Investing in our Company involves a high degree of risk.
−Removed: You should carefully consider the following risks and uncertainties, together with all other information in this Annual Report on Form 10-K, including our financial statements and related notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, before investing in our Company.
+Added: You should carefully consider the following risks and uncertainties, together with all other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, before investing in our Company.
Any of the risk factors we describe below could adversely affect our business, financial condition, results of operations, prospects or the trading price of our securities.
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Generally, the risks described below relate to the following:
−Removed: the effects of health epidemics, including the COVID-19 pandemic, in regions where we or third parties on which we rely have significant laboratory operations, manufacturing facilities, concentrations of clinical trial sites or other business operations;
+Added: the effects of health epidemics, including the COVID-19 pandemic or future variants of the SARS-CoV-2 virus, in regions where we or third parties on which we rely have significant laboratory operations, manufacturing facilities, concentrations of clinical trial sites or other business operations;
our significant net losses since inception, expected net losses in the future and need for significant investments in products and services;
our ability to leverage our immune medicine platform to discover, develop, commercialize and obtain regulatory clearance, authorization and approval for our products and services, particularly in light of the novelty of immune medicine and our methods;
−Removed: our ability to develop our TCR-Antigen Map and yield insights from it that are commercially viable;
+Added: our ability to develop our TCR-Antigen Map and yield additional insights from it that are commercially viable;
our collaboration with Genentech and ability to develop and commercialize cellular therapeutics, including our ability to achieve milestones and realize the intended benefits of the collaboration;
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We have incurred significant losses since our inception.
−Removed: For the years ended December 31, 2020, 2019 and 2018, we incurred net losses of $146.2 million, $68.6 million and $46.4 million, respectively.
+Added: For the year ended December 31, 2021, 2020 and 2019, we incurred a net loss of $207.3 million, $146.2 million and $68.6 million, respectively.
As of December 31, 2021, we had an accumulated deficit of $718.9 million.
We have funded our operations to date principally from the sale of convertible preferred stock and common stock, including the sale of common stock in our initial public offering, and, to a lesser extent, sequencing and development revenue.
−Removed: We have devoted most of our financial resources to the research and development of products and services under our immune medicine platform.
We expect to continue to incur significant expenses and operating losses for the foreseeable future as we continue to invest in the development of products and services utilizing our immune medicine platform to support the validation of additional clinical diagnostic and therapeutic products and services.
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We are seeking to leverage our immune medicine platform to develop a pipeline of future disease-specific research, diagnostic and therapeutic products and services.
−Removed: For example, we are developing our TCR-Antigen Map with a view toward advancing the development of T-Detect, a diagnostic test that may enable early and accurate detection of multiple diseases, including acute Lyme and celiac disease, from a single blood test.
+Added: For example, we are developing our TCR-Antigen Map with a view toward continually advancing the development of T-Detect, a diagnostic test that may enable early and accurate detection of multiple diseases from a single blood test, into further indications.
In addition, we are developing certain therapeutic product candidates under our collaboration agreement with Genentech by leveraging our platform to identify TCRs that can be engineered into personalized cellular immunotherapies.
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If, after development, a product or service appears successful, we or our collaborators may, depending on the nature of the product or service, still need to obtain FDA and other regulatory clearances, authorizations or approvals before we can market it.
−Removed: The FDA’s clearance, authorization or approval pathways are likely to involve significant time, as well as additional research, development and clinical study expenditures.
+Added: The FDA’s clearance, authorization or approval pathways, including seeking EUA for new indications of T-Detect or other products, are likely to involve significant time, as well as additional research, development and clinical study expenditures.
The FDA may not clear, authorize or approve any future product or service we develop.
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Together we are using immunosequencing, proprietary computational modeling and machine learning to map TCR sequences to the antigens they bind.
−Removed: However, we may not be successful in developing a comprehensive TCR-Antigen Map for any number of reasons.
−Removed: Our collaboration with Microsoft is in the early stages, and our computations and algorithmic-based methods are largely untested and may not allow us to accurately pair TCR sequences to a meaningful number of antigens.
+Added: However, we may not be successful in developing a comprehensive TCR-Antigen Map for any number of reasons including difficulty accessing required sample sets to validate signals and complications in advancing algorithmic-based methods that accurately define TCR signatures to be validated.
As a result, it may require significantly more time and resources for us to determine how to use machine learning to accelerate our mapping process, which could adversely impact our ability to develop or commercialize new diagnostic products or services.
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Our goal is to leverage the TCR-Antigen Map in connection with the development of T-Detect to enable early or accurate detection across a broad range of diseases.
−Removed: We have confirmed clinical signals for SARS-CoV-2, acute Lyme disease, and Crohn’s disease, but are still validating early detection testing for other disease states.
+Added: We have confirmed signals for SARS-CoV-2, acute Lyme disease, Crohn’s disease, celiac disease and multiple sclerosis.
+Added: We have also identified early signals in ulcerative colitis and rheumatoid arthritis and we will seek to confirm those signals in ongoing validation work.
+Added: We will also seek to identify new signals in other select autoimmune disorders or other diseases.
If our computational modeling and machine learning efforts do not accelerate the pace at which we can validate association of TCR sequences to the antigens they bind, the timetable for our business model may not be commercially viable.
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We are exposed to numerous risks associated with the Genentech Agreement, including sharing a measure of control over the operations of our research and development portions of the collaboration with Genentech and Genentech having sole control over the commercialization of any products developed via the collaboration.
+Added: For instance, in 2021, Genentech suspended development of a drug against our first shared antigen target candidate in response to published data.
The Genentech Agreement also prevents us from, among other things, developing or commercializing TCR-based cellular therapies outside the scope of the collaboration in the field of oncology on our own or with any third party.
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Genentech’s degree of control over collaboration development and commercialization efforts may impact the amounts we receive under the Genentech Agreement.
−Removed: For example, Genentech may decide not to pursue commercialization of product candidates at all, or it may agree to pay royalties to third parties or adopt a pricing model that reduces the amount of royalties we might otherwise expect.
+Added: For example, Genentech may suspend development of product candidates or decide not to pursue commercialization of product candidates at all, or it may agree to pay royalties to third parties or adopt a pricing model that reduces the amount of royalties we might otherwise expect.
It is also possible that effective cell therapies will not be developed under the Genentech Agreement or, if developed, approved by the FDA or comparable regulatory authorities outside of the United States.
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We will likely also need to acquire additional laboratory space and equipment, which can take several months or more to procure, set up and validate.
−Removed: These process enhancements and increases in scale, expansion of personnel, laboratory space and equipment may not be successfully implemented, and we may not have adequate space in our existing laboratory facilities to accommodate the required expansion.
+Added: These process enhancements and increases in scale, expansion of personnel, laboratory space and equipment may not be successfully implemented, and we may not have adequate laboratory facilities or resources to accommodate all the requirements that we currently anticipate needing to be successful.
If we cannot satisfy our obligations, Genentech is entitled to trigger a technology transfer of our TCR screening process (specific to the Personalized Product) or terminate the Genentech Agreement.
−Removed: In addition, due to our significant obligations under the Genentech Agreement, we may face challenges in keeping existing customers, collaborators and suppliers and obtaining new customers, including any biopharmaceutical customers that are actual or potential competitors with Genentech.
+Added: In addition, due to our significant obligations under the Genentech Agreement, we may face challenges in meeting the needs of existing customers, collaborators and suppliers and securing new customers, including any biopharmaceutical customers that are actual or potential competitors with Genentech.
If we support the commercialization of one or more products under the Genentech Agreement, we may need to incorporate new equipment, implement new technology systems and laboratory processes and hire new personnel with different qualifications.
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Under our Genentech collaboration, Genentech has invested significant financial resources to develop future TCR-based cellular therapies, including conducting preclinical studies and other early research and development activities, and providing general and administrative support for these operations.
−Removed: Our future success is dependent on our and Genentech’s ability to successfully develop therapeutic product candidates, and Genentech’s ability, where applicable, to obtain regulatory and marketing approval for, and then successfully commercialize, cellular therapeutics.
+Added: Our future success is dependent on our and Genentech’s ability to successfully develop therapeutic product candidates and advance those product candidates into the clinic, and Genentech’s ability, where applicable, to obtain regulatory and marketing approval for, and then successfully commercialize, cellular therapeutics.
We and Genentech have not yet developed and commercialized any cellular therapeutics, and we may not be able to do so.
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In particular, we have entered into the Genentech Agreement, with the goal of accelerating the development and commercialization of T cell therapies for the treatment of a broad range of tumor types, and a strategic collaboration agreement with Microsoft (“Microsoft Agreement”), which provides us with access to Microsoft’s research and machine learning technologies that we are using to develop our TCR-Antigen Map.
+Added: We are pursuing several additional industry and academic collaborations to access patient cohorts that could accelerate our TCR-Antigen Map signal generation and validation for our immune-based diagnostics or drug discovery product or services pipeline.
These collaborations may result in our incurring significant expenses in pursuit of potential products and services, and we may not be successful in identifying, developing or commercializing any potential products or services.
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Significant additional research and development and, in certain instances, clinical trials or validation will be required before we can potentially seek regulatory clearance, authorization or approval for, or commercialize any of our products or services in development.
−Removed: We are developing a pipeline of immune-driven diagnostics and therapeutics, including T-Detect (formerly immunoSEQ Dx) and cellular therapies in oncology, but significant additional research and development activities and clinical trials or validations could be required before we and our collaborators will have a chance to achieve additional commercially viable products.
+Added: We are developing a pipeline of immune-driven diagnostics and therapeutics, including T-Detect and cellular therapies in oncology, but significant additional research and development activities and clinical trials or validations could be required before we and our collaborators will have a chance to achieve additional commercially viable products.
Our research and development efforts remain subject to all of the risks associated with the development of new products and services based on immune-driven diagnostics and immune-mediated therapies.
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Safety, regulatory and efficacy issues, clinical hurdles or other challenges may result in delays and cause us to incur additional expenses that would increase our losses.
−Removed: If we and our collaborators cannot complete, or if we experience significant delays in developing, our clinical diagnostics or cellular therapies, particularly after incurring significant expenditures, our business may fail and investors may lose the entirety of their investment.
+Added: If we and our collaborators cannot complete, or if we experience significant delays in developing, our clinical diagnostics or therapeutics, including cellular therapies, T-cell based vaccines or antibody discoveries, particularly after incurring significant expenditures, our business may fail and investors may lose the entirety of their investment.
Prior to obtaining regulatory clearances, authorizations or approvals for the commercial sale of any new products or services, we must demonstrate that our products and services are both safe and effective for use in each target disease indication.
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Internal changes in processes or compositions of our reagents or other materials may also require validation efforts by us and supply of new materials from our suppliers which could impact timing of production and levels of inventory while such changes are being implemented.
−Removed: Further, as a result of the COVID-19 pandemic, the overall demand for supplies and equipment used in vaccine development and distribution or other public health or disease prevention initiatives, such as Hamilton tips and freezers, may continue to increase lead times for purchased supplies and equipment, thus potentially lowering our production capacity.
−Removed: Combined with lowered production capacity, any significantly increased demand for new products or services such as T-Detect may affect our ability to fulfill orders, resulting in a material adverse effect on volume or revenue.
+Added: Further, as a result of the COVID-19 pandemic, the overall demand for supplies and equipment used in vaccine development and distribution or other public health or disease prevention initiatives may continue to increase lead times for purchased supplies and equipment, thus potentially lowering our production capacity.
+Added: Combined with lowered production capacity, any significantly increased demand for existing or new products or services, such as T-Detect COVID, may affect our ability to fulfill orders, resulting in a material adverse effect on volume or revenue.
In particular, we have purchased and rely on the Illumina NextSeq System.
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As a result, we believe it is necessary for our sales representatives to have relevant, specialized market experience.
−Removed: Our internal sales organization is currently small, and competition for experienced sales and marketing personnel is intense.
+Added: Competition for experienced sales and marketing personnel is intense, and new members of our sales organization may require intense training to apply their experience and expertise to our products and services.
We may not be able to attract and retain personnel or be able to build or adequately train an efficient and effective sales organization, which could negatively impact sales and market acceptance of our clinical diagnostics and limit our revenue growth and potential profitability.
−Removed: We have engaged distributors for our improved immunoSEQ RUO kit in Japan and the United States.
−Removed: We may not be able to engage a distribution partner in other countries on favorable terms, or at all.
We established a collaboration with Genentech for the research, development, marketing, promotion, distribution and sale of TCR-based cellular therapies for the treatment of cancer.
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the cost of clinical trials of future products and services, or improvements to current products and services, may be greater than we anticipate;
−Removed: we may not have sufficient capacity in our laboratories, including the additional capacity we expect to come online as the result of the anticipated expansion of our corporate headquarters, to perform testing as requested or volumes requested or with the requested turnaround times necessary for clinical trials;
+Added: we may not have sufficient capacity in our laboratories to perform testing as requested or volumes requested or with the requested turnaround times necessary for clinical trials;
the supply or quality of materials or data necessary to conduct clinical trials of future products and services, or improvements to current products and services, may be insufficient or inadequate;
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A failure in any one of these areas could make it difficult for us to meet market expectations for our products and services and could damage our reputation and the prospects for our business.
−Removed: To manage our anticipated expansion, we must continue to implement and improve our managerial, operational and financial systems, continue to expand our facilities (including our corporate headquarters in Seattle, Washington and cellular lab in South San Francisco, California) and continue to recruit and train additional qualified personnel.
+Added: To manage our anticipated expansion, we must continue to implement and improve our managerial, operational and financial systems, continue to expand our facilities and continue to recruit and train additional qualified personnel.
Also, our management and operations teams may need to divert a disproportionate amount of their attention away from their day-to-day activities and devote a substantial amount of time to managing these development and improvement activities.
−Removed: Due to our limited resources and early stage of growth, we may not be able to effectively manage this simultaneous execution and the expansion of our operations or recruit and train additional qualified personnel.
−Removed: This may result in weaknesses in our infrastructure, operational mistakes, slower development of our products and services, missed or delayed milestone achievement, significant cost overruns, loss of business opportunities, loss of employees, inability to execute on hiring plans and reduced productivity among remaining employees.
+Added: Due to our limited resources and early stage of growth, we may not be able to effectively manage this simultaneous execution and the expansion of our operations or recruit, train, and retain additional qualified personnel.
+Added: This may result in weaknesses in our infrastructure, operational mistakes, slower development of our products and services, missed or delayed milestone achievement, significant cost overruns, loss of business opportunities, loss of employees and contingent workers, inability to execute on hiring plans and reduced productivity among remaining employees and contingent workers.
If our management is unable to effectively manage our expected development and expansion, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy.
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Our business could be adversely affected by global pandemics or health epidemics in regions where we have concentrations of clinical trial sites or other business operations, and such pandemics or epidemics could cause significant disruption in the operations of third-party manufacturers, suppliers, general contractors and sub-contractors related to capital projects and CROs upon whom we rely.
−Removed: For example, in December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, was reported to have surfaced in Wuhan, China.
−Removed: Since then, COVID-19 has spread to multiple countries, including the United States and several European countries, and the World Health Organization has declared the outbreak a “pandemic.” In response to the pandemic, the U.S.
−Removed: government has imposed travel restrictions on travel between the United States, Europe and certain other countries.
−Removed: Further, the President of the United States declared the COVID-19 pandemic a national emergency, invoking powers under the Stafford Act, the legislation that directs federal emergency disaster response.
+Added: The global pandemic of COVID-19 continues to rapidly evolve.
+Added: We do not yet know the full extent of potential delays or impacts on our business, clinical trials, sales force expansion plans and other initiatives, or the impacts to healthcare systems or the global economy as a whole.
Most of our facilities and employees are based in Seattle, Washington at our corporate headquarters, where the state government has imposed “stay at home” restrictions designed to slow the spread of COVID-19, which have disrupted our normal operations.
Similarly, San Mateo County, California had a “shelter-in-place” order with restrictions that have disrupted our normal operations in our South San Francisco office.
−Removed: With respect to our laboratory operations, we intend to rely on the measures implemented in the first half of 2020 to reduce the risk of exposure of COVID-19 to the employees who continue to work on site as part of government-defined essential services, including the implementation of work-from-home policies for certain employees, as well as the implementation of teams and zones to physically distance employees who remain on site.
−Removed: These policies may be modified as employees become vaccinated, causing additional operational disruption.
+Added: With respect to our laboratory operations, we intend to rely on the measures implemented in early 2020 to reduce the risk of exposure of COVID-19 to the employees who continue to work on site as part of government-defined essential services, including the implementation of work-from-home policies for certain employees, as well as physical distancing and contact tracing those employees who remain on site.
+Added: We have also required all on-site employees to be vaccinated, subject to applicable religious and medical exemptions.
We work with a variety of materials and samples from COVID-19 patients that could be hazardous to human health.
We intend to continue to adhere to the safety measures implemented to reduce the risk of exposure to our on-site staff.
−Removed: In the event of COVID-19 exposure to our employees, it is possible that all or a portion of our operations could be materially disrupted.
−Removed: The effects of the stay at home orders or similar government orders and our work-from-home and teams and zones measures may negatively impact productivity, disrupt our business and delay our clinical programs and corporate expansion initiatives, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations regarding our ability to conduct our business in the ordinary course.
+Added: We have experienced a number of staffing and supply chain disruptions due to COVID-19 and anticipate these will continue into the future.
+Added: The effects of the stay-at-home orders or similar government orders and internal protective measures may negatively impact productivity, disrupt our business and delay our clinical programs and corporate expansion initiatives, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations regarding our ability to conduct our business in the ordinary course.
+Added: Confirmed positive cases, close contacts, and other identified risks have resulted in disruptions to regular on-site staffing, and these disruptions may continue to negatively impact our research and production.
+Added: The effects of government restrictions such as the stay at home orders and our other operational safety measures may negatively impact productivity, disrupt our business and delay our clinical programs and corporate expansion initiatives, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations regarding our ability to conduct our business in the ordinary course.
These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.
Quarantines, stay at home orders and similar government orders, or the perception that such orders, shutdowns or other restrictions on business operations could occur, whether related to COVID-19 or other infectious diseases, could impact personnel at third-party manufacturing or supplier facilities in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain.
−Removed: In addition, public health measures undertaken to combat the COVID-19 pandemic or vaccine development and distribution efforts may increase demand for equipment, such as freezers, or supplies, such as Hamilton tips, which we use in the ordinary course of our business.
+Added: In addition, public health measures undertaken to combat the COVID-19 pandemic or vaccine development and distribution efforts may increase demand for equipment or supplies, which we use in the ordinary course of our business.
This increased demand has resulted in longer lead times for equipment purchases and may result in internal conservation of supplies, which may slow production.
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In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.
−Removed: The global pandemic of COVID-19 continues to rapidly evolve.
The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.
−Removed: We do not yet know the full extent of potential delays or impacts on our business, clinical trials, corporate expansion plans and other initiatives, or the impacts to healthcare systems or the global economy as a whole.
However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.
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delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;
−Removed: diversion of healthcare resources away from the conduct of clinical trials related to our non-COVID-19 related products and services, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
+Added: negative impact on interactions necessary for commercial testing, due to restricted access for industry employees;
+Added: patient and clinician avoidance of “elective” procedures that may encompass our products and services, and general reluctance of patients to seek in-person care;
+Added: challenges in providing clinical education with respect to our novel products and services in a virtual setting, and restrictions on clinician and provider travel;
+Added: diversion of healthcare resources, clinical staff, physicians and advanced practice providers in oncology, including hospitals serving as our clinical trial sites, away from the conduct of clinical trials related to our non-COVID-19 related products and services;
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;
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interruption in global shipping that may affect the transport of clinical trial materials;
−Removed: changes in local regulations as part of a response to the COVID-19 pandemic, which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or discontinuing clinical trials altogether;
−Removed: delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees;
+Added: changes in regulations as part of a response to the COVID-19 pandemic, which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or discontinuing clinical trials altogether;
+Added: delays in necessary interactions and anticipated timelines with local and federal regulators (including the FDA), ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees;
refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
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Our efforts to discover and develop products and services related to COVID-19 may not be successful from either a platform extension or commercialization perspective.
−Removed: We are attempting to leverage our immune medicine platform to discover and develop potential antibody therapies and diagnostics for COVID-19.
−Removed: In December 2020, we launched an early access program for T-Detect COVID to confirm past SARS-CoV-2 infection, and we also developed a therapeutic antibody discovery process called TruAB from which neutralizing antibodies to SARS-CoV-2 have been produced.
+Added: We are attempting to leverage our immune medicine platform to discover and develop potential antibody therapies and We are attempting to leverage our immune medicine platform to discover and develop potential antibody therapies and diagnostics for COVID-19.
Our efforts in this area are early and continue to evolve and mature continuously as we augment our databases and pool of knowledge.
−Removed: While we believe quantifying virus-specific T cells may provide important research and diagnostic advantages because T cells appear earlier than antibodies and persist longer, the data upon which such belief is based is limited and our analyses are preliminary.
+Added: While we believe quantifying virus-specific T cells may provide important research and diagnostic advantages because T cells appear to persist longer and protect against severity of disease , the data upon which such belief is based is limited and our analyses are preliminary.
As we continue to collect and analyze additional data, we may find that our initial hypotheses are not applicable to new variants of the SARS-CoV-2 virus or are not supported by a larger data set or further analysis.
−Removed: If our beliefs regarding the effectiveness of T-Detect COVID are incorrect, that could have a material adverse effect on the market for T-Detect COVID, our revenue, reputation, financial condition, and our stock price would be adversely impacted.
−Removed: Failure to obtain an EUA for a COVID-19 LDT can impair immunity under the PREP Act and could also make payor reimbursement for COVID-19 LDTs under the Family First Coronavirus Act unavailable.
−Removed: Our efforts to further develop and commercialize T-Detect COVID and neutralizing antibodies for COVID-19 involve a high degree of risk, and our efforts may fail for many reasons, including:
+Added: If our beliefs regarding the effectiveness of our current products and services related to COVID-19 are incorrect, or if we are unable to establish a correlate of protection between the T cell response and immunity to COVID-19, that could have a material adverse effect on the market for our products and services related to COVID-19 as well as collaborations for which a correlate of protection is a vital element.
+Added: Accordingly, our revenue, reputation, financial condition, and our stock price would be adversely impacted.
+Added: Our efforts to further develop and commercialize T-Detect COVID, neutralizing antibodies for COVID-19 or other products related to COVID-19, including efforts by our partners or collaborators, involve a high degree of risk, and our efforts may fail for many reasons, including:
failure of our products to be effective against new variants of COVID-19;
−Removed: lack of new patients infected by COVID-19 that require neutralizing antibody treatment due to increased availability of vaccines;
−Removed: failure of T-Detect COVID or TruAB to perform as expected, including defects and errors;
−Removed: failure to obtain a suitable partner for neutralizing antibody therapeutics;
+Added: failure of T-Detect COVID or TruAB neutralizing antibodies to perform as expected against current strains of COVID-19 or new variants, as well as the possibility of defects and errors;
+Added: failure to obtain a suitable partner for neutralizing antibody therapeutics or failure of our collaborators in vaccine development to bring products to market;
lack of validation data, particularly as new variants of COVID-19 arise;
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commercial disruption caused by the development of competing products or services.
−Removed: Additionally, there can be no assurances as to the commercial success of either T-Detect COVID or other neutralizing antibody or diagnostic tests.
+Added: Additionally, there can be no assurances as to the commercial success of either T-Detect COVID, neutralizing antibodies, vaccines or diagnostic tests.
Our investments in the discovery and development of products and services related to COVID-19 may not be accretive to our future financial results and if we determine that any product or service is unlikely to succeed, we may abandon them without any return on our investment.
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availability and extent of reimbursement by governmental and private payors for our products and services;
−Removed: the ability of our clinical sales teams to convert physicians from using incumbent products in the market to clonoSEQ and new diagnostic products and services we may develop;
+Added: the ability of our clinical sales teams to convert physicians from using incumbent products in the market to clonoSEQ and new diagnostic products and services we may develop, such as T-Detect COVID and other T-Detect products;
our ability to drive repeat usage of the clonoSEQ diagnostic test by physicians and get reimbursed for that repeat usage by commercial and government payors for monitoring of MRD;
+Added: our ability to drive repeat usage of T-Detect COVID by physicians serving immunocompromised patients and get reimbursed for that usage by commercial and government payors for determination of recent or prior infection;
the outcomes of research initiatives, clinical trials or other product development or approval processes conducted by us or our collaborators;
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and 10X Genomics, Inc., among others.
−Removed: In clinical diagnostics, our clonoSEQ MRD test faces competition from both conventional and next-generation flow cytometry performed either in-house by our target customers or by reference labs, as well as from labs and institutions advancing research-use-only MRD technologies for clinical applications.
+Added: In clinical diagnostics, our clonoSEQ MRD test faces competition from both conventional and next-generation flow cytometry performed either in-house by our target customers or by reference labs, as well as from labs and institutions advancing research-use-only MRD technologies for clinical applications and commercial-stage oncology diagnostics companies extending the application of their solid tumor ( ctDNA ) MRD products into the hematology MRD space .
+Added: In addition, our T-cell based diagnostic, T-Detect COVID, may face competition from other manufacturers such as Qiagen, who are seeking to commercialize T - cell testing to consumers.
In drug discovery, clinical trials of immune medicines are being undertaken by a number of industry and academic players.
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Our future success will depend on our ability to keep pace with the evolving needs of our customers on a timely and cost-effective basis and to pursue new market opportunities that develop as a result of scientific and technological advances.
−Removed: In recent years, there have been numerous advances in technologies relating to life sciences research and the diagnosis and treatment of cancer, other diseases and autoimmune disorders.
+Added: In recent years, there have been numerous advances in technologies relating to life sciences research and the diagnosis and treatment of cancer, infectious disease such as COVID-19, and autoimmune disorders.
There have also been advances in technologies used to computationally analyze very large amounts of biologic information.
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The loss of any member of our senior management team or our inability to attract and retain highly skilled scientists, clinicians and salespeople could adversely affect our business.
−Removed: Our success depends on the skills, experience and performance of key members of our senior management team, including Chad Robins, our chief executive officer and co-founder, Dr.
−Removed: Harlan Robins, our chief scientific officer and co-founder, and Julie Rubinstein, our president.
+Added: Our success depends on the skills, experience and performance of key members of our senior management team, including our co-founders and executive officers.
The individual and collective efforts of these employees will be important as we continue to develop products and services based on our immune medicine platform.
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Recruiting, training and retention difficulties can limit our ability to support our research and development and commercialization efforts.
+Added: We also employ a number of workers on work authorization visas.
+Added: We may have difficulty recruiting and retaining these workers as immigration regulations continue to change and as a result of the backlog of processing of immigration applications at the federal level.
All of our employees are at-will, which means that either we or the employee may terminate their employment at any time.
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The loss of the services of one or more of our current consultants or advisors might impede the achievement of our research, development, regulatory and commercialization objectives.
−Removed: In addition, we have flexibly grown our workforce through the use of contractors and part-time workers.
+Added: We have also have flexibly grown our workforce through the use of contingent workers, temporary employees, and part-time workers.
We may not be able to retain the services of such personnel which might result in delays in the operation of our business.
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In addition, our third-party billing and collections provider depends upon technology and telecommunications systems provided by outside vendors.
−Removed: Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts (such as ransomware) and natural disasters.
+Added: In addition to the risks directly relevant to our vendors, systems, and information technology, there are risks associated with the outside vendors and third parties with whom they subcontract.
+Added: For example, our third-party billing and collections provider depends upon technology and telecommunications systems provided by outside vendors.
+Added: Subcontractors can be a vector of vulnerability, as any weaknesses in their organization’s technical and organizational controls could affect vendor operations as well as data management, in turn impacting our own operations and ability to safeguard critical data.
+Added: Information technology and telecommunications systems are vulnerable to attack in a variety of forms and from a variety of sources, including telecommunications or network failures, malicious human acts (such as ransomware) and natural disasters.
Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.
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If our laboratory facilities become damaged or inoperable or we are required to vacate our existing facilities, our ability to conduct our laboratory processes and analysis and pursue our research and development efforts may be jeopardized.
−Removed: We operate laboratory facilities located in Seattle, Washington and South San Francisco, California, and are currently expanding our corporate headquarters in Seattle, Washington to enable us to expand our laboratory capacity and research and development footprint.
+Added: We operate laboratory facilities located in Seattle, Washington and South San Francisco, California.
Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure or terrorism, which may render it difficult or impossible for us to operate our immune medicine platform for some period of time.
The inability to perform our laboratory processes or to reduce the backlog of sequences that could develop if our facilities are inoperable, for even a short period of time, or to replace or repair inventory such as reagents or customer samples may result in the loss of customers or harm to our reputation, and we may be unable to regain those customers or repair our reputation in the future.
−Removed: Furthermore, our facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace, and we may not be able to execute on our anticipated expansion, which may increase the backlog of sequences if our laboratory space is not expanded to meet our expected increased throughput.
+Added: In addition, the expansion of our corporate headquarters, laboratory space and warehousing facilities in the Seattle, Washington area has increased the volume of material and sample transfers between and among local facilities, increasing risk to materials and customer samples.
+Added: Furthermore, our facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace.
It would be difficult, time-consuming and expensive to rebuild our facilities, to locate and qualify new facilities or license or transfer our proprietary technologies to a third party, particularly in light of licensure and accreditation requirements.
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the cost of expanding our laboratory operations and offerings, including our sales and marketing efforts;
−Removed: our rate of progress in, and cost of the sales and marketing activities associated with, establishing adoption of our immunoSEQ research services and kits, and reimbursement for our clonoSEQ diagnostic test, our T-Detect early detection test and cellular therapies developed under the Genentech Agreement;
−Removed: our rate of progress in, and cost of research and development activities associated with, products and services in research and early development;
+Added: our rate of progress in, and cost of the sales and marketing activities associated with, establishing adoption of our immunoSEQ research services and kits, and reimbursement for our clonoSEQ diagnostic test, T-Detect COVID and cellular therapies developed under the Genentech Agreement;
+Added: our rate of progress in, and research and development expenses associated with, products and services in research and early development;
the effect of competing technological, product and market developments;
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Generally, losses incurred will carry forward until such losses expire (for losses generated prior to January 1, 2018) or are used to offset future taxable income, if any.
−Removed: Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change in its equity ownership by certain shareholders over a three-year period, the corporation’s ability to use its pre-ownership change NOL carryforwards and other pre-ownership change tax attributes, such as research tax credits, to offset its post-ownership change income or taxes may be limited.
−Removed: Under the TCJA, which significantly reformed U.S.
−Removed: tax law, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of annual taxable income.
−Removed: It is uncertain if and to what extent various states will conform to the TCJA.
+Added: Utilization of our NOL carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986 (“Section 382”) and similar state provisions.
+Added: The annual limitation may result in the expiration of NOL carryforwards and credits before utilization.
If there should be an ownership change, our ability to utilize our NOL carryforwards and credits could be limited.
−Removed: We have completed a Section 382 analysis for changes in ownership through December 31, 2018 and an analysis is ongoing for ownership changes through December 31, 2020.
−Removed: Based on these analyses, we do not expect to have any permanent limitations on the utilization of our federal NOLs.
+Added: We have completed a Section 382 analysis for changes in ownership through December 31, 2020 and continue to monitor for changes that could trigger a limitation.
+Added: Based on this analysis, we do not expect to have any permanent limitations on the utilization of our federal NOLs.
+Added: Under the TCJA, federal NOLs incurred in 2018 and future years may be carried forward indefinitely, but the deductibility of such federal NOLs is subject to an annual limitation.
+Added: NOLs generated prior to 2018 are eligible to be carried forward up to 20 years.
+Added: Based on the available objective evidence, management determined that it was more likely than not that the net deferred tax assets would not be realizable as of December 31, 2021.
+Added: Accordingly, management applied a full valuation allowance against net deferred tax assets as of December 31, 2021.
We may experience ownership changes in the future as a result of shifts in our stock ownership, which may be outside of our control.
2 unchanged sentences
As a result, even if we attain profitability, we may be unable to use a material portion of our NOL carryforwards and other tax attributes, which could adversely affect our future cash flows.
−Removed: In addition, the TCJA reduced the corporate tax rate from a top marginal tax rate of 35% to a flat rate of 21%, limited the tax deduction for net business interest expense to 30% of adjusted taxable income, eliminated NOL carrybacks and modified or repealed many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs.” The U.S.
−Removed: Department of the Treasury and the U.S.
−Removed: Internal Revenue Service (“IRS”) have already issued and are expected to continue to provide guidance on the implementation of the TCJA.
−Removed: We continue to examine the impact this tax reform legislation may have on our business and the operations of our collaborators.
−Removed: However, the effect of the TCJA on our business and the operations of our collaborators, whether adverse or favorable, is uncertain and may not become evident for some period of time.
−Removed: We urge investors to consult with their legal and tax advisors regarding the implications of the TCJA on an investment in our Company.
We could be adversely affected by violations of the FCPA and other worldwide anti-bribery laws.
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If we do not comply with applicable regulations, we may be subject to fines and penalties.
−Removed: In addition, we cannot eliminate the risk of accidental injury or contamination from these materials or wastes, which could cause an interruption of our commercialization efforts, research and development programs, and business operations, as well as environmental damage resulting in costly cleanup and liabilities under applicable laws and regulations.
+Added: In addition, we cannot eliminate the risk of accidental injury or contamination from these materials or wastes, which increase with the volume of material and sample transfers and could cause an interruption of our commercialization efforts, research and development programs, and business operations, as well as environmental damage resulting in costly cleanup and liabilities under applicable laws and regulations.
Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.
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The disaster recovery and business continuity plans we and our collaborators currently have in place are limited and are unlikely to prove adequate in the event of a serious disaster or similar event.
−Removed: Our cybersecurity liability insurance may not cover any or all damages, depending on the severity and extent, we or our collaborators could sustain based on any breach of our respective computer security protocols or other cybersecurity attack.
+Added: Our cybersecurity liability insurance may not cover any or all damages, depending on the severity and extent, we or our collaborators could sustain based on any breach of our respective computer security protocols or other cybersecurity attack, including potential liability arising out of third parties’ negatively impacted data privacy rights.
We may incur substantial expenses as a result of the limited nature of our respective disaster recovery and business continuity plans, which could have a material adverse impact on our business.
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There is significant uncertainty related to the insurance coverage and reimbursement of newly cleared, authorized or approved products and services.
−Removed: In the United States, many significant decisions about reimbursement for new diagnostics and medicines are typically made by CMS, an agency within the HHS.
−Removed: CMS decides whether and to what extent a new diagnostic or medicine will be covered and reimbursed under Medicare.
−Removed: Private payors tend to follow CMS to a substantial degree.
−Removed: It is difficult to predict what CMS will decide with respect to reimbursement for novel products and services such as ours.
+Added: In the United States, many significant decisions about reimbursement for new diagnostics and medicines are typically made by CMS, an agency within the HHS, and its contractors.
+Added: CMS and its contractors decide whether and to what extent a new diagnostic or medicine will be covered and reimbursed under Medicare.
+Added: Private payors tend to follow CMS policies to a substantial degree.
+Added: It is difficult to predict what CMS and its contractors will decide with respect to reimbursement for novel products and services such as ours.
Additionally, reimbursement agencies in Europe may be more conservative than CMS.
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For example, the U.S.
−Removed: government recently introduced the Lower Drug Costs Now Act of 2019 to reduce the cost of drugs.
+Added: government introduced the Lower Drug Costs Now Act of 2019 to reduce the cost of drugs.
This blueprint contains certain measures that HHS is already working to implement.
+Added: In addition, t he No Surprises Act (“NSA”) took effect in January 2022.
+Added: One of the goals of the NSA is to protect patients from “surprise” medical bills resulting from gaps in coverage for services provided by out-of-network providers, such as laboratories, related to patient visits at in-network facilities.
+Added: The NSA limits the amount out-of-network laboratories may charge a patient for laboratory services ordered during an in-network facility visit and establishes an independent dispute resolution process for determining the amount of reimbursement for the laboratory service in the event that the laboratory and insurer cannot agree on a rate.
+Added: To the extent the NSA limits the price charged for our diagnostic products or cellular therapeutics, the commercial viability of those products may be adversely affected.
At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological program pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, which are, in some cases, designed to encourage importation from other countries and bulk purchasing.
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We must maintain compliance with FDA requirements for our products and services and failure to maintain compliance with FDA requirements may prevent or delay the marketing of our products and services.
−Removed: Even after we have obtained marketing authorization, as we have for clonoSEQ, we must comply with the scope of that clearance, authorization or approval.
+Added: Even after we have obtained marketing authorization, as we have for clonoSEQ and T-Detect COVID under an EUA, we must comply with the scope of that clearance, authorization or approval.
Failure to comply with those limitations or the additional, extensive and ongoing post-marketing obligations imposed by the FDA or other regulatory requirements of other regulatory agencies could result in unanticipated compliance expenditures, a range of administrative enforcement actions, injunctions and criminal prosecution.
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If any such investigations or actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, which could have a significant impact on our business.
−Removed: We currently have a compliance program in accordance with the elements of an effective program outlined by the OIG, which could help mitigate damages, but cannot prevent all misconduct.
+Added: We currently have a compliance program in accordance with the elements of an effective program outlined by the HHS OIG, which could help mitigate damages, but cannot prevent all misconduct.
Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees, suffer adverse publicity and reputational harm, and have the attention of management diverted in defending ourselves against any of these claims or investigations.
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The term “remuneration” expressly includes kickbacks, bribes or rebates and has been broadly interpreted to include anything of value, including gifts, discounts, waivers of payment, ownership interests and any goods or services provided at less than their fair market value.
−Removed: We are also subject to the Beneficiary Inducement Statute set forth in the civil monetary penalty provisions of the AKS.
There are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, however, these exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny.
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A person or entity does not need to have actual knowledge of the AKS or specific intent to violate any AKS provisions to have committed a violation.
+Added: In addition, renumeration may not be offered or provided to beneficiaries under the vili monetary penalty law provision prohibiting inducements to beneficiaries.
Section 8122 of the SUPPORT Act, EKRA, which establishes an all-payor anti-kickback prohibition that extends to arrangements with recovery homes, clinical laboratories and clinical treatment facilities.
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Many states have comparable laws that are not limited to Medicare and Medicaid referrals.
−Removed: The Stark Law also places an annual cap, currently at $429 for 2021, on the amount of non-monetary compensation, which consists of meal spend and educational items, that a company can spend on a physician in the aggregate.
+Added: The Stark Law also places an annual cap on the amount of non-monetary compensation, which consists of meal spend and educational items, that a company can spend on a physician in the aggregate.
This annual cap requires careful tracking and coordination and if it is exceeded, as long as the amount exceeded is less than 50% of the total annual cap and is recouped from the physician within 180 calendar days or before the end of the calendar year, it is not a violation.
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GINA, which restricts employers and health insurance companies from requiring or using the results of genetic tests in specific contexts and does not provide a private right of action.
−Removed: A number of states have also adopted laws regarding genetic tests, some aligned with GINA and some with broader applicability, including granting broader rights to individuals.
+Added: A number of states have also adopted laws regarding genetic tests, some aligned with GINA and some with broader applicability, including granting broader rights to individuals and imposing strict obligations on organizations to safeguard genetic data and the results of any such testing.
The Physician Payments Sunshine Act created under the ACA, and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program, with certain exceptions, to annually report to HHS information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
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While we strive to comply with all applicable privacy and security laws and regulations, including, in our case, our own posted privacy policies, legal standards for privacy, including but not limited to “unfairness” and “deception,” as enforced by the FTC and state attorneys general, these laws and regulations continue to evolve and any failure or perceived failure to comply may result in proceedings or actions against us by government entities or others, or could cause us to lose customers, which could have a material adverse effect on our business.
−Removed: Recently, there has been an increase in public awareness of privacy issues in the wake of revelations about the data-collection activities of various government agencies and in the number of private privacy-related lawsuits filed against companies (including a new private right of action under the CCPA as described below).
+Added: Recently, there has been an increase in public awareness of privacy issues in the wake of revelations about the data-collection activities of various government agencies and in the number of private privacy-related lawsuits filed against companies (including a private right of action under the CCPA and other similar state laws, as described below).
Concerns about our practices with regard to the collection, use, retention, disclosure or security of personal information or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws, could damage our reputation and harm our business.
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The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain or malicious harm.
−Removed: In addition, responding to government investigations regarding alleged violations of these and other laws and regulations, even if they ultimately result in no findings of violations or no penalties imposed, can consume our resources and impact our business and, if public, harm our reputation.
+Added: In addition, responding to government investigations or related third-party private rights of action regarding alleged violations of these and other laws and regulations, even if they ultimately result in no findings of violations or no penalties imposed, can consume our resources and impact our business and, if public, harm our reputation.
Computer networks are vulnerable to breach and unauthorized persons may in the future be able to exploit weaknesses in the security systems of our computer networks and gain access to PHI.
4 unchanged sentences
Further, various states, such as California, New York and Massachusetts, have implemented similar privacy laws and regulations, such as the California Confidentiality of Medical Information Act, that impose restrictive requirements regulating the use and disclosure of health information and other personal information.
−Removed: These laws and regulations are not necessarily preempted by HIPAA, but they afford greater protection to individuals than HIPAA.
+Added: These laws and regulations are not necessarily preempted by HIPAA, but they have a wider scope and afford greater protection to individuals than HIPAA.
Where state laws are more protective, we and our collaborators must comply with the stricter provisions where they apply.
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Changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as PHI, along with increased customer demand for enhanced data security infrastructure, could greatly increase the cost of providing our products and services, decrease demand for our products and services, reduce our revenue and subject us to additional liabilities.
−Removed: In addition, the interpretation and application of consumer, health-related and data protection laws, especially with respect to genetic samples and data, in the United States, the EU and elsewhere, are often uncertain, contradictory and in flux.
−Removed: We may eventually operate in a number of countries outside of the United States whose laws may in some cases be more stringent than the requirements in the United States.
+Added: We currently operate in some and may eventually operate in additional countries outside of the United States whose laws may in some cases be more stringent than the requirements in the United States.
For example, the EU has specific requirements relating to cross-border transfers of personal data to certain jurisdictions, including to the United States.
1 unchanged sentence
Moreover, international privacy and data security regulations may become more complex and result in greater penalties.
−Removed: For instance, as of May 25, 2018, the GDPR, has replaced the EU Data Protection Directive with respect to the collection and use of personal data of data subjects in the EU and the EEA.
−Removed: The GDPR applies extra-territorially under certain circumstances and imposes stringent requirements on controllers and processors of personal data, including, for example, requirements to obtain consent or other legal bases from individuals to process their personal data, provide robust disclosures to individuals, accommodate a set of individual data rights, provide data security breach notifications within 72 hours after discovering the breach, limit retention of personal information and apply enhanced protections to health data and other special categories of personal data.
+Added: For instance, the GDPR governs the collection and use of personal data of data subjects in the EU and the EEA.
+Added: The GDPR applies extra-territorially under certain circumstances and imposes stringent requirements on controllers and processors of personal data, including, for example, requirements to obtain consent or other legal bases from individuals to process their personal data, provide robust disclosures to individuals, accommodate a set of individual data rights, provide data security breach notifications within 72 hours after becoming aware of the breach, limit retention of personal information and apply enhanced protections to health data and other special categories of personal data.
The GDPR also applies to pseudonymized data, which is defined as “the processing of personal data in such a way that the data can no longer be attributed to a specific data subject without the use of additional information,” and imposes additional obligations when we contract with third-party processors in connection with the processing of any personal data.
−Removed: The GDPR provides that EU member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data, which could limit our ability to use and share personal data, could cause our costs to increase and could harm our financial condition.
+Added: The GDPR provides that EU m ember s tates may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data, which could limit our ability to use and share personal data, could cause our costs to increase and could harm our financial condition.
Failure to comply with the requirements of the GDPR and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of our preceding fiscal year, whichever is higher, and other administrative penalties.
−Removed: To comply with the new data protection rules imposed by the GDPR, we may be required to put in place additional mechanisms ensuring compliance, which may result in other substantial expenditures.
+Added: Compliance with the GDPR requires us to put in place and maintain additional policies, procedures and documentation that may not have been required under the preceding framework, which may result in other substantial expenditures.
This may be onerous and adversely affect our business, financial condition, results of operations and the profitability of our platform of products and services.
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In addition, these rules are consistently under scrutiny.
−Removed: In July 2020, the CJEU invalidated the EU-US Privacy Shield, effective immediately, one of the methods for transfers of personal data into the US.
−Removed: The court found that under US surveillance laws, the US government has access to personal data that does not provide Europeans with privacy protections equivalent with the level of protection required under EU law.
−Removed: The Standard Contractual Clauses, which are currently being revised by the European Commission, are still valid but given the court's findings on US surveillance laws, a future case might deem transfers to the United States based on Standard Contractual Clauses invalid because they fail to meet that "essentially equivalent to that guaranteed within the EU" standard.
+Added: In July 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-US Privacy Shield, effective immediately, one of the methods for transfers of personal data into the US.
+Added: The CJEU found that under US surveillance laws, the US government has access to personal data that does not provide Europeans with privacy protections equivalent with the level of protection required under EU law and required companies based outside of the EU/EEA to implement additional protective measures to safeguard data from the EU/EEA.
+Added: Furthering these requirements, the European Commission published a revised set of Standard Contractual Clauses in June 2021, which replace the former Standard Contractual Clauses on all existing transfers by December 2022 and impose additional technical and organizational measures on companies.
+Added: Despite these recent changes, there is continued uncertainty in this area given that EU supervisory authorities are increasingly fining companies based in the United States for data transfers.
+Added: In addition, given the CJEU’s findings on US surveillance laws, a future case might deem transfers to the United States based on Standard Contractual Clauses invalid because they fail to meet that "essentially equivalent to that guaranteed within the EU" standard.
In addition to the GDPR, we continue to expand our business into several jurisdictions that have data privacy laws or begin to develop new data privacy laws.
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If our operations are found to be in violation of any of the data protection laws described above or any other laws that apply to us, we may be subject to penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in government healthcare programs, injunctions, private qui tam actions brought by individual whistleblowers in the name of the government, class action litigation and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corrective action plan or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: In addition, the interpretation and application of consumer, health-related and data protection laws, especially with respect to genetic samples and data, in the United States, the EU and elsewhere, are changing and are also often uncertain, contradictory and in flux.
+Added: Within the United States, an increasing number of states have been and continue to add privacy bills to their legislative calendars each year.
+Added: While not all of these bills become law, they add significant uncertainty about additional obligations or potential penalties.
+Added: There are parallel activities at the federal level, with proposed rulemaking related to the FTC Act and HIPAA underway, as well as the potential of a federal privacy law similar to the GDPR.
+Added: There are similar trends at the international level, with potential new laws, as well as interpretation of existing laws (e.g., GDPR) that may impact Adaptive’s operations.
+Added: These uncertainties are confounded by parallel changes in laws adjacent to privacy, such as those impacting machine learning and artificial intelligence or data use, and we may incur substantial expense or experience disruption as related to compliance with these laws, which would adversely affect our ability to conduct our business.
Security breaches, loss of data and other disruptions could compromise confidential, personal and sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.
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Courts frequently render opinions in the biotechnology field that may affect the patentability of certain inventions or discoveries, including opinions that may affect the patentability of methods and compositions of matter useful in relation to immunosequencing.
−Removed: The patent position of companies engaged in the development and commercialization of clinical diagnostic tests, like our clonoSEQ diagnostic test, are particularly uncertain.
+Added: The patent position of companies engaged in the development and commercialization of clinical diagnostic tests, like our clonoSEQ diagnostic test and T-Detect products, are particularly uncertain.
Various courts, including the U.S.
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We may not be able to protect and enforce our trademarks.
−Removed: We have not yet registered certain of our trademarks in all of our potential markets, although we have registered Adaptive Biotechnologies, clonoSEQ, immunoSEQ, pairSEQ and TruTCR in the United States, the EU and a number of other countries and are seeking to register additional trademarks, including our new corporate logos, T-Detect and TruAB for our antibody development program.
+Added: We have not yet registered certain of our trademarks in all of our potential markets, although we have registered Adaptive Biotechnologies, clonoSEQ, immunoSEQ, pairSEQ and TruTCR in the United States, the EU and a number of other countries and are seeking to register additional trademarks, including our new corporate logos, certain slogans, T-Detect and TruAB for our antibody development program.
As we apply to register our unregistered trademarks in the United States and other countries, our applications may not be allowed for registration in a timely fashion or at all, and our registered trademarks may not be maintained or enforced.
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The market price of our common stock is volatile and is likely to continue to fluctuate substantially.
−Removed: We are a new public company and the market price of our common stock has been and is likely to continue to be highly volatile and may fluctuate substantially due to many factors, many of which are beyond our control.
+Added: The market price of our common stock has been and is likely to continue to be highly volatile and may fluctuate substantially due to many factors, many of which are beyond our control.
These factors include:
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The market price of our common stock might also decline in reaction to events that affect other companies within, or outside, our industry even if these events do not directly affect us.
+Added: Any decline in the market price of our common stock may impair our ability to raise capital through the sale of equity securities.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price.
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If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
−Removed: The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes.
+Added: The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources.
−Removed: If our assumptions change or if actual circumstances differ from our assumptions, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
+Added: If our assumptions change or if actual circumstances differ from our assumptions, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock and potentially impair our ability to raise capital through the sale of equity securities.
Substantial future sales or perceived potential sales of our common stock or other equity securities in the public market could cause the price of our common stock to decline significantly.
2 unchanged sentences
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), we are required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
−Removed: However, while we were an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, our auditors were not required to formally attest to the effectiveness of our internal control over financial reporting.
−Removed: As of the end of our fiscal year ended December 31, 2020, we qualified as a “large accelerated filer” as defined in the Exchange Act and, as a result, ceased to qualify as an emerging growth company.
−Removed: Accordingly, commencing with our Annual Report on Form 10-K for the year ended December 31, 2020, we are required to have our auditors formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.
Our compliance with Section 404 necessitates that we incur substantial accounting expense and expend significant management efforts.
1 unchanged sentence
Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404.
−Removed: This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
+Added: This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our consolidated financial statements.
We are also required to maintain disclosure controls and procedures.
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Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our shareholders will not be deemed to have waived our compliance with these laws, rules and regulations.
−Removed: These exclusive-forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
+Added: These exclusive-forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees or cause shareholders to incur additional costs to bring claims in the forums designated in our Articles of Incorporation.
If a court were to find these exclusive-forum provisions in our Articles of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
−Removed: For example, the Court of Chancery of the State of Delaware recently determined that a provision stating that U.S.
−Removed: federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable under Delaware law.
−Removed: It is unclear whether the Delaware Supreme Court will review and ultimately overturn this decision, and whether Washington courts would reach a similar conclusion under Washington law.
+Added: 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 jurisdiction other than those designated in the exclusive forum provision, and the provision may not be enforced by a court in that jurisdiction.
+Added: It is unclear whether Washington courts would reach a similar conclusion under Washington law.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.
1 unchanged sentence
Our Articles of Incorporation provide that we will indemnify our directors and officers to the fullest extent permitted by Washington law.
−Removed: In addition, as permitted by Section 23B.08.510 through Section 23B.08.570 of the WBCA, our Articles of Incorporation and our indemnification agreements that we have entered into with our directors and officers provide that:
+Added: In addition, as permitted by Section 23B.08.510 through Section 23B.08.570 of the WBCA, our Articles of Incorporation and our indemnification agreements that we have entered into with most of our directors and officers provide that:
We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Washington law.
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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.