What changed in this filing

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Item 1A. Risk Factors

2021-11-04 compared with 2021-08-05 · 64 added, 59 removed, 1382 unchanged (8% of the section changed)

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In addition, we have limited experience as a company and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry.

Only two of our drug candidates, ALG‑010133 and ALG-000184, are currently in clinical development.

Since inception, we have incurred significant net losses.

Our net losses were $57.5 million for the six months ended June 30, 2021 and $108.5 million for the year ended December 31, 2020.

As of June 30, 2021, we had a total stockholders’ equity of $168.9 million.

Our net losses were $90.6 million for the nine months ended September 30, 2021 and $108.5 million for the year ended December 31, 2020.

As of September 30, 2021, we had a total stockholders’ equity of $217.0 million.

We have funded our operations to date primarily with proceeds from the sale of common stock, preferred stock and convertible notes.

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obtaining market acceptance of drug candidates that we develop as viable treatment options;

addressing any competing technological and market developments;

technological and market developments;

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations in such collaborations;

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Nonclinical studies and clinical trials and additional research and development activities will require substantial funds to complete.

As of June 30, 2021, we had cash, cash equivalents and short-term investments of $190.7 million.

As of September 30, 2021, we had cash, cash equivalents and investments of $242.7 million.

In October 2020, we issued an aggregate of 3,569,630 shares of our Series B-2 redeemable convertible preferred stock in the second tranche of our Series B convertible preferred stock financing for aggregate proceeds to us of $40.0 million.

In addition, we have received net proceeds of $151.4 million from the sale of an aggregate of 11,150,000 shares of our common stock on October 20, 2020 and on November 5, 2020 as part of our IPO, and net proceeds of $77.9 million from the sale of 4,400,000 shares of our common stock on July 6, 2021 as part of our Follow-on Offering.

We expect to continue to spend substantial amounts to continue the nonclinical and clinical development of our current and future programs.

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As a result of these developments, we implemented work-from-home policies for most of our employees.

Since the availability of COVID-19 vaccines, the majority of our U.S.

Since the availability of COVID-19 vaccines, almost all of our U.S.

employees have been fully vaccinated and as a result, we are allowing such employees to return to work at our U.S.

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In addition, while the duration and severity of the effects of COVID-19 may be difficult to assess or predict, a continuing widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity and ability to progress our operations.

In addition, a recession, down-turn or market correction resulting from the COVID-19 pandemic could materially adversely affect the value of our common stock.

In addition, a recession, down-turn, market correction or supply chain disruption resulting from the COVID-19 pandemic or other health pandemics or epidemics could materially adversely affect the value of our common stock.

Risks related to product development and regulatory process

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Our clinical development efforts across our drug candidates are in an early stage.

We have initiated clinical trials for our most advanced drug candidates, ALG-010133 and ALG-000184 in many countries including New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova.

We have initiated clinical trials for our most advanced drug candidates in many countries, ALG-010133 and ALG-000184 in New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova and ALG-020572 in New Zealand.

Our other programs are in the discovery or nonclinical development stage.

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As an organization, we have not yet completed any clinical trials for any of our drug candidates.

Each of our lead drug candidates, ALG-010133 and ALG-000184, is currently being evaluated in Phase 1 clinical trials in many countries, including New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova.

Each of our lead drug candidates, ALG-010133, ALG-000184 and ALG‑020572 is currently being evaluated in Phase 1 clinical trials in many countries, ALG-010133 and ALG-000184 in New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova, and ALG-020572 in New Zealand.

As a company, we have limited experience in preparing, submitting and prosecuting regulatory filings.

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While the scope of regulatory approval in other countries is generally similar to that in the United States, in order to obtain separate regulatory approval in other countries we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy.

Other countries also have their own regulations governing, among other things, clinical trials and commercial sales, as well as pricing and distribution of drugs, and we may be required to expend significant resources to obtain regulatory approval and to comply with ongoing regulations in these jurisdictions.

Other countries also have their own regulations governing, among other things, clinical trials and

commercial sales, as well as pricing and distribution of drugs, and we may be required to expend significant resources to obtain regulatory approval and to comply with ongoing regulations in these jurisdictions.

The success of our current and future drug candidates will depend on many factors, which may include the following:

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the timely and successful completion of our nonclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;

acceptance of investigational new drug applications (INDs), CTAs and/or similar applications in other jurisdictions for our planned and future clinical trials;

acceptance of investigational new drug applications (INDs), clinical trial applications (CTAs) and/or similar applications in other jurisdictions for our planned and future clinical trials;

whether we are required by the FDA or a comparable foreign regulatory agency to conduct additional clinical trials or other studies beyond those planned to support approval of our drug candidates;

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Before we can commence clinical trials for a drug candidate, we must complete extensive nonclinical studies that support our planned INDs or CTAs in the United States and other countries.

At this time, we have two drug candidates (ALG-010133 and ALG-000184) being evaluated in Phase 1 clinical trials in many countries, including New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova.

At this time, we have three drug candidates (ALG-010133, ALG-000184 and ALG‑020572) being evaluated in Phase 1 clinical trials in many countries, ALG-01033 and ALG-000184 in New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova, and ALG-020572 in New Zealand.

The rest of our programs are in nonclinical research or earlier stages of development, including our other chronic hepatitis B (CHB) drug candidates, our nonalcoholic steatohepatitis (NASH) drug candidate and our coronavirus drug candidates.

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Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our drug candidates.

Further, we are currently conducting a clinical trial for each of ALG-010133 and ALG-000184 in many countries, including New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova.

We may also in the future conduct clinical trials for ALG-010133, ALG-000184 and other drug candidates in other countries and territories which presents additional risks that may delay completion of our clinical trials.

Further, we are currently conducting clinical trials of ALG-010133, ALG-000184 and ALG-020572 in many countries, ALG-010133 and ALG-000184 in New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova and ALG-020572 in New Zealand.

We may also in the future conduct clinical trials for these and other drug candidates in other countries and territories which presents additional risks that may delay completion of our clinical trials.

These risks include the possibility that we could be required to conduct additional nonclinical studies before initiating any clinical trials, may be unable to enroll and retain patients as a result of differences in healthcare services, research guidelines or cultural customs, or may face additional administrative burdens associated with comparable foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

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Significant clinical trial delays could also allow our competitors to bring products to market before we do, shorten any periods during which we may have the exclusive right to commercialize our drug candidates, impair our ability to commercialize our drug candidates and harm our business and results of operations.

Specifically, the clinical trial sites for our current drug trials, including for ALG-010133 and ALG-000184, and future planned trials may be affected by the COVID-19 outbreak due to prioritization of hospital resources toward COVID-19 efforts, travel or quarantine restrictions imposed by national, federal, state or local governments, and the inability to access sites for initiation and patient monitoring and enrollment.

Specifically, the clinical trial sites for our current drug trials, including for ALG-010133, ALG-000184, and ALG‑020572 and future planned trials may be affected by the COVID-19 outbreak due to prioritization of hospital resources toward COVID-19 efforts, travel or quarantine restrictions imposed by national, federal, state or local governments, and the inability to access sites for initiation and patient monitoring and enrollment.

As a result, patient screening, new patient enrollment, monitoring and data collection may be affected or delayed.

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For example, in June 2020, we entered into a Research, Licensing and Commercialization Agreement (the KU Leuven Agreement) with Katholieke Universiteit Leuven (KU Leuven) under which we are collaborating with KU Leuven’s Rega Institute for Medical Research, as well as its Centre for Drug Design and Discovery, to research, develop, manufacture and commercialize potential protease inhibitors for the treatment of coronaviruses, including SARS-CoV-2.

We are in the earliest stages of our collaboration under the KU Leuven Agreement.

We are in the early stages of our collaboration under the KU Leuven Agreement.

The KU Leuven Agreement may not result in a therapy that successfully treats SARS-CoV-2.

Further, if the KU Leuven Agreement does result in such a therapy, the therapy may not be developed and commercialized in a timely manner.

Further, if the KU Leuven Agreement does result in such a therapy, the therapy may not be developed and commercialized in a timely manner, or at all.

We are also committing significant financial resources and personnel to the development of potential therapies for COVID-19, which may cause delays in or otherwise negatively impact our other development programs, despite uncertainties surrounding the longevity and extent of COVID-19 as a global health concern.

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recently announced its COVID-19 experimental drug (an orally administered protease inhibitor) which entered the clinic in March 2021, may be available by the end of 2021.

Similarly, Merck (together with Ridgeback Bio), is developing the drug Molnupiravir , an antiviral drug currently in a Phase 3 clinical trial which has the potential to become the first oral COVID-19 treatment.

Similarly, Merck (together with Ridgeback Bio), is developing the drug Molnupiravir , an antiviral drug which has been submitted to the FDA for Emergency Use Authorization (EUA) , which has the potential to become the first oral COVID-19 treatment.

Also, Enanta Pharmaceuticals recently announced nomination of clinical candidate EDP-235 which is its lead oral protease inhibitor specifically designed for the treatment of Covid-19 and which is planned to enter the clinic early 2022.

In such an event, the value and/or market potential of our COVID-19 protease inhibitor program which is further behind in terms of development process may be adversely impacted.

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Results from our continued development and planned clinical trials may raise new questions and require us to redesign proposed nonclinical studies and clinical trials, including revising proposed endpoints or adding new clinical trial sites or cohorts of subjects, with minimal lead time.

The FDA has the authority to grant an Emergency Use Authorization (EUA) to allow unapproved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives.

For instance, the FDA granted an EUR for each of the COVID-19 vaccines developed by Pfizer/BioNTech, Moderna and Janssen Pharmaceutical Companies of Johnson & Johnson.

The FDA has the authority to grant an EUA to allow unapproved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives.

For instance, the FDA had granted an EUA for each of the COVID-19 vaccines developed by Pfizer/BioNTech, Moderna and Janssen Pharmaceutical Companies of Johnson & Johnson.

Depending on the outcomes of our planned nonclinical and initial clinical testing for our proposed COVID-19 therapies, we may seek an EUA for one or more of our drug candidates for use in the ongoing public health emergency, which would permit us to commercialize a drug candidate prior to FDA approval of an NDA.

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There can be no assurance that any of our current or future clinical trials will ultimately be successful or support further clinical development of any of our drug candidates.

Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval of any products.

Even if our clinical trials are completed, the results may not be sufficient to obtain

regulatory approval of any products.

Any such setbacks in our clinical development could have a material adverse effect on our business and operating results.

Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data.

From time to time, we may disclose interim data from our clinical trials, including the preliminary data included herein with respect to our CAM candidate, ALG-000184, and our STOPS candidate, ALG-000133.

From time to time, we may disclose interim data from our clinical trials, including the preliminary data with respect to our CAM candidate, ALG-000184, our STOPS candidate, ALG-000133, and our ASO candidate ALG‑020572.

Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more data on existing patients become available.

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If any current or future drug candidate we develop receives marketing approval, whether as a single agent or in combination with other therapies, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, and others in the medical community, or such participants may prefer existing treatment options such as nucleos(t)ide analogs including tenofovir and entecavir.

If the drug candidates we develop do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.

If the drug candidates we develop do not achieve an adequate level of acceptance, we may not generate significant

product revenues and we may not become profitable.

The degree of market acceptance of any drug candidate, if approved for commercial sale, will depend on a number of factors, including:

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Any marketing approvals that we receive for any current or future drug candidate may be subject to limitations on the approved indicated uses for which the product may be marketed, or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the drug candidate.

The FDA may also require a REMS as a condition of approval of any drug candidate, which could include requirements for a Medication Guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk-minimization tools.

The FDA may also require a REMS as a condition of approval of

any drug candidate, which could include requirements for a Medication Guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk-minimization tools.

In addition, if the FDA or a comparable foreign regulatory authority approves a drug candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import and export and record keeping for the product will be subject to extensive and ongoing regulatory requirements.

These requirements include submissions of safety and other post-marketing information and reports, establishment registration, as well as continued compliance with current Good Manufacturing Practice, or cGMP, and Good Clinical Practice, or GCP, for any clinical trials that we conduct post-approval.

Later discovery of previously

unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls;

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Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries.

For example, we are conducting our initial clinical trials for ALG-010133 and ALG-000184 in many countries, including New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova, and plan to conduct additional clinical trials in several other countries and territories within the Asia Pacific and/or Europe and our conduct of the trials must satisfy specific requirements in order for the FDA to accept the data in support of an IND or NDA in the United States.

For example, we are conducting our initial clinical trials for ALG-010133, ALG-000184 and ALG-020572 in many countries, ALG-010133 and ALG-000184 in New Zealand, Hong Kong, the United Kingdom, South Korea, China and Moldova and ALG-020572 in New Zealand, and plan to conduct additional clinical trials in several other countries and territories within the Asia Pacific and/or Europe and our conduct of the trials must satisfy specific requirements in order for the FDA to accept the data in support of an IND or NDA in the United States.

Further, any regulatory approval for our drug candidates may be withdrawn.

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For example, BioNTech SE (together with Pfizer Inc.), Janssen Pharmaceutical Companies of Johnson & Johnson and Moderna Inc.

have developed COVID-19 vaccines that have received authorization for emergency use and are being widely administered.

have developed COVID-19 vaccines that have received authorization for emergency use and/or regulatory approval are being widely administered.

In addition, Pfizer, Inc.

recently announced its COVID-19 experimental drug (an orally administered protease inhibitor) which entered the clinic in March 2021, may be available by the end of 2021.

Similarly, Merck (together with Ridgeback Bio), is developing the drug Molnupiravir, an antiviral drug currently in a Phase 3 clinical trial which has the potential to become the first oral COVID-19 treatment.

Similarly, Merck (together with Ridgeback Bio), is developing the drug Molnupiravir, an antiviral drug which has been submitted to the FDA for EUA which has the potential to become the first oral COVID-19 treatment.

The availability of such COVID-19 vaccines and Pfizer’s oral COVID-19 drug may reduce or eliminate the need for our potential COVID therapies to treat the disease and therefore negatively impact the commercial opportunity therefor.

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However, due to the significant resources required for the development of our drug candidates, we must focus on specific diseases and disease pathways and decide which drug candidates to pursue and the amount of resources to allocate to each.

Our near-term objective is to demonstrate favorable risk/benefit profiles through Phase 1 clinical trials of our drug candidates, ALG-010133 and ALG-000184.

Our near-term objective is to demonstrate favorable risk/benefit profiles through Phase 1 clinical trials of our drug candidates, ALG-010133, ALG-000184 and ALG‑020572.

Our estimates regarding the potential market for our drug candidates could be inaccurate and our decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular drug candidates or therapeutic areas may not lead to the development of any viable commercial product and may divert resources away from better opportunities.

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The ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new 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 being covered under Medicare Part D.

Since its enactment, there have been judicial, executive and Congressional challenges to the ACA.

By way of example, the Tax Cuts and Jobs Act of 2017 (the TCJA) was signed into law, which included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year, commonly referred to as the individual mandate.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the TCJA.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit ruled that that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is currently reviewing this case, although it is unclear how the Supreme Court will rule.

It is also unclear how other efforts, if any, to challenge, repeal or replace the ACA will impact the ACA or our business.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, re-examining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact the ACA or our business.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

On August 2, 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year.

These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken.

These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken.

In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers.

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We do not have the ability to independently conduct certain nonclinical studies and clinical trials.

We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs, to conduct or otherwise support certain nonclinical studies and clinical trials for our drug candidates, including ALG‑010133 and ALG‑000184, and we control only certain aspects of their activities.

We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs, to conduct or otherwise support certain nonclinical studies and clinical trials for our drug candidates, including ALG‑010133, ALG‑000184 and ALG‑020572, and we control only certain aspects of their activities.

Nevertheless, we are responsible for ensuring that each of our nonclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on CROs will not relieve us of our regulatory responsibilities.

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We rely on third parties for supply of our nonclinical and clinical drug supplies (including key starting and intermediate materials), and our strategy is to outsource all manufacturing of our drug candidates and products to third parties.

A disruption or termination in the supply of nonclinical or clinical drug supplies due to our reliance on third parties and/or a disruption in the supply chain generally could delay, prevent or impair our development or commercialization efforts.

In order to conduct clinical trials of drug candidates, we will need to have them manufactured in potentially large quantities.

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If we and our current or future collaborators and licensors are unable to obtain and maintain sufficient intellectual property protection for our drug candidates or other drug candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize drug candidates similar or identical to ours, and our ability to successfully commercialize our drug candidates and other drug candidates that we may pursue may be impaired.

We do not own any issued patents with respect to our programs, including our CHB and NASH programs, and we do not own or in-license any issued patents with claims that specifically recite our ALG‑010133, ALG‑000184, ALG‑020572, ALG‑125755 and ALG-055009 drug candidates.

We can provide no assurance that any of our current or future patent applications will result in issued patents or that any issued patents will provide us with any competitive advantage.

While we own some issued or allowed patents with respect to our programs, including our CHB and NASH programs, we do not own or in-license any issued patents with claims that specifically recite our ALG‑020572 or ALG‑125755 drug candidates.

We can provide no assurance that any of our other current or future patent applications will result in issued patents or that any issued patents will provide us with any competitive advantage.

We cannot be certain that there is no invalidating prior art of which we and the patent examiner are unaware or that our interpretation of the relevance of prior art is correct.

For example, there are certain patents and patent applications (and there may be other patents and patent applications) that are owned by third parties, including our competitors, that have (or may have) an earlier filing date, and could be determined to have an earlier priority date, than our patent applications relating to our STOPS candidate, ALG-010133.

If a patent or patent application is determined to have an earlier priority date, it may prevent our patent applications from issuing at all or issuing in a form that provides any competitive advantage for our product candidates.

Failure to obtain issued patents could have a material adverse effect on our ability to develop and commercialize our drug candidates.

Even if our patent applications do issue as patents, third parties may be able to challenge the validity and enforceability of our patents on a variety of grounds, including that such third party’s patents and patent applications have an earlier priority date, and if such challenges are successful, we may be required to obtain one or more licenses from such third parties, or be prohibited from commercializing our product candidates.

Failure to obtain additional issued patents could have a material adverse effect on our ability to develop and commercialize our drug candidates.

For example, there are certain patents and patent applications (and there may be other patents and patent applications) that are owned by third parties, including our competitors, that have (or may have) an earlier filing date, and such third parties may challenge our allowed patent relating to our STOPS candidate, ALG-010133.

If such challenge is successful, we may be required to obtain one or more licenses from such third parties or be prohibited from commercializing ALG-010133.

We may not be able to obtain these licenses on acceptable or commercially reasonable terms, if at all, or these licenses may be non-exclusive, which could result in our competitors using the same intellectual property.

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It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Moreover, under certain of our license or collaboration agreements, we may not have the right to control the preparation, filing, prosecution and maintenance of patent applications, or to maintain the rights to patents licensed to or from third parties.

Moreover, under certain of our license or collaboration agreements, we may not have

the right to control the preparation, filing, prosecution and maintenance of patent applications, or to maintain the rights to patents licensed to or from third parties.

We currently are the assignee of a number of U.S.

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We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of June 30, 2021, we had 86 full-time employees, including 71 employees engaged in research and development.

As of September 30, 2021, we had 86 full-time employees, including 71 employees engaged in research and development.

As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel.

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Our corporate headquarters and other facilities are located in the San Francisco Bay Area, which in the past has experienced both severe earthquakes and wildfires.

We are also conducting our initial clinical trials for ALG‑010133 and ALG‑000184 in New Zealand, an area also known for earthquakes.

We are also conducting our initial clinical trials for ALG‑010133, ALG‑000184 and ALG‑020572 in New Zealand, an area also known for earthquakes.

We do not carry earthquake insurance, and as such we would have to pay the full amount of any resultant liability out of pocket, which could significantly impair our financial condition.

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Our executive officers, directors and their affiliates have significant influence over our company, which will limit an investor’s ability to influence corporate matters and could delay or prevent a change in corporate control.

As of June 30, 2021, our executive officers, directors and their affiliates beneficially own, in the aggregate, approximately 57.2% of our outstanding common stock (assuming all shares of non-voting common stock are converted into voting common stock in accordance with the terms of our amended and restated certificate of incorporation).

As of September 30, 2021, our executive officers, directors and their affiliates beneficially own, in the aggregate, approximately 51.6% of our outstanding common stock (assuming all shares of non-voting common stock are converted into voting common stock in accordance with the terms of our amended and restated certificate of incorporation).

As a result, these stockholders, if they act together, will be able to influence our management and affairs and the outcome of matters submitted to our stockholders for approval, including the election of directors and any sale, merger, consolidation or sale of all or substantially all of our assets.

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If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline.

As of June 30, 2021, approximately 8,606,847 shares of common stock that are either subject to outstanding options or reserved for future issuance under our equity incentive plans are eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules and Rule 144 and Rule 701 under the Securities Act.

As of September 30, 2021, approximately 8,529,194 shares of common stock that are either subject to outstanding options or reserved for future issuance under our equity incentive plans are eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules and Rule 144 and Rule 701 under the Securities Act.

If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline.

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A severe or prolonged economic downturn, such as the 2008 global financial crisis, could result in a variety of risks to our business, including, weakened demand for any drug candidates we may develop and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.

A weak or declining economy or disruptions in the supply chain generally could also strain our suppliers, possibly resulting in supply disruption.

If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.

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As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.

Following a national referendum and enactment of legislation by the government of the United Kingdom, the United Kingdom formally withdrew from the European Union and ratified a trade and cooperation agreement governing its future relationship with the European Union.

The agreement, which is being applied provisionally from January 1, 2021 until it is ratified by the European Parliament and the Council of the European Union, addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things.

Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the United Kingdom and the European Union as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.

These developments, or the perception that any related developments could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital.

Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our common stock.

The United Kingdom’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our business.

Following the United Kingdom’s departure from the EU on January 31, 2020, and the end of the “transition period” on December 31, 2020, the EU and the United Kingdom have entered into a trade and cooperation agreement (TCA) which governs certain aspects of their future relationship, including ensuring tariff-free trade for certain goods and services.

Since the regulatory framework for pharmaceutical products in the United Kingdom relating to quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit will materially impact the future regulatory regime which applies to products and the approval of product candidates in the United Kingdom.

Longer term, the United Kingdom is likely to develop its own legislation that diverges from that in the EU.

The TCA provides details on how some aspects of the United Kingdom’s and EU’s relationship will operate going forwards, however there are still many uncertainties.

The uncertainty concerning the United Kingdom’s legal, political and economic relationship with the EU since Brexit may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise).

These developments have had, and may continue to have, a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets.

We are subject to certain U.S.

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What changed 10-Q

Item 1A. Risk Factors