What changed in this filing

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Item 1A. Risk Factors

2022-03-15 compared with 2021-02-25 · 173 added, 374 removed, 934 unchanged (37% of the section changed)

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These risk factors and other uncertainties may cause our actual future results or performance to differ materially from any future results or performance expressed or implied in the forward-looking statements contained in this report and in other public statements we make.

In addition, because of these risks and uncertainties, as well as other variables

affecting our operating results, our past financial performance is not necessarily indicative of future performance.

In addition, because of these risks and uncertainties, as well as other variables affecting our operating results, our past financial performance is not necessarily indicative of future performance.

See “Forward-Looking statements” in Item 1 of this Annual Report.

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To date, substantially all of our revenues have been derived from grants and contracts with governmental agencies, consisting primarily our BARDA contract for our anthrax vaccine product candidate.

We have incurred net losses in most periods since our inception, including a net loss of $49.0 million and $20.5 million for the years ended December 31, 2020 and 2019, respectively.

We have incurred net losses in most periods

since our inception, including a net loss of $97.1 million and $49.0 million for the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, we have an accumulated deficit of $293.2 million.

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● make royalty, milestone or other payments under any in-license agreements;

form strategic partnerships and/or makes additional acquisitions;

● form strategic partnerships and/or make additional acquisitions;

● maintain, protect and expand our intellectual property portfolio;

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We also test our indefinite-lived intangible assets for impairment at least annually in the fourth quarter, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value.

During 2019, the development activities under our SparVax-L governmental contract were completed with no future funding identified.

As a result of the contract completion and the US government’s funding prioritization of only single dose anthrax vaccine candidates, we impaired $1.0 million for the remaining net book value of the SparVax-L IPR&D asset during 2019.

As of December 31, 2021, we recorded non-cash impairment charges of $11.4 million for construction-in-progress assets that were previously capitalized in connection with the discontinuation of AdCOVID.

At December 31, 2021, we continued to carry $12.4 million of indefinite lived intangible assets.

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Therefore, we will use our existing cash resources, together with funding received from BARDA and MTEC, and will require additional funds to maintain our operations, continue our research and development programs, commence future preclinical studies and clinical trials, seek regulatory approvals and manufacture and market our products.

As of December 31, 2020, our cash and short-term investment balance was $216.0 million.

As of December 31, 2021, our cash, cash equivalents and restricted cash balance was $190.3 million.

Based on our current operating plan, we believe that our existing cash will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least a twelve-month period from the issuance date of our December 31, 2021 financial statements.

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● the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;

the amount of funding that we receive from BARDA, MTEC, other government agencies and other non-dilutive funding sources;

● the amount of funding that we receive from other non-dilutive funding sources;

● the number and development requirements of other product candidates that we pursue;

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Raising additional capital may cause dilution to stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates on unfavorable terms.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, BARDA funding, MTEC funding and license and development agreements through strategic partnerships with third parties.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that

adversely affect your rights as a stockholder.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, and license and development agreements through strategic partnerships with third parties.

Debt or preferred stock financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, issuing additional equity, making capital expenditures or declaring dividends.

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Our preclinical and clinical results are not necessarily predictive of the final results of our ongoing or future clinical trials.

We have completed a Phase 2 clinical trial of NasoVAX;

have initiated a Phase 2 clinical trial of HepTcell;

are conducting a Phase 1/2 clinical trial of T-COVID;

and, are currently in Phase 1 clinical development with NasoShield, ALT-801, and AdCOVID;.

Success in preclinical studies may not be predictive of similar results in humans during clinical trials, and successful results from early or small clinical trials of a product candidate may not be replicated in later and larger clinical trials.

Interim results from clinical trials may not be predictive of final results from clinical trials.

Additionally, we have utilized an “open-label” trial design in the past, and may do so again in the future.

An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo.

Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels.

Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment.

Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.

In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates for which we include an open-label clinical trial when studied in a controlled environment with a placebo or active control.

We have initiated a Phase 2 clinical trial of HepTcell and are currently in Phase 2 and Phase 1 clinical development with pemvidutide for multiple indications.

Success in preclinical studies may not be predictive of similar

results in humans during clinical trials, and successful results from early or small clinical trials of a product candidate may not be replicated in later and larger clinical trials.

Clinical trials are expensive, time consuming and uncertain as to outcome, and we cannot guarantee that any of these activities will be successful.

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If a larger workforce or one with a different skillset is ultimately required to maintain these operations, we may be unable to maximize our existing programs.

Interim and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to additional audit, validation and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim data, including interim top-line results or preliminary results from our clinical trials.

Any interim data and other results from our clinical trials may materially change as more patient data become available.

Preliminary or top-line results also remain subject to audit, validation and verification procedures that may result in the final data being materially different from the interim and preliminary data we previously published.

As a result, interim and preliminary data may not be predictive of final results and should be viewed with caution until the final data are available.

We may also arrive at different conclusions, or considerations may qualify such results, once we have received and fully evaluated additional data.

Differences between preliminary or interim data and final data could adversely affect our business.

The manufacture of our product candidates is complex and we may encounter difficulties in production, particularly with respect to acquisition of materials, process development or scaling-up of our manufacturing capabilities.

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We may be required to collect additional clinical data from any modified process prior to obtaining marketing approval for the product candidate produced with such modified process.

If clinical data are not ultimately comparable to that seen in the earlier trials in terms of safety or efficacy, we may be required to make further changes to our process

and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate .

In 2020, we initiated the manufacture of clinical lots of AdCOVID and in parallel began technology transfer to multiple commercial scale CMOs in preparation for process scale-up.

Although we have added, and are continuing to add, employees with experience in manufacturing products similar to our product candidates, we have limited experience as a company manufacturing product candidates for use in clinical trials and no experience as a company manufacturing product candidates for commercial supply.

We may never be successful in manufacturing product candidates in sufficient quantities or with sufficient quality for some or all of our clinical or commercial uses.

Even if we are successful in developing our manufacturing capabilities sufficient for our clinical and commercial uses, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, operator error, natural disasters, availability of qualified personnel, difficulties with logistics and shipping, problems regarding yields or stability of product, product contamination or other quality control issues, power failures, and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business.

Compliance with cGMP requirements and other quality or regulatory issues may arise during our internal efforts to manufacturing our product candidates, and with our current or any future CMOs.

If clinical data are not ultimately comparable to that seen in the earlier trials in terms of safety or efficacy, we may be required to make further changes to our process and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate.

Compliance with cGMP requirements and other quality or regulatory issues may arise with our current or any future contract manufacturing organizations (“CMOs”).

Furthermore, ongoing stability studies subsequent to manufacture must be periodically conducted to demonstrate that our product candidates do not undergo unacceptable deterioration over its shelf life.

If issues affecting the quality of our product candidates, our manufacturing facilities, or those of our CMOs are discovered, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the issue.

If issues affecting the quality of our product candidates, or those of our CMOs are discovered, such

manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the issue.

To the extent any adversely affected material is being used in an ongoing clinical trial, the FDA could impose a clinical hold on our study to investigate and remedy the quality issue.

We cannot assure that any manufactured product or product candidate will not suffer a loss is stability or that other issues relating to the manufacture of our product candidates will not occur in the future.

Additionally, we and our CMOs may experience manufacturing difficulties due to resource constraints, material constraints, or as a result of labor disputes or unstable political environments.

If we or our CMOs were to encounter any of these difficulties, our ability to provide our product candidate to patients in clinical trials, or to provide product for treatment of patients once approved, would be jeopardized.

We cannot assure that any manufactured product or product candidate will not suffer a loss in stability or that other issues relating to the manufacture of our product candidates will not occur in the future.

Additionally, our CMOs may experience manufacturing difficulties due to resource constraints, material constraints, or as a result of labor disputes or unstable political environments.

If our CMOs were to encounter any of these difficulties, our ability to provide our product candidate to patients in clinical trials, or to provide product for treatment of patients once approved, would be jeopardized.

We may encounter substantial delays in our clinical trials, or our clinical trials may fail to demonstrate the safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities.

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● delays or failure in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites;

delays or failure in obtaining required approvals from the Institutional Review Board (“IRB”) or other similar committees or bodies at each clinical trial site;

● delays or failure in obtaining required approvals from the IRB or other similar committees or bodies at each clinical trial site;

● imposition of a clinical hold by regulatory agencies for any reason, including safety concerns raised by other clinical trials of similar product candidates that may reflect an unacceptable risk with the patient population, technology platform, product stability or after an inspection of clinical operations or trial sites;

failure to perform clinical trials in accordance with the FDA’s Good Clinical Practices (“GCP”) or applicable regulatory guidelines in other countries, including the United Kingdom;

delays or failure in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;

any shelter-in-place orders from local, state or federal governments or clinical trial site policies resulting from the COVID-19 pandemic that determine essential and non-essential functions and staff, which may impact the ability of site staff to conduct assessments, or result in delays to the conduct of the assessments, as part of our clinical trial protocols, or the ability to enter assessment results into clinical trial databases in a timeline manner;

the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we anticipate or participant s may , including as a result of the COVID-19 pandemic, withdraw from our clinical trials, fail to complete dosing or fail to return for post-treatment follow-up at higher rates than we anticipate, any of which could result in significant delay;

● failure to perform clinical trials in accordance with the FDA’s GCP or applicable regulatory guidelines in other countries, including the United Kingdom and Australia;

● delays or failure in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites, including as a result of supply chain delays in obtaining materials for the manufacture of our clinical trial materials;

● delays in testing, analysis and other activities by our third-party contractors required in conducting and analyzing our clinical trials as a result of the ongoing COVID-19 pandemic;

● any shelter-in-place orders from local, state or federal governments or clinical trial site policies resulting from the ongoing COVID-19 pandemic that determine essential and non-essential functions and staff, which may impact the ability of site staff to conduct assessments, or result in delays to the conduct of the assessments, as part of our clinical trial protocols, or the ability to enter assessment results into clinical trial databases in a timeline manner;

● the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we anticipate or participants may, including as a result of the ongoing COVID-19 pandemic, withdraw from our clinical trials, fail to complete dosing or fail to return for post-treatment follow-up at higher rates than we anticipate, any of which could result in significant delay;

● withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate;

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Delays, including delays caused by the above factors, can be costly and could negatively affect our ability to complete a clinical trial.

For example, we have had delays in previous clinical trials, including those conducted for NasoVAX, as a result of clinical holds imposed by the FDA or other regulatory authorities and requests for additional or new information on vaccine product testing in connection with an Investigational New Drug (“IND”) submitted to the FDA.

We have previously experienced multiple failures during the manufacturing of clinical materials for use in a future NasoVAX Phase 2 clinical trial .

We have previously experienced multiple failures during the manufacturing of clinical materials for use in a NasoVAX Phase 2 clinical trial.

We cannot give any assurance that we will be able to resolve any future clinical holds imposed by the FDA or other regulatory authorities outside of the United States, or any delay caused by manufacturing failures or other factors described above or any other factors, on a timely basis or at all.

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The timing of our clinical trials depends on the speed at which we can recruit patients to participate in testing our product candidates.

If patients are unwilling to participate in our trials because of the COVID-19 pandemic and restrictions on travel or healthcare institution policies, negative publicity from adverse events in the biotechnology industries, public perception of vaccine safety issues or for other reasons, including competitive clinical trials for similar patient populations, the timeline for recruiting patients, conducting studies and

obtaining regulatory approval of potential products may be delayed.

If patients are unwilling to participate in our trials because of the ongoing COVID-19 pandemic and restrictions on travel or healthcare institution policies, negative publicity from adverse events in the biotechnology industries, public perception of vaccine safety issues or for other reasons, including competitive clinical trials for similar

patient populations, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential products may be delayed.

These delays could result in increased costs, delays in advancing our product development, delays in testing the effectiveness of our technology or termination of the clinical trials altogether.

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Consequently, it may be difficult to predict the time and cost of product development.

For example, the RespirVec platform involves intranasally administered adenovectored vaccines, the Densigen platform involves synthetic peptide T-cell vaccines and, the EuPort platform involves a novel peptide-based dual GLP-1/glucagon receptor agonist.

For example, the

RespirVec platform involves intranasally administered adenovectored vaccines, the Densigen platform involves synthetic peptide T-cell vaccines and, the EuPort platform involves a novel peptide-based dual GLP-1/glucagon receptor agonist.

Unforeseen problems with our approaches to vaccines and therapies may prevent further development or approval of our product candidates.

Because of the novelty of our approaches, there may be unknown safety risks associated with the vaccines that we develop or the clinical endpoints that we establish in trials may not be generally accepted by regulatory agencies, which may therefore require us to perform large field studies to demonstrate efficacy.

Because of the novelty of our approaches, there may be unknown safety risks associated with the vaccines and therapies that we develop or the clinical endpoints that we establish in trials may not be generally accepted by regulatory agencies, which may therefore require us to perform large field studies to demonstrate efficacy.

There can be no assurance that any development problems we may experience in the future will not cause significant delays or unanticipated costs, or that such development problems can be solved.

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Development of vaccines with novel adjuvants requires evaluation in larger numbers of patients prior to approval than would be typical for therapeutic drugs.

Guidelines for evaluation of vaccines with novel

adjuvants have been established by the FDA and other regulatory bodies and expert committees.

Guidelines for evaluation of vaccines with novel adjuvants have been established by the FDA and other regulatory bodies and expert committees.

Any vaccine, because of the presence of an adjuvant, may have side effects considered to pose too great a risk to patients to warrant approval of the vaccine.

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however, GSK pulled the vaccine due to low sales resulting from the negative public perception associated with the reports on joint pain.

In addition, parental aversion to new vaccines or vaccines in general may adversely influence later stage clinical trials of our COVID-19 product candidates or, if approved, its commercial success.

We rely, and expect to continue to rely, on third parties to conduct preclinical studies and clinical trials for our product candidates, and if they do not properly and successfully perform their obligations to us, we may not be able to obtain regulatory approvals for our product candidates.

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Furthermore, if these third parties do not successfully carry out their duties under their agreements, if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to clinical trial protocols or to regulatory requirements, or if they otherwise fail to comply with clinical trial protocols or meet expected deadlines, then the clinical trials of our product candidates may not meet regulatory requirements.

If clinical trials do not meet regulatory requirements or if these third parties need to be replaced, then preclinical development activities or clinical trials may be extended, delayed, suspended or terminated.

If clinical trials do not meet regulatory requirements

or if these third parties need to be replaced, then preclinical development activities or clinical trials may be extended, delayed, suspended or terminated.

If any of these events occur, we may not be able to obtain regulatory approval of our product candidates on a timely basis or at all.

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These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance on our behalf.

If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they cannot perform their contractual duties or obligations due to the impacts of the COVID-19 pandemic on their operations or at the sites they are overseeing, if they need to be replaced or if the quality or accuracy of the preclinical or clinical data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements or for other reasons, our development timelines, including clinical development timelines, may be extended, delayed or terminated and we may not be able to complete development of, receive regulatory approval of or successfully commercialize our product candidates.

If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they cannot perform their contractual duties or obligations due to the impacts of the ongoing COVID-19 pandemic on their operations or at the sites they are overseeing, if they need to be replaced or if the quality or accuracy of the preclinical or clinical data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements or for other reasons, our development timelines, including clinical development timelines, may be extended, delayed or terminated and we may not be able to complete development of, receive regulatory approval of or successfully commercialize our product candidates.

As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

If any of our relationships with these third parties terminates, we may not be able to enter into arrangements with alternative third parties or to do so on commercially reasonable terms.

Switching or adding additional third party service providers involves

additional cost and requires management time and focus.

Switching or adding additional third-party service providers involves additional cost and requires management time and focus.

In addition, there is a natural transition period when a new third-party service provider begins work.

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Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and manufacturing pharmaceutical products.

Large and established companies such as Roche, Novartis, Pfizer and Sanofi Pasteur, among others, compete in the same market as our product candidates.

Large and established companies such as Eli Lilly, Roche, Novo Nordisk, and Pfizer, among others, compete in the same market as our product candidates.

These companies compete with us with their greater experience and resources to support their research and development efforts, conduct testing and clinical trials, obtain regulatory approvals to market products, manufacture such products on a broad scale and market approved products.

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We also face competition from smaller companies who, like us, rely on investors to fund research and development and compete for co-development and licensing opportunities from large and established pharmaceutical companies.

We face competition from multiple biotechnology and bio-pharmaceutical companies, such as Pfizer, Moderna, AstraZeneca, Regeneron and Johnson & Johnson, that are in the process of developing vaccines and therapeutics against COVID-19.

Certain of these vaccine and therapeutic technologies are being developed at a faster rate than AdCOVID and T-COVID or have superior immunogenicity or manufacturability attributes.

We face competition for NasoShield, our single dose intranasal anthrax vaccine product candidate, from Emergent Biosolutions which manufactures the existing anthrax vaccine.

Additionally, we generally face substantial competition for government funding from companies that develop products with government contracts and grants.

We face competition for NasoVAX, our intranasal influenza candidate from Novavax, which is developing an influenza vaccine;

and a number of companies of varying sizes are also pursuing the development of a “universal” flu vaccine.

We face competition for ALT-801, our dual GLP-1/glucagon dual agonist product candidate for the treatment of NASH, from companies such as Intercept Pharmaceuticals, which is developing a farnesoid X receptor agonist;

Madrigal Pharmaceuticals, which is developing an orally administered, small-molecule, liver-directed, thyroid hormone receptor (THR) β-selective agonist;

and, Akero Therapeutics, which is developing a fibroblast growth factor 21 analog.

Finally, we face competition for HepTcell, our immunotherapeutic HBV product candidate, from companies such as Transgene which is developing an adenovirus-based vaccine;

Arrowhead Pharmaceuticals, which is developing an HBV therapeutic vaccine;

and Inovio, which is developing a DNA vaccine delivered by in vivo electroporation.

Any of these companies may develop competing products more rapidly than we do.

We face competition for pemvidutide, our dual GLP-1/glucagon dual agonist for the treatment of obesity and NASH.

For the treatment of obesity, we face competition from companies such as Novo Nordisk, whose GLP-1 agonist, brand named Wegovy, or compound name semaglutide, was approved in June 2020.

Other companies with potentially competitive candidates in development, include Eli Lilly with GLP-1/glucose-dependent insulinotropic polypeptide receptor (GIP) dual agonists;

Boehringer Ingelheim, Merck/Hamni Pharmaceutical, AstraZeneca, Innovent Biologics/Eli

Lilly and D&D Pharma, with GLP-1/glucagon receptor dual agonists;

Hanmi Pharmaceutical and Eli Lilly with GLP-1/glucagon/GIP triple agonists;

and, Novo Nordisk with Amylin and Amylin-GLP-1 combination candidates.

We face competition in NASH from companies such as Intercept Pharmaceuticals, which is developing a farnesoid X receptor agonist;

Madrigal Pharmaceuticals and Viking Therapeutics, which are developing orally administered, thyroid hormone receptor (THR) β-selective agonist;

Akero Therapeutics, 89Bio and Roche, which are developing fibroblast growth factor 21 analogs;

Novo Nordisk, which is developing a GLP-1 agonist;

Eli Lilly which is developing a GLP-1/GIP dual receptor agonist, Hanmi Pharmaeutical, which is developing a GLP-1/glucagon receptor/GIP receptor triple agonist;

and, Inventiva, which is developing a peroxisome proliferator-activated receptor (PPAR) agonist.

Finally, we face competition for HepTcell, our immunotherapeutic HBV product candidate, from companies such as Janssen, Vaccitech and VBI Vaccines, all of which are developing a therapeutic vaccine against chronic HBV infection.

In addition, many other companies are developing direct acting antivirals against HBV.

As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing and commercializing products before we do.

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If we are not able to compete effectively against potential competitors, our business will not grow, and our financial condition and operations will suffer.

We are heavily dependent on the success of our leading product candidates, AdCOVID and ALT-801.

If we ultimately are unable to develop, obtain regulatory approval for or commercialize AdCOVID, ALT-801, or any other product candidate, our business will be substantially harmed.

We are heavily dependent on the success of our leading product candidate, pemvidutide.

If we ultimately are unable to develop, obtain regulatory approval for or commercialize pemvidutide, or any other product candidate, our business will be substantially harmed.

We currently have no products approved for commercial distribution.

Our business strategy is to build a pipeline of product candidates using our proprietary platforms, including our leading product candidates AdCOVID and ALT-801, and to progress those product candidates through clinical development for the treatment of different types of diseases.

Our business strategy is to build a pipeline of product candidates using our proprietary platforms, including our leading product candidate, pemvidutide, and to progress the product candidate through clinical development for the treatment of different types of diseases.

We may not be able to develop products that are safe and effective for all or any of the indications that we target.

Even if we are successful in building a product pipeline, the potential product candidates that we identify may not be suitable for clinical development for a number of reasons, including causing harmful side effects or demonstrating other characteristics that indicate a low likelihood of receiving marketing

approval or achieving market acceptance.

If our methods of identifying potential product candidates fail to produce a pipeline of potentially viable product candidates, then our success as a business will be dependent on the success of fewer potential product candidates, which introduces risks to our business model and potential limitations to any success we may achieve.

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Our spending on current and future discovery and preclinical development programs and product candidates for specific indications may not yield any commercially viable products.

Furthermore, until such time as we are able to build a broader product candidate pipeline, if ever, any adverse developments with respect to our leading product candidates, AdCOVID and ALT-801, would have a more significant adverse effect on our overall business than if we maintained a broader portfolio of product candidates.

Furthermore, until such time as we are able to build a broader product candidate pipeline, if ever, any adverse developments with respect to our leading product candidate, pemvidutide, would have a more significant adverse effect on our overall business than if we maintained a broader portfolio of product candidates.

Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

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We are conducting our Phase 2 clinical trial of HepTcell in the U.S., United Kingdom, Canada, Germany and Spain;

conducting our ALT-801 Phase 1 clinical trial in Australia;

conducting our pemvidutide Phase 1 clinical trial in Australia;

and future clinical trials may be conducted in other foreign jurisdictions.

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● the acceptability of data obtained from studies conducted outside the United States to the FDA in support of U.S.

marketing authorizations, such as a BLA.

marketing authorizations, such as an NDA or BLA.

If we fail to successfully meet requirements for the conduct of clinical trials outside of the United States, we may be delayed in obtaining, or be unable to obtain, regulatory approval for our product candidates in the United States or in countries outside of the United States.

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We are highly dependent on members of our senior management, including Dr.

Vipin Garg, our President and Chief Executive Officer, Will Brown, our Chief Financial Officer, Dr.

Vipin Garg, our President and Chief Executive Officer, Richard Eisenstadt, our Chief Financial Officer, Dr.

Scott Harris, our Chief Medical Officer, and Dr.

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The spread of COVID-19 has impacted the global economy and may impact our operations, including the potential interruption of our clinical trial activities, regulatory reviews and our supply chain.

For example, the COVID-19 outbreak may delay preclinical testing and enrollment in our clinical trials due to prioritization of laboratory and hospital resources toward the outbreak or other factors, and some patients may be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates.

For example, the ongoing COVID-19 pandemic (including the Delta and Omicron variants and any future variants that may emerge) may delay preclinical testing and enrollment in our clinical trials due to prioritization of laboratory and hospital resources toward the outbreak or other factors, and some patients may be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates.

In addition, since the beginning of the COVID-19 pandemic, three vaccines for COVID-19 have received Emergency Use Authorization by the FDA and two of those later received marketing approval.

Additional vaccines may be authorized or approved in the future.

The resultant demand for vaccines and potential for manufacturing facilities and materials to be commandeered under the Defense Production Act of 1950, or equivalent foreign legislation, may make it more difficult to obtain materials or manufacturing slots for the products needed for our clinical trials, which could lead to delays in these trials.

Furthermore, the spread of the virus may affect the operations of key governmental agencies, such as the FDA, which may delay the development of our product candidates.

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In response to COVID-19-related government and public health directives and orders, we have implemented work-from-home policies for certain employees.

The effects of these orders and our work-from-home polices may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

The effects of these orders and our work-from-home policies may

negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on 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.

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As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms.

The COVID-19 outbreak continues to rapidly evolve.

The extent to which the coronavirus may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, the geographic spread of the disease, the duration of the outbreak, and the actions to contain the coronavirus or treat its impact, including travel and other social distancing restrictions in the United States and other countries, among others.

The COVID-19 pandemic continues to rapidly evolve.

The extent to which the COVID-19 pandemic may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, the geographic spread of the disease, the duration of the outbreak, new strains of the virus, including the Delta and Omicron variants and any future variants that may emerge, and the actions to contain the coronavirus or treat its impact, including vaccination campaigns, travel restrictions and other social distancing restrictions in the United States and other countries, among others.

A significant outbreak of coronavirus and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact our business, financial condition and results of operations.

Legal, political and economic uncertainty surrounding the exit of the U.K., from the European Union (“EU”) may be a source of instability in international markets, create significant currency fluctuations, adversely affect our operations in the U.K.

Labor shortages and constraints in the supply chain could adversely affect our results of operations.

In 2021, many companies experienced labor shortages and other labor-related issues, which were pronounced as a result of the ongoing COVID-19 pandemic.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, vaccine mandates and other government regulations and our responses thereto.

As more employers offer remote work, we may have more difficulty recruiting for jobs that require on-site attendance.

We have recently observed an overall tightening and increasingly competitive labor market.

If we are unable to hire and retain employees capable of performing at a high-level, our business could be adversely affected.

A sustained labor shortage, lack of skilled labor, or increased turnover within our employee base, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our business and operating results.

In addition, recent developments in the national and worldwide supply chain slowdown have resulted in increased cost and reduced supply for supplies and materials.

It is impossible to predict how long this supply chain slowdown will last or how much it will impact our business operations, but it is likely that our costs will increase for supplies.

Legal, political and economic uncertainty surrounding the exit of the United Kingdom (“U.K.”), from the European Union (“EU”) may be a source of instability in international markets, create significant currency fluctuations, adversely affect our operations in the U.K.

and pose additional risks to our business, revenue, financial condition, and results of operations.

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As part of the Agreement, the EU and the U.K.

will recognize Good Manufacturing Practice (GMP) inspections carried out by the other Party and the acceptance of official GMP documents issued by the other Party.

will recognize GMP inspections carried out by the other Party and the acceptance of official GMP documents issued by the other Party.

The Agreement also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures.

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However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory.

This means that medicinal products that are tested and released in the U.K.

This means that

medicinal products that are tested and released in the U.K.

must be retested and re-released when entering the EU market for commercial use.

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Northern Ireland will, however, continue to be covered by the marketing authorizations granted by the European Commission.

This lack of clarity on future UK laws and regulations and their interaction with EU laws and regulations may negatively impact foreign direct investment in the UK, increase costs, depress economic activity, and restrict access to capital.

The uncertainty concerning the UK’s legal, political and economic relationship with the EU after 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) beyond the date of Brexit.

This lack of clarity on future U.K.

laws and regulations and their interaction with EU laws and regulations may negatively impact foreign direct investment in the U.K., increase costs, depress economic activity, and restrict access to capital.

The uncertainty concerning the U.K.’s legal, political and economic relationship with the EU after 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) beyond the date of Brexit.

These developments, or the perception that any of them could occur, may have a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets.

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We may not be able to utilize a significant portion of our net operating loss carryforwards, which could harm our results of operations.

federal and state net operating loss carryforwards of approximately $45.7 million as of December 31, 2020.

Of this amount, $6.6 million has a 20-year carry forward period that will expire at various dates beginning in 2021.

Under current law, the remaining amount of $39.1 million has an unlimited life and generally may not be carried back to prior taxable years except that net operating losses generated in 2018, 2019 and 2020 may be carried back five taxable years.

federal and state net operating loss carryforwards of approximately $107.8 million and $110.3 million, respectively, as of December 31, 2021, of which a portion of the federal and state amount of $6.6 million and $110.3 million, respectively, has a 20-year carry forward period that will expire at various dates beginning in 2024.

Under current law, the remaining federal amount of $101.2 million has an indefinite life and generally may not be carried back to prior taxable years except that net operating losses generated in 2018, 2019 and 2020 may be carried back five taxable years.

For net operating losses arising in taxable years beginning after December 31, 2017, we are permitted a net operating loss deduction that is limited to 80% of our taxable income in such year.

The net operating loss carryforwards are reflective of a 382-limitation related to ownership changes.

Under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income.

For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period.

Under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses (“NOLs”), to offset future taxable income.

Our existing NOLs are subject to limitations arising from previous ownership changes that impact the timing and amount.

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Accordingly, we may not be able to utilize a material portion of our NOLs and this could harm our future operating results by effectively increasing our future tax obligations.

As of December 31, 2020, we have recorded a valuation allowance of $18.7 million against our net deferred tax asset.

Risks Related to the Development of COVID-19 Therapeutics

Our pursuit of potential therapeutic and prophylactic treatments for COVID-19 is at an early stage and subject to many risks.

We may be unable to receive emergency use authorization or approval for any of our COVID-19 product candidates in a timely manner, if at all, and our COVID-19 product candidates may never be authorized for emergency use or approved.

The FDA cleared our IND application in 2020 to proceed with a Phase 1/2 clinical trial of T-COVID, our investigational agent for the treatment of early COVID-19.

The FDA recently cleared our IND for AdCOVID, our intranasal vaccine candidate for COVID-19.

We have initiated the Phase 1 clinical trial for AdCOVID and are enrolling in the T-COVID trial.

We may experience difficulties or delays in enrolling patients in clinical trials due to the impact of the global COVID-19 pandemic or other reasons.

Many of the risks related to the development of these product candidates are beyond our control, including risks related to clinical development, the regulatory submission process, potential threats to our intellectual property rights and manufacturing delays or difficulties.

We may be unable to produce an efficacious and/or approved product for the treatment of patients with early COVID-19 in a timely manner, if at all.

The results of preclinical studies from our COVID-19 product candidates may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials.

There can be no assurance that any of our clinical trials for our COVID-19 product candidates, or any other of our product candidates, will ultimately be successful or support further clinical development.

In addition, the interpretation of the data from our clinical trials of T-COVID or AdCOVID by FDA and other regulatory agencies may differ from our interpretation of such data and the FDA or other regulatory agencies may require that we conduct additional studies or analyses.

Any of these factors could delay or prevent us from receiving regulatory approval of T-COVID or AdCOVID and there can be no assurance that either product candidate will be approved in a timely manner, if at all.

If the COVID-19 outbreak is effectively contained or the risk of coronavirus infection is diminished or eliminated before we can successfully develop and manufacture our product candidate, the commercial viability of such product candidate may be diminished or eliminated.

We are also committing financial resources and personnel to the development of this product candidate which may cause delays in or otherwise negatively impact our other development programs, despite uncertainties surrounding the longevity and extent of coronavirus as a global health concern.

Our business could be negatively impacted by our allocation of significant resources to a global health threat that is unpredictable and could rapidly dissipate or against which our treatment, if successfully developed, may not be effective.

Two vaccines for COVID-19 were granted Emergency Use Authorization by the FDA in late 2020, and more are likely to

be authorized in the coming months .

In addition, other parties are currently developing therapeutic and vaccine candidates for COVID-19, which may be more efficacious than or may be approved prior to T-COVID or AdCOVID.

The regulatory pathway for T-COVID and AdCOVID is continually evolving, and may result in unexpected or unforeseen challenges.

The speed at which parties are acting to create and test many therapeutics and vaccines for COVID-19 is unusual, and evolving or changing plans or priorities within the FDA, including those based on new knowledge of COVID-19 and how the disease affects the human body, may significantly affect the regulatory timeline for our product candidates.

Results from ongoing clinical trials and discussions with regulatory authorities may raise new questions and require us to redesign proposed clinical trials, including revising proposed endpoints or adding new clinical trial sites or cohorts of subjects.

Any such developments could delay the development timeline for our product candidates and materially increase the cost of the development for such candidates.

As of December 31, 2021, we have recorded a valuation allowance of $40.6 million against our gross deferred tax asset.

Risks Related to the Regulatory Approval Process

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The FDA and corresponding regulatory authorities in other jurisdictions have a significant amount of discretion in deciding whether or not to approve a marketing application.

Our product candidates could fail to receive regulatory approval from the FDA or comparable regulatory authorities outside the United States for several reasons, including:

Our product candidates could fail to

receive regulatory approval from the FDA or comparable regulatory authorities outside the United States for several reasons, including:

● disagreement with the design or implementation of our clinical trials ;

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Serious adverse events deemed to be caused by our product candidates could have a material adverse effect on the development of our product candidates and our business as a whole.

The most common adverse events in the clinical trials evaluating the safety and tolerability of the product candidates developed using the Respirvec platform have been headaches, runny noses and sore throats.

The most common adverse events observed in clinical trials for product candidates developed using the Densigen platform include injection site reactions, headache, malaise and fatigue.

We have not yet completed a clinical trial using our EuPort platform.

Our understanding of the relationship between our product candidates and these events, as well as our understanding of adverse events reported in future clinical trials of other product candidates, may change as we gather more information, and additional unexpected adverse events may be observed.

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The approval procedures vary among countries and may involve requirements for additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval.

In addition, in many

countries outside the United States, such as certain countries of the European Union, a vaccine or therapeutic must be approved for reimbursement, including the price that can be charged, before it can be approved for sale in that country.

In addition, in many countries outside the United States, such as certain countries of the European Union, a vaccine or therapeutic must be approved for reimbursement, including the price that can be charged, before it can be approved for sale in that country.

In these countries, pricing discussions with governmental authorities can take considerable time after the receipt of marketing approval for a product, and additional clinical research may be required to enable comparison of the cost effectiveness of our product candidate to other available alternatives.

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

Manufacturers and manufacturers’ facilities are also required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations and applicable product tracking and tracing requirements.

Any such restrictions may result in significant additional expense or could limit sales of the approved product.

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Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction.

We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of the product candidates we

may seek to develop in the future will ever obtain regulatory approval.

We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of the product candidates we may seek to develop in the future will ever obtain regulatory approval.

We have no experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs or regulatory consultants to assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the biologic product candidate’s safety, purity, efficacy and potency.

Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.

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Additionally, product approvals may be delayed as a result of the COVID-19 pandemic.

As of June 23, 2020, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals;

however, the FDA may not be able to continue its current pace and approval timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the COVID-19 pandemic and travel restrictions, the FDA is unable to complete such required inspections during the review period.

In 2020, several companies announced receipt of complete response letters due to the FDA's inability to complete required inspections for their applications.

As of May 26, 2021, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals;

however, the FDA may not be able to continue its current pace and approval

timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the ongoing COVID-19 pandemic and travel restrictions, the FDA is unable to complete such required inspections during the review period.

If we experience delays in obtaining approval or if we fail to obtain approval of any current or future product candidates we may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially impaired.

If the FDA or comparable foreign regulatory authorities approve generic or biosimilar versions of any of our products that receive marketing approval, or if any product approvals we obtain do not provide us with the exclusivity periods we hope to achieve, the sales of our products could be adversely affected.

As part of the ongoing efforts of governmental authorities to lower health care costs by facilitating generic competition to pharmaceutical products, the BPCIA enacted as part of the Health Care Reform Law, created a new abbreviated regulatory approval pathway in the United States for biological products that are found to be “biosimilar” to or “interchangeable” with a biological “reference product” previously licensed under a BLA.

This abbreviated approval pathway is intended to permit a biosimilar to come to market more quickly and less expensively by relying to some extent on the data generated by the reference product’s sponsor and the FDA’s previous review and approval of the reference product.

Under the BPCIA, a biosimilar sponsor’s ability to seek or obtain approval through the abbreviated pathway is limited by periods of exclusivity granted by the FDA to the holder of the reference product’s BLA, and no biosimilar application may be accepted by the FDA for review until four years after the date the reference product was first licensed by the FDA, and no biosimilar application, once accepted, may receive final approval until 12 years after the reference product was first licensed by the FDA .

Once approved, biosimilars likely would compete with, and in some circumstances may be deemed under applicable laws to be “interchangeable with,” the previously approved reference product.

The extent to which a biosimilar, once approved, will be substituted for any one of our product candidates, if approved, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Although there is uncertainty regarding the impact of this new program, it seems likely that if any of our product candidates are approved by the FDA, there is risk that the approval of a biosimilar competitor to one of our products could have an adverse impact on our business.

In particular, a biosimilar could be significantly less costly to bring to market and priced significantly lower than our product, if approved by the FDA.

If the FDA or comparable foreign regulatory authorities approve generic or biosimilar versions of any of our products that receive marketing approval, or if we do not obtain the exclusivity periods for our approved products that we hope to achieve, the sales of our products could be adversely affected.

If and when approved, our product candidates may face competition from ANDA or 505(b)(2) product candidates referencing our drug product and from biosimilars product candidates referencing our biological product.

Certain ANDAs, and certain biosimilar products that are deemed under applicable laws to be “interchangeable with” our biological product, once approved, may be substituted for our product candidates, subject to applicable state laws.

We may also be subject to competition from biosimilar products in Europe.

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A biosimilar sponsor must however still provide all of the preclinical and clinical data required to demonstrate the similarity of their product with the reference product.

The level of data

required is assessed on a case by case basis, but it will be less than that required for an original biological product.

The level of data required is assessed on a case by case basis, but it will be less than that required for an original biological product.

The pathway is more complex than the abridged procedure that may be followed to obtain authorization of a generic version of a non-biological product, but it would still allow the biosimilar product to be brought to market more quickly and less expensively than our original product.

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In the United States, the FDA has the authority to award additional exclusivity for approved products where the sponsor conducts specified testing on pediatric or adolescent populations upon the written request of the FDA.

If granted, pediatric exclusivity adds six months to existing exclusivity periods applicable to biological products under the BPCIA — namely, the four-year period during which the FDA will not consider an application for a biosimilar product, and the twelve-year period during which the FDA will not approve a biosimilar application.

This six-month exclusivity runs from the end of these exclusivity protection periods.

If granted, pediatric exclusivity may add six months to certain patents or regulatory exclusivity periods for an approved drug, and to regulatory exclusivity periods for an approved biological product.

In the EU, as well, pediatric studies are incentivized by the reward of additional exclusivity.

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Orphan drug designation can provide opportunities for grant funding towards clinical trial costs, tax advantages and FDA user fee exemptions.

In addition, if a product that has an orphan drug designation subsequently receives FDA approval for the indication for which it has such designation, the product may be entitled to orphan drug exclusivity, which means the FDA would not approve any other application to market the same drug for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.

In addition, if a product that has an orphan drug designation subsequently receives FDA approval for the indication for which it has such designation, the

product may be entitled to orphan drug exclusivity, which means the FDA would not approve any other application to market the same drug for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.

In the European Union, orphan drug status offers similar but not identical benefits as those in the United States.

We may pursue orphan drug designation for one or more of our product candidates but obtaining such designation cannot be assured.

Even if we obtain orphan drug exclusivity, competitors may receive approval of either a different product for the same indication or the same product for a different indication but that could be used off-label in the orphan indication.

Additionally, should a competitor receive orphan drug designation for a product to treat the same disease and same indication as one of our product candidates, there is a risk that the FDA or a comparable European regulatory body could delay approving our product candidate.

Developing a drug product, such as NasoShield, to address biological warfare involves special considerations, including compliance with the “Animal Rule,” that may increase drug development delays and costs, and result in a longer and more uncertain regulatory approval process.

Under a special FDA procedure available for studying certain biological warfare products, such as NasoShield, the FDA makes available a research pathway known as the “Animal Rule,” which permits the conduct of clinical trials without exposing human subjects to deadly substances, such as anthrax.

These regulations authorize the FDA to rely on evidence from animal studies to provide evidence of a product’s effectiveness under circumstances where there is a reasonably well-understood mechanism for the toxicity of the agent.

Under these requirements, and with the FDA’s prior agreement, biologics used to reduce or prevent the toxicity of chemical, biological, radiological or nuclear substances may be approved for use in humans based on evidence of effectiveness derived from appropriate animal studies and any additional supporting data.

Products evaluated for effectiveness under this rule are evaluated for safety under preexisting requirements for establishing the safety of new drug and biological products, including Phase 1 through Phase 2 clinical trials.

Under certain circumstances a single animal species may be acceptable if that animal model is sufficiently well-characterized for predicting a response in humans.

The animal study endpoint must be clearly related to the desired benefit in humans and the information obtained from animal studies must allow for selection of an effective dose in humans.

The Animal Rule also requires post-marketing studies, such as field studies, to verify and describe the product’s clinical benefit and assess its safety should an exigency exist that leads to the product being used in humans;

the nature of these studies will be discussed with

FDA as part of the BLA process.

Products approved under the Animal Rule are subject to additional requirements, such as restrictions imposed on marketing or distribution or requirements to provide information to patients.

Compliance with the Animal Rule would generally require us to utilize animal model studies for efficacy and provide certain animal and human safety data in order to obtain FDA approval for our anthrax vaccine product candidate.

The Animal Rule drug development pathway typically involves costs and delays in excess of what would be expended in conducting human vaccine clinical trials not requiring compliance with the Animal Rule.

Although there is an alternative regulatory pathway available for biological warfare drug candidates, called Emergency Use Authorization, which avoids the Animal Rule’s reliance on animal models focused on efficacy, there can be no assurance that this alternative model will apply to our anthrax vaccine product candidate.

Developing appropriate animal models in compliance with the Animal Rule is a time-consuming and expensive research effort.

Further, we may not be able to sufficiently demonstrate the animal correlation to the satisfaction of the FDA, as these corollaries are difficult to establish and are often unclear.

The FDA may decide that our data are insufficient for approval and require additional non-clinical, clinical or other studies, refuse to approve our product candidates, or place restrictions on our ability to commercialize those approved products.

As a general matter, complying with the Animal Rule involves a more uncertain pathway to regulatory approval, as relatively few products have been approved in this manner.

This means that it may be particularly difficult for us to predict the timing or ultimate success of receiving FDA approval for NasoShield.

Further, other countries have not, at this time, established criteria for review and approval of these types of products outside their normal review process;

i.e., there is no Animal Rule equivalent, and consequently there can be no assurance that we will be able to make a submission for marketing approval in foreign countries based on such animal data.

Additionally, few facilities in the United States and internationally have the capability to perform animal testing with anthrax or otherwise assist us in qualifying the requisite animal models.

We compete with other biodefense companies for access to this limited pool of highly specialized resources.

We therefore may not be able to secure contracts to conduct testing of our anthrax vaccine product candidate in a predictable timeframe or at all.

Our NasoShield anthrax vaccine product candidate and our NasoVAX pandemic influenza vaccine product candidate may potentially be eligible for the Strategic National Stockpile (“SNS”) under Project BioShield, but there is no guarantee that our product candidates will meet the criteria set forth by HHS or the FDA for procurement and Emergency Use Authorization.

Under the Project BioShield Act of 2004 (“Project BioShield”), the Secretary of HHS may, with the concurrence of the Secretary of DHS and upon the approval of the President, contract to purchase unapproved medical countermeasures for the SNS, in specified circumstances.

Congress is notified of a recommendation for a stockpile purchase after Presidential approval.

Project BioShield specifies that a company supplying the countermeasure to the SNS is paid on delivery of a substantial portion of the countermeasure.

To be eligible for purchase under these provisions, the Secretary of HHS must determine that there are sufficient and satisfactory clinical results or research data, including data, if available, from preclinical studies and clinical trials, to support a reasonable conclusion that the countermeasure will qualify for approval or licensing within eight years.

The legislation also allows unlicensed products to be procured for the SNS so that they are available at the time an emergency is declared.

Project BioShield also allows the Secretary of HHS to authorize the emergency use of medical products that have not yet been approved by the FDA.

To exercise this authority, the Secretary of HHS must conclude that:

the agent for which the countermeasure is designed can cause serious or life-threatening disease;

based on the totality of scientific evidence available to the Secretary, including data from adequate and well-controlled clinical trials, if available, it is reasonable to believe that the product may be effective in diagnosing, treating or preventing the disease;

the known and potential benefits of the product outweigh its known and potential risks;

there is no adequate, approved, and available alternative to the product for diagnosing, preventing, or treating such disease or condition.

Although this provision permits the Secretary of HHS to circumvent the FDA approval process, its use would be limited to rare circumstances.

Our product candidates will be eligible both for consideration for procurement into the SNS and for use in the event of an emergency, although there is no guarantee that our product candidates will meet the criteria set forth by HHS or the FDA for procurement and Emergency-use Authorization, respectively.

Both our NasoShield anthrax vaccine product candidate and our NasoVAX pandemic influenza vaccine product candidate may potentially be eligible for the SNS under Project BioShield.

Risks Related to Our Intellectual Property

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Even if patents do successfully issue and even if such patents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated.

Any successful challenge to our patents or patent applications, or to any other patents or patent applications owned by or licensed to us, could deprive us of the rights necessary to prevent competition from third parties, which may impair the commercial success of any product candidate that we may develop.

Any successful challenge to our patents or patent applications, or to any other patents or patent applications owned by or

licensed to us, could deprive us of the rights necessary to prevent competition from third parties, which may impair the commercial success of any product candidate that we may develop.

There is no assurance that all potentially relevant prior art relating to our patents and patent applications or those of our licensors has been found, and prior art that we have not identified could be used by a third party to invalidate a patent or prevent a patent from issuing from a pending patent application.

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Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop

their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement rights are not as strong as those in the United States.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement rights are not as strong as those in the United States.

These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

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However, the applicable authorities, including the USPTO and FDA in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available or whether any of our products qualify as a first licensure, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request, or may not grant regulatory exclusivity.

If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data, and then may be able to launch their product earlier than might otherwise be the case.

If this occurs,

our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data, and then may be able to launch their product earlier than might otherwise be the case.

We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful.

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and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we are developing and may develop our product candidates.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk

increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.

We may not have identified all U.S.

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Tang’s lab notebooks after the conclusion of his employment in 2012.

We have filed a motion to dismiss and believe the claims are without merit.

We believe the claims are without merit.

In some cases, we may have failed to identify such relevant third-party patents or patent applications.

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Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies or product candidates and/or the use, analysis and/or manufacture of our product candidates.

If any third-party patents are held by a court of competent jurisdiction to cover aspects of our materials, formulations, methods of manufacture, methods of analysis and/or methods for treatment, the holders of any such patents may be awarded monetary damages, obtain injunctive or other equitable relief, or both.

may be awarded monetary damages, obtain injunctive or other equitable relief, or both.

An award of monetary damages may be substantial and may include treble damages and attorneys’ fees for willful infringement.

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We are a party to a number of license agreements that are important to our business, and we may enter into additional license agreements in the future.

Certain of our in-licensed intellectual property covers, or may cover, RespirVec technology, EuPort technology, and certain of our product candidates including ALT-801.

Certain of our in-licensed intellectual property covers, or may cover, RespirVec

technology, EuPort technology, and certain of our product candidates including pemvidutide.

Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty and other of our obligations.

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For example, we have experienced threatened or actual opposition for two trademarks that we were pursuing.

We decided to discontinue

our use of one of those trademarks, and the other matter was resolved on favorable terms.

We decided to discontinue our use of one of those trademarks, and the other matter was resolved on favorable terms.

Although these matters have been resolved on terms that did not materially harm the Company, we may become subject to other trademark challenges in the future.

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We rely on, and expect to continue to rely on, third parties to manufacture our product candidates and related materials for our clinical trials and preclinical studies, and these third parties may not perform satisfactorily.

We do not have any manufacturing facilities or personnel, and we rely on, and expect to continue to rely on, third-party manufacturers and suppliers to manufacture and supply vaccines for our preclinical studies and clinical trials, and on related materials, such as anthrax, influenza and HBV products.

We rely on a small number of third-party manufacturers and suppliers to manufacture and supply bulk drug substance and fill finished vaccines for our initial clinical trials.

We do not have any manufacturing facilities or personnel, and we rely on, and expect to continue to rely on, third-party manufacturers and suppliers to manufacture and supply vaccines, drug substance and drug product for our preclinical studies and clinical trials, and on related materials, such as HBV products and pemvidutide.

We rely on a small number of third-party manufacturers and suppliers to manufacture and supply bulk drug substance and drug product and fill finished vaccines for our initial clinical trials.

This reliance on a small number of third parties increases the risk that we will not have sufficient quantities of our product candidates or other products needed for our preclinical studies and clinical trials, or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

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Our third-party manufacturers may be subject to damage or interruption from, among other things, fire, natural or man-made disaster, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency, bankruptcy and similar events.

For example, in December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China.

Two vaccines for COVID-19 were granted Emergency Use Authorization by the FDA in late 2020, and more are likely to be authorized in the coming months.

Since March 2020, foreign and domestic inspections by the FDA have largely been on hold with FDA announcing plans in July 2020 to resume prioritized domestic inspections.

Since March 2020, foreign and domestic inspections by the FDA have largely been on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis.

Since April 2021, the FDA has conducted limited inspections and employed remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates.

Ongoing travel restrictions and other uncertainties continue to impact oversight operations both domestic and abroad and it is unclear when standard operational levels will resume.

The FDA is continuing to complete mission-critical work, prioritize other higher-tiered inspectional needs (e.g., for-cause inspections), and carry out surveillance inspections using risk-based approaches for evaluating public health.

FDA has stated that foreign inspections not deemed mission-critical remain temporarily postponed, while those that are deemed “mission-critical” will be considered for inspection on a case-by-case basis.

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Further, if there is inadequate information to make a determination on the acceptability of a facility, FDA may defer action on the application until an inspection can be completed.

In 2020, several companies announced receipt of complete response letters due to the

FDA's inability to complete required inspections for their applications.

Throughout the duration of the public health emergency, several companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

Regulatory authorities outside the U.S.

may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

The extent to which the novel coronavirus may impact our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

The extent to which the ongoing COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, the emergence of new variants, and the actions to contain COVID-19 or treat its impact, among others.

Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities.

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These third-party manufacturers must also receive FDA or other applicable governmental authority approval before they can produce clinical material or commercial products.

Our products may be in competition with other products for access to these facilities and may be subject to delays in manufacture if third parties give other products greater priority.

Our products may be

in competition with other products for access to these facilities and may be subject to delays in manufacture if third parties give other products greater priority.

We may not be able to enter into any necessary third-party manufacturing arrangements on acceptable terms, or on a timely basis.

In addition, we may have to enter into technical transfer agreements and share our know-how with the third-party manufacturers, which can be time consuming and may result in delays.

No known manufacturer has received FDA clearance to manufacture large scale quantities of commercial products with the modified version of adenovirus used in the production of product candidates based on our proprietary RespirVec technology.

We or our contract manufacturers therefore will need to develop a scalable manufacturing process for any product candidates that we may develop and commercialize that use our RespirVec technology.

Our contract manufacturing organizations may encounter technical or scientific issues related to development or manufacturing that we may be unable to resolve in a timely manner or with available funds.

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We face significant competition in seeking appropriate partners for our product candidates, and the negotiation process is time consuming and complex.

In order for the Company to successfully partner our product candidates, potential partners must view these product candidates as

economically valuable in markets they determine to be attractive in light of the terms that we are seeking and other products available for licensing from other companies.

In order for the Company to successfully partner our product candidates, potential partners must view these product candidates as economically valuable in markets they determine to be attractive in light of the terms that we are seeking and other products available for licensing from other companies.

Even if we are successful in our efforts to establish strategic partnerships, the terms that we agree upon may not be favorable to the Company, and we may not be able to maintain such strategic partnerships if, for example, development or approval of a product is delayed or sales of an approved product are disappointing.

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If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates.

We believe our anthrax countermeasures are covered under the general immunity provisions of the U.S.

Public Readiness and Emergency Preparedness Act, or Public Readiness Act, but this cannot be assured.

Also, there can be no assurance that the Secretary of the HHS will make other declarations in the future that cover any of our other product candidates or that the U.S.

Congress will not act in the future to reduce coverage under the Public Readiness Act or to repeal it altogether.

Additionally, we are considering applying for liability protection under the U.S.

Support Anti-terrorism by Fostering Effective Technologies (SAFETY) Act of 2002 (the “SAFETY Act”) which may limit the claims and damages potentially faced by companies who provide certain “qualified” anti-terrorism products.

However, we cannot be certain that we will be able to obtain or maintain coverage under the SAFETY Act.

Even a successful defense would require significant financial and management resources.

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While we expect to have substantially compliant programs and controls in place to comply with the GDPR requirements, our compliance with the new regulation is likely to impose additional costs on us and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements could have a material adverse effect on our business.

Risks Related to our BARDA Contract and Other Government Programs

Without the BARDA anthrax contract award, we would only be able to move forward with the NasoShield program at our own risk and without BARDA reimbursement and may therefore suspend or terminate it.

In recent financial periods, a significant portion of our revenues have been derived from our BARDA contract and other government contracts.

For the years ended December 31, 2020 and 2019, BARDA funding for the development of NasoShield accounted for approximately 46% and 92% of our total consolidated revenue and grants and contracts, respectively.

There are significant uncertainties and risks associated with our BARDA contract for our NasoShield anthrax vaccine program.

Although our current BARDA contract that may fund our NasoShield anthrax vaccine program until 2021, including a $3.7 million award during the third quarter of 2019, the majority of the funds will be received during the three year period beginning in 2021 and are dependent on achieving positive clinical results during the initial two-year period to demonstrate interim safety and immune response to the vaccine in the Phase 1 clinical study.

The results of the Phase 1 study obtained during 2018 met the endpoints for safety, however an appreciable immune response was not observed.

We completed an investigation into the results, and the data from this study demonstrated that a simple modification to the method of intranasal dose administration had a dramatic impact on the resulting immunogenicity.

These results suggest that the 2018 Phase 1 study of NasoShield in healthy adults might have shown a more robust immunogenic effect had a modified administration method been employed.

The $3.7 million award is to perform a Phase 1b trial employing the modified administration method.

BARDA will decide in its sole discretion whether to pursue any of the options under the contract and there can be no assurance that BARDA will elect to pursue any of the designated options.

If BARDA does not pursue any of the options, BARDA could terminate the program, and we would not receive any further funds thereunder.

Our BARDA contracts are cost-plus-fixed-fee contracts that only reimburse certain specified activities.

Our BARDA contracts are cost-plus-fixed-fee contracts that only reimburse certain specified activities related to our anthrax vaccine program that have been previously authorized by BARDA.

There is no guarantee that additional activities will not be needed and, if so, that BARDA will reimburse the Company for these activities.

There are also significant requirements associated with operating as a federal government contractor, which include having appropriate accounting, and project tracking systems implemented and operational, and we may not be able to consistently meet these requirements.

Performance under the BARDA contracts requires that we comply with appropriate regulations and operational mandates, which require us to engage internal and external expertise for compliance.

Our ability to be regularly and fully reimbursed for our activities depends and will depend on our ability to comply and demonstrate compliance with such requirements.

In the past, we have experienced delays in reimbursements under a BARDA contract on account of compliance issues, which we have had to dedicate substantial time and resources to remedy, including through modifications to our statement of work related to the program.

In addition, under certain circumstances, BARDA may advise us to delay certain activities and invest additional time and resources before proceeding.

If we follow such BARDA advice, overall program delays and costs associated with additional resources for which we have not planned may result.

The costs associated with following such advice may or may not be reimbursed by BARDA under the contract.

We may decide not to follow the advice provided by BARDA and instead pursue activities that we believe are in the best interest of our anthrax vaccine program and our business as a whole, even if BARDA would not reimburse us under our contract.

Most of our immediately foreseeable future revenues are contingent upon grants, contracts and loans from the U.S.

and other governments, non-profit entities and academic institutions, and we may not achieve sufficient revenues from these sources either to maintain operations or eventually attain profitability.

Substantially all of our revenues to date have been derived from U.S.

and European government grants, contracts and loans (such as our current BARDA contract), and from time to time, we may apply for additional contracts, grants or loans from government agencies, non-profit entities and academic institutions.

Such contracts, grants or loans can be highly attractive, because they provide additional capital to fund the ongoing development of our technologies and product candidates without diluting our stockholders.

However, there is often significant competition for these contracts, grants and loans, and the process of obtaining government and other contracts, grants and loans is lengthy and uncertain.

Entities offering contracts, grants or loans may have requirements to apply for or to otherwise be eligible to receive certain contracts, grants or loans that our competitors may be able to satisfy that we cannot.

In addition, such entities may make arbitrary decisions as to whether to offer contracts or make grants or loans, to whom the contracts, grants or loans will be awarded and the size of the contracts, grants or loans to each awardee.

Even if we are able to satisfy the award requirements, there is no guarantee that we will be a successful awardee.

Therefore, we may not be able to win any contracts, grants or loans in a timely manner, if at all, and there can be no assurance that existing government or other contracts, grants or loans will be renewed or that we can enter into new contracts or receive new grants or loans.

With respect to the BARDA funding we receive for our anthrax vaccine product candidate, if the U.S.

government makes significant contract awards to our competitors, rather than to us, our business will be harmed and it is unlikely that we would ultimately be able to supply that particular treatment or product either in the United States or to foreign governments or other third parties.

Further, changes in government budgets and agendas, funding strategies, cost overruns in our programs, or advances by our competitors, may result in changes in the timing of funding for, a decreased and de-prioritized emphasis on, or termination of, government contracts that support the development and/or procurement of the biodefense product we are developing.

For example, the outbreak of Ebola in 2014 changed the near-term focus and priorities of BARDA to help ensure sufficient progress was being made on

a solution for that disease.

This resulted in a delay of funding to some non-Ebola programs until Congress appropriated additional funds to BARDA specific for this purpose.

government funding is also subject to Congressional appropriations generally made on an annual basis even for multi-year contracts.

More generally, due to the ongoing economic and political uncertainty, the U.S.

government may reduce or delay spending in the biodefense field or eliminate funding of certain programs altogether, which could decrease the likelihood of future government contract awards or that the government would procure products from the Company.

Future funding levels for BARDA for the advanced development and procurement of medical countermeasures are uncertain and may be subject to budget cuts and/or government shutdowns as the U.S.

Congress and the President look to reduce the U.S.

budget deficit.

Potential reductions in funding could severely limit our ability to maintain, renew or enter into new contracts and therefore materially and adversely impact our business.

A government shutdown could result in a suspension or delayed funding, which may materially and adversely affect our ability to continue our anthrax program.

Further, the 21 st Century Cures Act (“Cures Act”), was signed into law on December 13, 2016 and, among other things, includes a provision requiring timely and accurate recommended utilization guidelines for MCMs, including for products in the Strategic National Stockpile.

The Cures Act requires HHS to report to the appropriate committees of Congress when funding in the Special Reserve Fund (“SRF”), available for the procurement of MCMs falls below $1.5 billion and how the amount of funding will impact identified MCM priorities.

The Cures Act ensures coordinated and efficient processes for executing MCM development and procurement programs by clarifying that the Director of BARDA carry out the programs funded by the SRF, as well as the procurement contracts, grants, and cooperative agreements under BARDA.

government agencies have special contracting requirements that give them the ability to unilaterally control contracts such as our BARDA contract.

government contracts, such as our BARDA contract, typically contain unilateral termination provisions for the government and are subject to audit and modification by the government at its sole discretion, which will subject the Company to additional risks during the term of such contracts.

These risks include the ability of the U.S.

government unilaterally to:

suspend or prevent the Company for a set period of time from receiving new U.S.

government contracts or extending existing contracts based on violations or suspected violations of laws or regulations;

terminate our existing U.S.

government contracts, including for poor performance or if funds become unavailable or are not provided to the applicable governmental agency;

reduce the scope and value of our U.S.

government contracts and/or revise the timing for work to be performed;

audit and object to our contract-related costs and fees, including allocated indirect costs;

control and potentially prohibit the export of our products developed under the contract;

claim rights to products, including intellectual property, developed under the contract;

change certain terms and conditions in our U.S.

government contracts;

cancel outstanding Request for Proposal solicitations or Broad Agency Announcements.

government will be able to terminate any of its contracts with the Company, including our BARDA contract, either for its convenience or if we default by failing to perform in accordance with the contract schedule and terms.

Termination-for-convenience provisions generally enable us to recover only our costs incurred or committed, settlement expenses, and profit on the work completed prior to termination.

Termination-for-default provisions do not permit these recoveries and would make us liable for excess costs incurred by the U.S.

government in procuring undelivered items from another source.

government’s determination to award any contracts may be challenged by an interested party, such as another bidder, at the U.S.

Government Accountability Office (the “GAO”) or in federal court.

If such a challenge is successful, a contract award may be re-evaluated and terminated.

The laws and regulations governing the procurement of goods and services by the U.S.

government provide procedures by which other bidders and other interested parties may challenge the award of a government contract.

Such challenges or protests could be filed with respect to any U.S.

government contract awarded to the Company, including our BARDA contract, even if there are not any valid legal grounds on which to base the protest.

If any such protests are filed, the government agency may decide, and in certain circumstances will be statutorily required, to suspend our performance under the contract while such protests are being considered by the GAO or the applicable federal court, thus potentially delaying delivery of goods and services and payment.

In addition, we could be forced to expend considerable funds to defend any potential award.

If a protest is successful, the government may be ordered to

terminate our contract and re-evaluate bids.

The government could even be directed to award a potential contract to one of the other bidders.

Our business is subject to audit by the U.S.

government, and may be subject to audit by foreign governments.

A negative audit could adversely affect our business.

Our business is subject to audit by the U.S.

government in part because of the funding we receive for our anthrax vaccine program under our BARDA contract.

government agencies such as the Defense Contract Audit Agency (the “DCAA”) routinely audit and investigate government contractors.

These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.

The DCAA also reviews the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems.

Any costs found to be improperly allocated to a specific contract will not be reimbursed, while such costs already reimbursed must be refunded.

If an audit uncovers improper or illegal activities, it may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from conducting business with the U.S.

In addition, a contractor could suffer serious reputational harm if allegations of impropriety were made against it.

In the future, we may also be subject to audits by foreign governments, as we from time to time receive funding from non-U.S.

government sources.

Laws and regulations affecting government contracts make it more costly and difficult for us to successfully conduct our business.

Our business plan includes the continued development of our anthrax vaccine candidate, NasoShield, pursuant to our BARDA contract in addition to applying for additional contracts, grants or loans from government agencies, non-profit entities and academic institutions.

We must comply with numerous laws and regulations relating to the formation, administration and performance of government contracts, which can make it more difficult for us to retain our rights under these contracts.

These laws and regulations affect how we conduct business with government agencies.

Among the most significant government contracting regulations that affect our business are:

the Federal Acquisition Regulation (“FAR”) and agency-specific regulations supplemental to the FAR, which comprehensively regulate the procurement, formation, administration and performance of government contracts;

the business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act, the Procurement Integrity Act, the FCA and Foreign Corrupt Practices Act (“FCPA”);

export and import control laws and regulations;

laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.

Foreign governments typically also have laws and regulations governing contracts with their respective agencies.

These foreign laws and regulations affect how we and our customers conduct business and, in some instances, impose added costs on our business.

Any changes in applicable laws and regulations could restrict our ability to maintain our existing contracts and obtain new contracts, which could limit our ability to conduct our business and materially and adversely affect our revenues and results of operations.

Risks Related to Reimbursement and Government Regulation

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Third-party payers, such as government health care programs, and private health insurers and health plans, decide which drugs they will provide coverage for and establish reimbursement levels.

Coverage and reimbursement decisions by a third-party payer may depend upon a number of factors, including the third-party payer’s determination that use of a product is:

Coverage and reimbursement

decisions by a third-party payer may depend upon a number of factors, including the third-party payer’s determination that use of a product is:

● a covered benefit under its health plan;

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Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce revenues.

In some countries, additional clinical research may be required to enable comparison of the cost-effectiveness of our product candidates, if they are approved, to other available vaccines in order to obtain or maintain coverage, reimbursement or pricing approval.

In some countries, additional clinical research may be required to enable comparison of the cost-effectiveness of our product candidates, if they are approved, to other available products in order to obtain or maintain coverage, reimbursement or pricing approval.

Publication of discounts by third-party payers or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.

In the United States, concerns about drug pricing have been expressed by members of Congress and prior presidential administrations.

In the United States, concerns about drug pricing have been expressed by members of Congress and presidential administrations.

There can be no assurance that our product candidates, if approved, will be considered cost-effective by third-party payers, that an adequate level of reimbursement will be available or that the third-party payers’ reimbursement policies will not adversely affect our ability to sell our products profitably.

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We are subject to multiple and substantial federal and state health care and other laws, and the complexity of our regulatory compliance obligations is likely to increase in the event our product candidates are commercialized.

Our business operations and activities may be directly or indirectly subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal FCA, and their implementing regulations, such as recent rules finalized by OIG which added safe harbor protections under the Anti-Kickback Statute for certain coordinated care and value-based arrangements among clinicians, providers, and others and that (with exceptions) became effective January 19, 2021.

exceptions) became effective January 19, 2021.

If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.

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Additional legislative changes, regulatory changes or guidance could be adopted, which may impact the marketing approvals and reimbursement for our product candidates.

For example, on July 9, 2021, President Biden issued an executive order directing the FDA to, among other things, continue to clarify and improve the approval framework for biosimilars, including the standards for interchangeability of biological products, facilitate the development and approval of biosimilar and interchangeable products, clarify existing requirements and procedures related to the review and submission of BLAs, and identify and address any efforts to impede biosimilar competition.

Further, there has been increasing legislative, regulatory and enforcement interest in the United States with respect to drug pricing practices.

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Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from commercial payors.

We cannot predict the

reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.

We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.

These continuing health care reform initiatives may adversely affect:

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The laws that would govern our conduct in the United States upon the commercialization of our product candidates are enforceable by criminal, civil and administrative penalties.

Violations of laws such as anti-kickback and false claims laws, the FD&C Act, or any regulations promulgated under their authority, may result in jail sentences, fines or exclusion from federal and state programs, as may be determined by Medicare, Medicaid, the Department of Defense, other regulatory authorities and the courts.

Violations of laws such as the Anti-Kickback Statute and FCA, the FD&C Act, or any regulations promulgated under their authority, may result in jail sentences, fines or exclusion from federal and state programs, as may be determined by Medicare, Medicaid, the Department of Defense, other regulatory authorities and the courts.

There can be no assurance that our activities will not come under the scrutiny of regulators and other government authorities or that our practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen “relators” under federal or state false claims laws.

In the United States, among the laws that may affect our ability to operate and market our products include, but are not limited to:

The federal Anti-Kickback Law prohibits, among other activities, any person from knowingly and willfully, directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of (or in return for) generating referrals of individuals or purchases, orders or recommendations for services or items reimbursable by federal health care programs like Medicare and Medicaid.

● The federal Anti-Kickback Statute prohibits, among other activities, any person from knowingly and willfully, directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of (or in return for) generating referrals of individuals or purchases, orders or recommendations for services or items reimbursable by federal health care programs like Medicare and Medicaid.

Courts have interpreted this law very broadly, including by holding that a violation has occurred if even one purpose of the remuneration is to generate referrals, even if there are other lawful purposes.

Moreover, liability under the Anti-Kickback Law may be established without proving actual knowledge of the law or specific intent to violate.

Moreover, liability under the Anti-Kickback Statute may be established without proving actual knowledge of the law or specific intent to violate.

There are statutory exceptions and regulatory safe harbors that protect certain arrangements from prosecution or administrative sanctions, but the exceptions and safe harbors are drawn narrowly.

The fact that an arrangement does not fall within a safe harbor does not necessarily render the conduct illegal under the Anti-Kickback Law, but the arrangement may be subject to scrutiny based on the facts and circumstances.

The fact that an arrangement does not fall within a safe harbor does not necessarily render the conduct illegal under the Anti-Kickback Statute, but the arrangement may be subject to scrutiny based on the facts and circumstances.

Practices that involve remuneration to those who prescribe, purchase, or recommend pharmaceutical products, including certain discounts, or engaging such individuals as consultants, advisors and speakers, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor.

Moreover, there are no safe harbors for many common practices, such as educational and research grants, charitable donations, product support and patient assistance programs.

Violations of the Anti-Kickback Law may be punished by civil and criminal penalties, damages, fines, or exclusion from participation in federal health care programs like Medicare and Medicaid.

In addition, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback law constitutes a false or fraudulent claim for purposes of the FCA.

Violations of the Anti-Kickback Statute may be punished by civil and criminal penalties, damages, fines, or exclusion from participation in federal health care programs like Medicare and Medicaid.

In addition, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

● The FCA prohibits any person from, among other things, knowingly presenting or causing to be presented a false or fraudulent claim for payment of government funds, or making, or causing to be made, a false statement material to a false or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, or decreasing, an obligation to pay or transmit money or property to the government.

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Violations of the FCA can result in treble damages, mandatory per claim penalties, and exclusion from participation in federal health care programs.

HIPAA created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the Anti-Kickback Law, a

person or entity can be found guilty of violating the HIPAA fraud statute without actual knowledge of the statute or specific intent to violate it .

● HIPAA created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and

knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the Anti-Kickback Law, a person or entity can be found guilty of violating the HIPAA fraud statute without actual knowledge of the statute or specific intent to violate it.

● The Physician Payments Sunshine Act, implemented as the Open Payments program, imposes reporting requirements for pharmaceutical, biologic, and device manufacturers regarding payments or other transfers of value made to physicians, teaching hospitals, and other healthcare providers, including investment interests in such manufacturers held by physicians and their immediate family members during the preceding calendar year.

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In addition, several states require pharmaceutical companies to implement compliance programs or marketing codes of conduct.

The FDCA and comparable foreign laws, in addition to prohibiting the promotion of the safety or effectiveness of product candidates not yet approved for commercialization, an act known as pre-approval promotion, also generally restrict companies from promoting approved products for indications other than those indications for which a product is approved, which is also referred to as off-label use.

● The FD&C Act and comparable foreign laws, in addition to prohibiting the promotion of the safety or effectiveness of product candidates not yet approved for commercialization, an act known as pre-approval promotion, also generally restrict companies from promoting approved products for indications other than those indications for which a product is approved, which is also referred to as off-label use.

This means, for example, that we may not make claims about the use of our products, should they be approved for sale, outside of their approved indications, and we may not proactively discuss or provide information regarding any of their off-label uses subject to very specific and limited exceptions.

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If our product candidates are commercialized, then we would also be required to report detailed and complex pricing information, net of included discounts, rebates and other concessions, to CMS for the purpose of calculating national reimbursement levels, certain federal prices and certain federal and state rebate obligations, and we would need to develop the expertise, as well as the systems for collecting and reporting this data accurately to CMS and have instituted a compliance program to assure that the information collected is complete in all respects.

Companies that fail to accurately report this kind of pricing information to the U.S.

Companies that fail to accurately

report this kind of pricing information to the U.S.

government could be subject to fines and other sanctions (including potential FCA liability) that could adversely affect their business.

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There is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.

a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.

Further, the United Kingdom’s decision to leave the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.

The EU-UK Trade and Cooperation Agreement of 24 December 2020 allows for personal data to be transferred from the EU to the United Kingdom without the need to use a transfer mechanism as set out in Chapter V GDPR until 30 June 2021.

This means that personal data may flow freely from the EU to the United Kingdom until 30 June 2021.

It is unclear how data transfers to and from the United Kingdom will be regulated after that date.

However, the intention of the 6 month grace period is to give the European Commission sufficient time to adopt an adequacy decision in respect of the United Kingdom so that personal data may flow freely from the EU to the United Kingdom after 30 June 2021 as well.

On June 28, 2021, the EU Commission adopted decisions on the U.K.’s adequacy under the EU’s GDPR.

This means that most personal data can continue to flow from the EU and the EEA to the U.K.

without the need for additional safeguards.

However, restricted transfers from the U.K.

to other countries, including to the EEA, are subject to transfer rules under the U.K.

On February 2, 2022, the U.K.

announced the implementation of a new series of U.K.

Standard Contractual Clauses, which must be adopted by U.K.

companies no later than March 21, 2024.

transfer rules broadly mirror the EU GDPR rules, but the U.K.

has the independence to keep the framework under review, lending uncertainty to future data transfers in to and out of the U.K.

We must also ensure that we maintain adequate safeguards to enable the transfer of personal data outside of the EEA, in particular to the United States in compliance with European data protection laws.

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Any such investigation or charges by European data protection authorities could have a negative effect on our existing business and on our ability to attract and retain new clients or pharmaceutical collaboration partners.

We may also experience hesitancy, reluctance, or refusal by European or multi-national clients or pharmaceutical partners to continue to use our products due to the potential risk exposure as a result of the current (and, in particular, future) data protection obligations imposed on them by certain data protection authorities in interpretation of current law,

including the GDPR.

Such clients or pharmaceutical collaboration partners may also view any alternative approaches to compliance as being too costly, too burdensome, too legally uncertain, or otherwise objectionable and therefore decide not to do business with us.

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In particular, the promotion, sale and marketing of health care items and services, as well as certain business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent misconduct, including fraud, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and, structuring and commissions, certain customer incentive programs and other business arrangements.

These laws and regulations may restrict or prohibit a wide range of

pricing, discounting, marketing and, structuring and commissions, certain customer incentive programs and other business arrangements.

Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

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If any such actions are instituted against the Company, and in some cases regardless of the merits of those actions, those actions could have a significant impact on our business, including the costs of investigation, settlement arrangements, imposition of civil, criminal and administrative penalties (such as additional reporting requirements and oversight if we become subject to Corporate Integrity Agreements and other arrangements, damages, monetary fines, disgorgement, imprisonment, and possible exclusion from participation in Medicare, Medicaid and other federal health care programs), contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

In the United States, legislation limiting or restricting liability for medical products used to fight bioterrorism is new, and it cannot be certain that any such protection will apply to our product candidates or if applied what the scope of any such coverage will be.

The Public Readiness Act creates general immunity for manufacturers of drug products used to address bioterrorism attacks, when the Secretary of HHS issues a declaration for their manufacture, administration or use.

The declaration is meant to provide general immunity from all claims under state or federal law for loss arising out of the administration or use of a covered drug product, generally referred to as a “countermeasure.” Manufacturers are excluded from this protection in cases of willful misconduct.

Although we believe that our anthrax vaccine product candidate is covered under the general immunity provisions of the Public Readiness Act, there can be no assurance that this coverage will continue, or that the Secretary of HHS will make other declarations in the future that would cover any of our other product candidates, or that the U.S.

Congress will not act in the future to reduce coverage under the Public Readiness Act or to repeal it altogether.

In addition, under the Public Readiness Act, upon a declaration by the Secretary of HHS, a compensation fund would be created to provide “timely, uniform, and adequate compensation to eligible individuals for covered injuries directly caused by the administration or use of a covered countermeasure.” The “covered injuries” to which the program applies are defined as serious physical injuries or death.

Individuals are permitted to bring a willful misconduct action against a manufacturer after they have exhausted their remedies under the compensation program.

However, there is no assurance that the Secretary of HHS would issue under this act a declaration to establish a compensation fund.

Additionally, we are considering applying for liability protection under the Support Anti-terrorism by the SAFETY Act, which provides certain protections that would limit the damages potentially faced by companies who provide certain “qualified” anti-terrorism products.

However, we cannot be certain that we will be able to obtain or maintain coverage under the SAFETY Act.

Department of Homeland Security limits the scope of any coverage awarded to the Company, denies it coverage or continued coverage for a particular product or product candidate, or delays in making decisions about whether to grant it coverage, we may become exposed to legal claims.

We are required to comply with certain export control laws which may limit our ability to sell our products to non-U.S.

persons and may subject us to regulatory requirements that may delay or limit our ability to develop and commercialize our products.

Our product candidates are subject to the Export Administration Regulations (“EAR”), administered by the U.S.

Department of Commerce and are, in certain instances subject to the International Traffic in Arms Regulations (“ITAR”), administered by the U.S.

Department of State.

EAR restricts the export of dual-use products and technical data to certain countries, while ITAR restricts the export of defense products, technical data and defense services.

In addition, EAR and ITAR may also regulate the disclosure to certain foreign nationals in the United States, such as research staff, of technical data about controlled commodities.

government agencies responsible for administering EAR and ITAR have significant discretion in the interpretation and enforcement of these regulations.

Failure to comply with these regulations can result in criminal and civil penalties and may harm our ability to enter into contracts with the U.S.

It is also possible that these regulations could adversely affect our ability to sell our products to non-U.S.

Our product candidates may also be subject to export control laws within the United Kingdom and European Union resulting in the need for authorization from customs authorities before they can leave the United Kingdom or European Union customs territories and restrictions on export from these territories to certain countries.

Again, such laws could adversely affect our ability to sell to customers in certain countries and non-compliance can result in civil and criminal penalties.

Such restrictions exist across the European Union and within its member states individually and may vary between member states.

We must comply with environmental laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities.

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In addition, we may be required to pay damages or civil judgments related to third-party claims, for which we are uninsured, including those relating to personal injury (including exposure to hazardous chemicals and biological materials), product quality issues, property damage or contribution to remedial obligations.

If we use biological and hazardous materials in a manner that causes contamination or injury or violates laws, we may be liable for damages.

Our research and development activities and clinical trials involve the use of potentially harmful biological materials, including anthrax, as well as hazardous materials and chemicals.

We cannot completely eliminate the risk of accidental contamination or injury from the distribution, use, storage, handling or disposal of these materials.

In the event of contamination or injury, we could be held liable for damages that result, and any liability could exceed our available financial resources.

The Company, our collaborative partners, the third parties that conduct clinical trials on our behalf, and our third-party manufacturers are subject to federal, state, local or foreign laws and regulations governing the use, storage, handling and disposal of these materials and waste products.

The cost of compliance with these laws and regulations could be significant.

The failure to comply with any of these laws and regulations could result in significant fines and work stoppages.

Risks Related to our Securities

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New investors could also receive rights, preferences and privileges senior to those of existing holders of our common stock.

In addition, in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock, we may be

required to proportionally adjust the conversion price, exercise price or number of shares issuable upon exercise of our outstanding warrants.

In addition, in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock, we may be required to proportionally adjust the conversion price, exercise price or number of shares issuable upon exercise of our outstanding warrants.

If we do not meet the continued listing standards of The NASDAQ Global Market our common stock could be delisted from trading, which could limit investors’ ability to make transactions in our common stock and subject us to additional trading restrictions.

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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.

What changed 10-K

Item 1A. Risk Factors