7 unchanged sentences
If we are unable to raise capital when needed, we could be forced to curtail our planned operations.
−Removed: ● Our business is dependent on the successful development of our investigational drug candidate, zunsemetinib.
● We have a limited history as a clinical-stage biopharmaceutical company developing and partnering our drug candidates, which may make it difficult to evaluate the success of our business to date and to assess our future viability.
16 unchanged sentences
● 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 drug candidates;
−Removed: ● continue the clinical development of zunsemetinib as a potential treatment for moderate to severe rheumatoid arthritis, moderate to severe hidradenitis suppurativa and moderate to severe psoriatic arthritis, ATI-1777 as
−Removed: a potential treatment for moderate to severe atopic dermatitis, and ATI-2138 as a potential treatment for T cell-mediated autoimmune diseases;
−Removed: ● continue to develop our preclinical drug candidates, including ATI-2231;
+Added: ● continue to develop our drug candidates;
● continue to discover and develop additional drug candidates;
18 unchanged sentences
Furthermore, we incur and expect to continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses.
−Removed: We also expect to add additional personnel to support our operational plans and strategic direction .
As of December 31, 2023, we had cash, cash equivalents and marketable securities of $181.9 million.
−Removed: We believe that our existing cash, cash equivalents and marketable securities as of the date of this Annual Report will enable us to fund our operating expenses and capital expenditure requirements for a period greater than 12 months from the date of this
−Removed: report based on our current operating assumptions.
+Added: We believe that our existing cash, cash equivalents and marketable securities as of the date of this Annual Report will enable us to fund our operating expenses and capital expenditure requirements for a period greater than 12 months from the date of this report based on our current operating assumptions.
These assumptions may prove to be wrong, and we could use our available capital resources sooner than we expect.
4 unchanged sentences
● the costs, timing and outcome of regulatory review of our drug candidates;
−Removed: ● the extent to which we in-license or acquire additional drug candidates and technologies;
+Added: ● the extent to which we in-license or acquire drug candidates and technologies;
● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
−Removed: ● the impact on the timing of our preclinical studies, on the recruitment, enrollment, conduct and timing of our clinical trials, and on our business, due to the COVID-19 pandemic;
● our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our drug candidates;
● our ability to earn revenue from licenses to, or partnerships or other arrangements with, third parties.
−Removed: We will require additional capital to complete the clinical development of zunsemetinib, ATI-1777 and ATI-2138, to develop our preclinical compounds and to support our discovery efforts.
+Added: We will require additional capital to develop our drug candidates and to support our discovery efforts.
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.
1 unchanged sentence
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 drug candidates , we could be forced to curtail our planned operations.
−Removed: Our business is dependent on the successful development of our drug candidate, zunsemetinib.
−Removed: Our pipeline includes zunsemetinib, our investigational oral, novel, selective MK2 inhibitor compound, which we are developing as a potential treatment for moderate to severe rheumatoid arthritis, moderate to severe hidradenitis suppurativa and moderate to severe psoriatic arthritis.
−Removed: The success of our business will significantly depend on our successful development of and/or our ability to pursue strategic alternatives for, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize, zunsemetinib.
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 drug candidates.
9 unchanged sentences
We may also encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.
−Removed: Our business could be adversely affected by the evolving and ongoing impact of the COVID-19 global pandemic in regions where we or third parties on which we rely have manufacturing facilities, clinical trial sites or other business operations.
−Removed: The impact of the global COVID-19 pandemic continues to evolve.
−Removed: Clinical site initiation, patient enrollment and recruitment and the supply of materials for our drug candidates may be adversely affected due to the COVD-19 pandemic, including as a result of staffing shortages and COVID-19 infections.
−Removed: Some subjects may not be able to comply with clinical trial protocols if quarantines impede patient movement.
−Removed: The extent to which the COVID-19 pandemic or a similar health pandemic or epidemic impacts our business, our preclinical and clinical development and our regulatory efforts will depend on future developments that are highly uncertain and cannot be predicted.
−Removed: Accordingly, we do not yet know the full extent of the impacts on our business, our preclinical and clinical development and regulatory activities, healthcare systems or the global economy as a whole.
−Removed: However, these impacts could adversely affect our business, financial condition, results of operations and growth prospects.
−Removed: In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described herein.
Risks Related to the Development and Potential Commercialization of Our Drug Candidates
+Added: We may not be successful in our efforts to identify and develop additional drug candidates leveraging our KINect drug discovery platform.
+Added: A key element of our approach is to leverage our KINect drug discovery engine to identify and develop additional novel drug candidates.
+Added: Our platform is powered by a unique combination of our proprietary chemical library of kinase
+Added: inhibitors, our novel approaches to inhibitor modalities, our expertise in SBDD, and our custom kinase assays.
+Added: Our ability to identify and develop additional drug candidates is subject to numerous risks, including that:
+Added: ● our drug discovery methods and our KINect platform may not be successful in identifying additional drug candidates;
+Added: ● our discovery programs may initially show promise in identifying potential drug candidates, yet fail to yield drug candidates for clinical development;
+Added: ● potential drug candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drug candidates that will receive marketing approval and achieve market acceptance.
+Added: In addition, discovery programs require substantial technical, financial and human resources.
+Added: We may not be able to maintain sufficient resources and expertise to discover additional drug candidates.
+Added: It could take years to identify a viable drug candidate, and there is a risk that we may never do so.
+Added: If we are unable to identify successful drug 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 drug candidates, which could harm our business.
If we are unable to successfully develop our drug 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 drug candidates, or experience significant delays in doing so, our business will be harmed.
1 unchanged sentence
Our ability to earn substantial revenue from our drug 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 drug candidates.
−Removed: The success of any drug candidates that we develop, including zunsemetinib, will depend on several factors, including:
+Added: The success of any drug candidates that we develop will depend on several factors, including:
● successful completion of preclinical studies and our clinical trials;
13 unchanged sentences
Our drug candidates’ success in clinical trials will not guarantee marketing approval.
−Removed: Following submission, the NDA for any drug candidate may not be accepted for substantive review, or even if it is accepted for substantive review the FDA or other comparable foreign regulatory authorities may require additional studies or clinical trials, additional data, or additional manufacturing steps, or require other conditions before they will reconsider or approve the application, which could increase costs and cause delays in the marketing approval process and which may require the expenditure of additional resources.
+Added: Following submission, the NDA for any drug candidate may not be accepted for substantive review, or even if it is accepted for substantive review the FDA or other comparable foreign regulatory authorities may require additional studies or clinical trials, additional data, or additional manufacturing steps, or require other conditions before
+Added: they will reconsider or approve the application, which could increase costs and cause delays in the marketing approval process and which may require the expenditure of additional resources.
These delays would also impact our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our drug candidates.
9 unchanged sentences
A failure of one or more clinical trials can occur at any stage of testing.
+Added: For example, in March 2023 we announced that our Phase 2a study of zunsemetinib in patients with hidradenitis suppurativa did not meet its primary or second efficacy endpoints, and in November 2023, we announced that our Phase 2b study of zunsemetinib in patients with rheumatoid arthritis did not meet its primary or second efficacy endpoints, following which we discontinued further development of our MK2 inhibitor programs in immuno-inflammatory diseases, including halting enrollment in our Phase 2a study of zunsemetinib in patients with psoriatic arthritis.
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.
5 unchanged sentences
● the number of patients required for clinical trials of our drug 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;
−Removed: ● the COVID-19 pandemic may impact the recruitment, enrollment, conduct and timing of our clinical trials;
● our drug candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate the trials;
21 unchanged sentences
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.
−Removed: 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, such as the COVID-19 pandemic.
+Added: 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.
We may not be able to initiate or continue clinical trials for our drug 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.
46 unchanged sentences
Any of these changes could cause our drug 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 drug candidates and jeopardize our ability to pursue strategic alternatives, including identifying
−Removed: and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates.
−Removed: We currently conduct and may in the future conduct clinical trials for our drug candidates outside the United States.
+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 drug 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 drug candidates.
+Added: We have conducted and may in the future conduct clinical trials for our drug candidates outside the United States.
The FDA, EMA or comparable foreign regulatory authorities may not accept data from such trials.
−Removed: We currently conduct and may in the future conduct clinical trials for our drug candidates outside the United States.
+Added: We have conducted and may in the future conduct clinical trials for our drug candidates outside the United States.
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.
1 unchanged sentence
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 drug candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
+Added: If the FDA, EMA or any comparable regulatory authority does
+Added: 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 drug candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
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.
6 unchanged sentences
We may expend our limited resources to pursue a particular drug candidate or indication and fail to capitalize on drug candidates or indications that may be more profitable or for which there is a greater likelihood of success.
−Removed: Because we have limited financial and management resources, we focus on development programs and drug candidates that we identify for specific indications.
−Removed: As such, we are currently primarily focused on the development of zunsemetinib as a potential treatment for moderate to severe rheumatoid arthritis, moderate to severe hidradenitis suppurativa and moderate to severe psoriatic arthritis, ATI-1777 as a potential treatment for moderate to severe atopic dermatitis, ATI-2138 as a potential treatment for T cell-mediated autoimmune diseases and ATI-2231 as a potential treatment for pancreatic cancer and metastatic breast cancer as well as in preventing bone loss in patients with metastatic breast cancer.
−Removed: As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other indications that later prove to have greater commercial potential.
+Added: Because we have limited financial and management resources, we focus on development programs and drug candidates that we identify for specific indications or therapeutic areas.
+Added: As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other indications or therapeutic areas that later prove to have greater commercial potential.
Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities.
−Removed: Our spending on current and future development programs and drug candidates for specific indications may not yield any commercially viable drugs.
+Added: Our spending on current and future development programs and drug candidates for specific indications or therapeutics areas may not yield any commercially viable drugs.
If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable rights to that drug candidate through partnerships, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such drug candidate.
1 unchanged sentence
For any of our drug 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 drug candidates, we may not earn significant revenue
−Removed: and we may not become profitable.
+Added: If such third-party partners fail to obtain an adequate level of acceptance for our drug candidates, we may not earn significant revenue and we may not become profitable.
The degree of market acceptance of any drug candidate, if approved, will depend on a number of factors, including:
11 unchanged sentences
We will face competition with respect to any drug 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: With respect to zunsemetinib as a potential treatment for immuno-inflammatory diseases such as rheumatoid arthritis, hidradenitis suppurativa and psoriatic arthritis, there are several different types of therapies in the market.
−Removed: Medications for the treatment of rheumatoid arthritis and psoriatic arthritis currently fall into two categories:
−Removed: drugs that ease symptoms such as nonsteroidal anti-inflammatory drugs and drugs that slow disease activity.
−Removed: Drugs that slow disease activity include corticosteroids and DMARDs.
−Removed: DMARDs include (i) conventional synthetic DMARDs, such as methotrexate, sulfasalazine, leflunomide and hydroxychloroquine , (ii) biologic DMARDs (monoclonal antibodies which inhibit targets such as TNF α , IL1β, IL6, IL17 and costimulatory signaling mechanisms) , and (iii) targeted synthetic DMARDs such as JAK inhibitors.
−Removed: Hidradenitis suppurativa is currently treated with antibiotics, corticosteroids and surgery, as well as anti-TNF therapy.
−Removed: Drugs for the treatment of immuno-inflammatory diseases such as rheumatoid arthritis, hidradenitis suppurativa and psoriatic arthritis are produced and sold, or are approved for marketing, by large pharmaceutical companies, including AbbVie, Amgen, Bristol Myers Squibb, Eli Lilly, Johnson & Johnson, Pfizer, Novartis, UCB, Regeneron Pharmaceuticals, and Roche.
−Removed: In addition, we are aware of a number of companies developing and conducting clinical trials for investigational drug candidates, including biosimilars, that, if approved, could compete with zunsemetinib, if approved, for the treatment of immuno-inflammatory diseases.
−Removed: With respect to ATI-1777 as a potential treatment for moderate to severe atopic dermatitis, there are several different types of therapies in the atopic dermatitis market, such as biologics, oral and topical corticosteroids, injectable and oral methotrexate products, oral and topical calcineurin inhibitors, oral mycophenolate products, other JAK inhibitors, other oral antibiotics and antihistamines and phototherapy.
+Added: With respect to ATI-1777 as a potential treatment for atopic dermatitis, there are several different types of therapies in the atopic dermatitis market, such as biologics, oral and topical corticosteroids, oral and topical calcineurin inhibitors, oral mycophenolate products, other JAK inhibitors, other oral antibiotics and antihistamines and phototherapy.
There are also several prescription, non-prescription and OTC topical products, including PDE4 inhibitors, utilized to treat atopic dermatitis.
−Removed: These types of drugs are produced and sold, or are approved for marketing, by large pharmaceutical companies, including AbbVie, Incyte, LEO Pharma A/S, Pfizer, and Sanofi and Regeneron Pharmaceuticals.
−Removed: In addition, we are aware of a number of companies including large pharmaceutical companies, such as Eli Lilly, Novartis, LEO Pharma A/S, Pfizer, and Dermavant Sciences developing and conducting clinical trials for investigational drug candidates, that, if approved, could compete with ATI-1777, if approved, for the treatment of atopic dermatitis.
+Added: These types of drugs are produced and sold, or are approved for marketing, by large pharmaceutical companies, including AbbVie, Incyte, LEO Pharma A/S, Pfizer, and Regeneron Pharmaceuticals and Sanofi.
+Added: In addition, we are aware of a number of companies including large pharmaceutical companies, such as Amgen, Dermavant Sciences, Eli Lilly, LEO Pharma A/S and Pfizer, developing and conducting clinical trials for investigational drug candidates that could compete with ATI-1777, in each case if approved, for the treatment of atopic dermatitis.
The commercial opportunity for our drug 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 drug that we may develop.
19 unchanged sentences
Third-party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to determine reimbursement amounts.
−Removed: Accordingly, these updates could impact the demand for our drug candidates, if approved.
+Added: Accordingly, these updates could impact the demand for our drug candidates, if
Our drug 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 drug candidates, if approved, on a competitive and profitable basis.
29 unchanged sentences
If any of our relationships with these third parties terminate, we may not be able to timely enter into arrangements with alternative third parties or to do so on commercially reasonable terms, if at all.
−Removed: In addition, any third parties conducting our clinical trials will not be our employees, and except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our clinical programs.
+Added: In addition, any third parties conducting
+Added: our clinical trials will not be our employees, and except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our clinical programs.
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 drug candidates.
7 unchanged sentences
For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.
−Removed: Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCPs, for
−Removed: conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
+Added: Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.
15 unchanged sentences
In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
−Removed: If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our drug candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which could significantly impact our ability to develop, and identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize, our drug candidates.
+Added: If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our drug candidates or if it withdraws any such approval in the future, we may need to find alternative
+Added: manufacturing facilities, which could significantly impact our ability to develop, and identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize, our drug candidates.
We may be unable to establish any agreements with future third-party manufacturers or do so on acceptable terms.
24 unchanged sentences
● partners may not perform their obligations as expected;
−Removed: ● partners may not pursue development, marketing approval or commercialization of any drug candidates that achieve marketing approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the partners’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
+Added: ● partners may not pursue development, marketing approval or commercialization of any drug candidates that achieve marketing approval or may elect not to continue or renew development or commercialization
+Added: programs based on clinical trial results, changes in the partners’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
● partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing;
18 unchanged sentences
We may not be able to negotiate partnerships on a timely basis, on acceptable terms, or at all.
−Removed: If we are unable to do so, we may have to curtail the development of such drug candidate, or reduce or delay its development program or one or more of our other development programs, or increase our expenditures and undertake development or commercialization activities at our own expense.
−Removed: If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all.
+Added: If we are unable to do so, we may have to curtail the development of such drug candidate, reduce or delay its development program or one or more of our other development programs or increase our expenditures and undertake development or commercialization activities at our own expense.
+Added: If we elect to increase our expenditures to fund development or commercialization activities
+Added: on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all.
If we do not have sufficient funds, we may not be able to further develop our drug candidates or bring them to market and generate revenue.
5 unchanged sentences
If our partners do not timely inform us about the status of our drug 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.
−Removed: Our sublease could terminate if the master lease is terminated for any reason, thus terminating our rights to our corporate headquarters.
−Removed: We sublease space for our corporate headquarters.
−Removed: While the term of the sublease extends until October 2023, if for any reason the master lease is terminated or expires prior to October 2023, our sublease will also automatically terminate.
−Removed: In such an event, we would need to obtain a new direct lease with the master landlord or negotiate and enter into a new lease for office space at a different location, which we may not be able to do on commercially reasonable terms, if at all.
Risks Related to Our Intellectual Property
16 unchanged sentences
Patent and Trademark Office, or 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 drug 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 drug 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 drug candidates and compete directly with us, without payment to us, or result in the inability of our potential third-party partners to manufacture or
+Added: commercialize our drug 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 drug candidates.
5 unchanged sentences
patents covering zunsemetinib expire in 2034.
−Removed: We currently do not have any patents issued directed to ATI-2231, but any claims that may issue would expire in 2040.
Our issued U.S.
2 unchanged sentences
patent directed to ATI-2138 expires in 2039.
+Added: We are pursuing patent protection for methods of use, polymorphs and methods of manufacture for our drug candidates that may extend the term of patent protection.
Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
25 unchanged sentences
patents directed to ATI-1777 and ATI-2138, we do not currently have any patents for such drug candidates in the European Union or other foreign markets;
−Removed: rather, we have pending applications in the European Union and other foreign markets directed to each of ATI-
−Removed: 1777 and ATI-2138.
−Removed: Currently, we do not have any issued patents directed to ATI-2231, but we have a pending PCT application.
+Added: rather, we have pending applications in the European Union and other foreign markets directed to each of ATI-1777 and ATI-2138.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
20 unchanged sentences
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.
−Removed: Consequently, we or our potential third-party partner could be forced, including by court order, to cease developing or commercializing the infringing technology or drug candidate.
+Added: Consequently, we or our potential third-party partner could be forced, including by court order, to cease developing or
+Added: commercializing the infringing technology or drug candidate.
In addition, we or our potential third-party partner could be found liable for monetary damages, including treble damages and attorneys’ fees if we or such partner are found to have willfully infringed a patent.
A finding of infringement could prevent our potential third-party partners from commercializing our drug candidates, if approved, or force such partners to cease some of their business operations.
−Removed: In the event of a successful claim of infringement against us or our potential third-party partners, we or our potential third-party partners may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing drug candidate or obtain one or more licenses from third parties, which may be impossible
−Removed: or require substantial time and monetary expenditure.
+Added: In the event of a successful claim of infringement against us or our potential third-party partners, we or our potential third-party partners may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing drug candidate or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.
20 unchanged sentences
In addition to seeking and maintaining patents for our drug candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.
−Removed: We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties.
+Added: We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have
+Added: access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties.
We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
2 unchanged sentences
In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.
−Removed: If any of our trade secrets were to be lawfully obtained or independently
−Removed: developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.
+Added: If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.
9 unchanged sentences
patents covering zunsemetinib expire in 2034.
−Removed: We currently do not have any patents issued directed to ATI-2231, but any claims that may issue would expire in 2040.
Our issued U.S.
13 unchanged sentences
Similar provisions are available in certain foreign countries, such as the European Union and Japan.
−Removed: If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case.
+Added: If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing
+Added: our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case.
Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.
We expect to rely on trademarks as one means to distinguish our products, services or technologies from those of our competitors.
−Removed: Once we select new trademarks and apply to register them, our trademark applications may not be
+Added: Once we select new trademarks and apply to register them, our trademark applications may not be approved.
Third parties may oppose or attempt to cancel our trademark applications or trademarks, or otherwise challenge our use of the trademarks.
8 unchanged sentences
The impact of the withdrawal of the United Kingdom from the European Union will not be known for some time, which could lead to a period of uncertainty relating to our ability to obtain and maintain patents and trademarks in the United Kingdom.
−Removed: In 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing for a single pan-European Unitary Patent, and a new European Unified Patent Court, or UPC, for litigation of European patents.
−Removed: It is possible that implementation of the EU Patent Package will occur in the first half of 2023.
−Removed: If the EU Patent Package is ratified and in effect, 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.
−Removed: Under the EU Patent Package as currently proposed, once the UPC is established, patent holders are permitted to “opt out” of the UPC on a patent-by-patent basis during an initial seven year period after the EU Patent Package is ratified.
−Removed: Owners of traditional European patent applications who receive notice of grant after the EU Patent Package is ratified could either accept a Unitary Patent or validate the patent nationally and file an opt-out demand.
+Added: In 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing for a single pan-European Unitary Patent, and a new European Unified Patent Court, or UPC, for litigation of European patents, which was implemented in 2023.
+Added: 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.
+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.
8 unchanged sentences
● issued patents that we own or exclusively license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;
−Removed: ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets;
+Added: ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities,
+Added: as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets;
● we may develop additional proprietary technologies that are not patentable.
108 unchanged sentences
Among the provisions of the Affordable Care Act of importance to commercial products are the following:
−Removed: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government health care programs;
−Removed: ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;
−Removed: ● expansion of health care fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, which include, among other things, new government investigative powers and enhanced penalties for non-compliance;
−Removed: ● a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
−Removed: ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
−Removed: ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, thereby potentially increasing manufacturers’ Medicaid rebate liability;
−Removed: ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
−Removed: ● requirements under the federal Open Payments program and its implementing regulations;
−Removed: ● a requirement to annually report drug samples that manufacturers and distributors provide to physicians;
−Removed: ● the Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
+Added: expanded and increased industry rebates for drugs covered under Medicaid programs;
+Added: addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
+Added: extended the rebate program to individuals enrolled in Medicaid managed care organizations;
+Added: established annual fees and taxes on manufacturers of certain branded prescription drugs;
+Added: made changes to the coverage requirements under the Medicare prescription drug benefit;
+Added: and established a new Medicare Part D coverage gap discount program, in which manufacturers, as a condition for their outpatient drugs to be covered under Medicare Part D, must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period.
+Added: Moreover, the Affordable Care Act provided incentives to programs that increase the federal government’s comparative effectiveness research and implemented payment system reforms including a national pilot program on payment bundling meant to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain health care services.
There have been executive branch, judicial and Congressional challenges to certain aspects of the Affordable Care Act.
1 unchanged sentence
On June 17, 2021 the U.S.
−Removed: Supreme Court dismissed
−Removed: a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
+Added: Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
Prior to the U.S.
7 unchanged sentences
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: Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.
The American Taxpayer Relief Act of 2012, which was signed into law in January 2013, among other things, further reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
3 unchanged sentences
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 drug candidates, if approved, which in turn may impact our ability to earn revenue from arrangements with such third-party partners for our drug candidates.
−Removed: Further, it is also possible that additional governmental action is taken in response to the COVID-19 pandemic.
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for drugs.
5 unchanged sentences
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics 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 will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
+Added: These provisions take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.
1 unchanged sentence
It is unclear whether this executive order or similar policy initiatives will be implemented in the future.
+Added: 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.
+Added: 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.
+Added: While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
It is unclear whether these or similar policy initiatives will be implemented in the future.
1 unchanged sentence
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
+Added: In particular, it may reduce the attractiveness of investment in small molecule and biologic innovation.
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: 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 drug candidates, if any, may be.
+Added: For example, on January 5, 2024, the FDA approved Florida’s proposal to import certain drugs from Canada for specific state healthcare programs.
+Added: It is unclear if and how this program will be implemented and whether it will be subject challenges in the United States or Canada.
+Added: Other states have also submitted proposals that are pending review by the FDA.
+Added: Any such approved importation plans, if implemented, may result in lower drug prices for products covered by those programs.
+Added: We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed,
+Added: or what the impact of such changes on obtaining marketing approvals for our drug candidates, if any, may be.
In addition, increased scrutiny by the U.S.
19 unchanged sentences
Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
+Added: We are subject to stringent and evolving U.S.
+Added: and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
+Added: Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;
+Added: litigation (including class claims) and mass arbitration demands;
+Added: fines and penalties;
+Added: disruptions of our business operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: and other adverse business consequences.
+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, personnel data, data from participants in our clinical trials, and other sensitive third-party data (collectively, sensitive data).
+Added: 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.
+Added: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
+Added: In the past few years, numerous U.S.
+Added: including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
+Added: As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
+Added: The exercise of these rights may impact our business operations.
+Added: Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.
+Added: These state laws allow for statutory fines for noncompliance.
+Added: For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “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: The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
+Added: Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and potential liability with respect to other personal data we maintain about California residents.
+Added: 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.
+Added: While these states, like the CCPA, also 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.
+Added: In addition to “comprehensive” state privacy laws like CCPA, we are or may become subject to new state laws governing the privacy of consumer health data.
+Added: 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.
+Added: Other states are considering and may adopt similar laws.
+Added: Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.
+Added: For example, the European Union’s General Data Protection Regulation (“EU GDPR”) and the United Kingdom’s GDPR (“UK GDPR”) impose strict requirements for processing personal data.
+Added: For example, under GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;
+Added: fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater;
+Added: or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
+Added: In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
+Added: Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
+Added: In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.
+Added: Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
+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.
+Added: 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.
+Added: 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.
+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 activities groups.
+Added: 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.
+Added: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and may become subject to such obligations in the future.
+Added: 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.
+Added: We publish privacy policies and make other statements regarding data privacy and security.
+Added: If these policies or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
+Added: Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.
+Added: Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
+Added: Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
+Added: We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
+Added: 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.
+Added: 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: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
+Added: litigation (including class-action claims) and mass arbitration demands;
+Added: additional reporting requirements and/or oversight;
+Added: bans on processing personal data;
+Added: and orders to destroy or not use personal data.
+Added: In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
+Added: Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for significant statutory damages, depending on the volume of data and the number of violations.
+Added: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:
+Added: loss of customers;
+Added: or stoppages in our business operations (including clinical trials);
+Added: inability to process personal data or to operate in certain jurisdictions;
+Added: limited ability to develop our drug candidates;
+Added: expenditure of time and resources to defend any claim or inquiry;
+Added: adverse publicity;
+Added: or substantial changes to our business model or operations.
We are subject to governmental economic sanctions and export and import controls that could impair our potential third-party partners’ ability to compete in international markets or subject us or our potential third-party partners to liability if we or they are not in compliance with applicable laws.
5 unchanged sentences
economic sanctions and export control laws and regulations prohibit the shipment of certain products and services to countries, governments and persons targeted by U.S.
−Removed: While we are currently taking precautions to
−Removed: prevent doing any business, directly or indirectly, with countries, governments and persons targeted by U.S.
+Added: While we are currently taking precautions to prevent doing any business, directly or indirectly, with countries, governments and persons targeted by U.S.
sanctions and to ensure that our drug candidates are not exported or used by countries, governments and persons targeted by U.S.
19 unchanged sentences
We are highly dependent on the management, development, clinical, financial, and business development expertise of Dr.
−Removed: Douglas Manion, our Chief Executive Officer and President, Kevin Balthaser, our Chief Financial Officer, Dr.
−Removed: Joseph Monahan, our Chief Scientific Officer, Dr.
−Removed: Gail Cawkwell, our Chief Medical Officer, and James Loerop, our Chief Business Officer, as well as the other members of our scientific and clinical teams.
+Added: Neal Walker, our Interim Chief Executive Officer and President, Kevin Balthaser, our Chief Financial Officer, Dr.
+Added: 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.
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.
−Removed: We do not maintain “key person” insurance for any of our key executives other than for Dr.
+Added: We do not maintain “key person” insurance for any of our key executives.
Recruiting and retaining qualified scientific, manufacturing and clinical personnel will also be critical to our success.
3 unchanged sentences
We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
−Removed: In addition, we rely on consultants and advisors, including scientific
−Removed: and clinical advisors, to assist us in formulating our development strategy.
+Added: In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our development strategy.
Our consultants and advisors may have commitments under employment, consulting or advisory contracts with other entities that may limit their availability to us.
2 unchanged sentences
We are exposed to the risk that our employees, independent contractors, consultants, third-party partners, principal investigators, CROs and vendors may engage in fraudulent conduct or other illegal activity.
−Removed: Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, manufacturing standards, federal and state health care laws and regulations, and laws that require the true, complete and accurate reporting of financial information or data.
+Added: Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, manufacturing standards, federal and state health care laws and regulations, and laws that require the true, complete
+Added: and accurate reporting of financial information or data.
In particular, sales, marketing and business arrangements by our potential third-party partners in the health care industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices.
32 unchanged sentences
● general political and economic conditions;
−Removed: ● the evolution of the COVID-19 pandemic and success of mass vaccination efforts;
● other events or factors, many of which are beyond our control.
2 unchanged sentences
Such additional litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources from our business.
+Added: If we fail to maintain compliance with the listing requirements of the Nasdaq Global Select Market, we may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
+Added: Our common stock is currently listed on the Nasdaq Global Select Market.
+Added: To maintain the listing of our common stock on the Nasdaq Global Select Market, we are required to meet certain listing requirements, including, among others, either:
+Added: (i) a minimum closing bid price of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $5 million and stockholders’ equity of at least $10 million;
+Added: or (ii) a minimum closing bid price of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors, affiliates and 10% or more stockholders) of at least $15 million and a total market value of listed securities of at least $50.0 million.
+Added: We may fail to satisfy one or more the Nasdaq Global Select Market requirements for continued listing of our common stock in the future.
+Added: There can be no assurance that we will be successful in maintaining the listing of our common stock on the Nasdaq Global Select Market, or, if transferred, on the Nasdaq Capital Market.
+Added: This could impair the liquidity and market price of our common stock.
+Added: In addition, the delisting of our common stock from a national exchange could have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our common stock as a result of that delisting could adversely affect our ability to raise capital on terms acceptable to us, or at all.
Sales of a substantial number of shares of our common stock into the market could cause the market price of our common stock to drop significantly, even if our business is doing well.
7 unchanged sentences
The board of directors can fix the price, rights, preferences, privileges, and restrictions of the preferred stock without any further vote or action by our stockholders.
−Removed: The issuance of shares of preferred stock may delay or prevent a change of control transaction.
+Added: The issuance of shares of preferred stock may delay or prevent a change of
+Added: control transaction.
As a result, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected.
25 unchanged sentences
As of December 31, 2023, we also had federal research and development tax credit carryforwards of $20.4 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 2022.
−Removed: We also have $0.2 million of loss carryforwards in the United Kingdom which can be carried forward indefinitely.
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: We have completed an analysis under Section 382 for NOLs generated from July 13, 2012 through December 31, 2021.
−Removed: Although we have experienced Section 382 ownership changes since 2012, we have concluded that we should have sufficient ability to utilize NOLs accumulated during the periods tested.
−Removed: We have not yet determined if a Section 382 ownership change has occurred after December 31, 2021.
−Removed: In addition, we may experience ownership changes
−Removed: in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.
+Added: 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
+Added: may be limited.
+Added: Although we have experienced Section 382 ownership changes between 2012 and 2023, we have concluded that we should have sufficient ability to utilize NOLs accumulated during the periods tested.
+Added: In addition, we may have experienced ownership changes since 2023 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.
If we determine that an ownership change has occurred and our ability to use our historical NOL and tax credit carryforwards is materially limited, it might harm our future operating results by effectively increasing our future tax obligations.
17 unchanged sentences
General Risk Factors
−Removed: Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.
−Removed: Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, supply chain attacks, ransomware attacks, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.
−Removed: The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
−Removed: If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs.
−Removed: For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in obtaining
−Removed: marketing approval for our drug candidates and significantly increase our costs to recover or reproduce the data.
−Removed: To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development or commercialization of our drug candidates by a potential third-party partner could be delayed.
+Added: 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: fines and penalties;
+Added: disruptions of our business operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: and other adverse consequences.
+Added: 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.
+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
+Added: parties upon which we rely.
+Added: 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: 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.
+Added: 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 drug candidates and provide our services.
+Added: 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: In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to develop our drug candidates or provide our services, loss of sensitive data and income, reputational harm, and diversion of funds.
+Added: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
+Added: Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations.
+Added: Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
+Added: Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: In addition, our reliance on third-party service providers could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks and other threats to our business operations.
+Added: We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, SaaS platforms, encryption and authentication technology, employee email and other functions.
+Added: We also rely on third-party service providers to provide other products and services, or otherwise to operate our business.
+Added: Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
+Added: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: 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.
+Added: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
+Added: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
+Added: We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software).
+Added: We may not, however, detect and remediate all such vulnerabilities including on a timely basis.
+Added: Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.
+Added: Vulnerabilities could be exploited and result in a security incident.
+Added: Any of the previously identified or similar threats 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.
+Added: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to operate our business.
+Added: We may expend significant resources or modify our business activities to try to protect against security incidents.
+Added: Additionally, certain data privacy and security obligations may 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: Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
+Added: Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
+Added: 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: additional reporting requirements and/or oversight;
+Added: restrictions on processing sensitive data (including personal data);
+Added: litigation (including class claims);
+Added: indemnification obligations;
+Added: negative publicity;
+Added: reputational harm;
+Added: monetary fund diversions;
+Added: diversion of management attention;
+Added: interruptions in our operations (including availability of data);
+Added: financial loss;
+Added: and other similar harms.
+Added: 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: 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.
+Added: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
+Added: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
An active trading market for our common stock may not be sustained.
19 unchanged sentences
In addition, the Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation, which coupled with reduced government spending and volatility in financial markets may have the effect of further increasing economic uncertainty and heightening these risks.
−Removed: Additionally, financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022.
+Added: Additionally, financial markets around the world have experienced volatility in connection with geopolitical conflicts.
These conditions make it extremely difficult for us to accurately forecast and plan future business activities.
5 unchanged sentences
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 United States recently passed the Inflation Reduction Act, which 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: 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.
In addition, it is uncertain if and to what extent various states will conform to newly enacted federal tax legislation.
4 unchanged sentences
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC and The Nasdaq Stock Market, may increase legal and financial compliance costs and make some activities more time-consuming.
−Removed: These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
+Added: These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is
+Added: provided by regulatory and governing bodies.
We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
2 unchanged sentences
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: Unresolved Staff Comments
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.