Contract analysis

I. EXECUTIVE SUMMARY The purpose of this memorandum is to summarize and analyze the freedom-to-operate ("FTO") opinion provided by Whitford & Cascade Insurance Brokers ("W&M"), Penterra's patent prosecution counsel, for the manufacture, use, sale, offer for sale, and importation of PPC-4187 (proposed International Nonproprietary Name ("INN"): Penteracitinib; proposed trade name: PENTECLAR) across the Licensed Territo

II. BACKGROUND A. The Compound — PPC-4187 PPC-4187 is a novel, selective Janus kinase 1 (JAK1) inhibitor being developed as an oral, once-daily tablet formulation for the treatment of moderate-to-severe atopic dermatitis in adults. The compound was discovered by Penterra's internal medicinal chemistry team and is designed to achieve high selectivity for JAK1 over JAK2, JAK3, and TYK2, thereby potentially offering an

III. METHODOLOGY W&M employed a multi-layered search methodology designed to maximize coverage and minimize the risk of overlooking relevant third-party patent rights. The methodology comprised three principal search approaches, which were applied across all twelve jurisdictions in the Licensed Territory. Keyword Searches. W&M conducted keyword searches using terms related to PPC-4187's chemical name, proposed INN (p

IV. JURISDICTION-BY-JURISDICTION FTO ANALYSIS The following sections summarize W&M's FTO findings for each of the twelve jurisdictions in the Licensed Territory. For each jurisdiction, we identify the number of third-party patent families reviewed, highlight the most noteworthy third-party patents analyzed, summarize W&M's conclusions, and provide an overall risk assessment. A. People's Republic of China (Including H

1. Novagenix Biosciences Ltd. — CN Patent No. ZL 2017 1 0892345.6 (and related family members). This patent family includes claims directed to a broad genus of JAK inhibitor compounds characterized by a substituted pyrrolo-pyrimidine core scaffold. The genus is defined by a Markush structure with multiple variable substituents. W&M conducted a detailed structural comparison of PPC-4187 against the genus definition an

2. Zenlong Pharma Co., Ltd. — CN Patent No. ZL 2019 1 0345678.2 (and related family members). This patent family includes claims directed to pharmaceutical formulations of JAK1-selective inhibitors in the form of oral solid dosage forms. The independent claims specify the use of particular excipient combinations, including hydroxypropyl methylcellulose acetate succinate (HPMCAS) as a matrix-forming polymer and specif

3. Daiho Pharmaceutical Corp. — CN Patent No. ZL 2018 1 0567890.3 (and related family members). This patent family includes claims directed to methods of treating inflammatory skin conditions, including atopic dermatitis, using a combination therapy comprising a JAK inhibitor and a topical corticosteroid administered concurrently. The independent method claims expressly require the co-administration of both a JAK inh

1. Kitagawa Chemical Industries K.K. — JP Patent No. 6,890,123 (and related family members). This patent family includes claims directed to heteroaryl JAK inhibitors defined by a substituted pyridazine core scaffold with various heterocyclic substituents. W&M conducted a detailed comparison of PPC-4187's core scaffold against the Kitagawa claims and concluded that PPC-4187 is structurally distinct. Specifically, PPC-

2. Sanwa Pharma K.K. — JP Patent No. 6,945,678 (and related family members). This patent family includes claims directed to specific crystalline forms of JAK inhibitor compounds, characterized by X-ray powder diffraction (XRPD) patterns with enumerated peak positions and relative intensities. W&M compared the XRPD data for Penterra's commercial Form A polymorph against the crystalline form claims in the Sanwa patent

1. HanVita Biopharma Inc. — KR Patent No. 10-1987654 (and related family members). This patent family includes claims directed to substituted pyrrolo-pyrimidine JAK inhibitors for the treatment of inflammatory and autoimmune diseases. The independent claims define a genus of compounds using a Markush structure centered on a pyrrolo[2,3-d]pyrimidine ring system. Upon initial review, this patent family was classified a

I. Indonesia W&M identified approximately 10 third-party patent families with potential relevance to PPC-4187 in Indonesia. Patent filings in the JAK inhibitor space in Indonesia are limited, and the majority of the identified families were counterparts of families already reviewed in other Territory jurisdictions. Upon review, no material infringement risks were identified. Overall Indonesia Risk Assessment: LOW. J.

1. Formosa BioSciences Corp. — TW Patent No. I 789,012 (and related family members). This patent family includes claims directed to oral JAK inhibitor dosage forms, specifically extended-release (modified-release) formulations designed to achieve sustained drug release over an extended period. The independent claims specify extended-release matrix tablets incorporating specific rate-controlling polymers and requiring

V. CONSOLIDATED RISK ASSESSMENT Based on the jurisdiction-by-jurisdiction analysis set forth in Section IV, the consolidated FTO risk assessment for PPC-4187 across all twelve jurisdictions in the Licensed Territory is summarized in the table below. In total, W&M reviewed approximately 340 third-party patent families across all twelve jurisdictions in the Licensed Territory. Of these, approximately 12 families were c

VI. IMPLICATIONS FOR THE LICENSE AGREEMENT The favorable FTO risk profile described in this memorandum has several important implications for the Exclusive License Agreement between Penterra and Meridian. Representations and Warranties. The low FTO risk profile supports Penterra's ability to provide customary representations and warranties regarding non-infringement in the Licensed Territory. The current draft of the

VII. LIMITATIONS AND QUALIFICATIONS The FTO assessment summarized in this memorandum is subject to the following limitations and qualifications, which should be borne in mind by all recipients:

1. Unpublished Applications. The W&M FTO opinion is based on currently issued patents and published patent applications as of the search cut-off date of August 2023. Patent applications filed within the eighteen-month priority period prior to the cut-off date may not yet have been published and therefore would not have been captured by the patent landscape search. Such unpublished applications may contain claims that

2. Database Completeness. FTO opinions are inherently limited by the quality and completeness of patent database records. While the major patent offices in the Licensed Territory (including CNIPA, JPO, KIPO, and IP Australia) maintain comprehensive and well-indexed digital databases, the patent registries in certain ASEAN jurisdictions — including Thailand, Indonesia, the Philippines, and Vietnam — may not be fully d

3. Inherent Uncertainty of Claim Construction. Claim construction and infringement analysis necessarily involve the exercise of professional judgment and prediction. The interpretation of patent claims by courts and administrative bodies can be unpredictable, and actual outcomes in litigation or opposition proceedings may differ from the assessments provided in the W&M opinion and this memorandum. This is particularl

4. Scope Limited to Patent Rights. The W&M FTO analysis, and this memorandum, address only the risk of infringement of third-party patent rights. The analysis does not cover regulatory data exclusivity, trade secret rights, unfair competition claims, or other non-patent intellectual property rights that may affect the manufacture, use, sale, or importation of PPC-4187 in the Licensed Territory. Penterra and Meridian

5. Reliance Limitations. The W&M FTO opinion was provided solely for the benefit of Penterra Pharmaceuticals Corp. and Calderwood & Harkness LLP as Penterra's legal counsel. The opinion is not addressed to Meridian, and Meridian may not rely on the W&M opinion without a separate engagement letter or reliance letter from W&M. If Meridian or its counsel (Lam, Cheung & Firth LLP) requests access to the underlying FTO op

6. Formulation and Indication Changes. The FTO assessment is specific to PPC-4187 in its current 25 mg and 50 mg film-coated tablet formulation for the treatment of moderate-to-severe atopic dermatitis in adults. Any material changes to PPC-4187's formulation (e.g., development of a new dosage form, new dosage strength, or alternative delivery mechanism), manufacturing process (e.g., adoption of a different synthetic

VIII. RECOMMENDATIONS Based on our review of the W&M FTO opinion and the analysis set forth in this memorandum, we make the following recommendations to the deal team:

1. Periodic FTO Updates. We recommend that W&M be engaged to conduct annual updates to the patent landscape search in the five largest markets within the Licensed Territory — China, Japan, South Korea, Australia, and Taiwan — for the duration of the development and commercialization period for PPC-4187. Annual updates should include searches for newly published patent applications and newly granted patents in the JAK

2. Patent Watch Services. We recommend that W&M establish watching briefs for newly published patent applications in the JAK inhibitor / atopic dermatitis space in key Territory jurisdictions. Patent watch services should be configured to provide automatic alerts when new patent applications or grants are published by the national patent offices in China, Japan, South Korea, Australia, and Taiwan that match predefine

3. Coordination with Local Counsel. We recommend that the deal team coordinate with Meridian's local counsel, including Nakamura & Takeda Law Offices in Japan, regarding jurisdiction-specific patent linkage and regulatory patent list considerations as PPC-4187 progresses toward regulatory submissions in the Licensed Territory. Japan's patent linkage system, in particular, requires careful coordination between patent

4. Joint Patent Committee Agenda. We recommend that, once the Joint Patent Committee is constituted under the Exclusive License Agreement, FTO monitoring be included as a standing agenda item at the Committee's quarterly meetings. This will ensure that both Penterra and Meridian remain apprised of developments in the patent landscape and can coordinate on any necessary responsive actions, including patent challenges,

IX. CONCLUSION Based on Calderwood & Harkness's review of the W&M FTO opinion and our independent analysis of the underlying claim charts, prosecution histories, and relevant patent landscape, we concur with W&M's overall assessment that PPC-4187 (Penteracitinib; PENTECLAR) presents a low risk of infringing third-party patent rights across all twelve jurisdictions in the Licensed Territory. W&M identified and analyze