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.
ARCT-021 has been selected by a global entity for inclusion in a Phase 3 trial against COVID-19. If the Phase 3 clinical trial is not initiated or experiences significant delays in doing so, we may be unable to fund or timely initiate a Phase 3 clinical trial on ARCT-021 or any other COVID-19 vaccine candidate. If any clinical trial does not generate successful results, we may be unable to market and sell ARCT-021 or any other COVID-19 vaccine.
We have commenced a Phase 2 trial of ARCT-021 and the candidate has been selected by a global entity for inclusion in a Phase 3 clinical trial. However, the entity may determine not to initiate, or to delay or halt, the Phase 3 clinical trial. If the Phase 3 clinical trial is not initiated or experiences significant delays in doing so, we may be unable to fund or to timely initiate a Phase 3 clinical trial of ARCT-021 or any other COVID-19 vaccine. If we were to determine to initiate additional or separate Phase 3 clinical trial, we would need to identify additional funding sources to conduct and complete any Phase 3 trial 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.
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 the 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.
Our strategic partner, Vinbiocare, has received approval to conduct a Phase 1/2/3 clinical trial for ARCT-154, our next generation COVID-19 vaccine candidate, in Vietnam. If the Phase 1/2/3 clinical trial is not initiated or experiences significant delays in doing so, we may be unable to fund or timely initiate a clinical trial on ARCT-154 or any other COVID-19 vaccine candidate. If the planned clinical trial does not generate successful results, or the results are not accepted by government authorities outside of Vietnam, then we may be unable to, or be significantly limited in our ability to, market and sell ARCT-154 or any other COVID-19 vaccine.
Our strategic partner may determine not to initiate, or to delay or halt, the clinical trial. If our strategic partner does not proceed with the clinical trial or experiences significant delays in doing so, we may be unable to fund or to timely initiate a clinical trial of ARCT-154 or any other COVID-19 vaccine programs. If we were to determine to initiate additional or separate Phase 3 clinical trial, we would need to identify additional funding sources to conduct and complete any Phase 3 trial commenced. or does not generate successful results, or experiences significant delays in doing so, we may be unable to market and sell a COVID-19 vaccine program. If we were to determine to initiate additional or separate clinical trials, we would need to identify additional funding sources to conduct and complete any trial commenced. If the clinical trial does not generate successful results, or if the results are not accepted by government authorities outside of Vietnam, then we may be unable to, or be significantly limited in our ability to, market and sell ARCT-154 or any other COVID-19 vaccine.
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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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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