BrightPath Biotherapeutics Co., Ltd

Research and development of new drug candidate substances requires a long period and substantial funding from exploratory research through Phase III clinical trials, and development may be delayed or discontinued due to failure to achieve target trial results, the emergence of competing new drugs, or technological obsolescence. This creates a risk that licensing-out may not be concluded, or that existing license agreements may be terminated, resulting in stagnant royalty income. The Company focuses on seed creation and proof of concept, licensing out development from late-stage clinical trials onward to reduce financial burden, but the structure in which development progress significantly affects the success or failure of licensing-out remains unchanged.

Pharmaceutical-related laws and regulations in each country where research and development is conducted (GLP, GMP, GCP, etc.) are revised from time to time in response to technological developments and market trends, which may require changes to the existing research and development framework. If the response to such framework changes is delayed, there is a risk of delay or discontinuation of research and development, and additional unplanned funding for personnel recruitment or capital investment may be required, potentially necessitating new fundraising. The Company formulates its business plan on the premise of current laws and standards, but predicting regulatory changes is difficult, and there is no guarantee that their impact can be completely avoided.

The cancer immunotherapy field is expected to expand rapidly in the market, and numerous companies, including Western venture companies, may enter this field. If a competitor's product precedes the Company's in the same disease area, or if a competing new drug is launched, the competitiveness of the Company's development products may decline, potentially leading to stagnation or discontinuation of clinical trial subject enrollment, termination of license agreements, or stagnant royalties after market launch. The Company is advancing its own pipeline (including BP2202), but changes in the competitive landscape directly affect business strategy and operating results.

Because commercialization of the pipeline requires a long period, substantial fundraising will continue to be necessary going forward, and a shortage of funds may arise in situations requiring revision of the business plan. If fundraising cannot be conducted at the appropriate timing, there is a risk of significant concern regarding business continuity. The Company plans to address this through the use of public subsidies, entering into new partnership agreements with domestic and overseas companies, and issuing new shares, but fundraising may become difficult depending on market conditions.

As a means of raising funds for research and development expenses and business operating costs, the Company may continue to issue stock acquisition rights, new shares, and bonds with stock acquisition rights, which carries a risk of dilution of the per-share value for existing shareholders. There have been multiple capital increases, including the third-party allotment of new shares disclosed in November 2025, with proceeds continuing to be allocated to costs such as U.S. clinical trials for BP2202 (CD39 x CD3 T-cell engager). The number of potential shares is 56,500 shares (as of May 31, 2026), representing 0.04% of the total number of issued shares, but dilution may progress further with additional issuances in the future.

If serious health damage occurs to trial subjects or patients due to investigational drugs during clinical trials or marketed pharmaceutical products, the Company may bear product liability or receive claims for damages from licensee companies. Similar risks may arise if unexpected serious adverse reactions occur. The Company seeks to minimize the financial impact through means such as insurance coverage, but the impact on business performance and financial condition cannot be completely eliminated.

The Company is a small organization with 7 officers and 23 employees (as of March 31, 2026), with a high degree of dependence on specific officers and employees for its operations. If personnel loss occurs due to resignation or retirement, long-term leave, difficulty securing replacement personnel, or insufficient handover of duties, this may affect the business, operating results, and financial condition. The Company has established plans to strengthen its management organization and increase staff, but securing specialized research and development personnel is not easy.

Not all pending patent applications are certain to be granted, and if a registered patent right is invalidated, this may affect the business, operating results, and financial condition. In addition, if the Company becomes involved in a patent infringement lawsuit with a third party, resolution may require substantial time and cost. The Company works with lawyers and patent attorneys to implement risk mitigation measures, but there have been no lawsuits or claims to date.

The Company is considering the use of M&A to expand its business, and there is a risk that contingent liabilities may arise after an acquisition, or that if goodwill arises, changes in the business environment or competitive landscape may prevent the expected effects from being realized, resulting in the recognition of goodwill impairment losses. The Company plans to avoid such risks through detailed due diligence, but it is difficult to completely predict changes in the environment after an acquisition, and there is a possibility of a significant impact on financial position and operating results.

If confidential information such as research and development data, know-how, financial data, and personal information is leaked due to destruction or malfunction of communication infrastructure, system failures, or inadequate information management by officers, employees, or business partners, this may affect the business, operating results, and financial condition. The Company has established an information management framework including the development of internal rules and the conclusion of confidentiality agreements, but complete prevention is difficult, including in responding to external threats such as cyberattacks.