3 unchanged sentences
The risks and uncertainties described below are not the only ones we face.
−Removed: You should carefully consider the following factors and other information in this annual report before you decide to invest in our common stock.
+Added: You should carefully consider the following factors and other information in this A nnual R eport before you decide to invest in our common stock.
If any of the negative events referred to below occur, our business, financial condition and results of operations could suffer.
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We have never generated any revenue from product sales, have generated only limited revenue since inception, and may never be profitable.
−Removed: The recent coronavirus outbreak has caused interruptions or delays of our business plan and may have a significant adverse effect on our business.
−Removed: We may need to seek and secure significant funding through financings or from other sources to complete Phase 3 studies of ARCT-021, our LUNAR-COV19 vaccine candidate.
−Removed: If we are unable to generate successful results in our Phase 2 clinical trial for ARCT-021, our LUNAR-COV19 vaccine candidate, or experience significant delays in doing so, or are unable to develop a vaccine that does not require a booster shot, we may be unable to market and sell a COVID-19 vaccine.
−Removed: There is significant competition in the development of a vaccine against COVID-19, and many of our competitors have substantially greater financial, scientific and other resources than us.
−Removed: We are relying on advance purchase commitments of ARCT-021, our LUNAR-COV19 vaccine candidate, from certain foreign governmental agencies.
−Removed: Our ability to produce a successful vaccine may be curtailed by one or more government actions or interventions, which may be more likely during a global health crisis such as COVID-19.
−Removed: Our business may be harmed if we are unable to generate successful and timely clinical trials for our product candidates.
−Removed: The approach we are taking to discover and develop drugs is novel and may never lead to marketable products.
+Added: The coronavirus pandemic has caused interruptions and delays of our business plan for the past two years and may continue to have a significant adverse effect on our business.
+Added: We expect that we will need to raise additional capital, which may not be available on acceptable terms, or at all.
+Added: The clinical studies involving our initial COVID-19 vaccine candidate, ARCT-021, have concluded dosing and we might not proceed with further development of ARCT-021.
+Added: If we cannot quickly develop and achieve approval of a COVID-19 vaccine candidate, we may be unable to effectively market and sell a COVID-19 vaccine.
+Added: Even if we successfully develop a COVID-19 vaccine, we may not be able to sell it profitably, or it may not be accepted in the market.
+Added: Our next generation COVID-19 vaccine candidate, ARCT-154, does not have marketing approval and may never achieve marketing approval.
+Added: Regulators may refuse to approve ARCT-154 as a booster shot because we have not yet received approval for ARCT-154 as a primary vaccination series for COVID-19.
+Added: There is significant competition in the development of a vaccine against COVID-19, some competitors’ vaccines are already widely accepted in the market, and many of our competitors have substantially greater financial, scientific and other resources than we have.
+Added: If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed..
+Added: Our platform focuses on nucleic acid technology, and mRNA drug products in particular, which are relatively new and any adverse results from nucleic acid or mRNA technologies in the industry could significantly impact our ability to develop and commercialize marketable products..
We may not be successful in our efforts to identify or discover potential product candidates.
−Removed: We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates if our clinical trials are not successful.
−Removed: We may find it difficult to identify and enroll patients in our clinical studies due to the rollout of competing vaccines for COVID-19.
−Removed: In addition, the rollout of competing vaccines for COVID-19 may make it more difficult for us to achieve approval of certain clinical trial designs for our LUNAR-COV19 vaccine.
−Removed: Difficulty in enrolling patients, or in seeking approval for certain clinical trial designs could delay or prevent clinical studies of certain of our product candidates.
−Removed: Any of our product candidates may cause undesirable side effects or have other properties impacting safety that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.
−Removed: Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate.
+Added: If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
+Added: We may find it difficult to identify and enroll patients in our clinical studies, and the limited number of patients who have the diseases for which certain of our product candidates are being studied could delay or prevent clinical studies of certain of our product candidates.
+Added: If any of our product candidates cause undesirable side effects or have other properties impacting safety, their regulatory approval could be prevented, delayed or limited.
+Added: Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product.
Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face future development and regulatory difficulties.
−Removed: We may fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success than a particular program where we allocate resources.
+Added: We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
−Removed: If certain third-party alliances are unsuccessful or are terminated, we may be unable to commercialize certain product candidates and we may be unable to generate revenues from our development programs.
−Removed: Certain agreements with our alliance partners may impair or prevent entirely our ability to generate revenues from the development, manufacture and commercialization of certain product candidates.
−Removed: We rely on third-party manufacturers to produce the supply of our product candidates, and we intend to rely on third parties to produce future clinical supplies of product candidates.
−Removed: We rely on limited sources of supply for the drug substance of product candidates and any disruption in the chain of supply may cause a delay in developing and commercializing these product candidates.
−Removed: Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization.
−Removed: If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets.
−Removed: Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
−Removed: We could lose license rights that are important to our business for failure to comply with such agreements under which we license intellectual property.
−Removed: We may be involved in lawsuits to protect or enforce our patents or the patents of our licensees, which could be expensive, time consuming and unsuccessful.
−Removed: If our alliance partners are unable or unwilling to perform in accordance with the terms of our agreements, our potential to generate future revenue from these programs would be significantly reduced
−Removed: If we are unable to obtain regulatory approvals for a manufacturing facility for ARCT-021, our LUNAR-COV19 vaccine candidate, we may experience delays in product development, clinical trials, regulatory approval and commercial distribution.
+Added: Manufacturing issues may arise that could increase product and regulatory approval costs or delay or hinder commercialization.
+Added: If our alliance partners do not perform in accordance with the terms of our agreements, our potential to generate future revenue from these programs would be significantly reduced and our business would be materially and adversely harmed.
We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.
The commercial success of our product candidates will depend upon the acceptance of these product candidates by the medical community, including physicians, patients and healthcare payors.
−Removed: If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues.
+Added: If we are unable to establish cost-effective sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues.
If we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.
−Removed: Coverage and adequate reimbursement may not be available for our product candidates, if approved.
−Removed: We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.
+Added: If our strategic alliances are unsuccessful or are terminated, we may be unable to commercialize certain product candidates and generate revenues.
+Added: If the outside contractors we rely on to conduct some aspects of our compound formulation, research and studies do not perform satisfactorily and meet deadlines, development of our product candidates could be delayed or precluded.
+Added: If the contract manufacturers we rely on to produce the supply of our preclinical and clinical product candidates, including materials for the manufacture of our product candidates, do not timely deliver adequate quantities of quality materials, development and commercialization of our product candidates would be hindered.
+Added: Any disruption in the supply chain of raw materials for, or in the manufacturing capacity and timing for the manufacture of drug substance or drug product for, our product candidates may cause a delay in developing and commercializing these product candidates and limit the revenues that we could generate.
+Added: If the contract research organizations and clinical trial sites we rely on to conduct, supervise and monitor our clinical trials perform in an unsatisfactory manner, it may harm our business.
+Added: If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets.
+Added: Claims that we infringe the intellectual property rights of others, especially in the crowded and competitive field of mRNA patents, may prevent or delay our development and commercialization efforts.
+Added: If we fail to obtain licenses to necessary intellectual property or do not comply with our obligations in license agreements, we could lose important rights.
+Added: We may be involved in lawsuits to protect or enforce our patents or the patents of our licensees, which could be expensive, time consuming and unsuccessful.
RISKS RELATED TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL CAPITAL
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We are a global clinical-stage messenger RNA medicines company with a limited operating history.
−Removed: Since inception, our operations have been primarily limited to acquiring and licensing intellectual property rights, developing our nucleic acid product platform, undertaking basic research around nucleic acid targets and conducting studies for our initial programs.
+Added: Since inception, our operations have been primarily limited to acquiring and licensing intellectual property rights, developing our product platform, undertaking basic research and conducting studies for our initial product development programs.
We have not yet obtained regulatory approval for any product candidates.
−Removed: Consequently, any predictions about our future success or viability, or any evaluation of our business and prospects, may not be accurate.
+Added: Consequently, any predictions about our future success or viability, or any evaluation of our business and prospects, is difficult and may not be accurate.
We have incurred losses in each year since our inception.
12 unchanged sentences
acquire or in-license other products and technologies;
−Removed: advance product candidates into clinical trials;
−Removed: seek marketing approvals for our product candidates that successfully complete clinical trials;
+Added: advance product candidates into and through clinical trials;
+Added: seek marketing approvals for any product candidates that successfully complete clinical trials;
ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;
8 unchanged sentences
seeking, obtaining, and maintaining marketing approvals for product candidates that successfully complete clinical trials;
−Removed: establishing and maintaining supply and manufacturing relationships with third parties;
+Added: establishing and maintaining supply and manufacturing relationships with capable parties;
launching and commercializing product candidates for which we may obtain marketing approval, with an alliance partner or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure;
1 unchanged sentence
attracting, hiring and retaining qualified personnel.
−Removed: Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever.
+Added: Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict reliably the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever.
In addition, our expenses could increase beyond expectations if we are required by the FDA, or other foreign regulatory agencies to perform studies and trials in addition to those that we currently anticipate.
1 unchanged sentence
Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.
−Removed: The recent coronavirus outbreak has caused interruptions or delays of our business plan and may have a significant adverse effect on our business.
+Added: The coronavirus pandemic has caused interruptions and delays of our business plan for the past two years and may continue to have a significant adverse effect on our business.
In December 2019, a strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China, and on March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic.
In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, Canada and China, have imposed unprecedented restrictions on travel, quarantines, and other public health safety measures.
−Removed: The extent to which the pandemic may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, but the development of clinical supply materials have been and will continue to be delayed and enrollment of patients in our study for ARCT-810 (LUNAR-OTC) and ARCT-021 (LUNAR-COV19 Vaccine) may be delayed or suspended, as hospitals and clinics in areas where we are conducting trials shift resources to cope with the COVID-19 pandemic and may limit access or close clinical facilities due to the COVID-19 pandemic.
−Removed: Additionally, if our trial participants are unable to travel to our clinical study sites as a result of quarantines or other restrictions resulting from the COVID-19 pandemic, we may experience higher drop-out rates or delays in our clinical studies.
−Removed: Government-imposed quarantines and restrictions may also require us to temporarily suspend or terminate activity at our clinical sites.
−Removed: Furthermore, if we determine that our trial participants may suffer from exposure to COVID-19 as a result of their participation in our clinical trials, we may voluntarily terminate certain clinical sites as a safety measure until we reasonably believe that the likelihood of exposure has subsided.
−Removed: As a result, our expected development timelines for our product candidates may be negatively impacted.
−Removed: We cannot predict the ultimate continued impact of the COVID-19 pandemic as consequences of such an event are highly uncertain and subject to change.
−Removed: We do not yet know the full extent of potential delays or impacts on our business, our clinical studies or as a whole;
−Removed: however, the COVID-19 outbreak may materially disrupt or delay our business operations, further divert the attention and efforts of the medical community to coping with COVID-19, disrupt the marketplace in which we operate, and/or have a material adverse effect on our operations.
−Removed: Notwithstanding the ongoing rollout of vaccines, it will still take a substantial amount of time to produce, distribute and administer the vaccines worldwide and, as a result, to achieve broad protection of the global population.
−Removed: It is also still unclear if the vaccines will enable adequate protection, as (i) some vaccinated individuals
−Removed: may still become ill or transmit the virus, (ii) there are individuals who may refuse to be vaccinated or who cannot be vaccinated due to pre-existing conditions, (iii) it is unclear how long the vaccine protection will last, and (iv) genetic mutations of the virus may have an impact on the efficacy of available vaccines.
−Removed: Moreover, the various precautionary measures taken by many governmental authorities around the world in order to limit the spread of the coronavirus has had and may continue to have an adverse effect on the global markets and global economy generally, including on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the global economy.
−Removed: There have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19.
−Removed: Significant uncertainty remains as to the potential impact of the COVID-19 pandemic on the global economy as a whole.
−Removed: It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels.
−Removed: The COVID-19 pandemic could materially disrupt our business and operations, interrupt our sources of supply, hamper our ability to raise additional funds or sell our securities, or continue to slow down the overall economy.
+Added: This pandemic has adversely affected our operations in many ways, including:
+Added: delayed enrollment and difficulty retaining patients in clinical trials;
+Added: shortages, delays and higher prices for clinical supply materials and other resources used in our business;
+Added: suspensions and delays in completion of clinical trials;
+Added: diverted resources and priorities at hospitals and clinics in areas where we are conducting trials;
+Added: disruption in supply chain, including difficulties in procuring materials and components for our clinical trials;
+Added: limited availability and losses of key management, scientific and technical personnel;
+Added: slower expected development timelines for our product candidates.
+Added: The extent to which the pandemic will continue to adversely affect our business and the global economy and its full impact will depend on future developments, which are highly uncertain and cannot be reliably predicted.
We expect that we will need to raise additional capital, which may not be available on acceptable terms, or at all.
−Removed: Developing pharmaceutical products, including conducting studies and clinical trials, is expensive.
−Removed: We expect our research and development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates towards or through clinical trials.
+Added: Developing pharmaceutical products, including conducting studies and clinical trials, is extremely expensive.
+Added: We expect our research and development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates towards and through clinical trials.
We may need to raise additional capital to support our operations and such funding may not be available to us on acceptable terms, or at all.
−Removed: As of December 31, 2020, we had unrestricted cash and cash equivalents of $462.9 million.
−Removed: We cannot provide assurances that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate.
−Removed: For example, our trials may encounter technical or other difficulties.
−Removed: Additionally, our strategic alliance partners may not elect to pursue the development and commercialization of any of our product candidates that are subject to their respective strategic alliance agreements with us.
−Removed: Any of these events may increase our development costs more than we expect.
−Removed: In order to support our long-term plans, we may need to raise additional capital or otherwise obtain funding through additional strategic alliances if we choose to initiate preclinical or clinical trials for new product candidates other than programs currently partnered.
+Added: As of December 31, 2021, we had unrestricted cash and cash equivalents of $370.5 million, which we expect should be sufficient to fund currently planned operations for at least one year.
+Added: But if our plans change or we face unexpected circumstances, our capital resources may be depleted more rapidly than we currently anticipate.
+Added: For example, our clinical trials may encounter technical, regulatory or other difficulties.
+Added: Additionally, our strategic alliance collaborators may elect not to pursue the development and commercialization of any of our product
+Added: candidates that are subject to their respective strategic alliance agreements with us.
+Added: Any of these events would increase our development costs more than we expect.
+Added: In order to support our long-term plans, we will need to raise additional capital or otherwise obtain funding through additional strategic alliances if we choose to initiate preclinical or clinical trials for product candidates that are not currently subject to a collaboration.
In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, future product candidates.
−Removed: A significant portion of our current cash balance of $462.9 million along with the $46.6 million from the Singapore Loan is expected to be utilized during fiscal year 2021 to fund (i) the Phase 2 trial and anticipated Phase 3 trial of our current LUNAR-COV19 vaccine candidate, (ii) the continued Phase 1 trial and anticipated Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (iii) advancing our new LUNAR-FLU program toward submission of an IND, and (iv) other programs and administrative costs.
−Removed: The Phase 3 trial of our LUNAR-COV19 vaccine candidate is expected to be primarily or exclusively funded through our cash reserves.
+Added: A significant portion of our current cash balance is expected to be utilized during 2022 to fund our continued preclinical and clinical development activities for our pipeline, including manufacturing activities to support such development activities and corresponding manufacturing activities and resources to preparing filings with regulatory authorities.
+Added: Any additional Phase 3 trial of our LUNAR-COV19 vaccine candidate, if any, may need to be primarily or exclusively funded through our cash reserves.
If we achieve EUA approval to market our LUNAR-COV19 vaccine candidate, we will need to raise additional funds through equity transactions, additional debt or prepayments from potential customers, among other options, to fund commercialization of LUNAR-COV19.
−Removed: Any additional fundraising efforts may divert our management from our day-to-day activities, which may adversely affect our ability to develop and commercialize future product candidates.
−Removed: In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
−Removed: If we are unable to raise additional capital when required or on acceptable terms, we may be required to:
+Added: Any additional fundraising efforts may divert our management from our day-to-day activities, which may delay and hinder our ability to develop and commercialize future product candidates.
+Added: We may be unable to raise sufficient amounts of additional capital when needed and on acceptable terms, which could require us to:
significantly delay, scale back or discontinue the development or commercialization of any future product candidates;
−Removed: seek strategic alliances for research and development programs at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;
+Added: seek strategic alliances for research and development programs or clinical trials at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;
relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize ourselves.
−Removed: If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing development and commercialization efforts, which will have a material adverse effect on our business, operating results and prospects.
−Removed: We will need to seek and secure significant funding through financings or from other sources to complete Phase 3 studies of ARCT-021, our LUNAR-COV19 vaccine candidate.
−Removed: As of December 31, 2020, we had approximately $463.0 million in cash and cash equivalents.
−Removed: We expect that our existing cash and cash equivalents will be sufficient to fund our current operations through at least the next twelve months.
−Removed: If we have encouraging results from our current trial, we will need to seek additional funds sooner than planned, through public or private equity or debt financings, structured financings, government or other third-party funding, sales of assets, marketing and distribution arrangements, other collaborations and licensing arrangements, or a combination of these approaches.
−Removed: We will require additional capital to obtain regulatory approval for, and to commercialize ARCT-021.
We are exposed to interest rate risk, including under our loan agreements.
3 unchanged sentences
As of December 31, 2021, we had $15.2 million outstanding under the Western Loan Agreement.
−Removed: If we were to experience a 10% adverse change in the prime rate referenced above, the annual effect such change would have on our statement of operations, based on the amount we had outstanding as of December 31, 2020, under the Western Loan Agreement, would be approximately $26,000.
+Added: If we were to experience a 10% adverse change in the prime rate referenced above, the annual effect such change would have on our statement of operations, based on the amount we had outstanding as of December 31, 2021, under the Western Loan Agreement, would be negligible.
Additionally, on November 7, 2020, we entered into a Manufacturing Support Agreement with the EDB.
−Removed: Pursuant to the Manufacturing Support Agreement, the EDB agreed to make a term loan of up to S$62.1 million , subject to the satisfaction of customary deliveries, to support the manufacture of the LUNAR-COV19 vaccine candidate (the “Singapore Loan ”).
+Added: Pursuant to the Manufacturing Support Agreement, the Economic Development Board of the Republic of Singapore (the “EDB”) agreed to make a term loan (the “Singapore Loan”) of up to S$62.1 million, subject to the satisfaction of customary deliveries, to support the manufacture of the LUNAR-COV19 vaccine candidate (ARCT-021).
The Singapore Loan accrues interest at a rate of 4.5% per annum calculated on a daily basis.
−Removed: We elected to borrow the full amount available under the Support Agreement of S$62.1 million, or $46.6 million, as a result of applicable exchange rates, on January 29, 2021.
+Added: We elected to borrow the full amount available under the Support Agreement of S$62.1 million, or US$46.6 million, as a result of applicable exchange rates, on January 29, 2021.
Our indebtedness could materially and adversely affect our business, financial condition and results of operations.
1 unchanged sentence
limiting our flexibility in planning for, or reacting to, changes in our business and our industry;
−Removed: placing us at a competitive disadvantage compared to our competitors who may have less debt or comparable debt at more favorable interest rates;
+Added: placing us at a competitive disadvantage compared to our competitors who may have less debt or comparable debt at more favorable interest rates or less strict covenants and other limitations or requirements;
limiting our ability to incur specified types of additional indebtedness which may be desired for working capital, capital expenditures, research and development efforts, acquisitions, debt service requirements, execution of our business strategy or other purposes;
5 unchanged sentences
In the event we were to default on our obligations under our debt and were unable to cure or obtain a waiver of such default, the repayment of our debt may be accelerated.
−Removed: If such acceleration were to occur, we would be required to secure alternative sources of equity or debt financing to be able to repay the debt.
+Added: If such acceleration were to occur, we would be required to promptly secure alternative sources of equity or debt financing to be able to repay the debt.
Alternative financing may not be available on terms satisfactory to us, or at all.
1 unchanged sentence
If acceptable alternative financing were unavailable, we would have to consider alternatives to fund the repayment of the debt, which could materially and adversely affect our business, financial condition and results of operations.
−Removed: RISKS RELATED TO THE DISCOVERY AND DEVELOPMENT OF PRODUCT CANDIDATES
−Removed: We recently commenced a Phase 2 clinical trial for our COVID-19 vaccine candidate, ARCT-021.
−Removed: If we are unable to generate successful results, experience significant delays in doing so, or are unable to develop a vaccine that does not require a booster shot, we may be unable to market and sell a COVID-19 vaccine.
−Removed: We recently commenced a Phase 2 trial of ARCT-021 and expect to commence a Phase 3 trial in the second quarter of 2021.
−Removed: We anticipate that the Phase 3 trial will continue through 2021, and we plan to continue to monitor subjects in the Phase 3 trial into 2022 (whether or not we receive emergency use authorization for ARCT-021 during 2021).
−Removed: We will need to identify additional funding sources to continue the Phase 3 trial.
−Removed: 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.
−Removed: Our IND application to proceed with our Phase 2 clinical study was accepted by the HSA in December 2020, and by the FDA in January 2021.
−Removed: We are positioned to manufacture finished doses of ARCT-021 in the first quarter of 2021 for stockpiling purposes.
−Removed: Clinical trial results are inherently uncertain, and a significant portion of our success and business prospects depend on the progress of this program.
−Removed: 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 that does not require a booster shot could have an adverse effect on our business operations and financial condition.
−Removed: Furthermore, we will not have a detailed understanding of the efficacy of ARCT-021 until infection of a sufficient number of subjects in the placebo group of a Phase 3 clinical trial, enrollment for which may be delayed 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.
−Removed: If our data is not positive or inconclusive, we may not be able to continue our studies or identify additional funding to continue the studies.
−Removed: 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.
−Removed: There is significant competition in the development of a vaccine against COVID-19, and many of our competitors have substantially greater financial, scientific and other resources than us, and are further along in the development of their COVID-19 vaccine candidates.
−Removed: A large number of vaccine manufacturers, academic institutions and other organizations currently have programs to develop COVID-19 vaccine candidates and may be further along in development of their vaccine candidates.
−Removed: While we are not aware of all of our competitors’ efforts, there are reports that Johnson & Johnson/Janssen, Pfizer, GlaxoSmithKline, Moderna, Sanofi, Inovio, AstraZeneca and many other companies are all in various stages of developing vaccine candidates against COVID-19.
−Removed: In particular, Pfizer, Moderna and Johnson & Johnson have received emergency use authorization from the FDA for their COVID-19 vaccines and are already commercializing them and have vaccinated millions of people.
−Removed: Despite funding provided to us to date, many of our competitors pursuing vaccine candidates have significantly greater product candidate development, manufacturing and marketing resources than we do.
+Added: RISKS RELATED TO THE DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT CANDIDATES
+Added: The clinical studies involving our initial COVID-19 vaccine candidate, ARCT-021, have concluded dosing and we might not proceed with further development of ARCT-021.
+Added: If we cannot quickly develop and achieve approval of a COVID-19 vaccine candidate, we may be unable to effectively market and sell a COVID-19 vaccine.
+Added: The planned multinational Phase 3 vaccine trial against COVID-19 with a global entity, for which our initial COVID-19 vaccine candidate, ARCT-021, was selected, has taken longer than anticipated to proceed with ARCT-021 and might not ever proceed with ARCT-021.
+Added: We have completed dosing in the studies involving ARCT-021 and do not have current plans to sponsor additional development studies of ARCT-021 unless and until the global entity determines to proceed with ARCT-021 in the multinational Phase 3 vaccine trial.
+Added: We have developed next generation COVID-19 candidates, namely ARCT-154, that we have progressed further in clinical development, but advancing these next generation candidates has taken significant time and resources.
+Added: Further, the existence of several other COVID-19 vaccines that have achieved approval and widespread global adoption makes it significantly more challenging for us to run clinical trials on, and to achieve marketing approvals (including emergency use authorizations) for, any of our COVID-19 vaccine candidates.
+Added: Data from our ongoing Phase 1/2/3 clinical trials of ARCT-154 in Vietnam may not provide sufficient evidence to the Vietnamese regulatory authorities, the US FDA or regulatory authorities in other jurisdictions that it is sufficiently safe and effective to achieve any marketing approval (including any emergency use authorization) or to have a plausible clinical path to an approval.
+Added: Clinical trial results are inherently uncertain, and a significant portion of our potential success and business prospects currently depend on our COVID-19 vaccine program.
+Added: If we cannot demonstrate sufficient safety and efficacy and complete these clinical trials on a timely basis, we likely will have missed a substantial market opportunity for COVID-19 vaccines, after dedicating significant efforts and financial resources to this program.
+Added: Even if we successfully develop a COVID-19 vaccine, we may not be able to sell it profitably.
+Added: If the prevalence of COVID-19 continues to decline and more people get vaccinated, the potential market opportunity is likely shrinking for any vaccine, including any booster we may be able to develop.
+Added: As further COVID-19 vaccines are approved, production of existing COVID-19 vaccines improves and the COVID-19 impact transitions from pandemic to endemic stage, there may be downward pressure on prices.
+Added: Although many developing countries have large populations for whom COVID-19 vaccines have not been available, it may not be easy or profitable to get vaccines to those populations.
+Added: The price at which COVID-19 vaccines could be sold to developing countries is not likely to be as high as prices paid by wealthier countries eager to get vaccines when first available.
+Added: Therefore, even if we can get through the extremely costly, long and risky process of developing and obtaining
+Added: regulatory approval to market a vaccine, it may not be commercially successful.
+Added: This failure could be due to reduced demand for COVID-19 vaccines, lower prices, distribution problems, competitors’ products or many other reasons.
+Added: Our manufacturing process for our current COVID-19 vaccine candidates include a step for lyophilization to enhance the stability of the vaccine product.
+Added: The additional step of lyophilization adds time and costs to the overall production output, which could adversely impact the production volumes and profitability of our COVID-19 vaccines if approval to market a vaccine is achieved.
+Added: Our next generation COVID-19 vaccine candidate, ARCT-154, does not have marketing approval and may never achieve marketing approval.
+Added: Regulators may refuse to approve ARCT-154 as a booster shot because we have not yet received approval for ARCT-154 as a primary vaccination series for COVID-19.
+Added: In the coming months, we expect to receive important clinical data on ARCT-154, and the data may not support a regulatory approval (including emergency use authorization).
+Added: Regulatory authorities, including the FDA, may deem the data we expect to collect from studies outside of the United States to be inadequate or unacceptable.
+Added: Regulatory authorities, including the FDA, may also determine to foreclose or make more difficult a path to emergency use authorization.
+Added: If key regulatory authorities, such as the FDA, determine that our data is inadequate or unacceptable, or make the path to regulatory approval more difficult, we may not be able to achieve regulatory approval (including EUA) and any additional study may prove too costly for us to conduct without a strategic partner
+Added: Though we have exciting preliminary clinical data on ARCT-154 as a booster series, we do not have approval for ARCT-154 (or any vaccine candidate) as a primary vaccination series anywhere in the world.
+Added: We have completed EUA submission in Vietnam for ARCT-154 on the primary vaccination series.
+Added: But we cannot provide any assurance that the Vietnam Ministry of Health will approve the EUA, or that any other country will provide an EUA or other approval on the primary vaccination series.
+Added: We are not aware of the FDA authorizing use of any COVID-19 vaccine or any other vaccine as a booster shot unless the FDA has previously authorized that vaccine to be used as a primary vaccine series.
+Added: We cannot provide any assurance that the FDA would be willing in the future to approve a COVID-19 vaccine as a booster shot without prior approval as a primary vaccine series.
+Added: The FDA and regulators in other jurisdictions may still refuse to approve ARCT-154 or any other vaccine as a booster even if our COVID-19 vaccine candidate demonstrates safety and efficacy.
+Added: In such event, we will not be able to sell a COVID-19 vaccine and our financial condition could be substantially harmed.
+Added: Even if one of our vaccine candidates is approved for sale, it may not be accepted in the market, despite limitations on the effectiveness of some approved vaccines.
+Added: Notwithstanding the ongoing rollout of vaccines, it will still take a substantial amount of time to produce, distribute and administer the vaccines worldwide and, as a result, to achieve broad protection of the global population.
+Added: It is also still unclear if the vaccines will enable adequate long-term protection, as (i) many vaccinated individuals have become ill due to “breakthrough infections” and have transmitted the virus to many others, (ii) there are millions of individuals who refuse to be vaccinated or who cannot be vaccinated due to pre-existing conditions, (iii) it is unclear how long the vaccine protection will last, and (iv) genetic mutations or variants of the virus already have had, and are expected to continue to have, an adverse impact on the efficacy of available vaccines.
+Added: If we cannot develop and commercialize a vaccine that adequately addresses some of these shortcomings of vaccines currently on the market, we cannot expect to have commercial success.
+Added: There is significant competition in the development of a vaccine against COVID-19, some competitors’ vaccines are already widely accepted in the market, and many of our competitors have substantially greater financial, scientific and other resources than we have.
+Added: A large number of biopharmaceutical companies, academic institutions and other organizations currently have programs to develop COVID-19 vaccine candidates and many are further along in development of their vaccine candidates.
+Added: Pfizer, Moderna and Johnson & Johnson have received full approvals or emergency use authorization from the FDA and many other health regulatory authorities throughout the world, and other biopharmaceutical companies have received approvals or authorizations from many health regulatory authorities other than the FDA, for their COVID-19 vaccines and have already commercialized them on a large scale and have vaccinated billions of people around the world.
+Added: Despite funding provided to us to date, we are already at a significant competitive disadvantage to those companies with vaccines on the market, as well as many other competitors pursuing vaccine candidates.
+Added: competitors have significantly greater product candidate development, manufacturing and marketing resources than we do.
Larger pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for their products, and may have the resources to heavily invest to accelerate discovery and development of their vaccine candidates.
−Removed: Our business could be materially and adversely affected by our competitors commercialization of their vaccines before we complete development and seek approval for our vaccine candidate;
−Removed: if they develop and commercialize one or more COVID-19 vaccines that are safer, more effective, have fewer or less severe side effects, have broader market acceptance, are more convenient or are less expensive than any vaccine candidate that we may develop;
−Removed: or if we are unable to achieve a competitive advantage by successfully developing a single-dose vaccine that does not require a booster shot.
+Added: Our business could be further materially and adversely affected by our competitors commercialization of their vaccines before we complete development and seek approval for our vaccine candidate;
+Added: if they develop and commercialize one or more COVID-19 vaccines that are safer, more effective against multiple variants, have fewer or less severe side effects, have broader market acceptance, are more convenient or are less expensive than any vaccine candidate that we may develop.
Furthermore, if any competitors are successful in producing a more efficacious vaccine or other treatment for COVID-19, or if any competitors are able to manufacture and distribute any such vaccines or treatments with greater efficiency, there may be a diversion of potential governmental and other funding away from us and toward such other parties.
−Removed: We are relying on advance purchase commitments of ARCT-021, our LUNAR-COV19 vaccine candidate , from certain foreign governmental agencies.
−Removed: Although we have previously raised capital to support the development and manufacture of our LUNAR-COV19 vaccine, we must also secure additional funding through contractual arrangements with third parties.
−Removed: We may be unable to enter into such arrangements on favorable terms, or at all, which would adversely affect our ability to develop, manufacture and distribute a potential vaccine.
−Removed: Our ability to produce a successful vaccine may be curtailed by one or more government actions or interventions, which may be more likely during a global health crisis such as COVID-19.
−Removed: Given the significant global impact of the COVID-19 pandemic, it is possible that one or more government entities may take actions that directly or indirectly have the effect of diminishing some of our rights or opportunities with respect to LUNAR-COV19 and the economic value of a COVID-19 vaccine to us could be limited.
−Removed: In the United States, the Defense Production Act of 1950, as amended (the “Defense Production Act”) gives the U.S.
−Removed: government rights and authorities that may directly or indirectly diminish our own rights or opportunities with respect to LUNAR-COV19 and the economic value of a COVID-19 vaccine to us could be limited.
−Removed: Our third-party service providers may be impacted by government entities potentially invoking the Defense Production Act or other potential restrictions to all or a portion of services they might otherwise offer.
−Removed: Government entities imposing restrictions or limitations on our third-party service providers may require us to obtain alternative service sources for LUNAR-COV19.
−Removed: If we are unable to timely enter into alternative arrangements, or if such alternative arrangements are not available on satisfactory terms, we will experience delays in the development or production of LUNAR-COV19, increased expenses, and delays in potential distribution or commercialization of LUNAR-COV19, if approved.
−Removed: Preclinical and clinical studies of our product candidates may not be successful.
If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed.
We have no products approved for commercial marketing and all of our product candidates are in preclinical or clinical development.
−Removed: Other than our LUNAR-COV19 vaccine candidate and LUNAR-OTC, none of our product candidates have ever been tested in a human subject.
−Removed: Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and, if approved, successfully commercializing our product candidates, either alone or with third parties.
Before obtaining regulatory approval for the commercial distribution of our product candidates, we or an existing or future collaborator must conduct extensive preclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates.
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If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete the development or commercialization of our product candidates, which would materially harm our business.
−Removed: The approach we are taking to discover and develop drugs is novel and may never lead to marketable products.
−Removed: We have concentrated our therapeutic product research and development efforts on nucleic acid technology, and our future success depends on the successful development of this technology and products based on our nucleic acid product platform.
−Removed: Except for Moderna (CX-024414), Onpattro (patisiran), which is marketed by Alnylam;
−Removed: Kynamro (mipomersen), which was marketed by Kastle Therapeutics;
−Removed: Vitravene (fomivirsen), which Novartis withdrew from the US market in 2006;
−Removed: and Spinraza (nusinersen), which is marketed by Biogen Inc., neither we, nor any other company, has to our knowledge received regulatory approval to market nucleic acid therapeutics.
−Removed: The scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new.
+Added: Our platform focuses on nucleic acid technology, and mRNA drug products in particular, which are relatively new and any adverse results from nucleic acid or mRNA technologies in the industry could significantly impact our ability to develop and commercialize marketable products.
+Added: We have concentrated our therapeutic product research and development efforts on nucleic acid technology, and mRNA in particular, and our future success depends on the successful development and acceptance of this technology for drug products.
+Added: The development and commercialization of drug products based on nucleic acid technologies, including mRNA, are relatively new.
The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited.
−Removed: If we do not successfully develop and commercialize product candidates based upon our technological approach, we may not become profitable and the value of our common stock may decline.
−Removed: Further, our focus solely on nucleic acid technology for developing drugs as opposed to multiple, more proven technologies for drug development increases the risks associated with the ownership of our common stock.
+Added: If nucleic acid or mRNA approaches to drug products encounter setbacks based on the safety, efficacy, distribution, costs or other factors, it will significantly hurt our prospects and the value of our common stock.
+Added: Our focus on nucleic acid technology for developing drugs as opposed to more proven technologies for drug development increases the risks associated with the ownership of our common stock.
If we are not successful in developing any product candidates using nucleic acid technology, we may be required to change the scope and direction of our product development activities.
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Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for their products.
−Removed: Furthermore, even if prior animal studies have demonstrated the
−Removed: potential safety and efficacy of our product candidates, there can be no guarantee that such results will be reproducible in preclinical studies and clinical trials involving human subjects.
+Added: Furthermore, even if prior animal studies have demonstrated the potential safety and efficacy of our product candidates, there can be no guarantee that such results will be reproducible in preclinical studies and clinical trials involving human subjects.
Events which may result in a delay or unsuccessful completion of clinical development include:
delays in reaching an agreement with the FDA or other regulatory authorities on final trial design;
−Removed: delays in submitting or acceptance of, an application for authorization to administer an investigational new drug product to humans through the submission or acceptance of an IND application to the FDA, or comparable foreign regulatory authority;
+Added: delays in submitting or acceptance of, an application for authorization to administer an investigational new drug product to humans through the submission or acceptance of an IND application to the FDA, or foreign regulatory authority;
imposition of a clinical hold of our clinical trial operations or trial sites by the FDA or other regulatory authorities;
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delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.
−Removed: Accordingly, we cannot be certain the submission of an IND will be accepted by the FDA.
If we or our strategic alliance partners are required to conduct additional clinical trials or other testing of any product candidates beyond those that are currently contemplated, are unable to successfully complete clinical trials of any such product candidates or other testing, or if the results of these trials or tests are not positive, are only modestly positive or if there are safety concerns, we or our strategic alliance partners may:
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Our product development costs will also increase if we experience delays in testing or marketing approvals.
−Removed: We do not know whether any clinical trials will begin as planned, need to be restructured or will be completed on schedule, or at all.
−Removed: Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which would impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
−Removed: Any inability to successfully complete preclinical and clinical development, whether independently or with our strategic alliance partners, could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.
−Removed: We may find it difficult to identify and enroll patients in our clinical studies due to the development and rollout of competing vaccines for COVID-19 and due to the limited number of patients who have the diseases for which certain of our product candidates are being studied.
−Removed: In addition, the rollout of competing vaccines for COVID-19 may make it more difficult for us to achieve approval of certain clinical trial designs for our LUNAR-COV19 vaccine.
−Removed: Difficulty in enrolling patients, or in seeking approval for certain clinical trial designs, could delay or prevent clinical studies of certain of our product candidates.
+Added: We face risks that clinical trials may not begin as planned, may need to be restructured or may not be completed on schedule, or at all.
+Added: Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or could allow our competitors to bring products to market before we do, which would impair our ability to successfully commercialize our product candidates.
+Added: Any inability to timely and successfully complete preclinical and clinical development, whether independently or with our strategic alliance partners, could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.
+Added: We may find it difficult to identify and enroll patients in our clinical studies, and the limited number of patients who have the diseases for which certain of our product candidates are being studied could delay or prevent clinical studies of certain of our product candidates.
Identifying and qualifying patients to participate in clinical studies of our product candidates is critical to our success.
The timing of our clinical studies depends in part on the speed at which we can recruit patients to participate in testing our product candidates, and we may experience delays in our clinical studies if we encounter difficulties in enrollment.
−Removed: A number of preventative vaccines have recently been authorized for use in human populations by regulatory agencies in the U.S.
−Removed: and Europe and other countries.
−Removed: The rollout of these vaccines has resulted in slower than expected enrollment in the United States for the Phase 2 study of our LUNAR-COV19 vaccine candidate.
−Removed: Because of the aggressive roll-out of COVID-19 vaccines, we may find it challenging to enroll sufficient subjects in our LUNAR-COV19 trials who have not otherwise received a vaccine.
−Removed: Additionally, competing COVID-19 vaccine clinical trials may make it more difficult to enroll subjects in our LUNAR-COV19 trial.
+Added: Because of the aggressive roll-out of COVID-19 vaccines, we have found it challenging to enroll sufficient subjects in our LUNAR-COV19 trials who have not otherwise received a vaccine.
+Added: Additionally, competing COVID-19 vaccine clinical trials make it more difficult to enroll subjects in our LUNAR-COV19 trials.
We may also find it more difficult to identify subjects willing to participate in our studies.
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The availability and efficacy of competing therapies and clinical studies can also adversely impact enrollment.
−Removed: If we are unable to enroll an adequate number of patients in our studies for the foregoing or other reasons, the timeline for recruiting patients, conducting studies, and obtaining regulatory approval of potential products may be delayed, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenue from any of these product candidates could be delayed or prevented.
+Added: If we are unable to promptly enroll an adequate number of patients in our studies for the foregoing or other reasons, the timeline for conducting studies and obtaining regulatory approval of potential products may be delayed,
+Added: the commercial prospects of our product candidates will be harmed, and our ability to generate product revenue from any of these product candidates could be delayed or prevented.
Furthermore, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical studies may also ultimately lead to the denial of regulatory approval of our product candidates.
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Any of these occurrences may harm our business, financial condition, and prospects significantly.
−Removed: Any of our product candidates may cause undesirable side effects or have other properties impacting safety that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.
+Added: If any of our product candidates cause undesirable side effects or have other properties impacting safety, their regulatory approval could be prevented, delayed or limited.
Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.
It is likely that there will be side effects associated with use of our product candidates.
−Removed: Results of our trials could reveal a high and unacceptable severity and prevalence of side effects.
−Removed: In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.
+Added: If results of our trials reveal a high and unacceptable severity and prevalence of side effects, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications.
Such side effects could also affect patient recruitment, the ability of enrolled patients to complete the trial or result in potential product liability claims.
−Removed: Any of these occurrences may materially and adversely affect our business, financial condition, results of operations and prospects.
+Added: Any of these occurrences may materially and adversely affect our reputation and financial condition.
Further, clinical trials by their nature test product candidates in only samples of the potential patient populations.
With a limited number of patients and limited duration of exposure in such trials, rare and severe side effects of our product candidates may not be uncovered until a significantly larger number of patients are exposed to the product candidate.
−Removed: If any of our product candidates receives marketing approval, and causes serious, unexpected, or undesired side effects, a number of potentially significant negative consequences could result, including:
+Added: If any of our product candidates receives marketing approval, and causes serious, unexpected, or undesired side effects, a number of potentially significant negative consequences could result after we begin commercialization, including:
regulatory authorities may withdraw, suspend, or limit their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy;
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Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product.
−Removed: Neither we nor our strategic alliance partners can commercialize a product until the appropriate regulatory authorities, such as the FDA, have reviewed and approved the product candidate.
−Removed: The regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval for many reasons including:
+Added: The extent and timing of any product revenue is highly unpredictable because regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval for many reasons including:
regulatory authorities disagreeing with the design or implementation of our clinical trials;
such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
−Removed: such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States;
−Removed: unfavorable or unclear results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval;
+Added: such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States, such as our phase 1/2/3 clinical trial of ARCT-154 currently being conducted in Vietnam;
+Added: unfavorable or unclear results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or foreign regulatory agencies for approval;
serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;
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such authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates;
−Removed: such authorities may find deficiencies in the manufacturing processes or facilities of our third-party manufacturers with which we contract for clinical and commercial supplies;
−Removed: regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval.
+Added: such authorities may find deficiencies in the manufacturing processes or facilities of manufacturers with which we contract for clinical and commercial supplies;
+Added: regulations or interpretations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval.
Additional delays may result if an FDA advisory committee recommends restrictions on approval or recommends non-approval.
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Even if we obtain regulatory approval in the United States, the FDA may still impose significant restrictions on the indicated uses or marketing of our product candidates, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.
−Removed: The FDA may also require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
+Added: The FDA may also require a risk evaluation and mitigation strategy as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
Additionally, the manufacturing processes, packaging, distribution, adverse event reporting, labeling, advertising, promotion, and recordkeeping for the product will be subject to extensive and ongoing FDA regulatory requirements, in addition to other potentially applicable federal and state laws.
−Removed: These requirements include monitoring and reporting of adverse events (“AEs”) and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practice, or cGMP, regulations.
−Removed: holder of an approved NDA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process.
−Removed: If we or a regulatory agency discovers previously unknown problems with a product such as AEs of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
−Removed: If we or our partners fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may:
+Added: These requirements include monitoring and reporting of adverse events and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practice, or cGMP, regulations.
+Added: The holder of an approved NDA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process.
+Added: If we or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
+Added: If we or our strategic partners fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may:
issue a warning letter asserting that we are in violation of the law;
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Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
−Removed: Currently, we have allocated significant resources to the testing and development of our LUNAR-COV19 and LUNAR-OTC vaccine candidates.
−Removed: Our spending on research and development programs and product candidates for COVID-19 or other specific indications may not yield any commercially viable products.
+Added: For example, we have allocated significant resources to the testing and development of our LUNAR-COV19 and LUNAR-OTC vaccine candidates, but competitors Pfizer, Moderna and Johnson & Johnson have already received full approvals or emergency use authorization from the FDA for their COVID-19 vaccines, which have achieved regulatory approval and widespread global adoption.
+Added: Although we are seeking to develop a next-generation COVID-19 vaccine candidate, our spending on research and development programs and product candidates for COVID-19 may prove to have been unwise.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic alliance, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
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We cannot eliminate the risk of contamination or injury from these materials.
−Removed: In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.
+Added: In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed applicable insurance coverage we may have as well as our financial resources.
We also could incur significant costs associated with civil or criminal fines and penalties.
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Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
−Removed: RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES
−Removed: We depend upon our third-party alliances with partners and contract organizations for the development, manufacture and eventual commercialization of certain nucleic acid product candidates.
−Removed: If these third-party alliances are unsuccessful or are terminated, we may be unable to commercialize certain product candidates and we may be unable to generate revenues from our development programs.
−Removed: We depend upon third party alliance partners for financial and scientific resources for the clinical development, manufacture and commercialization of certain of our nucleic acid product candidates.
−Removed: These alliances will likely provide us with limited control over the course of development of a nucleic acid product candidate, especially once a candidate has reached the stage of clinical development.
−Removed: For example, in our alliance with Ultragenyx, Ultragenyx has the option to obtain an exclusive worldwide license to develop, manufacture and commercialize product candidates upon the achievement of relevant endpoints in preclinical studies and clinical trials.
−Removed: However, Ultragenyx is not under any obligation to exercise these options to progress any of our nucleic acid product candidates.
−Removed: While Ultragenyx has development obligations with respect to programs that it may elect to pursue under our agreement, our ability to ultimately recognize revenue from this and future relationships will depend upon the ability and willingness of our alliance partners to successfully meet their respective responsibilities under our agreements with them.
−Removed: Our ability to recognize revenues from successful strategic alliances may be impaired by several factors, including:
−Removed: an alliance partner may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit;
−Removed: an alliance partner may cease development in therapeutic areas which are the subject of our strategic alliances;
−Removed: an alliance partner may change the success criteria for a particular program or potential product candidate thereby delaying or ceasing development of such program or candidate;
−Removed: a significant delay in initiation of certain development activities by an alliance partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities;
−Removed: an alliance partner could develop a product that competes, either directly or indirectly, with an alliance product;
−Removed: an alliance partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
−Removed: an alliance partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
−Removed: an alliance partner may exercise its rights under the agreement to terminate a strategic alliance;
−Removed: a dispute may arise between us and an alliance partner concerning the research, development or commercialization of a program or product candidate resulting in a delay in milestones, royalty payments or termination of a program and possibly resulting in costly litigation or arbitration which may divert management attention and resources;
−Removed: an alliance partner may use our proprietary information or intellectual property in such a way as to invite litigation from a third party or fail to maintain or prosecute intellectual property rights such that our rights in such property are jeopardized.
−Removed: If any of our alliance partners do not elect to pursue the development and commercialization of our nucleic acid development candidates or if they terminate the strategic alliance, then, depending on the event:
−Removed: product candidates subject to our alliances may be terminated or significantly delayed;
−Removed: our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to the development and commercialization of product candidates that were previously funded, or expected to be funded, by our alliance partners;
−Removed: we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously the subject of our strategic alliance, including the reimbursement of third parties;
−Removed: in order to fund further development and commercialization, we may need to seek out and establish alternative strategic alliances with third-party partners;
−Removed: this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us to limit the size or scope of one or more of our programs, increase our expenditures, or seek additional funding by other means.
−Removed: Any of these events would have a material adverse effect on our results of operations and financial condition.
−Removed: Certain agreements with our alliance partners may impair or prevent entirely our ability to generate revenues from the development, manufacture and commercialization of certain product candidates.
−Removed: Under the Development and Option Agreement with CureVac, as amended (the “CureVac Agreement”), CureVac may be entitled to trigger an option to license certain of our product candidates.
−Removed: CureVac may identify certain of our development candidates as targets under the CureVac Agreement and exercise an option to enter into an exclusive or non-exclusive license agreement with us with respect to these identified targets, subject to the limitations given in the CureVac Agreement.
−Removed: The exercise of this option by CureVac may impair or prevent entirely our ability to generate revenues from the commercialization of these development candidates, as the licensing agreement may give CureVac the right to receive some or all of the revenues from the development, manufacture and/or commercialization of these development candidates.
−Removed: Our inability to realize the benefits from developing, manufacturing or marketing our development candidates with our alliance partners, including with CureVac, may have a material adverse impact on our business, financial condition and prospects.
−Removed: We rely on third parties to conduct some aspects of our compound formulation, research and studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such formulation, research or testing.
−Removed: We do not expect to independently conduct all aspects of our drug discovery activities, compound formulation research or preclinical and clinical studies of product candidates.
−Removed: We currently rely and expect to continue to rely on third parties to conduct some aspects of our preclinical and clinical studies and formulation development.
−Removed: Any of these third parties may terminate their engagements with us at any time.
−Removed: If we need to enter into alternative arrangements, it would delay our product development activities.
−Removed: Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities.
−Removed: For example, for product candidates that we develop and commercialize on our own, we will remain responsible for ensuring that each of our IND-enabling studies and clinical trials are conducted in accordance with the study plan and protocols for the trial.
−Removed: If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the necessary preclinical studies to enable us or our strategic alliance partners to select viable product candidates for IND submissions and will not be able to, or may be delayed in our efforts to, successfully develop and commercialize such product candidates.
−Removed: We rely on third-party manufacturers to produce the supply of our preclinical and clinical product candidates, and we intend to rely on third parties to produce future clinical supplies of product candidates that we advance into clinical trials and commercial supplies of any approved product candidates.
−Removed: Reliance on third-party manufacturers entails risks, including risks that we would not be subject to if we manufactured the product candidates ourselves, including:
−Removed: the inability to meet any product specifications and quality requirements consistently;
−Removed: a delay or inability to procure or expand sufficient manufacturing capacity;
−Removed: manufacturing and product quality issues related to scale-up of manufacturing;
−Removed: costs and validation of new equipment and facilities required for scale-up;
−Removed: a failure to comply with cGMP and similar foreign standards;
−Removed: the inability to negotiate manufacturing or supply agreements with third parties under commercially reasonable terms;
−Removed: termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
−Removed: the reliance on a limited number of sources, and in some cases, single sources for raw materials, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
−Removed: the lack of qualified backup suppliers for any raw materials that are currently purchased from a single source supplier;
−Removed: operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;
−Removed: carrier disruptions or increased costs that are beyond our control;
−Removed: the failure to deliver products under specified storage conditions and in a timely manner.
−Removed: Any of these events could lead to clinical study delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future products, if approved.
−Removed: Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.
−Removed: We rely on limited sources of supply for the drug substance of product candidates and any disruption in the chain of supply may cause a delay in developing and commercializing these product candidates.
−Removed: We have established manufacturing relationships with a limited number of suppliers to manufacture raw materials and the drug substance used to create our product candidates.
−Removed: The availability of such suppliers to manufacture raw materials for our product candidates may be limited.
−Removed: Further, each supplier may require licenses to manufacture such components if such processes are not owned by the supplier or in the public domain.
−Removed: Our ability to obtain the necessary drug substance of product candidates could be adversely impacted by the coronavirus outbreak.
−Removed: As part of any marketing approval, a manufacturer and its processes are required to be qualified by the FDA prior to commercialization.
−Removed: If supply from the approved vendor is interrupted, there could be a significant disruption in commercial supply.
−Removed: An alternative vendor would need to be qualified through an NDA supplement which could result in further delay.
−Removed: The FDA or other regulatory agencies outside of the United States may also require additional studies if a new supplier is relied upon for commercial production.
−Removed: Switching vendors may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.
−Removed: In addition, if our alliance partners elect to pursue the development and commercialization of certain programs, we will lose control over the manufacturing of the product candidate subject to the agreement.
−Removed: Also, we will not be able to ensure that the product candidates will be manufactured under the correct conditions to permit the product candidates to be used in such clinical trials.
−Removed: These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates, cause us to incur higher costs and prevent us from commercializing our products successfully.
−Removed: Furthermore, if our suppliers fail to deliver the required commercial quantities of active pharmaceutical ingredients on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production in a timely manner at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.
−Removed: We currently have one supplier for two important components in our LUNAR-COV19 drug candidate, which supplier is located in China.
−Removed: Our dependence upon a single supplier located outside of the United States could place our commercialization efforts at risk.
−Removed: Currently, we have one supplier for two important components in our LUNAR-COV19 drug candidate, which supplier is located in China.
−Removed: This supplier may only have a limited supply of such essential materials, may encounter unexpected delays, possible shutdowns, or other impediments to production, resulting in delays to our ability to manufacture and commercialize LUNAR-COV19.Further, our dependence upon a single supplier located outside of the United States could place our commercialization efforts at risk.
−Removed: Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization.
+Added: Manufacturing issues may arise that could increase product and regulatory approval costs or delay or hinder commercialization.
As we scale-up manufacturing of product candidates and conduct required stability testing, product, packaging, equipment and process-related issues may require refinement or resolution in order to proceed with any clinical trials and obtain regulatory approval for commercial marketing.
We may identify significant impurities, which could result in increased scrutiny by the regulatory agencies, delays in clinical programs and regulatory approval, increases in our operating expenses, or failure to obtain or maintain approval for product candidates or any approved products.
−Removed: We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.
−Removed: We or our strategic alliance partners intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials.
−Removed: While we will have agreements governing their activities, we and our strategic alliance partners have limited influence over their actual performance.
−Removed: We will control only certain aspects of our CROs’ activities.
−Removed: Nevertheless, we or our strategic alliance partners will be responsible for ensuring that each of our clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs will not relieve us of our regulatory responsibilities.
−Removed: We, our alliance partners and our CROs will be required to comply with the FDA’s or other regulatory agency’s GCPs, for conducting, recording and reporting the results of IND-enabling studies and clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of future clinical trial participants are protected.
−Removed: The FDA and non-U.S.
−Removed: regulatory agencies enforce these GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites.
−Removed: If we or our future CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or applicable non-U.S.
−Removed: regulatory agency may require us to perform additional clinical trials before approving any marketing applications for the relevant jurisdiction.
−Removed: Upon inspection, the FDA or applicable non-U.S.
−Removed: regulatory agency may determine that our future clinical trials did not comply with GCPs.
−Removed: In addition, our future clinical trials will require a sufficiently large number of test subjects to evaluate the safety and effectiveness of a potential drug product.
−Removed: Accordingly, if our future CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required to repeat such clinical trials, which would delay the regulatory approval process and increase our costs.
−Removed: Our future CROs will not be our employees, and we will not be able to control whether or not they devote sufficient time and resources to our future clinical and nonclinical programs.
−Removed: These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our competitive position.
−Removed: If our future CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize our product candidates.
−Removed: As a result, our financial results and the commercial prospects for such products and any product candidates that we develop would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
−Removed: We intend to rely on other third parties to store and distribute drug products for any clinical trials that we may conduct.
−Removed: Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.
−Removed: RISKS RELATED TO OUR INTELLECTUAL PROPERTY
−Removed: If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets.
−Removed: Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, for our product candidates, methods used to develop and manufacture our product candidates and methods for treating patients using our product
−Removed: candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others.
−Removed: As of February 15, 2021, we are the sole owner of over 209 patents and pending patent applications including 33 U.S.
−Removed: patents, 2 9 pending U.S.
−Removed: patent applications, 7 pending international applications under the PCT, 68 foreign patents and 7 2 pending foreign patent applications.
−Removed: The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain.
−Removed: The patent applications that we own or in-license may fail to result in patents with claims that cover the products in the United States or in other countries.
−Removed: There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found;
−Removed: such prior art can invalidate a patent or prevent a patent from issuing based on a pending patent application.
−Removed: Even if patents do successfully issue, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated.
−Removed: Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims.
−Removed: If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue or if their breadth or strength of protection is threatened, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future products.
−Removed: We cannot offer any assurances about which, if any, patents will issue or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties.
−Removed: A patent may be challenged through one or more of several administrative proceedings including post-grant challenges, re-examination or opposition before the U.S.
−Removed: PTO or foreign patent offices.
−Removed: For example, re-examination of, or oppositions to, patents owned by or licensed to us have previously been initiated, and while we believe these concluded proceedings did not result in a commercially relevant impact on the individual patents, any successful challenge of patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates that we or our strategic alliance partners may develop.
−Removed: Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file any patent application related to a product candidate.
−Removed: Furthermore, in certain situations, if we and one or more third parties have filed patent applications in the United States and claiming the same subject matter, an administrative proceeding, known as an interference, can be initiated to determine which applicant is entitled to the patent on that subject matter.
−Removed: Such an interference proceeding provoked by third parties or brought by us may be necessary to determine the priority of inventions with respect to our patents or patent applications, or those of our alliance partners or licensors.
−Removed: An unfavorable outcome could require us to cease using the related technology or to require us to license rights to it from the prevailing party.
−Removed: Our business could be harmed if the prevailing party does not offer us a license at all, or on commercially reasonable terms.
−Removed: Our defense of a patent or patent application in such a proceeding may not be successful and, even if successful, may result in substantial costs and distract our management and other employees.
−Removed: In addition, patents have a limited lifespan.
−Removed: In the United States, the natural expiration of a patent is generally 20 years after it is filed.
−Removed: Various extensions may be available however the life of a patent, and the protection it affords is limited.
−Removed: Once the patent life has expired for a product, we may be open to competition from generic medications.
−Removed: Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.
−Removed: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, including processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
−Removed: Although each of our employees agrees to assign their inventions to us through an employee inventions agreement, and all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology are required to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed, that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
−Removed: In addition, others may independently discover our trade secrets and proprietary information.
−Removed: For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
−Removed: Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.
−Removed: As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.
−Removed: If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.
−Removed: Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
−Removed: Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties.
−Removed: There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits.
−Removed: Numerous U.S.
−Removed: and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we and our strategic alliance partners are pursuing development candidates.
−Removed: 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.
−Removed: Third parties may assert that we are employing their proprietary technology without authorization.
−Removed: There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates.
−Removed: Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in patents that our product candidates may infringe.
−Removed: In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
−Removed: If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.
−Removed: Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires.
−Removed: In either case, such a license may not be available on commercially reasonable terms or at all.
−Removed: Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates.
−Removed: Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
−Removed: In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
−Removed: If we fail to obtain licenses or comply with our obligations in these agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
−Removed: We are a party to intellectual property license agreements that are important to our business and expect to enter into additional license agreements in the future.
−Removed: Our existing license agreements impose, and we expect that future license agreements will impose, various obligations on us, as described in “Other Material Agreements” and “Collaboration Agreements” under Part I, Item 1 and elsewhere in this annual report.
−Removed: We may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time.
−Removed: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.
−Removed: In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly.
−Removed: We cannot provide any assurances that third-party patents do not exist which might be enforced against our future products, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties.
−Removed: We may be involved in lawsuits to protect or enforce our patents or the patents of our licensees, which could be expensive, time consuming and unsuccessful.
−Removed: Competitors may infringe our patents or the patents of our licensees.
−Removed: To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.
−Removed: In addition, in an infringement proceeding, a court may decide that a patent of ours or of our licensees is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
−Removed: An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
−Removed: Our defense in a lawsuit may fail and, even if successful, may result in substantial costs and distract our management and other employees.
−Removed: We may not be able to prevent, alone or with our licensees, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.
−Removed: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
−Removed: There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
−Removed: If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
−Removed: We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
−Removed: We employ individuals who were previously employed at other biotechnology or pharmaceutical companies.
−Removed: We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.
−Removed: We may also be subject to claims that former employers or other third parties have an ownership interest in our patents.
−Removed: Litigation may be necessary to defend against these claims.
−Removed: There is no guarantee of success in defending these claims, and if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees.
−Removed: RISKS RELATED TO COMMERCIALIZATION OF PRODUCT CANDIDATES
−Removed: The commercial success of our programs that are part of our strategic alliance agreements will depend in large part on the development and marketing efforts of our alliance partners.
−Removed: If our alliance partners are unable or unwilling to perform in accordance with the terms of our agreements, our potential to generate future revenue from these programs would be significantly reduced and our business would be materially and adversely harmed.
−Removed: If or when our strategic alliance partners elect to further pursue the development and commercialization of any of the product candidates that are subject to a strategic alliance agreement, we will have limited influence and/or control over their approaches to development and commercialization.
+Added: We have limited stability data on ARCT-154, and though we have more extensive stability data for ARCT-021 and believe that our LUNAR platform should persuade regulatory authorities to consider ARCT-021 stability data for ARCT-154, regulatory authorities may disagree and require additional data.
+Added: We are performing long term stability studies on ARCT-154 and are continuing storage shipping validation studies and continuous process and quality verification programs, but we cannot be sure of the outcomes of such studies and programs.
+Added: Poor results could impact the prospects, timing and cost of our programs.
+Added: Furthermore, we are required by our contract manufacturers to make financial commitments in advance of the receipt of clinical data or feedback from regulatory authorities, which could result in significant financial obligations.
+Added: If our alliance partners do not perform in accordance with the terms of our agreements, our potential to generate future revenue from these programs would be significantly reduced and our business would be materially and adversely harmed.
+Added: If our strategic alliance partners elect to further pursue the development and commercialization of any of the product candidates that are subject to our strategic alliance agreement, we will have limited influence and/or control over their approaches to development and commercialization.
If strategic alliance partners do not perform in the manner that we expect or fail to fulfill their responsibilities in a timely manner, or at all, the clinical development, regulatory approval and commercialization efforts related to product candidates we have licensed to such strategic alliance partners could be delayed or terminated.
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This could result in a limited potential to generate future revenue from such product candidates and our business could be materially and adversely affected.
−Removed: If we are unable to manufacture our vaccines in sufficient quantities, at sufficient yields or are unable to obtain regulatory approvals for a manufacturing facility for ARCT-021, our LUNAR-COV19 vaccine candidate, we may experience delays in product development, clinical trials, regulatory approval and commercial distribution.
−Removed: Completion of our clinical trials and commercialization of our vaccine candidates require access to, or development of, facilities to manufacture our LUNAR-COV19 vaccine candidate at sufficient yields and at commercial-scale.
−Removed: We have limited experience manufacturing our vaccine candidates in the volumes that will be
−Removed: necessary to support large-scale clinical trials or commercial sales.
−Removed: Efforts to establish these capabilities may not meet initial expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, stability, potency or quality.
−Removed: In addition, other companies, many with substantial resources, may compete with us for access to materials needed to manufacture our vaccines.
−Removed: Manufacturing our LUNAR-COV19 vaccine candidate involves a complicated process with which we have limited experience.
−Removed: We are dependent on third-party organizations to conduct a portion of our vaccine manufacturing activities.
−Removed: If third-party manufacturing organizations are unable to manufacture our vaccine candidates in clinical quantities or, when necessary, in commercial quantities and at sufficient yields, then we will need to identify and reach supply arrangements with additional third parties.
−Removed: Third-party manufacturers must also be inspected by the FDA as part of the FDA’s review of our marketing application.
−Removed: Our LUNAR-COV19 vaccine candidate 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 higher priority.
−Removed: We may not be able to enter into any necessary additional third-party manufacturing arrangements on acceptable terms, or on a timely basis.
−Removed: In addition, we 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.
−Removed: Any delay in the manufacture or delivery of a vaccine could adversely affect our ability to sell the LUNAR-COV19 vaccine candidate, if approved.
−Removed: Our reliance on thir d-party manufacturers may adversely affect our operations or result in unforeseen delays or other problems beyond our control.
−Removed: Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture our bulk vaccines on a commercial scale, replacement of a manufacturer may be expensive and time-consuming and may cause interruptions in the production of our vaccine.
−Removed: A third-party manufacturer may also encounter difficulties in production.
−Removed: These problems may include:
−Removed: difficulties with production costs, scale up and yields;
−Removed: challenges in developing a lyophilized formula of, or validating a lyophilization process for, LUNAR-COV19;
−Removed: challenges in storage and cold chain distribution of LUNAR-COV19 (even with lyophilization);
−Removed: availability of raw materials and supplies;
−Removed: quality control and assurance;
−Removed: shortages of qualified personnel;
−Removed: compliance with strictly enforced federal, state and foreign regulations that vary in each country where products might be sold;
−Removed: lack of capital funding.
−Removed: As a result, any delay or interruption could have a material adverse effect on our business, financial condition, and results of operations.
We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.
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We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions.
−Removed: Our competitors may have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations.
+Added: Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing, regulatory and manufacturing organizations.
Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors.
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Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, drug products that are more effective or less costly than any product candidate that we may develop.
−Removed: Other than our LUNAR-COV19 vaccine candidate and LUNAR-OTC, all of our programs are preclinical and targeted toward indications for which there are product candidates in clinical development.
−Removed: We will face competition
−Removed: from other drugs currently approved or that may be approved in the future for the same therapeutic indications as our product candidates.
−Removed: For example, both Synlogic and Ultragenyx are currently conducting clinical trials with therapies to treat OTC deficiency.
−Removed: Currently approved therapies for these patients include the small molecule nitrogen scavengers sodium benzoate, sodium phenylacetate, and sodium phenylbutyrate, and glycerol phenylbutyrate (brand name Ravicti).
−Removed: Our ability to compete successfully will depend largely on our ability to leverage our experience in drug discovery and development to:
−Removed: discover and develop therapeutics that are superior to other products in the market;
−Removed: attract qualified scientific, product development and commercial personnel;
−Removed: obtain patent and/or other proprietary protection for our nucleic acid product platform and future product candidates;
−Removed: obtain required regulatory approvals;
−Removed: successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapeutics.
−Removed: The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize.
−Removed: We will not achieve our business plan if the acceptance of any of these products is inhibited by price competition or the reluctance of physicians to switch from existing drug products to our products, or if physicians switch to other new drug products or choose to reserve our future products for use in limited circumstances.
−Removed: The inability to compete with existing or subsequently introduced drug products would have a material adverse impact on our business, financial condition and prospects.
−Removed: Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive.
−Removed: In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful.
−Removed: Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA approval or discovering, developing and commercializing product candidates before we do, which would have a material adverse impact on our business.
The commercial success of our product candidates will depend upon the acceptance of these product candidates by the medical community, including physicians, patients and healthcare payors.
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the relative convenience, ease of administration and acceptance by physicians, patients and healthcare payors;
−Removed: the prevalence and severity of any AEs;
+Added: the prevalence and severity of any adverse events;
limitations or warnings contained in the FDA-approved label for such products;
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our ability to obtain hospital or payor formulary approval;
−Removed: our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement;
−Removed: the willingness of patients to pay out-of-pocket in the absence of third-party coverage.
+Added: our ability to obtain and maintain sufficient coverage from healthcare payors and adequate reimbursement;
+Added: the willingness of patients to pay out-of-pocket in the absence or inadequacy of coverage by healthcare payors.
Unless other formulations are developed in the future, we expect our compounds to be formulated in an injectable form.
Injectable medications may be disfavored by patients or their physicians in the event drugs which are easy to administer, such as oral medications, are available.
−Removed: If a product is approved, but does not achieve an adequate level of acceptance by physicians, patients and healthcare payors, we may not generate sufficient revenues from such product and we may not become or remain profitable.
+Added: If any of our products is approved, but does not achieve an adequate level of acceptance by physicians, patients and healthcare payors, we may not generate sufficient revenues from such product and we may not become or remain profitable.
Such increased competition may decrease any future potential revenue for future product candidates due to increasing pressure for lower pricing and higher discounts in the commercialization of our product.
−Removed: If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues.
−Removed: We currently do not have an organization for the sales, marketing and distribution of pharmaceutical products and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so.
−Removed: In order to market any products that may be approved, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services.
−Removed: With respect to certain of our current programs as well as future programs, we may rely completely on an alliance partner for sales and marketing.
−Removed: In addition, we intend to enter into strategic alliances with third parties to commercialize other product candidates, if approved, including in markets outside of the United States or for other large markets that are beyond our resources.
+Added: If we are unable to establish cost-effective sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues.
+Added: In order to market any products that may be approved, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with outside parties to perform these services.
+Added: With respect to certain of our current programs as well as future programs, we may rely completely on a strategic alliance partner for sales and marketing.
+Added: In addition, we intend to enter into strategic alliances with other parties to commercialize other product candidates, if approved, including in markets outside of the United States or for other large markets that are beyond our resources.
Although we intend to establish a sales organization if we are able to obtain approval to market any product candidates for niche markets in the United States, we will also consider the option to enter into strategic alliances for future product candidates in the United States if commercialization requirements exceed our available resources.
−Removed: This will reduce the revenue generated from the sales of these products.
+Added: This will reduce the potential profit generated from the sales of these products.
Our current and any future strategic alliance partners may not dedicate sufficient resources to the commercialization of our product candidates, if approved, or may otherwise fail in their commercialization due to factors beyond our control.
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business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
−Removed: Coverage and adequate reimbursement may not be available for our product candidates, if approved, which could make it difficult for us to sell products profitably.
+Added: If coverage and adequate reimbursement is not available for any of our future products, it would be difficult for us to sell that product profitably.
Market acceptance and sales of any product candidates that we develop will depend on coverage and reimbursement policies and may be affected by future healthcare reform measures.
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We cannot be sure that coverage and adequate reimbursement will be available for any future product candidates.
−Removed: In the United States, the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S.
+Added: In the United States, the Centers for Medicare &
+Added: Medicaid Services (“CMS”), an agency within the U.S.
Department of Health and Human Services, decides whether and to what extent a new drug will be covered and reimbursed under Medicare.
1 unchanged sentence
It is difficult to predict what CMS will decide with respect to reimbursement for novel product candidates.
−Removed: Inadequate reimbursement amounts may reduce the demand for, or the price of, our future products.
+Added: Inadequate reimbursement amounts could substantially reduce the demand for, or the price of, our future products.
Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.
1 unchanged sentence
Thus, even if we succeed in bringing a product to market, it may not be considered medically necessary or cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis.
−Removed: In addition, we cannot be certain if and when we will obtain formulary approval to allow us to sell any products that we may develop and commercialize into our target markets.
−Removed: Obtaining formulary approval from hospitals and from payors can be an expensive and time-consuming process.
+Added: In addition, we cannot be certain if and when we will obtain formulary approval to allow us to sell any products into our target markets.
+Added: Obtaining formulary approval from hospitals and from pharmacy benefits payors can be an expensive and time-consuming process.
Failure to obtain timely formulary approval will limit our commercial success.
5 unchanged sentences
For instance, government and private payors who reimburse patients or healthcare providers are increasingly seeking greater upfront discounts, additional rebates and other concessions to reduce prices for pharmaceutical products.
−Removed: to successfully secure and maintain reimbursement coverage for our future products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our future products and our business will be harmed.
+Added: If we fail to successfully secure and maintain sufficient reimbursement coverage for our future products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our future products and our business will be harmed.
In addition, in some non-U.S.
3 unchanged sentences
A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.
−Removed: There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.
+Added: If any country that has price controls or reimbursement limitations for pharmaceutical products does not allow favorable reimbursement and pricing arrangements for any of our products, our sales and profits from that product could be severely limited.
Historically, products launched in the EU do not follow price structures of the U.S.
and generally tend to be priced significantly lower
+Added: RISKS RELATED TO OUR RELIANCE ON OUTSIDE PARTIES
+Added: If our strategic alliances are unsuccessful or are terminated, we may be unable to commercialize certain product candidates and generate revenues.
+Added: We depend on alliance partners for financial and scientific resources for the clinical development, manufacture and commercialization of certain of our nucleic acid product candidates.
+Added: These alliances will likely provide us with limited control over the course of development of a nucleic acid product candidate, especially once a candidate has reached the stage of clinical development.
+Added: Our ability to ultimately recognize revenue from our strategic relationships will depend upon the ability and willingness of our alliance partners to successfully meet their respective responsibilities under our agreements with them.
+Added: Our ability to recognize revenues from strategic alliances may be impaired by several factors, including:
+Added: an alliance partner may shift its priorities and resources away from our programs due to a change in its business strategies, or a merger, acquisition, sale or downsizing of its company or business unit;
+Added: an alliance partner may cease development in therapeutic areas which are the subject of our strategic alliances;
+Added: an alliance partner may change the success criteria for a particular program or potential product candidate thereby delaying or ceasing development of such program or candidate;
+Added: a significant delay in initiation of certain development activities by an alliance partner will also delay payment to us of milestones tied to such activities, thereby impacting our ability to fund our own activities;
+Added: an alliance partner could develop a product that competes, either directly or indirectly, with our product candidate;
+Added: an alliance partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
+Added: an alliance partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
+Added: an alliance partner may exercise its rights under the agreement to terminate a strategic alliance;
+Added: a dispute may arise between us and an alliance partner concerning the research, development or commercialization of a program or product candidate resulting in a delay in payments of milestones or royalties, or the termination of a program, and possibly resulting in costly litigation or arbitration which may divert management attention and resources;
+Added: an alliance partner may use our proprietary information or intellectual property in such a way as to invite litigation from a third party or fail to maintain or prosecute intellectual property rights such that our rights in such property are jeopardized.
+Added: If any of our alliance partners do not elect to pursue the development and commercialization of our nucleic acid development candidates or if they terminate the strategic alliance, then, depending on the event:
+Added: development of product candidates subject to our alliances may be terminated or significantly delayed;
+Added: our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate limited resources to the development and commercialization of product candidates that were previously funded, or expected to be funded, by our alliance partners;
+Added: we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously the subject of our strategic alliance, including the reimbursement of third parties;
+Added: in order to fund further development and commercialization, we may need to seek out and establish alternative strategic alliances with other parties;
+Added: this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us to limit the size or scope of one or more of our programs, increase our expenditures, or seek additional funding by other means.
+Added: Any of these events would have a material adverse effect on our results of operations and financial condition.
+Added: If the outside contractors we rely on to conduct some aspects of our compound formulation, research and studies do not perform satisfactorily and meet deadlines, development of our product candidates could be delayed or precluded.
+Added: We do not independently conduct all aspects of our drug discovery activities, compound formulation research or preclinical and clinical studies of product candidates.
+Added: We currently rely and expect to continue to rely on outside contractors to conduct some aspects of our preclinical and clinical studies and formulation development, but we remain responsible for ensuring that each of our IND-enabling studies and clinical trials are conducted in accordance with the study plan and protocols for the trial.
+Added: If these outside parties terminate their engagements with us or do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated
+Added: study plans and protocols, we will not be able to complete, or may be delayed in completing, the necessary preclinical studies to enable us or our strategic alliance partners to select viable product candidates for IND submissions and will not be able to, or may be delayed in our efforts to, successfully develop and commercialize such product candidates.
+Added: If the contract manufacturers we rely on to produce the supply of our preclinical and clinical product candidates, including materials for the manufacture of our product candidates do not timely deliver adequate quantities of quality materials, development and commercialization of our product candidates would be hindered.
+Added: We rely on outside contractors to produce the supply of our preclinical and clinical product candidates, and we intend to rely on outside contractors to produce future clinical supplies of product candidates and commercial supplies of any approved product candidates.
+Added: Reliance on outside suppliers and manufacturers entails risks, some of which we would not be subject to if we manufactured the product candidates ourselves, including:
+Added: the inability to meet any product specifications and quality requirements consistently;
+Added: a delay or inability to procure or expand sufficient manufacturing capacity;
+Added: manufacturing and product quality issues related to scale-up of manufacturing;
+Added: costs and validation of new equipment and facilities required for scale-up;
+Added: a failure to comply with cGMP and similar foreign standards;
+Added: the inability to negotiate manufacturing or supply agreements with outside parties on commercially reasonable terms;
+Added: termination or nonrenewal of manufacturing agreements with outside parties in a manner or at a time that is costly or damaging to us;
+Added: the reliance on a limited number of sources, and in some cases, single sources for raw materials, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
+Added: the lack of qualified backup suppliers for any raw materials that are currently purchased from a single source supplier;
+Added: operations of our contract manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;
+Added: carrier disruptions or increased costs that are beyond our control;
+Added: the failure to deliver products under specified storage conditions and in a timely manner.
+Added: Any of these events could lead to clinical study delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future products, if approved.
+Added: Some of these events could be the basis for detrimental FDA action, including injunction, product recall or seizure, or total or partial suspension of production.
+Added: Any disruption in the supply chain of raw materials for, or in the manufacturing capacity and timing for the manufacture of drug substance or drug product for, our product candidates may cause a delay in developing and commercializing these product candidates and limit the revenues that we could generate.
+Added: We have established manufacturing relationships with a limited number of suppliers to supply raw materials used to create our product candidates and with a limited number of contract manufacturers to manufacture drug substance and drug product.
+Added: The availability of continued supply and manufacturing capacity from our current vendors, and the availability of additional suppliers and manufacturers, is limited.
+Added: We have experienced some supplier shortages and delivery delays since the COVID-19 pandemic began in early 2020.
+Added: If our vendors fail to supply materials or to manufacture substances or products in the required quantities on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement vendors in a timely manner at a substantially equivalent cost, our clinical trials may be delayed and our commercialization prospects could be materially diminished.
+Added: Prior to marketing approval for any of our product candidates, a manufacturer and its processes are required to be qualified by the FDA.
+Added: If supply from the approved manufacturer is interrupted, there could be a significant disruption in our sales of any product.
+Added: An alternative vendor would need to be qualified through an NDA supplement which could result in further delay.
+Added: The FDA or other regulatory agencies outside of the United States may also require additional studies if a new supplier is relied upon for commercial production.
+Added: Switching vendors may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.
+Added: In addition, if our alliance partners elect to pursue the development and commercialization of certain programs, we will lose control over the manufacturing of the product candidate subject to the agreement.
+Added: Also, we will not be able to ensure that the product candidates will be manufactured under the correct conditions to permit the product candidates to be used in such clinical trials.
+Added: If the contract research organizations and clinical trial sites we rely on to conduct, supervise and monitor our clinical trials perform in an unsatisfactory manner, it may harm our business.
+Added: We and our strategic alliance partners rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials.
+Added: We and our strategic alliance partners have limited control or influence over their actual performance, but remain responsible for ensuring that clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards.
+Added: If we or our CROs fail to comply with applicable good clinical practices , the clinical data generated in our clinical trials may be deemed unreliable and the FDA or applicable non-U.S.
+Added: regulatory agency may require us to perform additional clinical trials before approving any marketing applications.
+Added: In addition, our future clinical trials will require a sufficiently large number of test subjects to adequately evaluate the safety and effectiveness of a potential drug product.
+Added: Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required to repeat such clinical trials, which would delay the regulatory approval process and increase our costs.
+Added: Our CROs are not our employees, and we are not be able to control whether or not they devote sufficient time and resources to our clinical and nonclinical programs.
+Added: These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could possibly harm our competitive position.
+Added: If our future CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize our product candidates.
+Added: As a result, the commercial prospects for such products and any product candidates that we develop would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
+Added: We rely on other outside parties to store and distribute drug products for clinical trials.
+Added: Any performance failure or delays by our distributors could delay clinical development, marketing approval or commercialization of our product candidates, resulting in additional losses and depriving us of potential product revenue.
+Added: RISKS RELATED TO OUR INTELLECTUAL PROPERTY
+Added: If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets.
+Added: Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, for our product candidates, methods used to develop and manufacture our product candidates and methods for treating patients using our product candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others.
+Added: As of February 28, 2022, we own over 253 patents and pending patent applications including 38 U.S.
+Added: patents, 33 pending U.S.
+Added: patent applications, 12 pending international applications under Patent Cooperation Treaty (“PCT”), 82 foreign patents and 88 pending foreign patent applications.
+Added: The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be highly uncertain.
+Added: The patent applications that we own or in-license may fail to result in patents with claims that cover our products or methods in the United States or in other countries.
+Added: Our patents could be prevented from issuing or be invalidated after issuance for many reasons, including:
+Added: relevant prior art relating to our patents and patent applications;
+Added: Claims that others were first to file a patent application covering the same subject matter, which could require an interference proceeding to determine which applicant is entitled to a patent on that subject matter;
+Added: third party challenges to their validity, enforceability or scope, which may result in patents being narrowed or invalidated.
+Added: If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue or are invalidated or if their breadth or strength of protection is threatened, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future products.
+Added: For example, we have been subjected to re-examination of, or oppositions to, patents owned by or licensed to us.
+Added: Although we believe these concluded proceedings did not result in a commercially relevant impact on the individual patents, future challenges could deprive us of rights necessary for the successful commercialization of any product candidates that we or our strategic alliance partners may develop.
+Added: If we do not prevail in any challenge to our intellectual property rights, we could be required to cease using the related technology or to license rights to it from the prevailing party.
+Added: Our business could be harmed if the prevailing party does not offer us a license at all, or on commercially reasonable terms.
+Added: Our defense of a patent or patent application in such a proceeding may not be successful and, even if successful, may result in substantial costs and distract our management and other employees.
+Added: Even if our patent are issued and are not challenged or invalidated, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims.
+Added: In addition, patents have a limited lifespan.
+Added: In the United States, the natural expiration of a patent is generally 20 years after it is filed.
+Added: Various extensions may be available however the life of a patent, and the protection it affords is limited.
+Added: Once the patent life has expired for a product, we may be open to competition from generic medications.
+Added: Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.
+Added: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, including processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
+Added: Although each of our employees agrees to assign their inventions to us through an employee inventions agreement, and all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology are required to enter into confidentiality agreements, such agreements may not be effective in preventing our trade secrets and other confidential proprietary information from being disclosed or accessed by competitors.
+Added: In addition, competitors and others may independently discover our trade secrets and proprietary information or independently develop substantially equivalent information and techniques.
+Added: For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
+Added: Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.
+Added: As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.
+Added: If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business.
+Added: Claims that we infringe the intellectual property rights of others, especially in the crowded and competitive field of mRNA and delivery technology patents, may prevent or delay our development and commercialization efforts.
+Added: As the biotechnology and pharmaceutical industries expand and more patents are issued and as our activities expand, the risk increases that our product candidates and activities may be subject to claims of infringement of the patent rights of others.
+Added: This risk is significantly heightened because of the many patents and other intellectual property rights in messenger RNA and delivery technology, which is being relied on by many companies, including us, developing mRNA-based vaccines.
+Added: Since the outbreak of the COVID-19 pandemic, many companies have devoted substantial effort to developing vaccines and therapeutics that use mRNA technology and have developed their own intellectual property
+Added: rights, applied for patents, and licensed rights to patents held by other companies or research institutions.
+Added: Some of these patents may have broad claims that cover our current or expected activities.
+Added: We are aware of patent challenging and enforcement activities in connection with technologies used in mRNA-based COVID-19 vaccines.
+Added: The outcomes of such activities and the advancement of our programs could give rise to third party claims of infringement against us and our partners.
+Added: Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize a COVID-19 vaccine or one or more of our other product candidates.
+Added: Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee and financial resources from our business.
+Added: In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay significant royalties, or try to redesign our infringing products, which may be impossible or require substantial time and monetary expenditure, further delaying and commercialization and substantially reducing potential market revenue.
+Added: Or, in order to continue development, manufacture or sale of a product, we may need to obtain a license from the owner of intellectual property, which may not be available on commercially reasonable terms or at all.
+Added: If we fail to obtain licenses to necessary intellectual property or do not comply with our obligations in license agreements, we could lose important rights.
+Added: We may need to obtain licenses from owners of intellectual property to advance our research or allow commercialization of our product candidates, and we have done so from time to time.
+Added: If may fail to obtain any of these licenses at a reasonable cost and on reasonable terms, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly.
+Added: We may be involved in lawsuits to protect or enforce our patents or the patents of our licensees, which could be expensive, time consuming and unsuccessful.
+Added: Competitors may infringe our patents or the patents of our licensees.
+Added: To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.
+Added: In addition, in an infringement proceeding, a court may decide that a patent of ours or of our licensees is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
+Added: An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
+Added: Our defense in a lawsuit may fail and, even if successful, may result in substantial costs and distract our management and other employees.
+Added: We may not be able to prevent, alone or with our licensees, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during the course of litigation.
+Added: There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
+Added: If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
+Added: If we are subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties, we could incur substantial expenses.
+Added: We employ individuals who were previously employed at other biotechnology or pharmaceutical companies.
+Added: We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.
+Added: We may also be subject to claims that former employers or other parties have an ownership interest in our patents.
+Added: Litigation may be necessary to defend against these claims.
+Added: We may not be successful in defending these claims, and if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees.
RISKS RELATED TO OUR BUSINESS OPERATIONS AND INDUSTRY
−Removed: Our future success depends on our ability to attract and retain key executives and to attract, retain and motivate qualified personnel.
−Removed: We are highly dependent on principal members of our executive team, and any reduction or loss of their services may adversely impact the achievement of our objectives.
−Removed: While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, as all of our employees are “at will” employees.
−Removed: Recruiting and retaining other qualified employees for our business, including scientific and technical personnel, will also be critical to our success.
−Removed: There is currently a shortage of skilled executives in our industry, which is likely to continue.
−Removed: As a result, competition for skilled personnel is intense and the turnover rate can be high.
−Removed: We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical companies for individuals with similar skill sets.
−Removed: In addition, failure to succeed in preclinical studies and clinical trials may make it more challenging to recruit and retain qualified personnel.
−Removed: The inability to recruit any executive or key employee or the loss of the services of any executive or key employee might impede the progress of our research, development and commercialization objectives.
We may need to expand our organization and may experience difficulties in managing this growth, which could disrupt our operations.
7 unchanged sentences
Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.
+Added: We have recently experienced high turnover and if we cannot continue to attract, retain and motivate key executives and qualified scientists and other personnel, we will not be able to effectively operate our business.
+Added: We are highly dependent on principal members of our executive team, and any reduction or loss of their services may adversely impact the achievement of our objectives.
+Added: While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, as all of our employees are “at will” employees.
+Added: Recruiting and retaining other qualified employees for our business, including scientific and technical personnel, will also be critical to our success.
+Added: During the COVID-19 pandemic over the past two years, we have experienced a high number of resignations, as well as our Chief Medical Officer stepping down recently to a part-time role.
+Added: There was already a shortage of skilled executives as well as scientific and technical personnel in our industry prior to COVID-19, which was exacerbated by the pandemic and is likely to continue.
+Added: As a result, competition for skilled personnel is intense and the turnover rate can be high, as we have recently seen.
+Added: We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical companies for individuals with similar skill sets.
+Added: In addition, failure to succeed in preclinical studies and clinical trials may make it more challenging to recruit and retain qualified personnel.
+Added: The inability to recruit any executive or key employee or the loss of the services of any executive or key employee might impede the progress of our research, development and commercialization objectives.
Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.
We are exposed to the risk of employee fraud or other misconduct.
−Removed: Misconduct by employees could include intentional or nonintentional failures to comply with the regulations of the FDA and non-U.S.
−Removed: regulators, to provide accurate information to the FDA and non-U.S.
−Removed: regulators, to comply with healthcare fraud and abuse laws and regulations in the United States and abroad, to report financial information or data accurately or to disclose unauthorized activities to us.
+Added: Employee misconduct could have significant negative impacts on our business.
+Added: Misconduct by employees could include intentional or nonintentional failures to comply with the regulations of the FDA and other regulators, to provide accurate information to the FDA and other regulators, to comply with healthcare fraud and abuse laws and regulations in the United States and abroad, to report financial information or data accurately or to disclose unauthorized activities to us.
In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.
1 unchanged sentence
Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.
−Removed: We have adopted a code of conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
−Removed: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, additional reporting requirements and/or oversight, particularly if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance, disgorgement, imprisonment, and contractual damages.
+Added: Although we have adopted a code of conduct and procedures, we may not always be effective in identifying and deterring employee misconduct, controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
+Added: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, additional reporting requirements
+Added: and/or oversight, particularly if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance, disgorgement, imprisonment, and contractual damages.
Even if we are ultimately successful in defending any such action, we could be required to divert financial and managerial resources in doing so and adverse publicity could result, all of which could harm our business.
−Removed: Certain current and future relationships with customers and third-party payors as well as certain of our business operations may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws.
−Removed: If we are unable to comply, or have not fully complied, with such laws, we could face criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
+Added: If we do not fully comply with applicable healthcare fraud and abuse laws, false claims laws and health information privacy and security laws, we could face criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations may be directly, or indirectly through our customers, further subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act.
11 unchanged sentences
Federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act (“FCA”), which imposes criminal or civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment to the federal government, including Medicare or Medicaid, that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
−Removed: FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties $11,665 to $23,331 per false claim or statement.
+Added: FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties in 2021 of $11,803 to $23,607 per false claim or statement, which are adjusted for inflation.
The civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
14 unchanged sentences
With such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including regulation due to the GDPR.
−Removed: If our operations are found to be in violation of any of the laws described above or any other governmental regulations or laws that apply to us, we may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, additional reporting requirements and/or oversight, particularly if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance, disgorgement, imprisonment, 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.
+Added: If our operations are found to be in violation of any of the laws described above or any other governmental regulations or laws that apply to us, we may be subject to substantial penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, additional reporting requirements and/or oversight, particularly if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance, disgorgement, imprisonment, 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.
Recent and future healthcare legislation may further impact our business operations.
34 unchanged sentences
We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.
−Removed: The use of our product candidates in future clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims.
−Removed: Product liability claims might be brought against us by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our products.
+Added: The use of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims.
+Added: Product liability claims might be brought against us by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our product candidates or products.
For example, unanticipated adverse effects could result from the use of our future products or product candidates which may result in a potential product liability claim.
7 unchanged sentences
the inability to commercialize our product candidates;
−Removed: decreased demand for our product candidates, if approved for commercial sale.
−Removed: We plan to obtain product liability insurance relating to the use of our therapeutics in future clinical trials.
+Added: decreased demand for our products approved for commercial sale.
+Added: We have a limited amount of product liability insurance relating to the use of our therapeutics in clinical trials.
However, such insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer.
7 unchanged sentences
In addition, we rely on a global enterprise software system to operate and manage our business.
−Removed: We also maintain personally identifiable information about our employees.
+Added: We also maintain personally identifiable information about our employees and participants in our clinical trials.
Our business therefore depends on the continuous, effective, reliable, and secure operation of our computer hardware, software, networks, Internet servers, and related infrastructure.
To the extent that our hardware or software malfunctions or access to our data by internal research personnel is interrupted, our business could suffer.
−Removed: The integrity and protection of our employee and company data is critical to our business and employees have a high expectation that we will adequately protect their personal information.
+Added: The integrity and protection of our employee and company data is critical to our business and our employees and participants in our clinical trials have a high expectation that we will adequately protect their personal information.
The regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve.
8 unchanged sentences
Our headquarters are located in San Diego, California.
−Removed: We are vulnerable to natural disasters such as earthquakes and wildfires, as well as other events that could disrupt our operations.
+Added: We are vulnerable to natural disasters such as earthquakes, mudslides, floods and wildfires, as well as other events that could disrupt our operations.
We do not carry insurance for earthquakes or other natural disasters and we may not carry sufficient business interruption insurance to compensate us for losses that may occur.
6 unchanged sentences
To the extent that we continue to generate taxable losses for United States federal income tax purposes, unused NOLs will carry forward to offset future taxable income (subject to any applicable limitations), if any.
−Removed: Under Sections 382 and 383 of the Code, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.
+Added: Under Sections 382 and 383 of the Internal Revenue Code, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be significantly limited.
We believe we may have triggered an “ownership change” limitation;
−Removed: however, we have not completed a study in accordance with Sections 382 and 383 of the Code to determine whether this ownership change has occurred.
+Added: however, we have not completed a study in accordance with Sections 382 and 383 of the Code to determine whether this ownership change has occurred or what the possible effects of an ownership change would be on our ability to use NOLs.
We may also experience ownership changes in the future as a result of subsequent shifts in our share ownership.
5 unchanged sentences
As a result, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes, which could negatively impact our future cash flows.
−Removed: We do not intend to pay dividends on our common stock so any returns will be limited to the value of our shares.
+Added: We do not intend to pay dividends on our common stock so any returns to investors will be limited to the value of our shares.
We have never declared or paid any cash dividends on our common stock.
1 unchanged sentence
GENERAL RISK FACTORS
−Removed: The market price of our common stock may be highly volatile and investors may not be able to resell shares at or above the price at which they purchase the shares.
−Removed: The trading price of our common stock is likely to be volatile.
+Added: The market price of our common stock has been, and is expected to continue to be, highly volatile and investors may not be able to resell shares at or above the price at which they purchased the shares.
+Added: The trading price of our common stock is likely to continue to be volatile.
Our share price could be subject to wide fluctuations in response to a variety of factors, including but not limited to the following factors:
1 unchanged sentence
inability to obtain additional funding;
−Removed: any delay in filing an IND or BLA for any of our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or BLA;
+Added: any delay in filing an application for authorization to commence a clinical trial of, or for authorization or approval to market, any of our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or BLA;
failure to maintain our existing strategic alliances or enter into new alliances;
1 unchanged sentence
failure by us or our licensors and strategic alliance partners to prosecute, maintain or enforce our intellectual property rights;
−Removed: failure to successfully develop and commercialize our product candidates;
+Added: failure to successfully and timely develop and commercialize our product candidates;
changes in laws or regulations applicable to our preclinical and clinical development activities, product candidates or future products;
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Failure to comply with these requirements could subject us to enforcement actions by the SEC, divert management’s attention, damage our reputation, and adversely affect our business, results of operations, or financial condition.
−Removed: In particular, if our independent registered public accounting firm is not able to render the required attestation, it could result in a loss of investor confidence in the accuracy, reliability, and completeness of our financial reports.
−Removed: We expect that the loss of “emerging growth company” status and compliance with these additional requirements will require management to expend additional time while also condensing the time frame available to comply with certain requirements, which may further increase our legal and financial compliance costs.
−Removed: We may be at risk of securities class action litigation.
+Added: In particular, if our independent registered public accounting firm is not able to render the required unqualified attestation, it could result in a loss of investor confidence in the accuracy, reliability, and completeness of our financial reports.
+Added: Our loss of “emerging growth company” status and our current status as a “large accelerated filer,” and compliance with these additional requirements will require management to expend additional time while also condensing the time frame available to comply with certain requirements, which can be expected to further increase our legal and financial compliance costs.
+Added: If we are subject to securities class action litigation, we would incur substantial costs and diversion of management’s attention.
We may be at risk of securities class action litigation.
This risk is especially relevant for us due to our dependence on positive clinical trial outcomes and regulatory approvals of each of our product candidates.
−Removed: In the past, medicines, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
−Removed: If we face such litigation, it could result in substantial costs, divert management’s attention and resources, or have a material adverse effect on our business, operating results and prospects.
−Removed: Sales of a substantial number of our common stock in the public market by our existing shareholders could cause our share price to fall.
−Removed: If our existing shareholders sell, or indicate an intention to sell, substantial amounts of those common stock in the public market, the trading price of our common stock could decline.
+Added: In the past, medicines, biotechnology and pharmaceutical companies have experienced significant stock price volatility,
+Added: particularly when associated with binary events such as clinical trials results and product approvals.
+Added: If we face such litigation, it could result in substantial costs, divert management’s attention and resources, and have a very material adverse effect on our business, operating results and prospects.
+Added: Sales of a substantial number of shares of our common stock in the public market by our existing shareholders could cause our share price to fall.
+Added: If our existing shareholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly.
In particular, the former shareholders, warrant holders and noteholders of Arcturus Therapeutics, Inc.
2 unchanged sentences
Those shareholders are eligible to sell those shares in the public market without restriction, except for shareholders who are deemed our “affiliates” under Rule 144 under the Securities Act.
−Removed: In addition, common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans are or may become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules and Rule 144 under the Securities Act.
−Removed: If common stock is sold, or if it is perceived that it will be sold, in the public market, that could create downward pressure on the trading price of our common stock and cause the trading price to decline.
+Added: In addition, common stock that is either subject to outstanding options or reserved for future issuance under our employee benefit plans, may become eligible for sale in the public market to the extent permitted by vesting schedules and Rule 144 under the Securities Act.
+Added: If common stock is sold, or if it is perceived that it will be sold, in the public market, that could cause the trading price to decline.
Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
2 unchanged sentences
Pursuant to our 2019 Omnibus Equity Incentive Plan, our management is authorized to grant options and other equity-based awards to our employees, directors and consultants.
−Removed: We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time, any of which may result in material dilution to investors and/or our existing shareholders.
+Added: We may issue and sell additional shares of common stock, convertible securities or other equity securities in one or more capital-raising or other transactions at prices and in a manner we determine from time to time, any of which may result in material dilution to investors and/or our existing shareholders.
New investors could also be issued securities with rights superior to those of our existing shareholders.
4 unchanged sentences
For example, if we were to fail to meet the minimum bid price requirement for 30 consecutive business days, we could become subject to delisting.
−Removed: Although Nasdaq may provide us with a compliance period in which to regain compliance with the minimum bid price requirement, we cannot assure you that we would be able to regain compliance within the period provided by Nasdaq.
+Added: Although Nasdaq may provide us with a compliance period in which to regain compliance with the minimum bid price requirement, we may not be able to regain compliance within the period provided by Nasdaq.
In order to regain compliance with such requirement, the closing bid price of our common stock would need to meet or exceed $1.00 per share for at least 10 consecutive business days during the compliance period.
If we were not able to regain compliance within the allotted compliance period for this requirement or any other applicable listing standard, including any extensions that may be granted by Nasdaq, our common stock would be subject to delisting.
−Removed: In the event that our common stock are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our
−Removed: common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
+Added: In the event that our common stock is delisted from Nasdaq, liquidity will be reduced and the trading price of our common stock can be expected to decline immediately.
+Added: If our common stock is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
In such event, it could become more difficult to dispose of, or obtain accurate price quotations for our common stock and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further.
−Removed: Unresolved Staff Comments
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.