EUPRAXIA PHARMACEUTICALS INC.

Patents and Proprietary Information

IP strategy

We strive to protect our product candidates and other proprietary technologies, processes, andknow-how through a variety of methods. Our policy is to pursue, maintain and defend patent rights in strategic areas, whether developed internally or licensed from third parties, and to protect the technology, inventions and improvements that are commercially important to the development of our business. We also rely on trade secrets and other proprietary know how that may be important to the development of our business.

As of the date of this AIF we have licensed from Auritec Pharmaceuticals, Inc. (“Auritec”) one issued patent in the United States generally covering the EP-104 technology, which is expected to expire in 2029 with patent term adjustments.

In addition to the licensed Auritec patent, we have filed our own patent applications covering the EP-104 composition, among other things, which has resulted in two issued patents in the United States (US9987233, US11219604), one granted patent in Europe (EP2976062), and granted patents in more than ten additional foreign jurisdictions. These patents covering the EP-104 composition are expected to expire in 2034, absent any patent term adjustments or extensions. We have also filed our own patent applications covering a method of manufacturing the EP-104 composition, which is pending in the United States, Europe, and more than ten foreign jurisdictions outside the United States. These patent applications, if issued, could provide additional patent protection for EP-104 until 2040, absent any patent term adjustments or extensions. In addition, we have filed an international patent application directed to various methods of use of EP-104 in the treatment of inflammation of the gastrointestinal tract, such as EoE. Patents that issue from this international patent application could provide additional patent protection for the use of EP-104 in the treatment of EoE until 2043, absent any patent term adjustments or extensions. We have also filed an international patent application covering specific EP-104 formulations that release clinically effective amount of fluticaseone over a prolonged time period. Any patents that are issued based on this patent application will provide protection until 2044, absent any patent term adjustments or extensions.

We also seek to protect our intellectual property in part by entering into confidentiality agreements with companies with whom we share proprietary and confidential information in the course of business discussions, and by having confidentiality terms in our agreements with our employees, consultants, scientific advisors, clinical investigators, and other contractors and also by requiring our employees, commercial contractors, and certain consultants and investigators, to enter into invention assignment agreements that grant us ownership of any discoveries or inventions made by them while in our employ.

In addition to patent protection, we also rely on trademark registration, trade secrets, know how, other proprietary information to develop and maintain our competitive position. We seek to protect and maintain the confidentiality of proprietary information of our business that is not amenable to, or that we do not consider appropriate for, patent protection. We take steps to protect our proprietary information, including trade secrets and unpatented know-how, by entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors. We believe that the combination of patent protection and trade secrets will inhibit entry of generics into the market. However, 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 unpatented know-how, 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. For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Related to Our Intellectual Property.

License Agreement with Auritec

Auritec is a privately held clinical-stage drug delivery company that holds patents in the field of extended-release delivery of drug products utilizing its proprietary drug delivery platform (the “Plexis Platform”). We, through our subsidiary, Eupraxia USA, are a party to an amended and restated license agreement dated effective October 9, 2018 (as further amended, the “Amended and Restated****License Agreement”) with Auritec.

Under the terms of the Amended and Restated License Agreement, Auritec has granted Eupraxia USA an exclusive license (including the right to sublicense to its affiliates and third parties) under the licensed patents owned or controlled by Auritec and for all the technical information andknow-how relating to the technology claimed in such patents or possessed by Auritec with respect to the use of the Plexis Platform for the delivery of fluticasone in all medical fields (except for (a) otolaryngology and (b) the prevention, treatment and control of all diseases, disorders and conditions of the eye and its adnexa ((a) and (b) collectively, the “Excluded Fields”)), to develop, make, have made, manufacture, use, commercialize, sell, sub-license, offer for sale, import, and have imported products for the delivery of fluticasone drug products using the Plexis Platform in all medical fields except the Excluded Fields (such field, the “Eupraxia Field” and such products, the “Products”).

Pursuant to the terms of the Amended and Restated License Agreement, in consideration for the rights and exclusive license granted to Eupraxia USA, Eupraxia USA paid the upfront payment of US$5,000,000 (the “Upfront Fee”) with the agreement currently in good standing.

In addition to the Upfront Fee, pursuant to the Amended and Restated License Agreement, Eupraxia USA may pay Auritec up to US$30,000,000 upon achievement of certain regulatory and commercial milestones related to Licensed Products under the Amended and Restated Licensing Agreement as well as a royalty of up to 4% of net sales of Licensed Products by Eupraxia USA or its affiliates, subject to certain reductions. During the year ended December 31, 2024, the Company paid $5,000,000 to Auritec upon successful completion of the Phase 2b study.

The following table summarizes the remaining milestone payment schedule:

Eupraxia USA also agreed to pay to Auritec 20% of sublicensing royalties or other consideration based on net sales of Licensed Products received by Eupraxia USA or its affiliates pursuant to a sublicensing transaction. Eupraxia USA has further agreed to pay Auritec a percentage of Non-Royalty Monetization Revenue (as defined in the Amended and Restated License Agreement), which includes payments received for a sale of Eupraxia USA or its assets or sale or sublicense of a Licensed Product, which percentage ranges from 10% to 30% depending on the development stage of the most-advanced Licensed Product, up to a maximum of US$100,000,000. The following table summarizes the Non-Royalty Monetization Revenue percentage schedule:

Either party may terminate the Amended and Restated License Agreement in the event of the other party’s bankruptcy, liquidation, or dissolution. Auritec may also terminate upon a material breach of the Amended and Restated License Agreement by Eupraxia USA that is not cured within 60 days (15 days in the case of a payment breach). Further, if Eupraxia USA directly or indirectly challenges any claim in any Auritec patent licensed under the Amended and Restated License Agreement, or assist a third party in doing so, Auritec may immediately terminate the Amended and Restated License Agreement. If Auritec directly or indirectly challenges any Eupraxia patent contemplated in the Amended and Restated License Agreement other than as reasonably required to defend Auritec patents as a basis for such challenge, or assists a third party in doing so, we may immediately terminate the Amended and Restated License Agreement.

Manufacturing Agreements

Since we do not have our own manufacturing facilities, all manufacturing activities are contracted out to Good Manufacturing Practices (“GMP”) compliant facilities. All of the contract manufacturers used to date are under master service agreements and quality agreements and are compensated with cash and not shares of the Company. We share our proprietary knowhow to complete any manufacturing campaign with external contract manufacturers; however, all intellectual property associated with our proprietary know-how is retained by us.