What changed in this filing

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Item 1A. Risk Factors

2020-11-09 compared with 2020-08-05 · 148 added, 116 removed, 865 unchanged (23% of the section changed)

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In these circumstances, the market price of our common stock could decline, and investors may lose all or a part of their investment.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations.

These risks are more fully described below.

These risks include, among others:

we have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future;

we currently have no source of revenues and may never generate revenues or achieve profitability;

we are early in our development efforts, and we will need to successfully complete preclinical and clinical testing of our product candidates before we can seek regulatory approval and potentially generate commercial sales;

we will require substantial additional financing to achieve our goals, which may not be available to us on acceptable terms, or at all;

our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel;

the results of preclinical studies or earlier clinical studies are not necessarily predictive of future results, and product candidates we advance into clinical studies may not have favorable results in later clinical studies or receive regulatory approval;

clinical drug development, both in the U.S.

and international jurisdictions, involves a lengthy and expensive process with an uncertain outcome and even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties;

our T-cell immunotherapy product candidates and our next-generation CAR T programs represent new therapeutic approaches that could result in heightened regulatory scrutiny and delays in or our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates;

the market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small;

we may not be able to obtain or maintain orphan drug exclusivity for our product candidates;

the COVID-19 pandemic continues to impact our business and operations and could materially and adversely affect our business and operations in the future, as well as the businesses and operations of third parties on which we rely;

our success depends upon our ability to obtain and maintain sufficient intellectual property protection for our product candidates, and we may not be able to protect our intellectual property rights throughout the world;

our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval;

we may not be able to obtain and maintain the relationships with third parties that are necessary to develop, commercialize and manufacture some or all of our product candidates.

Risks Related to Our Financial Results and Capital Needs

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As a result, we have not been profitable and have incurred significant operating losses in every reporting period since our inception.

For the six months ended June 30, 2020, we reported a net loss of $151.0 million and we had an accumulated deficit of $968.9 million as of June 30, 2020.

For the nine months ended September 30, 2020, we reported a net loss of $225.3 million and we had an accumulated deficit of $1,043.3 million as of September 30, 2020.

We do not expect to generate revenues for the foreseeable future, if at all.

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We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our planned operations into 2022.

As of June 30, 2020, we had total cash, cash equivalents and short-term investments of $347.7 million.

As of September 30, 2020, we had total cash, cash equivalents and short-term investments of $327.2 million.

However, our operating plan may change as a result of many factors currently unknown to us, and we may need additional funds sooner than planned.

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Approvals by the EMA and FDA for existing autologous CAR T therapies, such as Novartis’s Kymriah ® and Gilead’s Yescarta ® , may not be indicative of what these regulators may require for approval of our therapies.

Moreover, our product candidates may not perform successfully in clinical studies or may be associated with adverse events that distinguish them from that which have previously been approved, such as existing autologous CAR T therapies.

Moreover, our product candidates may not perform successfully in clinical studies or may be associated with adverse events that distinguish them from those that have previously been approved, such as existing autologous CAR T therapies.

For instance, allogeneic product candidates may result in adverse events not experienced with autologous products.

Our development and commercialization activities could be harmed or delayed by governmental or regulatory delays due to limitations on the availability of governmental and regulatory agency personnel to review regulatory filings or engage with us, as a result of the COVID-19 pandemic, changes to governmental regulatory requirements, policies, guidelines or priorities, reallocation, or availability of government resources, or for other reasons, which may significantly delay the FDA’s ability to timely review and process any submissions we have filed or may file or cause other regulatory delays.

Our development and commercialization activities could be harmed or delayed by governmental or regulatory delays due to limitations on the availability of governmental and regulatory agency personnel to review regulatory filings or engage with us, as a result of the COVID-19 pandemic, changes to governmental regulatory requirements, policies, guidelines or priorities, reallocation, or availability of government resources, or for other reasons, which may significantly delay the FDA’s, or other regulatory agency, ability to review and process any submissions we have filed or may file or cause other regulatory delays.

Even if a product candidate were to successfully obtain approval from the FDA and comparable foreign regulatory authorities, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.

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developing therapies for types of diseases beyond those initially addressed by our current product candidates.

We cannot be sure that the manufacturing processes used in connection with our T-cell immunotherapy product candidates will yield a sufficient supply of satisfactory products that are safe, pure and potent, comparable to those T cells produced by our partners historically, scalable or profitable.

We cannot be sure that the manufacturing processes used in connection with our T-cell immunotherapy product candidates will yield a sufficient supply of satisfactory products that are safe, pure, potent, comparable to those T cells produced by our partners historically, scalable or profitable.

Moreover, actual or perceived safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical studies, or, if one of our product candidates is approved by applicable regulatory authorities, of physicians to subscribe to the novel treatment mechanics or of patients to provide consent to receive a novel treatment despite its regulatory approval.

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Depending on discussions with regulators, we may, for example, file a marketing application on the basis of interim data from a subset of the required patients or file a marketing application on the basis of the final data.

A marketing application based on interim data would impact the required ORR.

If conditional marketing authorization is granted from the European Commission, we may be subject to ongoing obligations, including the need to provide additional clinical data at a later stage to confirm a positive benefit/risk balance.

A marketing application based on interim data would impact the required ORR and may also result in post-marketing requirements that must be fulfilled.

Similarly, i f conditional marketing authorization is granted from the European Commission, we may be subject to ongoing obligations, including the need to provide additional clinical data at a later stage to confirm a positive benefit/risk balance.

For regulatory approvals of tab-cel ® , we plan on using independent radiologist and/or oncologist assessment of responses which may not correlate with the investigator-reported assessments.

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We may not be able to initiate or continue to support clinical studies of tab-cel ® , ATA188 or any other product candidates if we are unable to locate and enroll a sufficient number of eligible participants in these studies as required by the FDA or other regulatory authorities.

We have also experienced a delay in clinical trial site initiation and patient enrollment in certain of our clinical trials, including our Phase 3 clinical trial of tab-cel ® , as a result of the evolving impact of the ongoing COVID-19 pandemic, and if the COVID-19 pandemic continues and persists for an extended period of time, we could experience significant disruptions to our clinical development timelines.

We have experienced some transient delays in clinical trial site initiation and patient enrollment in certain of our clinical trials, including our Phase 3 clinical trial of tab-cel ® , as a result of the evolving impact of the ongoing COVID-19 pandemic, and if the COVID-19 pandemic continues and persists for an extended period of time, we could experience significant disruptions to our clinical development timelines.

Even if we are able to enroll a sufficient number of patients in our clinical studies, if the pace of enrollment is slower than we expect, the development costs for our product candidates may increase and the completion of our studies may be delayed or our studies could become too expensive to complete.

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Biologics designated as breakthrough therapies by the FDA may also be eligible for priority review.

Based on our BTD, we intend to pursue a rolling submission strategy for our BLA for tab-cel ® for EBV+ PTLD in the U.S.

While the rolling review process may provide the opportunity for ongoing communications with and feedback from the FDA, the FDA may raise issues and pose questions to us that may delay the initiation and completion of our BLA submission, acceptance of the complete BLA for filing, and approval of the BLA, thereby potentially delaying the approval process.

We may not be able to provide a satisfactory or a timely response to FDA questions or we may not be able to timely gather the required data to prepare our BLA submissions as we plan.

If we are unable to address all questions or concerns the FDA may raise or if we do not have timely access to the data required for the preparation of the BLA, we may not be able to timely initiate and complete our BLA and ultimately receive FDA approval.

In addition, the FDA retains discretion to decide not to review the portions of our BLA submitted under the rolling review process until the submission is deemed to be complete.

PRIME designation supports the development and accelerated review by the EMA of new therapies to treat patients with unmet medical need.

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In January 2013, the American Taxpayer Relief Act of 2012 (the ATRA) was enacted which, among other things, further reduced Medicare payments to several providers, including hospitals and outpatient clinics, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

T here remain judicial and Congressional challenges to numerous elements of the Affordable Care Act, as well as efforts by both the executive and legislative branches of the federal government to repeal or replace certain aspects of the Affordable Care Act.

There remain judicial and Congressional challenges to numerous elements of the Affordable Care Act, as well as efforts by both the executive and legislative branches of the federal government to repeal or replace certain aspects of the Affordable Care Act.

For example, the President signed Executive Orders designed to delay the implementation of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated by the Affordable Care Act.

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Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the Affordable Care Act, such as removing penalties, starting January 1, 2019, for not complying with the Affordable Care Act’s individual mandate to carry health insurance, eliminating the implementation of certain mandated fees, and increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D.

In December 2018, a Texas District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Cuts and Jobs Act of 2017.

In December 2018, a Texas District Court Judge ruled that the

Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Cuts and Jobs Act of 2017.

In December 2019, the U.S.

Court of Appeals for the 5 th Circuit upheld the Texas District Court ruling that the individual mandate was unconstitutional and remanded the case back to the Texas District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well.

In March 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and has allotted one hour for oral arguments, which are expected to occur in the fall of 2020.

In March 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, which are expected to occur in the fourth quarter of 2020.

It is unclear how this litigation and other efforts to repeal and replace the Affordable Care Act will impact the Affordable Care Act and our business.

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and one that reduces costs of insulin and epipens to patients of federally qualified health centers.

It is possible that additional governmental action is taken in response to the COVID-19 pandemic.

For example, on August 6, 2020, the presidential administration issued another executive order that instructs the federal government to develop a list of “essential” medicines and then buy them and other medical supplies from U.S.

manufacturers instead of from companies around the world, including China.

Although some of these and other proposals may require additional authorization to become effective, members of Congress and the presidential administration have indicated that they will continue to seek new legislative or administrative measures to control drug costs.

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In addition, a number of companies and academic institutions are developing product candidates for EBV+ PTLD and other EBV-associated diseases including:

Viracta Therapeutics, Inc., which is conducting a Phase 1b/2 clinical study for nanatinostat (formerly named tractinostat, or VRx-3996) in combination with antiviral drug valganciclovir in relapsed/refractory EBV + lymphomas, AlloVir (formerly known as ViraCyte), which has completed a Phase 2 clinical study for Viralym-M (ALVR105), an allogeneic, multi-virus T-cell product that targets six viruses including EBV and is planning to initiate several Phase 3 studies in 2020 and Tessa Therapeutics Pte Ltd., which has a Phase 3 autologous EBV-specific T-cell therapy (TT10) and a preclinical product candidate that is an allogeneic CD30-targeted CAR EBV-specific T-cell therapy.

Competition in the MS market is high with at least 18 therapies, including three generics, approved for the treatment of relapsing forms of MS (RMS), including clinically isolated syndrome, relapsing-remitting disease (RRMS) and active secondary progressive disease, in the U.S.

AlloVir (formerly known as ViraCyte), which has completed a Phase 2 clinical study for Viralym-M (ALVR105), an allogeneic, multi-virus T-cell product that targets six viruses in allogeneic HSCT recipients with ≥1 treatment-refractory infection, including EBV, and is planning to initiate several Phase 3 studies for CMV, AdV and Virus-Associated Hemorrhagic-Cystitis, as well as a Phase 1b/2 proof of concept trial for the prevention of BKV, CMV, AdV, EBV, HHV06 and JCV;

and Tessa Therapeutics Pte Ltd., which has a Phase 3 autologous EBV-specific T-cell therapy (TT10) and a preclinical product candidate that is an allogeneic CD30-targeted CAR EBV-specific T-cell therapy.

Competition in the MS market is high with at least 20 therapies, including four generics or bioequivalents, approved for the treatment of relapsing forms of MS (RMS), including clinically isolated syndrome, relapsing-remitting disease (RRMS) and active secondary progressive disease, in the U.S.

There are many competitors in the RMS market, including major multi-national fully-integrated pharmaceutical companies and established biotechnology companies.

Most recently, Zeposia ® (ozanimod), marketed by Bristol Myers Squibb, and Vumerity™ (diroximel fumarate), marketed by Biogen, was approved in the U.S.

for the treatment of RMS, and Mayzent ® (siponimod), marketed by Novartis, was approved in the EU for the same indication.

There are numerous development candidates in Phase 3 studies for RMS including TG Therapeutics’ anti-CD20 monoclonal antibody ublituximab and EMD Serono’s BTK inhibitor, evobrutinib.

Novartis and J&J have completed Phase 3 studies of their anti-CD20 monoclonal antibody, ofatumumab, and sphingosine-1-phosphate receptor 1 (S1P1) modulator, ponesimod, respectively, and have sought regulatory approval for these candidates in the U.S.

Most recently, Kesimpta ® (anti-CD20 monoclonal antibody), marketed by Novartis, was approved in the U.S.

for the treatment of RMS, and a decision for its approval for treatment of the same indication in the EU is expected in the first half of 2021.

Additionally, Mayzent ® (siponimod), marketed by Novartis, is approved in the EU for the same indication.

There are numerous development candidates in Phase 3 studies for RMS including TG Therapeutics’ anti-CD20 monoclonal antibody ublituximab and EMD Serono’s Bruton’s tyrosine kinase (BTK) inhibitor, evobrutinib.

Johnson & Johnson has completed Phase 3 studies of its sphingosine-1-phosphate receptor 1 (S1P1) modulator, ponesimod, and has sought regulatory approval in the U.S.

Two therapies have been approved for the treatment of non-relapsing, progressive forms of MS.

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The SPMS and PPMS markets have active development pipelines and additional novel agents could be approved in the future.

At least one development candidate is being evaluated in Phase 3 studies for progressive forms of MS including primary and secondary progressive MS.

This is AB Science’s masitinib, a tyrosine kinase inhibitor.

Several development candidate s are being evaluated in Phase 3 studies for progressive forms of MS including primary and secondary progressive MS , including AB Science’s masitinib, a tyrosine kinase inhibitor ;

Sanofi’s SAR442168, a BTK inhibitor;

and Roche’s fenebrutinib, a BTK inhibitor .

Medicinova is planning to initiate a Phase 3 study of its PDE inhibitor, ibudilast (MN166) in patients with non-relapsing secondary progressive MS.

There are currently t hree autologous CAR T therapies approved in the U.S.

There are currently three autologous CAR T therapies approved in the U.S.

Novartis’ Kymriah ® (tisagenlecleucel) and Gilead/Kite’s Yescarta ® (axicabtagene ciloleucel) and Tecartus TM (brexucabtagene autoleucel).

Bristol-Myers Squibb has filed BLA s to the US FDA for lisocabtagene maraleucel (liso-cel) (November 2020 PDUFA) and for idecabtagene vicleucel with bluebird bio .

Bristol-Myers Squibb has filed BLAs to the US FDA for lisocabtagene maraleucel (liso-cel) (November 2020 PDUFA) and for idecabtagene vicleucel (March 2021 PDUFA) with bluebird bio.

There are many CAR-mediated cell therapies in development, and, although the majority are autologous, they include allogeneic and off-the-shelf cell therapies.

There are multiple allogeneic CAR platforms being developed with differences in approach es to minimize instances of donor cells recognizing the patient’s body as foreign or rejection of the donor cells by the patient’s body.

These approaches include the use of gene-editing to remove the TCR and the use of cell types without a TCR.

There are multiple allogeneic CAR platforms being developed with differences in approaches to minimize instances of donor cells recognizing the patient’s body as foreign or rejection of the donor cells by the patient’s body.

These approaches include the use of gene-editing to remove or inhibit the TCR and the use of cell types without a TCR.

The majority of clinical stage allogeneic CAR programs utilize alpha beta T cells as the cell type and gene editing of the T-cell receptor and HLA as the preferred technology approach, however, other strategies are also in development.

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

As of June 30, 2020, we had 425 employees.

As of September 30, 2020, we had 429 employees.

We have made the decision to grow the size of our organization in order to support our continued development and potential commercialization of our product candidates.

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Our failure to accomplish any of these tasks could prevent us from successfully growing our company.

Risks Related to Our Business Generally

Risks Related to Ownership of Our Common Stock

Our stock price has been and will likely continue to be volatile and may decline regardless of our operating performance.

Our stock price has fluctuated in the past and can be expected to be volatile in the future.

From January 1, 2018 through September 30, 2020, the reported sale price of our common stock has fluctuated between $4.52 and $54.45 per share.

The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

In particular, the ongoing COVID-19 pandemic has further heightened the volatility of the stock market for biopharmaceutical companies.

As a result of this volatility, investors may experience losses on their investment in our common stock.

The market price of our common stock may be influenced by many factors, including the following:

the success of competitive products or technologies;

regulatory actions with respect to our product candidates or products or our competitors’ product candidates or products;

actual or anticipated changes in our growth rate relative to our competitors;

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

results of clinical studies of our product candidates or those of our competitors;

regulatory or legal developments in the U.S.

and other countries;

developments or disputes concerning patent applications, issued patents or other proprietary rights;

the recruitment or departure of key personnel;

the level of expenses related to any of our product candidates or clinical development programs;

the results of our efforts to in-license or acquire additional product candidates or products;

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

variations in our financial results or those of companies that are perceived to be similar to us;

fluctuations in the valuation of companies perceived by investors to be comparable to us;

inconsistent trading volume levels of our shares;

announcement or expectation of additional financing efforts;

sales of our common stock by us, our insiders or our other stockholders;

changes in the structure of healthcare payment systems;

market conditions in the pharmaceutical and biotechnology sectors;

general economic, industry and market conditions;

the other risks described in this “Risk Factors” section.

In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have experienced significant volatility that has often been unrelated to the operating performance of particular companies, including in connection with the ongoing COVID-19 pandemic, which has resulted in decreased stock prices for many companies.

For example, negative publicity regarding drug pricing and price increases by pharmaceutical companies has negatively impacted, and may continue to negatively impact, the markets for biotechnology and pharmaceutical stocks.

Likewise, as a result of significant changes in U.S.

social, political, regulatory and economic conditions or in laws and policies governing foreign trade and healthcare spending and delivery, including the possible repeal and/or replacement of all or portions of the Affordable Care Act or changes in tariffs and other restrictions on free trade stemming from U.S.

and foreign government policies, or for other reasons, the financial markets could experience significant volatility that could also negatively impact the markets for biotechnology and pharmaceutical stocks.

These market fluctuations may adversely affect the trading price of our common stock.

In the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price.

Any such litigation brought against us could result in substantial costs and divert management’s attention and resources, which could result in delays of our clinical studies or commercialization efforts.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Our executive officers, directors and principal stockholders own a significant portion of our outstanding common stock.

These stockholders may be able to determine the outcome of all matters requiring stockholder approval.

For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction.

This may prevent or discourage unsolicited acquisition proposals or offers for our common stock.

The interests of our significant stockholders may not always coincide with the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the market price for our common stock.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market could occur at any time.

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Moreover, certain holders of shares of our common stock will have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

We have registered and intend to continue to register all shares of common stock that we may issue under our equity compensation plans.

Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.

We have incurred and will continue to incur increased costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs.

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses.

We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition.

In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Stock Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted and will adopt additional rules and regulations, such as mandatory “say on pay” voting requirements, that now apply to us.

Stockholder activism, the current political environment and the potential for future regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activities more time-consuming and costly.

To the extent these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be the sole source of potential gain for our stockholders.

We have never declared or paid cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business.

In addition, the terms of any future debt agreements may preclude us from paying dividends.

As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future.

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 stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations.

To raise capital, we may sell substantial amounts of common stock or securities convertible into or exchangeable for common stock in one or more transactions at prices and in a manner we determine from time to time.

These future issuances of common stock or common stock-related securities, together with the exercise of outstanding options or warrants, and any additional shares issued in connection with acquisitions or in-licenses, if any, may result in material dilution to our investors.

Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to those of holders of our common stock.

To the extent equity valuations, including the trading price of our common stock, are depressed as a result of economic disruptions and uncertainty concerning the COVID-19 pandemic or other factors, the potential magnitude of this dilution will increase.

Pursuant to our equity incentive plans, our compensation committee is authorized to grant equity-based incentive awards to our employees, non-employee directors and consultants.

Future grants of RSUs, options and other equity awards and issuances of common stock under our equity incentive plans will result in dilution and may have an adverse effect on the market price of our common stock.

Some terms of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Our amended and restated certificate of incorporation (Certificate of Incorporation) and amended and restated bylaws (Bylaws), as well as Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.

These include terms that:

permit our board of directors to issue up to 20,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate;

provide that all vacancies on our board of directors, including as a result of newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

establish that our board of directors is divided into three classes, with each class serving three-year staggered terms, which makes it more difficult to replace a majority of our directors in a short period of time;

require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;

provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice;

not provide for cumulative voting rights, thereby allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election;

provide that special meetings of our stockholders may be called only by our board of directors, the chairperson of our board of directors or our chief executive officer.

Any of the factors listed above may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management.

In addition, because we are incorporated in Delaware, we are governed by Section 203 of the Delaware General Corporation Law, which may discourage, delay or prevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders.

Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction.

Any term of our Certificate of Incorporation or Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us and our business.

In the event securities or industry analysts who cover us downgrade our stock or publish unfavorable research about us or our business, our stock price would likely decline.

If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

General Risk Factors

Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel.

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the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information held by covered entities and their business associates;

the federal physician sunshine requirements under the Affordable Care Act requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to CMS information related to payments and other transfers of value to physicians, as defined by this law, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations, which will be expanded beginning in 2022, to require applicable manufacturers to report such information regarding its relationships with physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse midwives during the previous year;

state and foreign laws and regulations that are analogous to the federal laws and regulations described in the preceding subsections of this risk factor, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;

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Our ability to obtain clinical supplies of product candidates could be disrupted, if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption, including, for example, the ongoing COVID-19 pandemic.

Risks Related to Ownership of Our Common Stock

Our stock price has been and will likely continue to be volatile and may decline regardless of our operating performance.

Our stock price has fluctuated in the past and can be expected to be volatile in the future.

From January 1, 2018 through June 30, 2020, the reported sale price of our common stock has fluctuated between $4.52 and $54.45 per share.