson shall, in consultation with management and the external auditor and internal auditor (if any), establish the agenda for the meetings and ensure that properly prepared agenda materials are circulated to the members with sufficient time for study prior to the meeting. The external auditor will also receive notice of all meetings of the Audit Committee. The Audit Committee may employ a list of prepared questions and considerations as a portion of its review and assessment process. |
| (f) | The Audit Committee shall meet as often as it deems appropriate, but no less frequently than quarterly. A quorum at meetings of the Audit Committee shall be a majority of its members. The Audit Committee may hold its meetings, and members of the Audit Committee may attend meetings, by telephone conference or other electronic means if this is deemed appropriate. In lieu of a meeting, the Audit Committee may act by unanimous written consent in accordance with the Company’s articles of incorporation. |
| (g) | The minutes of the Audit Committee meetings shall accurately record the decisions reached and shall be distributed to Audit Committee members with copies to the Board of Directors, the Chief Executive Officer, the Chief Financial Officer and the external auditor. |
| (h) | The Audit Committee reviews, prior to their presentation to the Board of Directors and their release, all material financial information required by securities legislation and policies. |
| (i) | The Audit Committee enquires about potential claims, assessments and other contingent liabilities. |
| (j) | The Audit Committee periodically reviews with management, depreciation and amortization policies, loss provisions and other accounting policies for appropriateness and consistency. |
| (k) | The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend to the Board any amendments or modifications it deems appropriate. |
Authority
| (l) | Appointed by the Board of Directors pursuant to the provisions of the Business Corporations Act (British Columbia) and the by-laws of the Company. |
| (m) | Primary responsibility for the Company’s financial reporting, accounting systems and internal controls is vested in senior management and is overseen by the Board of Directors. The Audit Committee is a standing committee of the Board of Directors established to assist it in fulfilling its responsibilities in this regard. The Audit Committee shall have responsibility for overseeing management reporting on internal controls. While it is management’s responsibility to design and implement an effective system of internal control, it is the responsibility of the Audit Committee to ensure that management has done so. |
| (n) | In fulfilling its responsibilities, the Audit Committee shall have unrestricted access to the Company’s personnel and documents and will be provided with the resources necessary to carry out its responsibilities. |
| (o) | The Audit Committee shall have direct communication channels with the internal auditor (if any) and the external auditor to discuss and review specific issues, as appropriate. |
| (p) | The Audit Committee shall have the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties. |
| (q) | The Audit Committee shall establish the compensation to be paid to any advisors employed by the Audit Committee and such compensation shall be paid by the Company as directed by the Audit Committee. |
87
Relationship with External Auditors
| (r) | The Audit Committee shall be directly responsible for appointing, retaining and terminating, and for determining the compensation, of the Company’s External Auditors. The Audit Committee may consult with management in fulfilling these duties, but may not delegate these responsibilities to management. |
| (s) | An external auditor must report directly to the Audit Committee. |
| (t) | The Audit Committee is directly responsible for overseeing the work of the external auditor including the review and approval of the scope and staffing of the external auditor annual audit plan and the resolution of disagreements between management and the external auditor regarding financial reporting. |
| (u) | The Audit Committee shall implement structures and procedures to ensure that it meets with the external auditor as frequently as it deems necessary and at least annually in the absence of management. |
| (v) | At least annually, and before the external auditors issue their report on the annual financial statements, the Audit Committee shall obtain from the external auditors a formal written statement describing all relationships between the external auditors and the Company; discuss with the external auditors any disclosed relationships or services that may affect the objectivity and independence of the external auditors; and obtain written confirmation from the external auditors that they are objective and independent within the meaning of the applicable Rules of Professional Conduct/Code of Ethics adopted by the provincial institute or order of chartered accountants to which the external auditors belong and other Applicable Requirements. The Audit Committee shall take appropriate action to oversee the independence of the external auditors. |
Accounting Systems, Internal Controls and Procedures
| (w) | Obtain reasonable assurance from discussions with and/or reports from management, and reports from external auditors that accounting systems are reliable and that the prescribed internal controls are operating effectively for the Company and its subsidiaries and affiliates. |
| (x) | The Audit Committee shall review to ensure to its satisfaction that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements and will periodically assess the adequacy of those procedures. |
| (y) | Direct the external auditor’s examinations to particular areas. |
| (z) | Review control weaknesses identified by the external auditor, together with management’s response. |
| (aa) | Review with the external auditor its view of the qualifications and performance of the key financial and accounting executives. |
| (bb) | In order to preserve the independence of the external auditor the Audit Committee will: |
| (i) | recommend to the Board of Directors the external auditor to be nominated; and |
| (ii) | recommend to the Board of Directors the compensation of the external auditor’s engagement; |
| (cc) | The Audit Committee shall review and pre-approve any engagements for non-audit services to be provided by the external auditor or its affiliates, together with estimated fees, and consider the impact on the independence of the external auditor. |
| (dd) | Review with management and with the external auditor any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting. |
| (ee) | The Audit Committee shall review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and most recent former external auditor of the Company. |
88
| (ff) | The Audit Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
| (gg) | The Audit Committee shall on an annual basis, prior to public disclosure of its annual financial statements, ensure that the external auditor has entered into a participation agreement and has not had its participant status terminated, or, if its participant status was terminated, has been reinstated in accordance with the Canadian Public Accountability Board (“CPAB”) and Public Company Accounting Oversight Board (“PCAOB”) bylaws and is in compliance with any restriction or sanction imposed by the CPAB or PCAOB. |
Statutory and Regulatory Responsibilities
| (hh) | Annual Financial Information - review the annual audited financial statements and related management’s discussion and analysis (“MD&A”), including any letter to shareholders and related press releases, and recommend their approval to the Board of Directors, after discussing matters such as the selection of accounting policies (and changes thereto), major accounting judgments, accruals and estimates with management and the external auditor. |
| (ii) | Annual Report - review the management MD&A section and all other relevant sections of the annual report, if prepared, to ensure consistency of all financial information included in the annual report. |
| (jj) | Interim Financial Statements - review the quarterly interim financial statements and related MD&A, including any letter to shareholders and related press releases and recommend their approval to the Board of Directors. |
| (kk) | Earnings Guidance/Forecasts - review forecasted financial information and forward-looking statements. |
| (ll) | Review the Company’s financial statements, MD&A, prospectuses or other securities offering document, earnings press releases and any other publicly disseminated material financial disclosure before the Company publicly discloses such information. |
Reporting
| (mm) | Report, through the Chairperson of the Audit Committee, to the Board of Directors following each meeting on the major discussions and decisions made by the Audit Committee. |
| (nn) | Report annually to the Board of Directors on the Audit Committee’s responsibilities and how it has discharged them. |
| (oo) | Review the Audit Committee’s Charter annually and recommend the approval of any proposed amendments to the Board of Directors. |
Other Responsibilities
| (pp) | Investigating fraud, illegal acts or conflicts of interest. |
| (qq) | Discussing selected issues with corporate counsel or the external auditor or management. |
89
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
NervGen Pharma Corp.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of NervGen Pharma Corp. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of loss and comprehensive loss, shareholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the financial performance and its cash flows for each of the years then ended, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, Management has forecast that the Company’s ability to operate for the ensuing 12 months from the issuance of these financial statements is dependent on raising additional financing or successfully implementing measures to reduce operating costs, delay planned expenditures in its research and development programs and slow the progress in the Company’s planned clinical programs. These factors indicate the existence of a material uncertainty that may cast significant doubt as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG LLP
Chartered Professional Accountants
We have served as the Company’s auditor since 2022.
Vancouver, Canada
March 31, 2026
2
NERVGEN PHARMA CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
as at | | December 31, 2025 | | December 31, 2024 |
Assets |
| |
| |
Current assets |
| |
| |
Cash and cash equivalents |
| |
| |
Receivables (Note 9) |
| |
| |
Deferred Share Issuance Costs (Note 16) |
| — |
| |
Prepaids, deposits, and other current assets (Note 8) |
| |
| |
Current portion of net investment in lease (Note 11) |
| |
| |
|
| |
| |
Non-current assets |
| |
| |
Net investment in lease (Note 11) |
| — |
| |
Intangible assets, net (Note 12) |
| |
| |
|
| |
| |
|
| |
| |
| | | | |
Liabilities |
| |
| |
Current liabilities |
| |
| |
Accounts payable and accrued liabilities (Note 13, 14) |
| |
| |
Warrant derivative (Note 15) |
| |
| |
Current portion of lease liability (Note 11) |
| |
| |
|
| |
| |
Non-current liabilities |
| |
| |
Lease liability (Note 11) |
| — |
| |
|
| — |
| |
|
| |
| |
| | | | |
Shareholders’ Equity |
| |
| |
Common shares (Note 16) |
| |
| |
Reserves (Note 17) |
| |
| |
Deficit |
| ( |
| ( |
|
| |
| |
|
| |
| |
Nature of business (Note 1)
Commitments (Note 18)
Subsequent events (Note 20)
Approved by the Board | | | | | | |
| | | | | | |
/s/ Adam Rogers | | Director | /s/ Neil A. Klompas | | Director |
The accompanying notes are an integral part of these consolidated financial statements
3
NERVGEN PHARMA CORP.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars)
| | For the Year Ended | | For the Year Ended |
| | December 31, 2025 | | December 31, 2024 |
| | $ | | $ |
Operating expenses | |
| |
|
Research and development (Note 19) | | | | |
General and administrative (Note 19) | | | | |
Total operating expenses | | | | |
| | | | |
Interest income | | ( | | ( |
Unrealized loss on warrant derivative (Note 15) | | | | |
Foreign exchange loss (gain) | | | | ( |
Net loss and comprehensive loss | | ( | | ( |
| | | | |
Basic and diluted net loss per share | | ( | | ( |
| | | | |
Weighted average Common Shares outstanding (Note 16) | | | | |
The accompanying notes are an integral part of these consolidated financial statements
4
NERVGEN PHARMA CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| | Year Ended | | Year Ended | ||
| | December 31, 2025 | | December 31, 2024 | ||
| | $ | | $ | ||
Operating Activities | | |
| | |
|
Net loss for the period | | | ( | | | ( |
Items not involving cash: | | | | | | |
Amortization of intangible asset (Note 12) | | | | | | |
Depreciation expense (Note 10) | | | — | | | |
Interest expense on lease liability (Note 11) | | | | | | |
Interest income on net investment in lease (Note 11) | | | ( | | | ( |
Stock-based compensation (Note 14, 17) | | | | | | |
Unrealized foreign exchange | | | ( | | | |
Change in fair value of warrant derivative (Note 15) | | | | | | |
Loss on derecognition of equipment (Note 10) | | | — | | | |
Net investment in sub-sublease (Note 11) | | | — | | | |
Changes in non-cash working capital: | | | | | | |
Receivables (Note 9) | | | | | | ( |
Prepaid expenses (Note 8, 16) | | | | | | ( |
Accounts payable and accrued liabilities (Note 13, 14) | | | ( | | | |
| | | ( | | | ( |
Investing Activities | | | | | | |
Payments received from net investment in lease (Note 11) | | | | | | |
| | | | | | |
Financing Activities | | | | | | |
Repayment of lease liability (Note 11) | | | ( | | | ( |
Gross proceeds from issuance of common shares (Note 15, 16) | | | | | | |
Share issue costs – cash (Note 16) | | | ( | | | ( |
Warrant and option exercises (Note 17) | | | | | | |
| | | | | | |
| | | | | | |
Effect of foreign exchange on cash and cash equivalents | | | | | | ( |
| | | | | | |
Net (decrease) increase in cash and cash equivalents | | | | | | |
Cash and cash equivalents, beginning of period | | | | | | |
Cash and cash equivalents, end of period | | | | | | |
| | | | | | |
Cash paid for interest and taxes | | $ | — | | $ | — |
Non-cash transactions: | | | | | | |
Finder’s/Broker’s warrants | | | — | | | |
Fair value of options allocated to share capital | | | | | | |
Fair value of warrants allocated to share capital | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements
5
NERVGEN PHARMA CORP.
Consolidated Statements of Changes in Shareholders’ Equity
(Expressed in Canadian dollars)
| | Common Shares | | | | | | | ||
| | | | Amount | | Reserves | | Deficit | | Total |
| | Number | | $ | | $ | | $ | | $ |
Balance December 31, 2023 (Note 17) | | | | | | | | ( | | ( |
Common share financings, net (Note 16) | | | | | | | | — | | |
Broker warrants (Note 16) | | — | | ( | | | | — | | — |
Warrant exercise (Note 17) | | | | | | ( | | — | | |
Option exercises (Note 17) | | | | | | ( | | — | | |
Stock-based compensation (Note 17) | | — | | — | | | | — | | |
Loss and comprehensive loss | | — | | — | | — | | ( | | ( |
Balance December 31, 2024 (Note 17) | | | | | | | | ( | | |
Common share financings, net (Note 16) | | | | | | — | | — | | |
Warrant exercises (Note 17) | | | | | | ( | | — | | |
Warrant amendment (Note 15) | | — | | — | | | | — | | |
Option exercises (Note 17) | | | | | | ( | | — | | |
Stock-based compensation | | — | | — | | | | — | | |
Loss and comprehensive loss | | — | | — | | — | | ( | | ( |
Balance December 31, 2025 | | | | | | | | ( | | |
The accompanying notes are an integral part of these consolidated financial statements
6
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
1.Nature of business
NervGen Pharma Corp. (the “Company” or “NervGen”) is a publicly traded biotechnology company incorporated on January 19, 2017, under the Business Corporations Act (British Columbia). The corporate office of the Company is located at 112-970 Burrard Street, Unit 1290, Vancouver, BC, V6Z 2R4, Canada, and the registered office is located at 1133 Melville Street, Suite 3500, The Stack, Vancouver, BC, V6E 4E5, Canada.
Common Shares in the capital of NervGen (the “Common Shares”) trade on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “NGEN”.
The Company has
The Company’s principal business activity is the discovery, development and commercialization of neuroreparative therapeutics for spinal cord injury (“SCI”) and other neurotraumatic and neurologic conditions. NervGen’s initial target indication is SCI.
2.Basis of presentation
a) | Basis of measurement and statement of compliance |
These consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
The consolidated financial statements were approved by the Company’s board of directors (the “Board of Directors”) and authorized for issue on March 31, 2026.
b) | Going Concern |
These consolidated financial statements have been prepared in accordance with IFRS accounting principles applicable to a going concern using the historical cost basis.
The Company is in pre-revenue stage and no revenues are expected in the foreseeable future. The Company’s future operations are dependent on the success of the Company’s ongoing development, as well as its ability to secure additional financing as needed. Management has forecasted that the Company’s ability to operate the Company for the ensuing 12 months from the issuance of these financial statements is dependent on raising additional financing or successfully implementing measures to reduce operating costs, delay planned expenditures in its research and development programs and slow the progress in the Company’s planned clinical programs. The Company will need to raise additional capital to fund its research and development plans including its next phase human clinical trials for its various drug candidates until it generates revenue that reaches a level sufficient to provide self-sustaining cash flows. While the Company has been successful in the past in obtaining financing, there can be no assurance that the Company will be able to obtain adequate financing, or that such financing will be on terms acceptable to the Company, to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs. These factors indicate the existence of a material uncertainty that may cast significant doubt as to the Company’s ability to continue as a going concern.
These consolidated financial statements do not reflect the adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and settle its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements. Such amounts could be material.
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
2.Basis of presentation cont’d
c) | Principles of Consolidation |
These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries NervGen US Inc. and NervGen Australia Pty Ltd. The subsidiaries are fully consolidated from the date at which control is determined to have occurred and are deconsolidated from the date that the Company no longer controls the entity. Intercompany transactions, balances, and gains and losses on transactions between subsidiaries are eliminated.
d) | Functional and presentation currency |
The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of NervGen and its subsidiaries is the Canadian dollar. Transactions in foreign currencies are translated to the functional currency at the rate on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange as at the reporting date. All differences are taken to profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined.
3.Material accounting policies
a) | Cash and cash equivalents |
Cash and cash equivalents consist of cash and guaranteed investment certificates held in banks. Interest from cash and cash equivalents are recorded on an accrual basis.
b) | Research and development costs |
Expenditures on research and development activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred.
Research and development expenses include all direct and indirect operating expenses supporting the products in development and clinical trials. The Company outsources a significant portion of its research and development activities to third-party contract service providers. Third-party costs include those related to preclinical research, clinical trial activities and product manufacturing. Clinical trial activities expenses include investigator fees, clinical site costs, contract research organization fees and other related costs. The amount of expense recognized in a period for third-party contract service providers is based on the work performed using the accrual basis of accounting. The Company’s third-party contract service organizations provide information of services performed to allow the Company to determine the appropriate accrual at period end.
c) | Intangible assets |
The Company has acquired certain intellectual property licenses. The Company expenses patent costs, including license fees, annual minimum royalties, and other maintenance costs, until such time as the Company has certainty over the future recoverability of the intellectual property at which time it capitalizes the costs incurred. The Company will capitalize costs directly related to the acquisition of licensed patents. The Company does not hold any intangible asset with an indefinite life.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 8 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
3.Material accounting policies cont’d
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization method and amortization period of an intangible asset with a finite life is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in research and development expenses.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date they are available for use.
d) | Government assistance |
Government assistance, including grants and investment tax credits are recorded as a reduction of the related expense or cost of the asset acquired. Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received. Government assistance, grant funding and investment tax credits related to current expenditures are included in the determination of profit or loss as the expenditures are incurred when there is reasonable assurance they will be realized.
e) | Income taxes |
Current tax and deferred tax are recognized in the Company’s profit or loss, except to the extent that it relates to a business combination or items recognized directly in equity.
Current income taxes are recognized for the estimated taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the period end date.
Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss.
Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax assets can be utilized. At the end of each reporting period, the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has been deemed probable that future taxable profit will allow the deferred tax asset to be recovered.
f) | Basic and diluted loss per Common Share |
Basic loss per share is computed by dividing the loss available to Common Shareholders by the weighted average number of Common Shares outstanding during the year. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings per share. The dilutive effect of convertible securities is reflected in diluted earnings per share by application of the “if converted” method. The dilutive effect of outstanding options and warrants and their equivalents is reflected in diluted earnings per share by application of the “treasury stock method”.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 9 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
3.Material accounting policies cont’d
g) | Property and equipment |
Property and equipment are recorded at cost net of accumulated depreciation. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in profit or loss.
Depreciation is recognized using the straight-line method based on an expected life of the assets.
Computer equipment | | |
Network equipment and setup |
| |
Fixtures and fittings |
| |
Right-of-use asset |
| over the term of the lease |
Impairment of long-lived assets:
The Company’s long-lived assets are reviewed for indications of impairment each reporting period. If an indication of impairment exists, the asset’s recoverable amount is estimated.
An impairment loss is recognized when the carrying value of an asset, or its cash-generating unit, exceeds its recoverable amount. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or groups of assets. For the purpose of impairment testing, the Company determined it has
h) | Stock-based compensation and retention securities |
The Company has a stock-based compensation plan (the “Plan”) available to officers, directors, employees and consultants with grants under the Plan approved by the Company’s Board of Directors. The number of options available to be granted under the Plan is fixed at an amount approved by shareholders at the Company’s annual general meeting. Under the Plan, the exercise price of each option is determined by the Board of Directors. Vesting is provided for at the discretion of the Board of Directors and the expiration of options is to be no greater than
Retention securities which have been granted outside of the Plan, as an inducement grant, pursuant to Section 6.4 of TSX-V Policy 4.4 – Security Based Compensation (“Policy 4.4”) are also subject to board approval and determination of exercise price and vesting.
The Company uses the fair value-based method of accounting for officers, directors and employee awards granted under the Plan and for the retention securities. The Company calculates the fair value of each grant using the Black-Scholes option pricing model at the grant date. The stock-based compensation cost of the option or retention security is recognized as stock-based compensation expense over the relevant vesting period of the stock option or retention security using an estimate of the number of options or retention securities that will eventually vest.
Stock options awarded to non-employees are accounted for at the fair value of the goods received or expected to be received or the services rendered or expected to be rendered. The fair value is measured at the date the Company obtains the goods or the date the counterparty renders the service. If the fair value of the goods or services cannot be reliably measured, the fair value of the options granted will be used.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 10 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
3.Material accounting policies cont’d
i) | Financial instruments |
Financial assets
The Company’s financial assets are comprised of cash and accounts receivable. All financial assets are initially recorded at fair value plus directly attributable transaction costs except for those classified as fair value through profit or loss where transaction costs are expensed. Financial assets are designated upon inception into one of three categories: fair value through profit or loss (“FVTPL”); fair value through other comprehensive income (“FVOCI”); or amortized cost.
Subsequent to initial recognition, the financial assets are measured in accordance with the following:
| ● | FVTPL: Financial instruments or assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a financial instrument that is subsequently measured at FVTPL and is not part of a hedging relationship is recognized in profit or loss and presented net in profit or loss in the period in which it arises. The Company has classified its cash and cash equivalents as fair value through profit or loss. |
| ● | Amortized cost: Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Finance income from these financial instruments is recorded in net income (loss) using the effective interest rate method. Deposits and accounts receivable are classified as amortized cost. |
| ● | FVOCI: Financial instruments that are held for collection of contractual cash flows and for selling the financial instruments, where the financial instruments’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognized in net loss. When the financial instrument is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to net income (loss) except for equity investments classified as FVOCI. The Company currently has |
Impairment of financial assets
An expected credit loss (“ECL”) model applies to financial assets measured at amortized cost and contract assets, but not to investments in equity instruments. The ECL model requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period. In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. The Company’s financial assets measured at amortized cost are subject to the ECL model.
Financial liabilities
Financial liabilities are initially measured at fair value and are subsequently measured at amortized cost or FVTPL. Our financial liabilities include accounts payable and accrued liabilities and warrant derivative. The classification and measurement of accounts payable and accrued liabilities are at amortized cost. The classification and measurement of warrant derivative is at FVTPL.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 11 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
3.Material accounting policies cont’d
j) | Warrants issued in equity financing transactions |
The Company engages in equity financing transactions to obtain the funds necessary to continue operations and to explore and evaluate additional product development opportunities. These equity financing transactions may involve issuance of Common Shares together with warrants. Depending on the terms and conditions of each of the equity financing transactions, the warrants are exercisable into additional Common Shares at a price prior to expiry as stipulated in the transaction. Warrants issued in the Company’s functional currency, are assigned a value based on the residual value, if any, and included in reserves.
Warrants that are issued as payment for agency or finders’ fees or other transaction costs are accounted for as share-based payments.
Warrants issued in foreign currencies are classified as derivative liabilities. Upon exercise, in exchange for a fixed amount of Common Shares, the expected cash receivable is variable due to changes in foreign exchange rates. The Company measures derivative financial liabilities at fair value through profit or loss at initial recognition and in subsequent reporting periods. Fair value gains or losses are recognized in unrealized loss (gain) on warrant derivative on the consolidated statements of loss and comprehensive loss. The fair value of foreign currency share purchase warrants is determined using the quoted market price of the Common Shares on the valuation date, which is a Level 1 input. Transaction costs, which are directly attributable to the offering, are allocated between equity that is classified as equity financing transaction costs and liabilities that are expensed in the period incurred.
k) | Provisions |
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are assessed by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount on provisions is recognized in finance costs. A provision for onerous contracts is recognized when the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
l) | New accounting standards and interpretations |
The International Accounting Standards Board (IASB) issued IFRS 18, “Presentation and Disclosure in Financial Statements,” in April 2024. This standard aims to enhance the clarity and consistency of financial statements by requiring entities to present and disclose information in a specific manner. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027. As of the date of this report, the Company has not adopted IFRS 18. The Company is currently evaluating the potential impact of this standard on its financial statements and disclosures.
4.Use of judgements and estimates
The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are accounted for prospectively.
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are discussed below:
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 12 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4.Use of judgements and estimates cont’d
Intangible assets
The Company estimates the useful lives of intangible assets from the date they are available for use in the manner intended by management and periodically reviews the useful lives to reflect management’s intent about developing and commercializing the assets.
Government assistance
Management considers the reasonableness of whether the Company has met the requirements of the approved government assistance and whether there is reasonable assurance that the amount will be received. Government assistance can be subject to audits so the amounts received may differ from the amounts recorded.
Warrant derivative
The Company estimates fair value of the warrant derivative at initial measurement, at each exercise date and at each reporting period. This estimate requires determining the most appropriate inputs to the valuation model including the expected life, share price volatility, and dividend yield, and making assumptions about them. The assumptions and inputs used for estimating fair value of the warrant derivative are disclosed in Note 15.
Valuation of stock-based compensation, retention securities and warrants
Management measures the costs for stock-based compensation, retention securities and warrants using market-based option valuation techniques. Assumptions are made and estimates are used in applying the valuation techniques. These include estimating the future volatility of the share price, expected dividend yield, expected risk-free interest rate, future employee turnover rates, and expected term. Such estimates and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates of stock-based compensation and warrants.
Functional currency
Management considers the determination of the functional currency of the Company a significant judgement. Management has used its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and considered various factors including the currency of historical and future expenditures and the currency in which funds from financing activities are generated. A Company’s functional currency is only changed when there is a material change in the underlying transactions, events and conditions.
Going concern
The Company’s assessment of its ability to continue as a going concern requires judgments about whether there are events or conditions that may cast significant doubt about the Company’s ability to continue as a going concern. Management has determined that the use of the going concern basis of accounting is appropriate as disclosed in Note 2(b).
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 13 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
5.Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. The Company has
6.Capital disclosures
The Company defines its capital as share capital, warrants, retention securities and options. The Company’s objectives, when managing capital, are to safeguard cash as well as maintain financial liquidity and flexibility in order to preserve its ability to meet financial obligations and deploy capital to grow its businesses.
The Company’s financial strategy is designed to maintain a flexible capital structure consistent with the objectives stated above and to respond to business growth opportunities and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue shares or issue debt (secured, unsecured, convertible and/or other types of available debt instruments).
On November 25, 2024 the Company filed a short form base shelf prospectus, which was subsequently amended on December 15, 2025 (the “Base Shelf”) that qualifies for distribution of up to US$
Our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. We expect that our Base Shelf will be effective until December 25, 2026.
On December 19, 2024, the Company filed a prospectus supplement that, together with the Base Shelf, qualifies the distribution of Common Shares, under an at-the-market equity program (the “ATM Program”) that allows the Company to issue and sell Common Shares to the public from time to time through an agent (the “Agent”), at the Company’s discretion and subject to regulatory requirements. All Common Shares issued under the ATM Program are sold in transactions that are deemed to be “at-the-market” distributions as defined in National Instrument 44-102 – Shelf Distributions. All Common Shares sold under the ATM Program are sold through the TSX-V or any other recognized marketplace upon which the Common Shares are listed, quoted or otherwise traded in Canada, at the prevailing market price at the time of sale. As Common Shares distributed under the ATM Program are issued and sold at the prevailing market prices at the time of their sale, prices may vary among purchasers and during the period of distribution.
The ATM Program provides the Company with enhanced flexibility should future additional financing be required, and it can be activated as deemed appropriate. The ATM was activated and the distribution of shares under the ATM Program began on January 10, 2025. The volume and timing of distributions under the ATM Program, are determined in the Company’s sole discretion and in accordance with the terms and conditions of an equity distribution agreement (the “Distribution Agreement”), dated December 19, 2024, between the Company and the Agent. The Company is not obligated to make any sales of Common Shares under the ATM Program and is limited to sell up to CA$
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 14 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
6.Capital disclosures cont’d
Through December 31, 2025, the Company issued and sold
The Company currently intends to use the net proceeds from the ATM Program, to the extent raised, principally for general corporate purposes (including funding ongoing operations and/or working capital requirements), to repay indebtedness outstanding from time to time, to fund research and development, intellectual property development, preclinical and clinical expenses and potential future acquisitions or other corporate purposes. On March 12, 2026 the ATM Program was terminated.
There were no changes to the Company’s capital management policy during the year ended December 31, 2025. The Company is not subject to any externally imposed capital requirements.
7.Financial risk management
(a) | Fair value |
The Company’s financial instruments recognized on the consolidated statements of financial position consist of cash and cash equivalents, receivables, warrant derivative, accounts payable and accrued liabilities. The fair value of these instruments approximate their carrying values due to their short-term maturity.
(b) | Classification of financial instruments |
The Company’s financial instruments, recorded at fair value, require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.
Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace.
Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 15 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
7.Financial risk management cont’d
Cash and cash equivalents are measured at fair value using Level 1 as the basis for measurement in the fair value. The recorded amounts for receivables, accounts payable, and accrued liabilities, approximate their fair value due to their short-term nature. In July 2022 and November 2025, the Company issued common share purchase warrants with an exercise price denominated in a currency that differs from our functional currency, which are treated as a derivative measured at fair value with subsequent changes in fair value accounted for through the consolidated statements of loss and comprehensive loss. The warrants issued in July 2022 were subsequently amended in December 2025 to have an exercise price denominated in the Company’s functional currency resulting in a reclassification of the warrant as an equity classified instrument at the fair value determined on the date of the amendment. The November 2025 warrants remain liability classified as of December 31, 2025, and the fair value of the corresponding warrant derivative recognized on the consolidated statements of financial position is based on level 2 inputs (significant observable inputs) as these warrants have not been listed on an exchange and therefore do not trade on an active market. As at December 31, 2025, the fair value of our non-cash warrant derivative was $
The Company has exposure to the following risks from its use of financial instruments: credit, liquidity, currency, and interest rate risk. The Company reviews its risk management framework on a quarterly basis and makes adjustments as necessary.
(c) | Credit risk |
Credit risk is the risk of potential loss if a counterparty to a financial instrument fails to meet its contractual obligations. Our credit risk is primarily attributable to our liquid financial assets, including cash and cash equivalents, receivables, deposits, and balances receivable from the government. We limit the exposure to credit risk in our cash and cash equivalents by only holding our cash and cash equivalents with high-credit quality financial institutions in business and/or savings accounts.
(d) | Liquidity risk |
Liquidity risk is the risk that we will not have the resources to meet our obligations as they fall due. We manage this risk by closely monitoring cash forecasts and managing resources to ensure that we will have sufficient liquidity to meet our obligations. All of our financial liabilities are classified as current and the majority, other than the non-cash warrant derivative, are anticipated to mature within the next ninety days. We are exposed to liquidity risk other than for the warrant derivative which is non-cash.
(e) | Market Risk |
a. | Currency risk |
The Company has identified our functional currency as the Canadian dollar. Transactions are transacted in Canadian dollars, U.S. dollars and in Australian dollars. Fluctuations in the U.S. or Australian dollar exchange rate could have a significant impact on the Company’s results. Assuming all other variables remain constant, a
In the near-term, we mitigate overall currency risk through of the use of U.S. dollar denominated cash balances to pay forecasted U.S. denominated expenses when possible. In the long-term, we are exposed to net currency risk from employee costs as well as the purchase of goods and services in the United States and Australia.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 16 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
7.Financial risk management cont’d
Balances in U.S. dollars are as follows:
| | December 31, 2025 | | December 31, 2024 |
| | US$ | | US$ |
Cash |
| |
| |
Receivables |
| |
| |
Vendor deposits |
| |
| |
Accounts payable and accrued liabilities |
| ( |
| ( |
|
| |
| ( |
Balances in Australian dollars are as follows:
| | December 31, 2025 | | December 31, 2024 |
| | AU$ | | AU$ |
Cash |
| |
| |
Receivables |
| |
| — |
Accounts payable and accrued liabilities |
| ( |
| ( |
|
| ( |
| ( |
b. | Interest rate risk |
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The warrant derivative that is discussed further in Note 15 is recorded at fair value using a Black-Scholes pricing model with changes in fair value recorded in the consolidated statements of loss and comprehensive loss. An input to the model is the risk-free rate which is reflective of Canadian bond yields. Therefore, the company is exposed to interest rate risk through the non-cash impact it has on the consolidated statements of loss and comprehensive loss.
c.Other price risk
Other price risks include the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than interest rate or currency risk). The warrant derivative that is discussed further in Note 15 is recorded at fair value using a Black-Scholes pricing model with changes in fair value recorded in the consolidated statements of loss and comprehensive loss. An input to the model is the market price of the Company’s shares as of the valuation date.
Therefore, the company is exposed to other price risk through the non-cash impact it has on the consolidated statements of loss and comprehensive loss.
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 17 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8.Prepaids, deposits, and other current assets
| | December 31, 2025 | | December 31, 2024 |
| | $ | | $ |
Prepaid insurance | | | | |
Prepaid membership fees | | | | |
Prepaid listing fees | | | | |
Prepaid software | | | | |
Licensing fees | | | | |
Prepaid rent and related deposits | | | | |
Phase 1b/2a clinical trial deposit | | | | |
Prepaid manufacturing | | | | — |
Vendor deposits | | | | |
| | | | |
9.Receivables
| | December 31, 2025 | | December 31, 2024 |
| | $ | | $ |
Value added and other taxes receivable | | | | |
Grants receivable | | | | |
| | | | |
10.Property, equipment and lease liability
The changes in the carrying amounts of the Company’s equipment during the years ended December 31, 2025 and December 31, 2024, were as follows:
| | Equipment |
| | $ |
Balance December 31, 2023 | | |
Depreciation | | ( |
Acquisitions | | — |
Disposals | | ( |
Balance December 31, 2024 | | — |
Depreciation | | — |
Acquisitions | | — |
Disposals | | — |
Balance, December 31, 2025 | | — |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 18 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
11.Net investment in lease and lease liability
The changes in the carrying amounts of the Company’s net investment in lease and lease liabilities during the years ended December 31, 2025 and December 31, 2024, were as follows:
| | | | Net Investment in | | |
| | Right-of-Use Asset | | Lease | | Lease Liability |
| | $ | | $ | | $ |
Balance December 31, 2023 | | | | — | | |
Amortization | | ( | | — | | — |
Sublease | | ( | | | | — |
Lease payments | | — | | ( | | ( |
Lease interest | | — | | | | |
Balance December 31, 2024 | | — | | | | |
Lease payments | | — | | ( | | ( |
Lease interest | | — | | | | |
Balance, December 31, 2025 | | — | | | | |
Current portion | | — | | | | |
Non-current portion | | — | | — | | — |
The Company entered into a sub-sublease pursuant to which the Company agreed to sub-sublease the head office for a term of , commencing on June 1, 2024, and expiring on February 26, 2026 (the remaining term of our sublease). The sub-subtenant will pay base rent plus property taxes and operating expenses, equal to the amount owed by the Company under the sublease. When the right-of-use asset was leased to a third party, the Company assessed the classification of the sublease as to whether it is a finance or operating lease. The sublease was classified as a finance lease and the carrying value of the right-of-use asset was derecognized, a lease receivable was recognized, and the difference was recorded in profit of loss. During the year ended December 31, 2024, the Company derecognized the right-of-use-asset of $
During the year ended December 31, 2025, the Company recorded $
As of December 31, 2025, the Company’s net investment in lease and lease liability are classified as a current asset and current liability, respectively, as the remaining commitments are due within 12 months of December 31, 2025.
12.Intangible asset
In June 2018, the Company entered into an exclusive worldwide licensing agreement to research, develop and commercialize a patented technology, with Case Western Reserve University (“CWRU”) in Cleveland, Ohio with potential to bring new therapies for spinal cord injury and other conditions associated with nerve damage.
The license costs are being amortized on a straight-line basis over the remaining life of the licensed patent which was
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 19 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12.Intangible asset cont’d
Continuity of the intangible asset is as follows:
| | Total |
Intangible asset – Case Western Reserve license | | $ |
Balance, December 31, 2023 |
| |
Amortization expense |
| ( |
Balance, December 31, 2024 |
| |
Amortization expense |
| ( |
Balance, December 31, 2025 |
| |
Under the exclusive worldwide licensing agreement with CWRU to research, develop and commercialize patented technologies, the Company has commitments to pay various annual license fees, patent costs, milestone payments and royalties on revenues, contingent on the achievement of certain development and regulatory milestones. The future milestone payments that are contingent upon the occurrence of future events or future royalties which may be due upon the regulatory approval of products derived from licensed technologies cannot be reasonably estimated. Annual minimum royalty payments are expensed whereas milestone payments related to the cost of the intangible asset are capitalized, as incurred.
Under the terms of the agreement, the Company is obligated to pay the following:
| ● | An annual minimum royalty of US$ |
| ● | Project milestones payable based on the achievement of future clinical development milestones, estimated to total US$ |
13.Accounts payable and accrued liabilities
| | December 31, 2025 | | December 31, 2024 |
| | $ | | $ |
Employee related costs | | | | |
Legal and professional fees | | | | |
Research and development | | | | |
Other | | | | |
| | | | |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 20 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
14.Key management personnel
Key management personnel, consisting of the Company’s Board of Directors and corporate officers, received the following compensation for the following periods:
| | December 31, 2025 | | December 31, 2024 |
| | $ | | $ |
Stock-based compensation | | | | |
Salaries and bonuses | | | | |
Consulting | | | | — |
| | | | |
As of December 31, 2025, the Company had amounts owing or accrued to key management personnel of $
On June 30, 2025, Daniel Mikol, MD, Ph.D., resigned from his position as Chief Medical Officer. During the year ended December 31, 2025, Daniel Mikol was paid a salary of $
On July 3, 2025, the Company announced the appointment of Adam Rogers, MD as the Chair of the Company’s Board following the resignation of Glenn Ives. As a result of the resignation of Mr. Ives,
On July 17, 2025, the Company announced that President and Chief Executive Officer (“CEO”) Mike Kelly had stepped down as a director and officer of the Company and Dr. Adam Rogers, Chair of the Board, had been appointed Interim CEO. Adam Rogers was subsequently appointed President and CEO on February 9, 2026. During the year ended December 31, 2025, total compensation of $
Dr. Rogers is a representative of the Company’s largest shareholder PFP Bioscience Holdings (“PFP”) through his role as a Principal and Managing Member of PFP. PFP is considered to have significant influence over the Company by virtue of Dr. Rogers’ role as Chair, President, and CEO, and is therefore considered a related party of the Company.
Additionally, certain directors participated in the November 2025 private placement by acquiring
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 21 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
15.Warrant derivative
On July 13, 2022, pursuant to a non-brokered private placement,
On November 19, 2025, pursuant to a non-brokered private placement,
There is no cash flow impact as a result of the accounting treatment for changes in the fair value of the warrant derivative or when warrants expire unexercised.
A reconciliation of the change in fair value of the warrant derivatives is as follows:
| | Fair Value of July ’22 Warrant | | Fair Value of November ‘25 |
| | Derivative | | Warrant Derivative |
| | $ | | $ |
Balance, December 31, 2023 | | | | — |
Change in fair value of warrant derivative | | | | — |
Balance, December 31, 2024 | | | | — |
Recognition of warrant derivative | | | | |
Change in fair value of warrant derivative | | | | |
Derecognition of warrant derivative | | ( | | — |
Balance, December 31, 2025 | | — | | |
The estimated fair value of the warrant derivative was determined using the Black-Scholes valuation model using the following assumptions:
| | December 31, 2025 | | December 31, 2024 |
|
Risk-free interest rate |
| | % | | % |
Expected warrant life in years |
|
| | ||
Expected stock price volatility |
| | % | | % |
Dividend yield |
| — |
| — | |
Warrants outstanding |
| |
| | |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 22 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
16.Share capital
Authorized
Unlimited Common Shares.
Equity Issuances
Fiscal 2025
During the year ended December 31, 2025,
The Company also issued and sold
The Company closed a non-brokered private placement of
Fiscal 2024
During the year ended December 31, 2024,
On March 28, 2024, the Company closed a bought deal financing of
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 23 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
16.Share capital cont’d
Calculation of loss per share
Loss per Common Share is calculated using the weighted average number of Common Shares outstanding.
For the year ended December 31, 2025 and 2024 the calculation was as follows:
| | 2025 | | 2024 |
Common Shares issued and outstanding, beginning of period |
| |
| |
Shares issued |
| |
| |
Common Shares issued and outstanding, end of period |
| |
| |
Weighted average shares outstanding - basic and diluted, end of period |
| |
| |
17.Stock options, retention securities and warrants
Stock Options:
Stock option transactions for the years ended December 31, 2025 and 2024 are set forth below:
| | Number of shares | | Weighted average |
| | issuable under | | exercise price |
| | options | | $ |
Balance outstanding at December 31, 2023 |
| | | |
Granted |
| | | |
Exercised |
| ( | | |
Forfeited/Expired |
| ( | | |
Balance outstanding at December 31, 2024 |
| | | |
Granted |
| | | |
Exercised |
| ( | | |
Forfeited/Expired |
| ( | | |
Balance outstanding at December 31, 2025 |
| | |
The following table summarizes information about stock options outstanding at December 31, 2025:
| | | | Weighted | | | | | | Weighted | | |
| | | | average | | | | | | average | | |
| | Number of | | remaining | | Weighted | | Number of | | remaining | | Weighted |
| | Options | | contractual | | average exercise | | Options | | contractual | | average exercise |
Exercise Price ($) | | Outstanding | | life (Years) | | Price ($) | | Exercisable | | life (Years) | | Price ($) |
| |
|
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| |
|
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| |
|
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| |
|
| |
| |
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| |
|
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|
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NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 24 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
17.Stock options, retention securities and warrants cont’d
The fair value of options granted is calculated on the grant date using the Black-Scholes option pricing model using the following assumptions:
| | December 31, 2025 | | December 31, 2024 |
|
Risk-free interest rate |
| % | % | ||
Expected term in years |
|
| | ||
Expected stock price volatility |
| % | % | ||
Dividend yield |
| — |
| — | |
The Company made an adjustment related to the recognition of non-cash share-based compensation expense in prior periods. The Company adjusted opening balances as at January 1, 2024 by increasing Common Shares, Reserves, and Deficit by $
Retention Securities:
The Company has granted
The retention securities were granted outside of the Company’s stock option plan, as an inducement grant to the former President and Chief Executive Officer of the Company pursuant to Section 6.4 of TSX-V Policy 4.4.
Warrants:
Warrant transactions for the year ended December 30, 2025 and 2024 are set forth below:
| | Number of shares | | Weighted average | | Weighted average |
| | issuable under | | exercise price | | exercise price |
| | warrants | | US$ | | $ |
Balance outstanding at December 31, 2023 |
| |
| | | |
Granted |
| |
| | | |
Exercised |
| ( |
| | | |
Balance outstanding at December 31, 2024 |
| |
| | | |
Granted |
| |
| | | |
Exercised |
| ( |
| | | |
Balance outstanding at December 31, 2025 |
| |
| | |
The following table summarizes information about warrants outstanding at December 31, 2025:
Exercise Price ($) | | Number of Warrants Outstanding | | Grant Date | | Expiry Date |
| | | July 13, 2022 | | July 13, 2027 | |
| | | March 28, 2024 | | March 28, 2027 | |
| | | March 28, 2024 | | March 28, 2026 | |
| | | November 19, 2025 | | November 19, 2028 | |
|
| | | | | |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 25 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
18.Commitments
In the normal course of business, the Company enters into contracts for the procurement of research and related services. These contracts are typically cancellable by the Company with notice.
In June 2023, the Company was awarded a grant of up to US$
19.Nature of expenses
| | 2025 | | 2024 |
| | $ | | $ |
Research and Development Expenses | |
| |
|
Amortization of intangible asset | | | | |
Preclinical development | | | | |
Chemistry, manufacturing and controls | | | | |
Licensing and patent legal fees | | | | |
Clinical and regulatory | | | | |
Salaries and benefits | | | | |
Stock-based compensation | | | | |
Other research and development | | | | |
| | | | |
| | 2025 | | 2024 |
| | $ | | $ |
General and Administration Expenses | |
| |
|
Depreciation expense | | — | | |
Legal, professional and finance | | | | |
Investor and public relations | | | | |
Salaries and benefits | | | | |
Stock-based compensation | | | | |
Other general and administrative | | | | |
| | | | |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 26 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
20.Income taxes
a) | Provision for Income Tax |
A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
| | 2025 | | 2024 | ||
| | $ | | $ | ||
Loss for the year | | | ( | | | ( |
Expected income tax (recovery) | | | ( | | | ( |
Change in statutory tax, foreign tax, foreign exchange rates | | | | | | ( |
Permanent differences | | | | | | |
Share issue costs and financing fee | | | ( | | | ( |
Change in statutory tax rate | | | ( | | | |
Change in unrecognized deductible temporary differences | | | | | | |
Total income tax expense (recovery) | | | — | | | — |
| | | | | | |
Current income tax | | $ | — | | $ | — |
Deferred tax recovery | | $ | — | | $ | — |
b) | Deferred income tax |
| | 2025 | | 2024 |
| | $ | | $ |
Equipment and license | | | | |
R&D under Section 174 | | | | |
US R&D tax credit | | | | — |
Share issue costs and financing fee | | | | |
Foreign exchange | | ( | | ( |
Unpaid accrued bonus and vacation | | | | — |
Scientific research and experimental development expenditures | | | | |
Non-capital losses available for future periods | | | | |
| | | | |
Unrecognized deferred tax asset | | ( | | ( |
Net deferred tax assets | | — | | — |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 27 |
NERVGEN PHARMA CORP.
Notes to the consolidated financial statements
For the years ended December 31, 2025 and 2024
(Expressed in Canadian Dollars)
20.Income taxes cont’d
The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included in the consolidated statements of financial position are as follows:
| | 2025 | | Expiry | | 2024 | | Expiry |
| | $ | | | | $ | | |
Equipment and license | | | | None | | | | None |
R&D under Section 174 | | | | None | | | | None |
US R&D tax credit | | | | 2044-2045 | | — | | None |
Share issue costs and financing fee | | | | 2046-2049 | | | | 2045-2048 |
SRED pool | | | | None | | | | None |
Federal SRED ITC | | | | 2039-2045 | | | | 2039-2044 |
BC SRED ITC | | | | 2029-2035 | | | | 2029-2034 |
Non-capital losses available for future periods | | | | See below | | | | See below |
Canada | | | | 2036-2045 | | | | 2036-2044 |
USA | | | | None | | | | None |
Australia | | | | None | | | | None |
21.Subsequent events
Subsequent to December 31, 2025, the Company:
| (a) | Received cash proceeds of $ |
| (b) | received cash proceeds of $ |
| (c) | entered into an employment agreement with Dr. Adam Rogers, under which he was appointed President and Chief Executive Officer of both NervGen US Inc. and NervGen Pharma Corp., with terms including a US$ |
| (d) | announced that its Common Shares will be voluntarily delisted from the TSX-V effective March 16, 2026. Concurrently, the Company’s ATM Program was terminated on March 12, 2026. Through March 12, 2026, we issued and sold |
NERVGEN PHARMA CORP. 2025 ANNUAL FINANCIAL STATEMENTS | 28 |
Exhibit 99.3
Management’s Discussion and Analysis of
NERVGEN PHARMA CORP.
(Expressed in Canadian Dollars)
For the years ended December 31, 2025 and 2024
Effective Date: March 31, 2026
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion is management’s assessment and analysis of the results of operations and financial conditions of NervGen Pharma Corp. (the “Company” or “NervGen”) and should be read in conjunction with the accompanying consolidated financial statements and related notes thereto for the year ended December 31, 2025.
All financial information in this Management’s Discussion and Analysis (“MD&A”) has been prepared in accordance with IFRS accounting standards, and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.
FORWARD-LOOKING STATEMENTS
This MD&A contains “forward looking statements” within the meaning of U.S. securities laws and “forward-looking information” within the meaning of applicable Canadian securities legislation (collectively, the “forward-looking statements”). Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing and other information that is not historical information. These statements appear in a number of different places in this MD&A and can often be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, “will”, “could”, “may”, or their negatives or other comparable words. Such forward-looking statements are necessarily based on estimates and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.
Forward-looking statements in this MD&A, include, but are not limited to, statements relating to:
| ● | our expectations regarding the sufficiency of our capital resources and requirements for additional capital; |
| ● | requirements for, and the ability to obtain, future funding on favourable terms or at all, and the intended use of proceeds from financings; |
| ● | business strategy; |
| ● | expected future loss and accumulated deficit levels; |
| ● | projected financial position and estimated cash expenditure rate; |
| ● | expectations about the timing of achieving milestones and the cost of our development programs; |
| ● | estimates of the size and characteristics of the potential markets for our product candidates; |
| ● | observations and expectations regarding the effectiveness and durability of drug candidates, NVG-291 and NVG-300, and the potential benefits to patients; |
| ● | our ability to successfully develop NVG-291 and NVG-300; |
| ● | the term of NVG-291’s and NVG-300’s intellectual property protection; |
| ● | plans to use and evaluate NVG-291 and other potential drug candidates in our clinical development programs; |
| ● | plans to develop additional proprietary compounds that address nervous system repair; |
| ● | expectations and intended benefits of memorandums of understanding and agreements entered into with third parties; |
| ● | expectations about the timing with respect to commencement and completion of clinical trials; |
| ● | expectations about the timing and future plans with respect to preclinical and clinical studies; |
| ● | expectations regarding the objectives, endpoints and evaluation criteria of our ongoing clinical trials; |
| ● | expectations relating to the removal of the partial clinical trial hold initiated by the U.S. Food and Drug Administration (“FDA”); |
| ● | expectations regarding interactions with the FDA regarding future clinical development of our product candidates, including potential accelerated approval; |
| ● | expected results of toxicology studies with respect to NVG-291 and other potential drug candidates; |
| ● | expectations about our product candidates’ safety and efficacy; |
| ● | our ability to identify and secure sources of non-dilutive funding for the development of our product candidates and technologies; |
| ● | expectations regarding our ability to arrange for the manufacturing of our product candidates and technologies; |
| ● | expectations regarding the cost, progress and successful and timely completion of the various stages of the regulatory approval process; |
| ● | expectations about the potential benefits of Fast Track designation for NVG-291 in the treatment of spinal cord injury (“SCI”); |
| ● | ability to secure strategic partnerships with larger pharmaceutical and biotechnology companies; |
| ● | strategy to acquire and develop new product candidates and technologies and to enhance the safety and efficacy of existing products and technologies; |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 1 |
| ● | plans to market, sell and distribute our products and technologies, if approved; |
| ● | expectations regarding the acceptance of our products and technologies by the market, if approved; |
| ● | expectations regarding the commercial opportunities of our compounds; |
| ● | expectations regarding the use of our products and technologies in treating diseases and medical disorders; |
| ● | ability to retain and access appropriate staff, management, and expert advisers; |
| ● | expectations with respect to existing and future contractual obligations, corporate alliances, and licensing transactions with third parties, and the receipt and timing of any payments to be made by the Company or to the Company in respect of such arrangements; and |
| ● | strategy and ability with respect to the protection of our intellectual property; |
Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant medical, scientific, business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward-looking statements included in this MD&A, we have made various material assumptions, including but not limited to:
| ● | our ability to obtain financing on acceptable terms; |
| ● | additional sources of funding, including grants and funding from partners; |
| ● | our ability to attract and retain skilled staff; |
| ● | favourable general business and economic conditions; |
| ● | pandemics not having a material impact on our operations; |
| ● | our future research and development plans proceeding substantially as currently envisioned; |
| ● | our ability to obtain positive results from our research and development activities, including clinical trials; |
| ● | future expenditures to be incurred by us; |
| ● | research and development and operating costs; |
| ● | our ability to find partners in the pharmaceutical industry; |
| ● | the products and technology offered by our competitors; |
| ● | the impact of competition on our operations; |
| ● | our ability to identify additional product candidates; |
| ● | our ability to obtain regulatory and other approvals to commence additional clinical trials involving current and future product candidates; |
| ● | our ability to successfully out-license or sell our future products, if any, and in-license and develop new products; |
| ● | our ability to protect patents and proprietary rights; and |
| ● | expected research and development tax credits. |
In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors, including the risks outlined herein under the headings “Credit risk”, “Liquidity risk”, “Foreign currency risk”, “Market risk” and “Other risk”, and under the heading “Risk Factors” in our most recently filed Annual Information Form (the “AIF”), our amended and restated short form base shelf prospectus dated December 15, 2025 available under our profile on SEDAR+ at www.sedarplus.ca, and incorporated by reference in our Form F-10 filed with the Securities and Exchange Commission (the “SEC”) on December 17, 2025 and declared effective on January 7, 2026 and included in our Annual Report on Form 40-F available under our profile on SEC.gov. Certain risks and uncertainties that could cause such actual events or results expressed or implied by such forward-looking statements and information to differ materially from any future events or results expressed or implied by such statements and information include, but are not limited to, the risks and uncertainties related to the fact that:
| ● | we have a limited operating history, are early in our development efforts, and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability; |
| ● | since our inception, we have incurred significant net losses and expect to continue to incur significant net losses for the foreseeable future and we may never achieve or maintain profitability; |
| ● | we will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs or future commercialization efforts; |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 2 |
| ● | positive results from early preclinical studies and clinical trials of our current or future product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of our current or future product candidates. If we cannot replicate the positive results from our preclinical studies or early clinical trials of our current or future product candidates, we may be unable to successfully raise sufficient financing to develop, obtain regulatory approval for and commercialize our current or future product candidates; |
| ● | we have a history of negative operating cash flow and may continue to experience negative operating cash flow; |
| ● | raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates; |
| ● | our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be limited; |
| ● | we are substantially dependent on the success of our lead product candidate, NVG-291, which is currently in a Phase 1b/2a clinical trial for SCI (CONNECT SCI Study). If we are unable to complete development of, obtain approval for and commercialize NVG-291 for SCI in a timely manner, our business will be harmed; |
| ● | there are currently no FDA-approved products for the treatment of SCI; |
| ● | the regulatory approval processes of the FDA, EMA, Health Canada and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to commercialize our product candidates and generate product revenue and our business will be substantially harmed; |
| ● | preclinical studies and clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome. Further, we may encounter substantial delays in completing the development of our product candidates; |
| ● | our current or future product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could delay or prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences. NVG-291 for SCI is currently subject to a partial clinical hold by the FDA, and we may be unable to have the hold removed which could adversely affect development of NVG-291 and our results of operations; |
| ● | the outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA, Health Canada or other comparable foreign regulatory authorities; |
| ● | interim, “top-line”, and preliminary data from our clinical trials that we announce or publish from time to time may change as more participant data becomes available and are subject to audit and verification procedures that could result in material changes in the final data; |
| ● | if we fail to develop and commercialize NVG-291 for additional indications or fail to discover, develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve our strategic objectives would be impaired; |
| ● | we may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success; |
| ● | changes in methods of product candidate manufacturing or formulation may result in additional costs or delay; |
| ● | if we are unable to successfully develop companion diagnostics or biomarkers that may be required for our therapeutic product candidates, or experience significant delays in doing so, we may not achieve marketing approval or realize the full commercial potential of our therapeutic product candidates; |
| ● | if we experience delays or difficulties in the enrollment and/or retention of participants in clinical trials, our clinical development activities could be delayed or otherwise adversely affected; |
| ● | as an organization, we have never conducted later-stage clinical trials or submitted a new drug application, and may be unable to do so for any of our product candidates; |
| ● | 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; |
| ● | Fast Track or Breakthrough Therapy designation by the FDA may not actually lead to a faster development or regulatory review or approval process, and does not assure FDA approval of our product candidates; |
| ● | we may seek orphan drug designation for the product candidates we develop, and we may be unsuccessful or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity; |
| ● | even if approved, our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success; |
| ● | if the market opportunity for any product candidate that we develop is smaller than we believe, our revenue may be adversely affected and our business may suffer; |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 3 |
| ● | if we are unable to establish sales, marketing and distribution capabilities or enter into agreements with third parties to sell or market our product candidates, we may not be successful in commercializing our product candidates that obtain regulatory approval; |
| ● | our use of third parties to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates, products, or necessary quantities of such materials on time or at an acceptable cost; |
| ● | we rely on third parties to assist in conducting our clinical trials. If they do not perform satisfactorily, we may not be able to obtain regulatory approval or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed; |
| ● | we may seek to establish collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans; |
| ● | if we enter into collaborations with third parties for the development and commercialization of our product candidates, our prospects with respect to those product candidates will depend in significant part on the success of those collaborations; |
| ● | we may be subject to claims that we or our employees, independent contractors, or consultants have wrongfully used or disclosed alleged confidential information or trade secrets; |
| ● | even if our product candidates receive regulatory approval, they will be subject to significant post marketing regulatory requirements and oversight; |
| ● | obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions; |
| ● | any product candidates we develop may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations; |
| ● | we may face difficulties from changes to current regulations and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations; |
| ● | our relationships with healthcare professionals, clinical investigators, clinical research organizations (“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, government price reporting, and health information privacy and security laws, 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; |
| ● | failure to comply with laws, rules, regulations, policies, industry standards and contractual obligations relating to privacy, data protection and data security could adversely affect our business; |
| ● | 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; |
| ● | disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their 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; |
| ● | we are subject to certain U.S. and non-U.S. anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations. We can face serious consequences for violations; |
| ● | if we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our future licensors, we could lose license rights that are important to our business; |
| ● | our success depends on our ability to protect our intellectual property and our proprietary technologies; |
| ● | if the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected; |
| ● | intellectual property rights do not necessarily address all potential threats to our competitive advantage; |
| ● | patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time; |
| ● | others may challenge inventorship or claim an ownership interest in our intellectual property which could expose it to litigation and have a significant adverse effect on its prospects; |
| ● | 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 our product candidates; |
| ● | we may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents, which could be expensive, time consuming, and unsuccessful. Further, our issued patents or our future licensors’ patents could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad; |
| ● | we may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates; |
| ● | changes in U.S. patent law, or laws in other countries, or their interpretation could diminish the value of patents in general, thereby impairing our ability to protect our product candidates; |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 4 |
| ● | we may not be able to protect or enforce our intellectual property rights throughout the world; |
| ● | if our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected; |
| ● | if we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected, harming our business and competitive position; |
| ● | our rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of any future licenses granted to us by others; |
| ● | the patent protection and patent prosecution for some of our product candidates may be dependent on third parties; |
| ● | we depend heavily on our executive officers, principal consultants and others, and the loss of their services would materially harm our business; |
| ● | we only have a limited number of employees to manage and operate our business; |
| ● | our future growth may depend, in part, on our ability to operate internationally, where we would be subject to additional regulatory burdens and other risks and uncertainties; |
| ● | we expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations; |
| ● | the market price of our common shares (the “Common Shares”) may be volatile, and you could lose all or part of your investment; |
| ● | sales of a substantial number of shares of our Common Shares in the public market could cause our share price to fall; |
| ● | we are subject to the applicable provisions of the Sarbanes-Oxley Act of 2002, as amended. If we are unable to satisfy the requirements of the Sarbanes-Oxley Act of 2002, as amended, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned; |
| ● | we do not know whether a market for our Common Shares will develop to provide you with adequate liquidity; |
| ● | we do not intend to pay dividends on our Common Shares in the foreseeable future, so any returns will be limited to the value of our Common Shares; |
| ● | 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 Shares, the trading price or trading volume of our Common Shares could decline; |
| ● | we have broad discretion in the use of the net proceeds from any offering and may not use them effectively; |
| ● | investing in our securities is speculative, and investors could lose their entire investment; |
| ● | our constating documents permit us to issue an unlimited number of Common Shares without additional shareholder approval which could result in dilution; |
| ● | the exercise of stock options and warrants could cause dilution; |
| ● | it is possible that our status with regards to whether we are a “passive foreign investment company” may change, which could have adverse U.S. federal income tax consequences for U.S. shareholders; |
| ● | it may be difficult for non-Canadian investors to obtain and enforce judgments against us because of our Canadian incorporation and presence; |
| ● | we are subject to the informational requirements of the Exchange Act; however, as a foreign private issuer, we are subject to different U.S. securities laws and requirements than a domestic U.S. issuer, which reduces the information we are required to provide to our U.S. shareholders; |
| ● | we expect to lose our foreign private issuer status in 2027, which will likely result in significant additional costs and expenses. |
| ● | we have devoted, and will continue to devote significant resources to regulatory compliance as a public entity. These resource requirements will increase now that our Common Shares are listed on the Nasdaq Stock Market LLC; |
| ● | our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition; |
| ● | cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, contract research organizations, CROs, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations; and |
| ● | we may be subject to securities litigation, which is expensive and could divert management attention. |
If one or more of these risks or uncertainties or a risk that is not currently known to us materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from those expressed or implied by forward-looking statements. The forward-looking statements represent our views as of the date of this MD&A. While we may elect to update these forward-looking statements in the future, we have no current intention to do so except as to the extent required by applicable securities law. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements. We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 5 |
COMPANY OVERVIEW
NervGen Pharma Corp. was incorporated on January 19, 2017. The Company’s corporate office is 112-970 Burrard Street, Unit 1290, Vancouver, BC, V6Z 2R4, Canada.
NervGen is a publicly traded (NASDAQ: NGEN), clinical-stage biopharmaceutical company developing first-in-class neuroreparative therapeutics for SCI and other traumatic and neurologic disorders. We announced topline results from our Phase 1b/2a clinical trial (the “CONNECT SCI Study”) for our lead drug candidate, NVG-291. The Company’s Phase 1b/2a CONNECT SCI Study in individuals with subacute (20-90 days posts injury) SCI is ongoing, alongside preparation for a Phase 3 clinical trial in chronic SCI. We hold the exclusive worldwide rights to both NVG-291 and NVG-300. NVG-291’s technology is licensed from Case Western Reserve University (“CWRU”) and is based on academic studies demonstrating the preclinical efficacy of NVG-291-R, the rodent variant of NVG-291, in animal models of spinal cord injury. These studies implicated multiple potential molecular and cellular mechanisms by which NVG-291-R promotes neurorepair and functional improvement in both central and peripheral nervous system injury models. The reported effects of NVG-291-R, based on publications from multiple independent academic investigators, include the promotion of neuronal sprouting, or plasticity, remyelination, and promotion of a non-inflammatory phenotype in the microglial cells, and functional improvement.
The planned timing of clinical trials in other indications is continuously being evaluated by management. We believe SCI represents a significant commercial opportunity due to the unmet medical need, dramatic impact on quality of life, high-cost burden to the individual and healthcare system, and current absence of pharmacologic therapies in the market shown to promote neurorepair or enhance clinical improvement.
We also seek to identify new, innovative compounds. In April 2025, we announced initial, promising preclinical results of our discovery candidate, NVG-300, in models of ischemic stroke and SCI. We believe these indications represent significant commercial opportunities due to the lack of approved pharmacologic therapies that promote functional recovery in these diseases.
These objectives replace and supersede those described in the “Description and General Development of the Business of the Company” section of our amended and restated short form base shelf prospectus dated December 15, 2025 (the “Base Shelf”). All clinical development plans are subject to additional funding (see “Liquidity and Capital Resources” below).
ACHIEVEMENTS & HIGHLIGHTS
The following are the achievements and highlights for the year ending December 31, 2025, through to the date hereof:
| ● | On January 2, 2025, we announced the completion of enrollment in the chronic cohort of our CONNECT SCI Study of NVG-291 in individuals with SCI with topline data expected in Q2 2025. The Company also received IRB approval for an amendment to its Phase 1b/2a clinical trial and initiated screening of subjects for the subacute cohort. |
| ● | On February 6, 2025, we announced that the first subject was enrolled and dosed in the subacute cohort of our CONNECT SCI Study of NVG-291 in individuals with SCI. We also announced that the Company received IRB approval for an amendment focused on the subacute cohort of the CONNECT SCI Study. Key changes to the protocol were implemented to facilitate enrollment, for example, revising the timing of subacute SCI to 20 to 90 days post-injury, and to decrease the burden on study participants by reducing the number of visits and assessments. |
| ● | On March 31, 2025, we announced the initiation of an expanded access policy (“EAP”) to allow treatment use of the investigational product NVG-291 for those individuals with SCI who have participated in NervGen clinical trials and meet specific eligibility criteria. We received a request from a physician for expanded access to NVG-291 for a subject who participated in the chronic cohort of the CONNECT SCI Study. After we submitted an expanded access protocol for NVG-291 to the FDA, the FDA informed us that the study could proceed. |
| ● | We held our Annual general meeting on May 6, 2025. All resolutions submitted for approval were passed by shareholders including the election of directors, appointment of auditors, and certain amendments to our existing stock option plan including an increase in the number of shares reserved for issuance. |
| ● | On June 2, 2025, we announced positive topline results from the CONNECT SCI Study evaluating our lead drug candidate, NVG-291, as a potential treatment for spinal cord injury. NVG-291 met its primary endpoint, demonstrating significant improvements in electrophysiological connectivity, along with strong, consistent trends across functional assessments. |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 6 |
| ● | On June 18, 2025, we announced the appointment of Randall Kaye, MD, to the role of Chief Medical Advisor. Dr. Kaye, a current member of NervGen’s Board of Directors and Chair of the Science Committee since 2020, brings over 30 years of highly relevant and extensive experience in central nervous system (“CNS”) therapeutic development, regulatory strategy, and medical affairs to the NervGen team. |
| ● | On July 1, 2025, we announced that Daniel Mikol, MD, Ph.D., had resigned from his position as Chief Medical Officer to pursue new opportunities. It was announced that Randall Kaye, MD, who had recently been appointed Chief Medical Advisor, would increase the scope of his role as the company initiates a search for Dr. Mikol’s replacement. |
| ● | In July 2025, we announced the appointment of Adam Rogers, MD as the Chair of the Company’s Board and Interim CEO, replacing Glenn Ives as Chair of the Board and Mike Kelly as President and CEO. Dr. Rogers is a biotech executive and representative of NervGen’s largest shareholder, PFP Bioscience Holdings (“PFP”) through his role as a Principal and Managing Member of PFP. |
| ● | On August 21, 2025, we reported positive preclinical results from two U.S. Department of Defense sponsored studies, where NVG-291-R demonstrated significant functional recovery in models of traumatic hearing loss and peripheral nerve injury. |
| ● | On November 19, 2025, we completed a non-brokered private placement of 4,785,674 units of the Company at a price of US$2.10 per Unit for aggregate gross proceeds of US$10,049,915. Each Unit consisted of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). The Warrants are valid for 36 months and each Warrant is exercisable into one Common Share at an exercise price of US$2.65. |
| ● | On November 24, 2025, we announced expanded clinical findings from the CONNECT SCI Study. Participants receiving NVG-291 demonstrated functional improvements that were durable and continued to increase four weeks after the end of treatment (measured at Week 16 using the GRASSP Test). Improvements following the conclusion of the study period were measured by blinded, institutional review board (IRB) approved qualitative exit interviews. NVG-291 treatment also demonstrated statistically significant reductions in reticulospinal tract hyperactivity which, together with previously reported statistically significant improvements corticospinal connectivity, provide the biological basis to support NVG-291’s observed clinical efficacy. Additionally, we provided an update on recently completed and upcoming interactions with the FDA regarding our clinical development plans and potential regulatory pathways to support approval. |
| ● | On December 12, 2025, we announced that the Company intends to amend 5,075,000 common share purchase warrants (the “2022 Warrants”) that were issued pursuant to a private placement of units that closed on July 13, 2022. The proposed amendment solely changes the denomination of the exercise price of the 2022 Warrants from US$1.75 to the Canadian equivalent of C$2.44 to align with the Company’s functional currency and simplify the accounting treatment thereof. All other terms and conditions of the 2022 Warrants remain unchanged. The amendments to the 2022 Warrants were implemented effective December 15, 2025. |
| ● | On December 15, 2025, we announced that we filed the Base Shelf on SEDAR+. |
| ● | On December 17, 2025, we announced that we filed a registration statement on Form F-10 with the SEC, including the Base Shelf, in accordance with the Multijurisdictional Disclosure System established between Canada and the United States, which the SEC declared effective on January 7, 2026 (the “Registration Statement”). |
| ● | On January 8, 2026, we announced that the Company’s Common Shares had been approved for listing on Nasdaq and began trading on the exchange under the symbol “NGEN.” |
| ● | On February 9, 2026, we announced the appointment of Adam Rogers, MD, as President and Chief Executive Officer (“CEO”). Adam Rogers was previously serving as the Company’s interim CEO and remains the Chairman of the Company’s Board of Directors. |
| ● | On February 12, 2026, we announced the retirement of Bill Adams, Chief Financial Officer, effective March 15, 2026. On February 13, 2026, we announced Adam Rogers will serve as the Company’s interim Chief Financial Officer and the Company’s Principal Financial and Accounting Officer, beginning on March 15, 2026. |
| ● | On March 12, 2026, we announced that we have voluntarily delisted our Common Shares from the TSXV effective March 16, 2026. Concurrently we terminated our ATM Program effective March 12, 2026. |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 7 |
SELECTED FINANCIAL INFORMATION1
| | 2025 | | 2024 | | 2023 |
| | $ | | $ | | $ |
Research and development expenses |
| 13,907,206 |
| 15,811,020 |
| 8,046,313 |
General and administrative expenses |
| 11,172,046 |
| 9,365,129 |
| 9,730,397 |
Net loss |
| (44,117,305) |
| (24,250,049) |
| (22,382,120) |
Basic and diluted loss per share |
| (0.61) |
| (0.36) |
| (0.38) |
| | 2025 | | 2024 | | 2023 |
| | $ | | $ | | $ |
Total assets |
| 23,209,641 |
| 19,486,223 |
| 13,236,021 |
Total liabilities |
| 19,732,715 |
| 16,909,616 |
| 15,245,126 |
As of the date of this MD&A, we have not earned revenue other than income from interest earned on our cash and cash equivalents. If our development efforts for our current or future product candidates are successful and result in regulatory approval or if we enter into additional license or collaboration agreements with third parties, we may generate revenue in the future from product sales, payments from such license or collaboration agreements, or any combination thereof. We cannot predict if, when or to what extent we will generate revenue as we may never succeed in obtaining regulatory approval for any of our product candidates.
The increase in net loss for the twelve months ended December 31, 2025, compared to the same period in the prior year is primarily driven by a greater loss on non-cash fair value movement of the warrant derivative related to U.S dollar denominated warrants that were issued as part of the July 2022 non-brokered private placement and the November 2025 non-brokered private placement. Within general and administrative expense, there was an increase in legal spend, primarily related to the Company’s corporate development efforts achieved during 2025 and early 2026, including the filing of the Base Shelf, the filing of the Registration Statement and listing on Nasdaq. Within research and development expenses, expenses for clinical related activities continue to be lower period over period as a result of a decrease in the number of subjects in our CONNECT SCI Study as the chronic cohort completed in early Q2 2025. Preclinical related expenses are also lower in the current period as the Company continues to advance NVG-291 through the clinical phases of development. These decreases in research and development related spend are partially offset by an increase in chemistry, manufacturing and controls related expenses as the Company prepares for a planned phase 3 clinical trial and other regulatory requirements for NVG-291.
The increase in our total assets is mainly due to an increase in cash, which is a result of the November 2025 private placement and funds received as a result of option and warrant exercises. Total assets as of December 31, 2025 reflect the proceeds from closing of the US$10 million non-brokered private placement in November 2025 and proceeds from options and warrant exercises. The increase in our total liabilities as compared to December 31, 2024 is primarily attributable to the increase in fair value of the non-cash warrant derivative.
1 The Company made an adjustment to research & development expenses related to the recognition of non-cash share-based compensation expense in the year to date period ending December 31, 2024 of $85,350. Similarly, the Company made an adjustment to general & administrative expenses related to the recognition of non-cash share-based compensation expense in the period ending June 30 and September 30, 2024 of $144,735 and $14,069, respectively. The sum of these adjustments resulted in equivalent increase in the net loss for each period.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 8 |
RESULTS OF OPERATIONS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2025
Research and Development Expenses
| | Three Months | | Three Months | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| | $ | | $ | | $ | | $ |
Amortization of intangible asset |
| 13,949 |
| 13,949 |
| 55,795 |
| 55,795 |
Preclinical development |
| 77,778 |
| 969,466 |
| 726,790 |
| 2,085,692 |
Chemistry, manufacturing and controls |
| 1,463,997 |
| 399,643 |
| 3,391,560 |
| 1,571,048 |
Licensing and patent legal fees |
| 114,077 |
| 123,121 |
| 449,183 |
| 535,066 |
Clinical and regulatory |
| 808,679 |
| 1,545,807 |
| 2,924,649 |
| 5,845,332 |
Salaries and benefits |
| 900,521 |
| 943,023 |
| 4,356,192 |
| 3,702,721 |
Stock-based compensation |
| 165,337 |
| 353,647 |
| 1,569,787 |
| 1,309,644 |
Other research and development |
| 59,272 |
| 240,593 |
| 433,250 |
| 705,722 |
|
| 3,603,610 |
| 4,589,249 |
| 13,907,206 |
| 15,811,020 |
The decrease of $985,639 in research and development expenses in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, is primarily attributable to the following factors:
| ● | Preclinical development decreased by $891,688. The comparative period included higher spend related to strategic research and development planning for potential additional programs to our pipeline. These related activities and studies were substantially completed during the first half of 2025. Further, this overall decrease reflects a shift in our primary focus which is to continue to advance NVG-291 through the clinical phases of development. |
| ● | Chemistry, manufacturing and control (“CMC”) increased by $1,064,354, primarily related to the procurement and manufacturing of materials and drug product to supply the planned phase 3 clinical trial, the EAP program, and to meet other regulatory requirements. |
| ● | Clinical and regulatory costs decreased by $737,128 due to fewer participants enrolled in the CONNECT SCI Study, as the chronic cohort was completed in April 2025 partially offset by the cost of subjects enrolled in the subacute cohort of the study. This decrease was also partially offset by an increase in fees to clinical consultants who continue to support further data analysis from the chronic cohort, as well as assisting in the design of the clinical path forward for NVG-291. |
| ● | Salaries and benefits decreased by $42,502 primarily due to the realignment of our personnel resources to better support NVG‑291 at its current phase of development. |
| ● | Non-cash stock-based compensation expense decreased by $188,310 as a result of forfeitures of unvested options in connection with reductions in headcount. |
| ● | Other research and development decreased by $181,321 primarily due to a decrease in fees paid to certain consultants which is directly correlated to the realignment of resources to better support NVG‑291 at its current phase of development. |
The decrease of $1,903,814 in research and development expenses in the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily attributable to the following factors:
| ● | Preclinical development decreased by $1,358,902 as a result of an overall decrease in preclinical activities reflecting our primary focus which is to continue to advance NVG-291 through the clinical phases of development. |
| ● | CMC increased by $1,820,512, primarily related to the procurement and manufacturing of materials and drug product to supply the planned phase 3 clinical trial, the EAP program, and to meet other regulatory requirements. |
| ● | Licensing and patent legal fees decreased by $85,883 due to the timing of patent maintenance, filing costs, and licensing fees. |
| ● | Clinical and regulatory costs decreased by $2,920,683 primarily due to the Wings for Life grant milestone earned in June 2025 which is recorded as an offset to clinical costs incurred. Additionally, costs decreased due to fewer participants enrolled in the CONNECT SCI Study during the twelve months ended December 31, 2025, as the chronic cohort was completed in April 2025, and enrollment in the subacute cohort was initiated during the year. This decrease was partially offset by an increase in fees to clinical consultants who continue to support further data analysis from the chronic cohort, as well as assisting in the design of the clinical path forward for NVG-291. |
| ● | Salaries and benefits increased by $653,471 primarily due costs related to the realignment of personnel resources to better support NVG‑291 at its current phase of development. |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 9 |
| ● | Non-cash stock-based compensation expense increased by $260,143 as a result of the valuation of more recently granted options in accordance with our Stock Option Plan. |
| ● | Other research and development decreased by $272,472 primarily due to a decrease in fees paid to consultants which is directly correlated to our realignment of resources to better support NVG‑291 at its current phase of development. |
General and Administrative Expenses
| | Three Months | | Three Months | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| | $ | | $ | | $ | | $ |
Depreciation expense |
| — |
| 1,863 |
| — |
| 28,003 |
Legal, professional and finance |
| 1,196,179 |
| 148,482 |
| 2,236,274 |
| 831,755 |
Investor and public relations |
| 265,488 |
| 268,749 |
| 1,423,329 |
| 1,238,152 |
Salaries and benefits |
| 471,099 |
| 353,794 |
| 2,941,903 |
| 1,958,369 |
Stock-based compensation |
| 637,196 |
| 1,318,233 |
| 3,825,127 |
| 4,730,080 |
Other general and administrative |
| 230,711 |
| 125,270 |
| 745,413 |
| 578,770 |
|
| 2,800,673 |
| 2,216,391 |
| 11,172,046 |
| 9,365,129 |
The increase of $584,282 in general and administrative expenses in the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, are primarily attributable to the following factors:
| ● | Legal, professional, and financial services expenses increased by $1,047,697 during the three-month period, primarily due to higher fees paid to external legal counsel in connection Canadian and US corporate securities matters and to support our listing on Nasdaq. |
| ● | Employee salaries, bonuses, and benefits increased by $117,305 during the three-month period, reflecting the cost for attracting top talent to support our expanding operations. |
| ● | Non-cash stock-based compensation expense decreased by $681,037 for the three-month period, as a result of the reduction in unvested option awards outstanding following the termination of employment and services for several individuals within the general and administrative function, including the former CEO and former Chair of the board of directors. |
| ● | Other G&A increased by $105,441 primarily attributable fees incurred to support current and future corporate development efforts and financing related activities. |
The increase of $1,806,917 in general and administrative expenses in the year ended December 31, 2025, as compared to the year ended December 31, 2024, are primarily attributable to the following factors:
| ● | Legal, professional, and financial services expenses increased by $1,404,519 during the year, primarily due to higher fees paid to external legal counsel in connection Canadian and US corporate securities matters and to support our listing on Nasdaq, as well as increased audit fees during the year. |
| ● | Investor and public relations expenses increased by $185,177 during the year to support our business development initiatives and financing activities. These costs are primarily attributable to ongoing support from investor and public relations firms, particularly with announcing data for our CONNECT SCI Study. |
| ● | Employee salaries, bonuses, and benefits increased by $983,534 during the year, reflecting the cost for personnel to support our expanding operations and corporate development initiatives. |
| ● | Non-cash stock-based compensation expense decreased by $904,953 for the year, as a result of option awards being forfeited upon termination of employment and services for several individuals within the general and administrative function, including the former CEO and former Chair of the board of directors. |
| ● | Other G&A increased by $166,643 primarily attributable fees incurred to support current and future corporate development efforts and financing related activities. We also incurred increased employee travel for meetings, conferences, and seminars and increased fees to information and technology support service providers to support our information security requirements. |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 10 |
SUMMARY OF QUARTERLY FINANCIAL RESULTS
| | Dec 31 | | Sep 30 | | Jun 30 | | Mar 31 | | Dec 31 | | Sep 30 | | Jun 30 | | Mar 31 |
| | 2025 | | 2025 | | 2025 | | 2025 | | 2024 | | 2024 | | 2024 | | 2024 |
| | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ |
Research & development |
| 3,603,610 |
| 4,444,224 |
| 2,711,117 |
| 3,148,255 |
| 4,589,249 |
| 4,420,308 |
| 3,799,914 |
| 3,001,549 |
General & administrative |
| 2,800,673 |
| 1,726,463 |
| 3,757,883 |
| 2,887,027 |
| 2,216,391 |
| 2,806,173 |
| 2,345,128 |
| 1,997,437 |
Net loss |
| (26,908,856) |
| (4,156,070) |
| (9,104,187) |
| (3,948,192) |
| (8,608,651) |
| (5,295,871) |
| (7,970,671) |
| (2,374,856) |
Basic & diluted loss per share |
| (0.35) |
| (0.06) |
| (0.13) |
| (0.06) |
| (0.12) |
| (0.08) |
| (0.11) |
| (0.04) |
Total assets |
| 23,209,641 |
| 13,077,452 |
| 16,923,635 |
| 15,838,757 |
| 19,486,223 |
| 22,458,510 |
| 27,888,436 |
| 31,784,519 |
Total liabilities |
| 19,732,715 |
| 16,019,155 |
| 17,842,056 |
| 14,449,280 |
| 16,909,616 |
| 13,280,363 |
| 15,399,424 |
| 12,958,265 |
Research and development expenses fluctuate based on clinical activities for NVG-291, preclinical evaluation of NVG-300, and the receipt of grant payments. Costs had risen steadily from Q1 2024 to Q4 2024, due to ongoing Phase 1b/2a trials for NVG-291. Enrollment for the chronic cohort was completed in Q1 2025, and the last-patient-last-visit milestone was achieved in April 2025, triggering a grant milestone payment in Q2 2025. Additionally, during Q1 2025, we began enrolling the subacute cohort of the CONNECT SCI Study clinical trial. The wind-down of related clinical activities for the chronic cohort and receipt of the grant milestone were key drivers of lower expenses in Q1 and Q2 2025. During Q3 and Q4 2025, chemistry, manufacturing, and controls were elevated as we manufacture materials for our planned Phase 3 clinical trial and future toxicology studies for NVG-291.
General and administrative expenses consist of administrative activities related to expanding operations and developing staff and infrastructure. Expenses were higher for Q1 2025 and Q2 2025 primarily due to increased salaries, bonus, benefits, and non-cash stock-based compensation reflecting higher headcount during those periods. Expenses declined significantly in Q3 2025 as a result of the transition of our CEO and lower stock based compensation expense due to option awards being forfeited upon termination of employment and services for several individuals within the general and administrative function, including the former CEO and former Chair of the board of directors. The increase in expenses during Q4 was primarily related to fees paid to external legal counsel in relation to Canadian and US corporate securities matters and the cost of preparations for our Nasdaq listing.
Net loss includes non-cash unrealized gains and losses related to changes in the estimated fair value of the warrant derivative, determined using the Black-Scholes model. Fluctuations are related to changes in our share price, interest rates, and the foreign exchange rate between Canadian and the U.S. dollar. The specific warrant security underlying the liability also changed during Q4 2025. On November 19, 2025, pursuant to a non-brokered private placement, 4,785,674 units were sold at a purchase price of US$2.10 per unit for gross proceeds of $14,110,433 ( US$10,049,915). Each unit included one Common Share and one-half of one Common Share purchase warrant. Each whole warrant was exercisable into one Common Share at a price of US$2.65 per Common Share until November 19, 2028. The US dollar denominated warrants were recognized as derivative financial liability recorded at fair value through profit or loss at initial recognition and in subsequent reporting periods. On December 12, 2025, we amended the terms of the warrants issued pursuant to the July 2022 non-brokered private placement, to change the denomination of the exercise price from US$1.75 to C$2.44. The change in the denomination of the exercise price resulted in the derecognition of the warrant derivative liability and recognition of an equity classified instrument at the fair value as determined on December 12, 2025. The changes in fair value of the derivative liability have no cash flow impact. The net loss for Q4 2025 included a non-cash unrealized loss on warrant derivative of $20,244,999, compared to a gain of $1,983,455 in Q3 2025.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we have devoted our resources to evaluating and securing intellectual property rights and licenses related to the technology licensed from CWRU; conducting discovery research; manufacturing drug supplies; performing preclinical studies and clinical trials; and providing administrative support to research and development activities. These efforts have supported the clinical development of NVG-291 and discovery of NVG-300, resulting in an accumulated deficit of $146,763,518 as of December 31, 2025. With current income only consisting of interest earned on excess cash in the amount of $61,305 for the three months ended December 31, 2025, as compared with $171,110 for the three months ended December 31, 2024 and $329,724 for the year ended December 31, 2025, as compared with $812,617 for the year ended December 31, 2024, losses are expected to continue while our research and development and clinical programs are advanced.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 11 |
We do not earn any revenue from our product candidates and therefore are in the research and development stage. If our development efforts for our current or future product candidates are successful and result in regulatory approval or if we enter into additional license or collaboration agreements with third parties, we may generate revenue in the future from product sales, payments from such license or collaboration agreements, or any combination thereof. We cannot predict if, when or to what extent we will generate revenue as we may never succeed in obtaining regulatory approval for any of our product candidates. As required, we will continue to finance our operations through the issuance of equity and will pursue non-dilutive funding sources. The continuation of our research and development activities and the commercialization of our product candidates depends on our ability to successfully finance through equity financing, grant and other non-dilutive sources, and possibly revenues from strategic partners. Until our product candidates are approved and available for sale, and profitable operations are developed, the extent of our progress on our research activities and future clinical trials and the related expenses will be dependent on our ability to continue to obtain adequate financing. We have no current sources of revenues from strategic partners.
During the year ended December 31, 2025, we received $3,392,617 from the exercise of warrants and $4,480,370 from the exercise of options. We also issued and sold 949,700 Common Shares under an at-the-market equity program (the “ATM Program”) at a weighted average price of $2.92 per unit, for aggregate gross proceeds of $2,774,227 and we paid cash placement fees of $55,485 to the agents resulting in aggregate net proceeds of $2,718,742. We also incurred $665,162 in professional fees to establish and maintain the ATM Program, including $410,255 that were incurred in 2024. Additionally, we closed a non-brokered private placement of 4,785,674 units at a price of US$2.10 per unit, for aggregate gross proceeds of $14,110,433 (US$10,049,915). We incurred $144,392 in other share issue costs related to legal and listing fees in connection with the private placement.
We have forecasted that there is a material uncertainty whether our existing working capital is sufficient to operate for the ensuing 12 months. We have based this projection on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We will require additional capital to meet our announced goals (see “Company Overview” above for description of goals) and to fund our research and development plans including next phase human clinical trials until we generate revenue that reaches a level sufficient to provide self-sustaining cash flows. While we have been successful in the past in obtaining financing, there can be no assurance that we will be able to obtain adequate financing, or that such financing will be available on terms acceptable to us, to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs.
The initiation of future clinical studies to evaluate NVG-291’s effectiveness in human subjects is subject to additional funding. The CONNECT SCI Study is subject to successful enrollment of the required number of study participants. The duration and cost of clinical trials can range significantly depending on a variety of factors including rate of enrollment, the country in which trials are conducted, and the specific trial protocol.
The following table presents a summary of our cash flows for the years ended December 31, 2025, and 2024:
| | 2025 | | 2024 |
| | $ | | $ |
Net cash provided by (used in): |
| |
| |
Operating activities |
| (19,499,211) |
| (16,841,034) |
Investing activities |
| 100,926 |
| 58,874 |
Financing activities |
| 23,763,937 |
| 22,695,111 |
Effect of foreign exchange on cash and cash equivalents |
| 436,494 |
| (305,006) |
Net (decrease) increase in cash and cash equivalents |
| 4,802,146 |
| 5,607,945 |
Cash used in operating activities:
Our uses of cash for operating activities for the years ended December 31, 2025, and 2024 consisted of Phase 1b/2a clinical trial costs, salaries and wages for our employees, fees paid in connection with preclinical and clinical studies, drug manufacturing costs, and professional fees.
Cash from investing activities:
Cash generated from investing activities in the years ended December 31, 2025, relate to the sub- sublease of our office space.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 12 |
Cash from financing activities:
During the year ended December 31, 2025, funds were received from the exercise of 1,146,734 warrants for total cash proceeds of $3,392,617 and from the exercise of 2,434,000 options at varying exercise prices per Common Share for total cash proceeds of $4,480,370. We also issued and sold 949,700 Common Shares under the ATM Program at a weighted average price of $2.92 per unit, for aggregate gross proceeds of $2,774,227. We paid cash placement fees of $55,485 to the agents resulting in aggregate net proceeds of $2,718,742. We also incurred $665,162 in professional fees to establish and maintain the ATM Program, including $410,255 that were incurred in 2024. Additionally, we closed a non-brokered private placement of 4,785,674 units at a price of US$2.10 per unit, for aggregate gross proceeds of $14,110,433 (US$10,049,915). We incurred $144,392 in other share issue costs related to legal and listing fees in connection with the private placement.
During the year ended December 31, 2024, funds were received from the exercise of 887,000 stock options and 47,500 warrants at varying exercise prices per Common Share for total cash proceeds of $1,414,590, partially offset by costs related to lease payments of $100,926. We also closed a bought deal financing for aggregate gross proceeds of $23,011,788. We paid a cash commission of $1,090,152 to the underwriters and incurred approximately $540,190 in other share issue costs related to legal and listing fees.
CASH POSITION
At December 31, 2025, we had a cash and cash equivalents balance of $22,069,635 compared to $17,267,489 at December 31, 2024. The funds expended during the year ended December 31, 2025, for operating activities (including the effect of foreign exchange on cash and cash equivalents), of $19,062,717 as compared to $17,146,040 at December 31, 2024, were used to fund operating expenditures such as drug product formulation and development, salaries and benefits, clinical costs associated with the CONNECT SCI Study, and fees paid in connection with preclinical and clinical studies. Consultants were also engaged to further develop our technologies and manufacturing and quality processes were advanced. In addition, we retained expertise to provide legal services, business and corporate development services, public relations, and investor relations services to increase awareness of the Company within the industry and to potential investors.
We invest cash in excess of current operational requirements in highly rated and liquid instruments.
Working capital (a non-GAAP measure defined as current assets less current liabilities on our consolidated statements of financial position) as of December 31, 2025 was $3,067,763 as compared to $2,111,649 for the year ended December 31, 2024. Our current liabilities include $15,066,898 related to the non-cash warrant derivative. Given the nature of this liability, no funds would ever be expended by the Company, and it does not represent a liquidity risk. Our working capital requirements are dependent on our ability to raise equity capital or from the proceeds from the exercise of stock options and warrants, by obtaining business development revenue such as milestone payments from licensing agreements, by obtaining grant funding, or by obtaining credit facilities. No assurance can be given that any such additional funding or revenue will be available or that, if additional funding is available, it can be obtained on terms favorable to the Company. We can also manage our spending by delaying certain development activities; however such actions may not allow us to meet our stated corporate goals.
We do not expect to generate positive cash flow from operations for the foreseeable future due to additional expenses involved in commercializing our technologies, including expenses related to drug discovery, preclinical testing, clinical trials, chemistry, manufacturing and controls, regulatory activities and operating expenses associated with supporting these activities. It is expected that negative cash flow from operations will continue until such time, if ever, that we receive regulatory approval to commercialize any of our product candidates under development and/or royalty or milestone revenue from the licensing of any such product candidates should they exceed our expenses.
CONTRACTUAL OBLIGATIONS
We enter into research, development and license agreements in the ordinary course of business where we receive research services and rights to proprietary technologies. These contracts are typically cancellable by the Company with notice. Milestone and royalty payments or grant funding repayments that may become due under various agreements are dependent on, among other factors, clinical trials, regulatory approvals and ultimately the successful development of a new drug, the outcome and timing of which is uncertain. In addition, we incur purchase obligations in the ordinary course of business for clinical trials, drug manufacturing, nonclinical studies, stability and other related costs that can include payments over a number of months due to the nature of these activities. The amounts in the table below represent the contractual amounts under the agreements in place as of December 31, 2025, and do not represent the costs anticipated to complete specific Company objectives. We expect that these commitments will continue to increase in frequency and value as we continue to execute our business plan.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 13 |
Under the exclusive worldwide licensing agreement with CWRU to research, develop and commercialize patented technologies, we have commitments to pay various annual license fees, patent costs, milestone payments and royalties on revenues, contingent on the achievement of certain development and regulatory milestones. We cannot reasonably estimate milestone payments that are contingent upon the occurrence of future events or future royalties which may be due upon the regulatory approval of products derived from licensed technologies. Pursuant to the license agreement, all the key patents for NVG-291 are owned by CWRU.
As of December 31, 2025, we are obligated to pay the following to CWRU:
| ● | An annual minimum royalty of US$50,000 per year, adjusted by the cumulative percent change in the CPI-W. |
| ● | Project milestones payable based on the achievement of future clinical development milestones, estimated to total US$1,885,000, of which US$135,000 has been paid related to milestones achieved. There are up to US$1,750,000 remaining milestone payments as of December 31, 2025, of which US$250,000 may be payable within the next twelve months contingent on certain milestones being achieved. |
Other than as disclosed below, we did not have any contractual obligations relating to long-term debt obligations, capital (finance) lease obligations, operating lease obligations, purchase obligations or other long-term liabilities reflected on our consolidated statements of financial position as of December 31, 2025:
| | Under | | | | | |
|
| | 1 Year | | 1-3 Years | | 4-5 Years | | Total |
Anticipated Commitments | | $ | | $ | | $ | | $ |
Patent licensing costs, minimum annual royalties per license agreements |
| — |
| 184,901 |
| 184,901 |
| 369,802 |
| | | | | | | | |
Purchase obligations |
| 6,071,730 |
| — |
| — |
| 6,071,730 |
| | | | | | | | |
Lease Payments |
| 8,369 |
| — |
| — |
| 8,369 |
In addition, in June 2023, the Company was awarded a grant of up to US$3.18 million (C$4.22 million) to support the Company’s Phase 1b/2a CONNECT SCI Study in individuals with SCI. In connection with the grant, the Company has agreed to pay a percentage of the Company’s net annual sales revenue of NVG-291, or any derivative approved in SCI through the provision of an unrestricted donation to the granting entity in the amount of up to the total funds received through the agreement. Any donation that may become due under the agreement is dependent on, among other factors, the successful development and sale of a new drug, the outcome and timing of which is uncertain. As of December 31, 2025, we had achieved four of the five milestones in the grant and received US$2.56 million (C$3.40 million). The grant funding received was recorded as a reduction of the related clinical and regulatory expenses, included in research and development expenses, in the period the milestone was received.
OFF-BALANCE SHEET ARRANGEMENTS
We have no material undisclosed off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations, financial condition, revenues or expenses, liquidity, capital expenditures or capital resources that are material to investors.
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Key management personnel, consisting of the Company’s current and former executive officers (President and Chief Executive Officer, Chief Financial Officer and Chief Medical Officer) and directors, received the following compensation for the following periods:
| | Three Months | | Three Months | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| | $ | | $ | | $ | | $ |
Stock-based compensation |
| 617,512 |
| 698,757 |
| 3,594,682 |
| 4,209,044 |
Salaries and bonuses |
| 227,655 |
| 480,706 |
| 1,956,036 |
| 2,386,759 |
Consulting fees |
| 105,454 |
| — |
| 320,067 |
| — |
|
| 950,621 |
| 1,179,463 |
| 5,870,785 |
| 6,595,803 |
As of December 31, 2025, we had amounts owing or accrued to key management personnel of $332,430 as compared to $648,536 for the year ended December 31, 2024. Of this total, $274,351 pertained to accrued bonus, $13,718 to accrued vacation (both earned but unpaid and included in the table above), and $44,362 to expense reimbursement.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 14 |
MATERIAL ACCOUNTING POLICIES, BASIS OF PRESENTATION AND CRITICAL ACCOUNTING ESTIMATES
Material Accounting Policies:
Material accounting policies are described in note 3 of the audited consolidated financial statements for the year ended December 31, 2025, and available on SEDAR+ (www.sedarplus.ca) and included in our Annual Report on Form 40-F for the year ended December 31, 2025 (the “Form 40-F”) filed with the SEC.
Basis of Presentation:
The consolidated financial statements have been prepared in accordance with IFRS accounting standards applicable to a going concern using the historical cost basis. The Company is in pre-revenue stage and no revenues are expected in the foreseeable future. Our future operations are dependent on the success of our ongoing development, as well as our ability to secure additional financing as needed. We have forecasted that there is a material uncertainty whether our existing working capital is sufficient to operate for the ensuing 12 months. We have based this projection on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We will need to raise additional capital to fund our research and development plans including the next phase human clinical trials until we generate revenue that reaches a level sufficient to provide self-sustaining cash flows. While we have been successful in the past in obtaining financing, there can be no assurance that we will be able to obtain adequate financing, or that such financing will be on terms acceptable to us to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs. The consolidated financial statements do not reflect the adjustments that would be necessary should we be unable to continue as a going concern and therefore be required to realize our assets and settle our liabilities and commitments in other than the normal course of business and at amounts different from those in the consolidated financial statements. Such amounts could be material.
Critical Accounting Estimates:
Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience and current and expected economic conditions. Actual results could differ from those estimates. Significant assumptions about the future and other sources of estimation uncertainty that we have made at the consolidated statements of financial position date, that could result in a material adjustment to the carrying amounts of assets and liabilities include:
Intangible assets
We estimate the useful lives of intangible assets from the date they are available for use in the manner intended by management and periodically reviews the useful lives to reflect management’s intent about developing and commercializing the assets.
Government Assistance
Management considers the reasonableness of whether we have met the requirements of the approved government assistance and whether there is reasonable assurance that the amount will be received. Government assistance can be subject to audits so the amounts received may differ from the amounts recorded.
Warrant derivative
We estimate the fair value of the warrant derivative at initial measurement, at each exercise date and at each reporting period. This estimate requires determining the most appropriate inputs to the valuation model including the expected life, share price volatility, and dividend yield, and making assumptions about them.
Valuation of stock-based compensation and warrants
We measure the costs for stock-based compensation and warrants using market-based option valuation techniques. Assumptions are made and estimates are used in applying the valuation techniques. These include estimating the future volatility of the share price, expected dividend yield, expected risk-free interest rate, future employee turnover rates, and expected term. Such estimates and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates of stock-based compensation and warrants.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 15 |
Functional currency
We consider the determination of the functional currency of the Company a significant judgment. We have used our judgment to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and considered various factors including the currency of historical and future expenditures and the currency in which funds from financing activities are generated. A Company’s functional currency is only changed when there is a material change in the underlying transactions, events and conditions.
Going concern
Our assessment of our ability to continue as a going concern requires judgments about whether there are events or conditions that may cast significant doubt about our ability to continue as a going concern. We have determined that the use of the going concern basis of accounting is appropriate.
FINANCIAL INSTRUMENTS
(a) Fair value
Financial instruments are classified into one of the following categories: fair value through profit or loss (“FVTPL”); fair value through other comprehensive income; or amortized cost. The carrying values of our financial instruments are classified into the following categories:
| | | | December 31, 2025 | | December 31, 2024 |
Financial Instrument | | Category | | $ | | $ |
Cash and cash equivalents |
| FVTPL |
| 22,069,635 |
| 17,267,489 |
Accounts receivable |
| Amortized cost |
| 80,825 |
| 415,301 |
Net investment in lease |
| Amortized cost |
| 8,369 |
| 105,604 |
Warrant derivative |
| FVTPL |
| 15,066,898 |
| 11,862,687 |
Accounts payable and accrued liabilities |
| Amortized cost |
| 4,657,448 |
| 4,941,326 |
Our financial instruments, recorded at fair value, require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.
Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace.
Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.
Cash and cash equivalents are measured at fair value using Level 1 as the basis for measurement in the fair value. The recorded amounts for accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short-term nature. In July 2022 and November 2025, we issued Common Share purchase warrants with an exercise price denominated in a currency that differs from our functional currency, which were treated as a derivative measured at fair value with subsequent changes in fair value accounted for through the consolidated statements of loss and comprehensive loss. The warrants issued in July 2022 were subsequently amended in December 2025 to have an exercise price denominated in our functional currency resulting in a reclassification of the warrant as an equity classified instrument at the fair value determined on the date of the amendment. The November 2025 warrants remain liability classified as of December 31, 2025, and the fair value of our warrant derivative recognized on the consolidated statements of financial position is based on level 2 inputs (significant observable inputs) as these warrants have not been listed on an exchange and therefore do not trade on an active market. As of December 31, 2025, the fair value of our non-cash warrant derivative was $15,066,898, as compared to $11,862,687 for the year ended December 31, 2024. We use the Black-Scholes valuation model to estimate fair value. The expected volatility is based on our common share’s historical volatility, the risk-free interest rate is based on Bank of Canada benchmark treasury yield rates and the expected life represents the estimated length of time the warrants are expected to remain outstanding.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 16 |
(b) Financial risk management
Our risk exposures and the impact on our consolidated financial instruments are summarized below. Our Board has the overall responsibility for the oversight of these risks and reviews our policies on an ongoing basis to ensure that these risks are appropriately managed.
i. | Liquidity Risk |
Liquidity risk is the risk that we will not have the resources to meet our obligations as they fall due. We manage this risk by closely monitoring cash forecasts and managing resources to ensure that we will have sufficient liquidity to meet our obligations. All of our financial liabilities are classified as current and the majority, other than the non-cash warrant derivative, are anticipated to mature within the next ninety days. We are exposed to liquidity risk other than for the warrant derivative which is non-cash.
ii. | Credit Risk |
Credit risk is the risk of potential loss if a counterparty to a financial instrument fails to meet its contractual obligations. Our credit risk is primarily attributable to our liquid financial assets, including cash and cash equivalents, receivables, deposits, and balances receivable from the government. We limit the exposure to credit risk in our cash and cash equivalents by only holding our cash and cash equivalents with high-credit quality financial institutions in business and/or savings accounts.
iii. | Market Risk |
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and equity prices. These fluctuations may be significant.
(a) Foreign Currency Risk:
We have identified our functional currency as the Canadian dollar. Transactions are transacted in Canadian dollars, U.S. dollars and in Australian dollars. Fluctuations in the U.S. or Australian dollar exchange rate could have a significant impact on the Company’s results. Assuming all other variables remain constant, a 10% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an increase or decrease in loss and comprehensive loss for the year ended December 31, 2025, of $1,171,000, as compared to $53,000 for the year ended December 31, 2024. A 10% depreciation or appreciation of the Canadian dollar against the Australian dollar would result in an increase or decrease in loss and comprehensive loss for the year ended December 31, 2025, of $135,000, as compared to $112,000 for the year ended December 31, 2024.
In the near-term, we mitigate overall currency risk through the use of U.S. dollar denominated cash balances to pay forecasted U.S. denominated expenses when possible. In the long-term, we are exposed to net currency risk from employee costs as well as the purchase of goods and services in the United States and Australia.
Balances in U.S. dollars are as follows:
| | December 31, 2025 | | December 31, 2024 |
| | ($US) | | ($US) |
Cash |
| 9,695,348 |
| 1,088,930 |
Receivables |
| 47,275 |
| 263,447 |
Vendor deposits |
| 134,503 |
| 357,880 |
Accounts payable and accrued liabilities |
| (1,331,795) |
| (2,075,685) |
|
| 8,545,331 |
| (365,428) |
Balances in Australian dollars are as follows:
| | December 31, 2025 | | December 31, 2024 |
| | ($ AUD) | | ($ AUD) |
Cash |
| 529,628 |
| 152,806 |
Accounts receivable |
| 2,036 |
| — |
Accounts payable and accrued liabilities |
| (2,009,171) |
| (1,409,432) |
|
| (1,477,507) |
| (1,256,626) |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 17 |
(b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The warrant derivative that is discussed further in Note 15 of the December 31, 2025 consolidated financial statements is recorded at fair value using a Black-Scholes pricing model with changes in fair value recorded in the consolidated statements of loss and comprehensive loss. An input to the model is the risk-free rate which is reflective of Canadian bond yields. Therefore, we are exposed to interest rate risk through the non-cash impact it has on the consolidated statements of loss and comprehensive loss.
(c) Other Price Risk
Other price risks include the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than interest rate or currency risk). The warrant derivative that is discussed further in Note 15 of the December 31, 2025 consolidated financial statements is recorded at fair value using a Black-Scholes pricing model with changes in fair value recorded in the consolidated statements of loss and comprehensive loss. An input to the model is the market price of the Company’s shares as of the valuation date. Therefore, we are exposed to other price risk through the non-cash impact it has on the consolidated statements of loss and comprehensive loss.
(c) Managing capital
Our objectives, when managing capital, are to safeguard cash and cash equivalents as well as maintain financial liquidity and flexibility in order to preserve our ability to meet financial obligations and deploy capital to grow our businesses.
Our financial strategy is designed to maintain a flexible capital structure consistent with the objectives stated above and to respond to business growth opportunities and changes in economic conditions. In order to maintain or adjust our capital structure we may issue shares or issue debt (secured, unsecured, convertible and/or other types of available debt instruments).
On November 25, 2024, the Company filed a short form base shelf prospectus, which was subsequently amended and restated on December 15, 2025 that qualifies for distribution of up to US$150,000,000 of Common Shares, debt securities, subscription receipts, warrants and units comprised of one or more of the other securities described. The Base Shelf amends and restates our previous base shelf and was also registered with the SEC and included in the Registration Statement (also collectively the “Base Shelf”). Under our Base Shelf, we may sell securities to or through underwriters, dealers, placement agents, or other intermediaries, and also may sell securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be subject to change, at market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying prospectus supplement.
Renewing our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. Our amended Base Shelf will be effective until December 25, 2026.
On December 19, 2024, we filed a prospectus supplement that, together with the Base Shelf, qualifies the distribution of Common Shares under the ATM Program that allows the Company to issue and sell Common Shares to the public from time-to-time through an agent (the “Agent”), at our discretion and subject to regulatory requirements. All Common Shares sold under the ATM Program will be sold through the TSX Venture Exchange or any other recognized marketplace upon which the Common Shares are listed, quoted or otherwise traded in Canada, at the prevailing market price at the time of sale. On March, 12, 2026, we terminated the ATM Program concurrently with the announcement of our voluntary delisting from the TSXV. Common Shares distributed under the ATM Program were issued and sold at the prevailing market prices at the time of their sale, and prices varied among purchasers and during the period of distribution.
The ATM Program provided us with enhanced flexibility should future additional financing be required, and it was activated when and as deemed appropriate. The volume and timing of distributions under the ATM Program, are determined in our sole discretion and in accordance with the terms and conditions of an equity distribution agreement, dated December 19, 2024, between the Company and the Agent. We were not obligated to make any sales of Common Shares under the ATM Program and were limited to sell up to C$30 million in Common Shares.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 18 |
Through December 31, 2025, we issued and sold 949,700 Common Shares under the ATM Program at a weighted average price of $2.92 per Common Share, for aggregate gross proceeds of $2,774,227. We also paid cash placement fees of $55,485 to the Agent resulting in aggregate net proceeds of $2,718,742. We also incurred $665,162 in professional fees related to the establishment of the ATM Program, including $410,255 that were incurred in 2024. These costs are recorded as a decrease to Common Shares within the consolidated statements of financial position.
We currently intend to use the net proceeds raised from the ATM Program for general corporate purposes (including funding ongoing operations and/or working capital requirements), to repay indebtedness outstanding from time-to-time, to fund research and development, intellectual property development, preclinical and clinical expenses, and potential future acquisitions or other corporate purposes.
There were no changes to our capital management policy during the period. We are not subject to any externally imposed capital requirements.
USE OF PROCEEDS
November 2025 Non-brokered Private Placement
The principal business objectives that management expects to accomplish using the net proceeds from the November 2025 Non-brokered Private Placement, are advancing the Company’s NVG-291 clinical development program and for general corporate purposes, including to fund ongoing operations and/or working capital requirements, to repay indebtedness outstanding from time to time, or for other corporate purposes.
2025 ATM Program
As of the date of this report, we have raised total net proceeds of approximately $2.1 million under the ATM Program, which has been used to fund ongoing operations and working capital requirements. As disclosed in our prospectus supplement dated December 19, 2024, the principal business objectives that management expects to accomplish using the net proceeds from the ATM Program, are to fund general corporate purposes including to fund ongoing operations and/or working capital requirements, to repay indebtedness outstanding from time to time, to complete future acquisitions, to fund research and development, intellectual property development, preclinical expenses, or for other corporate purposes. We have broad discretion with respect to the actual use of the net proceeds from the ATM Program.
2024 Public Offering
The following table provides an update on the use of net proceeds raised in the 2024 bought deal financing as disclosed in our prospectus supplement dated March 25, 2024, along with actual amounts expended (in millions of Canadian dollars):
| | Estimated Amount to | | Actual Amount | | Remaining Amount |
Principal Purpose | | be Expended | | Expended | | to be Expended |
Outsourcing Phase 1b/2a clinical trial in SCI |
| 6.8 |
| 6.8 |
| — |
Research and development activities to support activities in other indications |
| 6.7 |
| 6.7 |
| — |
General and administrative costs |
| 5.1 |
| 5.1 |
| — |
General corporate purposes |
| 0.1 |
| 0.1 |
| — |
Balance December 31, 2025 |
| 18.7 |
| 18.7 |
| — |
The use of net proceeds from previous financings disclosed in our prospectus supplement dated March 25, 2024, have been substantially expended as planned.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 19 |
DISCLOSURE OF OUTSTANDING SHARE DATA
The following details our share capital structure as of the date immediately preceding the date of this MD&A:
| | Common Shares | | Warrants | | Common Share | | |
| | Issued and | | Issued and | | Purchase | | Retention |
| | Outstanding | | Outstanding | | Options | | Securities |
Balance December 31, 2024 |
| 70,333,149 |
| 10,093,750 |
| 11,777,700 |
| 590,000 |
Balance December 31, 2025 |
| 79,649,257 |
| 11,339,848 |
| 9,275,900 |
| 491,667 |
Balance March 31, 2026 |
| 80,930,871 |
| 11,043,479 |
| 9,034,291 |
| 491,667 |
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company’s certifying officers, based on their knowledge, having exercised reasonable diligence, are also responsible to ensure that these filings do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by these filings, and these consolidated financial statements together with the other financial information included in these filings. The Board approved the consolidated financial statements and MD&A and ensures that management has discharged its financial responsibilities.
RISKS AND UNCERTAINTIES
An investment in the Common Shares of NervGen involves a high degree of risk and should be considered speculative. An investment in the Common Shares should only be undertaken by those persons who can afford the total loss of their investment. Investors should carefully consider the risks and uncertainties set forth under the heading “Risk Factors” found in the AIF, as well as other information described elsewhere in this MD&A. Additional risks and uncertainties not presently known to us or that we believe to be immaterial may also adversely affect our business. If any such risks occur, our business, financial condition and results of operations could be seriously harmed, and you could lose all or part of your investment. Further, if we fail to meet the expectations of the public market in any given period, the market price of our Common Shares could decline. We operate in a highly competitive environment that involves significant risks and uncertainties, some of which are outside of our control.
SUBSEQUENT EVENTS
Subsequent to December 31, 2025, the Company:
(a) | received cash proceeds of $1,939,770 from the exercise of 985,000 stock options. |
(b) | received cash proceeds of $829,360 from the exercise of 296,369 warrants. |
(c) | entered into an employment agreement with Dr. Adam Rogers, under which he was appointed President and Chief Executive Officer of both NervGen US Inc. and NervGen Pharma Corp., with terms including a US$350,000 annual base salary, participation in incentive and benefits programs, and equity awards consisting of stock options, fully vested shares, and performance-based restricted stock units. |
(d) | announced that its Common Shares will be voluntarily delisted from the TSX-V effective March 16, 2026. Concurrently, the Company’s ATM Program was terminated on March 12, 2026. Through March 12, 2026, we issued and sold 949,945 Common Shares under the ATM Program at a weighted average price of $2.92 per Common Share, for aggregate gross proceeds of $2,775,746. We also paid cash placement fees of $55,515 to the Agent resulting in aggregate net proceeds of $2,720,230. |
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 20 |
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING
Our CEO and CFO have designed or caused to be designed under their supervision, disclosure controls and procedures which provide reasonable assurance that material information regarding the Company is accumulated and communicated to our management, including our CEO and CFO, in a timely manner.
In addition, the CEO and CFO have designed or caused to be designed under their supervision internal controls over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures and our ICFR are designed to be effective in providing reasonable, not absolute, assurance that the objectives of our control systems have been met.
The CEO and the CFO have evaluated, or caused to be evaluated under their supervision, whether or not there were changes to its ICFR during the year ended December 31, 2025 that have materially affected or are reasonably likely to materially affect our ICFR. No such changes were identified through their evaluation and concluded that as at December 31, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that material information regarding required disclosures was made known to them on a timely basis. Our CEO and CFO will certify the Company’s annual filings with the Canadian securities regulatory authorities.
OTHER INFORMATION
Additional information relating to the Company, including our most recently filed AIF, is available for viewing on our website at www.nervgen.com, and under our profile on SEDAR+ at www.sedarplus.ca, and included in our Form 40-F filed with the SEC.
NERVGEN PHARMA CORP. 2025 Q4 MD&A | 21 |
Exhibit 99.4
Consent of Independent Registered Public Accounting Firm
The Board of Directors
NervGen Pharma Corp.
We consent to the use of our report dated March 31, 2026 on the consolidated financial statements of NervGen Pharma Corp. (the “Entity”) which comprise the consolidated statements of financial position as of December 31, 2025 and 2024, the related consolidated statements of loss and comprehensive loss, shareholders’ equity and cash flows for each of the years then ended, and the related notes (collectively the “consolidated financial statements”) which is included in the Annual Report on Form 40-F of the Entity for the fiscal year ended December 31, 2025.
We also consent to the incorporation by reference of such report in the Registration Statement (No. 333-292197) on Form F-10, and in the Registration Statement (No. 333-292927) on Form S-8 of the Entity.
/s/ KPMG LLP
Chartered Professional Accountants
March 31, 2026
Vancouver, Canada
Exhibit 99.5
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Adam Rogers, certify that:
1. I have reviewed this Annual Report on Form 40-F of NervGen Pharma Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(c) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 31, 2026 | | |
| | |
/s/ Adam Rogers | | |
Name: | Adam Rogers | |
Title: | Chief Executive Officer and Interim Chief Financial Officer | |
| (principal executive officer and principal chief financial officer) | |
Exhibit 99.6
NERVGEN PHARMA CORP.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of NervGen Pharma Corp. (the “Company”) on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Adam Rogers, Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 31, 2026 | | |
| | |
/s/ Adam Rogers | | |
Name: | Adam Rogers | |
Title: | Chief Executive Officer and | |
| Interim Chief Financial Officer | |
| (principal executive officer and principal financial officer) | |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of NervGen Pharma Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.