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● We have a limited history as a clinical-stage biopharmaceutical company developing and partnering our product candidates, which may make it difficult to evaluate the success of our business to date and to assess our future viability.
−Removed: ● If we are unable to successfully develop our product candidates and to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, or experience significant delays in doing so, our business will be harmed.
+Added: ● If we are unable to successfully develop our product candidates and identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, or experience significant delays in doing so, our business will be harmed.
● Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
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Their performance impacts our timelines and success.
−Removed: ● If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully pursue strategic alternatives, including identifying and consummating transactions with potential third-party partners, to commercialize our technology and product candidates may be impaired.
+Added: ● If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully identify and consummate transactions with potential third-party partners, to commercialize our technology and product candidates may be impaired.
● We face substantial competition, which may result in others discovering, developing or commercializing drugs before or more successfully than we do.
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As of December 31, 2025, we had an accumulated deficit of $967.8 million.
−Removed: We have financed our operations over the last several years primarily from sales of equity securities and incurring indebtedness in the form of loans from commercial lenders .
+Added: We have financed our operations over the last several years primarily from sales of equity securities and non-dilutive financing .
We have devoted substantially all of our financial resources and efforts to the development of our product candidates, including preclinical studies and clinical trials.
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We expect to continue to incur significant expenses and operating losses in the near term as we:
−Removed: ● pursue strategic alternatives, including identifying and seeking to consummate transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates;
+Added: ● seek to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates;
● continue to develop our product candidates;
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● incur legal, accounting, investor relations and other administrative expenses in operating as a public company.
−Removed: To become and remain profitable, we must succeed in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates and pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, for the further development and/or commercialization of our product candidates, as well as discovering and developing additional product candidates.
+Added: To become and remain profitable, we must succeed in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates and identifying and consummating transactions with third-
+Added: party partners for the further development and/or commercialization of our product candidates, as well as discovering and developing additional product candidates.
We are in the early stages of most of these activities.
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● the number and development requirements of the product candidates that we may pursue;
−Removed: ● the scope, progress, results and costs of preclinical development, laboratory testing and conducting preclinical and clinical trials for our product candidates;
+Added: ● the scope, progress, results and costs of preclinical development, laboratory testing and conducting preclinical and clinical studies for our product candidates;
● the costs, timing and outcome of regulatory review of our product candidates;
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Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy.
−Removed: Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions caused by a variety of factors including geopolitical tensions and inflationary pressures.
+Added: Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions caused by a variety of factors including geopolitical tensions, tariff policies, and inflationary pressures.
If we are unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the development and/or commercialization of our product candidates , we could be forced to curtail our planned operations.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies, intellectual property, potential future revenue streams or product candidates.
−Removed: Until such time, if ever, as we can earn substantial revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings and license and partnership agreements.
+Added: Until such time, if ever, as we can earn substantial revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings and license and partnership agreements or other non-dilutive financing.
To the extent that we raise additional capital through the sale of equity securities or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock.
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Market opportunity estimates and growth forecasts included in this Annual Report and the other documents that we file with the SEC are subject to significant uncertainty and are based on assumptions and estimates.
−Removed: These estimates, which have been derived from a variety of sources, including scientific literature and market
−Removed: research, may prove to be incorrect.
+Added: These estimates, which have been derived from a variety of sources, including scientific literature and market research, may prove to be incorrect.
Further, new studies may change the estimated incidence or prevalence of these indications.
−Removed: Additionally, the potentially addressable patient population may not ultimately be amenable to treatment with our product candidates.
+Added: Additionally, the potentially addressable patient population may not ultimately be amenable to treatment with
+Added: our product candidates.
Our market opportunity may also be limited by current and future products of our competitors that are already available in the market or may enter the market for such patients.
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Biologics carry unique risks and uncertainties, which could have a negative impact on future results of operations.
−Removed: The successful discovery, development, manufacturing and sale of biologics is a long, expensive and uncertain process.
+Added: The successful discovery, development, manufacturing and sale of biologics is a long, expensive and uncertain process subject to more complex regulatory requirements than small molecule drugs.
There are unique risks and uncertainties with biologics.
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It could take years to identify a viable product candidate, and there is a risk that we may never do so.
−Removed: If we are unable to identify successful product candidates for preclinical and clinical development and regulatory approval in a timely matter or at all, we could experience significant delays or an inability to successfully pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, which could harm our business.
−Removed: If we are unable to successfully develop our product candidates and to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, or experience significant delays in doing so, our business will be harmed.
+Added: If we are unable to identify successful product candidates for preclinical and clinical development and regulatory approval in a timely matter or at all, we could experience significant delays or an inability to successfully identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, which could harm our business.
+Added: The rapid advancement of artificial intelligence and computational drug discovery technologies could make our KINect platform and discovery approaches less competitive or obsolete, and our failure to successfully adopt and integrate artificial intelligence technologies could put us at a competitive disadvantage.
+Added: The pharmaceutical and biotechnology industries are experiencing rapid transformation through artificial intelligence (“AI”), machine learning (“ML”), and computational approaches to drug discovery and development.
+Added: Large pharmaceutical companies and well-funded biotechnology companies are making substantial investments in AI-driven drug discovery platforms that may:
+Added: ● identify product candidates faster and more efficiently than our KINect platform;
+Added: ● reduce the time and cost required to progress from target identification to clinical candidate;
+Added: ● enable competitors to explore larger areas of chemical and biological space;
+Added: ● provide more accurate predictions of clinical outcomes, reducing development risk.
+Added: Our KINect drug discovery platform, while innovative, may become less competitive if we fail to successfully integrate advanced AI and ML capabilities.
+Added: Specifically:
+Added: ● our proprietary chemical library and SBDD approaches may be replicated or surpassed by AI-driven generative chemistry platforms;
+Added: ● competitors using AI may identify superior kinase inhibitors targeting the same pathways we are pursuing;
+Added: ● AI-enabled clinical trial design and patient selection may allow competitors to achieve proof-of-concept more rapidly and efficiently;
+Added: ● our internal expertise and resources for AI/ML integration are limited compared to larger competitors.
+Added: Furthermore, the use of AI in drug discovery and development raises new regulatory uncertainties.
+Added: Regulatory agencies including the FDA are still developing frameworks for evaluating AI-generated data and AI-assisted drug development processes.
+Added: If we utilize AI technologies, we may face uncertainty about what data and documentation regulators will require regarding AI-generated discoveries, potential challenges to the patentability of AI-discovered compounds or methods, questions about data integrity, bias, or validity of AI-generated predictions, and/or additional regulatory scrutiny or requirements that could delay our development timelines.
+Added: Our ability to remain competitive will depend on our capacity to adopt and integrate appropriate AI and computational technologies, which will require significant investment in technology infrastructure, data systems, and personnel with specialized expertise.
+Added: If we are unable to successfully leverage these technologies, or if we make substantial investments in AI approaches that do not yield productive results, our competitive position and financial condition could be materially harmed.
+Added: Additionally, the potential use of AI by contract research organizations, clinical trial sites, or regulatory agencies could change the standards and expectations for drug development, requiring us to adapt our processes and potentially increasing our costs and development timelines.
+Added: If we are unable to successfully develop our product candidates and identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, or experience significant delays in doing so, our business will be harmed.
We have invested significant efforts and financial resources in the development of our product candidates and the identification of potential product candidates.
−Removed: Our ability to earn substantial revenue from our product candidates will depend heavily on our ability to successfully develop and pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize these product candidates.
+Added: Our ability to earn substantial revenue from our product candidates will depend heavily on our ability to successfully develop and identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize these product candidates.
The success of any product candidates that we develop will depend on several factors, including:
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● maintaining compliance with regulatory requirements, including cGMPs;
−Removed: ● our potential third-party partners’ ability to compete effectively with other treatment procedures;
+Added: ● our potential third-party partners’ ability to compete effectively with other treatments;
● our potential third-party partners’ ability to maintain a continued acceptable safety, tolerability and efficacy profile of our product candidates following marketing approval.
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It is possible that our product candidates currently in development will never obtain marketing approval.
−Removed: If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, which would harm our business.
+Added: If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, which would harm our business.
Clinical drug development involves a lengthy and expensive process, with an uncertain outcome.
−Removed: We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development of our product candidates or pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development of our product candidates or the identification and consummation of transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
The risk of failure for our product candidates is high.
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A failure of one or more clinical trials can occur at any stage of testing.
−Removed: For example, in 2023 we announced that zunsemetinib failed to meet the endpoints in Phase 2 trials in rheumatoid arthritis and hidradenitis suppurativa, following which we discontinued further development of our MK2 inhibitor programs in immuno-inflammatory diseases.
The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
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Additionally, we may utilize an “open-label” clinical trial design.
−Removed: For example, our current Phase 2a trial of ATI-2138 is an “open-label” trial.
+Added: For example, our Phase 2a trial of ATI-2138 in patients with atopic dermatitis was an “open label” trial.
An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo.
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Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment.
−Removed: Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.
+Added: Open-label clinical trials may
+Added: be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
The results from an open-label trial may not be predictive of future clinical trial results of a product candidate when studied in a controlled environment with a placebo or active control.
−Removed: We may experience numerous unforeseen events during or as a result of clinical trials that could delay or prevent our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, including:
+Added: We may experience numerous unforeseen events during or as a result of clinical trials that could delay or prevent our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, including:
● regulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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● clinical trials of our product candidates may produce negative or inconclusive results, including failure to demonstrate statistical significance, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs;
+Added: ● early-stage clinical trial results may be subject to variability due to small sample size and may not be indicative of results from future clinical trials;
● the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate;
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● our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate the trials;
+Added: ● third parties conducting clinical trials using our product candidates may produce issues such as poor data integrity, safety concerns, protocol violations, or failure to meet endpoints in these third-party trials, which could adversely impact the development timeline and regulatory approval process for those product candidates in other indications or territories, require additional studies, create negative market perception affecting future commercial potential, result in increased regulatory scrutiny, or impact our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize such product candidates;
● our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
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Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
−Removed: If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, our costs will increase, our product candidate development process will be slowed, the commercial prospects of our product candidates will be harmed, and our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates will be delayed.
+Added: If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, our costs will increase, our product candidate development process will be slowed, the commercial prospects of our product candidates will be harmed, and our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates will be delayed.
Any of these occurrences may harm our business, financial condition and prospects significantly.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our product candidates.
−Removed: If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or if there are safety concerns, we may not be able to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, and our potential third-party partners may:
+Added: If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or if there are safety concerns, we may not be able to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, and our potential third-party partners may:
● be delayed in obtaining marketing approval for our product candidates;
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Significant preclinical study or clinical trial delays also could shorten any periods during which our potential third-party partners may have the exclusive right to commercialize our product candidates or allow competitors to bring drugs to market before such third-party partners do, which would impact our ability to successfully identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
−Removed: If we experience delays or difficulties in the enrollment of subjects in clinical trials, our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates could be delayed or prevented.
+Added: If we experience delays or difficulties in the enrollment of subjects in clinical trials, our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates could be delayed or prevented.
Successful and timely completion of clinical trials will require that we enroll a sufficient number of subjects.
+Added: Recruiting and retaining patients for clinical trials has become increasingly difficult and expensive, which could delay or prevent completion of our trials.
Subject enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the patient population.
Trials may be subject to delays as a result of subject enrollment taking longer than anticipated or subject withdrawal, including as a result of factors beyond our control.
−Removed: We may not be able to initiate or
−Removed: continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States.
+Added: We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States.
We cannot predict how successful we will be at enrolling subjects in future clinical trials.
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Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.
−Removed: Furthermore, we rely on and expect to continue to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and we will have limited influence over their performance.
−Removed: Any delays in completing clinical trials would delay or prevent our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
−Removed: Our clinical trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could increase our costs or necessitate the abandonment or limitation of the development of our product candidates or prevent or delay our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
−Removed: If our product candidates are associated with side effects in clinical trials or have characteristics that are unexpected, our costs could increase or we may need to abandon their development or limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
−Removed: The FDA or an IRB may also require that we suspend, discontinue, or limit our clinical trials based on safety information.
+Added: Furthermore, we rely on and expect to continue to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and we will have limited influence over
+Added: their performance.
+Added: Any delays in completing clinical trials would delay or prevent our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: Our clinical trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects or other unfavorable safety findings may be identified during the nonclinical or clinical development of our product candidates, which could increase our costs or necessitate the abandonment or limitation of the development of our product candidates or prevent or delay our ability identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: If our product candidates are associated with side effects in clinical trials, exhibit adverse toxicological findings in nonclinical studies or have characteristics that are unexpected, our costs could increase or we may need to abandon their development or limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
+Added: The FDA or an IRB may also require that we suspend, discontinue, or limit our clinical trials based on nonclinical or clinical safety information.
Such findings could further result in regulatory authorities failing to provide marketing authorization for our product candidates.
−Removed: Many product candidates that initially showed promise in early-stage testing have later been found to cause side effects that prevented further development of the product candidate.
+Added: Many product candidates that initially showed promise in early-stage testing have later been found to cause side effects or exhibit toxicological profiles in animal models that prevented further development of the product candidate.
Before any potential third-party partners can obtain marketing approvals for the commercial sale of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication, and failures can occur at any stage of testing.
+Added: Our nonclinical studies may yield results that are not predictive of future clinical results or that reveal safety concerns that preclude further development.
Clinical trials often fail to demonstrate safety and efficacy of the product candidate studied for the target indication.
−Removed: Additionally, if we or others identify undesirable side effects caused by our product candidates, a number of potentially significant negative consequences could result, including:
+Added: Additionally, if we or others identify undesirable side effects or unfavorable nonclinical safety findings caused by our product candidates, a number of potentially significant negative consequences could result, including:
● we may need to abandon the development or limit the further development of our product candidates, including in various populations and for certain indications;
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● our reputation and physician or patient acceptance of our product candidates, if approved, may suffer;
−Removed: ● our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates would be harmed.
−Removed: Any of these events could prevent us from pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize the particular product candidate and could significantly harm our business, results of operations and prospects.
+Added: ● our ability to identify and consummate with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates would be harmed.
+Added: Any of these events could prevent us from identifying and consummating transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize the particular product candidate and could significantly harm our business, results of operations and prospects.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more subject data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publicly disclose interim, topline or preliminary data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial.
+Added: For example, we recently announced interim Phase 1a data for ATI-052.
We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
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As a result, the interim, topline or preliminary results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
−Removed: Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.
+Added: Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the
+Added: preliminary data we previously published.
As a result, interim, topline and preliminary data should be viewed with caution until the final data are available.
−Removed: We may also disclose interim data from our clinical trials.
Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more subject data become available.
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In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is derived from information that is typically extensive, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular program, product candidate or our business.
−Removed: If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
+Added: If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
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Any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials.
−Removed: This 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 approval of our product candidates and jeopardize our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
−Removed: We have conducted and may in the future conduct clinical trials for our product candidates outside the United States.
−Removed: The FDA, EMA or comparable foreign regulatory authorities may not accept data from such trials.
−Removed: We have conducted and may in the future conduct clinical trials for our product candidates outside the United States.
−Removed: In addition, our partners may conduct clinical trials for our product candidates outside of the United States that we or our potential third-party partners may try to leverage to seek marketing approval in the United States.
−Removed: The acceptance of trial data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authorities may be subject to certain conditions or may not be accepted at all.
−Removed: In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless the data are applicable to the U.S.
+Added: This 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 approval of our product candidates and jeopardize our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: We have conducted and may in the future conduct clinical or nonclinical studies for our product candidates outside the United States.
+Added: The FDA, EMA or comparable foreign regulatory authorities may not accept data from such studies.
+Added: We have conducted and may in the future conduct clinical and nonclinical studies for our product candidates outside the United States.
+Added: In addition, our partners may conduct clinical and nonclinical studies for our product candidates outside of the United States that we or our potential third-party partners may try to leverage to seek marketing approval in the United States.
+Added: The acceptance of data from clinical and nonclinical studies conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authorities may be subject to certain conditions or may not be accepted at all.
+Added: In cases where data from foreign clinical and nonclinical studies are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless the data are applicable to the U.S.
population and U.S.
−Removed: medical practice, the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations, and the FDA can validate the data through on-site inspections or other appropriate means.
+Added: medical practice, the studies were performed by clinical investigators of recognized competence and pursuant to GCP regulations, and the FDA can validate the data through on-site inspections or other appropriate means.
Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met.
Such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.
−Removed: There can be no assurance that the FDA, EMA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction.
−Removed: If the FDA, EMA or any comparable regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
−Removed: In addition, any escalation of political tensions, economic instability, military activity or civil hostilities outside the United States could disrupt our ability to conduct trials outside of the United States, or delay or adversely affect the timeliness of such trials.
+Added: There can be no assurance that the FDA, EMA or any comparable foreign regulatory authority will accept data from studies conducted outside of the United States or the applicable jurisdiction.
+Added: If the FDA, EMA or any comparable regulatory authority does not accept such data, it would result in the need for additional studies, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
+Added: In addition, any escalation of political tensions, economic instability, military activity or civil hostilities outside the United States could disrupt our ability to conduct studies outside of the United States, or delay or adversely affect the timeliness of such studies.
This could result in the need for alternative trial sites, which could be costly and time-consuming and delay the clinical development of our product candidates.
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For any of our product candidates that receive marketing approval, our potential third-party partners may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
−Removed: If such third-party partners fail to obtain an adequate level of acceptance for our product candidates, we may not earn significant
−Removed: revenue and we may not become profitable.
+Added: If such third-party partners fail to obtain an adequate level of acceptance for our product candidates, we may not earn significant revenue and we may not become profitable.
The degree of market acceptance of any product candidate, if approved, will depend on a number of factors, including:
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The development and commercialization of new drugs is highly competitive.
−Removed: We will face competition with respect to any product candidates that we may seek to develop or through our potential third-party partners, commercialize, in the future, from many different sources, including major pharmaceutical, biotechnology and specialty pharmaceutical companies, academic institutions and governmental agencies and public and private research institutions.
−Removed: For our product candidate bosakitug targeting TSLP, we face direct competition from companies developing TSLP-targeted therapies, including Amgen and AstraZeneca (tezepelumab), KeyMed Biosciences (CM-326), Uniquity Bio (solrikitug), Windward Bio (WIN378), Tavotek Biotherapeutics (TAVO101), GSK (GSK5784283), and UpStream Bio (verekutig).
−Removed: As a potential treatment of atopic dermatitis with bosakitug, we compete with companies marketing or developing biologics, JAK inhibitors and other therapeutic classes, including AbbVie (upadacitinib), Incyte (ruxolitinib), LEO Pharma A/S (delgocitinib), Pfizer (crisaborole;
−Removed: abrocitinib), Eli Lilly (lebrikizumab), Dermavant Sciences (tapinarof), and Regeneron Pharmaceuticals and Sanofi (dupilumab).
−Removed: We also compete with these and other companies with respect to other indications of interest for bosakitug, including asthma, CRSwNP and COPD.
−Removed: For ATI-2138, our dual ITK/JAK inhibitor product candidate, we face competition from companies developing selective ITK inhibitors such as Corvus Pharmaceuticals (soquelitinib), as well as companies marketing or developing JAK inhibitors including Pfizer (tofacitinib, abrocitinib, and ritlecitinib), Eli Lilly/Incyte (baricitinib), and AbbVie (upadacitinib).
−Removed: We also compete with these and other companies marketing or developing other therapeutic classes with respect to indications of interest for ATI-2138, including atopic dermatitis, alopecia areata and vitiligo.
+Added: We will face competition with respect to any product candidates that we may seek to develop or through our potential third-party partners, commercialize,
+Added: in the future, from many different sources, including major pharmaceutical, biotechnology and specialty pharmaceutical companies, academic institutions and governmental agencies and public and private research institutions.
The commercial opportunity for our product candidates, if approved, could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than a product that we may develop.
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These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or that may be necessary for, our development programs.
+Added: Business—Competition” above for additional information regarding the competition we face.
The success of our product candidates, if approved, will depend significantly on coverage and adequate reimbursement or the willingness of patients to pay for these products.
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Many private third-party payors, such as managed care plans, manage access to drug products’ coverage partly to control costs for their plans, and may use drug formularies and medical policies to limit their exposure.
−Removed: Obtaining and maintaining favorable reimbursement can be a time-consuming and expensive process, and our potential third-party partners may not be able to negotiate or continue to negotiate reimbursement or pricing terms for our products with third-party payors at levels that are profitable to us, or at all.
+Added: Obtaining and maintaining favorable reimbursement can be a time-consuming and expensive process, and our potential third-party partners may not be able to negotiate or continue to negotiate reimbursement or pricing terms for our products which receive commercial approval, with third-party payors at levels that are profitable to us, or at all.
Further, coverage policies and third-party reimbursement rates may change at any time.
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Our product candidates, if approved, may not be considered cost effective, and government and third-party private health insurance coverage and reimbursement may not be available to patients or sufficient to allow our potential third-party partners to sell our product candidates, if approved, on a competitive and profitable basis.
−Removed: For example, the IRA among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics that have been on the market for at least 7 years covered under Medicare, and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
−Removed: Our results of operations could be adversely affected by the Affordable Care Act, the IRA, and by other health care legislative reforms that may be enacted or adopted in the future, particularly in light of the recent U.S.
−Removed: Presidential and Congressional elections.
−Removed: In addition, increasing emphasis on managed care in the United States will continue to put pressure on the pricing of pharmaceutical products.
+Added: Further, the containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort.
+Added: For example, HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis.
+Added: HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program.
+Added: Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program.
+Added: Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.
Cost control initiatives could decrease the price that our potential third-party partners could receive for any of our product candidates, if approved, and could adversely affect our profitability.
−Removed: We cannot predict how pending and future health care legislation will impact our business, and any changes in coverage and reimbursement that further restricts coverage of our product candidates could harm our business.
+Added: We cannot predict how pending and future health care
+Added: legislation will impact our business, and any changes in coverage and reimbursement that further restricts coverage of our product candidates could harm our business.
Foreign governments also have their own healthcare reimbursement systems, which vary significantly by country and region, and we cannot be sure that coverage and adequate reimbursement will be made available with respect to our product candidates, if approved, under any foreign reimbursement system.
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We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and relating to any of our commercial products that we have previously sold or are being sold by third-party partners.
−Removed: If we cannot successfully defend ourselves against claims that our commercial products that we have previously
−Removed: sold or are being sold by third-party partners, or product candidates, caused injuries, we will incur substantial liabilities.
+Added: If we cannot successfully defend ourselves against claims that our commercial products that we have previously sold or are being sold by third-party partners, or product candidates, caused injuries, we will incur substantial liabilities.
Regardless of merit or eventual outcome, product liability claims may result in:
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● reduced resources of our management to pursue our business strategy;
−Removed: ● our inability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: ● our inability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
We currently hold $10 million in product liability insurance coverage in the aggregate, with a per incident limit of $10 million, which may not be adequate to cover all liabilities that we may incur.
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If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
−Removed: Consequently, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase substantially and our ability to earn revenue from those partnerships could be delayed significantly.
+Added: Consequently, our results
+Added: of operations and the commercial prospects for our product candidates would be harmed, our costs could increase substantially and our ability to earn revenue from those partnerships could be delayed significantly.
Switching or adding CROs involves substantial cost and requires management time and focus.
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Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
−Removed: If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving
−Removed: marketing applications.
+Added: If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving marketing applications.
We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP regulations.
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W e currently use manufacturers in China to manufacture certain product candidates for use in our clinical trials.
−Removed: For example, we currently rely on WuXi Biologics (Hong Kong) Limited (“WuXi”) for the production of product necessary to complete our upcoming clinical trial for bosakitug.
−Removed: There have been Congressional legislative proposals, such as the bill titled the BIOSECURE Act, which would, among other things, prohibit U.S.
−Removed: federal funding in connection with biotechnology equipment or services produced or provided by certain named Chinese “biotechnology companies of concern” (which includes WuXi) and loans and grants to, and federal contracts with, any entity that uses biotechnology equipment or services from one of these entities in performance of the government contract, grant, or loan.
−Removed: The legislation would also give the federal government the authority to name additional “biotechnology companies of concern” that are engaged in research activities with the Chinese government and that pose a risk of U.S.
−Removed: national security.
−Removed: We continue to monitor the status of the BIOSECURE Act, the implementation of which could materially impact our agreement with WuXi or other Chinese companies.
−Removed: If this or similar legislation is adopted, or additional manufacturers are added to the list of companies of concern, we may need to find replacement manufacturers, which we may not be able to do on a timely basis, the result of which could delay, prevent or impair our ability to timely conduct our clinical trials or our other development efforts and adversely affect our business.
+Added: For example, we currently rely on WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”) for the production of product necessary to complete our upcoming clinical trial for bosakitug.
+Added: We also rely on WuXi AppTec (HongKong) Limited (“WuXi AppTec”, and together with WuXi Biologics, “WuXi”) to conduct toxicology studies.
+Added: The BIOSECURE Act, which prohibits, among other things, U.S.
+Added: federal funding in connection with biotechnology equipment or services produced or provided by certain named Chinese “biotechnology companies of concern” (“BCCs”) and loans and grants to, and federal contracts with, any entity that uses biotechnology equipment or services from one of these entities in performance of the government contract, grant, or loan.
+Added: While the enacted version of the BIOSECURE Act does not specifically name companies, it establishes a process for the Office of Management and Budget (“OMB”) to publish a list of BCCs by December 18, 2026 .
+Added: Such BCCs will include entities on the U.S.
+Added: Department of Defense’s annual List of Chinese Military Companies (“1260H List”) and also entities so designated by OMB through a separate designation process.
+Added: Companies previously identified in legislative drafts, such as WuXi, remain at risk of being designated as BCCs through this process or by inclusion on the 1260H list.
+Added: The Act includes a five-year grandfathering provision for existing commercial agreements executed prior to the implementation of the Federal Acquisition Regulation (“FAR”) revisions, which are expected by mid-2028.
+Added: The implementation of the BIOSECURE Act could materially impact our current and future agreements with WuXi or other Chinese manufacturers.
+Added: If WuXi or our other partners are designated as BCCs, we
+Added: may be required to transition to alternative manufacturers and service providers to maintain eligibility for federal contracts, grants, or clinical trial reimbursements.
+Added: Such a transition could be time-consuming, resource-intensive, and may require FDA supplemental approvals, potentially causing significant delays or impairments to our clinical development timelines and business operations.
+Added: Additionally, export controls or restrictions on the transfer of certain technologies, materials, or data could disrupt our collaborations, particularly our agreement with CTTQ in Greater China.
+Added: Changes in the trade relations between the United States and China could:
+Added: ● limit our ability to receive clinical data from CTTQ’s ongoing trials in China;
+Added: ● restrict data sharing under our license agreements;
+Added: ● prevent us from accessing drug product manufactured in China for our clinical trials;
+Added: ● impact our collaboration agreements and milestone payments.
+Added: We may not be able to quickly identify alternative suppliers or manufacturers and any such transitions would require regulatory approval, validation studies, and significant time and expense.
+Added: Any significant disruption in our supply chain or increase in costs due to tariffs or trade restrictions could delay our clinical programs, increase our operating expenses, and materially harm our business and financial condition.
The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or comparable foreign regulatory authorities pursuant to inspections that will be conducted after the NDA, BLA or comparable marketing application is submitted to the FDA or other regulatory authority.
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● the possible misappropriation of our proprietary information, including our trade secrets and know-how;
−Removed: ● the possible increase in costs by our third-party suppliers for the active pharmaceutical ingredients for our
−Removed: product candidates;
+Added: ● the possible increase in costs by our third-party suppliers for the active pharmaceutical ingredients for our product candidates;
● the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
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We expect to continue to depend on third-party contract manufacturers for the foreseeable future.
−Removed: Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates on a timely and competitive basis.
−Removed: We intend to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates on a timely and competitive basis.
+Added: We intend to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
If those arrangements are not successful, we may not be able to capitalize on the market potential of these product candidates.
−Removed: We intend to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: We intend to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
Our likely partners for any such arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.
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Therefore, our ability to keep our stockholders informed about the status of our product candidates will be limited by the degree to which our partners keep us informed and by the degree to which our partners allow us to disclose information to the public or provide such information to the public themselves.
−Removed: For example, we are relying on CTTQ, our partner in China, to share information about its Phase 2 trials of bosakitug in respiratory diseases.
+Added: For example, we are relying on CTTQ, our partner in China, to share information about its trials of bosakitug in respiratory diseases.
If our partners do not timely inform us about the status of our product candidates that are the subject of the partnership, we may make operational and investment decisions that we would not have made had we been fully informed, which may have an adverse impact on our business, prospects, financial condition and results of operations.
6 unchanged sentences
Additionally, in cases where third parties conduct clinical trials using our product candidates through partnership or licensing agreements, we face additional risks related to the conduct and outcome of those trials that are outside of our direct control.
−Removed: For example, issues such as poor data integrity, safety concerns, protocol violations, or failure to meet endpoints in these third-party trials could adversely impact the development timeline and regulatory approval process for those product candidates in other indications or territories, require additional studies, create negative market perception affecting future commercial potential, impact our ability to pursue strategic alternatives for such product candidates, or result in increased regulatory scrutiny across our programs.
+Added: For example, issues such as poor data integrity, safety concerns, protocol violations, or failure to meet endpoints in these third-party trials could adversely impact the development timeline and regulatory approval process for those product candidates in other indications or territories, require additional studies, create negative market perception affecting future commercial potential, impact our ability to identify and consummate transactions for such product candidates, or result in increased regulatory scrutiny across our programs.
Risks Related to Our Intellectual Property
8 unchanged sentences
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States or vice versa.
−Removed: European patent law restricts the patentability of methods of treatment of the human body more than U.S.
+Added: For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S.
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.
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Moreover, we may be subject to a third-party preissuance submission of prior art to the USPTO or other foreign patent office, or become involved in opposition, central revocation, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.
−Removed: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in the inability of our potential third-party partners to manufacture or commercialize our product candidates without infringing third-party patent rights.
+Added: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment
+Added: to us, or result in the inability of our potential third-party partners to manufacture or commercialize our product candidates without infringing third-party patent rights.
In addition, if the breadth or strength of protection provided by our patents and patent applications that we own or license is threatened, it could dissuade companies from partnering with us to license, develop and/or commercialize our product candidates.
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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 the ability to stop others from using or commercializing similar or identical technology and product candidates, or limit the duration of the patent protection of our technology and product candidates.
−Removed: Our pending U.S.
−Removed: application covering bosakitug, if issued, would expire in 2040 and our pending PCT application covering ATI-052, if issued, would expire in 2043.
Our issued U.S.
−Removed: patent directed to ATI-2138 expires in 2039.
−Removed: Our issued U.S.
−Removed: patent covering lepzacitinib expires in 2038.
+Added: patent covering bosakitug and methods of use expires in 2043 and our pending U.S.
+Added: application covering ATI-052, if issued, would also expire in 2043.
Our issued U.S.
−Removed: patents covering zunsemetinib expire in 2034.
−Removed: We are pursuing additional patent protection for our product candidates, such as methods of use, polymorphs and methods of manufacture, that may extend the term of patent protection in select countries.
+Added: patents directed to ATI-2138 and methods of use expire in 2039.
+Added: We are pursuing additional patent protection for our product candidates, such as additional methods of use, polymorphs and methods of manufacture, that may extend the term of patent protection in select countries.
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.
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The outcome following legal assertions of invalidity and unenforceability is unpredictable.
−Removed: With respect to the validity question, for example, we cannot be certain that there is no
−Removed: invalidating prior art of which we and the patent examiner were unaware during prosecution.
+Added: With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution.
If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
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Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
−Removed: For example, we only have pending applications in the United States, Europe, Japan and South Korea for our TSLP monoclonal antibodies.
+Added: For example, we only have issued patents and pending applications in the United States, Europe, Japan and South Korea for our TSLP monoclonal antibodies, including bosakitug.
We have issued U.S.
patents directed to ATI-2138, and pending applications in foreign markets directed to ATI-2138.
−Removed: We currently have a pending PCT application directed to ATI-052 and other TSLP and IL4R bispecific antibodies.
−Removed: While we have issued U.S.
−Removed: and Chinese patents directed to lepzacitinib, we do not currently have any patents in other foreign markets;
−Removed: rather, we have pending applications in other foreign markets directed to lepzacitinib.
−Removed: Zunsemetinib is currently covered by patents and applications in the United States, European Union and other foreign markets.
+Added: We currently have pending applications in the United States, Europe, Japan, South Korea and other major markets directed to ATI-052 and other TSLP and IL-4R bispecific antibodies.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
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In those countries, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of those patents.
−Removed: This could limit our ability to pursue strategic alternatives, including identifying and consummating transactions with potential third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, and consequently our potential revenue opportunities.
+Added: This could limit our ability to identify and consummate transactions with potential third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, and consequently our potential revenue opportunities.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
4 unchanged sentences
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
−Removed: Our success depends upon our ability to pursue strategic alternatives, including identifying and consummating transactions with potential third-party partners, to develop, obtain marketing approval for and/or commercialize our product candidates and earn revenue from those partnerships, and for our proprietary technologies to be used without infringing the proprietary rights of third parties.
+Added: Our success depends upon our ability to identify and consummate transactions with potential third-party partners, to develop, obtain marketing approval for and/or commercialize our product candidates and earn revenue from those partnerships, and for our proprietary technologies to be used without infringing the proprietary rights of third parties.
There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries.
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If we or our potential third-party partners are found to infringe a third party’s intellectual property rights, we or such partners could be required to obtain a license from such third party to continue developing or commercializing our product candidates and technology.
−Removed: However, we or our potential third-party partners may not be able to obtain any required license on commercially reasonable terms or at all.
+Added: However, we or our potential third-party partners may not be able to obtain any
+Added: required license on commercially reasonable terms or at all.
Even if we or our potential third-party partner were able to obtain a license, it could be non-exclusive, thereby giving competitors access to the same technologies licensed to us or our partner.
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Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.
−Removed: In addition, there could be public announcements of the results of hearings, motions or other interim
−Removed: proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
+Added: In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities.
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Litigation could result in substantial costs and diversion of management resources, which could harm our business.
−Removed: In addition, the uncertainties associated with litigation could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, or pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
+Added: In addition, the uncertainties associated with litigation could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, or identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
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Litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be expensive and time-consuming, may divert our management's attention from our core business, and may result in unfavorable results that could limit our ability to prevent third parties from competing with our product candidates, if approved.
−Removed: Any such challenge could result in the invalidation of, or render unenforceable, some or all of the relevant patent claims or a finding of non-infringement , which would harm our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, and earn revenue from such arrangements.
+Added: Any such challenge could result in the invalidation of, or render unenforceable, some or all of the relevant patent claims or a finding of non-infringement , which would harm our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, and earn revenue from such arrangements.
In addition, any such challenge on any divested product could harm our ability to earn revenue from the arrangements for such product.
1 unchanged sentence
Our success will largely depend on our ability to obtain and maintain patent and other intellectual property in the United States and other countries with respect to our proprietary technology, product candidates and our target indications.
−Removed: Our pending U.S.
−Removed: application covering bosakitug, if issued, would expire in 2040.
Our issued U.S.
+Added: patent covering bosakitug expires in 2043.
+Added: Our issued U.S.
patent directed to ATI-2138 expires in 2039.
Our pending PCT application covering ATI-052, if issued, would expire in 2043.
−Removed: Our issued U.S.
−Removed: patent covering lepzacitinib expires in 2038.
−Removed: Our issued U.S.
−Removed: patents covering zunsemetinib expire in
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting our product candidates might expire before or shortly after such candidates begin to be commercialized.
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We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
−Removed: Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
+Added: Moreover, the applicable time period or the scope of patent
+Added: protection afforded could be less than we request.
Similar provisions are available in certain foreign countries, such as the European Union and Japan.
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All European patents, including those issued prior to ratification, would by default automatically fall under the jurisdiction of the UPC and allow for the possibility of obtaining pan-European injunctions, unless the patent holder “opts out” of the UPC on a patent-by-patent basis during an initial seven-year period.
−Removed: Owners of traditional European patent applications who receive notice of grant after the EU Patent Package ratification can either accept a Unitary Patent or validate the patent nationally and file an opt-
+Added: Owners of traditional European patent applications who receive notice of grant after the EU Patent Package ratification can either accept a Unitary Patent or validate the patent nationally and file an opt-out demand.
The EU Patent Package may increase the uncertainties and costs surrounding the enforcement or defense of our issued European patents and pending applications.
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In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.
−Removed: Any marketing approval our potential third-party partners ultimately
−Removed: obtain may be limited or subject to restrictions or post-approval commitments that render the approved drug not commercially viable.
+Added: Any marketing approval our potential third-party partners ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved drug not commercially viable.
If our potential third-party partners experience delays in obtaining approval or if they fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to earn revenue from arrangements with such third-party partners will be materially impaired.
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Our potential third-party partners may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.
−Removed: Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and 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.
+Added: Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United
+Added: States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.
However, failure to obtain approval in one jurisdiction may impact our potential third-party partners’ ability to obtain approval elsewhere.
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The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the drug.
−Removed: The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling.
+Added: The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved
The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if our potential third-party partners do not market our drugs for their approved indications, they may be subject to enforcement action for off-label marketing.
20 unchanged sentences
These and other risks associated with the failure by our potential third-party partners to comply with regulatory requirements may compromise our ability to earn revenue from arrangements with such third-party partners for our product candidates.
−Removed: Our potential third-party partners’ relationships with third-party payors, health care professionals and customers in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other health care laws and regulations, and any failure to comply with such laws and regulations could have a material adverse effect on our ability to earn revenue from arrangements with such third-party partners for our product candidates.
−Removed: Health care providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any of our product candidates for which marketing approval is obtained.
−Removed: Our potential third-party partners’ arrangements with third-party payors, health care professionals and customers may expose them to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or financial arrangements and relationships through which they sell, market and distribute any product candidates for which marketing approval is obtained.
+Added: Our and our potential third-party partners’ operations may subject us and such partners, directly or indirectly, to broadly applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other health care laws and regulations, and any failure to comply with such laws and regulations could have a material adverse effect on our profitability.
+Added: Our and our potential third-party partners’ activities may expose us and them, directly or indirectly, to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or financial arrangements and relationships through which any product candidates for which marketing approval is obtained is sold, marketed and distributed.
In addition, we and our potential third-party partners may be subject to transparency laws and patient privacy regulation by the federal government and by the U.S.
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Further, several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal health care covered business, the Anti-Kickback Statute has been violated.
−Removed: The intent standard was further amended by the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
+Added: The intent standard was
+Added: further amended by the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
● federal civil and criminal false claims laws, including, without limitation, the federal civil False Claims Act (that can be enforced through civil whistleblower or qui tam actions), and the civil monetary penalties law, which impose criminal and civil penalties, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
−Removed: ● federal HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any health care benefit program or making false statements relating to health care matters.
+Added: ● HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any health care benefit program or making false statements relating to health care matters.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
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● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers;
−Removed: state and foreign laws that require
−Removed: pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to health care providers;
+Added: state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to health care providers;
state, local and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures;
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It is possible that governmental authorities will conclude that our or our potential third-party partners’ business practices, including relationships with physicians and other health care providers, some of whom may recommend, purchase and/or prescribe our product candidates, if approved, may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other health care laws and regulations.
−Removed: By way of example, some of our consulting arrangements with physicians may not meet all of the criteria of the personal services safe harbor under the federal Anti-Kickback Statute.
−Removed: Accordingly, they may not qualify for safe harbor protection from government prosecution.
−Removed: A business arrangement that does not substantially comply with a safe harbor, however, is not necessarily illegal under the Anti-Kickback Statute, but may be subject to additional scrutiny by the government.
−Removed: If our or our potential third-party partners’ operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us or them, we or our potential third-party partners may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement, imprisonment, exclusion from participation in government health care programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we or they become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our or their operations, which could have a material adverse effect on our ability to earn revenue from arrangements with such third-party partners for our product candidates.
+Added: If our or our potential third-party partners’ operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us or them, we or our potential third-party partners may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement, imprisonment, exclusion from participation in government health care programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we or they become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our or their operations, which could have a material adverse effect on our ability to earn revenue from arrangements with such third-
+Added: party partners for our product candidates.
If any physician or other health care provider or entity with whom we or our potential third-party partners expect to do business is found not to be in compliance with applicable laws, it may be subject to significant criminal, civil or administrative sanctions, including exclusions from participation in government health care programs, which could also materially affect our ability to earn revenue from arrangements with such third-party partners for our product candidates.
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There have been executive branch, judicial and Congressional challenges and amendments to certain aspects of the Affordable Care Act.
−Removed: For example, on August 16, 2022, President Biden signed the IRA into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
−Removed: The IRA also eliminates the “donut hole” under the Medicare Part D program
−Removed: beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.
+Added: For example, on July 4, 2025, the OBBBA was signed into law, which narrowed access to Affordable Care Act marketplace exchange enrollment and declined to extend the Affordable Care Act enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.
+Added: The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.
+Added: Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired Affordable Care Act subsidies.
+Added: We expect that additional U.S.
+Added: federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S.
+Added: federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates that receive marketing approval or additional pricing pressures.
It is possible that the Affordable Care Act will be subject to additional challenges and amendments in the future.
−Removed: It is unclear how such challenges and any additional health care reform measures of the second Trump administration will impact the Affordable Care Act and our business.
+Added: It is unclear how such challenges and any additional health care reform measures will impact the Affordable Care Act and our business.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
−Removed: These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year that became effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the BBA and the Infrastructure Investment and Jobs Act, will stay in effect through 2032 unless additional Congressional action is taken.
−Removed: Any similar new laws may result in additional reductions in Medicare and other health care funding, which could have a material adverse effect on our ability to earn revenue from arrangements with our potential third-party partners for our product candidates.
+Added: These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year that became effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018 and the Infrastructure Investment and Jobs Act, will stay in effect through 2032 unless additional Congressional action is taken.
+Added: Any similar new laws may result in additional reductions in Medicare and other health care funding, which could have a material adverse effect on our ability to earn revenue from arrangements with our potential third-party partners for our product candidates that receive marketing approval.
We expect that the Affordable Care Act, as well as other health care reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that our potential third-party partners receive for any approved product candidate.
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The implementation of cost containment measures or other health care reforms may prevent our potential third-party partners from being able to generate revenue, attain profitability, or commercialize our product candidates, if approved, which in turn may impact our ability to earn revenue from arrangements with such third-party partners for our product candidates.
−Removed: Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for drug and biologic products.
−Removed: For example, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics that have been on the market for at least 7 years covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
−Removed: These provisions took effect progressively starting in fiscal year 2023, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
−Removed: On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, which take effect in January 2026.
−Removed: HHS will select up to fifteen additional products covered under Part D for negotiation in 2025.
−Removed: Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.
−Removed: On December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.
−Removed: On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
−Removed: While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
−Removed: It is unclear whether these or similar policy initiatives will be implemented in the future.
−Removed: The effect of reducing prices and reimbursement for certain of our product candidates, if approved, could significantly impact our business and consolidated results of operations.
−Removed: In addition, the IRA may meaningfully influence our and pharmaceutical industry business strategies.
−Removed: In particular, it may reduce the attractiveness of investment in small molecule and biologic innovation.
−Removed: Further, we expect additional health reform measures may be implemented in the future, particularly in light of the recent U.S.
−Removed: Presidential and Congressional elections.
−Removed: At the state level, legislatures have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain drug access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: For example, on January 5, 2024, the FDA approved Florida’s proposal to import certain drugs from Canada for specific state healthcare programs.
−Removed: It is unclear if and how this program will be implemented and whether it will be subject challenges in the United States or Canada.
−Removed: Other states have also submitted proposals that are pending review by the FDA.
−Removed: Any such approved importation plans, if implemented, may result in lower drug prices for products covered by those programs.
−Removed: We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on obtaining marketing approvals for our product candidates, if any, may be.
−Removed: In addition, increased scrutiny by the U.S.
−Removed: Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject our potential third-party partners to more stringent drug labeling and post-marketing testing and other requirements.
−Removed: These risks may compromise our ability to earn revenue from arrangements with such third-party partners for our product candidates.
+Added: The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies.
+Added: These actions, presently directed by executive orders or
+Added: memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.
+Added: For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct-to-consumer platform, U.S.
+Added: patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues.
+Added: Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs;
+Added: (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products;
+Added: (3) imposing tariffs on imported pharmaceutical products;
+Added: and (4) as part of the Make America Healthy Again Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.
+Added: Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager payment methodologies, among other things.
+Added: These actions and policies may significantly reduce U.S.
+Added: drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.
+Added: In June 2024, in Loper Bright Enterprises v.
+Added: Raimondo , the United States Supreme Court greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our or our potential partners’ operations.
+Added: Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.
+Added: Individual states in the United States have also become increasingly active 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.
+Added: Legally mandated price controls on payment amounts by third-party payors or other restrictions could materially and adversely affect our business, financial condition, results of operations and prospects.
+Added: In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
+Added: This could reduce the ultimate demand for our product candidates or put pressure on our product pricing.
+Added: We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or judicial action in the United States or any other jurisdiction.
+Added: If we or any of our potential partners are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, we may not achieve or sustain profitability.
Our biological product candidates may face competition sooner than anticipated.
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and other adverse business consequences.
−Removed: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, personnel data, data from participants in our clinical trials, and other sensitive third-party data (collectively, “sensitive data”).
+Added: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data about our personnel, data about participants in our clinical trials, and other sensitive third-party data (collectively, “sensitive data”).
Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
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The exercise of these rights may impact our business operations.
−Removed: Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.
+Added: Certain states also impose stricter requirements for processing certain personal data, including
+Added: sensitive information, such as conducting data privacy impact assessments.
These state laws allow for statutory fines for noncompliance.
−Removed: For example, the California Consumer Privacy Act of 2018 (“CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
+Added: For example, the California Consumer Privacy Act (“CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.
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Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
−Removed: While these laws in other states, like the CCPA, exempt some data processed in the context of clinical trials, these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
−Removed: In addition to “comprehensive” state privacy laws like CCPA, we are currently and may become in the future subject to new state laws governing the privacy of consumer health data.
+Added: While these laws in other states, like the CCPA, exempt some data processed in the context of clinical trials, these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties with whom we work.
+Added: In addition to “comprehensive” state privacy laws like CCPA, we are currently or may become in the future subject to state laws governing the privacy of consumer health data.
For example, Washington’s My Health My Data Act broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
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Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in
−Removed: compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
+Added: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
−Removed: Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activities groups.
+Added: Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
−Removed: Regulators in the United States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and have proposed and may enact certain data localization requirements, for example, the Biden Administration’s executive order Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.
−Removed: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and may in the future become subject to additional obligations.
+Added: Additionally, the U.S.
+Added: Department of Justice issued a rule entitled the “Preventing Access to U.S.
+Added: Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons,” which places additional restriction on certain data transactions involving countries of concern ( e.g.
+Added: , China, Iran, Russia) and covered persons (i.e., individuals and entities who are designated as such by the U.S.
+Added: Attorney General or considered “foreign persons” and are majority owned by, organized under the laws of, a primary resident in, or a contractor of, a covered person or country of concern, as applicable) that may impact certain business activities such as vendor engagements, sale or sharing of data, employment of certain individuals and investor agreements.
+Added: The rule also applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular challenges for companies like ours and may impact our ability to engage in transactions or agreements with certain third parties in the future.
+Added: Violations of the rule could lead to significant civil and criminal fines
+Added: and penalties.
+Added: If notwithstanding our efforts to comply with these laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
+Added: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and may in the future become subject to additional such obligations.
We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
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We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
−Removed: Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
−Removed: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
+Added: Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
+Added: If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
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additional reporting requirements and/or oversight;
−Removed: bans on processing personal data;
−Removed: and orders to destroy or not use personal data.
+Added: bans or restrictions on processing personal data;
+Added: orders to destroy or not use personal data;
+Added: and imprisonment of company officials.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
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Export Administration Regulations, U.S.
−Removed: Customs regulations, the
−Removed: International Traffic in Arms Regulations, and economic embargo and trade sanction programs administered by the U.S.
+Added: Customs regulations, the International Traffic in Arms Regulations, and economic embargo and trade sanction programs administered by the U.S.
Treasury Department’s Office of Foreign Assets Control.
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Neal Walker, our Chief Executive Officer, Hugh Davis, Ph.D., our Chief Operating Officer and President, Kevin Balthaser, our Chief Financial Officer, Dr.
−Removed: Joseph Monahan, our Chief Scientific Officer, and James Loerop, our Chief Business Officer, as well as the other members of our scientific and clinical teams.
+Added: Jesse Hall, our Chief Medical Officer, Roland Kolbeck, Ph.D., our Chief Scientific Officer, and James Loerop, our Chief Business Officer, as well as the other members of our scientific and clinical teams.
Although we have entered into employment agreements with our executive officers, each of them may currently terminate their employment with us or resign at any time.
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The loss of the services of our executive officers or other key employees could impede the achievement of our development objectives and seriously harm our ability to successfully implement our business strategy.
−Removed: replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop and partner product candidates.
+Added: Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop and partner product candidates.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.
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● the commencement, enrollment and/or results of any preclinical studies and clinical trials we may conduct, or changes in the development status of our product candidates;
−Removed: ● any delay in our regulatory filings for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings,
−Removed: including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information;
+Added: ● any delay in our regulatory filings for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information;
● adverse results from, delays in or termination of clinical trials;
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We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.
−Removed: As of December 31, 2024, we had federal and state net operating loss carryforwards (NOLs) of $469.4 million and $401.1 million, respectively, which will begin to expire in 2032.
+Added: As of December 31, 2025, we had federal and state net operating loss (“NOL”) carryforwards of $568.2 million and $100.7 million, respectively, which will begin to expire in 2032.
Under federal law, federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but may only be used to offset 80% of our taxable income annually.
It is uncertain if and to what extent various states will conform to the federal tax law.
−Removed: As of December 31, 2024, we also had federal research and development tax credit carryforwards of $21.9 million which will begin to expire in 2032, and state research and development tax credit carryforwards of $0.1 million which will begin to expire in 2030.
+Added: As of December 31, 2025, we also had federal research and development tax credit carryforwards of $2.5 million which will begin to expire in 2045.
These NOL and tax credit carryforwards could expire unused or, due to limitation on use, be unavailable to offset future income tax liabilities.
−Removed: In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
−Removed: Although we have experienced Section 382 ownership changes between 2012 and 2024, we have concluded that we should have sufficient ability to utilize NOLs accumulated during the periods tested.
+Added: In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
+Added: We completed an analysis under Section 382 for NOLs generated through December 31, 2024, and concluded that an ownership change occurred as of December 30, 2024.
+Added: As a result of this ownership change, a component of our research and development tax credits and state NOL carryforwards will expire prior to utilization.
+Added: Accordingly, we have recorded an adjustment to write down our research and development tax credits and state NOL deferred tax assets in the amount of $21.9 million and $19.0 million, respectively.
+Added: The write down of these deferred tax assets resulted in a corresponding adjustment to our valuation allowance.
In addition, we may have experienced ownership changes since 2024 and may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.
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Accordingly, both state and federal courts have jurisdiction to entertain such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities
+Added: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
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This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws further provide any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions.
+Added: Our amended and restated certificate of incorporation and amended and restated bylaws further provide any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of
+Added: and consented to the foregoing provisions.
These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
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General Risk Factors
−Removed: If our information technology systems, those of third parties upon which we rely, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;
+Added: If our information technology systems or data, or those of the third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;
fines and penalties;
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and other adverse consequences.
−Removed: In the ordinary course of our business, we and the third parties upon which we rely process sensitive data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats that could cause security incidents.
−Removed: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely.
−Removed: Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
+Added: In the ordinary course of our business, we and the third parties upon which we rely process sensitive data.
+Added: We and the third parties with whom we work face a variety of evolving threats that could cause security incidents.
+Added: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work.
+Added: Such threats are prevalent and continue to increase, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
−Removed: During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to develop our product candidates and provide our services.
−Removed: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
+Added: During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of
+Added: these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to develop our product candidates and provide our services.
+Added: We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deepfakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to develop our product candidates or provide our services, loss of sensitive data and income, reputational harm, and diversion of funds.
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If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: For example, we rely on our third-party research collaborators for research and development of our product candidates and other third parties to conduct clinical trials, and security incidents or other similar events relating to their information technology systems could seriously harm our business.
While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
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Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our business.
−Removed: Threat actors may also gain access to other networks and systems after a compromise of our networks and
+Added: Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.
+Added: For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.
+Added: Any of the previously identified or similar threats has caused and, in the future, could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the
+Added: third parties with whom we work.
For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will continue in the future.
−Removed: Any of the previously identified or similar threats has caused and, in the future, could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely.
−Removed: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to operate our business.
−Removed: We may expend significant resources or modify our business activities to try to protect against security incidents.
−Removed: Additionally, certain data privacy and security obligations has required and may in the future require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
+Added: A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to operate our business.
+Added: For example, the loss of clinical trial data from completed, ongoing or future clinical trials could result in delays in or denials of our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
+Added: We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
+Added: Additionally, certain data privacy and security obligations have required and may in the future require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
−Removed: If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
+Added: If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
additional reporting requirements and/or oversight;
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and other similar harms.
−Removed: Security incidents and attendant consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: Security incidents and attendant material consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: For example, to the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, our competitive position could be harmed, and the further development and commercialization of our product candidates could be delayed, result in substantial costs, diversion of management attention, and other adverse consequences.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
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If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.
−Removed: Unfavorable conditions, including inflationary pressure, in the global economy could limit our ability to grow our business and negatively affect our operating results.
+Added: Unfavorable macroeconomic conditions, including tariff policies and inflationary pressure, as well as constrained capital markets, could limit our ability to grow our business, raise capital and negatively affect our operating results.
General worldwide economic conditions have experienced significant instability in recent years including the recent global economic uncertainty and financial market conditions.
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These conditions make it extremely difficult for us to accurately forecast and plan future business activities.
+Added: Our industry is sensitive to global and domestic economic conditions and capital market dynamics.
+Added: In 2025, the biotechnology industry faced significant macroeconomic headwinds, including trade policy uncertainty driven by tariff volatility, which created substantial uncertainty affecting pharmaceutical supply chains, active pharmaceutical ingredient sourcing, and overall investor sentiment toward the life sciences sector.
+Added: Although pharmaceutical products have historically been exempt from certain tariffs, the ongoing Section 232 investigations and potential tariffs on pharmaceutical imports could increase our operating costs, disrupt our supply chain relationships, or force us to reconfigure our manufacturing and sourcing strategies.
+Added: The biotechnology capital markets may also be impacted by U.S.
+Added: regulatory uncertainty amid agency leadership changes and shifting policy priorities.
+Added: As a company without approved products generating revenue, we may be particularly vulnerable to these capital market conditions.
+Added: Higher interest rates have increased the cost of capital and have generally made investors more selective, favoring companies with later-stage assets and established commercial operations.
+Added: Continued volatility or deterioration in equity markets, prolonged elevated interest rates, or further trade policy disruptions could materially impair our ability to raise additional capital on acceptable terms, if at all.
+Added: This could force us to delay, reduce, or eliminate research and development programs, or delay or modify clinical trial designs.
+Added: Additionally, macroeconomic uncertainty could affect our collaborators, suppliers, and potential partners, potentially leading to delayed payments, reduced collaboration funding, or renegotiation of existing agreements.
+Added: Government shutdowns or prolonged budget disputes may also delay FDA regulatory reviews, CMS rulemaking, or other agency actions critical to our product development timelines.
+Added: The combination of trade policy uncertainty, capital market constraints, and regulatory unpredictability makes it difficult to accurately forecast and plan future business activities, and any of these factors could materially and adversely affect our business, financial condition, results of operations, and prospects.
The issuance of additional stock in connection with financings, acquisitions, investments, our equity incentive plan or otherwise will dilute all other stockholders.
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New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance.
−Removed: For example, the Inflation Reduction Act provides for a minimum tax equal to 15% of the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on certain share buybacks by public corporations that would be imposed on such corporations.
+Added: The OBBBA, the Inflation Reduction Act enacted in 2022, the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020, and the Tax Cuts and Jobs Act enacted in 2017 made many significant changes to the Code.
+Added: Future guidance from the Internal Revenue Service and other tax authorities with respect to any legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation or sunset in future years.
In addition, it is uncertain if and to what extent various states will conform to newly enacted federal tax legislation.
−Removed: Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S.
+Added: Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses could have a material impact
+Added: on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S.
We incur significant costs and demands upon management as a result of being a public company.
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The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management.
−Removed: Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data.
−Removed: Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment,
−Removed: may result in reputational harm, liability, or other adverse consequences to our business operations.
+Added: Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data, and may subject us to evolving regulatory requirements.
+Added: Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
As with many technological innovations, artificial intelligence presents risks and challenges that could impact our business.
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If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information, and our reputation and the public perception of the effectiveness of our security measures could be harmed.
−Removed: Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property.
+Added: Further, bad actors around the world use increasingly sophisticated methods, including artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property.
Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
+Added: A growing number of jurisdictions and regulators are adopting laws and regulations, as well as focusing enforcement efforts, related to artificial intelligence.
+Added: The use of such technologies in compliance with ethical standards and societal expectations is also subject to increasing scrutiny.
+Added: These developments may increase our compliance burden and costs in connection with use of artificial intelligence and lead to legal liability if we fail to meet evolving legal standards or if use of such technologies results in harms or other causes of action we did not predict.
+Added: For example, the European Union’s Artificial Intelligence Act (“AI Act”) entered into force on August 1, 2024, with most provisions becoming effective on August 2, 2026.
+Added: This legislation imposes significant obligations on providers and deployers of artificial intelligence systems, and encourages providers and deployers of artificial intelligence systems to account for EU ethical principles in their development and use of these systems.
+Added: The scope of requirements depends on legal and risk determinations that rely on novel legal provisions that have not yet been interpreted by courts or regulators, and non-compliance can lead to significant fines.
+Added: Likewise, recent state legislative developments in the United States have introduced emerging compliance risks for companies that develop or deploy AI technologies, which may impose novel requirements on AI developers and users.
+Added: These state-level initiatives reflect a growing trend toward AI regulation in the absence of federal legislation.
+Added: we may face a fragmented and evolving compliance landscape that could increase operational complexity, regulatory scrutiny, and legal exposure associated with the use or development of AI technologies.
+Added: In addition, various federal regulators have issued guidance and focused enforcement efforts on the use of AI in regulated sectors.
+Added: The FDA, for example, issued guidance on the use of AI in medical devices, requiring detailed risk management and review processes to obtain approvals.
+Added: If we develop or use AI systems governed by these laws or regulations, we will need to meet higher standards of data quality, transparency, monitoring and human oversight, and we would need to adhere to specific and potentially burdensome and costly ethical, accountability, and administrative requirements, with the potential for significant enforcement or litigation in the event of any perceived non-compliance.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.