−Removed: You should carefully consider the following risk factors, as well as the other information in this Quarterly Report on Form 10-Q and in our other public filings.
−Removed: The occurrence of any of these risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time.
−Removed: You should consider all of the risk factors described in our public filings when evaluating our business.
−Removed: Summary of Risks Associated with Our Business
+Added: Risks Factors Summary
Below is a summary of the principal factors that make an investment in our securities speculative or risky.
This summary does not address all of the risks that we face.
−Removed: Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found following this summary and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the SEC before making investment decisions regarding our securities.
+Added: Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found following this summary and should be carefully considered, together with other information in this Quarterly Report and our other filings with the SEC before making investment decisions regarding our securities.
Investing in our securities involves substantial risk.
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We will need to raise additional capital or enter into strategic partnering relationships to fund our operations;
−Removed: We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
+Added: We are a pre-commercial biotherapeutics company and have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future;
We may encounter substantial delays and other challenges in our planned clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities;
−Removed: If we are unable to successfully complete or otherwise advance clinical development, obtain regulatory or marketing approval for, or successfully commercialize our therapeutic product candidates, including ATYR1923 and ATYR2810, or experience significant delays in doing so, our business will be materially harmed.
+Added: If we are unable to successfully complete or otherwise advance clinical development, obtain regulatory or marketing approval for, or successfully commercialize our therapeutic product candidates, including efzofitimod and ATYR2810, or experience significant delays in doing so, our business will be materially harmed;
Our current product candidates and any other product candidates that we may develop from our discovery engine represent novel therapeutic approaches, which may cause significant delays or may not result in any commercially viable drugs;
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If we are unable to obtain, maintain or protect intellectual property rights related to our product candidates, or if the scope of such intellectual property protection is not sufficiently broad, we may not be able to compete effectively in our markets;
−Removed: Our business could continue to be adversely affected by the effects of the COVID-19 pandemic.
+Added: Our business could continue to be adversely affected by the effects of the ongoing COVID-19 pandemic;
Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.
+Added: You should carefully consider the following risk factors, as well as the other information in this Quarterly Report and in our other public filings with the SEC.
+Added: The occurrence of any of these risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report and those we may make from time to time.
+Added: You should consider all of the risk factors described in our other public filings when evaluating our business.
Risks related to our financial condition and need for additional capital
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The development of therapeutic product candidates is expensive, and we expect our research and development expenses to fluctuate.
−Removed: As of September 30, 2021, our cash, cash equivalents and available-for-sale investments were approximately $116.4 million.
−Removed: We believe that our current cash, cash equivalents and available-for-sale investments, will be sufficient to meet our anticipated cash requirements for a period of at least one year from the date of this Quarterly Report on Form 10-Q.
+Added: As of March 31, 2022, our cash, cash equivalents and available-for-sale investments were approximately $98.7 million.
+Added: We believe that our current cash, cash equivalents and available-for-sale investments, will be sufficient to meet our material cash requirements for known contractual and other obligations for a period of at least one year from the date of this Quarterly Report.
However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through equity or debt offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements.
Our future funding requirements will depend on many factors, including but not limited to:
−Removed: our ability to initiate, and the progress and results of, our future clinical trials of ATYR1923 and ATYR2810;
−Removed: the outcome of our planned meetings with the FDA with respect to the design of additional clinical trials of ATYR1923 and other registration requirements;
+Added: our ability to initiate, and the progress and results of, our future clinical trials of efzofitimod (our lead therapeutic candidate) and ATYR2810;
+Added: the outcome of our planned meetings with the U.S.
+Added: Food and Drug Administration (FDA) with respect to the design of additional clinical trials of efzofitimod and other registration requirements;
the costs, timing and outcome of regulatory review of our product candidates;
our ability to initiate a clinical trial, and the progress and results of, our preclinical program for ATYR2810;
−Removed: delays of our planned clinical trials of ATYR1923 and ATYR2810 and any resulting cost increases as a result of the COVID-19 pandemic;
+Added: potential delays of our planned clinical trials of efzofitimod and ATYR2810 and any resulting cost increases as a result of the ongoing COVID-19 pandemic;
the number and characteristics of product candidates that we pursue;
the scope, progress, results and costs of preclinical development, and clinical trials for other product candidates;
−Removed: the manufacturing of preclinical study and clinical trial materials, including technology transfers to additional contract development and manufacturing organizations (CDMO), and any delays in the manufacturing of study drug as a result of the COVID-19 pandemic;
+Added: the manufacturing of preclinical study and clinical trial materials, including technology transfers to additional contract development and manufacturing organizations (CDMO), and any delays in the manufacturing of study drug as a result of the ongoing COVID-19 pandemic;
our ability to maintain existing and enter into new collaboration and licensing arrangements and the timing of any payments we may receive under such arrangements;
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The incurrence of indebtedness would result in fixed payment obligations and may require us to agree to certain restrictive covenants, such as limitations on our ability to incur debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
−Removed: As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
+Added: As a result of the ongoing COVID-19 pandemic, the global credit and financial markets have experienced volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
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Even if we are successful in our efforts to establish new strategic partnerships, the terms that we agree upon may not be favorable to us and we may not be able to maintain such strategic partnerships if, for example, we encounter unfavorable results or delays during development or approval of a product candidate or sales of an approved product are lower than expectations.
−Removed: We have incurred significant losses since our inception and will continue to incur significant losses for the foreseeable future.
−Removed: We are a clinical stage biotherapeutics company, and we have not yet generated any revenues from product sales.
−Removed: We have incurred net losses in each year since our inception in 2005, including a condensed consolidated net loss of $25.2 million for the nine months ended September 30, 2021.
−Removed: As of September 30, 2021, we had an accumulated deficit of $363.7 million.
+Added: We are a pre-commercial biotherapeutics company and have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
+Added: We are a pre-commercial biotherapeutics company, and we have not yet generated any revenues from product sales.
+Added: We have incurred net losses in each year since our inception in 2005, including consolidated net losses of $12.2 million for the three months ended March 31, 2022.
+Added: As of March 31, 2022, we had an accumulated deficit of $384.4 million.
We have devoted most of our financial resources to research and development, including our clinical and preclinical development activities.
−Removed: To date, we have financed our operations primarily through the sale of equity securities and convertible debt and through venture debt and term loans.
+Added: To date, we have financed our operations primarily through the sale of equity securities and convertible debt and through venture debt, term loans and license and collaboration agreement revenues.
The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to obtain funding through equity offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements.
−Removed: We have not commenced pivotal clinical trials for any product candidate and it will be several years, if ever, before we have a product candidate ready for commercialization.
+Added: While we intend to initiate a planned registrational trial for efzofitimod in the third quarter of 2022, we have not commenced registrational clinical trials for any product candidate to date and it will be several years, if ever, before we have a product candidate ready for commercialization.
Even if we obtain regulatory approval to market a product candidate, our future revenues will depend, in part, upon the size of any markets in which our product candidates have received approval, and our ability to achieve sufficient market acceptance, reimbursement from third-party payors and adequate market share for our product candidates in those markets.
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We anticipate that our expenses will fluctuate in connection with our ongoing activities as we:
−Removed: continue our research and preclinical and clinical development of ATYR1923 and ATYR2810 or any other product candidates that we may develop;
+Added: continue our research and preclinical and clinical development of efzofitimod and ATYR2810 or any other product candidates that we may develop;
obtain clinical trial materials and further develop the manufacturing process for our product candidates;
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attract and retain skilled personnel;
−Removed: additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.
+Added: and create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.
Our revenues, expenses and income or losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.
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seeking and obtaining regulatory approvals for product candidates for which we complete clinical trials;
−Removed: developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates and establish supply and manufacturing relationships with third parties;
+Added: developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates and establishing supply and manufacturing relationships with third parties;
launching and commercializing product candidates for which we obtain regulatory approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing and distribution infrastructure;
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obtaining market acceptance of our product candidates as viable treatment options for our target indications;
−Removed: identifying and validating new therapeutic product candidates based on tRNA synthetase biology or neuropilin-2 (NRP2) biology;
+Added: identifying and validating new therapeutic product candidates based on tRNA synthetase biology or neuropilin-2 (NRP2) biology, including through our AARS and DARS discovery programs;
attracting, hiring and retaining qualified personnel;
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Even if one of our product candidates is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any such approved product candidate.
−Removed: Our expenses could increase beyond expectations if we are required by the U.S.
−Removed: Food and Drug Administration (FDA) or other regulatory agencies, domestic or foreign, to perform clinical trials and other studies in addition to those that we currently anticipate.
+Added: Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies, domestic or foreign, to perform clinical trials and other studies in addition to those that we currently
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.
Risks related to the discovery, development and regulation of our product candidates
−Removed: We may encounter substantial delays and other challenges in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
+Added: We may encounter substantial delays and other challenges in our planned clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans.
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We cannot assure you that our product candidates will not be subject to new clinical holds or significant delay in the future.
+Added: For example, in our completed Phase 1b/2a clinical trial of efzofitimod in patients with pulmonary sarcoidosis, FDG-PET/CT was not evaluable due to incomplete data primarily caused by operational issues related to the ongoing COVID-19 pandemic.
Any inability to initiate or complete clinical trials of our product candidates in the United States, as a result of clinical holds or otherwise, would delay our clinical development plans, may require us to incur additional clinical development costs and could impair our ability to obtain U.S.
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our inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of human clinical trials, including trials of certain dosages;
−Removed: delays in reaching consensus with regulatory agencies on trial design;
+Added: delays in reaching consensus with regulatory agencies on trial design, including with respect to the endpoints for our planned registrational study of efzofitimod and prioritization of outcome measurements that would best support the evaluation of efzofitimod’s efficacy;
delays in reaching agreement on acceptable terms with prospective clinical contract research organizations (CROs) and clinical trial sites;
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Any delay in or inability to successfully complete preclinical and clinical development could result in additional costs to us and impair our ability to generate revenue.
−Removed: In addition, if we make manufacturing or formulation changes to our product candidates (including our planned technology transfer to another CDMO for bulk drug substance and production capacity changes for ATYR1923), we may need to conduct additional studies to bridge our modified product candidates to earlier versions.
+Added: In addition, if we make manufacturing or formulation changes to our product candidates (including our planned technology transfer to another CDMO for bulk drug substance and production capacity changes for efzofitimod ), we may need to conduct additional studies to bridge our modified product candidates to earlier versions.
If the results of our future clinical trials are perceived to be negative or inconclusive, or if there are safety concerns or adverse events associated with our product candidates, we may be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;
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or experience damage to our reputation.
−Removed: To date, the safety and efficacy of ATYR1923 in humans has not been studied to a significant extent and ATYR2810 has not been studied in humans at all.
−Removed: Accordingly, ATYR1923, ATYR2810 and any future product candidates could potentially cause adverse events that have not yet been predicted.
+Added: To date, the safety and efficacy of efzofitimod has only been studied in a limited number of humans and ATYR2810 has not been studied in humans at all.
+Added: Accordingly, efzofitimod , ATYR2810 and any future product candidates could potentially cause unexpected adverse events.
In addition, the inclusion of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to the natural progression of the disease.
−Removed: Further, if patients drop out of any future trials, miss scheduled doses or follow-up visits or otherwise fail to follow trial protocols, or if our trials are otherwise disrupted due to COVID-19 or actions taken to slow its spread, the integrity of data from our trials may be compromised or not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the applicable program.
−Removed: In addition, the COVID-19 pandemic has impacted clinical trials broadly, including our ATYR1923 Phase 1b/2a trial in patients with pulmonary sarcoidosis, where many sites stopped enrollment and patients chose not to enroll or continue participating in the trial.
+Added: Further, if patients drop out of any future trials, miss scheduled doses or follow-up visits or otherwise fail to follow trial protocols, or if our trials are otherwise disrupted due to the ongoing COVID-19 pandemic or actions taken to slow its spread, the integrity of data from our trials may be compromised or not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the applicable program.
+Added: In addition, the ongoing COVID-19 pandemic has impacted clinical trials broadly, including our completed efzofitimod Phase 1b/2a trial in patients with pulmonary sarcoidosis, where many sites stopped enrollment and patients chose not to enroll or continue participating in the trial.
While we completed the clinical trial, the availability of results from the Phase 1b/2a clinical trial was delayed to September 2021.
−Removed: We may experience delays in site initiation and patient enrollment, failures to comply with study protocols, delays in the manufacture of study drug for clinical testing and other difficulties in starting or completing our future trials due to the COVID-19 pandemic, including the emergence of new variants of COVID-19.
+Added: We may experience delays in site initiation and patient enrollment, failures to comply with study protocols, delays in the manufacture of study drug for clinical testing and other difficulties in starting or completing our future trials due to the ongoing COVID-19 pandemic, including the emergence of new variants of COVID-19.
Interim, top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
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If the top-line data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
−Removed: If we are unable to successfully complete or otherwise advance clinical development, obtain regulatory or marketing approval for, or successfully commercialize our therapeutic product candidates, including ATYR1923, or experience significant delays in doing so, our business will be materially harmed.
+Added: If we are unable to successfully complete or otherwise advance clinical development, obtain regulatory or marketing approval for, or successfully commercialize our therapeutic product candidates, including efzofitimod and ATYR2810 , or experience significant delays in doing so, our business will be materially harmed.
To date, we have expended significant time, resources and effort on the discovery and development of product candidates related to the extracellular proteins derived from the histidyl tRNA synthetase (HARS) family and NRP2 biology, including conducting preclinical studies and clinical trials.
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We cannot assure you that we will be able to successfully complete the necessary clinical trials, obtain regulatory approvals, secure an adequate commercial supply for, or otherwise successfully commercialize our therapeutic candidates.
−Removed: If we do not receive regulatory approvals for our product candidates, and even if we do obtain regulatory approvals, we may never generate significant revenues, if any, from commercial sales.
+Added: If we do not receive regulatory approvals for our product candidates,
+Added: and even if we do obtain regulatory approvals, we may never generate significant revenues, if any, from commercial sales.
If we fail to successfully commercialize our therapeutic candidates, we may be unable to generate sufficient revenues to sustain and grow our company, and our business, prospects, financial condition and results of operations will be adversely affected.
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Certain of the conditions for which we may elect to evaluate our product candidates may be rare diseases with limited patient pools from which to draw for clinical trials.
−Removed: For example, we are currently planning our next ATYR1923 clinical trial in patients with pulmonary sarcoidosis.
+Added: For example, we are currently planning our next efzofitimod clinical trial in patients with pulmonary sarcoidosis, and we intend to initiate this planned registrational trial in the third quarter of 2022.
While estimates of pulmonary sarcoidosis prevalence vary, we estimate that pulmonary sarcoidosis affects an estimated 200,000 patients in the United States.
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We may be unable to identify and enroll a sufficient number of patients with the disease in question and who meet the eligibility criteria for, and are willing to participate in, the clinical trials.
−Removed: Once enrolled, patients may decide or be required to discontinue from the clinical trial due to inconvenience, burden of trial requirements, adverse events associated with ATYR1923, limitations required by trial protocols or other reasons.
+Added: Once enrolled, patients may decide or be required to discontinue from the clinical trial due to inconvenience, burden of trial requirements, adverse events associated with efzofitimod , limitations required by trial protocols or other reasons.
Our ability to identify, recruit, enroll and maintain a sufficient number of patients, or those with required or desired characteristics to achieve diversity in future clinical trials in a timely manner may also be affected by other factors, including, but not limited to:
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If we have difficulty enrolling and maintaining a sufficient number of patients to conduct our clinical trials as planned for any reason, we may need to delay, limit or terminate clinical trials, any of which would have an adverse effect on our business, prospects, financial condition and results of operations.
+Added: Furthermore, clinical trial delays could also 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 could impair our
+Added: ability to obtain orphan exclusivity and successfully commercialize our product candidates and may have an adverse effect on our business, financial condition and results of operations.
Our current product candidates and any other product candidates that we may develop from our discovery engine represent novel therapeutic approaches, which may cause significant delays or may not result in any commercially viable drugs.
We have concentrated the bulk of our research and development efforts to date on studying extracellular functions of tRNA synthetase biology, a newly discovered area of biology.
−Removed: We have also identified NRP2 as a receptor for ATYR1923 and have focused research efforts on NRP2 biology.
−Removed: Our future success is highly dependent on the successful development of product candidates based on these new areas of biology, including ATYR1923, ATYR2810 and additional product candidates arising from proteins derived from HARS or targeting the NRP2 receptor or other pathways, including Alanyl-tRNA synthetase (AARS) and Aspartyl-tRNA synthetase (DARS).
+Added: We have also identified NRP2 as a receptor for efzofitimod and have focused research efforts on NRP2 biology.
+Added: Our future success is highly dependent on the successful development of product candidates based on these new areas of biology, including efzofitimod , ATYR2810 and additional product candidates arising from proteins derived from tRNA synthetases or targeting the NRP2 receptor or other pathways, including Alanyl-tRNA synthetase (AARS) and Aspartyl-tRNA synthetase (DARS).
Extracellular tRNA synthetase-based biology and NRP2 biology represents a novel approach to drug discovery and development, and to our knowledge, no drugs have been developed using, or based upon, this approach.
Despite the successful development of other naturally occurring proteins, such as erythropoietin and insulin, as therapeutics, proteins derived from HARS, AARS or DARS families or targeting the NRP2 receptor and from other tRNA synthetase pathways represent a novel class of protein therapeutics, and our development of these therapeutics is based on our new understanding of human physiology.
−Removed: In particular, the mechanism of action of tRNA synthetases and their role in immuno-modulation and tissue regeneration have not been studied extensively, nor has the safety of this class of protein therapeutics been evaluated extensively in humans.
+Added: In particular, the mechanism of action of tRNA synthetases and their role in immunomodulation and tissue regeneration have not been studied extensively, nor has the safety of this class of protein therapeutics been evaluated extensively in humans.
The therapeutic product candidates that we elect to develop may not have the physiological functions that we currently ascribe to them, may have limited or no therapeutic applications, or may present safety problems of which we are not yet aware.
We cannot be sure that our discovery engine will yield therapeutic product candidates that are safe, effective, approvable by regulatory authorities, manufacturable, scalable, or profitable.
−Removed: Because our work represents a new therapeutic approach, developing and commercializing our product candidates, including ATYR1923 and ATYR2810, subjects us to a number of challenges, including:
−Removed: defining indications within our targeted diseases and clinical endpoints within each indication that are appropriate to support regulatory approval;
+Added: Because our work represents a new therapeutic approach, developing and commercializing our product candidates, including efzofitimod and ATYR2810, subjects us to a number of challenges, including:
+Added: defining indications within our targeted diseases and clinical endpoints within each indication that are appropriate to support regulatory approval, including with respect to our planned registrational study of efzofitimod and prioritization of outcome measurements that would best support the evaluation of efzofitimod’s efficacy;
obtaining regulatory approval from the FDA and other regulatory authorities that have little or no experience with the development of extracellular tRNA synthetase-based therapeutics;
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Any inability to successfully develop commercially viable drugs would have an adverse impact on our business, prospects, financial condition and results of operations.
−Removed: Data generated in our preclinical studies and patient sample data relating to the immunomodulatory domain of HARS, including ATYR1923, may not be predictive or indicative of the immuno-modulatory activity or therapeutic effects, if any, of our product candidates in patients.
−Removed: Our scientists discovered the activity of the immunomodulatory domain of HARS, including ATYR1923, using in vitro and in vivo screening systems designed to test potential immuno-modulatory activity in animal models of immune activity or inflammation.
+Added: Data generated in our preclinical studies and patient sample data relating to the immunomodulatory domain of HARS, including efzofitimod , may not be predictive or indicative of the immunomodulatory activity or therapeutic effects, if any, of our product candidates in patients.
+Added: Our scientists discovered the activity of the immunomodulatory domain of HARS, including efzofitimod , using in vitro and in vivo screening systems designed to test potential immunomodulatory activity in animal models of immune activity or inflammation.
Translational medicine, or the application of basic scientific findings to develop therapeutics that promote human health, is subject to a number of inherent risks.
−Removed: In particular, scientific hypotheses formed from preclinical observations may prove to be incorrect, and the data generated in animal models or observed in limited patient populations may be of limited value, and may not be applicable in clinical trials conducted under the controlled conditions required by applicable regulatory requirements and our protocols.
−Removed: For example, we have not extensively studied the activity of ATYR1923 in patients with ILD.
+Added: In particular, scientific hypotheses formed from preclinical observations may prove to be incorrect, and the
+Added: data generated in animal models or observed in limited patient populations may be of limited value, and may not be applicable in clinical trials conducted under the controlled conditions required by applicable regulatory requirements and our protocols.
+Added: For example, we have not extensively studied the activity of efzofitimod in patients with ILD.
Our classification of diseases based on the existence of excessive immune cell activation or lack thereof and our hypothesis that these represent potential indications for our product candidates may not prove to be therapeutically relevant.
−Removed: Accordingly, the conclusions that we have drawn from animal studies and patient sample data regarding the potential immuno-modulatory activity of ATYR1923 may not be substantiated in other animal models or in clinical trials.
−Removed: Further, based on the discovery of the involvement of NRP2 in the mechanism of action of ATYR1923, we are still expanding our knowledge of the role of the NRP2 pathway in regulating immune responses.
−Removed: Although we were able to establish clinical proof-of-concept for ATYR1923 in our Phase 1b/2a study in patients with pulmonary sarcoidosis, this may not be validated in other clinical trials.
+Added: Accordingly, the conclusions that we have drawn from animal studies and patient sample data regarding the potential immunomodulatory activity of efzofitimod may not be substantiated in other animal models or in clinical trials.
+Added: Further, based on the discovery of the involvement of NRP2 in the mechanism of action of efzofitimod , we are still expanding our knowledge of the role of the NRP2 pathway in regulating immune responses.
+Added: Although we were able to establish clinical proof-of-concept for efzofitimod in our Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis, this may not be validated in other clinical trials.
Any failure to demonstrate in controlled clinical trials the requisite safety and efficacy of our product candidates will adversely affect our business, prospects, financial condition and results of operations.
−Removed: We have previously conducted and we or our third party collaborators may conduct additional clinical trials of ATYR1923 outside of the United States.
+Added: We have previously conducted and we or our third party collaborators may conduct additional clinical trials of efzofitimod outside of the United States.
The FDA, however, may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.
−Removed: In June 2018, we completed a Phase 1 clinical trial of ATYR1923 in healthy subjects in Australia.
−Removed: This randomized, double-blind, placebo-controlled study investigated the safety, tolerability, immunogenicity, and PK of intravenous ATYR1923 in 36 healthy volunteers.
−Removed: In addition, we or our third party collaborators may choose to conduct additional clinical trials for ATYR1923 in countries outside the United States, subject to applicable regulatory approval.
−Removed: For example, our partner, Kyorin, conducted a ATYR1923 Phase 1 study in healthy volunteers in Japan.
+Added: In June 2018, we completed a Phase 1 clinical trial of efzofitimod in healthy subjects in Australia.
+Added: This randomized, double-blind, placebo-controlled study investigated the safety, tolerability, immunogenicity, and PK of intravenous efzofitimod in 36 healthy volunteers.
+Added: In addition, we or our third party collaborators may choose to conduct additional clinical trials for efzofitimod in countries outside the United States, subject to applicable regulatory approval.
+Added: For example, our partner, Kyorin Pharmaceutical Co., Ltd.
+Added: (Kyorin), conducted an efzofitimod Phase 1 clinical trial in 32 healthy Japanese male volunteers.
Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of such study data is generally subject to certain conditions.
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diminished protection of intellectual property in some countries.
−Removed: Further, as a result of the COVID-19 pandemic, the integrity of data from any clinical trials conducted outside of the United States may not be acceptable to the FDA.
+Added: Further, as a result of the ongoing COVID-19 pandemic, the integrity of data from any clinical trials conducted outside of the United States may not be acceptable to the FDA.
Our therapeutic product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
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In addition, some patients in our Phase 1b/2 clinical trials of ATYR1940 experienced generalized infusion related reactions (IRRs) and discontinued dosing.
−Removed: We established procedural measures, including a decreased concentration and intravenous delivery rate of ATYR1940, in an effort to minimize the occurrence of generalized IRRs and the formation of anti-drug antibodies.
−Removed: After implementation of these procedures, we observed a decreased rate of IRRs in our clinical trials.
−Removed: We did not observe IRRs in our Phase 1b/2a clinical trial of ATYR1923 in patients in pulmonary sarcoidosis or in our other ATYR1923 clinical trials, but we cannot assure that this will be the case in any future clinical trials.
−Removed: Generalized IRRs and other complications or side effects could harm further development and/or commercialization of our product candidates, including ATYR1923.
+Added: We established procedural measures, including a decreased concentration and intravenous delivery rate of
+Added: ATYR1940, in an effort to minimize the occurrence of generalized IRRs and the formation of anti-drug antibodies.
+Added: After implementation of these procedures, we observed a decreased rate of IRRs in our clinical trials of ATYR1940.
+Added: We did not observe IRRs in our completed Phase 1b/2a clinical trial of efzofitimod in patients in pulmonary sarcoidosis or in our other efzofitimod clinical trials, but we cannot assure that this will be the case in any future clinical trials.
+Added: Generalized IRRs and other complications or side effects could harm further development and/or commercialization of our product candidates, including efzofitimod .
Additionally, our product candidates are designed to be administered by intravenous injection, which may cause side effects, including acute immune responses and injection site reactions.
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We may not be successful in our efforts to identify or discover additional product candidates.
−Removed: A key element of our strategy is to expand applications of ATYR1923 to additional immune-mediated diseases, advance the development of ATYR2810 for cancer indications and leverage our discovery engine to identify the therapeutic potential of NRP2 biology and extracellular proteins derived from tRNA synthetases to help identify or discover additional product candidates.
+Added: A key element of our strategy is to expand applications of efzofitimod to additional immune-mediated diseases, advance the development of ATYR2810 for cancer indications and leverage our discovery engine to identify the therapeutic potential of NRP2 biology and extracellular proteins derived from tRNA synthetases to help identify or discover additional product candidates.
A significant portion of the research that we are conducting involves new compounds and drug discovery methods, including our proprietary technology.
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Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.
−Removed: We or our CDMOs must supply all necessary documentation in support of a biological license application (BLA) on a timely basis and must adhere to the FDA’s Good Laboratory Practices and cGMP regulations enforced by the FDA through its facilities inspection program.
+Added: We or our CDMOs must supply all necessary documentation in support of a biologics license application (BLA) on a timely basis and must adhere to the FDA’s Good Laboratory Practices and cGMP regulations enforced by the FDA through its facilities inspection program.
The facilities and quality systems of our CDMOs and other CROs must pass a pre-approval inspection for compliance with applicable regulations as a condition of regulatory approval of our product candidates.
2 unchanged sentences
The regulatory authorities also may, at any time following approval of a product for sale, audit the facilities in which the product is manufactured.
−Removed: If any such inspection or audit of our facilities or those of our CDMOs and CROs identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independently of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a facility.
+Added: If any such inspection or audit of our facilities or those of our CDMOs and CROs identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independently of
+Added: such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a facility.
Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.
−Removed: In addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our CDMOs and CROs, which could disrupt our clinical timelines and have a material adverse impact on our business, prospects, financial condition and results of operations.
+Added: In addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to the ongoing COVID-19 pandemic or other infectious diseases could impact personnel at our CDMOs and CROs, which could disrupt our clinical timelines and have a material adverse effect on our business, prospects, financial condition and results of operations.
Additionally, the production of COVID-19 vaccines may disrupt the availability of raw materials and consumables required to manufacture our product candidates, which could result in decreased manufacturing and supply of these product candidates to support our planned clinical trials or regulatory filings.
7 unchanged sentences
Even minor deviations from normal manufacturing and distribution processes for any of our product candidates could result in reduced production yields, product defects, and other supply disruptions.
−Removed: Furthermore, although tRNA synthetases represent a class of proteins that may share immuno-modulatory properties in various physiological pathways, each tRNA synthetase has a different structure and may have unique manufacturing requirements that are not applicable across the entire class.
−Removed: For example, fusion proteins, such as ATYR1923, include an additional antibody domain to improve PK characteristics, and may therefore require a more complex and time-consuming manufacturing process than other tRNA synthetase-based therapeutic candidates.
−Removed: Currently, we are producing our ATYR1923 molecule in E.coli by expression in inclusion bodies and refolding to recreate the native structure.
+Added: Furthermore, although tRNA synthetases represent a class of proteins that may share immunomodulatory properties in various physiological pathways, each tRNA synthetase has a different structure and may have unique manufacturing requirements that are not applicable across the entire class.
+Added: For example, fusion proteins, such as efzofitimod , include an additional antibody domain to improve PK characteristics, and may therefore require a more complex and time-consuming manufacturing process than other tRNA synthetase-based therapeutic candidates.
+Added: Currently, we are producing our efzofitimod molecule in E.coli by expression in inclusion bodies and refolding to recreate the native structure.
The manufacturing processes for one of our product candidates may not be readily adaptable to other product candidates that we develop, and we may need to engage multiple third-party manufacturers to produce our product candidates.
−Removed: For example, we recently engaged an additional CDMO to manufacture ATYR1923 and will need to complete a technology transfer and validation process before the new CDMO will be able to produce additional bulk drug substance for our clinical trials or otherwise.
−Removed: Any adverse developments affecting manufacturing operations for our product candidates may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls or other
−Removed: interruptions in the supply of our drug substance and drug product which could delay the development of our product candidates.
+Added: For example, we recently engaged an additional CDMO to manufacture efzofitimod and will need to complete a technology transfer and validation process before the new CDMO will be able to produce additional bulk drug substance for our clinical trials or otherwise.
+Added: Any adverse developments affecting manufacturing operations for our product candidates may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls or other interruptions in the supply of our drug substance and drug product which could delay the development of our product candidates.
We may also have to write off inventory, incur other charges and expenses for supply of drug product that fails to meet specifications or expires, undertake costly remediation efforts, or seek more costly manufacturing alternatives.
7 unchanged sentences
In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates.
−Removed: We may not receive orphan drug designation for our product candidates under any applications for orphan drug designation that we may submit, and any orphan drug designations that we have received or may receive may not confer marketing exclusivity or other expected commercial benefits.
−Removed: We may apply for orphan drug designation for our product candidates.
−Removed: Orphan drug status confers up to ten years of marketing exclusivity in Europe, and up to seven years of marketing exclusivity in the United States, for a particular product that is the first to obtain approval in a specified indication.
−Removed: We cannot assure you that we will be able to obtain orphan drug designation, or rely on orphan drug or similar designations to exclude other companies from manufacturing or selling products using the same principal mechanisms of action for the same indications that we pursue beyond these timeframes.
+Added: Although the FDA has granted orphan drug designation to efzofitimod for the treatment of sarcoidosis and systemic sclerosis, we may not receive orphan drug designation for efzofitimod in other jurisdictions or for other indications that we may pursue, or for any other product candidates we may develop under any new applications for orphan drug designation that we may submit, and any orphan drug designations that we have received or may receive may not confer marketing exclusivity or other expected commercial benefits.
+Added: The FDA granted orphan drug designation to efzofitimod for the treatment of sarcoidosis and systemic sclerosis.
+Added: We may apply for orphan drug designation for efzofitimod for other indications and product candidates in the United States.
+Added: Orphan drug status confers up to ten years of marketing exclusivity in Europe, and up to seven years of marketing exclusivity in the United States, for a particular product in a specified indication.
+Added: Obtaining an orphan drug designation can be difficult and we cannot assure you that we will be able to obtain orphan drug designation in other jurisdictions or for other indications, or rely on orphan drug or similar designations to exclude other companies from manufacturing or selling products using the same principal mechanisms of action for the same indications that we pursue beyond these timeframes.
Furthermore, marketing exclusivity in Europe can be reduced from ten years to six years if the initial designation criteria have significantly changed since the market authorization of the orphan product.
2 unchanged sentences
A breakthrough therapy or fast track designation by the FDA may not lead to expedited development or regulatory review or approval.
−Removed: We may seek, from time to time, breakthrough therapy or fast track designation for our product candidates, although we may elect not to do so.
+Added: We may seek, from time to time, breakthrough therapy or fast track designation for our product candidates.
A breakthrough therapy designation is for a product candidate intended to treat a serious or life-threatening condition, and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement on a clinically significant endpoint(s) over available therapies.
12 unchanged sentences
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several
−Removed: years, including for 35 days beginning on December 22, 2018, the U.S.
+Added: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
27 unchanged sentences
Any government investigation of alleged violations of law could require us to expend significant time and resources in response, and could generate negative publicity.
−Removed: Any failure to comply with ongoing regulatory requirements may significantly and
−Removed: adversely affect our ability to commercialize and generate revenue from our products.
+Added: Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products.
If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.
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Our sole source of revenue depends upon the performance by these collaborators of their responsibilities under these arrangements.
−Removed: For example, while we are eligible to receive up to an additional $165.0 million in milestone payments under the Kyorin Agreement, as well as tiered royalties ranging from the mid-single digits to mid-teens on net sales in Japan, whether and when we receive these payments will depend on Kyorin’s development and commercialization of ATYR1923 in Japan, over which we have limited control.
+Added: For example, while we are eligible to receive up to an additional $165.0 million in milestone payments under the Kyorin Agreement, as well as tiered royalties ranging from the mid-single digits to mid-teens on net sales in Japan, whether and when we receive these payments will depend on Kyorin’s development and commercialization of efzofitimod in Japan, over which we have limited control.
The development efforts of our collaborators are subject to the same risks and uncertainties described above with respect to our independently developed product candidates.
1 unchanged sentence
It is possible that our collaborators may be unable to obtain regulatory approval of our product candidates or successfully market and commercialize any such products for which regulatory approval is obtained.
−Removed: For example, if Kyorin’s operations are limited due to the COVID-19 outbreak in Japan or in other regions where Kyorin operates or relies on third party operations, the development of ATYR1923 in Japan may be significantly delayed and adversely affected, which may in turn delay or limit our receipt of any additional payments under the Kyorin Agreement.
+Added: For example, while we received a $2.0 million milestone payment in January 2021, if Kyorin’s operations are limited due to the impacts of the ongoing COVID-19 pandemic in Japan or in other regions where Kyorin operates or relies on third party operations, the development of efzofitimod in Japan may be significantly delayed and adversely affected, which may in turn delay or limit our receipt of any additional payments under the Kyorin Agreement.
Other collaborators may not devote sufficient time or resources to the programs covered by these arrangements, and we may have limited or no control over the time or resources allocated by these collaborators to these programs.
21 unchanged sentences
These factors could cause the delay of clinical development, 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: We currently rely on a single CDMO for process development and scale-up of ATYR1923, including the manufacture of bulk drug substance for our projected needs for initial clinical trials.
−Removed: We have recently entered an agreement with another CDMO for the transfer of the process, scale-up and manufacturing of bulk drug substance for future clinical trials.
+Added: We currently rely on a single CDMO for process development and scale-up of efzofitimod , including the manufacture of bulk drug substance for our projected needs for initial clinical trials.
+Added: We have recently entered an agreement with another CDMO for the
+Added: transfer of the process, scale-up and manufacturing of bulk drug substance for future clinical trials.
Subject to the satisfactory completion of process validation and other requirements, we may contract with this CDMO for larger scale commercial manufacturing.
51 unchanged sentences
Changes to the patent laws in the United States and other jurisdictions could also diminish the value of our patents and patent applications or narrow the scope of our patent protection.
−Removed: Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.
+Added: Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse effect on our business.
If the patent applications we own or have in-licensed that relate to our programs or product candidates do not issue as patents, if their breadth or strength of protection is threatened, or if they fail to provide exclusivity for our product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize future products.
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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: If due to the COVID-19 pandemic we are unable to generate new animal, or in vitro data, in time to support new, or updated patent application filings, or prior to patent conversion deadlines, it could materially impact the enforceability or scope of those patent filings.
+Added: If due to the ongoing COVID-19 pandemic we are unable to generate new animal, or in vitro data, in time to support new, or updated patent application filings, or prior to patent conversion deadlines, it could materially impact the enforceability or scope of those patent filings.
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.
5 unchanged sentences
Numerous U.S.
−Removed: and foreign issued patents and pending patent applications, which are owned by third parties, exist in the
−Removed: fields in which we are pursuing development candidates.
+Added: and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development candidates.
As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
42 unchanged sentences
In some cases, patent prosecution of our licensed technology is controlled by the licensor.
−Removed: If our licensors fail to obtain and maintain patent or other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products using such intellectual property.
+Added: If our licensors fail to obtain and maintain patent or other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products using such
+Added: intellectual property.
In certain cases, we may control the prosecution of patents resulting from licensed technology.
20 unchanged sentences
Our defense of litigation or interference proceedings 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
−Removed: prevent, alone or with our licensors, 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: We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.
7 unchanged sentences
We employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
−Removed: Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties.
+Added: Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or
+Added: our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties.
Litigation may be necessary to defend against these claims.
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Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
−Removed: Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition
−Removed: proceedings).
+Added: Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).
Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates.
2 unchanged sentences
If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
−Removed: Such a loss of patent protection would have a material adverse impact on our business.
+Added: Such a loss of patent protection would have a material adverse effect on our business.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
9 unchanged sentences
Congress, or the USPTO may impact the value of our patents.
−Removed: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents generally, once obtained.
+Added: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has
+Added: created uncertainty with respect to the value of patents generally, once obtained.
Depending on decisions and actions by the U.S.
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Because we have limited resources, we may forego or delay pursuit of certain strategic opportunities or opportunities with certain programs, product candidates or indications that later prove to have greater commercial potential.
−Removed: We may focus on or pursue one indication over another potential indication and such development efforts may not be successful, which would cause us to delay the clinical development and approval of ATYR1923, ATYR2810 and other product candidates.
+Added: We may focus on or pursue one indication over another potential indication and such development efforts may not be successful, which would cause us to delay the clinical development and approval of efzofitimod , ATYR2810 and other product candidates.
In addition, our decisions as to which of our discovery programs to advance into preclinical and clinical development could preclude us from advancing others.
4 unchanged sentences
Any failure to allocate resources or capitalize on strategies in a successful manner will have an adverse impact on our business.
−Removed: Our business could continue to be adversely affected by the effects of the COVID-19 pandemic.
−Removed: The global pandemic resulting from the disease known as COVID-19 caused by a novel strain of coronavirus, SARS-CoV-2, has caused national and global economic and financial market disruptions.
−Removed: In 2020, the COVID-19 pandemic was declared a national emergency and many states and municipalities in the United States announced aggressive actions to reduce the spread of the disease, including limiting non-essential gatherings of people, ceasing all non-essential travel, ordering certain businesses and government agencies to cease non-essential operations at physical locations and issuing “shelter-in-place” orders which direct individuals to shelter at their places of residence (subject to limited exceptions).
−Removed: As a result, many of our employees telecommuted and some employees continue to do so, which has impacted certain of our operations and may continue to do so over the long term.
+Added: Our business could continue to be adversely affected by the effects of the ongoing COVID-19 pandemic.
+Added: Our business has been adversely affected by the effects of the ongoing COVID-19 pandemic and could continue to be adversely affected in the future.
+Added: For example, many of our employees began telecommuting during the onset of the ongoing COVID-19 pandemic as states and municipalities announced aggressive actions to reduce the spread of the disease such as “shelter in place” orders, and some employees continue to do so, which has impacted certain of our operations and may continue to do so over the long term.
We may experience further limitations on employee resources in the future, including because of sickness of employees or their families.
1 unchanged sentence
In the event that government authorities were to again implement restrictions, including due to the emergence of new variants of COVID-19, our employees who currently are not telecommuting may no longer be able to access our facilities, and our operations may be further limited or curtailed.
−Removed: As COVID-19 continues to spread, we may experience ongoing disruptions that could severely impact our business, preclinical studies and clinical trials, including:
+Added: During the ongoing COVID-19 pandemic, we may experience ongoing disruptions that could severely impact our business, preclinical studies and clinical trials, including:
delays in receiving approval from local regulatory authorities to initiate future clinical trials;
1 unchanged sentence
delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including as a result of manufacturing delays and interruptions in global shipping that may affect the transport of clinical trial materials;
−Removed: changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;
+Added: changes in local regulations as part of a response to the ongoing COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;
diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
1 unchanged sentence
interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines;
−Removed: risk that participants enrolled in future clinical trials will acquire COVID-19, or a variant thereof, while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;
+Added: risk that participants enrolled in future clinical trials will contract COVID-19, or a variant thereof, while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;
risk that the production of COVID-19 vaccines may disrupt the availability of raw materials and consumables required to manufacture our product candidates, which could result in decreased manufacturing and supply of these product candidates to support our planned clinical trials or regulatory filings;
2 unchanged sentences
These and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial condition.
−Removed: Our Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis was negatively affected by the COVID-19 pandemic .
+Added: Our completed Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis was negatively affected by the ongoing COVID-19 pandemic .
In 2020, many clinical trial sites in this clinical trial temporarily suspended dosing of previously-enrolled patients and/or enrollment of new patients and some patients discontinued from the trial.
1 unchanged sentence
Additionally, under the terms of the Kyorin Agreement, we rely on Kyorin to fund all research, development, regulatory, marketing and commercialization activities in Japan.
−Removed: If Kyorin’s operations are limited due to the COVID-19 outbreak in Japan or in other regions where Kyorin operates or relies on third party operations, the development of ATYR1923 in Japan may be significantly delayed and adversely affected, which may in turn delay or limit our receipt of any additional payments under the Kyorin Agreement.
+Added: If Kyorin’s operations are limited due to a COVID-19 outbreak in Japan or in other regions where Kyorin operates or relies on third party operations, the development of efzofitimod in Japan may be significantly delayed and adversely affected, which may in turn delay or limit our receipt of any additional payments under the Kyorin Agreement.
Further, we currently rely, and expect to continue to rely, on third parties to conduct some or all aspects of product manufacturing, protocol development, and research and preclinical and clinical testing with respect to our product candidates.
−Removed: While many materials on which we rely may be obtained by more than one supplier, port closures, travel bans and other restrictions resulting from the COVID-19 outbreak may disrupt our supply chain or limit our ability to obtain sufficient materials to conduct our operations.
+Added: While many materials on which we rely may be obtained by more than one supplier, port closures, travel bans and other restrictions resulting
+Added: from the ongoing COVID-19 pandemic may disrupt our supply chain or limit our ability to obtain sufficient materials to conduct our operations.
As a result of these events and uncertainties, we may need to obtain additional funding through a combination of equity offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and potentially through debt financings, if available on acceptable terms or at all.
We may be unable to raise additional funds on acceptable terms or at all.
−Removed: As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
+Added: As a result of the ongoing COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
−Removed: The impact of COVID-19 on capital markets may affect the availability, amount and type of financing available to us in the future.
+Added: The impact of the ongoing COVID-19 pandemic on capital markets may affect the availability, amount and type of financing available to us in the future.
If we are unable to raise additional funds, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
COVID-19 and actions taken to reduce its spread continue to rapidly evolve, including the emergence of new variants and additional actions taken in response to their spread.
−Removed: The extent to which COVID-19 may impede the development of our product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
+Added: The extent to which the ongoing COVID-19 pandemic may impede the development of our product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.
6 unchanged sentences
In addition, the available pool of skilled employees may be further reduced if immigration laws change in a manner that increases restrictions on immigration.
−Removed: Further, failure to succeed in preclinical studies or clinical trials may make it more challenging
−Removed: to recruit and retain qualified personnel.
+Added: Further, failure to succeed in preclinical studies or clinical trials may make it more challenging to recruit and retain qualified personnel.
The inability to recruit or loss of the services of any executive, key employee, consultant or advisor may impede the progress of our research, development and commercialization objectives.
10 unchanged sentences
Additionally, we have conducted clinical trials in the European Union (EU) and in Australia and may conduct future clinical trials internationally.
−Removed: Our partner, Kyorin, conducted an ATYR1923 Phase 1 clinical trial in healthy volunteers in Japan.
−Removed: If any of our product candidates are approved for commercialization outside of the United States, we expect to either use our own sales organization or selectively enter into agreements with third parties to market our products on a worldwide basis or in more limited geographical regions, as with Kyorin and ATYR1923 in Japan.
+Added: Our partner, Kyorin, conducted an efzofitimod Phase 1 clinical trial in healthy volunteers in Japan.
+Added: If any of our product candidates are approved for commercialization outside of the United States, we expect to either use our own sales organization or selectively enter into agreements with third parties to market our products on a worldwide basis or in more limited geographical regions, as with Kyorin and efzofitimod in Japan.
We are, and we expect that we will continue to be, subject to a variety of risks related to international operations, including, but not limited to:
2 unchanged sentences
unexpected changes in tariffs, trade barriers and regulatory requirements;
−Removed: economic weakness, including inflation, or political instability in particular foreign economies and markets;
+Added: economic weakness, including inflation, or political instability in particular foreign economies
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
foreign currency fluctuations, which could result in reduced revenues, and other obligations incident to doing business in another country;
−Removed: and the global impacts of the COVID-19 pandemic.
+Added: and the global impacts of the ongoing COVID-19 pandemic.
Any failure to continue our international operations or to commercialize our product candidates outside of the United States may impair our ability to generate revenues and harm our business, prospects and results of operations.
31 unchanged sentences
During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to our product candidates.
−Removed: Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts.
+Added: Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our
+Added: commercialization efforts.
Even in a circumstance in which we do not believe that an adverse event is related to our products, the investigation into the circumstance may be time-consuming or inconclusive.
1 unchanged sentence
As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.
−Removed: We are subject to stringent and changing privacy laws, regulations and standards as well as policies, contracts and other obligations related to data privacy and security, as well as federal and state healthcare fraud and abuse laws.
−Removed: Our actual or perceived failure to comply with such regulations could have a material adverse effect on our business and financial condition including a disruption of clinical trials or commercialization of products.
−Removed: We collect, receive, store, process, use, generate, transfer, disclose, make accessible, protect and share personal information and other information, including information we collect about patients and healthcare providers in connection with clinical trials (Process or Processing) necessary to operate our business, for legal and marketing purposes, and for other business-related purposes.
+Added: We are subject to stringent and changing privacy laws, regulations and standards as well as policies, contracts and other obligations related to data privacy and security.
+Added: Our actual or perceived failure to comply with such obligations could have a material adverse effect on our business and financial condition including, a disruption of clinical trials or commercialization of products.
+Added: We collect, receive, store, process, use, generate, transfer, disclose, make accessible, protect and share (Process or Processing) personal information and other sensitive information, including information we or our third party partners (such as CROs and clinical trial sites) collect about patients and healthcare providers in connection with clinical trials necessary to operate our business.
Therefore, we are, or may become, subject to data privacy and security laws, regulations, and industry standards as well as policies, contracts and other obligations that apply to the Processing of personal data both by us and on our behalf (collectively, Data Protection Requirements).
1 unchanged sentence
New Data Protection Requirements may be proposed or enacted.
−Removed: If we fail, or are perceived to have failed, to address or comply with Data Protection Requirements, this could result in government enforcement actions against us that could include investigations, fines, penalties, audits and inspections, additional reporting requirements and/or oversight, temporary or permanent bans on all or some Processing of personal data, orders to destroy or not use personal data, and imprisonment of company officials.
+Added: Although we endeavor to comply with all Data Protection Requirements, we may at times fail (or be perceived to have failed) to do so.
+Added: Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
+Added: For example, any failure by a third-party processor, such as a CRO or clinical trial site, to comply with Data Protection Requirements could result in material adverse effects, including inability to or interruption in our ability to operate our business and proceedings against us by governmental entities or others.
+Added: Additionally, if we or the third parties upon which we rely fail, or are perceived to have failed, to address or comply with Data Protection Requirements, this could result in government enforcement actions against us that could include investigations, fines, penalties, audits and inspections, additional reporting requirements and/or oversight, temporary or permanent bans on all or some Processing of personal data, orders to destroy or not use personal data, and imprisonment of company officials.
Further, individuals or other relevant stakeholders could bring a variety of claims against us for our actual or perceived failure to comply with the Data Protection Requirements.
3 unchanged sentences
limit our ability to develop or commercialize our products;
−Removed: or require us to revise or restructure our operations (each, a Material Adverse Impact).
+Added: require us to revise or restructure our operations;
+Added: or otherwise materially adversely affect our operations (each, a Material Adverse Impact).
Additionally, given the breadth and evolving nature of Data Protection Requirements, preparing for and complying with these requirements is rigorous, time-intensive and requires significant resources and a review of our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that Process personal data on our behalf.
−Removed: Additionally, our operations may be subject to various federal and state healthcare laws, including, without limitation, fraud and abuse laws, including false claims and anti-kickback laws, data privacy and security laws, including but not limited to the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical
−Removed: Health Act, as well as transparency laws regarding payments or other items of value provided to healthcare providers.
−Removed: These laws may impact, among other things, our research, proposed sales, marketing and education programs.
−Removed: In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business.
−Removed: It is possible that some of our business activities could be subject to challenge under one or more of these laws.
−Removed: If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including significant administrative civil and criminal penalties, damages, fines, disgorgement, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting requirements and regulatory oversight and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
−Removed: In addition, we may become subject to foreign privacy laws and regulators.
−Removed: For instance, the European Union’s (EU) General Data Protection Regulation (GDPR), which went into effect in May of 2018, is an example of the increasingly stringent data protection regulation being passed globally.
−Removed: The GDPR regulates the collection and use of personal data in the EU.
−Removed: The GDPR covers any business, regardless of its location, that provides goods or services to residents in the EU and, thus, could incorporate our activities in EU member states.
+Added: Additionally, our operations may be subject to various federal and state healthcare information privacy laws, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” and covered subcontractors that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
+Added: In addition, we may become subject to an increasing number of foreign privacy laws, particularly as we begin to sponsor clinical trials in foreign jurisdictions.
+Added: For example, the European Union’s (EU) General Data Protection Regulation (EU GDPR) regulates the collection and use of personal data in the EU.
+Added: The GDPR covers any business, regardless of its location, that provides goods or services to residents in the EU and, thus, could apply to our activities in EU member states.
The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “sensitive information,” which includes health and genetic information of individuals residing in the EU.
−Removed: The GDPR grants individuals the opportunity to object to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been violated.
−Removed: Further, the GDPR imposes strict rules on the transfer of personal data out of the EU to regions that have not been deemed to offer “adequate” privacy protections, such as the U.S.
−Removed: Failure to comply with the requirements of the GDPR and related national data protection laws of the EU member states, which may deviate slightly from the GDPR, may result in warning letters, mandatory audits and financial penalties, including fines of up to 4% of global revenues, or €20,000,000, whichever is greater.
−Removed: As a result of the implementation of the GDPR, we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules.
−Removed: Further, there is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with the GDPR.
−Removed: For example, it is unclear whether the authorities will conduct random audits of companies doing business in the EU, or act solely after complaints are filed claiming a violation of the GDPR.
−Removed: The lack of compliance standards and precedent, enforcement uncertainty and the costs associated with ensuring GDPR compliance may be onerous and adversely affect our business, financial condition, results of operations and prospects.
−Removed: States within the United States have also begun to introduce increasingly comprehensive privacy legislation, to which we may be or become subject.
+Added: Failure to comply with the requirements of the EU GDPR may result in warning letters, litigation, orders banning the processing of personal data, mandatory audits and financial penalties, including fines of up to 4% of global revenues, or €20,000,000, whichever is greater.
+Added: Certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws, which could make it more difficult to transfer information across jurisdictions (such as transferring or receiving personal data that originates in the EU or in other foreign jurisdictions).
+Added: Existing mechanisms that facilitate cross-border personal data transfers may change or be invalidated.
+Added: For example, absent appropriate safeguards or other circumstances, the EU GDPR generally restricts the transfer of personal data to countries outside of the European Economic Area (“EEA”) that the European Commission does not consider to provide an adequate level of data privacy and security, such as the United States.
+Added: The European Commission released a set of “Standard Contractual
+Added: Clauses” (“SCCs”) that are designed to be a valid mechanism to facilitate personal data transfers out of the EEA to these jurisdictions.
+Added: Currently, these SCCs are a valid mechanism to transfer personal data outside of the EEA, but there exists some uncertainty regarding whether the SCCs will remain a valid mechanism.
+Added: Additionally, the SCCs impose additional compliance burdens, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data.
+Added: In addition, Switzerland and the United Kingdom similarly restrict personal data transfers outside of those jurisdictions to countries such as the United States that do not provide an adequate level of personal data protection, and certain countries outside Europe (e.g.
+Added: Russia, China, Brazil) have also passed or are considering laws requiring local data residency or otherwise impeding the transfer of personal data across borders, any of which could increase the cost and complexity of doing business.
+Added: If we cannot implement a valid compliance mechanism for cross-border data transfers, we may face increased exposure to regulatory actions, substantial fines, and injunctions against processing or transferring personal data from Europe or other foreign jurisdictions.
+Added: The inability to import personal data to the United States could significantly and negatively impact our business operations, including by limiting our ability to conduct clinical trial activities abroad;
+Added: limiting our ability to collaborate with parties that are subject to such cross-border data transfer or localization laws;
+Added: or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expense.
+Added: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws.
For example, California enacted the California Consumer Privacy Act (CCPA), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling certain personal data of consumers or households.
−Removed: The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
Aspects of the CCPA and its interpretation and enforcement remain uncertain.
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will exit the EU (commonly referred to as Brexit), which could lead to a period of considerable uncertainty, particularly in relation to global financial markets which in turn could adversely affect our ability to raise additional capital.
−Removed: In addition, due to the COVID-19 pandemic, the global credit and financial markets have recently experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
+Added: In addition, due to the ongoing COVID-19 pandemic, the global credit and financial markets have recently experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, inflation and uncertainty about economic stability.
A severe or prolonged economic downturn, such as the global financial crisis, could result in a variety of risks to our business, including inability to raise additional capital when needed on acceptable terms, if at all.
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We are located in San Diego, California and our manufacturing activities are conducted by CDMOs at various locations in the United States.
−Removed: We conducted our Phase I clinical trial for ATYR1923 in Australia and we have a subsidiary in Hong Kong.
+Added: We conducted our Phase I clinical trial for efzofitimod in Australia and we have a subsidiary in Hong Kong.
Some of these geographic locations have in the past experienced natural disasters, including severe earthquakes.
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We may run into technical or scientific issues related to development or manufacturing that we may be unable to resolve in a timely manner or with available funds.
−Removed: For example, we recently engaged an additional CDMO to manufacture ATYR1923 bulk drug substance and will need to complete a technology transfer and validation process before the new CDMO will be able to produce additional bulk drug substance for our clinical trials or otherwise.
−Removed: The new CDMO has not previously manufactured ATYR1923 bulk drug substance, which subjects us to heighted risks that it will experience delays in validating the manufacturing process.
−Removed: If the new CDMO experiences such delays, particularly delays in producing ATYR1923 in compliance with cGMP regulations, we could be forced to delay future clinical trials or the submission of regulatory approval applications to the FDA.
−Removed: In addition, due to the fact that all prior cGMP batches of ATYR1923, including those that we intend to use in an initial pivotal trial, have been produced by our existing CDMO, we may be required to complete comparability studies prior to using ATYR1923 produced at the new CDMO’s facilities in subsequent clinical trials or submitting regulatory approval applications to the FDA.
+Added: For example, we recently engaged an additional CDMO to manufacture efzofitimod bulk drug substance and will need to complete a technology transfer and validation process before the new CDMO will be able to produce additional bulk drug substance for our clinical trials or otherwise.
+Added: The new CDMO has not previously manufactured efzofitimod bulk drug substance, which subjects us to heighted risks that it will experience delays in validating the manufacturing process.
+Added: If the new CDMO experiences such delays, particularly delays in producing efzofitimod in compliance with cGMP regulations, we could be forced to delay future clinical trials or the submission of regulatory approval applications to the FDA.
+Added: In addition, due to the fact that all prior cGMP batches of efzofitimod , including those that we intend to use in an initial pivotal trial, have been produced by our existing CDMO, we may be required to complete comparability studies prior to using efzofitimod produced at the new CDMO’s facilities in subsequent clinical trials or submitting regulatory approval applications to the FDA.
If we are unable to demonstrate such comparability to the satisfaction of the FDA, it may result in delays to future clinical trials or a deficiency in future regulatory applications.
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In addition, any significant disruption in our relationships with our CDMOs could harm our business.
−Removed: There are a relatively small number of potential manufacturers for our product candidates, and such manufacturers may not be able to supply our drug
−Removed: products at the times we need them or on commercially reasonable terms.
+Added: There are a relatively small number of potential manufacturers for our product candidates, and such manufacturers may not be able to supply our drug products at the times we need them or on commercially reasonable terms.
Any disruption to our relationship with our current CDMOs and any manufacturers that we contract with in the future will result in delays in our ability to complete the clinical development of, or to commercialize, our product candidates, and may require us to incur additional costs.
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We have competitors both in the United States and internationally, including major multi-national pharmaceutical companies, biotechnology companies and universities and other research institutions.
−Removed: Although we believe we are the only company engaged in the discovery and development of therapeutics based on novel functions of tRNA synthetases and NRP2 biology, we are aware of other companies that could compete with our product candidate, ATYR1923 for the treatment of pulmonary sarcoidosis and other ILD.
+Added: Although we believe we are the only company engaged in the discovery and development of therapeutics based on novel functions of tRNA synthetases and NRP2 biology, we are aware of other companies that could compete with our product candidate, efzofitimod for the treatment of pulmonary sarcoidosis and other ILD.
Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations.
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As a result, the coverage determination process is often time-consuming and costly.
−Removed: This process will require us to provide scientific and clinical support for the use of our products to each third-party payor separately, with no assurance that coverage and
−Removed: adequate reimbursement will be applied consistently or obtained in the first instance.
+Added: This process will require us to provide scientific and clinical support for the use of our products to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
Reimbursement agencies in Europe may be more conservative than third-party payors in the United States.
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While Congress has not passed comprehensive repeal legislation, it has enacted laws that modified certain provisions of the ACA such as removing penalties, starting January 1, 2019, for not complying with the ACA’s individual mandate to carry health insurance.
−Removed: In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.
On June 17, 2021 the U.S.
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In addition, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.
−Removed: Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
+Added: Such scrutiny has resulted in several recent presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
For example, on July 24, 2020 and September 13, 2020, President Trump announced several executive orders related to prescription drug pricing that attempt to implement several of the Trump administration’s proposals.
−Removed: The FDA also recently released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.
+Added: The FDA concurrently released a final rule and guidance in September 2020, implementing a portion of the importation executive order providing pathways for states to build and submit importation plans for drugs from Canada.
Further, on November 20, 2020, the U.S.
Department of Health and Human Services (HHS) finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed until January 1, 2023.
+Added: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.
+Added: The implementation of this rule has been delayed until January 1, 2026.
On November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation (MFN) executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.
−Removed: As a result of litigation challenging the MFN model, on August 10, 2021, CMS published a proposed rule that seeks to rescind the MFN model interim final rule.
+Added: As a result of litigation challenging the MFN model, on December 27, 2021, CMS published a final rule that rescinds the MFN model interim final rule.
In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.
In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
−Removed: legislation or administrative actions have been finalized to implement these principles.
−Removed: In addition, Congress is considering drug pricing as part of the budget reconciliation process .
−Removed: We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional health reform measures, particularly in light of the new presidential administration.
+Added: No legislation or administrative actions have been finalized to implement these principles.
+Added: In addition, Congress is considering additional health reform measures.
+Added: We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional health reform measures.
The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.
As a result, increasingly high barriers are being erected to the entry of new products.
−Removed: In addition, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
+Added: In addition, it is possible that additional governmental action is taken in response to the ongoing COVID-19 pandemic.
In addition, drug prices are under significant scrutiny in the markets in which our products may be sold.
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As a result, we may have difficulty raising capital and our results of operations may be adversely impacted.
+Added: Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors and customers may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws, health information privacy and security laws and other healthcare laws and regulations.
+Added: If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
+Added: Although we do not currently have any products on the market, our current and future operations may be, directly or indirectly through our prescribers, customers and third-party payors, subject to various federal and state healthcare laws and regulations.
+Added: The laws that may affect our ability to operate include:
+Added: the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration (including any kickback, bribe or certain rebates), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid.
+Added: A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: federal false claims, including the False Claims Act, which can be enforced through whistleblower actions, and Civil Monetary Penalties Laws, which, among other things, impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the U.S.
+Added: federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
+Added: In addition, the government may assert that a claim including items and services resulting from a violation of the U.S.
+Added: federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
+Added: HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services;
+Added: similar to the U.S.
+Added: federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: HIPAA, as amended by HITECH, which imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by covered entities, i.e.
+Added: health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates and covered subcontractors that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information;
+Added: federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;
+Added: analogous state and foreign laws and regulations.
+Added: If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, or similar programs in other countries or jurisdictions, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the delay, reduction, termination or restructuring of our operations.
Risks related to the ownership of our common stock
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The market price of our common stock has been volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
−Removed: In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q, these factors include:
−Removed: effects of the COVID-19 pandemic on our business operations or financial condition;
+Added: In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Quarterly Report, these factors include:
+Added: effects of the ongoing COVID-19 pandemic on our business operations or financial condition;
adverse results or delays in preclinical studies or clinical trials;
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In addition, companies trading in the stock market in general, and on the Nasdaq Capital Market and biotechnology companies in particular, have experienced extreme price and volume fluctuations, and we have in the past experienced volatility that has been unrelated or disproportionate to our operating performance.
−Removed: From January 1, 2020 through November 9 2021 the closing price of our common stock has ranged between $2.17 and $12.48 per share.
+Added: From January 1, 2020 through May 4, 2022 the closing price of our common stock has ranged between $2.17 and $12.48 per share.
Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
Our executive officers, directors, 5% holders and their affiliates currently own a significant percentage of our stock and will be able to exert significant control over matters submitted to stockholders for approval .
−Removed: As of November 9, 2021, based on the latest information available to us, our executive officers, directors, holders known by us to own 5% of our voting stock and their affiliates own approximately 34.4% of our voting stock.
+Added: As of May 4, 2022, based on the latest information available to us, our executive officers, directors, holders known by us to own 5% of our voting stock and their affiliates own approximately 42.1% of our voting stock.
Therefore, our executive officers, directors, holders known by us to own 5% of our voting stock and their affiliates will have the ability to influence us through their ownership positions and may be able to determine all matters requiring stockholder approval.
−Removed: For example, these stockholders, acting together, 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.
+Added: For example, these stockholders, acting
+Added: together, 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 that you may believe are in your best interest as one of our stockholders.
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In September 2020 , we entered into a common stock purchase agreement (Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement.
−Removed: Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act, as amended, for the resale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.
−Removed: For the nine months ended September 30, 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $5.09 per share for net proceeds of $15.2 million under this Purchase Agreement.
+Added: Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act, for the resale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.
+Added: During 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $5.09 per share for net proceeds of $15.2 million under this Purchase Agreement.
We may sell the remaining $4.8 million in the future under the Purchase Agreement.
−Removed: In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for a new at-the-market offering (ATM Offering Program), pursuant to which we can sell from time to time, at our option, up to an aggregate of $25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.
−Removed: JonesTrading is entitled to a commission at a fixed rate equal to up to 3% of the gross proceeds.
−Removed: For the nine months ended September 30, 2021, we sold an aggregate of 986,267 shares of common stock at an average price of $4.75 per share for net proceeds of $4.4 million under the ATM Offering Program.
+Added: For the three months ended March 31, 2022, there were no issuances or sales under the Purchase Agreement.
+Added: In April 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC (Jefferies) implementing an “at-the-market” offering program (ATM Offering Program), pursuant to which we may offer and sell, from time to time and at our option, up to an aggregate of $65.0 million of shares of our common stock through Jefferies, acting as sales agent.
+Added: Jefferies is entitled to a fixed commission rate of up to 3.0% of the gross sales proceeds of shares sold under the ATM Offering Program.
+Added: In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for an at-the-market offering program (Prior ATM Offering Program), pursuant to which we can sell from time to time, at our option, up to an aggregate of $25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.
+Added: JonesTrading is entitled to a commission at a fixed rate equal of up to 3.0% of the gross proceeds.
+Added: During 2021, we sold an aggregate of 986,267 shares of common stock at an average price of $4.75 per share for net proceeds of $4.4 million under the Prior ATM Offering Program.
+Added: For the three months ended March 31, 2022, we sold an aggregate of 260,455 shares of common stock at an average price of $6.07 per share for net proceeds of $1.5 million under the Prior ATM Offering Program.
+Added: On April 22, 2022, we terminated the Prior ATM Offering Program.
These financing activities may have an adverse effect on our stockholders’ rights, the market price of our common stock and on our operations, and may require us to relinquish rights to some of our technologies, intellectual property or product candidates, issue additional equity or debt securities, or otherwise agree to terms unfavorable to us.
In addition, sales of a substantial number of shares of our common stock by our existing stockholders in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
−Removed: Any sales of securities by these stockholders could have a material adverse
−Removed: effect on the trading price of our common stock, even if there is no relationship between such sales and the performance of our business.
+Added: Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock, even if there is no relationship between such sales and the performance of our business.
We have also registered or plan to register all common stock that we may issue under our employee benefits plans as well as shares of common stock underlying options to purchase shares of our common stock that were granted as inducement grants.
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Net operating loss carryforwards (NOLs) that expire unused will be unavailable to offset future income tax liabilities.
−Removed: Under legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income.
+Added: Under current law, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried
+Added: forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (Code) a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset post-change taxable income.
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There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, portions of our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes.
−Removed: For example, California imposed limits on the usability of California state NOLs to offset taxable income in tax years beginning after 2019 and before 2023.
For these reasons, we may not be able to utilize a material portion of our NOLs, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition .
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unauthorized access to;
−Removed: loss, unauthorized acquisition, disclosure or exposure of Sensitive Information, or compromise related to the security, confidentiality, integrity or availability of our (or their) information technology, software, services, communications or data (any, a Security Breach), it may result in a Material Adverse Impact (as defined above), including the diversion of funds to address the breach, and interruptions, delays or outages in our operations and drug development programs.
+Added: loss, unauthorized acquisition, disclosure or exposure of Sensitive Information;
+Added: or compromise related to the security, confidentiality, integrity or availability of our (or their) information technology, software, services, communications or data (any, a Security Breach), it may result in a Material Adverse Impact (as defined above).
For example, the loss of data from completed clinical trials for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs.
−Removed: Theft of our intellectual property or proprietary business information could require substantial expenditures to remedy.
−Removed: To the extent that any disruption or security breach were to result in a loss of or damage to our data, theft of our intellectual property, or inappropriate disclosure of confidential or proprietary information, we could suffer reputational harm or face litigation or adverse regulatory action, fines, other penalties, business interruption, and diversion of funds, and the development of our product candidates could be delayed.
−Removed: As use of digital technologies has increased, cyber incidents, including deliberate attacks and attempts to gain unauthorized access to computer systems and networks, which could result in the theft of our intellectual property, have increased in frequency and sophistication.
−Removed: In addition to traditional computer “hackers”;
−Removed: threat actors;
−Removed: software bugs;
+Added: Theft of our Sensitive Information could require substantial expenditures to remedy.
+Added: If we or the third parties upon which we rely experience a Security Breach, we could suffer
+Added: reputational harm or face litigation or adverse regulatory action , fines, other penalties, business interruption, and diversion of funds .
+Added: As a result, we could experience Material Adverse Impacts.
+Added: As use of digital technologies has increased, cyber incidents, malicious internet-based activity, and online and offline fraud have become prevalent and have increased in frequency and sophistication.
+Added: These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation state supported actors.
+Added: Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
+Added: During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
+Added: We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to software bugs;
malicious code (such as viruses and worms);
−Removed: employee error, theft or misuse;
denial-of-service attacks (such as credential stuffing);
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telecommunication and electrical failures;
−Removed: and ransomware attacks, sophisticated nation-state and nation-state supported actors are threats to our information technology assets and data.
−Removed: We may also be the subject of phishing attacks, server malfunction, software or hardware failures, supply-chain cyber attacks, loss of data or other computer assets, and other similar issues.
−Removed: Particularly, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruption of clinical trials, loss of data (including data related to clinical trials or needed to train our algorithm), and other Material Adverse Impacts.
+Added: ransomware attacks;
+Added: phishing attacks;
+Added: server malfunction;
+Added: software or hardware failures;
+Added: supply-chain attacks;
+Added: loss of data or other computer assets;
+Added: and other similar issues.
+Added: Particularly, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruption of clinical trials, loss of data (including data related to clinical trials), and other Material Adverse Impacts.
To alleviate the financial, operational and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments).
Similarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our platform, systems and networks or the systems and networks of third parties that support us and our services.
−Removed: Additionally, due to the COVID-19 pandemic, a significant portion of our workforce works remotely that has increased the risk to our information technology assets and data.
+Added: Additionally, due to the ongoing COVID-19 pandemic and the competitive labor market, a portion of our workforce works remotely and that has increased the risk to our information technology assets and data.
These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data.
+Added: Additionally, future or past business transactions could expose us to additional risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
While we have implemented security measures designed to protect against Security Breaches, there can be no assurance that we, or any third-party partner, will be successful in preventing cyber-attacks or mitigating their effects.
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Applicable Data Protection Requirements (as defined above) may require us to implement specific security measures or use industry-standard or reasonable measures to protect against Security Breaches.
−Removed: Applicable Data Protection Requirements may require us to notify relevant stakeholders of Security Breaches, including affected individuals, partners, collaborators, customers, regulators, law enforcement agencies, credit reporting agencies and others.
+Added: Furthermore, applicable Data Protection Requirements may require us to notify relevant stakeholders of Security Breaches.
Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to Material Adverse Impacts.
There can be no assurance that any limitations or exclusions of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages if we fail to comply with Data Protection Requirements related to information security or Security Breaches.
−Removed: We cannot be sure that our insurance coverage, if any, will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or Material Adverse Impacts arising out of our Processing operations, privacy and security practices, or Security Breaches we may
+Added: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
+Added: We cannot be sure that our insurance coverage, if any, will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or Material Adverse Impacts arising out of our Processing operations, privacy and security practices, or Security Breaches we may experience.
The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large excess or deductible or co-insurance requirements), could have a Material Adverse Impact.
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Although we have adopted a code of business conduct and ethics that includes provisions governing the interactions of employees with government entities to mitigate these risks, there can be no assurance that this will be successful in preventing violations of anti-corruption laws.
−Removed: If we are not in compliance with anti-corruption laws and other laws governing the conduct of business with government entities (including local laws), we may be subject to criminal and civil penalties and other remedial measures, which could harm our reputation and have a material adverse impact on our business, financial condition, results of operations and prospects.
+Added: If we are not in compliance with anti-corruption laws and other laws governing the conduct of business with government entities (including local laws), we may be subject to criminal and civil penalties and other remedial measures, which could harm our reputation and have a material adverse effect on our business, financial condition, results of
+Added: operations and prospects.
Any investigation of any actual or alleged violations of such laws could also harm our reputation or have an adverse impact on our business, prospects, financial condition and results of operations.
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If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and cause our stock price to decline.
−Removed: We have broad discretion in the use of our cash, cash equivalents and investments and are exposed to risks related to the marketable securities we may purchase.
−Removed: We have considerable discretion in the application of our existing cash, cash equivalents and investments.
+Added: We have broad discretion in the use of our cash, cash equivalents and available-for-sale investments and are exposed to risks related to the marketable securities we may purchase.
+Added: We have considerable discretion in the application of our existing cash, cash equivalents and available-for-sale investments.
We expect to use our existing cash to fund research and development activities and for working capital and general corporate purposes, including funding the costs of operating as a public company.
2 unchanged sentences
However, volatility in the financial markets in recent years has created additional uncertainty regarding the liquidity and safety of these investments.
−Removed: Additionally, we may use these proceeds for purposes that do not yield a significant return or any return at all for our stockholders.
+Added: Additionally, we may use this cash, cash equivalents and available-for-sale investments for purposes that do not yield a significant return or any return at all for our stockholders.
Unregistered Sales of Equity Securities and Use of Proceeds
3 unchanged sentences
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.