Item 1A. Risk Factors
Item 1A. Risk Factors.
Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which we strongly encourage you to review. Other than as set forth below, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.
Our competitors, which have substantially greater financial, scientific and other resources than us have completed the development of and sold hundreds of millions of doses of their COVID-19 vaccine candidates, making it more difficult for us to establish ARCT-021 as a viable candidate.
A large number of vaccine manufacturers, academic institutions and other organizations currently have programs to develop COVID-19 vaccine candidates and are further along in development of their vaccine candidates. Moderna, AstraZeneca and Johnson & Johnson, and several other companies, have received emergency use authorization from the FDA or other government authorities for their COVID-19 vaccines and are already commercializing them and have vaccinated hundreds of millions of people. As more people in the United States and globally are vaccinated by COVID-19 vaccines developed by our competitors, the demand for ARCT-021 will decline. As our development may be delayed, the number of vaccinated individuals will increase and the need for our vaccine, if developed, may decline further.
We are planning a Phase 3 clinical trial for our COVID-19 vaccine candidate, ARCT-021. If we are unable to initiate the trial or generate successful results, or experience significant delays in doing so, we may be unable to market and sell a COVID-19 vaccine.
We commenced a Phase 2 trial of ARCT-021 and are in discussions with multiple regulatory authorities in different parts of the world regarding a Phase 3 trial. We anticipate that a Phase 3 trial would continue through 2021, and that we would continue to monitor subjects in the Phase 3 trial into 2022 (whether or not we receive emergency use authorization for ARCT-021 during 2021). We will need to identify additional funding sources to complete any Phase 3 trial that is commenced. The data received to date, although providing sufficient information to allow us to proceed further is not complete enough to provide conclusive evidence with respect to safety and potential efficacy of ARCT-021. In December 2020, our CTA application to proceed with our Phase 2 clinical study was accepted by the HSA and the IND for the same trial received a “safe to proceed” from the FDA. Clinical trial results are inherently uncertain, and a significant portion of our success and business prospects depend on the progress of this program. Our failure to demonstrate safety or obtain positive clinical trial results, inability to meet the expected timeline for release of data for this trial, or failure to successfully develop a single-dose vaccine could have an adverse effect on our business operations and financial condition. Furthermore, we will not have a detailed understanding of the efficacy of ARCT-021 until infection of a sufficient number of subjects in a Phase 3 trial, enrollment for which may be delayed or prevented by rollout of competing vaccines for COVID-19, competing clinical trials and the refusal of certain countries’ regulatory authorities to allow placebo-controlled trials for COVID-19 vaccine candidates. We cannot be certain if we will receive approval to proceed with a Phase 3 study, when we will begin enrollment, or the nature of the protocols that may eventually be approved. If our data is not positive or is inconclusive, we may not be able to continue our studies or identify additional funding to continue the studies. No assurance can be given that the results of the trials will produce adequate results to allow us to commence or continue expected trials or that that adequate efficacy will be demonstrated such that ARCT-021 will be a viable commercial product.
If government bodies in the United States or elsewhere implement a waiver on patents on COVID-19 vaccines, there could be a significant adverse effect on our business.
On May 5, 2021, the Biden Administration announced that it supports a waiver for patents on vaccines protecting against the coronavirus. Any action by governments of the United States or other countries, or by global governmental authorities, that limit the ability of companies to enforce their patents or other technology could limit the value of the Company’s intellectual property and revenue potential for the Company’s product candidates.
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Item 2. Unregistered Sales of Equi ty Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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