Discussion and analysis by LIANBIO management of the financial situation and operating results. (form 10-Q)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes included in this Quarterly Report on Form 10-Q and the audited
financial statements and notes thereto as of and for the year ended December 31,
2020 and the related Management's Discussion and Analysis of Financial Condition
and Results of Operations, included in our final prospectus (the "IPO
Prospectus") dated October 31, 2021 and filed with the Securities and Exchange
Commission (the "SEC") on November 2, 2021, pursuant to Rule 424(b)(4) under the
Securities Act of 1933, as amended (the "Securities Act"). This discussion,
particularly information with respect to our future results of operations or
financial condition, business strategy, and plans and objectives of management
for future operations, includes forward-looking statements that involve risks
and uncertainties as described under the heading "Cautionary Note Regarding
Forward-Looking Statements" in this Quarterly Report on Form 10-Q. Investors
should review the disclosure under the heading "Risk Factors" in this Quarterly
Report on Form 10-Q for a discussion of important factors that could cause our
actual results to differ materially from those anticipated in these
forward-looking statements.

                                    Overview

We are a global, science-driven biopharmaceutical company dedicated to
developing and commercializing innovative medicines for patients with unmet
medical needs, with an initial focus on in-licensing assets for Greater China
and other Asian markets. We have assembled a pipeline of nine assets across five
therapeutic areas, each with its own distinct value proposition and the
potential to drive new standards of care across cardiovascular, oncology,
ophthalmology, inflammatory disease and respiratory indications.

Recent Business Highlights and Clinical Development Updates

Initial public offering

In November 2021, we completed an initial public offering ("IPO") of our
ordinary shares through the sale and issuance of 20,312,500 American Depositary
Shares ("ADSs"), at a public offering price of $16.00 per ADS. Following the
close of the IPO, on December 1, 2021, the underwriters exercised their option
to purchase an additional 593,616 ADSs at the initial public offering price of
$16.00 per ADS. We received gross proceeds of $334.5 million in connection with
the IPO and subsequent exercise of the underwriters' option and aggregate net
proceeds of $311.1 million after deducting underwriting discounts and
commissions.

Mavacamten

In November 2021, we initiated and completed enrollment and dosing in a
pharmacokinetic ("PK") study of mavacamten in healthy volunteers. We expect to
begin treating patients in the Phase 3 EXPLORER-China ("EXPLORER-CN") trial of
mavacamten in obstructive hypertrophic cardiomyopathy ("oHCM") in the first
quarter of 2022.

In November 2021, our partner Bristol-Myers Squibb ("BMS") announced that the
U.S. Food and Drug Administration ("FDA") has extended the review of the U.S.
New Drug Application ("NDA") for mavacamten for the treatment of patients with
symptomatic oHCM to April 28, 2022 to allow sufficient time to review
information pertaining to updates to BMS's proposed Risk Evaluation Mitigation
Strategy ("REMS"). We do not anticipate this review extension to impact the
timing of our planned clinical development strategy to support the registration
of mavacamten in Mainland China.

In November 2021, BMS presented data at the American Heart Association
Scientific Sessions 2021 from the Phase 2 MAVERICK study demonstrating long-term
efficacy and safety of mavacamten in patients with non-obstructive hypertrophic
cardiomyopathy.



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Infigratinib

In August 2021, we announced that we began treating patients in a Phase 2a
clinical trial of infigratinib in locally advanced or metastatic gastric cancer
or gastroesophageal junction adenocarcinoma with fibroblast growth factor
receptor-2 ("FGFR2") gene amplification and other advanced solid tumors with
FGFR genomic alterations.

TP-03

In November 2021, our partner Tarsus Pharmaceuticals, Inc. ("Tarsus") presented
data from two studies on the prevalence and impact of Demodex blepharitis ("DB")
at the American Academy of Optometry 2021 Annual Meeting. Data from the Titan
real-world prevalence study demonstrated that DB accounts for 69% of all
blepharitis cases and that current management tools for this disease are largely
ineffective. Data from the multi-center observational Atlas impact study
demonstrated that DB is associated with a significant symptomatic and
psychosocial burden, negatively affecting daily life in 80% of patients.

NBTXR3

In October 2021, our partner Nanobiotix S.A. ("Nanobiotix") presented data at
the 2021 Annual Meeting of the American Society for Radiation Oncology. The
first analysis of overall survival ("OS") and progression-free survival ("PFS")
from the ongoing Phase 1 trial of NBTXR3 in elderly and frail locally advanced
head and neck squamous cell carcinoma patients ineligible for cisplatin and
intolerant to cetuximab (Study 102) demonstrated median OS of 18.1 months and
median PFS of 10.6 months in the evaluable population (n=41) from the dose
expansion part of the study. NBTXR3 administration was feasible and
well-tolerated overall. A total of 8 Grade 3-4 NBTXR3-related adverse events
("AEs") were observed in 8 patients. Of these AEs related to NBTXR3, 5 serious
adverse events ("SAEs") were observed including dysphagia, sepsis, soft tissue
necrosis, stomatitis, and tumor hemorrhage. Of the SAEs, one death from sepsis
assessed by the investigator as possibly related to NBTXR3, radiotherapy, and
cancer was observed.

LYR-210

In October 2021, our partner Lyra Therapeutics, Inc. ("Lyra") presented new data
from the Phase 2 LANTERN clinical trial of LYR-210 in surgically naïve chronic
rhinosinusitis patients who had failed previous medical management at the 67th
Annual Meeting of the American Rhinologic Society ("ARS"). The data presented at
ARS demonstrated that 24 weeks after LYR-210 removal, 50% of treated patients
continued to experience durable symptom improvement. LYR-210 continued to show
strong safety during the 24-week follow up period with no increased incidence of
treatment-related AEs.

Omilancor

In November 2021, our partner Landos Biopharma, Inc. ("Landos") announced that
prior to initiating a pivotal Phase 3 study, the company plans to leverage the
results of the prior Phase 2 study of omilancor in mild-to-moderate ulcerative
colitis ("UC") patients to design and initiate a Phase 2b study in 2022. The
Phase 2b study is expected to provide additional data to inform the pivotal
Phase 3 study design. Accordingly, we are evaluating our clinical development
strategy within our territories.

In October 2021, Landos presented positive translational data from the Phase 2
trial of omilancor in mild-to-moderate UC at United European Gastroenterology
Week. Patients remaining on omilancor after the induction phase of the trial
maintained low Mayo scores, an assessment of disease severity in UC, and nearly
90% of patients achieved remission thresholds in stool frequency and rectal
bleeding after 36 weeks of open-label treatment.

Appointments to the Board of Directors

In October 2021, we announced the appointments of Jesse Wu and Susan Silbermann
to our Board of Directors. Mr. Wu is the former Chairman of Johnson & Johnson
China. Ms. Silbermann is the former Global President, Emerging Markets at
Pfizer.



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Management team appointments

In August 2021, we announced the appointment of Pascal Qian as the general manager of China. Mr. Qian is a member of our management team and is responsible for the development of our China business operations and infrastructure.

In October 2021, we announced the appointment of Michael Humphries, MBBS, as
Chief Scientific Advisor. Dr. Humphries is responsible for guiding our research
and development ("R&D") strategy, advancing our pipeline and leading the
assessment of new in-licensing opportunities.

Factors Affecting Our Operating Results

Impact of the COVID-19 pandemic on our operations

Beginning in December 2019, the outbreak of the COVID-19 pandemic created
business interruptions for companies globally, including us. For example, in the
biotechnology sector, companies have experienced delays in their ability to
enroll patients at clinical trial sites because of the pandemic, potentially
leading to delays in the regulatory approval process. Although we have not been
materially impacted by the COVID-19 pandemic to date, other outbreaks may occur,
or there could be further resurgences of the COVID-19 pandemic, which could
cause business disruptions in the future.

Efforts to contain the spread of the COVID-19 pandemic in the United States
(including in New Jersey, where our U.S. headquarters is located) have included
quarantines, shelter-in-place orders and various other government restrictions
in order to control the spread of this virus.

We have been carefully monitoring the COVID-19 pandemic and its potential impact
on our business. We have taken important steps to ensure the workplace safety of
our employees when working within our administrative offices, or when traveling
to our clinical trial sites. We may take further actions as may be required by
federal, state or local authorities.

To date, we have been able to continue our key business activities and advance
our clinical programs. However, in the future, it is possible that our clinical
development timelines and business plans could be adversely affected. We
maintain regular communication with our vendors and clinical sites to
appropriately plan for, and mitigate, the impact of the COVID-19 pandemic on our
operations.

See "Risk Factors" included in this Quarterly Report on Form 10-Q for a further
discussion of the potential adverse impact of COVID-19 on our business, results
of operations and financial condition.

Key components of the results of operations

Returned

To date, we have not generated any material revenue from any sources, including
from product sales, and we do not expect to generate any revenue from the sale
of products in the foreseeable future.

Research and development costs

We believe our ability to successfully develop product candidates will be a
significant factor affecting our long-term competitiveness, as well as our
future growth and development. Developing high quality product candidates
requires a significant investment of resources over a prolonged period of time,
and a core part of our strategy is to continue making sustained investment in
this area.

We expect our research and development expense to increase significantly in
connection with our ongoing activities, particularly as we advance the clinical
development of our product candidates and initiate additional clinical trials
of, and seek regulatory approval for, these and other future product candidates.
These expenses include:


• payments made under license and asset acquisition agreements with third parties;



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• personnel costs, including salaries, benefits,

share-based compensation and travel expenses for employees

          research and development functions;




     •    expense incurred in connection with the clinical development of our
          product candidates, including expenses incurred under agreements with
          CROs;




  •   costs related to compliance with regulatory requirements; and




     •    facilities, depreciation and amortization, insurance and other direct and

assigned expenses incurred as a result of research and development

Activities.

The following table presents the components of our research and development expenses for the years indicated (in thousands):


                                   Three Months          Three Months           Nine Months           Nine Months
                                       Ended                 Ended                 Ended                 Ended
                                   September 30,         September 30,         September 30,         September 30,
                                       2021                  2020                  2021                  2020
Research and development expenses:
Licensing fees                    $            -        $       114,375       $       136,915       $       114,375
Employee related expense                    1,921                   780                 5,031                 1,632
CRO costs                                   1,952                   376                 6,521                   672
Other costs                                   782                 1,384                 2,571                 1,494

Total                             $         4,655       $       116,915       $       151,038       $       118,173


The following table shows the distribution of license fees by program for the years indicated (in thousands):



                   Three Months        Three Months         Nine Months         Nine Months
                       Ended               Ended               Ended               Ended
                   September 30,       September 30,       September 30,       September 30,
                       2021                2020                2021                2020
Licensing fees:
Mavacamten        $            -      $       106,375     $            -      $       106,375
BBP-398                        -                8,000               8,500               8,000
Sisunatovir                    -                   -               14,000                  -
TP-03                          -                   -               64,415                  -
BT-11 and NX-13                -                   -               18,000                  -
NBTXR3                         -                   -               20,000                  -
LYR-210                        -                   -               12,000                  -

Total             $            -      $       114,375     $       136,915     $       114,375





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General and administrative expenses

Our general and administrative expense consists primarily of salaries and other
related costs for personnel in executive, finance and administrative functions.
General and administrative expense also includes professional fees for legal,
consulting, auditing, tax services and insurance costs.

We expect that our general and administrative expense will increase in the
future to support continued development and commercialization of our product
candidates. These increases will likely include increased costs related to
hiring additional personnel and fees to outside consultants, attorneys and
accountants, among other expenses. Additionally, we have incurred and will
continue to incur increased expenses associated with being a public company,
including costs of additional personnel, accounting, audit, legal, regulatory
and tax-related services associated with maintaining compliance with exchange
listing and SEC requirements, director and office insurance costs, and investor
and public relations costs.

Licensing arrangements

Our results of operations have been, and we expect them to continue to be,
affected by our licensing, collaboration and development agreements. We are
generally required to make upfront payments upon entry into such agreements and
milestone payments upon the achievement of certain development, regulatory and
commercial milestones for the relevant product candidate under these agreements,
as well as tiered royalties based on net sales of the license products. These
upfront payments and milestone payments upon the achievement of certain
development and regulatory milestones are recorded in research and development
expense in our consolidated financial statements and totaled $0.0 million,
$136.9 million, $114.4 million, and $114.4 million for the three and nine months
ended September 31, 2021 and 2020, respectively.

Interest (expense) income, net

Interest (expense) income, net consists of interest expense from the payment
made upon reaching the financing milestone under the exclusive license agreement
with MyoKardia ("the MyoKardia Agreement"), offset by interest income received
on our cash balances.

Other income (expense), net

Other income (expense), net consists of unrealized gains on foreign currencies
held in our China subsidiary, Shanghai LianBio Development Co., Ltd., offset by
bank fees incurred on our cash balances.

Income taxes

The provision for income taxes consists of we federal and state income taxes and income taxes in certain foreign jurisdictions in which we do business.

We recorded income tax (benefit) expense of ($0.4) million and $1.6 million for
the three and nine months ended September 30, 2021 and income tax expense of
$0.0 million and $0.0 million for the three and nine months ended September 30,
2020.

At December 31, 2020, we had net operating loss ("NOL") carryforwards for
federal income tax purposes of approximately $22.7 million, which do not expire.
We had foreign NOL carryforwards of $1.4 million, which will expire if unused in
2025.

As required by Accounting Standards Codification ("ASC") Topic 740, Income
Taxes, our management has evaluated the positive and negative evidence bearing
upon the realizability of our deferred tax assets, which are composed
principally of NOL carryforwards, intangible assets, share compensation, and
accrued expenses. Management has determined that it is more likely than not that
we will not realize the benefits of the deferred tax assets. As a result, a
valuation allowance of $43.1 million was recorded as of December 31, 2020. As of
September 30, 2021, the valuation allowance decreased by approximately
$1.2 million from December 31, 2020.



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Cayman Islands

We are incorporated in the Cayman Islands. The Cayman Islands currently levies
no taxes on profits, income, gains or appreciation earned by individuals or
corporations. In addition, our payment of dividends, if any, is not subject to
withholding tax in the Cayman Islands.

people from the Republic of China

Our subsidiaries incorporated in China are governed by the PRC Enterprise Income
Tax Law ("EIT Law"), and regulations. Under EIT Law, the standard Enterprise
Income Tax ("EIT") rate is 25.0% on taxable profits as reduced by available tax
losses. Tax losses may be carried forward to offset any taxable profits for up
to following five years.

Hong Kong

Our subsidiaries incorporated and carrying on a trade or business in Hong Kong
are generally subject to profits tax at a rate of 16.5%. Tax losses incurred may
be carried forward indefinitely to offset any taxable profits in subsequent
years. Hong Kong does not levy tax on capital gains or non-Hong Kong sourced
income. Payments of dividend and interest are not subject to withholding tax in
Hong Kong, however, certain payments (such as payment for right to use
intellectual properties) made to non-resident persons may be subject to
withholding tax.

Results of operations

Comparison of the three months ended September 30, 2021 and 2020

The following table is a summary of our consolidated operating results for the periods indicated.


                                       Three Months Ended       Three Months Ended
                                       September 30, 2021       September 30, 2020

Operating expenses (in thousands):

 Research and development             $              4,655      $           116,915
 General and administrative                          8,889                    2,129

 Total operating expenses                           13,544                  119,044

 Operating loss                                    (13,544 )               (119,044 )

 Other income (expense):
 Interest income (expense), net                         32                   (1,293 )
 Other income, net                                       3                       99

 Net loss before income taxes                      (13,509 )               (120,238 )
 Income tax (benefit)                                 (397 )                     -

 Net loss                             $            (13,112 )    $          (120,238 )


Research and development costs

Research and development expenses decreased by $112.3 million from
$116.9 million for the three months ended September 30, 2020 to $4.6 million for
the three months ended September 30, 2021. For the three months ended
September 30, 2021, research and development cost was primarily attributable to
$1.9 million in personnel-related expenses and $2.1 million in development
activities to support our clinical trials and professional fees.



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For the three months ended September 30, 2020, research and development cost was
primarily attributable to (i) $72.7 million in upfront and milestone payments
and $33.8 million of expenses related to the warrant issued in connection with
our exclusive license agreement with MyoKardia (the "MyoKardia Agreement") and
(ii) the $8.0 million upfront payment for our exclusive license agreement with
Navire (the "Navire Agreement").

General and administrative expenses

General and administrative expenses increased by $6.8 million from $2.1 million
for the three months ended September 30, 2020 to $8.9 million for the three
months ended September 30, 2021. The increase was primarily attributable to a
$3.5 million increase in payroll and personnel-related expenses (including
share-based compensation expense) for increased employee headcount and a
$2.9 million increase, primarily attributable to legal service costs, consulting
costs and accounting services.

Interest income (charges)

Interest income (expense) decreased by $1.3 million from ($1.3) million for the
three months ended September 30, 2020 to $0.0 million for the three months ended
September 30, 2021. The decrease was primarily attributable to interest expense
in 2020 related to imputed interest related to the achievement of the financing
milestone under the MyoKardia Agreement that did not exist in 2021 and
$0.6 million interest expense for the three months ended September 30, 2020
related to the conversion in June 2020 of the $15.0 million convertible
promissory notes due June 29, 2021 issued to Perceptive (the "2020 Convertible
Notes").

Other income, net

Other income (expense), net decreased by $0.1 million from $0.1 million for the
three months ended September 30, 2020 to $0.0 million for the three months ended
September 30, 2021. The decrease was primarily attributable to unrealized loss
on foreign currencies held in our China subsidiary and by bank fees incurred on
our cash balances.

Income taxes

Our income benefit was $0.4 million, resulting in an effective income tax rate
of 1.0% for the three months ended September 30, 2021 as compared to
$0.0 million, or an effective income tax rate of 0.0%, for the same period in
2020. Our income tax benefit for the three months ended September 30, 2021 was
primarily due to an increase in pretax losses.

Comparison of the completed nine months September 30, 2021 and 2020

The following table is a summary of our consolidated operating results for the periods indicated.


                                        Nine Months Ended        Nine Months Ended
                                       September 30, 2021       September 30, 2020

Operating expenses (in thousands):

  Research and development             $           151,038      $           118,173
  General and administrative                        22,496                    7,492

  Total operating expenses                         173,534                  125,665

  Operating loss                                  (173,534 )               (125,665 )

  Other income (expense):
  Interest income (expense), net                       171                  

(1,280)

  Other (expense) income, net                         (189 )                

81

  Net loss before income taxes                    (173,552 )               (126,864 )
  Income taxes                                       1,553                        2

  Net loss                             $          (175,105 )    $          (126,866 )





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Research and development costs

Research and development expenses increased by $32.9 million from $118.2 million
for the nine months ended September 30, 2020 to $151.0 million for the nine
months ended September 30, 2021. For the nine months ended September 30, 2021,
research and development cost was primarily attributable to (i) $55.0 million
upfront and development milestone payments and $9.4 million of expenses related
to warrants issued in connection with our development and license agreement with
Tarsus, (ii) a $20.0 million upfront payment pursuant to our license,
development and commercialization agreement with Nanobiotix, (iii) a
$18.0 million upfront payment pursuant to our license and collaboration
agreement with Landos, (iv) a $14.0 million upfront payment pursuant to our
co-developmentand license agreement with ReViral, (v) a $12.0 million upfront
payment pursuant to our license and collaboration agreement with Lyra, and
(vi) a $8.5 million development milestone payment pursuant to the Navire
Agreement. The remaining increase was attributable to higher personnel-related
expenses, including share-based compensation expense, as a result of increased
employee headcount, and development activities to support our clinical trials
and professional fees.

For the nine months ended September 30, 2020, research and development cost was
primarily attributable to (i) $72.7 million in upfront and milestone payments
and $33.8 million of expenses related to the warrant issued in connection with
the MyoKardia Agreement and (ii) the $8.0 million upfront payment for the Navire
Agreement.

General and administrative expenses

General and administrative expenses increased by $15.0 million from $7.5 million
for the nine months ended September 30, 2020 to $22.5 million for the nine
months ended September 30, 2021. The increase was primarily attributable to (i)
$7.7 million increase in payroll and personnel-related expenses, including
share-based compensation expense, and employee severance, as a result of changes
to employee headcount, (ii) $2.9 million increase in consulting costs, and (iii)
$2.3 million increase in legal service costs.

Interest income (charges, net)

Interest income (expense), net decreased by $1.4 million from ($1.3) million for
the nine months ended September 30, 2020 to $0.1 million for the nine months
ended September 30, 2021. The decrease was primarily attributable to interest
expense in 2020 related to the imputed interest related to the achievement of
the financing milestone under the MyoKardia Agreement that did not exist in 2021
as well as interest on the 2020 Convertible Note.

Other income (expense), net

Other income (expense), net decreased by ($0.3) million from $0.1 million for
the nine months ended September 30, 2020 to ($0.2) million for the nine months
ended September 30, 2021. The decrease was primarily attributable to unrealized
loss on foreign currencies held in our China subsidiary and by bank fees
incurred on our cash balances.

Income taxes

Our income tax expense was $1.6 million, resulting in an effective income tax
rate of 0.9% for the nine months ended September 30, 2021 as compared to income
tax expense of $0.0 million, or an effective income tax rate of 0.0%, for the
same period in 2020. Our income tax expense for the nine months ended
September 30, 2021 was primarily due to the effect of cash taxes associated with
certain income that cannot be deferred for U.S. income tax purposes.



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Liquidity and capital resources

Sources of liquidity

Since our incorporation, our operations have been substantially financed with
proceeds from sales of preferred shares as part of the Series Seed financing and
the Series A financing, as well as the issuance of the 2020 Convertible Notes.
As of September 30, 2021, we had cash and cash equivalents of $109.0 million.

On November 3, 2021, the Company completed its initial public offering ("IPO")
through an underwritten sale of 20,312,500 ADSs representing 20,312,500 ordinary
shares at a price of $16.00 per share. Following the close of the IPO, on
December 1, 2021, the underwriters exercised their option to purchase an
additional 593,616 ADSs at the initial public offering price of $16.00 per ADS.
We received gross proceeds of $334.5 million in connection with the IPO and
subsequent exercise of the underwriters' options and aggregate net proceeds of
$311.1 million after deducting underwriting discounts and commissions.

We are a holding company with no operations of our own and, as such, we may rely
on dividends and other distributions on equity paid by our Chinese subsidiaries
to fund any cash and financing requirements we may have, including the funds
necessary to pay dividends and other cash distributions to our shareholders or
holders of our ADSs or to service any debt we may incur. Deterioration in the
financial condition, earnings or cash flow of our subsidiaries for any reason,
as well as any changes in Chinese laws or regulations, could limit or impair
their ability to pay such distributions. See "Risk Factors-We may rely on
dividends and other distributions on equity paid by our Chinese subsidiaries to
fund any cash and financing requirements we may have, and any limitation on the
ability of our Chinese subsidiaries to make payments to us could have a material
and adverse effect on our ability to conduct our business."

Funding requirements

Our primary use of cash is to fund our operating expenditures, consisting of
research and development expense (including activities within our clinical and
regulatory initiatives and upfront and milestone payments) and general and
administrative expense. Our use of cash is impacted by the timing and extent of
the required payments for each of these activities.

To date, we have not generated any revenue. We do not expect to generate
material product revenue unless and until we (i) complete development of any of
our product candidates; (ii) obtain applicable regulatory approvals; and
(iii) successfully commercialize or enter into collaborative agreements for our
product candidates. We do not know with certainty when, or if, any of these
items will ultimately occur. We expect to incur continuing significant losses
for the foreseeable future and for our losses to increase as we ramp up our
clinical development programs and begin activities related to commercial launch
readiness. We may encounter unforeseen expenses, difficulties, complications,
delays and other currently unknown factors that could adversely affect our
business. Moreover, since the completion of our IPO, we have incurred and will
continue to incur additional costs associated with operating as a publicly
traded company.

We will require additional capital to develop our product candidates and fund
our operations into the foreseeable future. We anticipate that we will
eventually need to raise substantial additional capital, the requirements for
which will depend on many factors, including:



  •   the number and scope of clinical programs we decide to pursue;



• the cost, timing and results of the preparation and implementation of the regulations

          review of our product candidates;




     •    the cost and timing associated with commercializing our product
          candidates, if they receive regulatory approval;




     •    the amount of revenue, if any, received from commercial sales of our
          product candidates, should any of our product candidates receive
          regulatory approval;



• the achievement of milestones or the occurrence of other developments that

          trigger payments under any collaboration agreements we might have at such
          time;




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• the extent to which we acquire or license other product candidates and

          technologies;



• the costs of preparing, filing and pursuing patent applications,

maintain and enforce our intellectual property rights and defend

          intellectual property-related claims;



• our ability to forge and maintain collaborations on favorable terms,

          if at all;




     •    our efforts to enhance operational systems and our ability to attract,

hire and retain qualified personnel, including personnel to support the

          development of our product candidates and, ultimately, the sale of our
          products, following regulatory approval;




     •    impact of the COVID-19 pandemic on our clinical development or
          operations; and




  •   the costs associated with being a public company.


A change in the outcome of any of these or other variables with respect to the
development and regulatory approval of any of our product candidates could
significantly change the costs and timing associated with the development of
that product candidate. Furthermore, our operating plans may change in the
future, and we will continue to require additional capital to meet operational
needs and capital requirements associated with such operating plans. If we raise
additional funds by issuing equity securities, our shareholders may experience
dilution. Any future debt financing into which we enter may impose upon us
additional covenants that restrict our operations, including limitations on our
ability to incur liens or additional debt, pay dividends, repurchase our
ordinary shares, make certain investments or engage in certain merger,
consolidation or asset sale transactions. Any debt financing or additional
equity that we raise may contain terms that are not favorable to us or our
shareholders.

Adequate funding may not be available to us on acceptable terms or at all. Our
potential inability to raise capital when needed could have a negative impact on
our financial condition and our ability to pursue our additional licensing
opportunities.

Cash flow

The following table presents the main sources and uses of cash and cash equivalents for each of the periods presented (in thousands):


                                      Nine Months Ended        Nine Months Ended
                                     September 30, 2021        September 30, 2020

Net cash (used) provided by:

   Operating activities              $          (133,573 )    $            (49,273 )
   Investing activities                             (159 )                    (335 )
   Financing activities                            8,249                    14,964

Net cash used in operating activities

During the nine months ended September 30, 2021, operating activities used approximately $ 133.6 million cash flow, mainly due to our net loss of
$ 175.1 million, partially offset by the non-cash counterpart of $ 9.4 million
relating to the warrants granted to Tarsus, $ 20.0 million other receivables related to Pfizer’s in-licensing and co-development activities, $ 5.3 million
related to stock-based compensation expense and other changes related to operating assets and liabilities.

During the nine months ended September 30, 2020, operating activities used
approximately $49.3 million of cash, primarily due to our net loss of
$126.9 million, partially offset by non-cash items of $33.8 million related to
the warrant granted to MyoKardia, $33.2 million related to the MyoKardia
sellers' financing and $2.3 million related to share-based compensation expense,
as well as other changes related to operating assets and liabilities.



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Net cash used in investing activities

During the nine months ended September 30, 2021, investment activities used approximately $ 0.2 million, resulting mainly from purchases of tangible fixed assets.

During the nine months ended September 30, 2020, investment activities used approximately $ 0.3 million, resulting mainly from purchases of tangible fixed assets.

Net cash flow generated by financing activities

During the nine months ended September 30, 2021, fundraising activities provided approximately $ 8.2 million in net proceeds from our issuance of Series A preferred shares of $ 2.9 million and the exercise of stock options of
$ 5.3 million.

During the nine months ended September 30, 2020, financing activities provided
approximately $15.0 million in net proceeds, primarily resulting from the net
proceeds from the 2020 Convertible Notes.

Contractual obligations

The following table presents our contractual obligations at September 30, 2021
(in thousands):



                                                      Payments Due by Period
                                    Less than      1 to 3      3 to 5      More than
                                     1 year         years       years       5 years       Total

                                                          (in thousands)

Operating lease obligations (1) $ 331 $ – $ – $ – $ 331

(1) The obligations linked to the operating rental contract are linked to the installation rental contract for our

China sits at Shanghai expiring in March 2022 and our Princeton, New

Jersey lease expiring in October 2021. During the three months ended

September 30, 2021, we have reduced the term in our Shanghai lease, thus resulting

in a revaluation of the assets and liabilities of the prior right of use.

We also have an obligation to fund clinical trial commitments under the QED license over the remaining term of the QED license.

Off-balance sheet provisions

In the normal course of business, we do not enter into any transactions involving, or form relationships with, unconsolidated entities or financial partnerships that are established for the purpose of facilitating off-balance sheet arrangements or for other contractual purposes. narrow or limited.

Critical accounting policies and significant judgments and estimates

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States ("U.S. GAAP") requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and notes to the financial statements. Some of those
judgments can be subjective and complex, and therefore, actual results could
differ materially from those estimates are different assumptions and conditions.
For a discussion of our critical accounting estimates, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
IPO Prospectus, the notes to our audited financial statements appearing in the
IPO Prospectus and the notes to the condensed consolidated financial statements
appearing elsewhere in this Quarterly Report on Form 10-Q. There have been no
material changes to the Company's critical accounting policies and estimates
through September 30, 2021 from those discussed in the IPO Prospectus.



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Recently published accounting standards

A description of recent accounting pronouncements that may potentially impact
our financial position, results of operations or cash flows are disclosed in the
footnote to which each relates within the financial statements included in this
Quarterly Report on Form 10-Q.

Qualitative and quantitative information on market risk

We are exposed to market risk, including currency risk, credit risk and interest rate risk on cash flows.

Risk of change

Our business mainly operates in China with transactions in renminbi, and our
financial statements are presented in U.S. dollars. We do not believe that we
currently have any significant direct foreign exchange risk and have not used
any derivative financial instruments to hedge our exposure to such risk.
Although, in general, our exposure to foreign exchange risk should be limited,
the value of any investment in our ADSs will be affected by the exchange rate
between the U.S. dollar and the renminbi because a portion of the value of our
business is effectively denominated in renminbi, while the ADSs will be traded
in U.S. dollars.

Renminbi is not a freely convertible currency. The State Administration of
Foreign Exchange, under the authority of the People's Bank of China ("PBOC"),
controls the conversion of renminbi into foreign currencies. The value of
renminbi is subject to changes in the central government policies and to
international economic and political developments affect supply and demand in
the China Foreign Exchange Trading System market.

Translation of the net proceeds that we received from our initial public
offering into renminbi will also expose us to currency risk. The value of the
renminbi against the U.S. dollar and other currencies may fluctuate and is
affect by, among other things, changes in China's political and economic
conditions. To the extent that we need to convert U.S. dollars into renminbi for
our operations or if any of our arrangements with other parties are denominated
in U.S. dollars and need to be converted into renminbi, appreciation of the
renminbi against the U.S. dollar would have an adverse effect on the renminbi
amount we receive from the conversion. Conversely, if we decide to convert
renminbi to U.S. dollars for the purpose of making payments for dividends on our
ordinary shares or ADSs or for other business purposes, appreciation of the U.S.
dollar against the renminbi would have a negative effect on the U.S. dollar
amounts available to us.



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