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TABLE OF CONTENTS
AEVI GENOMIC MEDICINE, INC. AND ITS SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
CERECOR INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-235666

LOGO   LOGO

PROPOSED MERGER OF
CERECOR INC. AND AEVI GENOMIC MEDICINE, INC.

        On behalf of the boards of directors of Cerecor Inc. ("Cerecor") and Aevi Genomic Medicine, Inc. ("Aevi"), we are pleased to deliver this proxy statement/prospectus for a proposed Merger involving Cerecor and Aevi.

        Cerecor and Aevi have entered into an Agreement and Plan of Merger and Reorganization, dated as of December 5, 2019, as may be amended from time to time (the "Merger Agreement"), pursuant to which a wholly owned subsidiary of Cerecor will merge with and into Aevi, with Aevi as the surviving corporation, and as part of the same overall transaction, Aevi will then merge with and into a wholly owned subsidiary of Cerecor, with such wholly owned subsidiary of Cerecor as the surviving entity. We refer herein to the mergers contemplated by the Merger Agreement as the "Merger." The Merger will result in a combined bio-pharmaceutical company that will continue to be focused on pediatric rare and orphan diseases and operate under the name Cerecor.

        At the effective time of the Merger (the "Merger Effective Time"), each share of Aevi common stock that is outstanding immediately prior to the Merger Effective Time (other than cancelled shares or dissenting shares), will automatically be converted into the right to receive (A) the fraction of a share of Cerecor common stock equal to the exchange ratio set forth in the Merger Agreement, (B) one contingent value right (a "CVR"), which will represent the right to receive contingent payments upon the achievement of certain milestones (the "CVR Consideration") as set forth in the contingent value rights agreement (the "CVR Agreement"), the form of which is attached hereto as Annex B, and (C) cash in lieu of any fractional shares of Cerecor common stock, as described in this proxy statement/prospectus. Cerecor will acquire all outstanding shares of Aevi common stock at an aggregate purchase price of $16.1 million less an amount by which Aevi's net assets at closing are less than negative $1.3 million (such target amount will decrease by $7,142.86 each day after December 31, 2019 until completion of the Merger), but in no event will such adjustment be more than $500,000. The exchange ratio and the total number of shares of Cerecor common stock to be issued to Aevi stockholders in the Merger will be determined by dividing the aggregate purchase price by the number of shares of Aevi's common stock outstanding immediately prior to closing, and then dividing such amount by the average of the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to signing the Merger Agreement and the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to completion of the Merger. Also, at the Merger Effective Time, each outstanding option to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time, whether or not vested, will be cancelled and retired and will cease to exist, and no Merger consideration or payment will be delivered in exchange thereof, and each outstanding warrant to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time will be cashlessly exercised. Given the exercise price of the outstanding warrants, we do not anticipate that any shares of Aevi common stock will be issuable to warrant holders. Cerecor stockholders will continue to own and hold their existing shares of Cerecor common stock.

        Shares of Cerecor common stock are currently listed on the Nasdaq Capital Market under the symbol "CERC". The closing price of Cerecor common stock on December 27, 2019, the latest practicable trading day before the date of this proxy statement/prospectus, was $5.13. Shares of Aevi common stock are currently listed on the Nasdaq Capital Market under the symbol "GNMX". The closing price of Aevi common stock on December 27, 2019, the latest practicable trading day before the date of this proxy statement/prospectus, was $0.1560. We urge you to obtain current market quotations for the shares of common stock of Cerecor and Aevi.

        Stockholders of Aevi are being asked to approve the Merger Agreement. We cannot complete the Merger unless Aevi obtains stockholder approval. Aevi will hold a special meeting of its stockholders to consider and vote on a proposal to adopt and approve the Merger Agreement. Your vote is important.

        More information about Aevi, Cerecor and the proposed Merger is contained in this proxy statement/prospectus. Aevi and Cerecor urge you to read the accompanying proxy statement/prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER "RISK FACTORS" BEGINNING ON PAGE 27. You can also obtain additional information about Cerecor and Aevi from documents that each has filed with the Securities and Exchange Commission (the "SEC") at www.sec.gov.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

        The accompanying proxy statement/prospectus is dated December 31, 2019 and is first being mailed to Aevi stockholders on or about December 31, 2019.


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LOGO

AEVI GENOMIC MEDICINE, INC.
435 Devon Park Drive, Suite 715
Wayne, Pennsylvania 19087
(610) 254-4201

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 3, 2020

To the Stockholders of Aevi Genomic Medicine, Inc.:

        NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Aevi Genomic Medicine, Inc. ("Aevi"), will be held on February 3, 2020, beginning at 10:00 a.m., local time, at the offices of Pepper Hamilton LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, Pennsylvania, for the following purposes:

        Aevi will also transact such other business as may properly come before the stockholders at the special meeting or any adjournment or postponement thereof.

        The proposals are described in more detail in the accompanying proxy statement/prospectus, which you should read carefully in its entirety before voting.

        The board of directors of Aevi has fixed the close of business on December 20, 2019 as the record date for determining stockholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of Aevi common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting. At the close of business on the record date, Aevi had 77,713,782 shares of common stock outstanding and entitled to vote.

        As described in the accompanying proxy statement/prospectus, Aevi stockholders, officers and directors, owning collectively, as of December 5, 2019, approximately 36% of the outstanding shares of Aevi common stock, are parties to voting agreements with Aevi and Cerecor whereby such stockholders agreed to vote in favor of the proposal to adopt and approve the Merger Agreement and to approve the transactions contemplated thereby and agreed not, except in limited circumstances, to sell or transfer, or engage in swap or similar transactions with respect to, shares of Aevi common stock and stock options until the termination of the Merger Agreement or the approval the Merger by Aevi's stockholders.

        The affirmative vote of a majority of the shares of Aevi common stock outstanding on the record date is required for approval of Proposal No. 1. The affirmative vote of a majority of the votes properly cast at the special meeting is required for approval of Proposal No. 2. Even if you plan to attend the special meeting in person, Aevi requests that you sign and return the enclosed proxy card


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and thus ensure that your shares will be represented at the special meeting if you are unable to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, your shares will be voted in favor of Proposal No. 1 and Proposal No. 2. If you fail to return your proxy card and you do not vote in person at the special meeting, the effect will be the same as if your shares were voted against the adoption of Proposal No. 1 and will have no effect on the vote for Proposal No. 2, and your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If you do attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

        The accompanying proxy statement/prospectus is dated December 31, 2019 and is first being mailed to Aevi stockholders on or about December 31, 2019.

        All stockholders as of the record date, or their duly appointed proxies, may attend the special meeting. If you attend, you will be asked to present valid picture identification such as a driver's license or passport. If your Aevi stock is held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and this proxy statement/prospectus is being forwarded to you by your broker or nominee. As a result, your name does not appear on the list of stockholders. If your stock is held in street name, in addition to picture identification, you should bring with you a letter or account statement showing that you were the beneficial owner of the stock on the record date, in order to be admitted to the special meeting.

        If you are a stockholder of record, please submit a proxy card or, for shares held in street name, the voting instruction form you receive from your broker or nominee, as soon as possible so your shares can be voted at the special meeting. You may submit your proxy card or voting instruction form by mail. If you are a stockholder of record, you may also vote over the Internet or by telephone. If your shares are held in street name, you will receive instructions from your broker or other nominee explaining how to vote your shares, and you may also have the choice of instructing the record holder as to the voting of your shares over the Internet or by telephone. Follow the instructions on the voting instruction form you received from your broker or nominee.

        THE AEVI BOARD OF DIRECTORS HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE TO, AND IN THE BEST INTERESTS OF, AEVI AND ITS STOCKHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. THE AEVI BOARD OF DIRECTORS RECOMMENDS THAT AEVI STOCKHOLDERS VOTE "FOR" EACH SUCH PROPOSAL.

By Order of the Aevi Board of Directors,

Michael F. Cola
President and Chief Executive Officer
Wayne, Pennsylvania
December 31, 2019


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TABLE OF CONTENTS

 
  Page  

INFORMATION ABOUT THIS PROXY STATEMENT/PROSPECTUS

    1  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND SPECIAL MEETING OF AEVI STOCKHOLDERS

   
2
 

PROSPECTUS SUMMARY

   
9
 

SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

   
18
 

MARKET PRICE INFORMATION

   
23
 

COMPARATIVE MARKET PRICE INFORMATION

   
26
 

RISK FACTORS

   
27
 

FORWARD-LOOKING STATEMENTS

   
118
 

SPECIAL MEETING OF AEVI STOCKHOLDERS

   
119
 

THE MERGER

   
123
 

THE MERGER AGREEMENT

   
154
 

AGREEMENTS RELATED TO THE MERGER

   
164
 

MATTERS BEING SUBMITTED TO A VOTE OF AEVI STOCKHOLDERS

   
167
 

AEVI BUSINESS

   
169
 

CERECOR BUSINESS

   
190
 

AEVI MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
204
 

CERECOR MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
217
 

MANAGEMENT FOLLOWING THE MERGER

   
246
 

EXECUTIVE COMPENSATION OF AEVI

   
252
 

EXECUTIVE COMPENSATION OF CERECOR

   
261
 

RELATED PARTY TRANSACTIONS OF DIRECTORS AND EXECUTIVE OFFICERS OF THE COMBINED COMPANY

   
267
 

LEGAL PROCEEDINGS

   
272
 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

   
273
 

COMPARISON OF RIGHTS OF HOLDERS OF AEVI STOCK AND CERECOR STOCK

   
286
 

PRINCIPAL STOCKHOLDERS OF AEVI

   
291
 

PRINCIPAL STOCKHOLDERS OF CERECOR

   
295
 

LEGAL MATTERS

   
304
 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

   
304
 

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  Page  

EXPERTS

    304  

PROPOSALS OF STOCKHOLDERS

   
304
 

HOUSEHOLDING OF PROXY MATERIALS

   
305
 

WHERE YOU CAN FIND MORE INFORMATION

   
305
 

Annex A—Agreement and Plan of Merger and Reorganization

   
A-1
 

Annex B—Form of Contingent Value Rights Agreement

   
B-1
 

Annex C—Opinion Letter of Wedbush Securities Inc. 

   
C-1
 

Annex D—Section 262 of the Delaware General Corporation Law

   
D-1
 

AEVI GENOMIC MEDICINE, INC. CONSOLIDATED FINANCIAL STATEMENTS

   
FS-1
 

CERECOR INC. CONSOLIDATED FINANCIAL STATEMENTS

   
FS-35
 

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INFORMATION ABOUT THIS PROXY STATEMENT/PROSPECTUS

        Except where specifically noted:

        Aevi Genomic Medicine, Inc.TM is a registered and unregistered trademark of Aevi in the United States. Other third-party logos and product/trade names are registered trademarks or trade names of their respective companies.

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QUESTIONS AND ANSWERS
ABOUT THE MERGER AND
SPECIAL MEETING OF
AEVI STOCKHOLDERS

        The following questions and answers are intended to address briefly some commonly asked questions regarding the Merger and the matters to be addressed at the special meeting. These questions and answers might not address all questions that may be important to you. To better understand these matters, and for a description of the legal terms governing the Merger, you should carefully read this entire proxy statement/prospectus, including the attached annexes. See "Where You Can Find More Information" in this proxy statement/prospectus.

Q:
Why am I receiving this proxy statement/prospectus?

A:
You are receiving this proxy statement/prospectus because you have been identified as a stockholder of Aevi as of the record date, and thus you are entitled to vote at Aevi's special meeting. This document serves as both a proxy statement of Aevi, used to solicit proxies for the special meeting, and as a prospectus of Cerecor, used to offer securities of Cerecor in exchange for securities of Aevi pursuant to the terms of the Merger Agreement. This document contains important information about the Merger and the special meeting of Aevi, and you should read it carefully.

Q:
Why are Aevi and Cerecor proposing this transaction? (see page 131)

A:
The Aevi and Cerecor boards of directors have both approved the Merger Agreement and have determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of the companies' respective stockholders. In reaching these decisions, the Aevi and Cerecor boards of directors considered the terms and conditions of the Merger Agreement and the ancillary agreements, as well as a number of other factors.

Q:
What will happen in the Merger? (see page 154)

A:
In the Merger, Merger Sub will merge with and into Aevi and, as part of the same overall transaction, Aevi will then merge with and into Second Merger Sub, with Second Merger Sub as the surviving entity and a wholly owned subsidiary of Cerecor.

Q:
What will happen to Aevi if, for any reason, the Merger does not close?

A:
If, for any reason, the Merger does not close, the Aevi board of directors may elect to, among other things, attempt to complete another strategic transaction like the Merger, attempt to sell or otherwise dispose of the various assets of Aevi or continue to operate the business of Aevi. However, Aevi would likely have little or no cash at such time and will have significant liabilities, including the CHOP Note. As a result, Aevi may have no choice but to dissolve and liquidate its assets. If Aevi decides to dissolve and liquidate its assets, Aevi would be required to pay all of its debts and contractual obligations and to set aside certain reserves for potential future claims. In such event, there would be little to no available cash left to distribute to stockholders after paying the debts and other obligations of Aevi and setting aside funds for reserves in the event of such a liquidation. If Aevi were to continue its business, it would need to identify and obtain funding in order to run its business.

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Q:
What will holders of Aevi common stock receive in exchange for their shares in the Merger? (see page 154)

A:
Pursuant to the terms of the Merger Agreement, holders of Aevi common stock will receive (A) the fraction of a share of Cerecor common stock equal to the exchange ratio set forth in the Merger Agreement and summarized below, (B) one contingent value right (a "CVR"), which will represent the right to receive contingent payments upon the achievement of certain milestones (the "CVR Consideration"), as set forth in the form of CVR Agreement included as Annex B to this proxy statement/prospectus (the "CVR Agreement"), and (C) cash in lieu of any fractional shares of Cerecor common stock, as contemplated in the Merger Agreement. Cerecor will acquire all outstanding shares of Aevi common stock at an aggregate purchase price of $16.1 million, less an amount by which Aevi's net assets at closing are less than negative $1.3 million (such target amount will decrease by $7,142.86 each day after December 31, 2019 until completion of the Merger), but in no event will such adjustment be more than $500,000. The exchange ratio and the total number of shares of Cerecor common stock to be issued to Aevi stockholders in the Merger will be determined by dividing the aggregate purchase price by the number of shares of Aevi's common stock outstanding immediately prior to closing, and then dividing such amount by the average of the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to signing the Merger Agreement and the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to completion of the Merger.

Q:
What are the CVRs?

A:
As part of the Merger consideration, Cerecor will issue one CVR to each holder of Aevi common stock. A holder of a CVR will be entitled to receive payments from Cerecor if Cerecor, or the surviving entity reaches specified milestones. The CVR Consideration payable to each holder of a share of Aevi common stock pursuant to the terms and conditions of the CVR Agreement will be an amount up to $6,500,000 ($2,000,000 upon enrollment of the first patient in a Phase II clinical trial for AEVI-002, AEVI-006 or AEVI-007 prior to the twenty-four (24) month anniversary of the date of the CVR Agreement, and $4,500,000 upon approval by the United States Food and Drug Administration (the "FDA") of a new drug application ("NDA") for AEVI-006 or AEVI-007 achieved or occurring prior to the sixty (60) month anniversary of the date of the CVR Agreement) divided by the total number of shares of Aevi common stock issued and outstanding immediately prior to the Merger Effective Time. The CVR Consideration will be paid in cash, shares of Cerecor common stock or a combination of cash and stock, at Cerecor's sole discretion. See the section entitled "Agreements Related to the Merger—Contingent Value Rights Agreement." You should also read the form of CVR Agreement included as Annex B to this proxy statement/prospectus for more information on the terms of the CVRs.

Q:
How many shares of Cerecor stock will be issued to Aevi stockholders in the Merger?

A:
Subject to the terms of the Merger Agreement, Cerecor will acquire all outstanding shares of Aevi common stock at an aggregate purchase price of $16.1 million less an amount by which Aevi's net assets at closing are less than negative $1.3 million (such target amount will decrease by $7,142.86 each day after December 31, 2019 until completion of the Merger), but in no event will such adjustment be more than $500,000. The exchange ratio and the total number of shares of Cerecor common stock to be issued to Aevi stockholders in the Merger will be determined by dividing the aggregate purchase price by the number of shares of Aevi's common stock outstanding immediately prior to closing, and then dividing such amount by the average of the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to signing the Merger Agreement and the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to completion of the Merger.

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Q:
How will the Merger consideration be allocated among the Aevi stockholders? (see page 154)

A:
In accordance with the Merger Agreement, upon the Merger Effective Time, each outstanding share of Aevi common stock will be converted solely into the right to receive (i) the fraction of a share of Cerecor common stock equal to the exchange ratio set forth in the Merger Agreement and described above, (ii) one CVR, and (iii) cash in lieu of fractional shares of Cerecor common stock.

Q:
How will the Merger affect outstanding stock options and warrants to acquire Aevi common stock? (see page 155)

A:
In connection with the Merger, each Aevi stock option outstanding and unexercised immediately prior to the closing, whether or not vested, will be cancelled and retired and will cease to exist, and no Merger consideration or payment will be delivered in exchange therefor or in respect thereof and each outstanding warrant to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time will be cashlessly exercised. Given the exercise price of the outstanding warrants, we do not anticipate that any shares of Aevi common stock will be issuable to warrant holders. There are no stock options or warrants with an exercise price lower than the anticipated per share Merger consideration.

Q:
Who will be the members of the combined company's board of directors after the Merger? (see page 246)

A:
Immediately following the Merger Effective Time, the board of directors of the combined company is expected to be made up of the existing Cerecor directors, Chair Simon Pedder, Steven J. Boyd, Peter Greenleaf, Phil Gutry, Uli Hacksell, Magnus Persson and Keith Schmidt, plus Aevi and combined company Chief Executive Officer Michael F. Cola and Aevi independent director Sol J. Barer.

Q:
Who will the officers of the combined company be after the Merger? (see page 246)

A:
Immediately following the Merger Effective Time, the combined company is expected to operate under the leadership of the existing Cerecor management team, with the addition of Michael F. Cola joining as the President and Chief Executive Officer of the combined company and Garry Neil joining as the Chief Medical Officer of the combined company.

Q:
Are Aevi stockholders entitled to appraisal rights? (see page 149)

A:
Yes. See "The Merger—Appraisal Rights" beginning on page 149.

Q:
What are the United States federal income tax consequences of the transaction? (see page 144)

A:
Aevi and Cerecor intend the Merger to qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code"), as described in "The Merger—Material United States Federal Income Tax Consequences of the

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Q:
Do persons involved in the Merger have interests that may conflict with mine as an Aevi stockholder? (see page 141)

A:
Yes. When considering the recommendations of Aevi's board of directors, you should be aware that certain Aevi directors and officers have interests in the Merger that are different from, or are in addition to, yours. The Aevi board of directors was aware of these interests and considered them, among other matters, in its decision to approve the Merger Agreement. Upon completion of the Merger, it is expected that Michael F. Cola, Aevi's President and Chief Executive Officer, and Garry Neil, Aevi's Chief Scientific Officer, will enter into employment agreements with the combined company and serve as officers of the combined company as President and Chief Executive Officer and Chief Medical Officer, respectively. In addition, Aevi's directors and officers will continue to be entitled to indemnification and liability insurance benefits from the combined company after the Merger is consummated. Additionally, Mr. Cola and Dr. Sol Barer, current Chairman of the Aevi board of directors, are both expected to serve as members of the combined company's board of directors after the Merger.

Q:
What Aevi proposals will be voted on at the special meeting in connection with the Merger? (see page 167)

A:
Proposals Nos. 1 and 2 will be voted on at the special meeting. Proposal No. 1 is to adopt and approve the Merger Agreement and the transactions contemplated thereby, including the Merger. Proposal No. 2 is to approve an adjournment, if needed, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to approve Proposal No. 1.

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Q:
How does the Aevi board of directors recommend that stockholders vote on the proposals to be voted on at the special meeting?

A:
After careful consideration, the Aevi board of directors recommends that stockholders vote "FOR" Proposal No. 1 and Proposal No. 2.

Q:
Are there any Aevi stockholders already committed to voting in favor of the proposals to be voted on at the special meeting? (see page 165)

A:
Yes. The Children's Hospital of Philadelphia Foundation, and certain Aevi directors and officers, namely Sol J. Barer, Eugene A. Bauer, Alastair Clemow, Michael F. Cola, Barbara G. Duncan, Joseph J. Grano, Jr., Garry A. Neil, and Michael H. McInaw, who collectively owned, as of December 5, 2019, approximately 36% of Aevi's outstanding common stock, have entered into a voting agreement agreeing to vote in favor of the Aevi proposals and against any alternative acquisition proposal, agreement or transaction.

Q:
Are there risks Aevi stockholders should consider in deciding whether to vote for the Merger?

A:
Yes. In evaluating the Merger, you should carefully consider the factors discussed in the section titled "Risk Factors" beginning on page 27.

Q:
If I own Aevi shares that are certificated, should I send in certificates now? (see page 122)

A:
No. You should not send in your Aevi stock certificates now. Prior to the Merger Effective Time, Aevi will appoint a bank or trust company that is reasonably acceptable to Cerecor to act as an exchange agent. Promptly after the Merger Effective Time, the exchange agent will provide stock certificate transmittal materials to the holders of Aevi common stock (whether certificated or in book entry form). The transmittal materials will contain instructions for surrendering Aevi stock certificates to the exchange agent in exchange for the Merger consideration. You bear the risk of delivery and should send your letter of transmittal by courier, by hand or by fax, with stock certificates delivered by courier or by hand, to the appropriate addresses shown on the letter of transmittal.

Q:
What do Aevi stockholders need to do now?

A:
First, carefully read this document in its entirety. Then, vote your shares of Aevi common stock by one of the following methods:

marking, signing, dating and returning your proxy card;

attending the special meeting, and submitting a properly executed proxy or ballot (to obtain directions to attend the special meeting, please call Michael Mclnaw at 610-975-4482); or

submitting your vote over the Internet or by telephone by following the instructions on the enclosed proxy card. If you choose to submit your proxy over the Internet or by telephone, your proxy must be received by 11:59 p.m. Eastern Time on February 2, 2020 in order to be counted at the special meeting.
Q:
What constitutes a quorum at the special meeting?

A:
Stockholders who hold shares representing at least one third of the votes represented by the issued and outstanding stock of Aevi, entitled to vote at the special meeting, present in person or

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Q:
If I am an Aevi stockholder, how do I vote shares of Aevi common stock that are held in street name by my bank, broker or other nominee? (see page 121)

A:
If a broker, bank or other nominee holds your shares in street name you may vote in the following ways:

By Internet or telephone. Follow the instructions you receive from the record holder to vote by Internet or telephone. If you choose to submit your proxy over the Internet or by telephone, your proxy must be received by 11:59 p.m. Eastern Time on February 2, 2020 in order to be counted at the special meeting.

By mail. You should receive instructions from the record holder explaining how to vote your shares by mail.

In person at the special meeting. Contact the bank, broker or other nominee who holds your shares to obtain a broker's proxy card and bring it with you to the special meeting. You will not be able to vote at the special meeting unless you have a proxy card from your broker, bank or other nominee.
Q:
What stockholder votes are required to approve the proposals at the special meeting? (see page 120)

A:
The affirmative vote of a majority of the shares of outstanding common stock on the record date is required for approval of Proposal No. 1, while the affirmative vote of a majority of the votes cast is required for approval of Proposal No. 2. Failures to vote and abstentions will have the same effect as a vote against Proposal No. 1. Failures to vote and abstentions with respect to Proposal No. 2 are not considered votes cast and will have no effect on the outcome of Proposal No. 2. At the close of business on the record date, Aevi had 77,713,782 shares of common stock outstanding and entitled to vote.

Q:
If I am an Aevi stockholder, can I change my vote? (see page 121)

A:
Yes. You may revoke your proxy at any time before it is voted by notifying Aevi, in writing, by returning a signed proxy with a later date (or by transmitting a subsequent vote over the Internet

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Q:
When and where will the vote take place? (see page 119)

A:
The special meeting will be held at the offices of Pepper Hamilton, LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, Pennsylvania, on February 3, 2020, starting at 10:00 a.m. local time.

Q:
Are there any conditions that must be satisfied prior to the completion of the Merger? (see page 159)

A:
Yes. There are a number of conditions that must be satisfied before the completion of the Merger, some of which are outside the parties' control. See "The Merger Agreement—Conditions to Completion of the Merger" beginning on page 159.

Q:
When do you expect the Merger to be completed?

A:
Aevi and Cerecor are working to complete the Merger as quickly as practicable and currently expect that the Merger could be completed during the first quarter of 2020. However, Aevi and Cerecor cannot predict the exact timing of the completion of the Merger because it is subject to approvals and other conditions.

Q:
Who is paying for this proxy solicitation?

A:
Aevi is soliciting proxies for the Aevi special meeting from its stockholders. Pursuant to the terms of the Merger Agreement, Cerecor is paying for the expenses in printing and filing this proxy statement/prospectus and the proxy card; and the amount of such expenses are included as Aevi liabilities in the calculation of net assets, which is the basis for a possible adjustment to the consideration to be received in the Merger as discussed elsewhere in this proxy statement/prospectus. Arrangements will also be made with banks, brokers and other nominees who are record holders of Aevi common stock for the forwarding of solicitation materials to the beneficial owners of such shares. Cerecor will reimburse the banks, brokers and other nominees for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials to beneficial owners of Aevi common stock.

Q:
Where can I find the voting results of the meeting?

A:
Aevi plans to announce the preliminary voting results at the meeting. Aevi will publish the results in a Form 8-K filed with the SEC within four business days of the meeting.

Q:
If I am an Aevi stockholder, whom do I call if I have questions about the special meeting or the Merger?

A:
Aevi stockholders may seek answers to their questions by writing or calling Aevi at:

Michael F. Cola
President and Chief Executive Officer
Aevi Genomic Medicine, Inc.
435 Devon Park Drive, Suite 715
Wayne, PA 19087
Tel: (610) 254-4201

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PROSPECTUS SUMMARY

        This summary highlights selected information contained elsewhere in this proxy statement/prospectus. Aevi and Cerecor urge you to read carefully the remainder of this proxy statement/prospectus, including the documents attached to this proxy statement/prospectus, because the information in this section does not provide all the information that might be important to you regarding the Merger and the other matters being considered at the special meeting.

The Companies

Aevi Genomic Medicine, Inc.

435 Devon Park Drive, Suite 715
Wayne, PA 19087
(610) 254-4201

        Aevi is a clinical stage biopharmaceutical company with an emphasis on identifying the drivers of disease and applying this understanding to the pursuit of differentiated novel therapies primarily for pediatric onset, life-altering diseases, including rare and orphan diseases.

Cerecor Inc.

540 Gaither Road, Suite 400
Rockville, MD 20850
(410) 522-8707

        Cerecor is a biopharmaceutical company focused on becoming a leader in the development and commercialization of treatments for orphan diseases.

Genie Merger Sub, Inc.

        Merger Sub is a wholly owned subsidiary of Cerecor and was formed solely for the purposes of carrying out the Merger.

Second Genie Merger Sub, LLC

        Second Merger Sub is a wholly owned subsidiary of Cerecor and was formed solely for the purposes of carrying out the Merger.

The Merger (see page 154)

        If the Merger is completed, Merger Sub will merge with and into Aevi and, as part of the same overall transaction, Aevi will then merge with and into Second Merger Sub, with Second Merger Sub as the surviving entity and a wholly owned subsidiary of Cerecor.

        At the Merger Effective Time, each share of Aevi common stock that is outstanding immediately prior to the Merger Effective Time (other than cancelled shares or dissenting shares) will automatically convert into the right to receive (A) the fraction of a share of Cerecor common stock equal to the exchange ratio set forth in the Merger Agreement, (B) one CVR, which will represent the right to receive CVR Consideration as set forth in the CVR Agreement, and (C) cash in lieu of fractional shares of Cerecor common stock, as contemplated in the Merger Agreement and described in this proxy statement/prospectus. Cerecor will acquire all outstanding shares of Aevi common stock at an aggregate purchase price of $16.1 million less an amount by which Aevi's net assets at closing are less than negative $1.3 million (such target amount will decrease by $7,142.86 each day after December 31, 2019 until completion of the Merger), but in no event will such adjustment be more than $500,000. The exchange ratio and the total number of shares of Cerecor common stock to be issued to Aevi

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stockholders in the Merger will be determined by dividing the aggregate purchase price by the number of shares of Aevi's common stock outstanding immediately prior to closing, and then dividing such amount by the average of the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to signing the Merger Agreement and the 20 day volume weighted average price of Cerecor common stock ending two trading days prior to completion of the Merger. The purchase price will be paid in Cerecor common stock, as discussed in "The Merger Agreement—Merger Consideration" beginning on page 154. Also, at the Merger Effective Time, each outstanding option, to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time, whether or not vested, will be cancelled and retired and will cease to exist, and no Merger consideration or payment will be delivered in exchange therefor or in respect thereof, and each outstanding warrant to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time will be cashlessly exercised in accordance with the terms of the warrant amendment. Given the exercise price of the outstanding warrants, we do not anticipate that any shares of Aevi common stock will be issuable to warrant holders. Cerecor stockholders will continue to own and hold their existing shares of Cerecor common stock.

        Each share of Cerecor common stock issued and outstanding immediately prior to the Merger Effective Time will remain issued and outstanding, and those shares will be unaffected by the Merger. Cerecor stock options and other equity awards that are outstanding immediately prior to the Merger Effective Time will also remain outstanding and be unaffected by the Merger. Please see "The Merger Agreement—Equity Other than Common Stock" beginning on page 155.

        For a more complete description of the exchange ratio, please see the section entitled "The Merger Agreement—Merger Consideration" beginning on page 154.

        The Merger will be completed as promptly as practicable after all of the conditions to completion of the Merger, including the approval of the Merger Agreement by the stockholders of Aevi, are satisfied or waived. Aevi and Cerecor are working to complete the Merger as quickly as practicable. However, Aevi and Cerecor cannot predict the exact timing of the completion of the Merger because it is subject to various conditions.

Reasons for the Merger (see pages 131 and 133)

        Following the Merger, the combined company will continue to be focused on pediatric orphan diseases and will operate under the name Cerecor Inc.

        Aevi and Cerecor believe that the combined company will have the following potential advantages:

        Each of the boards of directors of Aevi and Cerecor considered various reasons for the Merger. For example, the board of directors of Aevi considered, among other things:

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        In addition, the board of directors of Cerecor approved the Merger based on a number of factors, including the following:

Opinion of the Aevi Financial Advisor (see page 134)

        In July 2019, Aevi's board of directors engaged Wedbush to act as Aevi's exclusive financial advisor, placement agent and underwriter in connection with a financing or sale transaction. Wedbush

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was engaged to, among other things, assist Aevi in analyzing, structuring, negotiating and effecting the proposed financing or sale transaction. On December 5, 2019, Aevi's board of directors requested that Wedbush render an opinion as to whether the proposed consideration to be received by holders of Aevi common stock in the Merger was fair, from a financial point of view, to the holders of Aevi common stock. At the December 5, 2019 meeting of Aevi's board of directors, Wedbush rendered its oral opinion, subsequently confirmed by delivery of a written opinion dated December 5, 2019, to Aevi's board of directors that, as of the date of such opinion, and based upon the assumptions made, procedures followed, matters considered, and qualifications and limitations of the review set forth in its written opinion, the consideration to be received by holders of Aevi common stock in the Merger was fair, from a financial point of view, to the holders of Aevi common stock.

        The full text of Wedbush's written opinion, which sets forth the procedures followed, assumptions made, matters considered, and qualifications and limitations of the review undertaken in connection with such opinion, is attached to this proxy statement/prospectus as Annex C. Wedbush's opinion was intended solely for the benefit and use of Aevi's board of directors (in its capacity as such) in connection with its consideration of the Merger. Wedbush's opinion was not intended to be used for any other purpose without Wedbush's prior written consent in each instance, except as expressly provided for in the engagement letter between Aevi and Wedbush. Wedbush has consented to the use of Wedbush's opinion in this proxy statement/prospectus. Wedbush's opinion did not address Aevi's underlying business decision to enter into the Merger Agreement or complete the Merger or the merits of the Merger as compared to any alternative transactions that were or may be available to Aevi, and did not constitute a recommendation to Aevi's board of directors or to any holder of Aevi common stock as to how such holder should vote with respect to the Merger or otherwise.

Overview of the Merger Agreement

        Capitalized terms used in this section, but not otherwise defined will have the meaning ascribed to such term in the Merger Agreement.

Merger Consideration (see page 154)

        At the Merger Effective Time:

        Also, at the Merger Effective Time, each outstanding option to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time, whether or not vested, will be cancelled and retired and will cease to exist, and no Merger consideration or payment will be delivered in exchange therefor or in respect thereof, and each outstanding warrant to purchase Aevi common stock unexercised immediately prior to the Merger Effective Time will be cashlessly exercised. Given the exercise price of the outstanding warrants, we do not anticipate that any shares of Aevi common stock will be issuable to warrant holders.

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Conditions to Completion of the Merger (see page 159)

        To complete the Merger, Aevi stockholders must approve the Merger and adopt the Merger Agreement. In addition to such stockholder approval, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived.

No Solicitation

        The Merger Agreement contains provisions prohibiting Aevi from seeking a competing transaction, subject to specified exceptions described in the Merger Agreement. Under these "no solicitation" provisions, Aevi has agreed that neither it nor its subsidiaries, nor any of its officers, directors, employees, consultants, advisors, agents or other representatives will directly or indirectly:

Termination of the Merger Agreement (see page 162)

        Either Aevi or Cerecor can terminate the Merger Agreement under specified circumstances, which would prevent the Merger from being completed.

Termination Fee (see page 162)

        The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, Aevi might be required to pay Cerecor a termination fee of $600,000.

Voting Agreements (see page 165)

        In connection with the execution of the Merger Agreement, certain stockholders, officers and directors of Aevi entered into voting agreements with Aevi and Cerecor under which such stockholders have agreed to vote in favor of the Merger and against any alternative acquisition proposal, agreement or transaction. As of December 5, 2019, these stockholders, officers and directors collectively owned approximately 36% of the voting power of Aevi.

        Each stockholder executing a voting agreement has made representations and warranties to Aevi and Cerecor regarding his, her or its ownership and unencumbered title to the Aevi shares, such stockholder's power and authority to execute the voting agreement, and due execution and enforceability of the voting agreement. Unless otherwise waived, all of these voting agreements prohibit the sale, assignment, transfer or other disposition by the stockholder of his, her or its shares of Aevi stock, or the entry into an agreement or commitment to do any of the foregoing, except for transfers by will or by operation of law, in which case the voting agreement will bind the transferee.

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        The voting agreements will terminate upon approval of the Merger Agreement by Aevi's stockholders or termination of the Merger Agreement in accordance with its terms.

Promissory Notes (see page 165)

        In connection with the Merger Agreement, Cerecor agreed to fund certain of Aevi's expenses related to the exercise of the AZ Option and progressing the AEVI-007 program, and Aevi's operating expenses through the earlier of the termination of the Merger Agreement or the completion of the Merger. These funding obligations are evidenced by two promissory notes, one related to exercising the AZ Option and progressing the AEVI-007 program and one related to operating expenses, each in the amount of $5 million.

Management Following the Merger (see page 246)

        Effective as of the completion of the Merger, Cerecor's executive officers are expected to be:

Name
  Title
Michael Cola   President and Chief Executive Officer
Dr. Perricles Calias   Chief Scientific Officer
James A. Harrell, Jr.    Chief Commercial Officer
Joseph Miller   Chief Financial Officer
Dr. Garry Neil   Chief Medical Officer

Interests of Certain Directors, Officers and Affiliates of Aevi and Cerecor (see page 141)

        When considering the recommendations of Aevi's board of directors, Aevi stockholders should be aware that certain Aevi directors and officers have interests in the Merger that are different from, or are in addition to, theirs. The Aevi board of directors was aware of these interests and considered them, among other matters, in its decision to approve the Merger Agreement. Upon completion of the Merger, it is expected that Michael F. Cola, Aevi's President and Chief Executive Officer, and Garry Neil, Aevi's Chief Scientific Officer, will enter into employment agreements and serve as officers of the combined company as the President and Chief Executive Officer and Chief Medical Officer, respectively. The employment agreements into which Mr. Cola and Dr. Neil will enter which become effective upon completion of the Merger are discussed in greater detail in the section entitled, "Executive Compensation of Aevi—New Employment Agreements Following the Merger" beginning on page 260. Aevi's directors and officers will continue to be entitled to indemnification and liability insurance benefits from the combined company after the Merger is consummated. Mr. Cola and Dr. Sol J. Barer, current Chairman of Aevi's board of directors, are both expected to serve as members of the combined company's board of directors after the Merger. In addition, Sol J. Barer and Eugene Bauer, current members of Aevi's board of directors, each own a de minimis amount of Cerecor's common stock and options to purchase shares of Cerecor's common stock.

        As of the record date, the directors and executive officers of Aevi owned shares of Aevi common stock representing approximately 30% of the outstanding voting power of Aevi common stock, including the shares owned by the CHOP Foundation which had a designee on the board of directors as of the record date, entitled to vote at the special meeting. On December 5, 2019, certain Aevi officers and directors, and their affiliates, also entered into voting agreements in connection with the Merger. The voting agreements are discussed in greater detail in the section entitled "Agreements Related to the Merger—Voting Agreements" beginning on page 165.

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Certain United States Federal Income Tax Consequences of the Merger (see page 143)

        Aevi and Cerecor intend the Merger to qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the Code, as described in "The Merger—Material United States Federal Income Tax Consequences of the Merger to Aevi Stockholders." Assuming the Merger constitutes a reorganization, subject to the limitations and qualifications described in "The Merger—Material United States Federal Income Tax Consequences of the Merger to Aevi Stockholders," Aevi stockholders generally should not recognize gain or loss for U.S. federal income tax purposes on the receipt of shares of Cerecor common stock issued in connection with the Merger. Each Aevi stockholder that receives cash in lieu of a fractional share of Cerecor common stock will be treated for U.S. federal income tax purposes as having received such fractional share pursuant to the Merger and then as having exchanged such fractional share for cash in a redemption by Cerecor. An Aevi stockholder should generally recognize capital gain or loss on such a deemed exchange of the fractional share. The tax treatment of the receipt of the CVR is uncertain, and the alternative treatments are described in "The Merger—Material United States Federal Income Tax Consequences of the Merger to Aevi Stockholders."

        If the Merger is not a reorganization under Section 368(a) of the Code, then, subject to the limitations and qualifications described in "The Merger—Material United States Federal Income Tax Consequences of the Merger to Aevi Stockholders," each Aevi stockholder will generally recognize gain or loss, for U.S. federal income tax purposes, on the receipt of any cash in lieu of fractional shares and the shares of Cerecor common stock issued to such Aevi stockholder in connection with the Merger. The tax consequences to each Aevi stockholder will depend on that stockholder's particular circumstances. Each Aevi stockholder should consult with his, her or its tax advisor for a full understanding of the tax consequences of the Merger to that stockholder.

Risk Factors (see page 27)

        Both Aevi and Cerecor are subject to various risks associated with their businesses and their industries. In addition, the Merger, including the possibility that the Merger might not be completed, poses a number of risks to each company and its respective stockholders, including the following risks:

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        These risks and other risks are discussed in greater detail under the section entitled "Risk Factors" beginning on page 27. Aevi and Cerecor both encourage you to read and consider all of these risks carefully.

Regulatory Approvals (see page 143)

        Cerecor must comply with applicable federal and state securities laws and the rules and regulations of the Nasdaq Capital Market in connection with the issuance of shares of Cerecor common stock and the filing of this proxy statement/prospectus with the SEC. As of the date hereof, the registration statement of which this proxy statement/prospectus is a part has not been declared effective.

Anticipated Accounting Treatment (see page 144)

        The Merger will be treated by Aevi as reverse acquisition business combination, using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States. For accounting purposes, Cerecor is considered to be acquiring Aevi in the Merger.

        As of the date of this proxy statement/prospectus, Cerecor has not finalized the purchase accounting of the Merger. Cerecor preliminarily determined this transaction will be recorded as an asset purchase as opposed to a business combination. After completion of the Merger, management will revisit purchase accounting considerations of the Merger (including the conclusion of whether the transaction will be recorded as an asset purchase or a business combination) and complete an updated valuation to reflect the Merger in the combined company's financial information.

Appraisal Rights and Dissenters' Rights (see page 149)

        Under the Delaware General Corporation Law ("DGCL"), holders of Cerecor common stock are not entitled to appraisal rights in connection with the Merger.

        Under the DGCL, holders of Aevi common stock who do not vote for the adoption and approval of the Merger Agreement and to approve the Merger have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the Merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this proxy statement/prospectus. This appraisal amount could be more than, the same as, or less than the amount an Aevi stockholder would be entitled to receive under the Merger Agreement. Any holder of Aevi common stock intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to Aevi prior to the vote on the adoption and approval of the Merger Agreement and the Merger, not vote or otherwise submit a proxy in favor of adoption and approval of the Merger Agreement and to approve the Merger and not submit a letter of transmittal. Failure to follow exactly the procedures specified under Delaware law will result in the loss of appraisal rights. Because of the complexity of the Delaware law relating to appraisal rights, if you are considering exercising your appraisal rights, you are encouraged to seek the advice of your own legal counsel. A copy of Section 262 of the DGCL is also included as Annex D to this proxy statement/prospectus.

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Comparison of Stockholder Rights (see page 286)

        Both Aevi and Cerecor are incorporated under the laws of the State of Delaware and, accordingly, the rights of the stockholders of each are currently, and will continue to be, governed by the DGCL. If the Merger is completed, Aevi stockholders will become stockholders of Cerecor, and their rights will be governed by the DGCL, the bylaws of Cerecor and Cerecor's certificate of incorporation. The rights of Cerecor stockholders contained in the certificate of incorporation and bylaws of Cerecor differ from the rights of Aevi stockholders under the certificate of incorporation and bylaws of Aevi, as more fully described under the section entitled "Comparison of Rights of Holders of Aevi Stock and Cerecor Stock" beginning on page 286.

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SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL DATA

        The following tables present summary historical financial data for Aevi and Cerecor, summary unaudited pro forma condensed combined financial data for Aevi and Cerecor, and comparative historical and unaudited pro forma per share data for Aevi and Cerecor.

Selected Historical Financial Data of Aevi

        The selected financial data as of December 31, 2018 and 2017 and for the years ended December 31, 2018 and 2017 are derived from the Aevi audited financial statements prepared using accounting principles generally accepted in the United States, which are included in this proxy statement/prospectus. The selected financial data as of September 30, 2018 and 2019, are derived from Aevi's unaudited financial statements included in this proxy statement/prospectus. The financial data should be read in conjunction with "Aevi Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Aevi financial statements and related notes appearing elsewhere in this proxy statement/prospectus. The historical results are not necessarily indicative of results to be expected in any future period.

 
  Year ended
December 31,
  Nine Months
Ended
September 30,
 
(in thousands of dollars except share and per share data)
  2018   2017   2019   2018  

Statement of Operations Data:

                         

Revenues

  $       $   $  

Operating expenses

                         

Research and development expenses

    22,299     25,176     7,902     17,433  

General and administrative expenses

    8,663     9,524     4,643     6,852  

Total operating expenses

    30,962     34,700     12,545     24,285  

Operating loss

    (30,962 )   (34,700 )   (12,545 )   (24,285 )

Financial income (expense), net

    187     (14 )   19     136  

Net loss

  $ (30,775 )   (34,714 ) $ (12,526 ) $ (24,149 )

Basic and diluted loss per share

  $ (0.50 )   (0.83 ) $ (0.19 ) $ (0.40 )

Weighted average number of shares of common stock used in computing basic and diluted loss per share

    61,381,611     41,675,814     64,766,882     60,240,787  

 

 
  As of December 31,   September 30,  
 
  2018   2017   2019  

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 12,076   $ 33,729   $ 2,381  

Current assets

  $ 12,246   $ 34,622   $ 2,784  

Long-term assets

  $ 31   $ 139   $ 12  

Total assets

  $ 12,277   $ 34,761   $ 2,796  

Current liabilities

  $ 4,345   $ 4,140   $ 4,253  

Total long-term liabilities

  $       $ 2,000  

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Selected Historical Financial Data of Cerecor

        The selected financial data as of December 31, 2018 and 2017 and for the years ended December 31, 2018 and 2017 are derived from the Cerecor audited financial statements prepared using accounting principles generally accepted in the United States, which are included in this proxy statement/prospectus. The selected financial data as of September 30, 2019 and 2018, are derived from Cerecor's unaudited financial statements included in this proxy statement/prospectus. The financial data should be read in conjunction with "Cerecor Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cerecor financial statements and related notes appearing elsewhere in this proxy statement/prospectus. The historical results are not necessarily indicative of results to be expected in any future period.

 
  Year ended
December 31,
  Nine Months
Ended
September 30,
 
(in thousands of dollars except share and per share data)
  2018   2017   2019   2018  

Statement of Operations Data:

                         

Total revenues, net

    18,327     27,813     15,474     13,343  

Operating expenses:

                         

Cost of product sales

    7,478     636     3,241     5,398  

Research and development

    5,787     4,373     8,857     3,780  

Acquired in-process research and development

    18,724             18,724  

General and administrative

    10,677     7,941     7,779     7,834  

Sales and marketing

    8,523     570     8,676     5,889  

Amortization expense

    4,532     403     3,195     3,316  

Impairment of intangible assets

    1,862         1,449     1,861  

Change in fair value of contingent consideration

    58         (1,009 )   361  

Total operating expenses

    57,641     13,923     32,188     47,163  

(Loss) income from operations

    (39,314 )   13,890     (16,714 )   (33,820 )

Total other expense, net

    (773 )   (54 )   (631 )   (582 )

Income tax (benefit) expense

    (34 )   1,966     349     92  

Net (loss) income

  $ (40,053 ) $ 11,870   $ (17,694 ) $ (34,494 )

Net (loss) income attributable to common shareholders

  $ (41,710 ) $ 7,772   $ (13,239 ) $ (34,494 )

Net (loss) attributable to preferred shareholders

  $   $   $ (4,455 ) $  

Net (loss) income per share of common stock, basic and diluted

  $ (1.20 ) $ 0.42   $ (0.31 ) $ (1.05 )

Weighted-average shares of common stock, basic

    34,773,613     18,410,005     42,453,928     32,749,291  

Weighted-average shares of common stock, diluted

    34,773,613     18,754,799     42,453,928     32,749,291  

Net loss per share of preferred stock, basic and diluted

  $   $   $ (1.56 ) $  

Weighted-average shares of preferred stock, basic and diluted

            2,857,143      

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  December 31,   September 30,  
(in thousands of dollars)
  2018   2017   2019  

Balance Sheet Data

                   

Cash and cash equivalents

  $ 10,646   $ 2,472   $ 5,251  

Total current assets

  $ 21,932   $ 10,674   $ 12,589  

Total assets

  $ 70,251   $ 42,807   $ 57,194  

Total current liabilities

  $ 26,217   $ 11,089   $ 17,262  

Total liabilities

  $ 49,343   $ 14,947   $ 38,973  

Total stockholders' equity

  $ 20,908   $ 27,860   $ 18,221  

Total liabilities and stockholders' equity

  $ 70,251   $ 42,807   $ 57,194  

Selected Unaudited Pro Forma Condensed Combined Financial Data of Aevi and Cerecor (In thousands, except per share amounts)

        The following selected unaudited pro forma condensed combined financial information was prepared under the assumption that the Merger will be recorded as an asset acquisition as opposed to a business combination. For accounting purposes, Cerecor is considered to be acquiring Aevi in the Merger. Aevi and Cerecor's unaudited pro forma condensed combined balance sheet gives effect to the Merger as if it had occurred on September 30, 2019, the date of Cerecor and Aevi's most recently filed balance sheet. Aevi and Cerecor's unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2019 and for the year ended December 31, 2018 give effect to the Merger as if it had occurred on January 1, 2018.

        The selected unaudited pro forma condensed combined financial data are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations of future periods or the results that actually would have been realized had the entities been a single entity during these periods. The selected unaudited pro forma condensed combined financial data as of and for the period ended September 30, 2019 are derived from the unaudited pro forma condensed combined financial information and should be read in conjunction with that information. For more information, please see the section entitled "Unaudited Pro Forma Condensed Combined Financial Statements" in this proxy statement/prospectus.

        Pursuant to the Merger Agreement, the $16.1 million purchase price will be reduced if Aevi's net assets are less than a target net asset amount (also referred to as the "net working capital adjustment"), but in no event will such adjustment be more than $500,000. The target net asset amount is initially negative $1.3 million, which amount will decrease (meaning it will become a more negative number) by $7,142.86 for each day after December 31, 2019, until and including the date of the completion of the Merger. As of September 30, 2019 (which is the date the unaudited pro forma condensed balance sheet gives effect to the Merger as of), Aevi's net assets were not less than the target net asset amount. Accordingly, the following selected unaudited pro forma condensed combined financial information was prepared under the assumption that the net working capital adjustment would be $0. The actual net working capital adjustment will be determined at the Merger Effective Time and will likely be $500,000 because working capital has decreased since September 30, 2019 and will likely continue to do so.

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  Nine months
ended
September 30,
2019
  Year ended
December 31,
2018
 

Unaudited Pro Forma Combined Statement of Operations Data:

             

Total revenues, net

    6,210     7,162  

Operating expenses:

   
 
   
 
 

Cost of product sales

    (612 )   3,427  

Research and development

    16,759     30,428  

Acquired in-process research and development

        42,505  

General and administrative

    12,455     20,624  

Sales and marketing

    936     504  

Amortization expense

    1,259     2,224  

Impairment of intangible assets

        1,862  

Change in fair value of contingent consideration

    (1,256 )   (111 )

Total operating expenses

    29,541     101,463  

Loss from operations

    (23,331 )   (94,301 )

Total other income, net

    102     242  

Net loss before taxes

    (23,229 )   (94,059 )

Income tax expense

    309     (18 )

Net loss

  $ (23,538 ) $ (94,041 )

Net loss attributable to common shareholders

  $ (18,083 ) $ (95,698 )

Weighted-average shares of common stock, basic and diluted

    47,353     45,366  

Net loss per share of common stock, basic and diluted

  $ (0.38 ) $ (2.11 )

Net loss attributable to preferred shareholders

 
$

(5,455

)
     

Weighted-average shares of preferred stock, basic and diluted

    2,857        

Net loss per share of preferred stock, basic and diluted

  $ (1.91 )      

 

 
  As of
September 30,
2019
 

Unaudited Pro Forma Combined Balance Sheet Data:

       

Current assets:

       

Cash and cash equivalents

  $ 7,315  

Total current assets

  $ 13,241  

Total assets

  $ 42,037  

Total current liabilities

  $ 16,711  

Total liabilities

  $ 19,931  

Total stockholders' equity

  $ 22,106  

Total liabilities and stockholders' equity

  $ 42,037  

Comparative Historical and Unaudited Pro Forma Per Share Data

        The information below reflects the historical net loss and book value per share of Aevi common stock and the historical net loss and book value per share of Cerecor common stock in comparison with the unaudited pro forma net loss and book value per share after giving effect to the proposed Merger of Aevi with Cerecor on a purchase basis.

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        You should read the tables below in conjunction with the audited and unaudited consolidated financial statements of Aevi included in this proxy statement/prospectus and the audited and unaudited financial statements of Cerecor included in this proxy statement/prospectus and the related notes and the unaudited pro forma condensed financial information and notes related to such financial statements included elsewhere in this proxy statement/prospectus.


AEVI

 
  Year Ended
December 31,
2018
  Nine Months
Ended
September 30,
2019
 

Historical Per Common Share Data:

             

Basic and diluted net loss per share

  $ (0.50 ) $ (0.19 )

 

 
  December 31,
2018
  September 30,
2019
 

Book value per share

  $ 0.12   $ (0.05 )


CERECOR

 
  Year Ended
December 31,
2018
  Nine Months
Ended
September 30,
2019
 

Historical Per Common Share Data:

             

Basic and diluted net loss per share

  $ (1.20 ) $ (0.31 )

 

 
  December 31,
2018
  September 30,
2019
 

Book value per share

  $ 0.51   $ 0.41  


AEVI AND CERECOR

 
  Year Ended
December 31,
2018
  Nine Months
Ended
September 30,
2019
 

Combined Company Common Share Data:

             

Basic and diluted net loss per share

  $ (2.11 ) $ (0.38 )

 

 
  September 30,
2019
 

Book value per share

  $ 0.45  

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MARKET PRICE INFORMATION

Aevi Common Stock

        Beginning October 15, 2019, Aevi's common stock became listed on the Nasdaq Capital Market under the symbol "GNMX", and from October 21, 2016 through October 14, 2019, Aevi's common stock was listed on the Nasdaq Global Market. The following table presents, for the periods indicated, the range of high and low per share sales prices for Aevi common stock as reported on the Nasdaq Capital Market or Nasdaq Global Market, as applicable, for each of the periods set forth below.

 
  High   Low  

Year Ended December 31, 2017

             

First Quarter

  $ 6.18   $ 1.50  

Second Quarter

  $ 1.92   $ 0.98  

Third Quarter

  $ 1.47   $ 1.12  

Fourth Quarter

  $ 1.91   $ 1.01  

Year Ended December 31, 2018

             

First Quarter

  $ 2.65   $ 1.20  

Second Quarter

  $ 2.05   $ 1.08  

Third Quarter

  $ 1.40   $ 0.83  

Fourth Quarter

  $ 1.32   $ 0.59  

Year Ended December 31, 2019

             

First Quarter

  $ 1.10   $ 0.17  

Second Quarter

  $ 0.35   $ 0.15  

Third Quarter

  $ 0.33   $ 0.15  

Fourth Quarter (through December 27, 2019)

  $ 0.19   $ 0.11  

        As of December 20, 2019, the record date for the special meeting, Aevi had approximately 234 holders of record of its common stock.

Dividends

        Aevi has never paid or declared any cash dividends on its common stock. Aevi does not anticipate paying periodic cash dividends on its common stock for the foreseeable future. Notwithstanding the foregoing, any determination to pay dividends subsequent to the Merger will be at the discretion of the combined company's then-current board of directors and will depend upon a number of factors, including its results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the combined company's then-current board of directors deems relevant.

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Securities Authorized for Issuance under Equity Compensation Plans

        The following table provides information as of December 31, 2018 regarding the common stock that may be issued as stock grants or upon exercise of options, warrants and rights under all of Aevi's equity compensation plans, including individual compensation arrangements:

Plan Category
  Number of Shares to Be
Issued Upon Exercise of
Outstanding Options
and Warrants(1)
(a)
  Weighted
Average
Exercise Price of
Outstanding
Options
and Warrants
(b)
  Number of Shares
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column (a))
(c)
 

Equity compensation plans approved by security holders

    7,477,118 (2) $ 3.73     4,674,838  

Equity compensation plans not approved by security holders

    2,700,000 (3) $ 4.21      

Total

    10,177,118   $ 3.86     4,674,838  

(1)
The number of shares is subject to adjustment in the event of stock splits and other similar events.

(2)
Consists of options awarded under Aevi's Stock Incentive Plan.

(3)
Consists of:

(i)
Inducement awards granted in September 2013 outside of Aevi's Stock Incentive Plan to Mr. Cola (1,500,000 options) and Dr. Neil (900,000 options).

(ii)
An inducement award of 100,000 options granted outside of Aevi's Stock Incentive Plan to a new employee in February 2016 having an exercise price of $3.64 per share and expiring on February 16, 2026; and

(iii)
An inducement award of 200,000 options granted outside of Aevi's Stock Incentive Plan to a new employee in March 2016 having an exercise price of $4.42 per share and expiring on March 7, 2026.

Securities Issuable upon Conversion of CHOP Note

        Immediately prior to the consummation of the Merger, the CHOP Note will convert into a number of shares equal to one-third of the then outstanding shares of Aevi common stock, which Aevi anticipates will be 38,856,891 shares of Aevi common stock. The foregoing refers to shares that are not outstanding as of the date of this proxy statement/prospectus and were not outstanding as of the record date for the special meeting.


Cerecor Common Stock

        Cerecor's common stock is listed on the Nasdaq Capital Market under the symbol "CERC." The following table presents, for the periods indicated, the range of high and low per share sales prices for

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Cerecor common stock as reported on the Nasdaq Capital Market for each of the periods set forth below.

 
  High   Low  

Year Ended December 31, 2017

             

First Quarter

  $ 1.24   $ 0.66  

Second Quarter

  $ 0.89   $ 0.34  

Third Quarter

  $ 1.42   $ 0.523  

Fourth Quarter

  $ 4.25   $ 0.826  

Year Ended December 31, 2018

             

First Quarter

  $ 5.739   $ 2.18  

Second Quarter

  $ 5.0   $ 3.1  

Third Quarter

  $ 5.2   $ 3.85  

Fourth Quarter

  $ 4.85   $ 2.71  

Year Ended December 31, 2019

             

First Quarter

  $ 7.65   $ 3.08  

Second Quarter

  $ 6.47   $ 4.44  

Third Quarter

  $ 5.93   $ 2.91  

Fourth Quarter (through December 27, 2019)

  $ 6.19   $ 2.91  

        Because the market price of Cerecor common stock is subject to fluctuation and the exchange ratio in the Merger is based, in part, on the price of Cerecor common stock at signing of the Merger Agreement and completion of the Merger, the market value of the shares of Cerecor common stock that Aevi stockholders will be entitled to receive in the Merger may increase or decrease. As of December 20, 2019, Cerecor had approximately 55 holders of record of its common stock.

Dividends

        Cerecor has never paid or declared any cash dividends on its common stock. If the Merger does not occur, Cerecor does not anticipate paying any cash dividends on its common stock in the foreseeable future, and Cerecor intends to retain all available funds and any future earnings to fund the development and expansion of its business. Any future determination to pay dividends will be at the discretion of Cerecor's board of directors and will depended upon a number of factors, including its results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors Cerecor's then-current board of directors deems relevant.

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Securities Authorized for Issuance under Equity Compensation Plans

        The following table contains certain information with respect to Cerecor's equity compensation plan in effect as of December 31, 2018:

 
  (A)   (B)   (C)  
Plan category
  Number of Securities to
be Issued Upon Exercise
of Outstanding Options
and Vesting of Restricted
Stock Units
(#)
  Weighted-
Average
Exercise Price
of Outstanding
Options
($)
  Number of Securities Remaining
Available for Future Issuance
under Equity Compensation
Plans (excluding securities
reflected in column (A))
(#)
 

Equity compensation plans approved by stockholders

    4,691,597   $ 4.17 (1)   602,657 (2)

Equity compensation plans not approved by stockholders

             

Total

    4,691,597   $ 4.17     602,657  

(1)
The weighted-average exercise price does not take into account shares issuable upon the vesting of outstanding Restricted Stock Units, which have no exercise price. As of December 31, 2018, there were 445,000 shares of non-vested Restricted Stock Units.

(2)
Reflects shares of common stock available for future issuance under Cerecor's 2016 Amended and Restated Equity Incentive Plan at December 31, 2018. In March 2018, Cerecor's board of directors adopted the 2016 Amended and Restated Incentive Plan, which was approved by Cerecor's stockholders in May 2018. Pursuant to the terms of the 2016 Amended and Restated Equity Incentive Plan, an additional 1,632,167 shares were added to the number of available shares effective January 1, 2019.


COMPARATIVE MARKET PRICE INFORMATION

        The following table presents the closing prices of Cerecor common stock and Aevi common stock on December 4, 2019, the last trading day before the public announcement of the Merger Agreement, and December 27, 2019, the last practicable trading day prior to the mailing of this proxy statement/prospectus. The table also shows the approximate per share value of the Merger consideration for a share of Aevi common stock on the relevant date, assuming the maximum net asset related adjustment, 116,570,673 shares of Aevi common stock outstanding as of the date of this proxy statement/prospectus (which includes 12,946,900 shares of Aevi common stock issued pursuant to the exercise of the AZ Option) and issuance of 38,856,891 shares of Aevi common stock in connection with the conversion of the CHOP Note.

Date
  Cerecor
Closing
Price
  Aevi
Closing
Price
  Approximate
Value
Per Share of Aevi
Common Stock
 

December 4, 2019

  $ 3.70   $ 0.151   $ 0.134  

December 27, 2019

  $ 5.13   $ 0.156   $ 0.134  

        The above table shows only historical comparisons. These comparisons may not provide meaningful information to Aevi stockholders in determining whether to approve the adoption of the Merger Agreement.

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RISK FACTORS

        The combined company will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, stockholders of Aevi should carefully consider the material risks described below before deciding how to vote your shares of stock. Investors in Cerecor should also carefully consider these risks before buying or selling Cerecor stock. Following the risks related to the Merger, we have highlighted particular risks related to the combined company after the Merger. In addition, you should read and consider the risks associated with the businesses of Aevi and Cerecor because these risks may also affect the combined company. These risks follow the risks related to the combined company below.

Risks Related to the Merger

The exchange ratio in the Merger Agreement is subject to adjustment based on Aevi's net assets as of a determination date prior to completion of the Merger, which could further dilute the ownership of Aevi's stockholders in the combined company.

        Subject to the terms and conditions of the Merger Agreement, immediately prior to the Merger Effective Time and as a result of the Merger, each share of Aevi common stock issued and outstanding immediately prior to the Merger Effective Time will be converted into the right to receive that fraction of a share of Cerecor's common stock, as determined pursuant to the exchange ratio described in the Merger Agreement. The exchange ratio is subject to potential adjustment as described in the Merger Agreement depending upon the amount of Aevi's "net assets," as defined in the Merger Agreement and generally consisting of Aevi's cash and cash equivalents including certain credits for deal-related expenses and security deposits, net of liabilities, as of a determination date immediately prior to the closing date of the Merger. The aggregate purchase price of $16.1 million will be reduced by an amount by which Aevi's net assets at completion of the Merger are less than negative $1.3 million (such target amount will decrease by $7,142.86 each day after December 31, 2019 until completion of the Merger), but in no event will such adjustment be more than $500,000. The items that will constitute Aevi's net assets at the determination date set forth in the Merger Agreement are subject to a number of factors, some of which are outside Aevi's control and many of which are outside Cerecor's control.

Failure to complete the Merger could negatively impact Aevi's business, financial condition or results of operations or the trading price of Aevi common stock.

        The completion of the Merger is subject to a number of conditions and there can be no assurance that the conditions to the completion of the Merger will be satisfied. If the Merger is not completed, Aevi will be subject to several risks, including:

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        If the Merger is not completed, these risks may materialize and materially and adversely affect Aevi's business, financial condition, results of operations, or the trading price of Aevi common stock.

Aevi's stockholders might not approve the Merger of the two companies.

        Aevi has signed the Merger Agreement with Cerecor, pursuant to which Aevi has agreed to become a wholly owned subsidiary of Cerecor subject to, among other closing conditions, the approval of the stockholders of Aevi. Although Aevi believes the Merger is in the best interests of Aevi and its stockholders, it may not be able to obtain the stockholder vote required to approve the Merger. If Aevi's stockholders do not approve the Merger, Aevi will likely pursue other strategic alternatives or potentially pursue a dissolution of Aevi, which could result in a lower return to the Aevi stockholders.

The Merger may be completed even though material adverse changes may result from the announcement of the Merger, industry-wide changes and other causes.

        In general, either Aevi or Cerecor can refuse to complete the Merger in the event that certain circumstances occur between December 5, 2019, the date of the Merger Agreement, and the closing. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Aevi or Cerecor, including:

        However, the underlying cause of any event, failure, change, or effect referred to in clauses (i), (iii), (iv), (v) or (viii) immediately above will be taken into account in determining whether a material adverse effect has occurred or would reasonably be expected to occur to the extent that such event, change, or effect has a disproportionate effect on Aevi and its subsidiaries, taken as a whole, compared to other participants of similar size operating in the industries in which Aevi and its subsidiaries conduct their businesses.

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        If adverse changes occur and Aevi and Cerecor still complete the Merger, the combined company's stock price may be adversely affected. This in turn may reduce the value of the Merger to the stockholders of Aevi, Cerecor or both.

Some Aevi officers and directors have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests.

        When considering the recommendations by the Aevi board of directors that the Aevi stockholders vote "for" each of the proposals being submitted to the Aevi stockholders at the special meeting, Aevi stockholders should be aware that certain of the directors and executive officers of Aevi have arrangements that provide them with interests in the Merger that are different from, or in addition to, those of the stockholders of Aevi. For instance, following completion of the Merger, Michael Cola, Aevi's Chief Executive Officer, is expected to serve as Chief Executive Officer of Cerecor, and Dr. Garry Neil, current Chief Scientific Officer of Aevi, is expected to serve as Chief Medical Officer of Cerecor and both will receive cash and equity compensation in consideration for such service. In addition, Mr. Cola and Dr. Sol J. Barer, both current directors at Aevi, are expected to become members of the board of directors of Cerecor immediately following the completion of the Merger, and as a result, Dr. Barer will be entitled to receive cash and equity compensation as a non-employee director. The directors and executive officers of Aevi have rights to indemnification and to directors' and officers' liability insurance that will be provided by the combined company following completion of the Merger. The board of directors of Aevi was aware of these potential interests and considered them in making its recommendations to approve the Merger Agreement and the proposals being submitted to the Aevi stockholders at the special meeting of Aevi stockholders. Aevi, Cerecor and certain significant stockholders of Aevi also entered into voting agreements in connection with the Merger. The voting agreements are discussed in greater detail in the section entitled "Agreements Related to the Merger—Voting Agreements" beginning on page 165.

Because Aevi stockholders will receive a fixed number of shares of Cerecor common stock in the Merger based on the average of the volume weighted price of the Cerecor common stock for the 20 trading days immediately preceding the second day prior to the date of the Merger Agreement and the volume weighted price of the Cerecor common stock for the 20 trading days immediately preceding the second day prior to the date of the completion of the Merger, rather than a fixed value, if the market price of Cerecor common stock declines, Aevi stockholders will receive consideration in the Merger of lesser value.

        The aggregate number of shares of Cerecor common stock to be issued to Aevi stockholders will be based on the average of the volume weighted price of the Cerecor common stock for the 20 trading days immediately preceding the second day prior to the date of the Merger Agreement and volume weighted price of the Cerecor common stock for the 20 trading days immediately preceding the second day prior to the date of the completion of the Merger. In recent years, the stock market in general, and the securities of similarly situated companies in particular, have experienced extreme price and volume fluctuations. These market fluctuations may adversely affect the market price of Cerecor's common stock, and, therefore, the value of the Cerecor common stock to be received by Aevi stockholders upon completion of the Merger could be lower than on the date of the Merger Agreement.

The market price of Cerecor common stock following the Merger may decline as a result of the Merger.

        The market price of Cerecor common stock may decline as a result of the Merger for a number of reasons, including if:

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The issuance of shares of Cerecor common stock to Aevi stockholders in connection with the Merger will dilute substantially the voting power of current Aevi stockholders.

        Assuming the maximum net asset adjustment of $500,000 discussed above, a Cerecor stock price of $3.70 (which was the closing stock price on the trading day immediately prior to the date of the Merger Agreement), issuance of 12,946,900 shares of Aevi common stock in connection with the exercise of the AZ Option and issuance of 38,856,891 shares of Aevi common stock upon conversion of the CHOP Note, then based on the anticipated number of shares of Aevi common stock outstanding at closing Cerecor would issue approximately 4.2 million shares of its common stock in the Merger. After such issuance, the shares of Aevi common stock outstanding immediately prior to completion of the Merger will represent approximately 8.7% of the outstanding shares of common stock of the combined company as of immediately following completion of the Merger. This ownership percentage may change depending upon the amount of Aevi's net assets as of immediately prior to completion of the Merger. In any event, Aevi's stockholders as a group will have significantly less influence over the management and policies of Cerecor after the Merger than it had over the management and policies of Aevi prior to the Merger.

During the pendency of the Merger, Aevi may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect its business.

        Covenants in the Merger Agreement impede the ability of Aevi to make acquisitions, or complete other transactions that are not in the ordinary course of business pending completion of the Merger. As a result, if the Merger is not completed, Aevi may be at a disadvantage to its competitors. In addition, while the Merger Agreement is in effect, Aevi is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination outside the ordinary course of business, with any third party, even though such transactions could be favorable to Aevi's stockholders.

Provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

        The terms of the Merger Agreement prohibit Aevi from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when Aevi's board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and is reasonably capable of being consummated and that failure to cooperate with the proponent of the proposal could reasonably be considered a breach of the Aevi board of directors' fiduciary duties. In addition, if Aevi terminates the Merger Agreement under specified circumstances, Aevi would be required to pay a termination fee of $600,000 to Cerecor and in specified cases, repay loans from Cerecor that will be used by Aevi for its working capital needs prior to completion of the Merger. This termination fee and repayment obligation may discourage third parties from submitting alternative takeover proposals to Aevi or its

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stockholders, and may cause Aevi's board of directors to be less inclined to recommend an alternative proposal.

If the conditions to the Merger are not satisfied or waived, the Merger will not occur.

        Even if the Merger is approved by the stockholders of Aevi, specified conditions, including conditions that are outside Aevi's control, must be satisfied or waived to complete the Merger. These conditions are set forth in the Merger Agreement and described in the section entitled "The Merger Agreement—Conditions to the Completion of the Merger" in this proxy statement/prospectus. Aevi cannot assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the Merger will not occur or will be delayed, and Aevi and Cerecor may lose some or all of the intended benefits of the Merger.

Aevi may waive one or more of the conditions to the Merger without resoliciting stockholder approval for the Merger.

        Certain conditions to Aevi's obligations to complete the Merger may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement of Aevi and Cerecor. In the event of a waiver of a condition, the board of directors of Aevi will evaluate the materiality of any such waiver to determine whether amendment of this proxy statement/prospectus and resolicitation of proxies is necessary. In the event that the board of directors of Aevi determines any such waiver is not significant enough to require resolicitation of stockholders, it will have the discretion to complete the Merger without seeking further stockholder approval. The conditions requiring the approval of Aevi's stockholders cannot, however, be waived.

Third-party lawsuits may be filed against Aevi in connection with the Merger transactions, which even if frivolous, could be costly to defend.

        Third parties may assert claims against Aevi alleging that the terms of the Merger are somehow unfair or inappropriate. Any claims against Aevi, with or without merit, as well as claims initiated by Aevi against third parties, can be time-consuming and expensive to defend or prosecute and resolve. Aevi cannot assure you that litigation asserting claims against the company will not be initiated or that Aevi will prevail in any litigation. Aevi cannot assure you that the Merger would close if and to the extent a claim or claims were filed against Aevi in this regard.

Aevi and Cerecor may become involved in securities litigations or stockholder derivative litigation in connection with the Merger, and this could divert the attention of Aevi and Cerecor's management and harm the combined company's business, and insurance coverage might not be sufficient to cover all related costs and damages.

        Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction. This risk is especially relevant for Aevi, Cerecor and the combined company because biotechnology companies, like Aevi and Cerecor, have experienced significant stock price volatility in recent years. Aevi and Cerecor may become involved in these types of litigations in connection with the Merger, and the combined company may become involved in these types of litigations in the future. Litigation is often expensive and diverts management's attention and resources, which could adversely affect the business of Aevi, Cerecor and the combined company, and insurance coverage may not be sufficient to cover all related costs and damages.

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The Merger may fail to qualify as a reorganization for U.S. federal income tax purposes, resulting in recognition of taxable gain or loss by Aevi stockholders in respect of their common stock.

        Aevi and Cerecor intend for the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, as described in "The Merger—Material United States Federal Income Tax Consequences of the Merger to Aevi Stockholders." However, if the Merger fails to qualify as a reorganization, each Aevi stockholder generally will be treated as exchanging his, her or its Aevi common stock in a fully taxable transaction for the Merger consideration.

The opinion received by the Aevi board of directors from Wedbush is subject to assumptions and qualifications, and it has not been, and is not expected to be, updated to reflect changes in circumstances that may have occurred since the date of the opinion.

        On December 5, 2019, Wedbush rendered its oral opinion to the Aevi board of directors (which was subsequently confirmed in writing by delivery of Wedbush's written opinion dated the same date thereof) to the effect that, based upon and subject to the assumptions, factors, qualifications and limitations set forth in the written opinion described herein, as of December 5, 2019, the Merger consideration to be received by the Aevi stockholders in the Merger was fair, from a financial point of view, to such stockholders. Wedbush did not express any view on, and its opinion did not address, any other term or aspect of any other agreements or arrangements contemplated by the Merger Agreement or entered into in connection with the Merger.

        Wedbush's opinion was prepared solely for the information of the Aevi board of directors and only addressed the fairness, from a financial point of view, to holders of Aevi common stock of the Merger consideration to be received by such stockholders. Wedbush was not requested to opine as to, and Wedbush's opinion does not address, the relative merits of the Merger or any alternatives to the Merger, Aevi's underlying decision to proceed with or effect the Merger, or any other aspect of the Merger. Wedbush's opinion is not a valuation of Aevi or Cerecor or their respective assets or any class of their securities. Wedbush did not express an opinion about the fairness of the amount or nature of any compensation payable or to be paid to any of the officers, directors or employees, of Aevi, whether or not relative to the Merger.

        Although subsequent developments may affect the conclusion reached in the opinion, Wedbush does not have any obligation to update, revise or reaffirm such opinion and has not done so. See the section titled "The Merger—Opinion of the Aevi Financial Advisor" and Annex C to this proxy statement/prospectus.

Risks Related to the Combined Company

The combined company will need substantial additional capital for the continued development of its product candidates and for its long-term operations.

        After the Merger, the combined company will need to raise capital to continue product development. The combined company's capital requirements depend on many factors, including:

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        The combined company will likely require significant amounts of additional capital in the future, and such capital might not be available on favorable terms when needed, if at all. The combined company might never progress to the point where it has commercially successful product sales or other revenue sufficient to sustain operations. Accordingly, the combined company may seek to raise these funds through public or private equity offerings, debt financings, credit facilities, partnering or other corporate collaborations and licensing arrangements. If adequate funds are not available or are not available on acceptable terms, the combined company's ability to fund its operations, take advantage of opportunities, develop products and technologies, and otherwise respond to competitive pressures could be significantly delayed or limited, and it might need to downsize or halt its operations.

The success of the Merger will depend, in large part, on the ability of the combined company to realize the anticipated benefits from combining the businesses of Aevi and Cerecor.

        The Merger involves the integration of two companies that previously have operated independently with principal offices in two distinct locations. Significant management attention and resources will be required to integrate the two companies after completion of the Merger. The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in the combined company's failure to achieve some or all of the anticipated benefits of the Merger.

        Potential difficulties that may be encountered in the integration process include the following:

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        Delays in the integration processes of both companies could adversely affect the combined company's business, financial results, financial condition and stock price following the Merger. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration or that these potential benefits will be achieved within a reasonable period of time.

Ownership of the combined company's common stock will be highly concentrated, and it may prevent the Aevi stockholders from influencing any corporate decisions of the combined company and may result in conflicts of interest that could cause the combined company's stock price to decline.

        Upon completion of the Merger, Cerecor directors and executive officers continuing with the combined company, together with their respective affiliates, are expected to beneficially own or control approximately 60.1% of the combined company. Accordingly, current directors and executive officers of Cerecor will have significant influence over the outcome of any corporate action of the combined company requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of the combined company's assets or any other significant corporate transaction. These stockholders also may exert influence in delaying or preventing a change in control of the combined company, even if such change in control would benefit the other stockholders of the combined company. In addition, the significant concentration of stock ownership may affect adversely the market value of the combined company's common stock due to investors' perception that conflicts of interest may exist or arise.

The unaudited pro forma financial information included in this proxy statement/prospectus might not be representative of the combined company's results following the Merger.

        The unaudited pro forma financial information included in this proxy statement/prospectus has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Merger and related transactions been completed as of the date indicated, nor is it indicative of the combined company's future operating results or financial position. The pro forma financial statements have been derived from the historical financial statements of Aevi and Cerecor and adjustments and assumptions have been made regarding the combined company after giving effect to the Merger, as well as adjustments giving effect to previous acquisition and divestures of Cerecor. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Merger. As a result, the actual financial condition of the combined company following the Merger might not be consistent with, or evident from, these pro forma financial statements. The assumptions used in preparing the pro forma financial information might not prove to be accurate, and other factors may affect the combined company's financial condition following the Merger and related transactions.

The CVRs might not result in payments to holders.

        Under the terms of the Merger Agreement, each share of Aevi common stock (other than cancelled shares or dissenting shares) issued and outstanding immediately prior to the Merger Effective Time will automatically be converted into the right to receive (A) the fraction of a share of Cerecor common stock equal to the exchange ratio set forth in the Merger Agreement, (B) one CVR, which will represent the right to receive CVR Consideration as set forth in the CVR Agreement, and

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(C) cash in lieu of fractional shares of Cerecor common stock, as described in this proxy statement/prospectus. Each CVR entitles the holder to receive, without interest and subject to applicable withholding tax, CVR Consideration in an amount up to $6,500,000, consisting of: (i) $2,000,000 upon enrollment of first patient in a Phase II clinical trial for AEVI-002, AEVI-006 or AEVI-007 within 24 months of closing (the "Study Milestone"), and (ii) $4,500,000 upon NDA approval for AEVI-006 or AEVI-007 within 60 months of closing (the "NDA Milestone") divided by the total number of shares of Aevi common stock issued and outstanding immediately prior to the Merger Effective Time. The CVR Consideration will be paid in cash, shares of Cerecor common stock or a combination of cash and stock, at Cerecor's sole discretion. As of the date hereof, neither the Study Milestone or NDA Milestone is close to being met. Aevi cannot determine whether any milestones will be achieved or occur within the requisite time period after the completion of the Merger. Accordingly, neither Aevi nor Cerecor can assure you that any CVR Consideration will be payable by the combined company. If neither of the milestone events occur, no payments will be made under the CVR Agreement. Accordingly, the CVRs may ultimately have no value and expire without yielding any payments to holders of such CVRs. It is difficult to value the CVRs, and the amount of actual payments on the CVRs is highly speculative.

The CVRs are not registered under the Securities Act of 1933, as amended (the "Securities Act") and may not be transferred except in certain limited circumstances.

        The CVRs that will be issued as part of the Merger Consideration will not be registered under the Securities Act and will not be listed on any exchange. Cerecor does not intend to, and is not obligated to, register the CVRs or list them on an exchange. Subject to certain limited exceptions, holders of CVRs will not be able to transfer or sell the CVRs. As a result, Aevi stockholders should anticipate holding the CVRs until such time as they expire.

Because the Merger will result in an ownership change under Section 382 of the Code ("Section 382") for Aevi, Aevi's pre-Merger net operating loss ("NOL") carryforwards and certain other tax attributes will be subject to limitations. The NOL carryforwards and other tax attributes of Cerecor and of the combined company may also be subject to limitations as a result of ownership changes.

        If a corporation undergoes an "ownership change" within the meaning of Section 382, the corporation's NOL carryforwards and certain other tax attributes arising before the ownership change are subject to limitations on use after the ownership change. In general, an ownership change occurs if there is a cumulative change in the corporation's equity ownership by certain stockholders that exceeds 50% over a rolling three-year period. The amount of the annual limitation is determined based on a corporation's value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. Similar rules may apply under state tax laws. The Merger will result in an ownership change for Aevi, and accordingly Aevi's NOL carryforwards and certain other tax attributes will be subject to additional limitations (or disallowance) on their use after the Merger, beyond the Section 382 limitations that already apply due to prior ownership changes for Aevi. Cerecor's NOL carryforwards may also be subject to limitation as a result of prior shifts in equity ownership and/or the Merger. Additional ownership changes in the future could result in additional limitations on Aevi's, Cerecor's and the combined company's NOL carryforwards. Consequently, even if the combined company achieves profitability, it may not be able to utilize a material portion of Aevi's, Cerecor's or the combined company's NOL carryforwards and other tax attributes, which could in turn result in increased future income tax payments for the combined company and could have a material adverse effect on cash flow and results of operations of the combined company.

        Under Section 384 of the Code ("Section 384"), available NOL carryovers of Aevi or Cerecor might not be available to offset certain gains arising after the Merger from assets held by the other corporation at the Merger Effective Time. This limitation will apply to the extent that the gain is

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attributable to an unrealized built-in-gain in the assets of Aevi or Cerecor existing at the Merger Effective Time. To the extent that any such gains are recognized in the five-year period after the Merger upon the disposition of any such assets, the NOL carryovers of the other corporation will not be available to offset such gains (but the NOL carryovers of the corporation that owned such assets will not be limited by Section 384, although they may be subject to other limitations under Section 382 as described above).

If any key employees of the combined company discontinue his or her services, the combined company's efforts to develop its business may be delayed.

        The combined company's success will depend on the retention of its directors and other current and future members of its management and technical team, including Michael F. Cola, President and Chief Executive Officer, Dr. Perricles Calias, Chief Scientific Officer, James A. Harrell, Jr., Chief Commercial Officer, Joe Miller, Chief Financial Officer, and Garry A. Neil, Chief Medical Officer, and on the combined company's ability to continue to attract and retain highly skilled and qualified personnel. The combined company might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. Key employees may depart following the Merger because of issues relating to the uncertainty and difficulty of integration or a desire not to remain following the Merger. The combined company's industry has experienced a high rate of turnover of management personnel in recent years. As such, the combined company could have difficulty attracting experienced personnel to the company and may be required to expend significant financial resources in its employee recruitment and retention efforts. Many of the other biotechnology and pharmaceutical companies with whom the combined company competes for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than the combined company will have. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high quality candidates than that which the combined company has to offer. If the combined company is not able to attract and retain the necessary personnel to accomplish its business objectives, the combined company may experience constraints that will impede significantly its ability to implement its business strategy and achieve its business objectives. There can be no assurance that the combined company will retain the services of any of its directors, officers or employees, or attract or retain additional senior managers or skilled employees. Furthermore, the combined company does not intend to carry key man insurance with respect to any of such individuals.

If the combined company fails to attract and keep management and other key personnel, as well as its board members, the combined company may be unable to develop its product candidates or otherwise implement its business plan.

        The combined company might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. The combined company's industry has experienced a high rate of turnover of management personnel in recent years. As such, the combined company could have difficulty attracting experienced personnel to the company and may be required to expend significant financial resources in its employee recruitment and retention efforts. Many of the other biotechnology and pharmaceutical companies with whom the combined company competes for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than the combined company does. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high quality candidates than that which the combined company has to offer. If the combined company is not able to attract and retain the necessary personnel to accomplish its business objectives, the combined company

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may experience constraints that will impede significantly its ability to implement its business strategy and achieve its business objectives.

        In addition, the combined company will have scientific and clinical advisors who assist it in formulating its development and clinical strategies. These advisors are not the combined company's employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to the combined company. In addition, the combined company's advisors may have arrangements with other companies to assist those companies in developing products or technologies that may compete with the combined company.

        The success of the Merger will depend in part on the retention of personnel critical to its business and operations, including certain employees of Cerecor who will become employees of the combined company upon completion of the Merger. Key employees may depart following the Merger because of issues relating to the uncertainty and difficulty of integration or a desire not to remain following the Merger. Accordingly, no assurance can be given that the combined company will be able to retain key employees.

Failure to maintain effective internal controls could have a material adverse effect on the combined company's business and operating results. In addition, current and potential stockholders could lose confidence in the combined company's financial reporting, which could have a material adverse effect on the price of its common stock.

        Effective internal controls are necessary for the combined company to provide reliable financial reports and effectively prevent fraud. If the combined company cannot provide reliable financial reports or prevent fraud, its results of operation could be harmed.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires annual management assessments of the effectiveness of the combined company's internal controls over financial reporting and a report by the combined company's independent registered public accounting firm addressing these assessments. The combined company will continuously monitor its existing internal controls over financial reporting systems to confirm that they are effective, and the combined company may identify deficiencies that it may not be able to remediate in time to meet the deadlines imposed by the Sarbanes-Oxley Act. This process may divert internal resources and will take a significant amount of time and effort to complete.

        If at any time it is determined that the combined company's internal controls are not effective, the combined company may be required to implement new internal control procedures and reevaluate its financial reporting. the combined company may experience higher than anticipated operating expenses as well as increased independent auditor fees during the implementation of these changes and thereafter. If the combined company fails to maintain the adequacy of its internal controls, as such standards are modified, supplemented or amended from time to time, the combined company's may not be able to conclude on an ongoing basis that it has effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act, which could result in the combined company being unable to obtain an unqualified report on internal controls from its independent auditors. Failure to maintain an effective internal control environment could also cause investors to lose confidence in the combined company's reported financial information, which could have a material adverse effect on the price of the combined company's common stock

Fluctuations in operating results could adversely affect the price of the combined company's common stock.

        The combined company's operating results are likely to fluctuate significantly from quarter to quarter and year to year. These fluctuations could cause the price of its common stock to decline. Some of the factors that may cause operating results to fluctuate on a period-to-period basis include the scope, progress, duration results and costs of preclinical and clinical development programs, as well as non-clinical studies and assessments of product candidates and programs, implementation or

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termination of collaboration, licensing, manufacturing or other material agreements with third parties, non-recurring revenue or expenses under any such agreement, the cost, timing and outcomes of regulatory compliance, approvals or other regulatory actions and general and industry-specific economic conditions, particularly those conditions that affect the pharmaceutical, biopharmaceutical or biotechnology industries in the United States. Period-to-period comparisons of Aevi and Cerecor's historical and future financial results might not be meaningful, and investors should not rely on them as an indication of future performance. Fluctuating losses may fail to meet the expectations of securities analysts or investors. Failure to meet these expectations may cause the price of the combined company's common stock to decline.

Anti-takeover provisions in the combined company charter documents and under Delaware law could make an acquisition of the combined company more difficult and may prevent attempts by the combined company stockholders to replace or remove the combined company management.

        Provisions in the combined company's certificate of incorporation and bylaws may delay or prevent an acquisition or a change in management. See the risk factor entitled "Risks Related to Cerecor's Stock—Some provisions of Cerecor's charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of Cerecor by others, even if an acquisition would benefit Cerecor's stockholders and may prevent attempts by Cerecor's stockholders to replace or remove its current management" below.

Aevi and Cerecor do not anticipate that the combined company will pay any cash dividends in the foreseeable future.

        The current expectation is that the combined company will retain its future earnings to fund the development and growth of the combined company's business. As a result, capital appreciation, if any, of the common stock of the combined company will be your sole source of gain, if any, for the foreseeable future.

Future results of the combined company may differ materially from the unaudited pro forma financial statements presented herein.

        The future results of the combined company may be materially different from those shown in the unaudited pro forma condensed combined financial statements presented herein, which show only a combination of the historical results of Aevi and Cerecor, and the financial forecasts prepared by Cerecor in connection with discussions concerning the Merger. See the risk factor entitled "The unaudited pro forma financial information included in this proxy statement/prospectus might not be representative of the combined company's results following the Merger" above.

After completion of the Merger, the combined company will possess not only all of the assets but also all of the liabilities of both Aevi and Cerecor. Discovery of previously undisclosed or unknown liabilities could have an adverse effect on the combined company's business, operating results and financial condition.

        Acquisitions involve risks, including inaccurate assessment of undisclosed, contingent or other liabilities or problems. After completion of the Merger, the combined company will possess not only all of the assets, but also all of the liabilities of both Aevi and Cerecor. Although Aevi conducted a due diligence investigation of Cerecor and its known and potential liabilities and obligations, and Cerecor conducted a due diligence investigation of Aevi and its known and potential liabilities and obligations, it is possible that undisclosed, contingent or other liabilities or problems may arise after completion of the Merger, which could have an adverse effect on the combined company's business, operating results and financial condition.

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Risks Related to Aevi's Historical Business Operation and Financial Condition

Business-Related Risks

Aevi's recurring losses from operations raise substantial doubt regarding Aevi's ability to continue as a going concern if the Merger is not consummated.

        Aevi's recurring losses from operations raise substantial doubt about Aevi's ability to continue as a going concern if the Merger is not consummated. There is no assurance that sufficient financing will be available when needed to allow Aevi to continue as a going concern. The perception that Aevi may not be able to continue as a going concern may cause others to choose not to deal with Aevi due to concerns about Aevi's ability to meet its contractual obligations.

If the Merger is not consummated, Aevi will review strategic alternatives and there can be no assurance that Aevi will be successful in identifying or completing any strategic transaction, that any such strategic transaction will result in additional value for Aevi's stockholders or that the process will not have an adverse impact on Aevi's business.

        As a result of the negative outcomes of AEVI-001 Phase 2 trial (the "ASCEND trial") and Aevi's limited financial resources, Aevi began exploring financing and strategic alternatives, which ultimately led to entering into the Merger Agreement and the proposed Merger. If the Merger is not completed, Aevi will again explore strategic alternatives, which could include, but would not be limited to, issuing or transferring shares of Aevi's common stock or other equity securities, the license, sale or disposition of certain assets or programs, the formation of a joint venture, a strategic business combination, a transaction that results in private ownership or the sale of Aevi, or some combination of these, in addition to other potential actions aimed at increasing stockholder value. There can be no assurance that the review of strategic alternatives would result in the identification or consummation of any transaction. Aevi's board of directors may also determine that Aevi's most effective strategy is to continue to execute Aevi's current development strategy or to cease Aevi's current drug development activities altogether. The process of reviewing strategic alternatives could be time consuming and disruptive to Aevi's business operations and, if Aevi was unable to effectively manage the process, Aevi's business, financial condition and results of operations could be adversely affected. Aevi could incur substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives. There can be no assurance that any potential transaction or other strategic alternative, if consummated, would provide greater value to Aevi's stockholders than that reflected in the current price of Aevi's common stock. If the Merger is not consummated, until the review process is concluded, perceived uncertainties related to Aevi's future may result in the loss of potential business opportunities and volatility in the market price of Aevi's common stock and may make it more difficult for Aevi to attract and retain qualified personnel and business partners.

        Additionally, Aevi continues to pursue discussions related to potentially expanding the company's pipeline of development programs via the in-license or acquisition of future product development candidates. There can be no assurance that these discussions will results in completed transactions.

Aevi is a clinical stage biopharmaceutical company and has a history of significant and continued operating losses and a substantial accumulated earnings deficit and may continue to incur significant losses and may never achieve or maintain profitability.

        Aevi is a clinical stage biopharmaceutical company and since its inception has been focused on research and development and has not generated any substantial revenues. Aevi has incurred net losses of approximately $30.78 million and $34.71 million for the years ended December 31, 2018 and 2017, respectively. As of September 30, 2019, Aevi had negative stockholders' equity of approximately $3.46 million. Given Aevi's increasing operating losses, as well as negative cash flow from operations, for the foreseeable future, it could be several years, if ever, before Aevi has a commercialized product or the

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combined company has another commercialized product. Aevi's ability to raise working capital or generate revenues from sales of its potential products will depend on:

If the Merger is not completed, Aevi's board of directors may decide to pursue a restructuring, which may include a reorganization or bankruptcy under federal bankruptcy laws, or a dissolution, liquidation and/or winding up.

        If the Merger is not competed, there can be no assurance that the process to identify and evaluate potential business alternatives will result in a successful alternative for Aevi's business. If no transactions with respect to potential business alternatives are identified and completed, Aevi's board of directors may decide to pursue a restructuring, which may include a reorganization or bankruptcy under federal bankruptcy laws, or a dissolution, liquidation and/or winding up of Aevi. If Aevi's board of directors were to approve and recommend, and Aevi's stockholders were to approve, a dissolution and liquidation of Aevi, Aevi would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Aevi's stockholders. Aevi's commitments and contingent liabilities may include (i) obligations under its employment and separation agreements with certain members of its management that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control of Aevi, (ii) various claims and legal actions arising in the ordinary course of business, (iii) obligations to CHOP pursuant to the Sponsored Research Agreement with CHOP (the "Research Agreement"), and (iv) non-cancelable lease obligations. As a result of this requirement, a portion of Aevi's assets may need to be reserved pending the resolution of such obligations. In addition, Aevi may be subject to litigation or other claims related to a dissolution and liquidation of Aevi. If a dissolution and liquidation were pursued, Aevi's board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Aevi's common stock may lose their entire investment in the event of a reorganization, bankruptcy, liquidation, dissolution or winding up of Aevi.

        Any of the foregoing risks could have a material adverse effect on Aevi's business, financial condition and prospects.

If the Merger is not completed, raising additional capital may cause dilution to Aevi's existing stockholders, restrict Aevi's operations or require Aevi to relinquish rights.

        Until such time, if ever, as Aevi can generate substantial product revenues, Aevi expects to finance its cash needs through a combination of equity offerings and debt financings. If the Merger is not completed, Aevi will not have any committed external source of funds outside of the Merger. Aevi may seek additional capital through a combination of private and public equity offerings, debt financings, collaborations and strategic and licensing arrangements. To the extent that Aevi raises additional capital through the sale of common stock or securities convertible or exchangeable into common stock, the ownership interest of Aevi's stockholders in the company will be diluted. In addition, the terms of any such securities may include liquidation or other preferences that materially adversely affect the rights of Aevi's stockholders. Debt financing, if available, would increase Aevi's fixed payment obligations and

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may involve agreements that include covenants limiting or restricting Aevi's ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

        Aevi cannot be certain that additional funding will be available on acceptable terms, or at all, if the Merger is not completed. If Aevi raises additional funds through collaboration, strategic partnerships and licensing arrangements with third parties, Aevi may have to relinquish valuable rights to its product candidates, its intellectual property, future revenue streams or grant licenses on terms that are not favorable to Aevi.

Risk Related to Aevi's Clinical Development, Regulatory Review and Approval of its Products

Aevi is still in the process of clinical trials and does not have a commercialized product and may never be able to commercialize its product candidates.

        Only a small number of research and development programs ultimately result in commercially successful drugs and drug delivery systems. Potential products that appear to be promising at early stages of development may not reach the market and even if commercialized might not be commercially successful for a number of reasons, including:

        If any of these potential problems occur, Aevi may never successfully commercialize its product candidates, including AEVI-002. If Aevi is unable to develop commercially viable products, Aevi's business, results of operations and financial condition will be materially and adversely affected.

Aevi has limited history as an organization in conducting clinical trials.

        Aevi has limited history as an organization in conducting advanced clinical trials and may not possess the necessary resources and expertise to complete such trials, and Aevi may need to seek additional partnerships or collaborations with third parties to advance these trials. Aevi's most advanced clinical program is an 8-week Phase Ib proof-of-concept study of AEVI-002 in subjects with a diagnosis of severe pediatric-onset Crohn's disease. For potential marketing application approval, additional clinical testing will be required, which involves significantly greater resources, commitments and expertise and so it is likely that Aevi would need to enter into a collaborative relationship with a pharmaceutical company that could assume responsibility for late-stage development and commercialization.

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Aevi's product candidates are still being developed and have not been tested on a large patient population, and, therefore, Aevi does not know all of the possible adverse events and may not be able to commercialize its product candidates as planned.

        Aevi's product candidates have not been tested on a large number of patients, and are still in an early stage of development. Aevi's product candidates are not yet fully developed or proven, and disappointing results and problems could delay or prevent the completion of Aevi's development programs and commercialization of its product candidates

        Aevi's previous safety tests and results obtained in previous clinical trials of its product candidates may not be representative of either a larger multi-centric test or the commercial version of the technology in the general population. The basis may have been subject to bias and such results may not be replicated in a double-blinded clinical trial. In addition, the full impact of Aevi's product candidates, and their many possible variations, on the body is, as yet, unknown.

        Treatment-related adverse events or complications in clinical trials, or post-approval, could result in limitations on the use of Aevi's product candidates and may also result in financial claims and losses against Aevi, damage Aevi's reputation, and increase Aevi's expenses and reduce Aevi's assets. In addition, Aevi's product candidates may not gain commercial acceptance or ever be commercialized.

Aevi is currently dependent upon the successful development of its lead product candidates, AEVI-002, AEVI-006 and AEVI-007. If Aevi or its strategic partners, licensees and sublicensees fail to successfully complete their development and commercialization, Aevi will not generate operating revenues.

        A substantial portion of Aevi's historical efforts and expenses were focused on the development of AEVI-001, which was unsuccessful. A substantial portion of Aevi's efforts and expenses are currently focused on the development of AEVI-002, AEVI-006 and AEVI-007. Aevi's ability to generate product revenues, which Aevi does not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of AEVI-002, AEVI-006, AEVI-007 and other product candidates Aevi is in the early stages of developing. There is no guarantee that Aevi will succeed in developing AEVI-002, AEVI-006 and AEVI-007 or any of its product candidates. If the development of AEVI-002, AEVI-006 and AEVI-007 or other product candidates fails, Aevi may be unable to generate any revenues. There is no certainty as to Aevi's success, whether within a given time frame or at all. Any delays in Aevi's schedule for clinical trials, regulatory approvals or other stages in the development of Aevi's technology are likely to cause Aevi additional expense and may even prevent the successful commercialization of any or all of Aevi's product candidates. Delays in the timing for development of Aevi's technology may also have a material adverse effect on its business, financial condition and results of operations due to the possible absence of financing sources for Aevi's operations during such additional periods of time. Although Aevi may pursue other technologies (either developed in-house or acquired), there is no assurance that any other technology will be successfully identified or exploited.

Clinical trials involve lengthy and expensive processes with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results.

        The risk of failure of Aevi's product candidates is high. Aevi cannot predict whether it will encounter problems with any of its completed, ongoing, planned or future clinical trials, which would cause Aevi or regulatory authorities to delay or suspend clinical trials, or delay the analysis of data from completed or ongoing clinical trials. The Food & Drug Administration Reauthorization Act of 2017 ("FDARA"), signed into law in August 2017, authorizes the FDA to impose additional clinical trial requirements on manufacturers seeking orphan drug designation ("ODD") and/or pediatric indications. The impact of these future regulations is uncertain and could result in the need for additional clinical trials. Aevi estimates that clinical trials involving AEVI-002, AEVI-006 and

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AEVI-007 will continue for several years; however, such trials may also take significantly longer to complete and may cost more money than Aevi expects. Failure can occur at any stage of testing, and Aevi may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent commercialization of the current, or a future, more advanced, version of Aevi's product candidates, including but not limited to:

        A number of companies in the biopharmaceutical and pharmaceutical industries including those with greater resources and experience than Aevi have suffered significant setbacks in advanced clinical trials, even after seeing promising results in earlier clinical trials. Aevi does not know whether any clinical trials Aevi or any future clinical partners may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market AEVI-002, AEVI-006 and AEVI-007 or any other product development candidates. If subsequent clinical trials involving AEVI-002, AEVI-006 and AEVI-007 or other product development candidates do not produce favorable results, Aevi may be required to perform additional clinical trials or Aevi's ability to obtain regulatory approval may be adversely impacted, either of which would have an adverse material effect on Aevi's business, financial condition and the results of its operations.

Potential difficulty with, and delays in, recruiting patients for human clinical trials may adversely affect the timing of Aevi's clinical trials and Aevi's working capital requirements.

        Aevi's research and development is highly dependent on timely recruitment of the requisite number and type of patients for Aevi's clinical trials. Aevi has previously found it very difficult to recruit such patients, and the increased volume and ethnic backgrounds required for future testing may render such testing even more difficult. Such larger studies will likely be based on the use of multicenter, multinational design, which can prove difficult to manage and could result in delays in patient recruitment. In addition, as Aevi pursues development of its product candidates in orphan and

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rare disease applications, including for pediatric populations, Aevi may find it difficult to find sufficient treatment-naïve patients needed for initial trials, especially within commercially-reasonable geographical regions. Delays in the recruitment of such patients could delay Aevi's trials and negatively impact Aevi's working capital requirements and ability to raise capital.

Aevi may not successfully establish and maintain relationships with third-party service providers and collaborators, which could adversely affect its ability to develop, manufacture and commercialize its product candidates.

        Aevi's ability to develop and commercialize its product candidates is dependent on Aevi's ability to reach strategic licensing and other development agreements with appropriate partners, including biopharmaceutical and pharmaceutical companies and CROs. If Aevi is unable to successfully negotiate such agreements, Aevi may not be able to continue to develop its product candidates, including AEVI-002, AEVI-006 and AEVI-007, without raising significant additional capital for development and commercialization.

        Aevi's core business strategy is to develop its product candidates for use in specific indications and disease markets that Aevi would internally develop and launch. However, Aevi does plan to explore collaborative relationships or strategic partnerships and/or license its product candidates. Aevi may not be able to identify such collaborators and partners on a timely basis, and it may not be able to enter into relationships with any future collaborator(s) or partner(s) on terms that are commercially beneficial to Aevi or at all. In addition, such relationships and partnerships may not come to fruition or may not be successful. Aevi's agreements with these third parties may also contain provisions that restrict its ability to develop and test its product candidates or that give third parties rights to control aspects of Aevi's product development and clinical programs.

        The third-party contractors may not assign as great of a priority to Aevi's clinical development programs or pursue them as diligently as Aevi would if it were undertaking such programs directly and, accordingly, may not complete activities on schedule, or may not conduct the studies or Aevi's clinical trials in accordance with regulatory requirements or with Aevi's trial design. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if their performance is substandard, Aevi may be required to replace them.

        In addition, conflicts may arise with Aevi's collaborators (e.g. those concerning the interpretation of clinical data), the achievement of milestones, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration. If any conflicts arise with Aevi's existing or future collaborators, they may act in their self-interest, which may be adverse to Aevi's best interests. The third-party contractors may also have relationships with other commercial entities, some of whom may compete with Aevi. If third-party contractors work with Aevi's competitors, Aevi's competitive position may be harmed.

        In addition, although Aevi attempts to audit and control the quality of third-party data, it cannot guarantee the authenticity or accuracy of such data, nor can Aevi be certain that such data has not been fraudulently generated. The failure of third parties to carry out their obligations towards Aevi would materially adversely affect Aevi's ability to develop and market product candidates.

Aevi has no medical affairs, marketing experience, sales force or distribution capabilities. If Aevi's product candidates are approved, and it is unable to recruit key personnel to perform these functions, Aevi may not be able to successfully commercialize the products.

        Although Aevi does not currently have any marketable products, Aevi's ability to produce revenues ultimately depends on its ability to commercialize its product candidates if and when they are approved by the FDA and/or other regulatory health agencies. Aevi currently does not have a medical affairs, marketing and sales staff or distribution capabilities. Developing medical affairs as well as a marketing

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and sales force is also time-consuming and expensive and these costs may be incurred in advance of any approval of Aevi's product candidates. Failure to develop these capabilities could delay the launch of new products or expansion of existing product sales. In addition, Aevi will compete with many companies that currently have extensive and well-funded medical affairs, marketing, sales and distribution operations. If Aevi fails to establish successful medical affairs, marketing, sales and distribution capabilities or fails to enter into successful marketing sales or distribution arrangements with third parties, Aevi's ability to generate revenues will suffer.

        Furthermore, even if Aevi enter into medical affairs, marketing, sales and distributing arrangements with third parties, these third parties may not be successful or effective in marketing, selling or distributing Aevi's product candidates. If Aevi fails to create successful and effective medical affairs, marketing, sales and distribution channels, Aevi's ability to generate revenue and achieve its anticipated growth could be adversely affected. If these distributors experience financial or other difficulties, sales of Aevi's products could be reduced, and Aevi's business, financial condition and results of operations could be harmed.

Aevi is subject to intense government regulation and Aevi may not be able to successfully complete the necessary clinical trials.

        Approval for clinical trials depends, among other things, on data obtained from Aevi's pre-clinical and clinical activities, including completion of pre-clinical animal and in vitro studies in a timely manner. These pre-clinical and clinical activities must meet stringent quality assurance and compliance requirements. Data obtained from such activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approvals.

        Aevi currently has limited experience in and resources for conducting the large-scale clinical trials which may hamper Aevi's ability to obtain or comply with regulatory approval. The failure to comply with applicable regulatory requirements may result in criminal prosecution, civil penalties, product recalls, withdrawal of product approval, mandatory restrictions and other actions, which could impair Aevi's ability to conduct business.

Use of third parties to manufacture Aevi's product candidates or diagnostics may increase the risk that Aevi will not have sufficient quantities of its product candidates or such quantities at an acceptable cost or that development of the diagnostics will be delayed. Clinical development and commercialization of Aevi's product candidates could be delayed, prevented or impaired.

        Aevi does not own or operate manufacturing facilities for production of its product candidates or diagnostics. Aevi lacks the resources and the capabilities to manufacture any of its product candidates or diagnostics on a clinical or commercial scale. Aevi currently outsources the manufacturing and packaging of its pre-clinical and clinical product candidates to third parties and if it pursues a diagnostic product, Aevi anticipates that it would outsource manufacturing to a third party. The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling up initial production. These problems include difficulties with production costs and yields and quality control, including stability of the product candidate. The occurrence of any of these problems could significantly delay Aevi's clinical trials or the commercial availability of its products.

        Aevi does not currently have any agreements with third party manufacturers for the long-term commercial supply of any of its product candidates or agreements with any third party for development of diagnostics. Aevi may be unable to enter into agreements for development and commercial supply with third party manufacturers or with a third party for development of diagnostics, or may be unable to do so on acceptable terms. Even if Aevi enters into these agreements, the manufacturers of each

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product candidate and developer of diagnostics will likely be single source suppliers to Aevi for a significant period of time.

        Reliance on third party manufacturers entails risks, to which Aevi would not be subject if it manufactured product candidates or products itself, including:

        The failure of any of Aevi's contract manufacturers to maintain high manufacturing standards could result in injury or death of clinical trial participants or patients using products. Such failure could also result in product liability claims, product recalls, product seizures or withdrawals, delays or failures in testing or delivery, cost overruns or other problems that could seriously harm Aevi's business or profitability.

        Aevi's contract manufacturers are required to adhere to FDA regulations setting forth current Good Manufacturing Practice ("cGMP"). These regulations cover all aspects of the manufacturing, testing, quality control and recordkeeping relating to Aevi's product candidates and any products that it may commercialize. Aevi's manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States. Aevi's failure or the failure of Aevi's third-party manufacturers, to comply with applicable regulations could significantly and adversely affect regulatory approval and supplies of Aevi's product candidates.

        Aevi's product candidates and any products that Aevi may develop or acquire may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that are both capable of manufacturing for Aevi and willing to do so. If the third parties that Aevi engages to manufacture products its pre-clinical tests and clinical trials should cease to continue to do so for any reason, Aevi likely would experience delays in advancing these trials while Aevi identifies and qualifies replacement suppliers and it may be unable to obtain replacement supplies on terms that are favorable to Aevi. Later relocation to another manufacturer will also require notification, review and other regulatory approvals from the FDA and other regulators and will subject Aevi's production to further cost and instability in the availability of Aevi's product candidates. In addition, if Aevi is not able to obtain adequate supplies of its product candidates or the drug substances used to manufacture them, it will be more difficult for Aevi to develop its product candidates and compete effectively.

        Aevi's current and anticipated future dependence upon others for the manufacture of its product candidates may adversely affect Aevi's future profit margins and its ability to develop product candidates and commercialize any products that obtain regulatory approval on a timely and competitive basis.

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Materials necessary to manufacture Aevi's product candidates may not be available on commercially reasonable terms, or at all, which may delay the development and commercialization of Aevi's product candidates.

        Aevi relies on the manufacturers of its product candidates to purchase from third party suppliers the materials necessary to produce the compounds for Aevi's preclinical and clinical studies and will rely on these other manufacturers for commercial distribution if Aevi obtains marketing approval for any of its product candidates. Suppliers may not sell these materials to Aevi's manufacturers at the time Aevi needs them or on commercially reasonable terms and all such prices are susceptible to fluctuations in price and availability due to transportation costs, government regulations, price controls and changes in economic climate or other foreseen circumstances. Aevi does not have any control over the process or timing of the acquisition of these materials by its manufacturers. Moreover, Aevi currently does not have any agreements for the commercial production of these materials. If Aevi's manufacturers are unable to obtain these materials for Aevi's preclinical and clinical studies, product testing and potential regulatory approval of Aevi's product candidates would be delayed, significantly impacting Aevi's ability to develop its product candidates. If Aevi's manufacturers or Aevi are unable to purchase these materials after regulatory approval has been obtained for Aevi's product candidates, the commercial launch of Aevi's product candidates would be delayed or there would be a shortage in supply, which would materially affect Aevi's ability to generate revenues from the sale of its product candidates.

Aevi may not be successful in its efforts to in-license or acquire additional product candidates.

        A significant element of Aevi's strategy is to build and expand its pipeline of product candidates through in-licensing or acquiring additional product candidates. Currently, Aevi does not have the internal expertise, nor does it intend to develop the internal expertise, necessary to discover new chemical entities for therapeutic purposes. As a result, if Aevi is not able to identify and acquire additional product candidates, it will not be able to expand its pipeline. Even if Aevi was successful in continuing to build its pipeline through in-licensing or acquisitions, the potential product candidates that Aevi in-license or acquire may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval and achieve market acceptance.

Aevi's business activities involve the use of hazardous materials, which require compliance with environmental and occupational safety laws regulating the use of such materials. If Aevi violates these laws, it could be subject to significant fines, liabilities or other adverse consequences.

        Aevi's research and development programs involve the controlled use of hazardous materials, including microbial agents and other hazardous compounds in addition to certain biological hazardous waste. Ultimately, the activities of Aevi's third-party product manufacturers when a product candidate reaches commercialization will also require the use of hazardous materials. Accordingly, Aevi is subject to federal, state and local laws governing the use, handling and disposal of these materials. Although Aevi believes that its safety procedures for handling and disposing of these materials comply in all material respects with the standards prescribed by local, state and federal regulations, Aevi cannot completely eliminate the risk of accidental contamination or injury from these materials. In addition, Aevi's collaborators may not comply with these laws. In the event of an accident or failure to comply with environmental laws, Aevi could be held liable for damages that result, and any such liability could exceed Aevi's assets and resources or Aevi could be subject to limitations or stoppages related to its use of these materials which may lead to an interruption of Aevi's business operations or those of its third-party contractors. While Aevi believes that its existing insurance coverage is generally adequate for its normal handling of these hazardous materials, it may not be sufficient to cover pollution conditions or other extraordinary or unanticipated events. Furthermore, an accident could damage or

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force Aevi to shut down its operations. Changes in environmental laws may impose costly compliance requirements on Aevi or otherwise subject Aevi to future liabilities and additional laws relating to the management, handling, generation, manufacture, transportation, storage, use and disposal of materials used in or generated by the manufacture of Aevi's products or related to its clinical trials. In addition, Aevi cannot predict the effect that these potential requirements may have on Aevi, its suppliers and contractors or its customers.

The FDA and other regulatory health agencies will regulate Aevi's product candidates and Aevi may never receive regulatory approval to market and sell its product candidates.

        Aevi's product candidates will require regulatory approvals prior to sale. In particular, Aevi's product candidates are subject to stringent approval processes, prior to commercial marketing, by the FDA and other regulatory health agencies in all countries where Aevi operates and desires to introduce its product candidates, whether sold via a strategic partner or directly by Aevi. These requirements range from efficacy and safety assessments in multiple clinical trials to long-term follow-up assessments on treated patients in clinical trials for product approval for sale. The process of obtaining FDA and corresponding foreign approvals is costly and time-consuming, and Aevi cannot assure that such approvals will be granted. Also, the regulations Aevi is subject to change frequently and such changes could cause delays in the development of Aevi's product candidates.

        It typically takes a company several years or longer to satisfy the substantial requirements imposed by the FDA and other regulatory health agencies in other countries for the introduction of therapeutic pharmaceutical and biological products. Pharmaceutical or biological products must be registered in accordance with applicable law before they can be manufactured, marketed and distributed. This registration must include preclinical, clinical, manufacturing and other data proving the product's safety, efficacy and clinical testing for its intended use(s) in the specific population(s) designated.

        To obtain regulatory approvals in the United States or other jurisdictions, Aevi or a collaborator must ultimately demonstrate to the satisfaction of the FDA and other health regulatory agencies that Aevi's product candidates are sufficiently safe and effective for their proposed indications in patients. Many factors, both known and unknown, can adversely impact the development of Aevi's product candidates and Aevi's ability to obtain regulatory approval for its product candidates, including:

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        There can be no assurance that Aevi's clinical trials will in fact demonstrate, to the satisfaction of the FDA and others, that Aevi's product candidates are sufficiently safe or effective for their intended use. The FDA or Aevi may also restrict or suspend its clinical trials at any time if either believes that Aevi is exposing the subjects participating in the trials to unacceptable health risks.

        Delays in obtaining such clearances and/or changes in existing requirements could have a material adverse effect on Aevi by making it difficult to advance product candidates or by reducing or eliminating their potential or perceived value and, therefore, Aevi's ability to conduct its business as currently planned could materially suffer. Failure to obtain required regulatory approvals could require Aevi to delay, curtail or cease its operations. Even if Aevi invests the necessary time, money and resources required to advance through the FDA approval process, there is no guarantee that Aevi will receive FDA approval of its product candidates.

        Aevi's failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or other regulatory health agencies, which may include any of the following sanctions:

        If any of these events were to occur, it could adversely affect Aevi's business, financial condition and results of operations.

Even if Aevi obtains regulatory approvals, its products will be subject to ongoing regulatory review and if Aevi fails to comply with continuing regulations, it could lose those approvals and its business, financial condition and results of operations would be seriously harmed.

        Even if Aevi's product candidates receive initial regulatory approval or clearance for specific therapeutic applications, Aevi will still be subject to ongoing reporting obligations, and such product and the related manufacturing operations will be subject to continuing regulatory review, including

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FDA and other health regulatory inspections. This ongoing review may result in the withdrawal of Aevi's product from the market, the interruption of manufacturing operations and/or the imposition of labeling and/or marketing limitations related to specific applications of Aevi's product. Since many more patients will be exposed to Aevi's product candidates following their marketing approval, serious but infrequent adverse events that were not observed in clinical trials may be observed during the commercial marketing of such product. In addition, the manufacturer(s) and the manufacturing facilities that Aevi will use to produce its product candidates will be subject to periodic review and inspection by the FDA and other health regulatory agencies. Late discovery of previously unknown problems with any product, manufacturer or manufacturing process, or failure to comply with regulatory requirements, may result in actions, such as:

        In addition, from time to time, legislation is drafted and introduced in the United States that could significantly change the statutory provisions governing any regulatory clearance or approval that Aevi receives from the U.S. regulatory authorities. FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect Aevi's business and its product. Aevi cannot predict what these changes will be, how or when they will occur or what effect they will have on the regulation of its product. If Aevi, or its licensees, suppliers, collaborative research partners or clinical investigators are slow to adapt, or are unable to adapt, to changes in existing regulatory requirements or the adoption of new regulatory requirements or policies, Aevi may lose marketing approval for any of the therapeutic applications of Aevi's product (to the extent that such applications are initially approved), resulting in decreased or lost revenue from milestones, product rental or usage fees, or royalties.

        Although physicians, in the practice of medicine, may prescribe approved drugs for unapproved indications, pharmaceutical companies are prohibited from marketing or promoting their drug products for uses outside the approved label, a practice known as off-label promotion. Certain of Aevi's product candidates are under development for indications for which off-label use is possible. To the extent the price of Aevi's product candidates, if approved, is significantly higher than the prices of commercially available products that are frequently prescribed off-label, physicians may recommend and prescribe these commercial alternatives instead of writing prescriptions for Aevi's products. Either of these outcomes may adversely impact Aevi's results of operations by limiting how Aevi prices its product and increasing Aevi's competition.

        In addition, if any of Aevi's product candidates are approved, its product labeling, advertising and promotional materials would be subject to regulatory requirements and continuing review by the FDA,

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Department of Justice, Department of Health and Human Services' Office of Inspector General, state attorneys general, members of Congress and the public. If Aevi is found to have improperly promoted off-label uses of its product candidates, if approved, Aevi may become subject to significant liability. Such enforcement has become more common in the industry. If Aevi is found to have promoted its products for any such off-label uses, the federal government could levy civil, criminal or administrative penalties, and seek fines against Aevi. The FDA or other regulatory authorities could also request that Aevi enter into a consent decree or a corporate integrity agreement, or seek a permanent injunction against Aevi under which specified promotional conduct is monitored, changed or curtailed. If Aevi cannot successfully manage the promotion of its product candidates, if approved, Aevi could become subject to significant liability, which would materially adversely affect Aevi's business and financial condition.

        In the United States, engaging in the impermissible promotion of Aevi's products, following approval, for off-label uses can also subject Aevi to false claims litigation under federal and state statutes, which can lead to civil and criminal penalties and fines, agreements with governmental authorities that materially restrict the manner in which Aevi promotes or distributes drug products through, for example, corporate integrity agreements, and debarment, suspension or exclusion from participation in federal and state healthcare programs. These false claims statutes include, among others, federal civil False Claims Act, which allows any individual to bring a lawsuit against a pharmaceutical company on behalf of the federal government alleging submission of false or fraudulent claims, or causing others to present such false or fraudulent claims, for payment by a federal program such as Medicare or Medicaid. If the government decides to intervene and prevails in the lawsuit, the individual will share in the proceeds from any fines or settlement funds. If the government declines to intervene, the individual may pursue the case alone. These false claims lawsuits against pharmaceutical companies have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements regarding certain sales practices promoting off-label drug uses. This growth in litigation has increased the risk that a pharmaceutical company will have to defend a false claim action, pay settlement fines or restitution, as well as criminal and civil penalties, agree to comply with burdensome reporting and compliance obligations, and be excluded from Medicare, Medicaid and other federal and state healthcare programs. If Aevi does not lawfully promote its approved products, if any, Aevi may become subject to such litigation and, if Aevi does not successfully defend against such actions, those actions may have an adverse effect on Aevi's business, financial condition, results of operations and prospects.

If Aevi received regulatory approvals, it intends to market its products in multiple jurisdictions where Aevi has limited or no operating experience and may be subject to increased business and economic risks that could affect its financial results.

        If Aevi receives regulatory approvals, it may plan to market its products in jurisdictions where Aevi has limited or no experience in marketing, developing and distributing its products. Aevi is subject to a variety of risks inherent in doing business internationally, including risks related to the legal and regulatory environment in non-U.S. jurisdictions, including with respect to privacy and data security, trade control laws and unexpected changes in laws, regulatory requirements and enforcement, as well as risks related to fluctuations in currency exchange rates and political, social and economic instability in foreign countries. If Aevi is unable to manage such operations successfully, Aevi's financial results could be adversely affected.

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Even if any of Aevi's product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

        Even if the FDA or any other regulatory health agency approves the marketing of any product candidates that Aevi develops, physicians, patients, third-party payors or the medical community may not accept or use them. Efforts to educate the medical community and third-party payors on the benefits of Aevi's product candidates may require significant resources and may not be successful. If any product candidate that Aevi develops does not achieve an adequate level of acceptance, Aevi may not generate significant product revenue or any profits from operations. The degree of market acceptance of any of Aevi's product candidates that are approved for commercial sale will depend on a variety of factors, including:

        Aevi's efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of Aevi's products, if approved, may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of Aevi's product candidates. Because Aevi expects sales of its product candidates, if approved, to generate substantially all of its product revenue for the foreseeable future, the failure of Aevi's product candidates to find market acceptance would harm Aevi's business and could require Aevi to seek additional financing.

Aevi's efforts to comply with fraud and abuse laws could be costly, and, if Aevi is unable to fully comply with such laws, it could face substantial penalties.

        Aevi is subject to extensive federal and state healthcare fraud and abuse laws and regulations, including, but not limited to, the following:

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        If Aevi's past or present operations are found to be in violation of any of these laws or any other governmental regulations that may apply to Aevi, it may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from third-party payer programs such as Medicare and Medicaid and/or the curtailment or restructuring of Aevi's operations. If any of the physicians or other providers or entities with whom Aevi may do business are found to be non-compliant with applicable laws, they may be subject to criminal, civil or administrative sanctions including exclusions from government- funded health care programs, which could also negatively impact Aevi's operations. Aevi's ongoing efforts to comply with these laws may be costly, and Aevi's failure to comply with these laws could have a material adverse effect on Aevi's business, financial condition and results of operations. The risk of Aevi being found in violation of these laws is increased by the fact that many of them have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and their interpretations are subject to change. Any action against Aevi for violation of these laws, even if Aevi successfully defends against it, could cause Aevi to incur significant legal expenses, divert its management's attention from the operation of its business and damage Aevi's reputation.

        Comparable laws and regulations exist in countries within the European Economic Area. Although such laws are partially based upon European Union law, they may vary from country to country. Non-compliance with any of these laws or regulations could lead to criminal or civil liability.

Governments outside the United States tend to impose strict price controls, which may adversely affect Aevi's revenues, if any.

        In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. Aevi may be required to conduct a clinical trial that compares the cost-effectiveness of its product candidate to other available therapies in such countries. If reimbursement of Aevi's products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, Aevi's business could be harmed, possibly materially.

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Aevi expects to rely on third-party contractors and organizations to conduct its clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

        Aevi relies and expects to continue to rely on third-party contractors, clinical data management organizations, independent contractors, medical institutions and clinical investigators to conduct its clinical trials of AEVI-002 and for its other development candidate programs. These agreements may terminate for a variety of reasons, including a failure to perform by the third parties. If Aevi needed to enter into alternative arrangements, its product development activities could be delayed.

        Aevi competes with many other companies, some of which may be its competitors, for the resources of these third parties. Large pharmaceutical companies often have significantly more extensive agreements and relationships with such third-party providers, and such third-party providers may prioritize the requirements of such large pharmaceutical companies over Aevi. The third parties on whom Aevi relies may terminate their engagements with Aevi at any time, which may cause delay in the development and commercialization of Aevi's product candidates. If any such third party terminates its engagement with Aevi or fails to perform as agreed, Aevi may be required to enter into alternative arrangements, which would result in significant cost and delay to its product development program. Moreover, Aevi's agreements with such third parties generally do not provide assurances regarding employee turnover and availability, which may cause interruptions in the research on Aevi's product candidates by such third parties.

        Aevi's reliance on these third parties to conduct its clinical trials will reduce Aevi's control over these activities but will not relieve Aevi of its responsibilities. For example, the FDA and other regulatory authorities require Aevi to comply with standards, commonly referred to as 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. Aevi is also required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.

        If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct Aevi's clinical trials in accordance with regulatory requirements or Aevi's stated protocols, Aevi will not be able to obtain, or may be delayed in obtaining, marketing approvals for its product candidates and will not be able to, or may be delayed in its efforts to, successfully commercialize Aevi's product candidates.

Risks Related to Aevi's Business and Industry

Even if any of Aevi's product candidates advance through pre-clinical studies and clinical trials, Aevi may experience difficulties in managing its growth and expanding its operations.

        Aevi has limited resources to carry out objectives for its current and future pre-clinical studies and clinical trials. In addition, while Aevi has experienced management and expects to contract out many of the activities related to conducting these programs, Aevi is a small company and therefore has limited internal resources both to conduct pre-clinical studies and clinical trials and to monitor third-party providers. As Aevi's product candidates advance through pre-clinical studies and clinical trials, Aevi, or the combined company upon completion of the Merger, will need to expand its development, regulatory and manufacturing operations, either by expanding its internal capabilities or contracting with other organizations to provide these capabilities. The combined company's ability to manage its operations and future growth will require it to continue to improve its operational, financial and management controls, reporting systems and procedures.

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Aevi is subject to intense competition from companies with greater resources and more mature products, which may result in Aevi's competitors developing or commercializing products before or more successfully than Aevi.

        While Aevi believes its product candidates have significant advantages, there are a number of well-established and sizeable companies engaged in the development, production, marketing, sale and distribution of products and product candidates that may potentially be competitive with Aevi's product candidates. Many of these companies are more experienced than Aevi and represent significant competition. It is also possible that other parties have in development product candidates substantially similar to or with properties that are more efficacious, less invasive and more cost effectively delivered than Aevi's product candidates. The success of Aevi's competitors in developing, bringing to market, selling and distributing their products could negatively affect Aevi's result of operations and/or general acceptance of Aevi's product candidates.

Aevi faces risks related to general economic conditions that may adversely affect its business.

        In general, Aevi's operating results can be significantly and adversely affected by negative economic conditions, high labor, material and commodity costs, and unforeseen changes in demand for Aevi's potential products. These conditions have resulted and could continue to result in slower adoption of new technologies and cost containment efforts by governments and other payers for healthcare research and development, products and services.

Health care policy changes may have a material adverse effect on Aevi.

        Health care reform is often a subject of attention in governments that are trying to control health care expenditures. Health care reform proposals have been the subject of much debate in the U.S. Congress and some state legislatures, as well as in other countries. There is no assurance that legislation or underlying rules and guidelines resulting in adverse effects on Aevi or its product candidates will not be adopted in a country in which Aevi intends to operate and/or upon the distribution of Aevi's product candidates in the United States.

        In August 2017, President Trump signed FDARA into law, imposing significant new requirements for clinical trial sponsors which will affect, among other things, obtaining orphan drug designation, and the development of drugs and biological products for pediatric use. This legislation will result in new regulations which might materially impact Aevi's business.

Reimbursement policies of third-party payers may negatively affect the acceptance of Aevi's product candidates by subjecting the product candidates to sales and pharmaceutical pricing controls.

        Third-party payers may affect the pricing or relative attractiveness of Aevi's product candidates by regulating the level of reimbursement provided to the physicians and clinics utilizing Aevi's product candidates or by refusing reimbursement. If reimbursement under these programs, or if the amount of time to secure reimbursement is too long, Aevi's ability to market its technology and product candidates may be adversely and materially affected. In international markets, reimbursement by private third-party medical insurance providers, including government insurers and independent providers, varies from country to country.

        The Budget Control Act enacted in August 2011 committed the U.S. federal government to significantly reduce the federal deficit over ten years. In addition to placing caps on discretionary spending through 2021, the Budget Control Act also established a budget sequestration that calls for automatic spending cuts over a nine-year period. Across-the-board spending cuts went into effect on March 1, 2013, and Medicare spending cuts that reduce Part A and Part B payments by 2% went into effect on April 1, 2013. Further, the Bipartisan Budget Act of 2013, passed in December 2013, extends the sequestration automatic Medicare spending cuts to 2023 from 2021. Although Aevi cannot predict the full effect on its business of the implementation of existing legislation such as The Patient

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Protection and Affordable Care Act ("ACA") and the Budget Control Act, or the enactment of additional legislation, Aevi believes that legislation or regulation that reduces reimbursement for its products could adversely affect how much or under what circumstances health care providers will prescribe or administer Aevi's products. This could materially and adversely impact Aevi's business by reducing its ability to generate revenue, raise capital, obtain additional collaborators and market its products. In addition, Aevi believes the increasing emphasis on managed care in the United States has and will continue to put pressure on the price and usage of pharmaceutical products, which may adversely impact product sales.

        The pricing of pharmaceutical products, in general, and specialty drugs, in particular, has also been a topic of concern in the U.S. government. There can be no assurance as to how this scrutiny on pricing of pharmaceutical products will impact future pricing of Aevi's products or orphan drugs or pharmaceutical products generally.

Aevi may experience product liability claims, which could adversely affect its business and financial condition.

        Aevi may become subject to product liability claims. Aevi has not experienced any product liability claims to date; however, the production at commercial scale, distribution, sale and support of its product candidates may entail the risk of such claims, which is likely to be substantial in light of the use of Aevi's product candidates in the treatment of medical conditions. Aevi carries product liability insurance coverage in connection with the clinical trials of its product candidates. If Aevi is unable to obtain a renewal or if Aevi suffers a successful product liability claim in excess of its insurance coverage, such claim could result in significant monetary liability and could have a material adverse impact on Aevi's business, operations, financial position and/or reputation.

        Regardless of merit or eventual outcome, product liability claims may result in, among other things:

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses and may divert management's attention from operating Aevi's business which could have a material adverse effect on its business.

        There have been changing laws, regulations and standards relating to corporate governance and public disclosure, as well as new regulations promulgated by the SEC and rules promulgated by the national securities exchanges, including The Nasdaq Stock Market. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding

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compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, Aevi's efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Aevi's board members, principal executive officer and principal financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, Aevi may have difficulty attracting and retaining qualified board members and executive officers, which could have a material adverse effect on its business. If Aevi's efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, Aevi may incur additional expenses to comply with standards set by regulatory authorities or governing bodies which would have a material adverse effect on its business, financial condition and results of operations.

Security breaches and other disruptions to Aevi's information technology infrastructure could interfere with its operations or clinical trials, compromise information belonging to Aevi and its suppliers and expose Aevi to liability, which could adversely impact its business and reputation.

        Aevi relies on information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including the conduct of Aevi's clinical trials. Additionally, Aevi collects and stores sensitive data, including proprietary business information and confidential patient health information. Despite security measures, Aevi's information technology networks and infrastructure may be vulnerable to damage, disruptions or shutdowns due to attack by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters or other catastrophic events. Aevi has invested in its systems and the protection of its data to reduce the risk of an intrusion or interruption, and Aevi monitors its systems on an ongoing basis for any current or potential threats. Aevi can give no assurances that these measures and efforts will prevent interruptions or breakdowns. If Aevi is unable to detect or prevent a security breach or cyber-attack or other disruption from occurring, then Aevi could incur losses or damage to its data, or inappropriate disclosure of Aevi's confidential information or that of others; and Aevi could sustain damage to its reputation, suffer disruptions to its research and development and incur increased operating costs including costs to mitigate any damage caused and protect against future damage, and be exposed to additional regulatory scrutiny or penalties and to civil litigation and possible financial liability. For instance, the loss of preclinical or clinical data could result in delays in Aevi's development and regulatory filing efforts and significantly increase Aevi's costs. Any such event could result in legal claims or proceedings, liability or significant penalties under privacy laws, disruption in operations and damage to Aevi's reputation, which could adversely affect its business.

Risks Related to Aevi's Intellectual Property

If Aevi is unable to obtain and maintain sufficient intellectual property protection for its product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, Aevi's competitors could develop and commercialize product candidates similar or identical to Aevi's, and Aevi's ability to successfully commercialize its product candidates may be impaired.

        As is the case with similarly situated companies, Aevi's success depends in large part on its ability to obtain and maintain protection of the intellectual property it may own solely and jointly with others, particularly patents, in the United States and other countries with respect to Aevi's product candidates and technology. Aevi seeks to protect its proprietary position by in-licensing AEVI-002, and by filing patent applications in the United States and abroad related to product candidates that it may identify.

        Obtaining and enforcing biopharmaceutical patents is costly, time consuming and complex, and Aevi may not be able to file and prosecute all necessary or desirable patent applications, or maintain,

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enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner. It is also possible that Aevi will fail to identify patentable aspects of its research and development output before it is too late to obtain patent protection. Aevi may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed to third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of Aevi's business.

        The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation. Applications for patents and other intellectual property rights capable of being registered have been, and will be, filed in certain key jurisdictions. Aevi may not successfully obtain patents in the countries in which patent applications have been or will be filed, and Aevi may not develop other patentable products or processes. In addition, the patents Aevi owns and license, or any further patents Aevi may own or license, may not prevent other persons or companies from developing similar or therapeutically equivalent products, and other persons or companies may be issued patents that may prevent the sale of Aevi's products or that will require Aevi to license or pay significant fees or royalties. Patents also will not protect Aevi's product candidates if competitors devise ways of making or using these product candidates without legally infringing Aevi's patents. Furthermore, Aevi's own in-licensed patents may not be valid or enforceable or be able to provide Aevi with meaningful protection. Aevi cannot be assured that its patents will not be challenged by third parties or that it will be successful in any defense it undertakes. Patent litigation is costly and time-consuming, and there can be no assurance that Aevi will have, or will be able to devote, sufficient resources to pursue such litigation. In addition, potentially unfavorable outcomes in such proceedings could limit Aevi's intellectual property rights and activities and have an adverse effect on its business.

        In addition, the laws of foreign countries may not protect Aevi's rights to the same extent as the laws of the United States, or vice versa. Further, Aevi may not be aware of all third-party intellectual property rights potentially relating to its product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, Aevi cannot know with certainty whether it was the first to make the inventions claimed in its patents or pending patent applications, or that it was the first to file for patent protection of such inventions. Moreover, Aevi may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or the USPTO. As a result, the issuance, scope, validity, enforceability and commercial value of Aevi's patent rights are highly uncertain. Aevi's pending and future patent applications may not result in patents being issued that protect its product candidates, in whole or in part, or which effectively prevent others from commercializing competitive product candidates. Even if Aevi's patent applications issue as patents, they may not issue in a form that will provide Aevi with any meaningful protection, prevent competitors from competing with Aevi or otherwise provide Aevi with any competitive advantage. Aevi's competitors may be able to circumvent its patents by developing similar or alternative product candidates in a non-infringing manner.

        In addition, even if patents do issue to Aevi or its licensors covering embodiments of its product candidates, devices, or methods of using them, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and those patents can be challenged by Aevi's competitors or other third parties in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit Aevi's ability to stop others from using or commercializing similar or identical product candidates, or limit the duration of the patent protection of Aevi's product candidates. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, Aevi's patent rights, allow third parties to commercialize Aevi's product candidates and compete directly with Aevi, without payment to Aevi,

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or result in Aevi's inability to manufacture or commercialize drugs without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by Aevi's patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with Aevi to license, develop or commercialize current or future product candidates.

If Aevi fails to comply with its obligations in the agreements under which it licenses intellectual property rights from third parties or these agreements are terminated or Aevi otherwise experience disruptions to its business relationships with its licensors, Aevi could lose intellectual property rights that are important to its business.

        Aevi is party to several license agreements under which it in-license patent rights and other intellectual property related to Aevi's business. Aevi may need to obtain additional licenses from others in the future to advance its research and development activities or allow the commercialization of product candidates Aevi may identify and pursue. See the section entitled "Aevi Business" for a more detailed description of Aevi's current license agreements.

        Aevi's license agreements impose, and it expects that future license agreements will impose, various diligence, milestone payment, royalty, insurance and other obligations on Aevi. In spite of Aevi's efforts, its licensors might conclude that Aevi has materially breached its obligations under such license agreements and might therefore terminate the license agreements, thereby removing or limiting Aevi's ability to develop and commercialize products and technology covered by these license agreements. Any uncured, material breach under these license agreements could result in Aevi's loss of rights to practice the patent rights and other intellectual property licensed to Aevi under these agreements, and could compromise Aevi's development and commercialization efforts for product development candidates. If any of Aevi's current or future licenses or material relationships or any in-licenses upon which Aevi's current or future licenses are based are terminated, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to its current products and Aevi may be required to cease its development and commercialization of current or future product development candidates. Any of the foregoing could have a material adverse effect on Aevi's competitive position, business, financial conditions, results of operations and prospects.

        If any of Aevi's current or future licenses or material relationships or any in-licenses upon which Aevi's current or future licenses are based are terminated or breached, Aevi may:

        If Aevi experiences any of the foregoing, it could harm Aevi's business, financial condition and results of operations.

Aevi's intellectual property in-licenses with third parties may be subject to disagreements over contract interpretations, which could narrow the scope of Aevi's rights to the relevant intellectual property or technology or increase Aevi's financial or other obligations to its licensors.

        The agreements under which Aevi currently in-license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple

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interpretations. Disputes may arise regarding intellectual property subject to a licensing agreement, including:

        The resolution of any contract interpretation disagreement that may arise could narrow what Aevi believes to be the scope of its rights to the relevant intellectual property or technology, or increase what Aevi believes to be its financial or other obligations under the agreement, either of which could have a material adverse effect on Aevi's business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that Aevi has licensed prevent or impair Aevi's ability to maintain its current licensing arrangements on commercially acceptable terms, Aevi may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on Aevi's business, financial conditions, results of operations and prospects.

        As Aevi develops its product candidates, it may need to obtain additional licenses to protect its rights to make and use its technology. These licenses may not be available on acceptable terms or at all. Even if Aevi is able to obtain a license, the license would likely obligate Aevi to pay license fees or royalties or both, and the rights granted to Aevi might be non-exclusive, which could result in Aevi's competitors gaining access to the same intellectual property. Ultimately, Aevi could be prevented from commercializing a product or be forced to cease some aspect of its business operations, if, as a result of actual or threatened patent infringement claims, Aevi is unable to enter into licenses on acceptable terms. All of the issues described above could also impact Aevi's collaborators, which would also impact the success of the collaboration and therefore Aevi. Under certain of Aevi's in-licensed patents, the licensor is responsible for maintaining, controlling or enforcing the licensed intellectual property portfolio. Thus, Aevi cannot ensure that the patent rights licensed to Aevi will be adequately maintained, controlled or enforced by Aevi's licensor. In addition, even when Aevi has the right to control patent prosecution of licensed patents and patent applications, enforcement of licensed patents, or defense of claims asserting the invalidity of those patents, Aevi may still be adversely affected or prejudiced by actions or inactions of its licensors and their counsel that took place prior to or after Aevi assuming control.

Aevi may be required to make significant payments in connection with its license and development agreements.

        Aevi is party to license agreements and a research agreement with The Children's Hospital of Philadelphia ("CHOP") and the Center for Applied Genomics ("CAG"), and a Development and Option Agreement with Kyowa Hakko Kirin Co., Ltd. (the "KHK Development and Option Agreement") pursuant to which Aevi exclusively licenses certain technology related to the development of AEVI-002 and AEVI-005, a license agreement with OSI Pharmaceuticals, LLC, a wholly owned subsidiary of Astellas Pharma, Inc. ("Astellas"), for AEVI-006 and a license and option agreement with MedImmune Limited, a subsidiary of AstraZeneca plc ("AstraZeneca"), for AEVI-007. Under Aevi's license agreements and research agreement with CHOP, Aevi may be required to make significant

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payments in connection with the achievement of certain milestones and royalties on the sale of resulting products and have certain ongoing payment obligations with respect to Aevi's Research Agreement. If Aevi exercises its option under the terms of KHK Development and Option Agreement, Aevi will be obligated to cover significant development costs for AEVI-002 and make significant payments in connection with certain milestones and the sale of resulting products. Pursuant to Aevi's exercise of the AZ Option, Aevi is obligated to spend significant amounts to develop the program. If Aevi develops AEVI-006, it will have significant obligations to Astellas under the license agreement with OSI Pharmaceuticals, LLC, a wholly owned subsidiary of Astellas. If the obligations become due under the terms any of these agreements, Aevi may not have sufficient funds available to meet its obligations and its development efforts may be negatively impacted. In addition, if Aevi does not have sufficient funds to pay its ongoing obligations under the development agreement with CHOP, Aevi may lose its rights under that agreement, which would negatively impact their development capabilities.

Third-party claims of intellectual property infringement may prevent or delay Aevi's development and commercialization efforts.

        Aevi's commercial success depends in part on Aevi avoiding infringement of the patents and proprietary rights of third parties. However, Aevi's research, development and commercialization activities may be subject to claims that Aevi infringed or otherwise violated patents or other intellectual property rights owned or controlled by third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and inter partes review and reexamination proceedings before the USPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which Aevi is pursuing development candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that AEVI-002, AEVI-006, AEVI-007 or other product development candidates that Aevi may identify may be subject to claims of infringement of the patent rights of third parties.

        Third parties may bring patent infringement or other intellectual property claims against Aevi, which would cause Aevi to incur substantial expenses and, if successful against Aevi, could cause Aevi to pay substantial damages. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of AEVI-002, AEVI-006, AEVI 007, or other product development candidates that Aevi may identify. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that AEVI-002, AEVI-006, AEVI-007 or other product development candidates that Aevi may identify may infringe. In addition, third parties may obtain patents in the future and claim that use of Aevi's technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of AEVI-002, AEVI-006, AEVI-007 or other product development candidates that Aevi may identify, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block Aevi's ability to commercialize such product candidate unless Aevi obtained a license under the applicable patents, or until such patents expire.

        Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of Aevi's formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block Aevi's ability to develop and commercialize the applicable product candidate unless Aevi obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all, or it may be non-exclusive, which could result in Aevi's competitors gaining access to the same intellectual property.

        Parties making claims against Aevi may obtain injunctive or other equitable relief, which could effectively block Aevi's ability to further develop and commercialize AEVI-002, AEVI-006, AEVI-007

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or other product development candidates that Aevi may identify. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from Aevi's business. In the event of a successful claim of infringement against us, Aevi may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties, redesign Aevi's infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

        If a patent infringement suit were brought against us, Aevi could be forced to stop or delay research, development, manufacturing or sales of the product candidate that is the subject of the suit. Additionally, if it is determined that Aevi's product candidates infringe third-party patents or other intellectual property rights, there can be no assurance that Aevi can successfully develop non-infringing alternatives on a timely basis or license non-infringing alternatives, if any exist, on commercially reasonable terms. A significant intellectual property impediment to Aevi's ability to develop and commercialize its product candidates could materially adversely affect Aevi's business prospects.

        Parties making claims against Aevi may be able to sustain the costs of complex patent litigation more effectively than Aevi can because they have substantially greater resources. 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 Aevi's 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 Aevi's ability to raise additional funds or otherwise have a material adverse effect on Aevi's business, results of operations, financial condition and prospects.

Patent terms may be inadequate to protect Aevi's competitive position on Aevi's product candidates for an adequate amount of time.

        Even if Aevi's product candidates and the methods for treating patients for prescribed indications using these product candidates are covered by valid and enforceable patents and have claims with sufficient scope, disclosure, and support in the specification, the patents will provide protection only for a limited amount of time. 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. Even if patents covering Aevi's product candidates are obtained, once the patent life has expired, Aevi may be open to competition from competitive products, including generics or biosimilars. 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, Aevi's owned and licensed patent portfolio may not provide Aevi with sufficient rights to exclude others from commercializing products similar or identical to Aevi.

If Aevi is not able to obtain patent term extension or non-patent exclusivity in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of Aevi's marketing exclusivity for AEVI-002, AEVI-006, AEVI-007, or other product development candidates that Aevi may identify, Aevi's business may be materially harmed.

        Depending upon the timing, duration and specifics of FDA marketing approval of AEVI-002, AEVI-006, AEVI-007 or other product development candidates that Aevi may identify, one of the U.S. patents covering each of such product candidates or the use or manufacturing method thereof may be eligible for up to five years of patent term extension under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for

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manufacturing it may be extended. Patent term extension also may be available in certain foreign countries upon regulatory approval of Aevi's product candidates. Nevertheless, Aevi may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

        If Aevi is unable to obtain patent term extension or restoration, or the term of any such extension is less than Aevi requests, the period during which Aevi will have the right to exclusively market its product may be shortened and Aevi's competitors may obtain approval of competing products following Aevi's patent expiration sooner, and Aevi's revenue could be reduced, possibly materially.

        It is possible that Aevi will not obtain patent term extension under the Hatch-Waxman Act for a U.S. patent covering AEVI-002 or other product candidates that Aevi may identify even where that patent is eligible for patent term extension, or if Aevi obtains such an extension, it may be for a shorter period than it had sought. Further, for certain of Aevi's licensed patents, Aevi does not have the right to control prosecution, including filing with the USPTO, a petition for patent term extension under the Hatch-Waxman Act. Thus, if one of Aevi's licensed patents is eligible for patent term extension under the Hatch-Waxman Act, Aevi may not be able to control whether a petition to obtain a patent term extension is filed, or obtained, from the USPTO.

If Aevi is unable to protect the confidentiality of its trade secrets, the value of Aevi's technology could be materially adversely affected and its business would be harmed.

        Aevi's business is dependent on proprietary rights that may be difficult to protect, and such dependence could affect Aevi's ability to effectively compete. In addition to patents, Aevi also relies on trade secrets, technical know-how, licensing opportunities, and continuing innovation to develop and maintain its competitive position especially where Aevi does not believe that patent protection is appropriate or obtainable. Trade secrets are by nature difficult to protect. Aevi seeks to protect its proprietary information by requiring its employees, consultants, contractors, outside scientific collaborators and other advisors to execute non-disclosure and confidentiality agreements and Aevi's employees to execute assignment of invention agreements to Aevi. Aevi also requires confidentiality or material transfer agreements from third parties that receive Aevi's confidential data or materials. These agreements are designed to protect Aevi's proprietary information. However, Aevi cannot be certain that such agreements have been entered into with all relevant parties, and even if they are all in place, there can still be no guarantee that agreements have not been or will not be violated or that there will be an adequate remedy available for a violation of an agreement. Accordingly, Aevi cannot be certain that its trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to Aevi's trade secrets or independently develop substantially equivalent information and techniques. Enforcing a claim that a third party illegally obtained and is using Aevi's trade secrets is expensive and time-consuming, and the outcome is unpredictable. Moreover, others, including Aevi's competitors, may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to Aevi's trade secrets or technology.

        Aevi also seeks to preserve the integrity and confidentiality of its confidential proprietary information by maintaining physical security of its premises and physical and electronic security of Aevi's information technology systems, but it is possible that these security measures could be breached. If any of Aevi's confidential proprietary information were to be lawfully obtained or independently developed by a competitor, Aevi would have no right to prevent such competitor from using that technology or information to compete with Aevi, which could harm Aevi's competitive position.

        Aevi anticipates that it will spend both time and management resources to develop and file trademark applications in the future. However, third parties may have trademarks or pending

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trademark applications on Aevi's contemplated marks, similar marks, or in confusingly similar fields of use (or may be using Aevi's contemplated marks or similar marks). Aevi may have to change its use of certain marks which could have an adverse impact on Aevi's business and may require Aevi to spend additional funds to develop new marks.

Although Aevi is not currently involved in any intellectual property litigation, Aevi may become involved in lawsuits to protect or enforce its patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

        Unauthorized parties may infringe Aevi's patents or other intellectual property, try to copy aspects of Aevi's product candidates and technologies, or obtain and use information Aevi considers proprietary. Policing the unauthorized use of Aevi's proprietary rights is difficult. Aevi cannot guarantee that no harm or threat will be made to Aevi or its collaborators' intellectual property. In addition, changes in, or different interpretations of, patent laws in the United States and other countries may also adversely affect the scope of Aevi's patent protection and Aevi's competitive situation. Further, Aevi may not have sufficient rights under Aevi's license agreements with collaborators to enforce the intellectual property licensed to Aevi against third-party infringers.

        Although Aevi is not currently involved in any litigation, if Aevi were to initiate legal proceedings against a third party to enforce a patent covering product candidates that Aevi may identify, the defendant could counterclaim that the patent covering Aevi's product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, written description or non- enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Interference or derivation proceedings provoked by third parties or brought by Aevi or declared by the USPTO may be necessary to determine the priority of inventions with respect to Aevi's patents or patent applications. An unfavorable outcome could require Aevi to cease using the related technology or to attempt to license rights to it from the prevailing party. Aevi's business could be harmed if the prevailing party does not offer Aevi a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and Aevi's competitors gain access to the same technology. Aevi's defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract Aevi's management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on Aevi's ability to raise the funds necessary to continue Aevi's clinical trials, continue Aevi's research programs, license necessary technology from third parties, or enter into development partnerships that would help Aevi bring AEVI- 002, AEVI-006, AEVI-007 or other product candidates that Aevi may identify to market. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of Aevi's confidential information could be compromised by disclosure during this type of litigation.

        There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of Aevi's common stock.

Aevi may be subject to claims challenging the inventorship of its patents and other intellectual property.

        Aevi or its licensors may be subject to claims that former employees, collaborators or other third parties have an interest in Aevi's owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor. Litigation may be necessary to defend against these and other claims challenging inventorship or Aevi or its licensors' ownership of Aevi owned or in-licensed patents,

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trade secrets or other intellectual property. If Aevi or Aevi's licensors fail in defending any such claims, in addition to paying monetary damages, Aevi may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to Aevi's product candidates. Even if Aevi is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on Aevi's business, financial condition, results of operations and prospects.

Any issued patents that may cover Aevi's product candidates could be found invalid or unenforceable if challenged in court.

        Third parties may claim that Aevi's owned or in-licensed patents relating to product candidates that Aevi may identify, are invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.

        Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non- enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to Aevi's patents in such a way that they no longer cover AEVI-002 or other product candidates that Aevi may identify. The outcome following legal assertions of invalidity and unenforceability is unpredictable. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, Aevi would lose at least part, and perhaps all, of the patent protection on Aevi's product candidates. Such a loss of patent protection would have a material adverse impact on Aevi's business.

Aevi may be subject to claims that its employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that its employees have wrongfully used or disclosed alleged trade secrets of their former employers.

        As is common in the biotechnology and pharmaceutical industry, Aevi employs individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including Aevi's competitors or potential competitors. Agreements with Aevi's employees aim to prevent employees from bringing any proprietary rights of third parties to Aevi. Although Aevi tries to ensure that its employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for Aevi, Aevi may be subject to claims that Aevi or its employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of Aevi's employee's former employer or other third parties. Litigation may be necessary to defend against these claims. If Aevi fails in defending any such claims, in addition to paying monetary damages, Aevi may lose valuable intellectual property rights or personnel, which could adversely impact its business. Even if Aevi is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Obtaining and maintaining Aevi's patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and Aevi's patent protection could be reduced or eliminated for non-compliance with these requirements.

        Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent

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agencies outside of the United States in several stages over the lifetime of the patents and/or applications. Aevi has systems in place to remind it to pay these fees, and it employs an outside agency and relies on its outside agency to pay these fees due to U.S. and non-US patent agencies. Aevi employs reputable professionals to help it comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, Aevi's competitors might be able to enter the market, having a material adverse effect on Aevi's business.

Aevi may not be able to protect its intellectual property rights throughout the world.

        Filing, prosecuting and defending patents on Aevi's product candidates in all countries throughout the world would be prohibitively expensive, and Aevi's 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 foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

        Consequently, Aevi may not be able to prevent third parties from practicing Aevi's inventions in all countries outside the United States, or from selling or importing products made using Aevi's inventions in and into the United States or other jurisdictions. Competitors may use Aevi's technologies in jurisdictions where Aevi has not obtained patent protection to develop their own products and may also export infringing products to territories where Aevi has patent protection, but enforcement is not as strong as that in the United States. These products may compete with Aevi's products and its patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

        Proceedings to enforce Aevi's patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert Aevi's efforts and attention from other aspects of its business, could put Aevi's patents at risk of being invalidated or interpreted narrowly and Aevi's patent applications at risk of not issuing and could provoke third parties to assert claims against Aevi. Aevi may not prevail in any lawsuits that it initiates and the damages or other remedies awarded, if any, might not be commercially meaningful. Accordingly, Aevi's efforts to enforce its intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Aevi develops or licenses.

Changes in U.S. and foreign patent law could diminish the value of patents in general, thereby impairing Aevi's ability to protect its products.

        Changes in either the patent laws or interpretation of the patent laws in the United States and abroad could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. For example, assuming that other requirements for patentability are met, prior to March 2013, in the United States, in general, the first to invent was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act (the "America Invents Act"), 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 will 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 Aevi could therefore be awarded a patent covering an invention of Aevi even if Aevi had made the invention before it was made by such third party. This will require Aevi 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, Aevi cannot be certain that Aevi or its licensors were the first to either (i) file any patent application related to Aevi's

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product candidates or (ii) invent any of the inventions claimed in Aevi or its licensor's patents or patent applications.

        The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third party 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 Aevi's patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of Aevi's owned or in-licensed patent applications and the enforcement or defense of Aevi's owned or in-licensed issued patents, all of which could have a material adverse effect on Aevi's business, financial condition, results of operations, and prospects.

        In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on Aevi's existing patent portfolio and its ability to protect and enforce its intellectual property in the future.

Risk Related to Aevi's Securities

Aevi's securities are thinly traded, resulting in relative illiquidity and price volatility, and there may not ever be an active market for Aevi's securities.

        Although beginning October 15, 2019, Aevi's common stock became listed on the Nasdaq Capital Market under the symbol "GNMX," and from October 21, 2016 through October 14, 2019, Aevi's common stock was listed on the Nasdaq Global Market, the volumes and trading in Aevi's securities has been extremely sporadic. As a result, the ability of holders to purchase or sell Aevi's securities is limited, with low-volume trading creating wide shifts in price. For Aevi's securities to continue to be listed on The Nasdaq Stock Market, Aevi must meet the current listing requirements of that exchange by February 3, 2020. If Aevi were unable to meet these requirements by such date, its securities will be delisted from The Nasdaq Stock Market. Any such delisting of Aevi's securities could have an adverse effect on the market price of, and the efficiency of the trading market for, Aevi's securities, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and less coverage of Aevi by securities analysts, if any. Also, if in the future Aevi were to determine that it needs to seek additional equity capital, it could have an adverse effect on Aevi's ability to raise capital in the public or private equity markets.

        Further, the share prices of public companies, particularly those operating in high growth sectors, are often subject to significant fluctuations. The market price of Aevi's common stock on The Nasdaq Stock Market has been volatile, ranging from $0.11 per share to $1.30 per share during the 52-week trading period ending December 5, 2019. Aevi expects that the market price of its common stock will continue to fluctuate significantly due to factors including, but not limited to, the following:

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Securities analysts may not initiate coverage or continue to cover Aevi's common stock, and this may have a negative impact on its market price.

        The trading market for Aevi's securities could depend in part on the research and reports that securities analysts publish about Aevi's business and Aevi. Aevi does not have any control over these analysts. There is no guarantee that securities analysts will cover Aevi's securities. If securities analysts do not cover Aevi's securities, the lack of research coverage may adversely affect their market prices. If Aevi is covered by securities analysts, and Aevi's securities are the subject of an unfavorable report, the prices for Aevi's securities would likely decline. If one or more of these analysts ceases to cover Aevi or fails to publish regular reports on Aevi, Aevi could lose visibility in the financial markets, which could cause Aevi's stock price and/or trading volume to decline.

The exercise of options and other issuances of shares of common stock or securities convertible into or exercisable for shares of common stock will dilute the ownership interests of Aevi's current stockholders and may adversely affect the future market price of Aevi's common stock.

        Sales of Aevi's common stock in the public market, either by Aevi or by Aevi's current stockholders, or the perception that these sales could occur, could cause a decline in the market price of Aevi's securities. Nearly all of the shares of Aevi's common stock held by those of Aevi's current stockholders who are not affiliates may be immediately eligible for resale in the open market either in compliance with an exemption under Rule 144 promulgated under the Securities Act, or pursuant to an effective resale registration statement that Aevi has previously filed with the SEC. Such sales, along with any other market transactions, could adversely affect the market price of Aevi's common stock.

        In addition, as of December 5, 2019, there were issuable 12,665,026 shares of Aevi common stock upon the exercise of all outstanding options and warrants. The exercise of options at prices below the market price of Aevi's common stock could adversely affect the price of shares of Aevi's common stock. In addition, Aevi expects that approximately 38,856,891 shares of Aevi common stock will be issued upon conversion of the CHOP Note immediately prior to the completion of the Merger. Additional dilution may result from the issuance of shares of Aevi's common stock in connection with collaborations or manufacturing arrangements or in connection with other financing efforts. For example, 12,946,900 shares of Aevi common stock were issued to AstraZeneca in December 2019, upon Aevi's exercise of the AZ Option.

        Any issuance of Aevi's common stock that is not made solely to then-existing stockholders proportionate to their interests, such as in the case of a stock dividend or stock split, will result in dilution to each stockholder by reducing his, her or its percentage ownership of the total outstanding shares. Holders of shares of Aevi's common stock have no preemptive rights that entitle them to purchase their pro rata share of any offering of shares of any class or series.

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Aevi has a significant stockholder, which will limit your ability to influence corporate matters and may give rise to conflicts of interest.

        The Children's Hospital of Philadelphia Foundation (the "CHOP Foundation"), is Aevi's largest stockholder. As of December 5, 2019, the CHOP Foundation owned 18,424,036 shares of Aevi's common stock. The shares of common stock owned by the CHOP Foundation represent approximately 28.4% of Aevi's outstanding shares of common stock. Accordingly, the CHOP Foundation exerts significant influence over Aevi and any action requiring the approval of the holders of Aevi's common stock, including the election of directors and approval of significant corporate transactions. This concentration of voting power makes it less likely that any other holder of common stock or directors of Aevi's business will be able to affect the way Aevi is managed and could delay or prevent an acquisition of Aevi on terms that other stockholders may desire. In addition, if the CHOP Foundation obtains a majority of Aevi's common stock, the CHOP Foundation would be able to control all matters submitted to Aevi's stockholders for approval, as well as Aevi's management and affairs. In addition, if the CHOP Foundation obtains a majority of Aevi's common stock, Aevi would be deemed a "controlled company" for purposes of The Nasdaq Stock Market listing requirements. Under The Nasdaq Stock Market rules, a "controlled company" may elect not to comply with certain Nasdaq Stock Market corporate governance requirements, including (i) the requirement that a majority of Aevi's board of directors consist of independent directors, (ii) the requirement that the compensation of Aevi's officers be determined or recommended to the board by a majority of independent directors or a compensation committee that is composed entirely of independent directors and (iii) the requirement that director nominees be selected or recommended to the board by a majority of independent directors or a nominating committee that is composed of entirely independent directors.

        Furthermore, the interests of the CHOP Foundation may not always coincide with your interests or the interests of other stockholders and the CHOP Foundation may act in a manner that advances its best interests and not necessarily those of other stockholders, including seeking a premium value for its common stock, and might affect the prevailing market price for Aevi's common stock. Aevi's board of directors, which currently consists of eight directors, including one designated by the CHOP Foundation, has the power to set the number of directors on Aevi's board from time to time.

        The CHOP Foundation has executed a voting agreement pursuant to which it has agreed to vote its shares of Aevi common stock "For" the Proposals set forth in this proxy statement/ prospectus at the special meeting.

Aevi has never declared or paid dividends on its common stock and it does not anticipate paying any cash dividends in the foreseeable future.

        Aevi has never declared or paid dividends on its common stock and Aevi does not anticipate paying any cash dividends in the foreseeable future. Aevi currently intends to retain future earnings, if any, to fund the development and growth of its business. Any future determination to pay dividends will be at the discretion of Aevi's board of directors and will be dependent upon Aevi's financial condition, operating results, capital requirements, applicable contractual restrictions and other such factors as Aevi's board of directors may deem relevant.

Provisions of Delaware law may delay or prevent efforts to acquire a controlling interest in Aevi, even if such acquisition were in the best interests of Aevi's stockholders.

        Aevi is subject to the anti-takeover provisions of Section 203 of the DGCL, which regulates corporate acquisitions. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for Aevi's common stock. These provisions may also prevent changes in Aevi's management.

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Risks Related to Cerecor

Risks Related to Cerecor's Financial Position and Capital Needs

Cerecor might require additional capital to continue to fund its operations and to finance the further advancement of its product candidates, which might not be available to Cerecor on acceptable terms, or at all. Failure to obtain any necessary capital will force Cerecor to delay, limit or terminate its product development efforts or cease its operations.

        At September 30, 2019, Cerecor had $5.3 million in cash and cash equivalents and $17.3 million in current liabilities. Accordingly, Cerecor might not currently have sufficient funds to finance its continuing operations beyond the short term or to further advance any of its product candidates.

        As a research and development company, Cerecor's operations have consumed substantial amounts of cash since inception. Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and Cerecor expects its research and development expenses to increase substantially in connection with its ongoing activities, particularly as Cerecor advances its product candidates into clinical trials or obtains and advances additional product candidates. Circumstances may cause Cerecor to consume capital more rapidly than it currently anticipates. Cerecor may need to raise additional funds or otherwise obtain funding through collaborations if Cerecor chooses to initiate additional clinical trials for product candidates.

        Additional fundraising efforts may divert Cerecor's management from its day-to-day activities, which may adversely affect Cerecor's ability to develop and commercialize its product candidates. In addition, Cerecor cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to Cerecor, if at all. If Cerecor does not raise additional capital when required or on acceptable terms, Cerecor may need to:

        Cerecor's future funding requirements, both short and long term, will depend on many factors, including:

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Cerecor's role as a guarantor of Certain Obligations assigned to Aytu BioScience, Inc. ("Aytu") exposes it to risk of loss or illiquidity.

        In connection with the sale of Cerecor's pediatric portfolio to Aytu, Aytu assumed Cerecor's financial obligations to Deerfield CSF, LLC ("Deerfield"), which include a $15 million loan due in January 2021 minimum monthly and royalty payments of the higher of 15% of net sales or $100,000 through the earlier of February 2026 (the "Deerfield Obligation") or reaching the maximum aggregated royalty payment of $12.5 million. The Deerfield Obligation could be accelerated upon default or a breach of covenants. Cerecor also assigned payment obligations ("TRIS Obligations") to Aytu under a supply and distribution agreement with TRIS Pharma (the "Karbinal Agreement"). As a part of these assignments, Cerecor also became a guarantor to the Deerfield Obligation and the TRIS Obligation. If Aytu defaults under the terms of the agreement with Deerfield or TRIS, Cerecor could be liable as a guarantor for unpaid amounts of the Deerfield Obligation and the TRIS Obligation. Cerecor currently does not have cash on hand to permit it to pay the entire amount that could become due under the Deerfield Obligation, and any amount Cerecor would be required to pay under the Karbinal Agreement would limit the amount of cash available for development of Cerecor's clinical pipeline. If Cerecor were to become required to pay the Deerfield Obligation, such obligation could significantly impair its ability to continue as a going concern and its ability to continue operations. Even if Cerecor were to have sufficient liquidity to pay the TRIS Obligation, or obtain funding to meet the Deerfield Obligation, Cerecor might not be able to recover the cost of such a payment and may therefore be exposed to significant losses, which would materially and adversely affect Cerecor's results of operations.

Cerecor has incurred significant net losses in most periods since its inception and Cerecor might continue to incur net losses in the future.

        Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate an adequate effect or acceptable safety profile, gain marketing approval and become commercially viable. Historically, Cerecor financed its operations primarily through private placements of its common and convertible preferred stock and convertible debt. Cerecor incurred net loss of $4.0 million for the three months ended September 30, 2019. As of September 30, 2019, Cerecor had an accumulated deficit of $115.9 million. Substantially all of Cerecor's operating losses have resulted from costs incurred in connection with its research and development program and from general and administrative costs associated with its operations.

        Cerecor expects to continue to incur losses in the future and it might never achieve profitability on an annual basis. Cerecor may also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect its business. Cerecor's future profitability will depend, in part, on the rate of future growth of Cerecor's expenses and Cerecor's ability to generate revenues. Cerecor's prior losses and expected future losses have had and will continue to have an adverse effect on Cerecor's stockholders' equity and working capital.

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Cerecor's ability to use its NOL carryforwards and certain other tax attributes may be limited.

        Cerecor has a significant amount of gross NOLs for federal and state purposes. The NOLs accumulated through the end of 2017 will begin to expire in 2031. Unused NOLs for the current tax year and prior tax years will carry forward to offset future taxable income, if any, until such unused losses expire. Unused NOLs generated after December 31, 2017, will not expire and may be carried forward indefinitely but will be only deductible to the extent of 80% of current year taxable income in any given year. In addition, both the deductibility of current and future unused NOL carryovers may be subject to limitation under Sections 382 and 383 of the Code as described above.

In connection with the reporting of Cerecor's financial condition and results of operations, Cerecor is required to make estimates and judgments which involve uncertainties, and any significant differences between Cerecor's estimates and actual results could have an adverse impact on Cerecor's financial position, results of operations and cash flows.

        Cerecor's discussion and analysis of its financial condition and results of operations are based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires Cerecor to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses and revenues and related disclosure of contingent assets and liabilities. For example, Cerecor estimates returns, wholesaler fees, prompt payment discounts, chargebacks and government rebates. Cerecor also estimates clinical trial costs incurred using subject data and information from Cerecor's CROs. If Cerecor' underestimates or overestimates these expenses, adjustments to expenses may be necessary in future periods. Any significant differences between Cerecor's actual results and Cerecor's estimates and assumptions could negatively impact Cerecor's financial position, results of operations and cash flows.

Cerecor's operating results fluctuate from quarter to quarter and year-to-year, making future operating results difficult to predict.

        Cerecor's quarterly and annual operating results historically have fluctuated and are likely to continue to fluctuate depending on several factors, many of which are beyond Cerecor's control. Accordingly, Cerecor's quarterly and annual results are difficult to predict prior to the end of the quarter or year, and Cerecor may be unable to confirm or adjust expectations with respect to Cerecor's operating results for a particular period until that period has closed. Any failure to meet Cerecor's quarterly or annual revenue or earnings targets could adversely impact the market price of Cerecor's securities. Therefore, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.

Cerecor engages in in-licensing, acquisitions or other strategic transactions that could impact its liquidity, increase its expenses and divert a significant amount of Cerecor's management's time.

        Since inception, Cerecor has acquired or in-licensed product candidates, most recently product candidates Cerecor acquired from Ichorion Therapeutics, Inc. ("Ichorion"). As a part of the Ichorion acquisition, Cerecor issued approximately 5,798,735 shares of Cerecor's common stock, and payment of certain development milestones of up to an additional $15,000,000, payable either in shares of Cerecor's common stock or in cash. From time to time Cerecor may consider additional in-licensing of products and other strategic transactions, such as acquisitions of companies, asset purchases and out-licensing of product candidates or technologies. Additional potential transactions that Cerecor may consider include a variety of different business arrangements, including strategic partnerships, collaborations, joint ventures, business combinations and investments. Any such transaction may require Cerecor to incur non-recurring or other charges, may increase Cerecor's near and long-term expenditures and may pose significant integration challenges or disrupt Cerecor's management or

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business, which could adversely affect Cerecor's operations and financial results. For example, these transactions may entail numerous operational and financial risks, including:

Risks Related to Cerecor's Historical Business Operations and Industry

Cerecor's product candidates that it intends to commercialize are in early stages of development. If Cerecor does not successfully complete preclinical testing and clinical development of its product candidates or experiences significant delays in doing so, Cerecor's business may be materially harmed.

        Cerecor has invested a significant portion of its efforts and financial resources in the identification and preclinical and clinical development of product candidates. Cerecor's ability to increase product revenues will depend on Cerecor's ability to advance Cerecor's one clinical product candidate and its preclinical product candidates into clinical development and successfully complete preclinical testing of its clinical stage product candidates. The outcome of preclinical studies and Phase 1 clinical trials might not predict the success of future clinical trials. Preclinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies have nonetheless failed in clinical development. Cerecor's inability to successfully complete development of its product candidates could result in additional costs to Cerecor relating to product development and obtaining marketing approval and impair Cerecor's ability to generate product revenues and commercialization and sales milestone payments and royalties on product sales.

If clinical trials of Cerecor's product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, Cerecor may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of Cerecor's product candidates.

        Before obtaining required approvals from regulatory authorities for the sale of future product candidates, Cerecor alone, or with a partner, must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Clinical testing is expensive and difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical studies and early clinical trials might not predict the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of

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efficacy or unacceptable safety profiles, notwithstanding promising results in earlier trials. Cerecor's product candidates will require additional clinical and preclinical development, management of clinical, preclinical and manufacturing activities, regulatory approval in multiple jurisdictions, obtaining manufacturing supply on Cerecor's own or from a third party, expansion of Cerecor's commercial organization, and substantial investment and significant marketing efforts before Cerecor generates any revenues from sales of any of those product candidates approved for marketing. Cerecor does not know whether the clinical trials Cerecor or Cerecor's partners may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market any of Cerecor's product candidates in any particular jurisdiction or jurisdictions. If later stage clinical trials do not produce favorable results, Cerecor's ability to achieve regulatory approval for any of its product candidates would be adversely impacted.

If Cerecor experiences delays in clinical testing, it will be delayed in obtaining regulatory approvals and commercializing its product candidates, Cerecor's costs may increase and its business may be harmed.

        Cerecor does not know whether any clinical trials will begin as planned, whether the design will be revised prior to or during conduct of the study, completed on schedule or conducted at all. Cerecor product development costs will increase if Cerecor experiences delays in clinical testing. Significant clinical trial delays also could shorten any periods during which Cerecor may have the exclusive right to commercialize its product candidates or allow its competitors to bring products to market before Cerecor does, which would impair Cerecor's ability to successfully commercialize its product candidates and may harm Cerecor's business, results of operations and prospects.

        Events which may result in a delay or unsuccessful completion of clinical development include:

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        Any inability by Cerecor or its partners to timely complete clinical development could result in additional costs to Cerecor relating to product development and obtaining marketing approval and impair Cerecor's ability to generate product revenues and commercialization and sales milestone payments and royalties on product sales.

If Cerecor is unable to enroll appropriate subjects in clinical trials, Cerecor will be unable to complete these trials on a timely basis or at all.

        Identifying and qualifying subjects to participate in clinical trials of Cerecor's product candidates is critical to Cerecor's success. The timing of Cerecor's clinical trials depends on the speed at which Cerecor can recruit appropriate subjects to participate in testing Cerecor's product candidates as well as completion of required follow-up periods. If subjects are unwilling to participate in Cerecor's trials, the timeline for recruiting subjects, conducting trials and obtaining marketing approval of potential products may be delayed.

        Difficulty or delays in patient recruitment into Cerecor's trials could result in increased costs, delays in advancing Cerecor's product development, delays in testing the effectiveness of Cerecor's technology or termination of the clinical trials altogether. Many factors affect subject enrollment, including:

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        There is significant competition for recruiting subjects in clinical trials for product candidates for the treatment of neurological disorders and Cerecor or its partners may be unable to enroll the subjects it needs to complete clinical trials on a timely basis or at all. Furthermore, Cerecor relies on CROs and clinical trial sites to ensure the proper and timely conduct of Cerecor's clinical trials, and while Cerecor has agreements governing their committed activities, it has limited influence over their actual performance. If Cerecor is unable to enroll sufficient subjects in its clinical trials, if enrollment is slower than Cerecor anticipates, or if Cerecor's clinical trials require more subjects than Cerecor anticipates, Cerecor's clinical trials may be delayed or might not be completed. If Cerecor experiences delays in its clinical trials, the commercial prospects of its product candidates will be harmed. In addition, any delays in completing Cerecor's clinical trials will increase its costs, slow down Cerecor's product candidate development and approval process and jeopardize Cerecor's ability to commence product sales and generate revenues. In addition, many of the factors that could cause a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of Cerecor's lead product candidates or Cerecor's other product candidates.

Cerecor may face significant delays in its clinical studies and trials due to an inability to recruit patients for its clinical studies and trials or to retain patients in the clinical studies and trials it may perform.

        Cerecor may not be able to locate and enroll enough eligible patients to participate in these trials as required by the FDA, the European Medicines Agency ("EMA ") or similar regulatory authorities outside the United States and the European Union. This may result in Cerecor's failure to initiate or continue clinical trials for its product candidates or may cause Cerecor to abandon one or more clinical trials altogether. In particular, because several of Cerecor's programs are focused on the treatment of patients with rare, orphan or ultra-orphan diseases, Cerecor's ability to enroll eligible patients in these trials may be limited or slower than it anticipates in light of the small patient populations involved and the specific age range required for treatment eligibility in some indications. In addition, Cerecor's potential competitors, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions, may seek to develop competing therapies, which would further limit the small patient pool available for Cerecor's studies.

        Completion of orphan clinical trials may take considerably more time than other trials, sometimes years, depending on factors such as type, complexity, novelty and intended use of a product candidate. As a result of the uncertainties described above, there can be no assurance that Cerecor will meet timelines that it establishes for any of its clinical trials.

Cerecor may in the future conduct clinical trials for certain of its product candidates at sites outside the United States, and the FDA might not accept data from trials conducted in such locations.

        Cerecor may in the future choose to conduct one or more of Cerecor's clinical trials outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom Cerecor intends to seek approval in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any of Cerecor's clinical trials that it determines to conduct outside the United States, it would likely result in the need for additional trials,

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which would be costly and time-consuming and delay or permanently halt Cerecor's development of the product candidate.

Cerecor may fail to successfully identify, in-license, acquire, develop or commercialize potential product candidates.

        The success of Cerecor's business depends in part upon its ability to identify and validate new therapeutic targets and identify, develop and commercialize therapeutics, which it may develop itself, in-license or acquire from others. Research programs designed to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Cerecor's research efforts may initially show promise in identifying potential therapeutic targets or candidates, yet fail to yield product candidates for clinical development for a number of reasons, including:

        Additionally, Cerecor may focus its efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. If any of these events occur, Cerecor may be forced to abandon its development efforts for a program or programs, which would have a material adverse effect on its business, operating results and prospects and could potentially cause Cerecor to cease operations.

Cerecor might not be successful in its efforts to develop and commercialize its preclinical product candidates.

        Cerecor's continued development of its preclinical product candidates will be dependent on receiving positive preclinical and clinical data that, in Cerecor's judgment, merits advancing such programs. Even if Cerecor is successful in continuing to build and expand its pipeline, the potential product candidates that Cerecor identifies might not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance. Similarly, even if the FDA approves Cerecor's Investigational New Drug Applications ("INDs"), there is no guarantee that Cerecor will be successful in its efforts to advance Cerecor's preclinical product candidates into clinical trials. If Cerecor does not successfully develop and commercialize product

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candidates based upon Cerecor's technological approach, Cerecor will not be able to obtain product revenues in future periods, which likely would result in significant harm to Cerecor's financial position and adversely affect Cerecor's stock price.

The marketing approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, costly and inherently unpredictable. Cerecor's inability to obtain regulatory approval for its product candidates would substantially harm its business.

        The time required to obtain approval to market new drugs by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the discretion of the regulatory authorities. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate's clinical development and may vary among jurisdictions. Cerecor has not obtained regulatory approval for any product candidate and it is possible that none of its existing product candidates or any future product candidates will ever obtain regulatory approval. Moreover, the filing of an NDA for products that have not been granted Orphan Drug Designation requires a payment of a significant NDA application fee under the Prescription Drug User Fee Act ("PDUFA") upon submission. Any subsequent clinical data submissions to the NDA (i.e. for new indications) are also assessed an NDA application fee. The filing of an NDA for Cerecor's product candidates may be delayed due to Cerecor's lack of financial resources to pay such user fee.

        Cerecor's product candidates could fail to receive regulatory approval from the FDA or a comparable foreign regulatory authority for many reasons, including:

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        The FDA or comparable foreign regulatory authority may require more information, including additional preclinical or clinical studies to support approval, which may delay or prevent approval and Cerecor's commercialization plans, or Cerecor may decide to abandon the development program. This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in Cerecor failing to obtain approval to market its product candidates, which would significantly harm its business, results of operations and prospects. In addition, even if Cerecor were to obtain approval, regulatory authorities may approve any or all of its product candidates for fewer or more limited indications than Cerecor request, may require that contraindications, warnings or precautions be included in the product labeling, including a black-box warning, may grant approval with a requirement of costly post-marketing clinical trials or other post-market requirements, 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 materially harm the commercial prospects for Cerecor's product candidates.

As appropriate, Cerecor intends to seek all available periods of regulatory exclusivity for its product candidates. However, there is no guarantee that Cerecor will be granted these periods of regulatory exclusivity or that it will be able to maintain these periods of exclusivity.

        The FDA grants product sponsors certain periods of regulatory exclusivity, during which the agency might not approve, and in certain instances, might not accept, certain marketing applications for competing drugs. For example, product sponsors may be eligible for five years of exclusivity from the date of approval of a new chemical entity, seven years of exclusivity for drugs that are designated to be orphan drugs, and/or a six-month period of exclusivity added to any existing exclusivity period or patent life for the submission of FDA requested pediatric data. While Cerecor intends to apply for all periods of market exclusivity that it may be eligible for, there is no guarantee that Cerecor will receive all such periods of market exclusivity. Additionally, under certain circumstances, the FDA may revoke the period of market exclusivity. Thus, there is no guarantee that Cerecor will be able to maintain a period of market exclusivity, even if granted. Moreover, Cerecor has not sought to obtain orphan drug designation for any of its product candidates, which the FDA must first grant to be eligible for orphan drug exclusivity, but may if Cerecor determines that it may be eligible. In the case of orphan designation, other benefits, such as tax credits and exemption from user fees may be available. If Cerecor is not able to obtain or maintain orphan drug designation or any period of market exclusivity to which it may be entitled, Cerecor will be materially harmed, as it will potentially be subject to greater market competition and may lose the benefits associated with programs.

Cerecor's product candidates may cause undesirable side effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following any marketing approval.

        Undesirable side effects caused by Cerecor's product candidates could cause Cerecor or regulatory authorities to issue a Clinical Hold and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or other comparable foreign regulatory authority. Results of Cerecor's trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

        Should Cerecor's clinical studies of its product candidates reveal undesirable side effects, Cerecor could suspend or terminate its trials or the FDA or comparable foreign regulatory authorities as well as IRBs could order Cerecor to suspend or cease clinical trials. The FDA or comparable regulatory authorities could also deny approval of Cerecor's product candidates for any or all targeted indications or only for a limited indication or patient population or could require label warnings, contraindications

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or precautions, including black box warnings, post-market studies, testing and surveillance programs or other conditions including distribution restrictions or other risk management mechanisms under a costly risk evaluation and mitigation strategy ("REMS"). Drug-related side effects could affect subject recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims. Any of these occurrences may harm Cerecor's business, financial condition and prospects significantly.

        Additionally, if one or more of Cerecor's product candidates receives marketing approval, and Cerecor or others (regulatory agencies, consumers, etc.) later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

        Any of these events could prevent Cerecor from achieving or maintaining market acceptance of the particular product candidate or otherwise materially harm the commercial prospects for the product candidate, if approved, and could significantly harm Cerecor's business, financial condition, results of operations and prospects.

Changes in product candidate manufacturing or formulation may result in additional costs or delay.

        As product candidates are developed through preclinical studies to late-stage clinical trials towards regulatory approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause Cerecor's product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. Such changes may also require additional testing, FDA notification or FDA approval.

        Similarly, changes in the location of manufacturing or addition of manufacturing facilities may increase Cerecor's costs and require additional studies and FDA approval. This may require Cerecor to ensure that the new facility meets all applicable regulatory requirements, is adequately validated and qualified, and to conduct additional studies of product candidates manufactured at the new location. Any of the above could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay regulatory approval of Cerecor's product candidates and jeopardize its ability to commence product sales and generate revenue.

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Even if Cerecor completes the necessary clinical trials, Cerecor cannot predict when or if it will obtain marketing approval to commercialize a product candidate or the approval may be for a narrower indication than Cerecor expects.

        Cerecor cannot commercialize a product candidate until the appropriate regulatory authorities have reviewed and approved the product candidate. Even if Cerecor's product candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies might not complete their review processes in a timely manner, or Cerecor might not be able to obtain marketing approval from the relevant regulatory agencies. Additional delays may result if the FDA, an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, Cerecor may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy during the period of product development, clinical trials and the review process. Regulatory authorities also may approve a product candidate for fewer or more limited indications than requested, may impose significant limitations in the form of narrow indications, warnings, including black-box warnings, precautions or contra-indications with respect to conditions of use or may grant approval subject to the performance of costly post-marketing clinical trials or other post-marketing requirements, including a REMS. In addition, regulatory agencies might not approve the labeling claims that are necessary or desirable for the successful commercialization of Cerecor's product candidates. Cerecor's drugs, if approved, may be required to carry warnings comparable to this and other class-wide warnings. Any of the foregoing scenarios could materially harm the commercial prospects for Cerecor's product candidates.

Even if Cerecor were to obtain approval for its product candidates with the Rare Pediatric Disease Designation, the Rare Pediatric Disease Priority Review Voucher Program may no longer be in effect at the time of such approval or Cerecor might not be able to capture the value of the Rare Pediatric Disease Priority Review Voucher Program.

        Rare pediatric disease designation by the FDA is granted in the case of serious or life-threatening diseases affecting fewer than 200,000 people in the United States in which the serious or life-threatening manifestations are primarily in individuals 18 years of age and younger. The designation provides regulatory incentives for companies to develop and market therapies that treat these conditions. The sponsor of a drug for a rare pediatric disease may be eligible for a priority review voucher upon approval of the drug that can be used to obtain a priority review of a subsequent marketing application. The priority review voucher may be sold or transferred an unlimited number of times. Congress has extended the priority review voucher program until September 30, 2020 with new drug approvals that meet the voucher criteria grandfathered through 2022. This program has been subject to criticism, including by the FDA, and it is possible that even if Cerecor obtains approval for some of its product candidates and qualifies for such a priority review voucher, the program may no longer be in effect at the time of approval. Also, although priority review vouchers may be sold or transferred to third parties, there is no guaranty that Cerecor will be able to realize any value if it were to sell a priority review voucher.

Even if Cerecor were able to commercialize its products focused on rare orphan diseases, product sales of these products might not justify the cost of development.

        Because of the small patient population for a rare orphan disease, if pricing is not approved or accepted in the market at an appropriate level for an approved therapeutic product with orphan drug designation, such drug may not generate enough revenue to offset costs of development, manufacturing, marketing, and commercialization despite any benefits received from the rare orphan drug designation, such as market exclusivity, assistance in clinical trial design, or a reduction in user fees or tax credits related to development expense. Furthermore, Cerecor's estimates regarding potential market size for any rare indication may be materially different from what Cerecor discovers to exist at the time it

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commences commercialization, if any, for a therapeutic product, which could result in significant changes in its business plan and have a material adverse effect on its business, financial condition, results of operations, and prospects.

Once commercialized, some of Cerecor's products may face significant competition from non-prescription competition and consumer substitution, and Cerecor's operating results will suffer if it fails to compete effectively.

        Cerecor may be subject to non-prescription competition and consumer substitution for certain of its pipeline assets. For example, the three preclinical therapies in its pediatric orphan rare disease pipeline, CERC-801, CERC-802 and CERC-803, are ultra-pure formulations of D-galactose, D-mannose and L-fucose, respectively. These formulations are naturally occurring substances contained in various foods, including dairy products and fruit. Additionally, these formulations, particularly D-mannose, are also marketed by others as non-prescription dietary supplements. Once approved by the FDA and commercially available, Cerecor cannot be sure physicians will view the pharmaceutical grade purity and tested safety of CERC-801, CERC-802 or CERC-803 as having a superior therapeutic profile to the naturally occurring formulations and dietary supplements. In addition, to the extent the net price of CERC-801, CERC-802 or CERC-803, after insurance and offered discounts, is significantly higher than the prices of commercially available formulations marketed by other companies as dietary supplements (through that lack of coverage by insurers or otherwise), physicians and pharmacists may recommend these commercial alternatives instead of writing or filling prescriptions for CERC-801, CERC-802 or CERC-803, or patients may elect on their own to take commercially available supplements. Either of these outcomes may adversely impact Cerecor's results of operations by limiting how it prices its product and limiting the revenue it receives from the sale of CERC-801, CERC-802 and CERC-803 due to reduced market acceptance.

Even if Cerecor's product candidates receive marketing approval, Cerecor will still be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. Additionally, Cerecor's product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and Cerecor may be subject to administrative sanctions or penalties if it fails to comply with regulatory requirements or experiences unanticipated problems with its products.

        Even if Cerecor obtains marketing approval for a product candidate, Cerecor would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising, promotion, recordkeeping and annual reporting of safety and other post-market information. The FDA and comparable foreign regulatory authorities will continue to closely monitor the safety profile of any product even after approval. If the FDA or comparable foreign regulatory authorities become aware of new safety information after approval of any of Cerecor's product candidates, they may withdraw approval, require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on a product's indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. In addition, any marketing approvals that Cerecor obtains for its product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval or contain requirements for potentially costly post-marketing testing and other requirements, including Phase 4 clinical trials, imposition of a REMS and surveillance to monitor the safety and efficacy of the product candidate.

        In addition, manufacturers of drug products and their facilities, including contracted facilities, are subject to periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards. If Cerecor or a regulatory agency discover previously unknown problems with the facility where the product is manufactured, Cerecor may be subject to reporting obligations

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and a regulatory agency may impose restrictions on that product, the manufacturing facility, Cerecor, or Cerecor's suppliers, including requesting recalls or withdrawal of the product from the market or suspension of manufacturing. If Cerecor, its product candidates, its contractors, the manufacturing facilities for its product candidates or others working on Cerecor's behalf fails to comply with applicable regulatory requirements, either before or after marketing approval, a regulatory agency may:

        The occurrence of any event or penalty described above may inhibit Cerecor's ability to continue its development programs, commercialize its products and generate revenue.

        Advertising and promotion of any product candidate that obtains approval in the United States will be heavily scrutinized by the FDA, the Department of Justice, the Department of Health and Human Services' Office of Inspector General, state attorneys general, members of Congress and the public. While the FDA does not restrict physicians from prescribing approved drugs for uses outside of the drugs' approved labeling, known as off-label use, pharmaceutical manufacturers are strictly prohibited from promoting and marketing their products for such uses. Violations, including promotion of Cerecor's products for off-label uses, are subject to enforcement letters, inquiries, investigations, civil and criminal sanctions by the government, corporate integrity agreements, deferred prosecution agreements, debarment from government contracts and refusal of future orders under existing contracts, and exclusion from participation in federal healthcare programs. Additionally, comparable foreign regulatory authorities will heavily scrutinize advertising and promotion of any product candidate that obtains approval outside of the United States.

        In the United States, engaging in the impermissible promotion of Cerecor's products for off-label uses can also subject Cerecor to false claims litigation under federal and state statutes, which can lead to civil and criminal penalties and fines, debarment from government contracts and refusal of future orders under existing contracts, deferred prosecution agreements, and corporate integrity agreements with governmental authorities that materially restrict the manner in which a company promotes or

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distributes drug products. These false claims statutes include the federal civil False Claims Act, which allows any individual to bring a lawsuit against a pharmaceutical company on behalf of the federal government alleging submission of false or fraudulent claims, or causing to present such false or fraudulent claims, for payment by a federal program such as Medicare or Medicaid. If the government decides to intervene and prevails in the lawsuit, the individual will share in any fines or settlement funds. If the government does not intervene, the individual may proceed on his or her own. Since 2004, these False Claims Act lawsuits against pharmaceutical companies have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements, such as settlements regarding certain sales practices promoting off-label drug uses involving fines that are as much as $3.0 billion. This growth in litigation has increased the risk that a pharmaceutical company will have to defend a false claim action, pay settlement fines or restitution, agree to comply with burdensome reporting and compliance obligations, and be excluded from Medicare, Medicaid and other federal and state healthcare programs. If Cerecor does not lawfully promote its approved products, Cerecor may become subject to such litigation and, if it does not successfully defend against such actions, those actions may have a material adverse effect on Cerecor's business, financial condition, results of operations and prospects.

        The FDA's policies may change, and additional government regulations may be enacted that could prevent, limit or delay marketing approval, and the sale and promotion of Cerecor's product candidates. If Cerecor is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if it is not able to maintain regulatory compliance, Cerecor may lose any marketing approval that it may have obtained, which would adversely affect Cerecor's business, prospects and ability to achieve or sustain profitability.

If Cerecor is unable to, or is delayed in obtaining, state regulatory licenses for the distribution of its products, Cerecor would not be able to sell its product candidates in such states.

        The majority of states require manufacturer and/or wholesaler licenses for the sale and distribution of drugs into that state. The application process is complicated, time consuming, costly and requires dedicated personnel or a third party to oversee and manage. If Cerecor is delayed in obtaining these state licenses, or denied the licenses, even with FDA approval, Cerecor would not be able to sell or ship product into that state which would adversely affect its sales and revenues.

If any of Cerecor's product candidates are ultimately regulated as controlled substances, Cerecor, its contract manufacturers, as well as distributors, prescribers, and dispensers will be required to comply with additional regulatory requirements which could delay the marketing of Cerecor's product candidates, and increase the cost and burden of manufacturing, distributing, dispensing, and prescribing its product candidates.

        Before Cerecor can commercialize its product candidates, the United States Drug Enforcement Administration, or DEA, may need to determine the controlled substance Schedule, taking into account the recommendation of the FDA. This may be a lengthy process that could delay Cerecor's marketing of a product candidate and could potentially diminish any regulatory exclusivity periods for which Cerecor may be eligible. While Cerecor currently does not know whether any of its product candidates will be considered to be controlled substances, certain of Cerecor's product candidates may be regulated as controlled substances.

        If any of Cerecor's product candidates are regulated as controlled substances, depending on the controlled substance schedule in which the product candidates are placed, Cerecor, Cerecor's contract manufacturers, and any distributers, prescribers, and dispensers of the scheduled product candidates may be subject to significant regulatory requirements, such as registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA. Moreover, if any of Cerecor's product candidates are regulated as controlled substances, Cerecor and its contract manufacturers would be subject to initial and periodic DEA

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inspection. If Cerecor or its contract manufacturers are not able to obtain or maintain any necessary DEA registrations, Cerecor might not be able to commercialize any product candidates that are deemed to be controlled substances or Cerecor may need to find alternative contract manufacturers, which would take time and cause Cerecor to incur additional costs, delaying or limit Cerecor's commercialization efforts.

        Because of their restrictive nature, these laws and regulations could limit commercialization of Cerecor's product candidates, should they be deemed to contain controlled substances. Failure to comply with the applicable controlled substance laws and regulations can also result in administrative, civil or criminal enforcement. The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate administrative proceedings to revoke those registrations. In some circumstances, violations could result in criminal proceedings or consent decrees. Individual states also independently regulate controlled substances.

Cerecor's failure to obtain regulatory approval in international jurisdictions would prevent Cerecor from marketing its product candidates outside the United States, which would limit Cerecor's market opportunities and adversely affect its business.

        In order to market and sell Cerecor's products in other jurisdictions, Cerecor must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, Cerecor must secure product reimbursement approvals before regulatory authorities will approve the product for sale in that country. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for Cerecor and could delay or prevent the introduction of Cerecor's products in certain countries. Further, clinical trials conducted in one country might not be accepted by regulatory authorities in other countries. If Cerecor fails to comply with the regulatory requirements in international markets and receive applicable marketing approvals, Cerecor's target market will be reduced and Cerecor's ability to realize the full market potential of its product candidates will be harmed and Cerecor's business will be adversely affected. Cerecor might not obtain foreign regulatory approvals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions. Approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. Also, regulatory approval for any of Cerecor's product candidates may be withdrawn. However, the failure to obtain approval in one jurisdiction may negatively impact Cerecor's ability to obtain approval in another jurisdiction. Cerecor's failure to obtain approval of any of its product candidates by regulatory authorities in another country may significantly diminish the commercial prospects of that product candidate and Cerecor's business prospects could decline.

If Cerecor obtains approval to commercialize its product candidates outside of the United States, a variety of risks associated with international operations could materially adversely affect Cerecor's business.

        If any of Cerecor's product candidates are approved for commercialization, Cerecor may enter into agreements with third parties to market them on a worldwide basis or in more limited geographical regions. Cerecor expects that it will be subject to additional risks related to entering into international business relationships, including:

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        These and other risks associated with Cerecor's international operations may materially adversely affect Cerecor's ability to attain or maintain profitable operations.

Cerecor faces substantial competition and rapid technological change and the possibility that others may discover, develop or commercialize products before or more successfully than Cerecor.

        The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. Cerecor faces competition with respect to its current product candidates and will face competition with respect to any future product candidates from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Many of Cerecor's competitors have significantly greater financial, technical and human resources. Smaller and early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

        Cerecor's competitors may obtain marketing approval of their products more rapidly than Cerecor may or may obtain patent protection or other intellectual property rights that limit Cerecor's ability to develop or commercialize its product candidates. Cerecor's competitors may also develop drugs that are more effective, more convenient, more widely used and less costly or have a better safety profile than Cerecor's products and these competitors may also be more successful than Cerecor in manufacturing and marketing their products.

        Cerecor's competitors will also compete with Cerecor in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, its programs.

        There are numerous currently approved therapies for treating the pediatric conditions Cerecor's products address and, consequently, competition in these markets is intense. Many of these approved

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drugs are well established therapies or products and are widely accepted by physicians, patients and third-party payors. Some of these drugs are branded and subject to patent protection and non-patent regulatory exclusivity, and others are available on a generic basis.

        Insurers and other third-party payors may also encourage the use of generic products or specific branded products. Cerecor expects that any or Cerecor's product candidates, if approved, would be priced at a significant premium over competitive generic, including branded generic, products, but, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. This may make it difficult for Cerecor to differentiate its product from currently approved therapies, which may adversely impact Cerecor's business strategy. If Cerecor is not able to compete effectively against its current and future competitors, Cerecor's business will not grow, and its financial condition and operations will suffer.

Cerecor's products might not achieve adequate market acceptance among physicians, patients, third -party payors and others in the medical community necessary for commercial success.

        Even if Cerecor's product candidates have or receive marketing approval, they might not gain adequate market acceptance among physicians, patients and others in the medical community. Cerecor's commercial success also depends on coverage and adequate reimbursement of its product candidates by third-party payors, including government payors, generally, which may be difficult or time-consuming to obtain, may be limited in scope or might not be obtained in all jurisdictions in which Cerecor may seek to market its products. The degree of market acceptance of any of Cerecor's approved product candidates will depend on a number of factors, including:

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        If any product candidate is approved but does not achieve an adequate level of acceptance by physicians, hospitals, third-party payors and patients, Cerecor might not generate or derive sufficient revenue from that product candidate and might not become or remain profitable.

Even if Cerecor commercializes any of its product candidates, these products may become subject to unfavorable third-party coverage and reimbursement policies, healthcare reform initiatives, or pricing regulations, any of which could negatively impact Cerecor's business.

        Cerecor's ability to commercialize any products successfully will depend in part on the extent to which coverage and adequate reimbursement for these products will be available from government authorities, private health insurers, health maintenance organizations and other entities. These third-party payors determine which medications they will cover and establish reimbursement levels, and increasingly attempt to control costs by limiting coverage and the amount of reimbursement for particular medications. Several third-party payors are requiring that drug companies provide them with predetermined discounts from list prices, are using preferred drug lists to leverage greater discounts in competitive classes and are challenging the prices charged for drugs. In addition, federal programs impose penalties on drug manufacturers in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate greater than the Consumer Price Index-Urban, and these rebates and/or discounts, which can be substantial, may impact Cerecor's ability to raise commercial prices. Cerecor cannot be sure that coverage and reimbursement will be available for any product that it commercializes and, if coverage is available, what the level of reimbursement will be. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which Cerecor obtains marketing approval. If coverage and reimbursement are not available or available only to limited levels, Cerecor might not successfully commercialize any product candidate for which it obtains marketing approval.

        There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers Cerecor's costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover Cerecor's costs and may only be temporary. Reimbursement rates for a drug may vary according to the clinical setting in which it is used and may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Prices paid for a drug also vary depending on the class of trade. Prices charged to government customers are subject to price controls and private institutions obtain discounts through group purchasing organizations. Net prices for drugs may be further reduced

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by mandatory discounts or rebates required by government healthcare programs and demanded by private payors, and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Cerecor's inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that it develops could have a material adverse effect on Cerecor's operating results, its ability to raise capital needed to commercialize products and its overall financial condition.

        Moreover, the regulations that govern marketing approvals, pricing, coverage and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Adverse pricing limitations may hinder Cerecor's ability to recoup its investment in one or more product candidates even if Cerecor's product candidates obtain marketing approval.

Cerecor may expend its limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

        Because Cerecor has limited financial and managerial resources, it may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Cerecor's resource allocation decisions may cause it to fail to capitalize on viable commercial products or profitable market opportunities. Cerecor's spending on current and future research and development programs and product candidates for specific indications might not yield any commercially viable products. If Cerecor does not accurately evaluate the commercial potential or target market for a particular product candidate, Cerecor may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous to retain sole development and commercialization rights to such product candidate.

Cerecor's current revenue depends on one product; so if it does not grow sales of that product, its revenue might not grow, which could affect its stock price.

        Following the sale of Cerecor's Pediatric Portfolio, it currently has rights to only one commercial pharmaceutical product, Millipred. Cerecor does not expect Millipred to generate significant revenue and profits, but it currently relies on it for all its commercial revenue. Cerecor's ability to increase revenue in the future will depend on commercializing it successfully, as well as developing and commercializing its current pipeline of product candidates. Any failure to do so could require Cerecor to raise additional financing, and could negatively impact Cerecor's stock price.

Recently enacted and future legislation may increase the difficulty and cost for Cerecor to obtain marketing approval of and commercialize its product candidates and affect the prices it may obtain.

        In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of Cerecor's product candidates, restrict or regulate post-approval activities and affect Cerecor's ability to profitably sell any product candidates for which it obtains marketing approval.

        For example, in March 2010, the ACA was enacted. The law has continued the downward pressure on pharmaceutical pricing, especially under the Medicare program, and increased the industry's

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regulatory burdens and operating costs. Among the provisions of the ACA of importance to Cerecor's potential drug candidates are the following:

        Cerecor cannot predict the full impact of the ACA on pharmaceutical companies, as many of the reforms require the promulgation of detailed regulations implementing the statutory provisions, some of which has not yet fully occurred. Since January 2017, the President of the United States has signed two Executive Orders and other directives designed to delay the implementation of any certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. The Tax Cuts and Jobs Act ("TCJA") included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate." Congress will likely consider other legislation to replace elements of the ACA. The ACA is likely to continue the downward pressure on pharmaceutical pricing and may also increase Cerecor's regulatory burdens and operating costs. Cerecor continues to evaluate the effect that the ACA and its possible repeal and replacement has on Cerecor's business.

        Other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011 President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation's

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automatic reduction to several government programs. This included further reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2025 unless additional Congressional action is taken. Additionally, in January 2013 the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years.

        Further, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs and reform government program reimbursement methodologies for drugs. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to pharmaceutical product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the current administration's budget proposal for fiscal year 2019 contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. Additionally, on May 11, 2018, the President of the United States laid out his administration's "Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs" to reduce the cost of prescription drugs while preserving innovation and cures. The U.S. Department of Health and Human Services ("HHS") has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority. Although some of these and other proposals will require authorization through additional legislation to become effective, Congress and the U.S. presidential administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

        Moreover, the Drug Supply Chain Security Act, which was enacted in 2012 as part of the Food and Drug Administration Safety and Innovation Act, imposes new obligations on manufacturers of pharmaceutical products related to product tracking and tracing.

        Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. Cerecor is not sure whether additional legislative changes will be enacted, whether the current regulations, guidance or interpretations will be changed, or what the impact of such changes on Cerecor's business, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA's approval process may significantly delay or prevent marketing approval, as well as subject Cerecor to more stringent product labeling and post-marketing testing and other requirements.

        Cerecor expects that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for Cerecor's product candidates or additional pricing pressures.

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Product liability lawsuits against Cerecor could cause Cerecor to incur substantial liabilities and to limit commercialization of any products that it may develop.

        Cerecor faces an inherent risk of product liability exposure related to the testing of Cerecor's product candidates in human clinical trials and related to the commercial sale of Cerecor's products. Product liability claims may be brought against Cerecor by subjects enrolled in Cerecor's clinical trials, patients, healthcare providers or others using, administering or selling Cerecor's products. For example, Cerecor may be sued if any product it sells allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If Cerecor cannot successfully defend itself against claims that its product candidates or products that it may develop caused injuries, Cerecor could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

        Cerecor currently holds product and clinical trial liability insurance coverage, but it might not adequately cover all liabilities that Cerecor incurs. Cerecor might not be able to maintain clinical trial insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Cerecor also maintains insurance coverage for its commercially available products, which might not adequately cover all liabilities that Cerecor may incur. Cerecor might not be able to maintain insurance coverage for its approved products at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A product liability claim or series of claims brought against Cerecor, whether or not successful, but particularly if judgments exceed Cerecor's insurance coverage, could decrease Cerecor's cash and adversely affect its reputation and business.

Cerecor's relationships with commercial and government customers, healthcare providers, and third -party payors and others are subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare related laws, regulations and requirements, which could expose Cerecor to criminal sanctions, civil penalties, exclusion from participation in federal healthcare programs, contractual damages and consequences, reputational harm, administrative burdens and diminished profits and future earnings.

        Pharmaceutical companies participating in federal and/or state healthcare programs such as Medicare and Medicaid are subject to a multitude of federal and state laws and regulations which are intended to address and prevent "fraud and abuse". These laws also apply to the physicians and third-party payors who play a primary role in the recommendation and prescription of Cerecor's

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commercially-available products. Cerecor's arrangements with providers, payors, and patients may expose Cerecor to broadly-applicable fraud and abuse laws. These laws may constrain the business or financial arrangements and relationships through which Cerecor markets, sells, and distributes its products. There are also laws, regulations, and requirements applicable to the award and performance of federal grants and contracts.

        Actions resulting in violations of these laws regulations, and requirements may result in civil and criminal liability, damages and restitution, as well as exclusion from participation in federal healthcare programs, corporate integrity agreements, deferred prosecution agreements, debarment from government contracts and grants and refusal of future orders under existing contracts or contractual damages, and other consequences. Restrictions under applicable federal and state healthcare related laws and regulations, include the following:

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        Efforts to ensure that Cerecor's business arrangements with third parties will comply with applicable healthcare laws and regulations involve substantial costs. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that governmental authorities will conclude that Cerecor's business practices do not comply with current or future statutes, regulations, or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. In addition, recent health care reform legislation has strengthened these laws. For example, recent case law from the U.S. Supreme Court interpreted the federal False Claims Act to include liability for implied false certifications, in certain instances. If Cerecor's operations are found to be in violation of any of these laws or any other governmental regulations or requirements that may apply to it, Cerecor may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, restitution exclusion from government funded healthcare programs, such as Medicare and Medicaid, corporate integrity agreements, deferred prosecution agreements, debarment from government contracts and grants and refusal of future orders under existing contracts, contractual damages, the curtailment or restructuring of Cerecor's operations and other consequences. If any of the physicians or other healthcare providers or entities with whom Cerecor expects to do business are found not to be in compliance with applicable laws, that person or entity may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

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Moreover, availability of any federal grant funds which Cerecor may receive or for which it may apply is subject to federal appropriations law. Grant funding may also be withdrawn or denied for other reasons.

Cerecor may be subject to numerous and varying privacy and security laws, and its failure to comply could result in penalties and reputational damage.

        Cerecor maintains a large quantity of sensitive information, including confidential business information and information associated with clinical trials. If Cerecor's security measures are breached or fail and/or are bypassed because of third-party action, inadvertent disclosures through technological or human error (including employee error), malfeasance, hacking, ransomware, social engineering (including phishing schemes), computer viruses, malware, or otherwise, unauthorized acquisition of or access to sensitive information may occur. As a result, Cerecor's reputation could be damaged, its business might suffer, information might be lost, and Cerecor could face damages for breach of contract, penalties for violation of applicable laws or regulations, costly litigation or government investigations, and significant costs for remediation and remediation efforts to prevent future occurrences. The harm associated with these negative results is likely to be exacerbated if the affected information is personally identifiable.

        Cerecor may be subject to laws and regulations governing the privacy and security of personal information, including regulations pertaining to health information. The legislative and regulatory landscape for privacy and data security continues to evolve, and there has been an increasing focus on privacy and data security issues that may affect Cerecor's business. In the U.S., there are numerous federal and state privacy and data security laws and regulations that govern the collection, use, disclosure, and protection of personal information, including federal and state health information privacy laws, federal and state security breach notification laws, and federal and state consumer protection laws. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for Cerecor. If Cerecor fails to comply with applicable laws and regulations, Cerecor could be subject to penalties or sanctions. Recently, the HHS Office for Civil Rights, which enforces HIPAA, appears to have increased its enforcement activities. Additionally, state attorneys general may bring civil actions seeking either injunctions or damages in response to violations of HIPAA that threaten the privacy of state residents. Privacy and data security has become an area of emphasis for some state legislatures. In addition to the risk associated with enforcement, compliance with these evolving laws, rules, and regulations regarding the privacy, security and protection of personal information could result in higher compliance and technology costs for Cerecor and present challenges for its business model.

        There are numerous federal and state laws that generally require notice to affected individuals, regulators, and sometimes the media or credit reporting agencies in the event of a data breach impacting personal information. For example, at the federal level, HIPAA Breach Notification Rule mandates notification of breaches affecting protected health information to affected individuals and regulators under conditions set forth in the Rule. Covered Entities must report breaches of unsecured protected health information to affected individuals without unreasonable delay, but not to exceed 60 days of discovery of the breach by a Covered Entity or its agents. Notification must also be made to HHS and, in certain circumstances involving large breaches, to the media. Business Associates must report breaches of unsecured protected health information to Covered Entities within 60 days of discovery of the breach by the Business Associate or its agents. All states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands have enacted data breach notification laws. These laws may impose notification obligations in addition to, or inconsistent with, the HIPAA Breach Notification Rule when a data breach implicates protected health information. In that event that Cerecor fails to detect or timely report a data breach it may be subject to significant penalties under federal and state law. In the event that Cerecor reports a data breach as required by federal or state law, federal or state

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regulators may initiate an investigation into, and/or litigation related to, Cerecor's privacy or data security practices. Private plaintiffs may also initiate costly class-action litigation following a data breach.

        Numerous other countries have, or are developing, laws governing the collection, use, and transmission of personal information. These laws often impose significant compliance obligations. For example, since May 25, 2018, the General Data Protection Regulation ("GDPR"), has imposed more stringent obligations and restrictions on the ability to collect, analyze, and transfer personal information, including health data from clinical trials and substantial fines for breaches of the data protection rules in the European Economic Area. To the extent that Cerecor's activities are or become subject to the GDPR, Cerecor may need to devote significant effort and resources to complying with those legal regimes. Any failure to comply with the rules arising from the GDPR could lead to government enforcement actions and significant penalties against Cerecor and adversely impact its operating results.

If Cerecor's employees, independent contractors, principal investigators, CROs, manufacturers, consultants or vendors commit fraud or other misconduct, including noncompliance with regulatory standards and requirements and insider trading, Cerecor's business may experience serious adverse consequences.

        Cerecor is exposed to the risk that its employees, independent contractors, principal investigators, CROs, manufacturers, consultants and vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to Cerecor that violates: (1) FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, (2) manufacturing standards, (3) federal and state healthcare fraud and abuse laws and regulations or (4) laws that require the true, complete and accurate reporting of financial information or data. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, 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. The improper use of information obtained in the course of clinical trials could also result in significant legal sanctions and serious harm to Cerecor's reputation. In addition, federal procurement laws and regulations impose substantial penalties for misconduct in connection with government contracts and require contractors to maintain a code of business conduct and ethics. Cerecor has adopted a Code of Business Conduct and Ethics, but it is not always possible to identify and deter misconduct by Cerecor's employees and other third parties, and the precautions Cerecor takes to detect and prevent this activity might not be effective in controlling unknown or unmanaged risks or losses or in protecting Cerecor from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Cerecor, and Cerecor is not successful in defending itself or asserting its rights, those actions could have a significant impact on Cerecor's business, including regulatory enforcement action, the imposition of significant criminal and civil fines, penalties, or other sanctions, including imprisonment, exclusion from participation in federal healthcare programs, and deferred prosecution and corporate integrity agreements.

        In addition, during the course of Cerecor's operations, Cerecor's directors, executives and employees may have access to material, nonpublic information regarding Cerecor's business, its results of operations or potential transactions Cerecor is considering. Cerecor has adopted an Insider Trading and Window Period Policy, but despite the adoption of such policy, Cerecor might not be able to prevent a director, an executive or an employee from trading in Cerecor's common stock on the basis of, or while having access to, material, nonpublic information. If a director, executive or employee was to be investigated, or an action was to be brought against a director, executive or employee for insider trading, it could have a negative impact on Cerecor's reputation and its stock price. Such a claim, with

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or without merit, could also result in substantial expenditures of time and money, and divert attention of Cerecor's management team from other tasks important to the success of Cerecor's business.

Cerecor may encounter difficulties in managing its growth and expanding its operations successfully.

        As Cerecor seeks to advance its product candidates through clinical trials, Cerecor will need to expand its development, regulatory, manufacturing, administrative, marketing and sales capabilities or contract with third parties to provide these capabilities for it. As Cerecor's operations expand, Cerecor expects that it will need to manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management. Cerecor's future financial performance and its ability to commercialize its product candidates and to compete effectively will depend, in part, on Cerecor's ability to manage any future growth effectively. To that end, Cerecor must be able to manage its development efforts and clinical trials effectively and hire, train and integrate additional management, administrative and sales and marketing personnel. The hiring, training and integration of new employees may be more difficult, costly and/or time-consuming for Cerecor because it has fewer resources than a larger organization. Cerecor might not be able to accomplish these tasks, and its failure to accomplish any of them could prevent Cerecor from successfully growing its company.

If, in the future, Cerecor is unable to grow its own sales, or establish marketing and distribution capabilities or enter into licensing or collaboration agreements for these purposes, Cerecor might not be successful in commercializing its product candidates.

        Cerecor does not currently have a robust sales or marketing infrastructure. To develop its internal sales, distribution and marketing capabilities for new product candidates, Cerecor will have to invest significant amounts of financial and management resources, some of which will be committed prior to any confirmation that any new product candidates will be approved. For product candidates for which Cerecor decides to perform sales, marketing and distribution functions itself, it could face a number of additional risks, including:

        Where and when appropriate, Cerecor may elect to utilize contract sales forces or strategic partners to assist in the commercialization of Cerecor's product candidates. If Cerecor enters into arrangements with third parties to perform sales, marketing and distribution services for its products, the resulting revenues or the profitability from these revenues to Cerecor is likely to be lower than if it had sold, marketed and distributed its products itself. In addition, Cerecor might not be successful in entering into arrangements with third parties to sell, market and distribute its product candidates or may be unable to do so on terms that are favorable to Cerecor. Cerecor likely will have little control

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over such third parties, and any of these third parties may fail to devote the necessary resources and attention to sell, market and distribute its products effectively. Such third parties may also not comply with the applicable regulatory requirements, which could potentially expose Cerecor to regulatory and legal enforcement actions.

Risks Related to Cerecor's Dependence on Third Parties

Cerecor might not succeed in establishing and maintaining development collaborations, which could adversely affect Cerecor's ability to develop and commercialize product candidates.

        A part of Cerecor's strategy is to enter into product development collaborations in the future, including collaborations with major biotechnology or pharmaceutical companies for the development or commercialization of its current and future product candidates. Cerecor also faces significant competition in seeking appropriate development partners and the negotiation process is time-consuming and complex. Cerecor might not succeed in its efforts to establish development collaborations or other alternative arrangements for any of its existing or future product candidates and programs because its research and development pipeline may be insufficient, its product candidates and programs may be deemed to be at too early a stage of development for collaborative effort and/or third parties might not view its product candidates and programs as having the requisite potential to demonstrate safety and efficacy.

        Furthermore, any collaborations that Cerecor enters into might not be successful. The success of Cerecor's development collaborations will depend heavily on the efforts and activities of its collaborators. Furthermore, any collaborations that Cerecor enters into might not be successful. The success of Cerecor's development collaborations will depend heavily on the efforts and activities of its collaborators. Cerecor's relationship with any future collaborations may pose several risks, including the following:

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        Even if Cerecor is successful in its efforts to establish development collaborations, the terms that Cerecor agrees upon might not be favorable to it and it might not be able to maintain such development collaborations if, for example, development or approval of a product candidate is delayed or sales of an approved product candidate are disappointing. Any delay in entering into development collaboration agreements related to Cerecor's product candidates could delay the development and commercialization of its product candidates and reduce their competitiveness if they reach the market. Additionally, collaborations with pharmaceutical or biotechnology companies and other third parties often are terminated or allowed to expire by the other party. Any such termination or expiration would adversely affect Cerecor financially and could harm its business reputation.

        If Cerecor fails to establish and maintain additional development collaborations related to its product candidates:

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Cerecor relies on third parties to conduct, supervise and monitor its clinical trials. The failure of these third parties to successfully carry out their contractual duties or meet expected deadlines could substantially harm Cerecor's business because Cerecor might not obtain marketing approval for or commercialize its product candidates in a timely manner or at all.

        Cerecor relies upon third-party CROs to monitor and manage data for its clinical programs. Cerecor relies on these parties for execution of its clinical trials and, while Cerecor has agreements governing their activities, Cerecor has limited influence over their actual performance and control only certain aspects of their activities. Nevertheless, Cerecor is responsible for ensuring that each of its studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and Cerecor's reliance on the CROs does not relieve it of its regulatory responsibilities. Cerecor, its clinical trial sites, and its CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities for all of Cerecor's products in clinical development. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and trial sites. If Cerecor, any of its CROs or clinical trial sites fails to comply with applicable GCP requirements, the clinical data generated in Cerecor's clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require Cerecor to perform additional clinical trials before approving its marketing applications, if at all. In addition, Cerecor is required to report certain financial interests of its third-party investigators if these relationships exceed certain financial thresholds or meet other criteria. The FDA or comparable foreign regulatory authorities may question the integrity of the data from those clinical trials conducted by principal investigators who previously served or currently serve as scientific advisors or consultants to Cerecor from time to time and receive cash compensation in connection with such services or otherwise receive compensation from Cerecor that could be deemed to impact study outcome, proprietary interests in a product candidate, certain company equity interests, or significant payments of other sorts. Cerecor cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of its clinical trials complies with GCP requirements. In addition, Cerecor must conduct its clinical trials with product produced under applicable cGMP requirements. Failure to comply with these regulations may require Cerecor to repeat preclinical and clinical trials, which would delay the marketing approval process.

        Cerecor's CROs and clinical trial sites are not its employees, and, except for remedies available to Cerecor under its agreements with such CROs and clinical trial sites, Cerecor cannot control whether or not they devote sufficient time and resources to Cerecor's ongoing clinical, nonclinical and preclinical programs. These CROs and clinical trial sites may also have relationships with other commercial entities, including Cerecor's competitors, for whom they may also be conducting clinical trials or other drug development activities that could harm Cerecor's competitive position. If CROs or clinical trial sites do not successfully carry out their contractual duties or obligations or meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to Cerecor's clinical protocols, regulatory requirements or for other reasons, Cerecor's clinical trials may be extended, delayed or terminated and Cerecor might not be able to obtain marketing approval for or successfully commercialize its product candidates or it may be subject to regulatory enforcement actions. As a result, Cerecor's results of operations and the commercial prospects for its product candidates would be harmed, its costs could increase and its ability to generate revenues could be delayed. To the extent Cerecor is unable to successfully identify and

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manage the performance of third-party service providers in the future, Cerecor's business may be adversely affected.

        Switching or adding CROs involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact Cerecor's ability to meet its desired clinical development timelines. Though Cerecor carefully manages its relationships with its CROs, there can be no assurance that Cerecor will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on Cerecor's business, prospects, financial condition and results of operations.

Cerecor uses third parties to manufacture all of its product candidates. This may increase the risk that Cerecor will not have sufficient quantities of its product candidates to conduct its clinical trials or such quantities at an acceptable cost, which could result in the delay, prevention, or impairment of clinical development and commercialization of Cerecor's product candidates.

        Cerecor's does not own or operate, and has no plans to establish, any manufacturing facilities for its product candidates. Cerecor has limited personnel with experience in drug manufacturing and Cerecor lacks the resources and the capabilities to manufacture any of its product candidates on a clinical or commercial scale.

        Cerecor currently outsources all manufacturing of its product candidates to third parties typically without any guarantee that there will be sufficient supplies to fulfill Cerecor's requirements or that Cerecor may obtain such supplies on acceptable terms. Any delays in obtaining adequate supplies with respect to Cerecor's product candidates may delay the development or commercialization of its other product candidates.

        In addition, Cerecor does not currently have any agreements with third-party manufacturers for the long-term commercial supply of its product candidates. Cerecor may be unable to enter agreements for commercial supply with third-party manufacturers, or may be unable to do so on acceptable terms. Even if Cerecor enters into these agreements, the various manufacturers of each product candidate will likely be single source suppliers to Cerecor for a significant period of time.

        The facilities used by Cerecor's contract manufacturers to manufacture Cerecor's product candidates must be approved by the FDA pursuant to inspections that will be conducted after Cerecor submits its NDA to the FDA. While Cerecor is ultimately responsible for the manufacture of its product candidates, other than through its contractual arrangements, Cerecor does not control the manufacturing process of, and is completely dependent on, its contract manufacturing partners for compliance with cGMP requirements for manufacture of both active drug substances and finished drug products for clinical supply and eventually for commercial supply, if Cerecor receives regulatory approval. If Cerecor's contract manufacturers cannot successfully manufacture material that conforms to Cerecor's specifications and the strict regulatory requirements of the FDA or other regulatory authorities, Cerecor's will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. Failure of Cerecor's contract manufacturers to comply with the applicable regulatory requirements may also subject Cerecor to regulatory enforcement actions. In addition, other than through Cerecor's contractual agreements, Cerecor has no control over the ability of Cerecor's contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of Cerecor's product candidates or if it withdraws any such approval in the future, Cerecor may need to find alternative manufacturing facilities, which would significantly impact its ability to develop, obtain marketing approval for or market its product candidates, if approved.

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        Reliance on third-party manufacturers subjects Cerecor to risks that would not affect it if Cerecor manufactured the product candidates itself, including:

        Cerecor's product candidates may compete with other products and product candidates for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP

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regulations and that are both capable of manufacturing for Cerecor and willing to do so. If Cerecor's existing third-party manufacturers, or the third parties that it engages in the future to manufacture a product for commercial sale or for Cerecor's clinical trials, should cease to continue to do so for any reason, Cerecor likely would experience delays in obtaining sufficient quantities of its product candidates for Cerecor to meet commercial demand or to advance its clinical trials while it identifies and qualifies replacement suppliers. If for any reason Cerecor is unable to obtain adequate supplies of its product candidates or the drug substances used to manufacture them, it will be more difficult for Cerecor to develop its product candidates and compete effectively.

        Cerecor's suppliers are subject to regulatory requirements, covering manufacturing, testing, quality control, manufacturing, and record keeping relating to its product candidates, and subject to ongoing inspections by the regulatory agencies. Failure by any of Cerecor's suppliers to comply with applicable regulations may result in long delays and interruptions to Cerecor's manufacturing capacity while Cerecor seeks to secure another supplier that meets all regulatory requirements, as well as market disruption related to any necessary recalls or other corrective actions.

Cerecor will continue to depend on Aytu to provide it with certain services to manage the operations of Millipred.

        In connection with the sale of Cerecor's Pediatric Portfolio to Aytu, Cerecor retained the rights to Millipred and entered into a Transition Services Agreement with Aytu. Pursuant to the Transition Services Agreement, Aytu is responsible for managing the commercial operations of Millipred, including providing accounting reporting services and managing the third-party logistics provider. Cerecor exercises no control over the activities of Aytu, other than the contractual rights it has pursuant to its Transition Services Agreement. If Aytu were to fail to fulfill all of its obligations under the Transition Service Agreement, Cerecor could suffer operational difficulties or significant losses. If Aytu ceases to provide services pursuant to the Transition Services Agreement, Cerecor might not be able to reestablish its commercial infrastructure to replace these services in a timely manner, if at all, which would materially adversely affect its financial position.

        The revenue generated by sales of Millipred will be received by Aytu and subsequently transferred to Cerecor, and any delay or default in payment by Aytu to Cerecor of these revenues could adversely affect Cerecor's cash flows, financial condition, and results of operations. Pursuant to the Transition Services Agreement, Aytu is responsible for managing the commercial operations of Millipred and is obligated to transfer the revenue generated by sales of Millipred to Cerecor on a timely basis. Adverse economic conditions or financial difficulties of Aytu could impair its ability to remit such payment or could cause Aytu to delay such payments. Furthermore, if Aytu were unable to meet its obligations, it could consider restructuring under the bankruptcy laws, which might make it difficult for Cerecor to collect all or a significant portion of the revenues generated by Millipred. Cerecor's inability to collect its revenues generated by Millipred from Aytu could adversely affect its cash flows, financial condition, and results of operations.

Risks Related to Intellectual Property

If Cerecor is unable to obtain or maintain intellectual property rights, or if the scope of patent protection is not sufficiently broad, competitors could develop and commercialize products similar or identical to Cerecor's, and Cerecor might not be able to compete effectively in its market.

        Cerecor's success depends in significant part on Cerecor's and its licensors', licensees' or collaborators' ability to establish, maintain and protect patents and other intellectual property rights and operate without infringing the intellectual property rights of others. Cerecor has filed numerous patent applications both in the United States and in foreign jurisdictions to obtain patent rights to inventions it has discovered. Cerecor have also licensed from third parties' rights to patent portfolios.

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        The patent prosecution process is expensive and time-consuming, and Cerecor and Cerecor's current or future licensors, licensees or collaborators might not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that Cerecor or its licensors, licensees or collaborators will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Moreover, in some circumstances, Cerecor might not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that it licenses from or license to third parties and are reliant on Cerecor's licensors, licensees or collaborators. Therefore, these patents and applications might not be prosecuted and enforced in a manner consistent with the best interests of Cerecor's business. If Cerecor's current or future licensors, licensees or collaborators fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If Cerecor's licensors, licensees or collaborators are not fully cooperative or disagree with Cerecor as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.

        The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of Cerecor and Cerecor's current or future licensors', licensees' or collaborators' patent rights are highly uncertain. Cerecor's and its licensors', licensees' or collaborators' pending and future patent applications might not result in patents being issued which protect Cerecor's technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. The patent examination process may require Cerecor or its licensors, licensees or collaborators to narrow the scope of the claims of Cerecor or its licensors', licensees' or collaborators' pending and future patent applications, which may limit the scope of patent protection that may be obtained. Cerecor's and its licensors', licensees' or collaborators' patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.

        Furthermore, 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, Cerecor's owned and licensed patent portfolio might not provide Cerecor with sufficient rights to exclude others from commercializing products similar or identical to Cerecor's products. Cerecor expects to seek extensions of patent terms where these are available in any countries where Cerecor is prosecuting patents. This includes in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984, which permits a patent term extension of up to five years beyond the expiration of the patent. However, the applicable authorities, including the FDA in the United States, and any equivalent regulatory authority in other countries, might not agree with Cerecor's assessment of whether such extensions are available, and may refuse to grant extensions to Cerecor's patents, or may grant more limited extensions than Cerecor requests. If this occurs, Cerecor's competitors may take advantage of its investment in development and clinical trials by referencing its clinical and preclinical data and launch their product earlier than might otherwise be the case.

If Cerecor breaches the license agreements related to its product candidates, Cerecor could lose the ability to develop and commercialize its product candidates.

        Cerecor's commercial success depends upon its ability, and the ability of its licensors and collaborators, to develop, manufacture, market and sell Cerecor's product candidates and use Cerecor and its licensors' or collaborators' proprietary technologies without infringing the proprietary rights of third parties. If Cerecor fails to comply with its obligations in the agreements under which it licenses intellectual property rights from third parties or otherwise experience disruptions to Cerecor's business

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relationships with its licensors, Cerecor could lose the ability to continue the development and commercialization of its product candidates or face other penalties under these agreements. Cerecor has entered into exclusive license agreements with Merck & Co., Inc. and its affiliates ("Merck") pursuant to which Merck has granted Cerecor rights to the compounds used in CERC-301 and the COMTi platform, including CERC-406. If Cerecor fails to comply with the obligations under these agreements, including payment terms, Merck and Lilly may have the right to terminate any of these agreements, in which event Cerecor might not be able to develop, market or sell the relevant product candidate. Such an occurrence could materially adversely affect the value of the product candidate being developed under any such agreement. Termination of these agreements or reduction or elimination of Cerecor's rights under these agreements may result in Cerecor having to negotiate new or reinstated agreements, which might not be available to Cerecor on equally favorable terms, or at all, or cause Cerecor to lose its rights under these agreements, including its rights to intellectual property or technology important to Cerecor's development programs. Any of these occurrences may harm Cerecor's business, financial condition and prospects significantly.

Obtaining and maintaining Cerecor's patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and Cerecor's patent protection could be reduced or eliminated for non-compliance with these requirements.

        Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO, and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If Cerecor or its licensors or collaborators fails to maintain the patents and patent applications covering its product candidates, Cerecor's competitors might be able to enter the market, which would have a material adverse effect on Cerecor's business.

Third parties may initiate legal proceedings against Cerecor alleging that it infringed their intellectual property rights, or Cerecor may initiate legal proceedings against third parties to challenge the validity or scope of intellectual property rights controlled by third parties, the outcome of which would be uncertain and could have a material adverse effect on the success of Cerecor's business.

        Third parties may initiate legal proceedings against Cerecor or its licensors or collaborators alleging that Cerecor or its licensors or collaborators infringe their intellectual property rights or Cerecor or its licensors or collaborators may initiate legal proceedings against third parties to challenge the validity or scope of intellectual property rights controlled by third parties, including in oppositions, interferences, reexaminations, inter partes reviews or derivation proceedings before the United States or other jurisdictions. These proceedings can be expensive and time-consuming and many of Cerecor's or its licensors' or collaborators' adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than Cerecor or its licensors or collaborators can.

        An unfavorable outcome could require Cerecor or its licensors or collaborators to cease using the related technology or developing or commercializing its product candidates, or to attempt to license rights to it from the prevailing party. Cerecor's business could be harmed if the prevailing party does not offer Cerecor or its licensors or collaborators a license on commercially reasonable terms or at all.

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Even if Cerecor or its licensors or collaborators obtain a license, it may be non-exclusive, thereby giving Cerecor's competitors access to the same technologies licensed to Cerecor or its licensors or collaborators. In addition, Cerecor could be found liable for monetary damages, including treble damages and attorneys' fees, if Cerecor is found to have willfully infringed a patent. A finding of infringement could prevent Cerecor from commercializing its product candidates or force Cerecor to cease some of its business operations, which could materially harm Cerecor's business.

Cerecor may become involved in lawsuits to protect or enforce its intellectual property, which could be expensive, time-consuming and unsuccessful and have a material adverse effect on the success of Cerecor's business.

        Third parties may infringe on Cerecor's or its licensors' or collaborators' patents or misappropriate or otherwise violate Cerecor's or its licensors' or collaborators' intellectual property rights. In the future, Cerecor or its licensors or collaborators may initiate legal proceedings to enforce or defend Cerecor's or its licensors' or collaborators' intellectual property rights, to protect Cerecor's or its licensors' or collaborators' trade secrets or to determine the validity or scope of intellectual property rights Cerecor owns or controls. Also, third parties may initiate legal proceedings against Cerecor or its licensors or collaborators to challenge the validity or scope of intellectual property rights Cerecor owns or controls. The proceedings can be expensive and time-consuming and many of Cerecor's or its licensors' or collaborators' adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than Cerecor or its licensors or collaborators can. Accordingly, despite Cerecor's or its licensors' or collaborators' efforts, Cerecor or its licensors or collaborators might not prevent third parties from infringing upon or misappropriating intellectual property rights Cerecor owns or controls, particularly in countries where the laws might not protect those rights as fully as in the United States. Litigation could result in substantial costs and diversion of management resources, which could harm Cerecor's business and financial results. In addition, in an infringement proceeding, a court may decide that a patent owned by or licensed to Cerecor is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that Cerecor's or its licensors' or collaborators' patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of Cerecor's or its licensors' or collaborators' patents at risk of being invalidated, held unenforceable or interpreted narrowly.

        Third party pre-issuance submission of prior art to the USPTO, or opposition, derivation, reexamination, inter partes review or interference proceedings, or other pre-issuance or post-grant proceedings in the United States or other jurisdictions provoked by third parties or brought by Cerecor or its licensors or collaborators may be necessary to determine the priority of inventions with respect to Cerecor's or its licensors' or collaborators' patents or patent applications. An unfavorable outcome could require Cerecor or its licensors or collaborators to cease using the related technology and commercializing its product candidates, or to attempt to license rights to it from the prevailing party. Cerecor's business could be harmed if the prevailing party does not offer Cerecor or its licensors or collaborators a license on commercially reasonable terms or at all. Even if Cerecor or its licensors or collaborators obtain a license, it may be non-exclusive, thereby giving Cerecor's competitors access to the same technologies licensed to Cerecor or its licensors or collaborators. In addition, if the breadth or strength of protection provided by Cerecor's or its licensors' or collaborators' patents and patent applications is threatened, it could dissuade companies from collaborating with Cerecor to license, develop or commercialize current or future product candidates. Even if Cerecor successfully defends such litigation or proceeding, Cerecor may incur substantial costs and it may distract Cerecor's management and other employees. Cerecor could be found liable for monetary damages, including treble damages and attorneys' fees if Cerecor is found to have willfully infringed a patent.

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        Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of Cerecor's confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of Cerecor's warrants or shares of its common stock.

Cerecor may be subject to claims by third parties asserting that its employees or Cerecor has misappropriated their intellectual property, or claiming ownership of what Cerecor regards as its own intellectual property.

        Many of Cerecor's employees, including its senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies, including Cerecor's competitors or potential competitors. Some of these employees executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Cerecor may be subject to claims that Cerecor or these employees have used or disclosed confidential information or intellectual property, including trade secrets or other proprietary information, of any such employee's former employer. In addition, Cerecor may be subject to claims that former employees, collaborators, or other third parties have an ownership interest in Cerecor's patents or other intellectual property. While it is Cerecor's policy to require its employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to Cerecor, Cerecor may be unsuccessful in executing such an agreement to each party who in fact develops intellectual property that Cerecor regards as its own. Cerecor could be subject to ownership disputes arising, for example, from conflicting obligations of consultants or others who are involved in developing Cerecor's product candidates. Litigation may be necessary to defend against these claims.

        If Cerecor fails in prosecuting or defending any such claims, in addition to paying monetary damages, Cerecor may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and Cerecor could be required to obtain a license from such third party to commercialize its technology or products. Such a license might not be available on commercially reasonable terms or at all. Even if Cerecor successfully prosecutes or defends against such claims, litigation could result in substantial costs and distract management.

Cerecor's inability to protect its confidential information and trade secrets would harm Cerecor's business and competitive position.

        In addition to seeking patents for some of Cerecor's technology and products, Cerecor also relies on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain Cerecor's competitive position. Though Cerecor seeks to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as Cerecor's employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties, as well as by entering into confidentiality and invention or patent assignment agreements with Cerecor's employees and consultants, any of these parties may breach the agreements and disclose Cerecor's proprietary information, including Cerecor's trade secrets, and Cerecor might 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 both within and outside the United States may be less willing or unwilling to protect trade secrets. If a competitor lawfully obtained or independently developed any of Cerecor's trade secrets, Cerecor would have no right to prevent such competitor from using that technology or information to compete with Cerecor, which could harm Cerecor's competitive position.

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Changes in patent law could diminish the value of patents in general, thereby impairing Cerecor's ability to protect its product candidates.

        As is the case with other biotechnology and pharmaceutical companies, Cerecor's success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve technological and legal complexity, and obtaining and enforcing biopharmaceutical patents is costly, time-consuming, and inherently uncertain. The Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to Cerecor's and its licensors' or collaborators' ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by Congress, the federal courts, and the USPTO the laws and regulations governing patents could change in unpredictable ways that would weaken Cerecor's and its licensors' or collaborators' ability to obtain new patents or to enforce existing patents and patents Cerecor and its licensors or collaborators may obtain in the future. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of Cerecor's and its licensors' or collaborators' patent applications and the enforcement or defense of Cerecor's or its licensors' or collaborators' issued patents. On September 16, 2011, the America Invents Act was signed into law. The America Invents Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The USPTO recently developed new regulations and procedures to govern administration of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the America Invents Act will have on the operation of Cerecor's business. However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of Cerecor's or its licensors' or collaborators' patent applications and the enforcement or defense of Cerecor's or its licensors' or collaborators' issued patents, all of which could have a material adverse effect on Cerecor's business and financial condition.

Cerecor might not be able to protect its intellectual property rights throughout the world.

        Filing, prosecuting, enforcing and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and Cerecor's or its licensors' or collaborators' 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 foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, Cerecor and its licensors or collaborators might not be able to prevent third parties from practicing Cerecor's and its licensors' or collaborators' inventions in all countries outside the United States, or from selling or importing products made using Cerecor's and its licensors' or collaborators' inventions in and into the United States or other jurisdictions. Competitors may use Cerecor's and its licensors' or collaborators' technologies in jurisdictions where Cerecor has not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where Cerecor and its licensors or collaborators have patent protection, but enforcement is not as strong as that in the United States. These products may compete with Cerecor's product candidates and Cerecor's and its licensors' or collaborators' patents or other intellectual property rights might 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 certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for Cerecor

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and its licensors or collaborators to stop the infringement of Cerecor's and its licensors' or collaborators' patents or marketing of competing products in violation of Cerecor's and its licensors' or collaborators' proprietary rights generally. Proceedings to enforce Cerecor's and its licensors' or collaborators' patent rights in foreign jurisdictions could result in substantial costs and divert Cerecor's and its licensors' or collaborators' efforts and attention from other aspects of Cerecor's business, could put Cerecor's and its licensors' or collaborators' patents at risk of being invalidated or interpreted narrowly and Cerecor's and its licensors' or collaborators' patent applications at risk of not issuing and could provoke third parties to assert claims against Cerecor or its licensors or collaborators. Cerecor or its licensors or collaborators might not prevail in any lawsuits that Cerecor or its licensors or collaborators initiate and the damages or other remedies awarded, if any, might not be commercially meaningful.

        The requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug. In India, unlike the United States, there is no link between regulatory approval of a drug and its patent status. Furthermore, generic or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of Cerecor's or its licensors' or collaborators' patents, requiring Cerecor or its licensors or collaborators to engage in complex, lengthy and costly litigation or other proceedings. Generic or biosimilar drug manufacturers may develop, seek approval for, and launch biosimilar versions of Cerecor's products. In addition to India, certain countries in Europe and developing countries, including China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, Cerecor and its licensors or collaborators may have limited remedies if patents are infringed or if Cerecor or its licensors or collaborators are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit Cerecor's potential revenue opportunities. Accordingly, Cerecor and its licensors' or collaborators' efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Cerecor owns or licenses.

Risks Related to Cerecor's Stock

If Cerecor is not able to comply with the applicable continued listing requirements or standards of The Nasdaq Stock Market, Nasdaq could delist Cerecor's common stock.

        Cerecor's common stock is currently listed on The Nasdaq Stock Market. In order to maintain that listing, Cerecor must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders' equity, minimum share price, and certain corporate governance requirements. There can be no assurances that Cerecor will be able to comply with the applicable listing standards.

        In the event that Cerecor's common stock is delisted from The Nasdaq Stock Market and is not eligible for quotation or listing on another market or exchange, trading of Cerecor's common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, Cerecor's common stock, and there would likely also be a reduction in Cerecor's coverage by securities analysts and the news media, which could cause the price of Cerecor's common stock to decline further. Also, it may be difficult for Cerecor to raise additional capital if it is not listed on a major exchange.

        Such a de-listing would also likely have a negative effect on the price of Cerecor's common stock and would impair your ability to sell or purchase Cerecor's common stock when you wish to do so. In the event of a de-listing, Cerecor may take actions to restore its compliance with The Nasdaq Stock

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Market's listing requirements, but Cerecor can provide no assurance that any such action taken by Cerecor would allow its common stock to become listed again, stabilize the market price or improve the liquidity of its common stock, prevent its common stock from dropping below The Nasdaq Stock Market minimum bid price requirement or prevent future non-compliance with The Nasdaq Stock Market's listing requirements.

An active trading market for Cerecor's securities might not be sustained.

        Although Cerecor's common shares are listed on The Nasdaq Stock Market, Cerecor cannot assure you that an active trading market for Cerecor's common shares will continue to develop or be sustained, particularly because one investor, Armistice, now holds a significant amount of Cerecor's outstanding stock. If an active market for Cerecor's common shares is not sustained it may impair your ability to sell your warrants or shares of Cerecor's common stock at the time you wish to sell them or at a price that you consider reasonable, you may not be able to sell your shares quickly or at the market price. An inactive market may also impair Cerecor's ability to raise capital to continue to fund operations by selling common shares and may impair Cerecor's ability enter into strategic collaborations or acquire companies or products by using Cerecor's common shares as consideration.

The market price of Cerecor's stock is volatile, and you could lose all or part of your investment.

        The market price of Cerecor's shares of its common stock has been highly volatile and subject to wide fluctuations in response to various factors, some of which Cerecor cannot control. From Cerecor's initial public offering in October 2015 through September 30, 2019, the per share trading price of Cerecor's common stock has been as high as $7.65 and as low as $0.34. As a result of this volatility, you might not be able to sell your shares of Cerecor's common stock at a favorable price. In addition to the factors discussed in this "Risk Factors" section and elsewhere in this proxy statement/prospectus, these factors that could negatively affect or result in fluctuations in the market price of shares of Cerecor's common stock include:

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        In addition, the stock market in general, and the market for biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of shares of common stock, regardless of Cerecor's actual operating performance. 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 a material adverse impact on the market price of Cerecor's shares of common stock. When the market price of a stock is volatile, security holders often institute class action litigation against the company that issued the stock. If Cerecor becomes involved in this type of litigation, regardless of the outcome, Cerecor could incur substantial legal costs and Cerecor's management's attention could be diverted from the operation of Cerecor's business, which could have a material adverse effect on Cerecor's business, financial condition, results of operations and cash flows.

Future sales and issuances of shares of Cerecor's common stock or rights to purchase common stock, including pursuant to Cerecor's equity incentive plans, could result in additional dilution of the percentage ownership of Cerecor's stockholders and could cause Cerecor's stock price to fall.

        Cerecor expects that additional capital may be needed in the future to continue Cerecor's planned operations, including conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating a public company. To raise capital, Cerecor may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner Cerecor determines from time to time. If Cerecor sells common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to Cerecor's existing stockholders, and new investors could gain rights, preferences and privileges senior to Cerecor's existing stockholders.

        Cerecor is authorized to grant equity awards, including stock grants and stock options, to Cerecor's employees, directors and consultants. As of September 30, 2019, there were 1,963,869 shares available for future issuance under the Second and Amended 2016 Equity Incentive Plan ("the 2016 Amended Plan"). During the term of the 2016 Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, by an amount equal to 4% of the total number of outstanding shares of common stock of Cerecor on the last trading day in December of the prior calendar year. On January 1, 2019, on the terms of the 2016 Amended Plan an additional 1,632,167 shares were made available for issuance for a total of 2,234,824 shares available for issuance. In addition, as of September 30, 2019, there were 1,148,085 shares available for future issuance under the 2016 Employee Stock Purchase Plan (the "ESPP"). On January 1 of each calendar year, the aggregate number of shares that may be issued under the ESPP will automatically increase by a number equal to the lesser of (i) 1% of the total number of shares of Cerecor's common stock outstanding on

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December 31 of the preceding calendar year, and (ii) 500,000 shares of Cerecor's common stock, or (iii) a number of shares of Cerecor's common stock as determined by Cerecor's board of directors or compensation committee. Future issuances, as well as the possibility of future issuances, under the 2016 Amended Plan or the ESPP or other equity incentive plans could cause the market price of Cerecor's common stock to decrease.

Armistice has significant influence over Cerecor, and its interests may be different from or conflict with those of Cerecor's other stockholders.

        Armistice Capital, LLC ("Armistice") beneficially own approximately 63% of Cerecor's outstanding common stock. As a consequence, Armistice continues to be able to exert a significant degree of influence over Cerecor's management, affairs, and matters requiring stockholder approval, including the election of directors, a merger, consolidation or sale of all or substantially all of Cerecor's assets, and any other significant transaction. The interests of Armistice might not always coincide with Cerecor's interests or the interests of Cerecor's other stockholders. For instance, this concentration of ownership may have the effect of delaying or preventing a change in control of Cerecor otherwise favored by Cerecor's other stockholders and could depress Cerecor's stock price.

        Armistice makes investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with Cerecor. Armistice may also pursue, for its own account, acquisition opportunities that may be complementary to Cerecor's business, and as a result, those acquisition opportunities might not be available to Cerecor. The interests of the Armistice may supersede Cerecor, causing Armistice or their affiliates to compete against Cerecor or to pursue opportunities instead of Cerecor, for which Cerecor has no recourse. Such actions on the part of Armistice and inaction on Cerecor's part could have a material adverse effect on Cerecor's business, financial condition, results of operations and cash flows.

        Armistice controls a seat on Cerecor's board of directors. Since Armistice could invest in entities that directly or indirectly compete with Cerecor, when conflicts arise between the interests of Armistice and the interests of Cerecor's stockholders, this director might not be disinterested.

Sales of a significant number of shares of Cerecor's common stock in the public markets, or the perception that such sales could occur, could depress the market price of Cerecor's common stock.

        Sales of a substantial number of shares of Cerecor's common stock in the public markets could depress the market price of Cerecor's common stock and impair Cerecor's ability to raise capital through the sale of additional equity securities. As additional shares of Cerecor's common stock become available for resale in the public market pursuant to this offering, and otherwise, the supply of Cerecor's common stock will increase, which could decrease its price. In addition, some or all of the shares of common stock may be offered from time to time in the open market pursuant to Rule 144, and these sales may have a depressive effect on the market for Cerecor's shares of common stock. Therefore, Cerecor cannot predict the effect that future sales of Cerecor's common stock would have on the market price of its common stock.

Cerecor has never paid cash dividends on its capital stock, and it does not anticipate paying any cash dividends in the foreseeable future.

        The continued operation and expansion of Cerecor's business will require substantial funding. Cerecor currently intends to retain all of its future earnings, if any, to finance the growth and development of its business. Accordingly, Cerecor does not anticipate that it will pay any cash dividends on shares of Cerecor's common stock for the foreseeable future. Consequently, currently stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Any determination to pay dividends in the future

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will be at the discretion of Cerecor's board of directors and will depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors Cerecor's board of directors deems relevant.

Cerecor is an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act") and will be able to avail itself of reduced disclosure requirements applicable to emerging growth companies, which could make Cerecor's securities less attractive to investors and adversely affect the market price of Cerecor's securities.

        For so long as Cerecor remains an "emerging growth company" as defined in the JOBS Act, Cerecor may take advantage of certain exemptions from various requirements applicable to public companies that are not "emerging growth companies" including:

        Cerecor may take advantage of these exemptions until it is no longer an "emerging growth company." Cerecor would cease to be an "emerging growth company" upon the earliest of: (i) the first fiscal year following the fifth anniversary of Cerecor's initial public offering; (ii) the first fiscal year after Cerecor's annual gross revenues are $1.07 billion or more; (iii) the date on which Cerecor has, during the previous three-year period, issued more than $1.07 billion in non-convertible debt securities; or (iv) as of the end of any fiscal year in which the market value of Cerecor's common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

        Cerecor has determined to take advantage of some, but not all, of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an "emerging growth company." For example, Cerecor has irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Cerecor's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of Cerecor's internal control over financial reporting so long as Cerecor qualifies as an "emerging growth company," which may increase the risk that material weaknesses or significant deficiencies in Cerecor's internal control over financial reporting go undetected. Likewise, so long as Cerecor qualifies as an "emerging growth company," it may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of Cerecor's executive officers, that it would otherwise have been required to provide in filings Cerecor makes with the SEC which may make it more difficult for investors and securities analysts to evaluate Cerecor. Even after Cerecor "no longer qualifies as an emerging growth company, Cerecor may still qualify as a "smaller reporting company," which would allow it to take advantage of many of the same exemptions from disclosure requirements, including not being required

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to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in Cerecor's periodic reports and proxy statements. Cerecor cannot predict if investors will find its securities less attractive because it may rely on these exemptions. If some investors find Cerecor's securities less attractive as a result, there may be a less active trading market for Cerecor's securities, and the securities prices may be more volatile and may decline.

Cerecor may be subject to future litigation against it, including securities litigation, which could be costly and time-consuming to defend.

        The market price of Cerecor's securities may be volatile, and in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. Cerecor may be the target of this type of litigation in the future. Securities litigation against Cerecor could result in substantial costs and divert Cerecor's management's attention from other business concerns, which could seriously harm Cerecor's business. Any adverse determination in litigation could also subject Cerecor to significant liabilities.

        Cerecor may also become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business such as claims brought by Cerecor's clients in connection with commercial disputes, or employment claims made by Cerecor's current or former associates. Litigation might result in substantial costs and may divert management's attention and resources, which might seriously harm Cerecor's business, overall financial condition, and operating results. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to Cerecor. A claim brought against Cerecor that is uninsured or underinsured could result in unanticipated costs, thereby reducing Cerecor's operating results and leading analysts or potential investors to reduce their expectations of Cerecor's performance, which could reduce the trading price of Cerecor's stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about Cerecor's business, Cerecor's securities prices and trading volume could decline.

        The trading market for Cerecor's securities will depend in part on the research and reports that securities or industry analysts publish about Cerecor or its business. Cerecor currently has limited, and might not sustain, research coverage by securities and industry analysts. If Cerecor does not sustain coverage of Cerecor, the trading price for securities would be negatively impacted. If the securities and industry analysts are unable to predict accurately the demand and net of sales Cerecor's products, that could result in Cerecor's reported revenues and earnings being lower than the so-called "market consensus" of Cerecor's projected revenues, which could negatively affect Cerecor's stock price. Additionally, if the securities and industry analysts are unable to predict accurately the cost of advancing Cerecor's pipeline, which could result in Cerecor's reported costs being different than expectations and could negatively affect Cerecor's stock price. If Cerecor does obtain securities or industry analyst coverage and if one or more of the analysts who covers Cerecor downgrades its securities or publishes inaccurate or unfavorable research about Cerecor's business, Cerecor's securities prices would likely decline. If one or more of these analysts ceases coverage of Cerecor or fails to publish reports on Cerecor regularly, demand for Cerecor's securities could decrease, which could cause Cerecor's securities prices and trading volume to decline.

The requirements of being a public company may strain Cerecor's resources and divert management's attention, and Cerecor's minimal public company operating experience may impact Cerecor's business and stock price.

        As a public company, Cerecor incurs significant legal, accounting and other expenses, and these expenses may increase even more after Cerecor is no longer an "emerging growth company." Cerecor

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is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Protection Act, as well as rules adopted, and to be adopted, by the SEC, The Nasdaq Stock Market and other applicable securities rules and regulations imposed on public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Cerecor's management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, Cerecor expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will increase Cerecor's net loss. For example, Cerecor expects these rules and regulations to make it more difficult and more expensive for Cerecor to obtain director and officer liability insurance and it may be required to incur substantial costs to maintain sufficient coverage. The impact of these requirements could also make it more difficult for Cerecor to attract and retain qualified persons to serve on its board of directors, its board committees or as executive officers.

        Because these rules and regulations are often subject to varying interpretations, it is difficult to accurately estimate or predict the amount or timing of these additional costs. Further, the lack of specificity of many of the rules and regulations may result in an application in practice that may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Cerecor's disclosure controls and procedures might not prevent or detect all errors or acts of fraud.

        Cerecor is subject to the periodic reporting requirements of the Exchange Act, Sarbanes-Oxley Act and The Nasdaq Stock Market rules and regulations. The Sarbanes-Oxley Act requires, among other things, that Cerecor maintain effective disclosure controls and procedures and internal control over financial reporting. Cerecor designed its disclosure controls and procedures to reasonably assure that information Cerecor must disclose in reports it files or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Cerecor believes that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Cerecor cannot assure, in the future, a material weakness or significant deficiency will not exist or otherwise be discovered. If that were to happen, it could harm Cerecor's operating results and cause stockholders to lose confidence in Cerecor's reported financial information. Any such loss of confidence would have a negative effect on the trading price of Cerecor's securities.

        These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in Cerecor's control system, misstatements due to error or fraud may occur and not be detected.

Cerecor's amended and restated certificate of incorporation provides that unless Cerecor consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between Cerecor and Cerecor's stockholders, which could limit Cerecor's stockholders' ability to obtain a favorable judicial forum for disputes with Cerecor or its directors, officers or employees.

        Cerecor's amended and restated certificate of incorporation provides that, unless Cerecor consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on Cerecor's behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against Cerecor arising pursuant to the

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DGCL, Cerecor's amended and restated certificate of incorporation or Cerecor's bylaws; or any action asserting a claim against Cerecor that is governed by the internal affairs doctrine. This choice of forum provision does not preclude or contract the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act or the Exchange Act. Accordingly, Cerecor's exclusive forum provision will not relieve Cerecor of its duties to comply with the federal securities laws and the rules and regulations thereunder, and Cerecor's stockholders will not be deemed to have waived Cerecor's compliance with these laws, rules and regulations.

        Any person or entity purchasing or otherwise acquiring any interest in any of Cerecor's securities will be deemed to have notice of and consented to these provisions. These exclusive-forum provisions may limit a stockholder's ability to bring a claim in a judicial forum of its choosing for disputes with Cerecor or its directors, officers or other employees, which may discourage lawsuits against Cerecor and its directors, officers and other employees.

        If a court were to find the choice of forum provision contained in Cerecor's amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, Cerecor may incur additional costs associated with resolving such action in other jurisdictions, which could harm Cerecor's business, results of operations, and financial condition. Even if Cerecor is successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.

Some provisions of Cerecor's charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of Cerecor by others, even if an acquisition would benefit Cerecor's stockholders and may prevent attempts by Cerecor's stockholders to replace or remove its current management.

        Provisions in Cerecor's amended and restated certificate of incorporation and second amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire Cerecor or increase the cost of acquiring Cerecor, even if doing so would benefit Cerecor's stockholders, or remove its current management. These provisions include:

        These provisions may frustrate or prevent any attempts by Cerecor's stockholders to replace or remove Cerecor's current management by making it more difficult for stockholders to replace members of Cerecor's board of directors, who are responsible for appointing the members of Cerecor's management. Because Cerecor is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL which may discourage, delay or prevent someone from acquiring Cerecor or merging with Cerecor whether or not it is desired by or beneficial to Cerecor's stockholders. Under the DGCL, a corporation might not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Any provision of Cerecor's amended and restated certificate of incorporation or second amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for Cerecor's stockholders to receive a premium for their shares of Cerecor's common stock, and could also affect the price that some investors are willing to pay for Cerecor's securities.

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FORWARD-LOOKING STATEMENTS

        This proxy statement/prospectus contains forward-looking statements. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements should not be relied upon as predictions of future events as Aevi and Cerecor cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including "believes," "expects," "may," "might," "will," "should," "seeks," "intends," "plans," "pro forma," "estimates," or "anticipates" or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, forward-looking statements include any statements of the plans, strategies and objectives of management for future operations, including the execution of integration and plans and the anticipated timing of filings; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. Forward-looking statements may also include any statements of the plans, strategies and objectives of management with respect to the approval and completion of the Merger, Aevi's ability to solicit a sufficient number of proxies to approve the Merger and other matters related to the consummation of the Merger.

        For a discussion of the factors that may cause Aevi, Cerecor or the combined company's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, or for a discussion of risk associated with the ability of Aevi and Cerecor to complete the Merger and the effect of the Merger on the business of Aevi, Cerecor and the combined company, see "Risk Factors" beginning on page 27.

        Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in reports filed with the SEC by Aevi and by Cerecor. See "Where You Can Find More Information" beginning on page 305.

        If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of Aevi, Cerecor or the combined company could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement/prospectus are current only as of the date on which the statements were made. Except as required by law, Aevi and Cerecor do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events.

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SPECIAL MEETING OF AEVI STOCKHOLDERS

        This proxy statement/prospectus is being sent to Aevi stockholders in order to provide important information regarding the Merger in connection with the solicitation of proxies by Aevi's board of directors for use at the special meeting of its stockholders and at any adjournment or postponement of the special meeting.

Date, Time and Place of the Special Meeting

        Aevi will hold a special meeting of its stockholders on February 3, 2020, beginning at 10:00 a.m., local time, at the offices of Pepper Hamilton LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, PA.

Matters for Consideration

        At the special meeting, Aevi stockholders will be asked to:

        At the special meeting, Aevi will also transact such other business as may properly come before the stockholders at the special meeting or any adjournment or postponement thereof. Aevi is not aware of any business to be acted upon at the special meeting, other than the proposals set forth in this proxy statement/prospectus. If, however, other matters incident to the conduct of the special meeting are properly brought before the special meeting or any adjournment or postponement of the special meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

Board of Directors' Recommendation

        After careful consideration, the Aevi board of directors believes that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of Aevi and its stockholders. The Aevi board of directors recommends that the Aevi stockholders vote "FOR" Proposal No. 1 to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger, and "FOR" Proposal No. 2 to adjourn the special meeting, if necessary, to solicit additional proxies to approve Proposal No. 1.

Record Date and Voting Power

        Only holders of record of Aevi common stock at the close of business on the record date, December 20, 2019, are entitled to notice of, and to vote at, the special meeting. Each share of common stock entitles the holder thereof to one vote on each matter submitted for stockholder approval.

        There were approximately 234 holders of record of common stock with 77,713,782 shares of common stock issued and outstanding at the close of business on the record date.

Shares Owned by Directors and Executive Officers

        As of the record date, the directors and executive officers of Aevi owned shares of Aevi common stock representing approximately 30% of the outstanding voting power of Aevi common stock entitled to vote at the special meeting. On December 5, 2019, the following Aevi stockholders, owning

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collectively approximately 36% of the outstanding voting stock of Aevi, entered into voting agreements pursuant to which they have agreed to vote their shares in favor of the approval and adoption of the Merger Agreement and the transactions proposed thereunder, including the Merger: The Children's Hospital of Philadelphia Foundation, Sol J. Barer, Eugene A. Bauer, Alastair Clemow, Michael F. Cola, Barbara G. Duncan, Joseph J. Grano, Jr., Garry A. Neil, and Michael H. McInaw. The voting agreements are described in the section "Agreements Related to the Merger" on page 164.

Quorum and Vote Required

        Stockholders who hold shares representing at least one third of the votes represented by the issued and outstanding stock of Aevi, entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. Your shares will be counted as present at the meeting if you:

        If you are present in person or by proxy at the special meeting, but withhold your vote or abstain from voting on any or all proposals, your shares are also still counted as present and entitled to vote.

        The affirmative vote of a majority of the shares of outstanding common stock on the record date is required for approval of Proposal No. 1, while the affirmative vote of a majority of the votes cast is required for approval of Proposal No. 2. Failures to vote and abstentions will have the same effect as a vote against Proposal No. 1. Failures to vote and abstentions with respect to Proposal No. 2 are not considered votes cast and will have no effect on the outcome of Proposal No. 2.

Adjournment and Postponement

        Any adjournment or postponement of the special meeting (e.g., an adjournment required because of the absence of a quorum) would be voted upon pursuant to the discretionary authority granted by the proxy. If the special meeting is adjourned or postponed, Aevi is not required to give notice of the time and place of the adjourned or postponed meeting if it is to take place within 30 days and if the time and place of the adjourned or postponed meeting are announced at the special meeting, unless the Aevi board of directors fixes a new record date for the special meeting.

Voting of Proxies

        The Aevi proxy accompanying this proxy statement/prospectus is solicited on behalf of the Aevi board of directors for use at the special meeting.

Proxies and Voting Generally

        If you are an Aevi stockholder of record, you may vote in person at the special meeting or vote by proxy using the enclosed proxy card. Whether or not you plan to attend the meeting, you are urged to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person if you have already voted by proxy.

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        All properly executed proxies that are not revoked will be voted at the special meeting and at any adjournments or postponements of the special meeting in accordance with the instructions contained in the proxy. If a holder of Aevi voting stock executes and returns a proxy and does not specify otherwise, the shares represented by the proxy will be voted "FOR" Proposal No. 1 to approve and adopt the Merger Agreement and to approve the Merger in accordance with the recommendation of the Aevi board of directors and Proposal No. 2 to adjourn the special meeting, if necessary, to solicit additional proxies to approve Proposal No. 1.

        If a bank, broker or other nominee holds your shares in street name you may vote in the following ways:

        Under the applicable NYSE rule, brokers, banks and nominees are not permitted to vote shares held for a customer on "non-routine" matters without specific instructions from the customer. Proposal No. 1 and Proposal No. 2 are both considered to be "non-routine" matters and therefore, brokers, banks and other nominees do not have discretionary voting power on these matters and such entity will only vote your shares of Aevi common stock if you provide instructions on how to vote by complying with the voter instruction form sent to you by your bank, broker or other nominee with this proxy statement/prospectus.

        In any event, to be sure that your vote will be received in time, please cast your vote by your choice of available means at your earliest convenience.

How to Revoke a Proxy

        You may revoke your proxy at any time before it is voted by notifying the secretary of Aevi in writing, by returning a signed proxy with a later date, by transmitting a subsequent vote over the Internet or by telephone, or by attending the special meeting and voting in person. Notices to the secretary of Aevi should be addressed to: Secretary, Aevi Genomic Medicine, Inc., 435 Devon Park Drive, Suite 715, Wayne, PA 19087, (610) 254-4201. If your stock is held in street name, you must contact your bank, broker or other nominee for instructions as to how to change your vote.

Solicitation of Proxies and Expenses

        Aevi is soliciting proxies for the special meeting from the Aevi stockholders and Cerecor will bear the related expenses in connection with the solicitation of proxies. Aevi expects that the expenses of this special solicitation will be nominal. Certain directors, officers and employees of Aevi or Cerecor may solicit proxies, without additional remuneration, by mail, telephone, facsimile, e-mail and in person.

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Aevi Stock Certificates

        Aevi stockholders holding their shares in certificated form should not send stock certificates with their proxies. A letter of transmittal with instructions for the surrender of Aevi stock certificates, if applicable, will be mailed to Aevi stockholders separately, if the Merger is consummated.

Assistance

        If you need assistance in completing your proxy card or have questions regarding the special meeting, please contact Michael Cola, President and Chief Executive Officer of Aevi at (610) 254-4201.

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THE MERGER

        This section and the section titled "The Merger Agreement" in this proxy statement/prospectus describes the material aspects of the Merger, including the Merger Agreement. While Aevi believes that this description covers the material terms of the Merger and the Merger Agreement, it may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus for a more complete understanding of the Merger and the Merger Agreement, including the Merger Agreement attached as Annex A, the form of CVR Agreement attached as Annex B, the fairness opinion of Wedbush attached as Annex C, and the other documents to which you are referred herein. See the section titled "Where You Can Find More Information" in this proxy statement/prospectus.

Background of the Merger

Introduction

        Aevi's board of directors and management team regularly review Aevi's operating and strategic plans, both near-term and long-term, as well as potential partnerships, all in an effort to enhance stockholder value. These reviews and discussions focus, among other things, on the opportunities and risks associated with Aevi's business, financial condition, strategic relationships and other strategic options.

        The Cerecor board of directors and management team, as part of its ongoing oversight and management of Cerecor, also periodically reviews and assesses Cerecor's near-term and long-term strategic goals and opportunities, and considers ways to enhance Cerecor's performance and prospects, all with the goal of enhancing stockholder value. These reviews have included periodic discussions with respect to strategic alternatives, including potential business combinations, acquisitions, and divestitures.

        In January 2019, upon evaluation of the disappointing outcome of the ASCEND trial, in addition to management focusing on Aevi's pipeline of additional molecules, Aevi's board of directors commenced a review to explore and evaluate potential strategic alternatives to enhance stockholder value, including, among others, continuing to execute Aevi's business plan, issuing or transferring shares of Aevi's common stock or other equity securities, the license, sale or disposition of certain assets or programs, the formation of a joint venture, a strategic business combination, a transaction that could result in private ownership or the sale of Aevi, or some combination of these. At a meeting of Aevi's board of directors on January 30, 2019, the board of directors authorized the existing Science and Technology Advisory Committee, consisting of Dr. Sol Barer, Barbara Duncan and Dr. Eugene A. Bauer, to discuss and review the strategic business transaction process and to advise Aevi's management on their progress to identify potential strategic alternatives.

        Beginning in February 2019, and continuing through May 2019, Aevi's management worked to identify and evaluate potential in-licensing product candidates, strategic business partners and investors. Throughout March and April 2019, members of Aevi's management had multiple conversations with two private equity firms regarding a potential sale transaction. Each firm was, at the time, in the process of raising a committed fund, and its respective management believed a transaction with Aevi would be consistent with the strategies of the funds. Although both firms expressed an interest in purchasing or investing in Aevi, neither firm was prepared to move forward until their new investment funds were closed and ready for investments.

        On February 26, 2019, Aevi's board of directors reaffirmed the authority of the Science and Technology Advisory Committee to provide guidance to Aevi's management in its evaluation of strategic alternatives as a transaction committee. On April 25th Aevi's board of directors formally established a special committee, the Transaction Committee (the "Transaction Committee"), comprised of Dr. Sol Barer, Barbara Duncan, Dr. Eugene A. Bauer and Joseph J. Grano, to evaluate, consider and explore possible strategic transactions.

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        From February through May 2019, Aevi's management identified two product candidates to enhance Aevi's product portfolio and which they believed would attract potential investors and strategic business partners. In July 2019, Aevi in-licensed AEVI-006, a novel second generation mTORC1/2 inhibitor from a subsidiary of Astellas and in August 2019, Aevi obtained an option to in-license AEVI-007, a Phase 2-ready fully human monoclonal antibody that targets interleukin 18, or IL-18, from a subsidiary of AstraZeneca.

        Also in July 2019, Aevi engaged Wedbush to act as Aevi's financial advisor in connection with a potential financing or strategic business transaction. Commencing in July 2019, and continuing through October 2019, Wedbush approached approximately 75 institutions concerning a potential equity investment in Aevi. Members of Aevi's management team met (either in person or via telephone call) with 31 of those institutions. Of the 31 institutions with which management met, none of them expressed an interest in participating in an equity financing.

        However, an affiliate of one such institution, Cerecor, reviewed the Aevi opportunity in October 2019. On October 18, 2019, Cerecor submitted a non-binding indication of interest for a stock-for-stock merger with Aevi.

        The non-binding indication of interest with Cerecor was negotiated and subsequently executed on October 30, 2019. As part of Aevi's "market check," Wedbush contacted 39 potential strategic business partners and other institutions that Wedbush and Aevi management felt may have an interest in acquiring Aevi. Four of the 39 institutions participated in calls or meetings with members of Aevi's management team. One such potential strategic business partner, Company A, submitted a non-binding indication of interest on December 2nd to purchase one of Aevi's assets, which did not progress and ultimately was abandoned by Aevi's board of directors.

Detailed Timeline of Events

        On August 13, 2019, Mike Cola, Chief Executive Officer of Aevi, attended an investor conference sponsored by Wedbush. At the conference, Mr. Cola, as a part of Aevi's financing efforts, met in person with Steve Boyd, the Chief Investment Officer of Armistice Capital, LLC ("Armistice") and member of the board of directors of Cerecor.

        Between August 13, 2019 and October 15, 2019, Aevi continued its financing efforts.

        On October 14, 2019, Mike Cola again met telephonically with Steve Boyd and representatives from Wedbush to continue the discussions regarding a potential financing of Aevi by Armistice.

        On October 16, 2019, Mike Cola and Steve Boyd met telephonically to discuss the status of Cerecor's current pipeline and ongoing developments in its business.

        On October 17, 2019, Mike Cola, Garry Neil, Chief Medical Officer of Aevi, and Stephen Thomas, Vice President and Head of Discovery at Cerecor met telephonically to discuss Cerecor's current pipeline.

        Also on October 17, 2019, Joe Miller, Chief Financial Officer of Cerecor, and Steve Boyd met telephonically to discuss Aevi's pipeline, financial situation, management team, board of directors and the potential for a merger or acquisition of Aevi by Cerecor.

        On October 18, 2019, Mike Cola had an in-person meeting with Steve Boyd to discuss the potential business combination of Aevi and Cerecor, at which point Steve Boyd suggested a meeting between Mike Cola and Joe Miller.

        On October 18, 2019, Joe Miller met telephonically with Simon Pedder, Executive Chairman of the Cerecor board of directors, to discuss the proposed transaction with Aevi and the framework for a

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non-binding letter of interest concerning an acquisition of Aevi. It was decided following that meeting to submit the initial indication of interest.

        Also on October 18, 2019, at Steve Boyd's request, Mike Cola and Joe Miller met telephonically to discuss the potential business combination of Aevi and Cerecor. Thereafter, on October 18th, both parties executed a standard confidentiality agreement in connection with the proposed transaction and Aevi received a non-binding indication of interest from Cerecor for a stock-for-stock merger of Aevi with and into a wholly-owned subsidiary of Cerecor for an aggregate purchase price of approximately $15 million. Mike Cola then sent the non-binding indication of interest from Cerecor to the members of Aevi's Transaction Committee later in the day on October 18th.

        On October 21, 2019, Aevi's Transaction Committee met telephonically to discuss and review management's and Wedbush's progress on the financing and strategic business transaction process, including the non-binding indication of interest received from Cerecor. Members of management and representatives of Wedbush were present at the meeting and summarized the details of the non-binding indication of interest received from Cerecor. A representative from Wedbush noted that despite interest from potential investors in a financing transaction, no lead investor had been identified. Members of management updated the Transaction Committee about the ongoing discussions with Cerecor. Members of management and the Transaction Committee assessed the offer from Cerecor, including the overall price to stockholders given the number of shares of common stock that Aevi anticipated issuing to CHOP upon conversion of the CHOP Note and to AZ upon exercise of the AZ Option. The Transaction Committee instructed management to continue to engage Cerecor in discussions and diligence to determine whether acceptable definitive terms could be agreed upon relating to a strategic business transaction, including an increased amount of upfront consideration, additional consideration in the form of contingent value rights, or both. The Transaction Committee also directed Wedbush to contact additional potential strategic transaction partners on a confidential basis. During the time period between October 18th and November 26th, Pepper Hamilton LLP ("Pepper Hamilton"), legal counsel to Aevi, and Aevi engaged in an extensive due diligence review of Cerecor, and Wyrick Robbins Yates & Ponton LLP ("Wyrick"), legal counsel to Cerecor, and Cerecor engaged in an extensive due diligence review of Aevi.

        Later in the day on October 21, 2019, Mike Cola, Mike McInaw, Interim Chief Financial Officer of Aevi, and Joe Miller met telephonically to discuss the process for moving forward with the proposed business combination.

        On October 22, 2019, Mike Cola, Mike McInaw, Steve Boyd and Joe Miller met telephonically to again discuss the process for moving forward with the proposed business combination and other issues related to the proposed business combination.

        On October 23, 2019, Mike Cola, Garry Neil and Perry Calias, Chief Scientific Officer of Cerecor, met telephonically to discuss Cerecor's current pipeline.

        On October 25, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss the business strategy of the combined company and the expected cash needs of the combined company, including the likelihood that Aevi would require certain financing during the period between signing the Merger Agreement and completion of the Merger.

        Throughout the end of October and beginning of November 2019, members of Aevi and Cerecor management met several times to conduct diligence and discuss follow-up questions regarding each company's respective business, operations and product pipeline.

        Between October 25, 2019 and October 29, 2019, Aevi's management met with representatives of Wedbush to discuss the details of a counter-offer to Cerecor and Mike Cola had several conversations with Dr. Sol Barer, the Chairman of the Transaction Committee, on the terms of the counter-offer to be presented to Cerecor.

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        On October 28, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss follow-up diligence questions from Cerecor, process for moving forward with the transaction and potential revisions to the non-binding indication of interest.

        Also on October 28, 2019, the Transaction Committee, representatives of Wedbush and Pepper Hamilton and Aevi's management met telephonically to discuss the proposed engagement of Wedbush by Cerecor for non-Merger related investment banking services to the proposed combined company, as well as the terms of Aevi's counter-offer to be presented to Cerecor. After discussion and review, including the fact that Wedbush would not take on such engagement until after the material terms of the proposed Merger with Cerecor were finalized, and that such engagement would not prohibit Wedbush from providing Aevi with a fairness opinion, the Transaction Committee unanimously approved the proposed engagement of Wedbush by Cerecor for non-Merger related investment banking services to the proposed combined company and instructed Aevi's management to respond to Cerecor with the counter-offer terms as discussed.

        On October 29, 2019, in accordance with the directive from the Transaction Committee, Mike Cola sent a revised version of the Cerecor non-binding indication of interest to Cerecor, which added contingent value rights in the aggregate amount of $7 million, clarified the calculation of shares of Cerecor common stock to be outstanding at closing of the transaction and added an acknowledgment regarding Aevi's anticipated financing plans during the time period between signing and closing. Also on October 29th, Aevi sent a diligence request list to Cerecor regarding additional diligence requests concerning Cerecor and its programs.

        On October 30, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss and finalize the non-binding indication of interest and expected cash needs for the combined company and Aevi during the period between signing the Merger Agreement and completion of the Merger.

        Also on October 30, 2019, Joe Miller met with Simon Pedder and Steve Boyd, to discuss the revised non-binding indication of interest received from Aevi, including the addition of the contingent value rights, triggering events and timing of the potential milestones, and the net working capital requirement. Following this meeting Aevi and Cerecor executed the non-binding indication of interest.

        On November 1, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss the contingent value rights, the proposed net asset adjustment terms, and Cerecor's then current transaction with Aytu and agreed that Pepper Hamilton would provide the initial draft of the Merger Agreement.

        Additionally, on November 1, 2019, Mike Cola provided the Transaction Committee with an update regarding the negotiations with Cerecor and explained that the principal points of negotiation up to that point had been the exchange ratio and purchase price adjustment at closing. A representative from Wedbush also provided an update regarding the market outreach to potential other strategic transaction partners and advised that they received positive interest from two parties (including Company A). Based in part on this interest the Transaction Committee directed management not to agree to an exclusivity agreement with Cerecor.

        On November 2, 2019, Cerecor and Wyrick received access to a virtual data room containing Aevi's documents responsive to Cerecor's diligence request list.

        On November 4, 2019, Mike Cola and Joe Miller met telephonically to discuss the proposed marketing plan and pipeline for the combined company after completion of the proposed Merger.

        On November 5, 2019, the Cerecor board of directors held a regularly scheduled meeting. Among other topics, at this meeting the of directors and management, with legal advice from a Wyrick representative, reviewed and discussed Aevi and the proposed Merger in detail. After detailed

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discussion, the Cerecor's board of directors unanimously directed management to proceed with negotiation of the proposed Merger with Aevi.

        On November 6, 2019, Mike Cola and Garry Neil met telephonically with representatives from Company A regarding follow up diligence questions.

        On November 7, 2019, Pepper Hamilton distributed an initial draft of the Merger Agreement to Cerecor and Wyrick. Also on November 7th Mike Cola, Joe Miller and representatives from Wyrick and Pepper Hamilton met telephonically to discuss the process for progressing the negotiations of the Merger Agreement and the preparation of a proxy statement/prospectus on Form S-4.

        On November 8, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss the terms of the proposed Merger contained in the draft Merger Agreement. Also on November 8th Cerecor sent a diligence request list to Aevi regarding additional diligence requests.

        On November 11, 2019, Wyrick distributed a material issues list based on the draft Merger Agreement circulated by Pepper Hamilton on November 7th.

        On November 12, 2019, representatives from Pepper Hamilton, Wyrick, Aevi and Cerecor met telephonically to discuss the material issues list. Also on November 12th Aevi and Pepper Hamilton received access to a virtual data room containing Cerecor's documents responsive to Aevi's diligence request list.

        On November 13, 2019, representatives from Pepper Hamilton and Wyrick met telephonically to discuss the material issues list and proposed solutions.

        On November 18, 2019, Aevi's board of directors discussed the terms of the proposed Merger with Cerecor and interest from Company A at a telephonic meeting. Mike Cola advised the Aevi board of directors that although Company A expressed an interest in pursuing a transaction with Aevi, there can be no guarantee with respect to timing and Company A's diligence requests remain ongoing. Aevi's board of directors directed management to pursue the potential offer from Company A without slowing down the process with Cerecor.

        Also on November 18, 2019, Pepper Hamilton distributed an initial draft of the CVR Agreement to Wyrick, and Cerecor and Wyrick circulated a revised draft of the Merger Agreement to Aevi and Pepper Hamilton for review. Representatives from Aevi, Cerecor, Pepper Hamilton and Wyrick met telephonically to review the outstanding issues on the Merger Agreement, including the terms of the net asset adjustment, which assets should be included in such calculation and how the target net asset amount should change (if any) based on the closing date of the proposed Merger.

        On November 19, 2019, Pepper Hamilton circulated a material issues list regarding Wyrick's revised draft of the Merger Agreement and representatives from Pepper Hamilton and Wyrick met telephonically to discuss the material issues remaining in the Merger Agreement; namely the exchange ratio calculation, net asset adjustment and the amount of funding needed for Aevi during the period between signing and closing.

        Also on November 19, 2019, with Aevi's knowledge and consent, Cerecor engaged Wedbush for certain non-Merger related investment banking services to the proposed combined company.

        On November 21, 2019, Pepper Hamilton distributed a revised draft of the Merger Agreement and Wyrick distributed a revised draft of the CVR Agreement as well as an initial draft of the form of Voting Agreement.

        Also on November 21, 2019, Joe Miller met telephonically with Steve Boyd, to discuss Aevi's net working capital needs, Aevi's financing requirements between signing the Merger Agreement and completion of the Merger and Cerecor's need for interim financing.

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        On November 22, 2019, Pepper Hamilton responded to Wyrick's revised draft of the CVR Agreement with a further revised draft to add AEVI-002 for purposes of the Study Milestone (as defined therein). Representatives from Pepper Hamilton, Wedbush and Aevi met telephonically on November 22nd to discuss the remaining material issues, including the net asset adjustment and target net asset amount. Also on November 22nd, Garry Neil met telephonically with Stephen Thomas regarding Cerecor's remaining diligence questions regarding Aevi and representatives from Pepper Hamilton and Wyrick discussed the need to document Cerecor's agreement to finance Aevi during the time period between signing and closing.

        On November 23, 2019, Wyrick circulated a revised draft of the Merger Agreement contemplating the issuance of two promissory notes (one for general corporate expenses and one for exercise of the AZ Option and related development expenses, the "Notes").

        Also on November 23, 2019, Cerecor and Armistice began negotiating the terms of a Backstop Agreement in order to ensure Cerecor has adequate capital available to fund its own operations and Aevi's operations prior to the closing of the Merger and members of Cerecor's Audit Committee indicated their approval of the related party transaction.

        During the day on November 24, 2019, representatives from Aevi, Cerecor, Pepper Hamilton and Wyrick discussed various issues related to the revised draft of the Merger Agreement, including the interim operating covenants placed on Aevi between signing and closing and payment of certain fees and expenses. Late in the day on November 24th Wyrick circulated an updated draft of the Merger Agreement reflecting the various discussions and agreements made throughout the day regarding the operation of Aevi between signing and closing and the payment of fees and expenses.

        On November 25, 2019, representatives from Pepper Hamilton and Wyrick met telephonically to discuss the various tax issues related to the structure of the proposed Merger (reverse triangular merger) and the payment of the CVRs in cash or stock (at Cerecor's sole option). This discussion regarding the various tax issues continued on November 26th and resulted in a mutual decision to change the structure of the proposed Merger from a one-step reverse triangular merger into a two-step forward merger whereby Aevi would merge with and into a wholly owned subsidiary of Cerecor with Aevi surviving and then as part of the same overall transaction Aevi would merge with and into a second wholly owned subsidiary of Cerecor with such subsidiary surviving as a disregarded subsidiary of Cerecor for tax reporting purposes. This change was made to better preserve the desired tax-free structure of the proposed Merger.

        Also on November 25, 2019, Cerecor's board of directors met telephonically with members of management and representatives from Wyrick to review the current status of negotiations with Aevi. At this meeting representatives from Cerecor management provided Cerecor's board of directors with an updated overview of Aevi and the potential strategy of the combined company and the terms of the Merger Agreement, the CVR Agreement, the form of the warrant amendment agreement and the form of Voting Agreement, as well as financing alternatives, including the Armistice Backstop Agreement. After detailed discussion, the Cerecor board of directors unanimously approved the proposed Merger on the terms described and negotiated to date.

        On November 26, 2019, Aevi's board of directors met telephonically with members of management and representatives from Wedbush and Pepper Hamilton to review the current status of negotiations with Cerecor and Company A. At this meeting representatives from Pepper Hamilton provided Aevi's board of directors with an overview of the terms of the Merger Agreement, the CVR Agreement, the form of the warrant amendment agreement and the form of Voting Agreement. Aevi's board of directors instructed Wedbush to exclude any value attributable to the CVRs issuable under the CVR Agreement from its fairness evaluation. A representative from Wedbush provided an update on the status of discussions with Company A and informed Aevi's board of directors that Company A was interested in a transaction to acquire/license AEVI-007 only (i.e., not a business combination

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transaction). Additionally, on November 26th Pepper Hamilton reviewed and commented on Cerecor's draft press release announcing the Merger and distributed Aevi's draft press release for review by Cerecor and Wyrick.

        On November 27, 2019, Wyrick provided drafts of the Notes.

        Between November 28, 2019 and December 2, 2019, there were few discussions between the parties given the Thanksgiving holiday, but the parties continued their confirmatory diligence on each other and drafting of the definitive transaction documents.

        On November 29, 2019, Magnus Persson, as Chairman of Cerecor's compensation committee, met telephonically with Mike Cola and Garry Neil to discuss the proposed terms of their respective employment agreements with Cerecor following completion of the Merger.

        On December 2, 2019, Company A submitted a non-binding indication of interest to Aevi relating to the purchase of the AEVI-007 program for a purchase price comprised of a $7.5 million upfront cash payment, $15 million cash payment upon FDA approval for the first indication and royalties on net sales in the low single digits.

        On December 2, 2019, the Transaction Committee met telephonically to review the non-binding indication of interest Aevi received from Company A. After review and discussion the Transaction Committee concluded that the proposal from Company A was insufficient to justify abandoning the transaction with Cerecor given that it did not provide enough cash consideration to repay outstanding financial obligations including the CHOP Note, and operate the company as a going concern or provide a realistic opportunity to monetize Aevi's remaining assets before Aevi used up its remaining cash. The Transaction Committee directed management and Wedbush to respond to Company A with the terms that would be necessary to justify acceptance of an offer from Company A.

        On December 3, 2019, Mike Cola, Mike McInaw and Joe Miller met telephonically to discuss the expected cash needs of the combined company and all outstanding issues needed to resolve before the signing of the Merger Agreement. During the day on December 3rd, all parties worked to finalize the Merger Agreement and the terms and conditions of the Notes.

        On December 3, 2019, a revised set of transaction documents, including the Merger Agreement, summaries of the material terms of the Merger Agreement, the CVR Agreement and the other ancillary documents and proposed resolutions were circulated to Aevi's board of directors for consideration. Also on December 3rd, Magnus Persson sent draft employment agreements to Mike Cola and Garry Neil. Messrs. Cola and Neil sent revised drafts of the employment agreements back to Mr. Persson on December 4th and then proceeded to negotiate the agreements with Dr. Persson over the next several days, not finalizing them until December 18, 2019.

        In the morning on December 4, 2019, Aevi's board of directors met telephonically to receive an update from management and representatives of Pepper Hamilton and Wedbush on the status of negotiating the Merger Agreement with Cerecor. Mike Cola advised of the intention of all parties to receive the fairness opinion, sign the Merger Agreement and announce the Merger before the opening of regular trading on the Nasdaq Capital Market on the following day, December 5th. Throughout the day on December 4th all parties were alerted to the rise in Aevi's stock price. As a result of the increase in Aevi's stock price Cerecor agreed to raise the base purchase price from approximately $15.6 million to $16.1 million in exchange for a corresponding reduction in the aggregate value of the CVRs from $7 million to $6.5 million. In the afternoon on December 4th, Dr. Sol Barer (as the chairman of Aevi's board of directors and Transaction Committee), a representative from Wedbush and representatives from Aevi and Pepper Hamilton met telephonically to review the events of the day, including the rise in Aevi's stock price and the increase in base purchase price. After discussion Aevi's board of directors determined to move forward with signing the Merger Agreement the following day.

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        During the day on December 4, 2019, a representative from Wedbush had a conversation with a representative from Company A regarding the non-binding indication of interest submitted to Aevi, informing him that the Aevi board of directors had determined that the proposal was insufficient to justify abandoning the transaction with Cerecor. The representative from Company A expressed an interest in pursuing a potential acquisition of the entire company rather than the originally proposed acquisition of the AEVI-007 program. However, Company A did not have any definitive timeline for delivering a proposal with an increased price. No further discussions occurred with Company A.

        In the afternoon of December 4, 2019, Wedbush's presentation regarding its fairness evaluation was circulated to Aevi's board of directors.

        Also on December 4, 2019, the Cerecor board of directors approved the final terms of the proposed Merger via unanimous written consent. In addition, Armistice and Cerecor agreed to the final terms of the Backstop Agreement, which Cerecor's Audit Committee approved via unanimous written consent.

        On the morning of December 5, 2019, Aevi's board of directors met telephonically with representatives of Wedbush and Pepper Hamilton, to consider approving the Merger. Representatives of Pepper Hamilton updated the Aevi board of directors with respect to the current status of certain terms of the Merger Agreement that remained open as of the prior Aevi board of directors meeting, including that Cerecor had made material concessions with respect to raising the base purchase price and repayment of the Notes funded by Cerecor in connection with certain termination provisions of the Merger Agreement. Representatives of Pepper Hamilton then answered questions from the Aevi board of directors regarding the terms of the Merger Agreement and summarized the material terms of the other documents included in the transactions contemplated by the Merger Agreement.

        Representatives from Wedbush reviewed with the Aevi board of directors its financial evaluation of the Merger consideration and rendered an oral opinion, confirmed by the delivery of a written opinion, dated December 5, 2019, to the Aevi board of directors to the effect that, as of such date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, the Merger consideration to be received by the holders of Aevi common stock pursuant to the Merger Agreement was fair, from a financial point of view, to such stockholders.

        Following the foregoing discussion, a representative of Pepper Hamilton reviewed proposed resolutions approving the Merger and the other transactions contemplated by the Merger Agreement. In addition to approving the execution, delivery and performance of the Merger Agreement, the resolutions contained, among other matters, resolutions approving the CVR Agreement and other ancillary matters.

        Aevi's board of directors adopted the resolutions, with Dr. Matthew Bayley abstaining from the vote, and all other directors voting in favor, which among other things, (i) determined that the Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement were fair and advisable to, and in the best interests of, Aevi and its stockholders, (ii) approved the execution, delivery and performance by Aevi of the Merger Agreement and the consummation of the Merger and the other transactions contemplated by the Merger Agreement, (iii) approved the form of CVR Agreement and (iv) resolved to recommend that the stockholders of Aevi adopt and approve the Merger Agreement.

        Immediately following the December 5, 2019 meeting of the Aevi board of directors, Aevi, Cerecor, Merger Sub and Second Merger Sub signed the Merger Agreement and each of Aevi and Cerecor issued a press release announcing the Merger prior to the opening of regular trading on the Nasdaq Capital Market.

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Aevi Reasons for the Merger

        At a telephonic meeting held on December 5, 2019, among other things, Aevi's board of directors (i) determined that the Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement were fair and advisable to, and in the best interests of, Aevi and its stockholders, (ii) approved the execution, delivery and performance by Aevi of the Merger Agreement and the consummation of the Merger and the other transactions contemplated by the Merger Agreement, (iii) approved the CVR Agreement and (iv) resolved to recommend that the stockholders of Aevi adopt and approve the Merger Agreement.

        Aevi's board of directors considered the following factors in reaching its conclusion to approve the Merger Agreement and the Merger, all of which Aevi's board of directors viewed as supporting its decision to approve the Merger with Cerecor:

        Aevi's board of directors also reviewed the recent financial condition, results of operations and financial condition of Aevi, including:

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        Aevi's board of directors also reviewed the terms of the Merger and associated transactions, including:

        In the course of its deliberations, Aevi's board of directors also considered a variety of risks and other countervailing factors related to entering into the Merger, including:

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        The foregoing information and factors considered by Aevi's board of directors are not intended to be exhaustive but are believed to include all of the material factors considered by Aevi's board of directors. In view of the wide variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, Aevi's board of directors did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of Aevi's board of directors may have given different weight to different factors. Aevi's board of directors conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, Aevi's management team and the legal and financial advisors of Aevi, and considered the factors overall to be favorable to, and to support, its determination.

Cerecor Reasons for the Merger

        The following discussion sets forth material factors considered by the Cerecor board of directors in reaching its determination to authorize the Merger Agreement and approve the Merger; however, is not intended to be exhaustive. In light of the number and wide variety of factors considered in connection with its evaluation of the Merger Agreement and the Merger, the Cerecor board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Cerecor board of directors viewed its position and determinations as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

        In the course of reaching its decision to authorize the Merger Agreement and approve the Merger, the Cerecor board of directors consulted with its senior management and legal counsel, reviewed a significant amount of information and considered a number of factors, including, among others:

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        Cerecor's board of directors also considered a number of uncertainties and risks in its deliberations concerning the Merger and the other transactions contemplated by the Merger Agreement, including the following:

        The Cerecor board of directors weighed the benefits, advantages and opportunities of a potential transaction against the uncertainties and risks described above, as well as the possible diversion of management attention for an extended period of time. After taking into account these and other factors, the Cerecor board of directors approved and authorized the Merger Agreement and the transactions contemplated thereby, including the Merger.

Opinion of Aevi's Financial Advisor

Scope of the Assignment

        In July 2019, Aevi's board of directors engaged Wedbush to act as Aevi's exclusive financial advisor, placement agent and underwriter in connection with a financing or sale transaction. Wedbush was engaged to, among other things, assist Aevi in analyzing, structuring, negotiating and effecting a proposed financing or sale transaction. As part of that engagement, Aevi's board of directors requested that Wedbush render an opinion as to whether the proposed consideration to be received by holders of

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Aevi common stock in the Merger was fair, from a financial point of view, to the holders of Aevi common stock. At the December 5, 2019 meeting of Aevi's board of directors, Wedbush rendered its oral opinion, subsequently confirmed by delivery of a written opinion dated December 5, 2019, to Aevi's board of directors that, as of the date of such opinion, and based upon the assumptions made, procedures followed, matters considered, and qualifications and limitations of the review set forth in its written opinion, the consideration to be received by holders of Aevi common stock in the Merger was fair, from a financial point of view, to the holders of Aevi common stock.

        The full text of Wedbush's written opinion, which sets forth the procedures followed, assumptions made, matters considered, and qualifications and limitations of the review undertaken in connection with such opinion, is attached to this proxy statement/prospectus as Annex C. Wedbush's opinion was intended solely for the benefit and use of Aevi's board of directors (in its capacity as such) in connection with its consideration of the Merger. Wedbush's opinion was not intended to be used for any other purpose without Wedbush's prior written consent in each instance, except as expressly provided for in the engagement letter between Aevi and Wedbush. Wedbush has consented to the use of Wedbush's opinion in this proxy statement/prospectus. Wedbush's opinion did not address Aevi's underlying business decision to enter into the Merger Agreement or complete the Merger or the merits of the Merger as compared to any alternative transactions that were or may be available to Aevi, and did not constitute a recommendation to Aevi's board of directors or to any holder of Aevi common stock as to how such holder should vote with respect to the Merger or otherwise. The following is a summary of Wedbush's opinion and stockholders are encouraged to read the full text of Wedbush's opinion, which is attached to this proxy statement/prospectus as Annex C.

        For purposes of its opinion and in connection with its review, Wedbush, among other things:

        In addition, Wedbush held discussions with the members of Aevi's management concerning their views as to the financial and other information described above. Wedbush also conducted such other analyses and examinations and considered such other financial, economic and market criteria as Wedbush deemed appropriate to arrive at its opinion.

        In rendering its opinion, Wedbush assumed and relied upon the accuracy and completeness of all information that was publicly available or was furnished to or discussed with Wedbush by Aevi or otherwise reviewed by Wedbush. With respect to information provided to or reviewed by it, Wedbush was advised by the members of Aevi's management that such information was reasonably prepared on bases reflecting the best currently available estimates and judgments of the members of Aevi's management. Wedbush did not express any view as to the reasonableness of such financial information or the assumptions on which it was based.

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        Wedbush further relied on the assurances of the members of Aevi's management that they were not aware of any facts that would make the information provided to Wedbush incomplete or misleading. Wedbush did not make and was not provided with any independent evaluations or appraisals of any of the assets, properties, liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities) or securities, nor did Wedbush make any physical inspection of the properties or assets, of Aevi. With respect to the cash forecast of Aevi provided to Wedbush, upon the guidance of members of Aevi's management, Wedbush assumed that such forecast had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Aevi as to the future expenses of Aevi. Wedbush assumed no responsibility for and expressed no view as to such forecast or the assumptions on which it was based. Wedbush did not evaluate the solvency or fair value of Cerecor, Aevi, or any of their respective subsidiaries (or the impact of the Merger thereon) under any law relating to bankruptcy, insolvency or similar matters.

        Wedbush's opinion was based on financial, economic, market and other conditions as in effect on, and the information made available to Wedbush as of, the date of such opinion. Wedbush also relied, without independent verification, on the accuracy and completeness of Cerecor's and Aevi's representations and warranties in the draft Merger Agreement and the draft of the form of CVR Agreement, without regard to any qualifications or exceptions that may be set forth in disclosure schedules, and the information provided to Wedbush by Aevi. In addition, Wedbush assumed that the Merger would be consummated in accordance with the terms set forth in the draft Merger Agreement and the draft of the form of CVR Agreement without any waiver, amendment or delay of any terms or conditions that would be material to Wedbush's analysis. Representatives of Aevi advised Wedbush that, and Wedbush further assumed that, the final terms of the Merger Agreement would not differ from the terms set forth in the draft Merger Agreement and that the final terms of the CVR Agreement would not differ from the terms set forth in the draft form of CVR Agreement, in each case in any respect material to Wedbush's analysis. Wedbush also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger would be obtained without imposition of any terms or conditions that would be material to Wedbush's analysis. Wedbush noted that events occurring after the date of its opinion could materially affect the assumptions used in preparing its opinion. Wedbush did not undertake any obligation to reaffirm or revise its opinion or otherwise comment upon any events occurring after the date of such opinion.

        Wedbush was not a legal, tax or regulatory advisor, and did not express any opinion as to any tax or other consequences that may arise from the Merger, nor did its opinion address any legal, regulatory or accounting matters, as to which Wedbush understood that Aevi had obtained such advice as it deemed necessary from qualified professionals. Wedbush was a financial advisor only and relied upon, without independent verification, the assessment of Cerecor and Aevi and their legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Wedbush assumed that the Merger would have the tax effects contemplated by the Merger Agreement.

        Wedbush is an investment banking firm and a member of the NYSE and other principal stock exchanges in the United States, and is regularly engaged as part of its business in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, private placements, secondary distributions of listed and unlisted securities, and valuations for corporate, estate and other purposes. Wedbush was selected by Aevi based on Wedbush's experience, expertise and reputation and its familiarity with Aevi. Aevi's board of directors did not impose any limitations on Wedbush with respect to the investigations made or procedures followed in rendering its opinion. Wedbush's opinion was approved by a fairness committee at Wedbush in accordance with the requirements of the Financial Industry Regulatory Authority Rule 5150.

        In rendering its opinion, Wedbush expressed no opinion as to the amount or nature of any compensation to any officers, directors, or employees of Aevi, or any class of such persons, whether relative to the consideration to be paid in the Merger or otherwise, or with respect to the fairness of any such compensation.

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        Wedbush was not asked to, nor did it, offer any opinion as to the terms, other than the consideration to be received by the holders of Aevi common stock to the extent expressly set forth in Wedbush's opinion, of the Merger Agreement or the form of the Merger. Wedbush did not express any opinion with respect to the terms of any other agreement entered into or to be entered into in connection with the Merger. Wedbush expressed no opinion as to the price at which Cerecor common stock may trade at any time subsequent to the announcement or consummation of the Merger.

        Aevi paid Wedbush a nonrefundable retainer of $50,000 at the time of Wedbush's engagement. Aevi agreed to pay Wedbush a fee of $500,000 for rendering its opinion, which fee was not contingent upon the completion of the Merger. Aevi also agreed to pay Wedbush a success fee of $1.5 million for its services as Aevi's strategic advisor, which fee is contingent, and payable, upon the completion of the Merger. In addition, Aevi agreed to reimburse Wedbush for its reasonable out-of-pocket expenses and to indemnify Wedbush for certain liabilities arising out of the engagement. Wedbush did not have a material relationship with, nor otherwise receive fees from, Cerecor or Aevi during the two years prior to the date of its opinion, except as described below. With Aevi's knowledge and consent, Cerecor engaged Wedbush to provide certain investment banking services for the combined company, for which Wedbush expects to receive customary fees. Wedbush may also provide other investment banking and financial advisory services to Cerecor, Aevi or their affiliates in the future, for which Wedbush would expect to receive customary fees.

        In the ordinary course of its business, Wedbush and its affiliates, as well as investment funds in which Wedbush and its affiliates may have financial interests, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or make investments in, Aevi or Cerecor.

Summary of Analyses

        The following is a summary of the material financial analyses performed by Wedbush in connection with reaching its opinion:

        Representatives of Wedbush and members of Aevi's management determined that a discounted cash flow analysis was not an appropriate indicator to measure the value of Aevi because Aevi had recently acquired two early-stage assets and therefore did not anticipate any revenue in the foreseeable future to form the basis for such an analysis.

        The following summaries are not a comprehensive description of Wedbush's opinion or the analyses and examinations conducted by Wedbush, and the preparation of an opinion necessarily is not susceptible to partial analysis or summary description. Wedbush believes that such analyses and the following summaries must be considered as a whole and that selecting portions of such analyses and of the factors considered, without considering all such analyses and factors, would create an incomplete view of the process underlying the analyses. The order in which the analyses are described below does not represent the relative importance or weight given to the analyses by Wedbush. Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand the analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of Wedbush's analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the

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methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the analyses.

        In performing its analyses, Wedbush made numerous assumptions with respect to industry performance and general business and economic conditions such as industry growth, inflation, interest rates and many other matters, many of which are beyond the control of Aevi and Wedbush. Any estimates contained in Wed