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● Operating our business requires substantial additional capital to finance our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.
−Removed: ● We currently depend significantly on the success of furmonertinib, which is our only product candidate in clinical development.
−Removed: If we are unable to advance furmonertinib in clinical development, obtain regulatory approval and ultimately commercialize furmonertinib, or experience significant delays in doing so, our business will be materially harmed.
−Removed: ● Clinical and preclinical development of new biopharmaceutical products involves a lengthy and expensive process with uncertain timelines and outcomes, and results of prior clinical trials and studies of furmonertinib are not necessarily predictive of future results.
−Removed: Furmonertinib may not achieve favorable results in our clinical trials or receive regulatory approval on a timely basis, if at all.
+Added: ● We currently depend significantly on the success of firmonertinib, which is our only product candidate in clinical development.
+Added: If we are unable to advance firmonertinib in clinical development, obtain regulatory approval and ultimately commercialize firmonertinib, or experience significant delays in doing so, our business will be materially harmed.
+Added: ● Clinical and preclinical development of new biopharmaceutical products involves a lengthy and expensive process with uncertain timelines and outcomes, and results of prior clinical trials and studies of firmonertinib and our other product candidates are not necessarily predictive of future results.
+Added: Firmonertinib and our other product candidates may not achieve favorable results in our clinical trials or receive regulatory approval on a timely basis, if at all.
● Any difficulties or delays in the commencement or completion, or the termination or suspension, of our current or planned clinical trials or nonclinical studies could result in increased costs to us, delay or limit our ability to generate revenue or adversely affect our commercial prospects.
● Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, which could adversely affect our business, operating results and prospects.
−Removed: ● Use of furmonertinib or any future product candidates could be associated with adverse side effects, adverse events or other safety risks, which could delay or preclude regulatory approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of an approved drug label or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.
−Removed: ● Several of the ongoing clinical trials for our lead product candidate, furmonertinib, are being conducted outside the United States, including in China.
+Added: ● Use of firmonertinib or any other current or future product candidates could be associated with adverse side effects, adverse events or other safety risks, which could delay or preclude regulatory approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of an approved drug label or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.
+Added: ● Several of the ongoing clinical trials for our lead product candidate, firmonertinib, are being conducted outside the United States, including in China.
However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.
1 unchanged sentence
● The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
−Removed: ● A Breakthrough Therapy Designation by the FDA may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
+Added: ● Firmonertinib has been granted Breakthrough Therapy Designation for the treatment of first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations from the FDA and we may seek Breakthrough Therapy Designation for other product candidates in the future.
+Added: Even if we apply for Breakthrough Therapy Designation in the future, we might not receive such designation, and even if received, such designation FDA may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
● Furmonertinib has been granted Fast Track Designation by the FDA for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations and we may seek Fast Track Designation for other product candidates in the future.
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Further, such designation could be withdrawn by the FDA.
−Removed: ● We heavily rely on our exclusive license with Allist to provide us with intellectual property rights to develop and commercialize furmonertinib.
−Removed: Any termination or loss of significant rights under our agreements with Allist would adversely affect our development or commercialization of furmonertinib.
−Removed: ● We rely on, and intend to continue to rely on third parties to conduct, supervise and monitor our clinical trials and nonclinical studies.
−Removed: If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize furmonertinib and any future product candidates may
−Removed: be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.
−Removed: ● We currently rely on a Chinese third party for the manufacture of furmonertinib for clinical development and expect to continue to rely on third parties for the foreseeable future.
−Removed: This reliance on third parties increases the risk that we will not have sufficient quantities of furmonertinib or such quantities at an acceptable cost, which could delay, prevent or impair our development or potential commercialization efforts.
−Removed: ● Even if we receive regulatory approval for furmonertinib or any future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.
−Removed: Additionally, furmonertinib and any future product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, if any of them are approved.
−Removed: ● We face significant competition, and if our competitors develop and commercialize technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective, safer, or less expensive than furmonertinib and any future product candidates we develop, our business and our ability to develop and successfully commercialize products will be adversely affected.
−Removed: ● Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
−Removed: ● We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer.
+Added: ● We heavily rely on our exclusive license with Allist to provide us with intellectual property rights to develop and commercialize firmonertinib.
+Added: Any termination or loss of significant rights under our agreements with Allist would adversely affect our development or commercialization of firmonertinib.
+Added: ● We currently rely on a Chinese third party for the manufacture of firmonertinib and other product candidates for clinical development, and potential future commercial supply of firmonertinib, and expect to continue to rely on third parties for the foreseeable future.
+Added: We expect to rely on a Chinese third party for the manufacture of ARR-217 for clinical development.
+Added: This reliance on third parties increases the risk that we will not have sufficient quantities of firmonertinib or ARR-217 or such quantities at an acceptable cost, which could delay, prevent or impair our development or potential commercialization efforts.
+Added: ● Even if we receive regulatory approval for firmonertinib or any other current or future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.
+Added: Additionally, firmonertinib and any future product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, if any of them are approved.
+Added: ● We face significant competition, and if our competitors develop and commercialize technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective, safer, or less expensive than firmonertinib and any future product candidates we develop, our business and our ability to develop and successfully commercialize products will be adversely affected.
● We are subject to various U.S.
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● If our internal information technology systems, or those used by our CROs, clinical sites, or other contractors or consultants upon which we rely, are or were compromised, become unavailable or suffer security breaches, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, litigation, fines, penalties and liability, compromise of sensitive information related our business, and other adverse consequences.
−Removed: ● If we are unable to obtain and maintain, sufficient intellectual property protection for furmonertinib or future product candidates or technology, or if the scope of our intellectual property rights is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize furmonertinib or any future product candidates may be adversely affected.
−Removed: ● We depend heavily on intellectual property licensed from a third party, and our licensors may not always act in our best interest.
+Added: ● We depend heavily on intellectual property licensed from third parties, and our licensors may not always act in our best interest.
If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated or if disputes regarding these licenses arise, we could lose significant rights that are important to our business.
−Removed: ● We may not be able to protect our intellectual property and proprietary rights throughout the world.
−Removed: ● The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses.
−Removed: ● Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
−Removed: ● We have identified material weaknesses in our internal control over financial reporting related to our control environment.
−Removed: If we do not remediate the material weaknesses in our internal control over financial reporting, or if we fail to establish and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our stock.
Risks Related to Our Limited Operating History, Financial Position and Capital Requirements
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We do not have any products approved for sale and have not generated any revenue since our inception.
−Removed: If furmonertinib is not successfully developed, approved and commercialized, we may never generate significant revenue, if we generate any revenue at all.
+Added: If firmonertinib is not successfully developed, approved and commercialized, we may never generate significant revenue, if we generate any revenue at all.
Our net losses were $80.5 million and $69.3 million for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2024, we had an accumulated deficit of $238.3 million.
−Removed: Substantially all of our losses have resulted from expenses incurred in connection with in-licensing intellectual property related to, and developing, furmonertinib and from general and administrative costs associated with our operations.
−Removed: Furmonertinib and any future product candidates will require substantial additional development time and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales.
−Removed: We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for and potentially commercialize furmonertinib, seek to identify, assess, acquire, in-license intellectual property related to or develop additional product candidates and operate as a public company.
−Removed: In addition, we are obligated to pay Allist milestone payments up to an aggregate of $765.0 million upon the achievement of certain development, regulatory and sales milestone events as set forth in the Allist License Agreement, as defined herein.
+Added: Substantially all of our losses have resulted from expenses incurred in connection with in-licensing intellectual property related to, and developing, firmonertinib and from general and administrative costs associated with our operations.
+Added: Firmonertinib, our other product candidates, and any future product candidates will require substantial additional development time and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales.
+Added: We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for and potentially commercialize firmonertinib and our other product candidates, seek to identify, assess, acquire, in-license intellectual property related to or develop additional product candidates and operate as a public company.
+Added: In addition, we are obligated to make milestone payments and royalty payments under certain license agreements and collaboration agreements.
+Added: For example, we are obligated to pay Allist milestone payments up to an aggregate of $765.0 million upon the achievement of certain development, regulatory and sales milestone events as set forth in the Allist License Agreement, as defined herein.
We are also obligated under the Allist License Agreement to pay Allist tiered royalties based on net sales of Licensed Products, as defined herein.
−Removed: See “Business — Licenses, Partnerships and Collaborations — Allist Agreements”.
+Added: Furthermore, we are obligated to pay Lepu Biopharma milestone payments up to an aggregate of $1.17 billion upon the achievement of certain development, regulatory and sales milestone events as set forth in the Lepu Biopharma Agreement, as defined herein.
+Added: We are also obligated under the Lepu Biopharma Agreement to pay Lepu Biopharma tiered royalties based on net sales of Licensed Products, as defined herein.
+Added: See “Business — Licenses, Partnerships and Collaborations — .
If these payments become due, we may not have sufficient funds available to meet our obligations and our development efforts may be harmed.
To become and remain profitable, we must succeed in developing, obtaining regulatory approvals for, and eventually commercializing products that generate significant revenue.
−Removed: This will require us to be successful in a range of challenging activities, including completing clinical trials of furmonertinib and any future product candidates, acquiring additional product candidates, obtaining regulatory approval for furmonertinib and any future product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval.
+Added: This will require us to be successful in a range of challenging activities, including completing clinical trials of firmonertinib, our other product candidates, and any future
+Added: product candidates, acquiring additional product candidates, obtaining regulatory approval for firmonertinib and any future product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval.
We may never succeed in these activities and, even if we do, may never generate revenue that is significant enough to achieve profitability.
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We are a clinical-stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.
−Removed: We commenced operations in April 2021 and, to date, we have focused primarily on organizing and staffing our company, business planning, raising capital, in-licensing our product candidate, furmonertinib, establishing our intellectual property portfolio and conducting research, preclinical studies, and clinical trials.
+Added: We commenced operations in April 2021 and, to date, we have focused primarily on organizing and staffing our company, business planning, raising capital, in-licensing our product candidates, firmonertinib, and our other product candidates, establishing our intellectual property portfolio and conducting research, preclinical studies, and clinical trials.
We have not yet completed any pivotal clinical trials, obtained regulatory approvals, manufactured products at commercial scale, or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization.
−Removed: Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products.
+Added: Consequently, any predictions made about our future success or viability may not be accurate.
Operating our business requires substantial additional capital to finance our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.
The development of biopharmaceutical product candidates is capital-intensive.
−Removed: We expect our expenses to substantially increase in connection with our ongoing activities, particularly as we conduct our ongoing and planned clinical trials for furmonertinib and potentially seek regulatory approval for furmonertinib and any future product candidates we may develop, acquire or in-license additional product candidates and operate as a public company.
−Removed: In addition, if we are able to progress furmonertinib through development and commercialization, we will be required to make milestone and royalty payments to Allist from whom we have in-licensed intellectual property related to furmonertinib.
−Removed: If we obtain regulatory approval for furmonertinib or any future product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution.
−Removed: Because the outcome of any clinical trial or preclinical study is highly uncertain, we cannot reliably estimate the actual amount of financing necessary to successfully complete the development and commercialization of furmonertinib or any future product candidates.
+Added: We expect our expenses to substantially increase in connection with our ongoing activities, particularly as we conduct our ongoing and planned clinical trials for firmonertinib, our other product candidates, and potentially seek regulatory approval for firmonertinib and our other current and any future product candidates we may develop, acquire or in-license additional product candidates and operate as a public company.
+Added: In addition, if we are able to progress firmonertinib and our other product candidates through development and commercialization, we will be required to make milestone and royalty payments to our licensors from whom we have in-licensed intellectual property related to our product candidates.
+Added: If we obtain regulatory approval for firmonertinib or any other current or future product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution.
+Added: Because the outcome of any clinical trial or preclinical study is highly uncertain, we cannot reliably estimate the actual amount of financing necessary to successfully complete the development and commercialization of firmonertinib or any other current or future product candidates.
Furthermore, we expect to incur additional costs associated with operating as a public company.
1 unchanged sentence
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.
−Removed: Based on our current operating plan, we believe that our existing cash and cash equivalents, including the proceeds from our recently completed initial public offering, will enable us to fund our operations into 2026.
+Added: Based on our current operating plan, we believe that our existing cash and cash equivalents, including the proceeds from our recently completed initial public offering, will enable us to fund our operations through at least twelve months from the issuance date of these financial statements.
We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned.
−Removed: Our existing cash and cash equivalents, including the net proceeds from our recently completed initial public offering, may not be sufficient to complete development of furmonertinib, or any future product candidate, and we will require substantial capital in order to advance furmonertinib and any future product candidates through clinical trials, regulatory approval and commercialization.
+Added: Our existing cash and cash equivalents, may not be sufficient to complete development of firmonertinib, our other product candidates, or any future product candidate, and we will require substantial capital in order to advance firmonertinib, our other product candidates,and any future product candidates
+Added: through clinical trials, regulatory approval and commercialization.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
−Removed: Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, the conflicts in the Middle East and between Russia and Ukraine and other factors, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
+Added: Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, change in inflation rates, trade sanctions, tariffs the conflicts in the Middle East and between Russia and Ukraine and other factors, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates 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.
4 unchanged sentences
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
−Removed: Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop furmonertinib and any future product candidates.
+Added: Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop firmonertinib, our other product candidates and any future product candidates.
Our future capital requirements, both near and long-term, will depend on many factors, including, but not limited to:
−Removed: ● the initiation, type, number, scope, progress, expansions, results, costs and timing of clinical trials and studies of furmonertinib and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;
−Removed: ● the costs and timing of manufacturing for furmonertinib, or any future product candidate, including commercial manufacture at sufficient scale, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages;
−Removed: ● requirements of regulatory authorities in any jurisdictions in which we may seek approval for furmonertinib and any future product candidates and our anticipated timing for seeking approval in such jurisdictions;
−Removed: ● the costs, timing and outcome of regulatory meetings and reviews of furmonertinib or any future product candidates;
+Added: ● the initiation, type, number, scope, progress, expansions, results, costs and timing of clinical trials and studies of firmonertinib, our other product candidates, and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;
+Added: ● the costs and timing of manufacturing for firmonertinib, our other product candidates, or any future product candidate, including commercial manufacture at sufficient scale, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages;
+Added: ● requirements of regulatory authorities in any jurisdictions in which we may seek approval for firmonertinib, our other product candidates, and any future product candidates and our anticipated timing for seeking approval in such jurisdictions;
+Added: ● the costs, timing and outcome of regulatory meetings and reviews of firmonertinib or any other current or future product candidates;
● any delays and cost increases that may result from any health epidemics and outbreaks, including COVID-19;
2 unchanged sentences
● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, Chemistry, Manufacturing, and Controls (CMC) quality and commercial personnel;
−Removed: ● the timing and amount of the milestone, royalty or other payments we must make to Allist, from whom we have in-licensed furmonertinib, or any future licensors;
−Removed: ● the costs and timing of establishing or securing sales and marketing capabilities if furmonertinib or any future product candidate is approved;
+Added: ● the timing and amount of the milestone, royalty or other payments we must make to our licensors, from whom we have in-licensed our current product candidates, or any future licensors;
+Added: ● the costs and timing of establishing or securing sales and marketing capabilities if firmonertinib or any other current or future product candidate is approved;
● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;
−Removed: ● our ability and strategic decision to acquire or develop future product candidates other than furmonertinib, and the timing of such development, if any;
+Added: ● our ability and strategic decision to acquire or develop future product candidates other than firmonertinib, and the timing of such development, if any;
● patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors;
1 unchanged sentence
● costs associated with any products or technologies that we may in-license or acquire.
−Removed: Conducting clinical trials and nonclinical studies and potentially identifying future product candidates is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and commercialize furmonertinib or any future product candidates.
−Removed: If approved, furmonertinib and any future product candidates may not achieve commercial success.
−Removed: Our commercial revenue, if any, will initially be derived from sales of furmonertinib, which we do not expect to be commercially available for many years, if at all.
+Added: Conducting clinical trials and nonclinical studies and potentially identifying future product candidates is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and commercialize firmonertinib or any other current or future product candidates.
+Added: If approved, firmonertinib, our other product candidates, and any future product candidates may not achieve commercial success.
+Added: Our commercial revenue, if any, will initially be derived from sales of firmonertinib, which we do not expect to be commercially available for many years, if at all.
Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
3 unchanged sentences
We do not have any committed external source of funds.
+Added: On February 3, 2025, we filed an automatic universal shelf registration on Form S-3 with the SEC, which became effective upon filing, on which we registered for sale any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine (2025 Form S-3), including up to $250 million of common stock which we may offer and sell, from time to time at our sole discretion, under our at-the-market program sales agreement that we entered into with Jefferies LLC (Jefferies) in February 2025 (2025 Sales Agreement).
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.
−Removed: To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include
−Removed: liquidation or other preferences that adversely affect your rights as a common stockholder.
+Added: To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.
−Removed: If we raise additional funds through future collaborations, licenses and other similar arrangements, we may be required to relinquish valuable rights to our future revenue streams, product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock.
+Added: If we raise additional funds through collaborations, licenses and other similar arrangements, we may be required to relinquish valuable rights to our future revenue streams, product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would be required to delay, limit, reduce, or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we might otherwise prefer to develop and market ourselves, or on less favorable terms than we would otherwise choose.
Risks Related to the Development and Regulatory Approval of Our Product Candidates
−Removed: We currently depend significantly on the success of furmonertinib, which is our only product candidate in clinical development.
−Removed: If we are unable to advance furmonertinib in clinical development, obtain regulatory approval and ultimately commercialize furmonertinib, or experience significant delays in doing so, our business will be materially harmed.
−Removed: We currently only have one product candidate in clinical development, furmonertinib, the intellectual property for which we have in-licensed and which is in Phase 3 clinical development.
−Removed: Our business presently depends significantly on our ability to successfully develop, obtain regulatory approval for, and commercialize furmonertinib in a timely manner.
+Added: We currently depend significantly on the success of firmonertinib, which is our only product candidate in clinical development.
+Added: If we are unable to advance firmonertinib in clinical development, obtain regulatory approval and ultimately commercialize firmonertinib, or experience significant delays in doing so, our business will be materially harmed.
+Added: We currently only have one product candidate in clinical development, firmonertinib, the intellectual property for which we have in-licensed and which is in Phase 3 clinical development.
+Added: Our business presently depends significantly on our ability to successfully develop, obtain regulatory approval for, and commercialize firmonertinib in a timely manner.
This may make an investment in our company riskier than similar companies that have multiple product candidates in active development and may be able to better sustain the delay or failure of a lead product candidate.
−Removed: In addition, our assumptions about furmonertinib’s development potential are partially based on the data generated from preclinical studies and clinical trials conducted by our licensor and we may observe materially and adversely different results as we continue to conduct our clinical trials.
−Removed: The success of furmonertinib will depend on several factors, including the following:
+Added: In addition, our assumptions about firmonertinib’s development potential are partially based on the data generated from preclinical studies and clinical trials conducted by our licensor and we may observe materially and adversely different results as we continue to conduct our clinical trials.
+Added: The success of firmonertinib will depend on several factors, including the following:
● successful initiation, enrollment and completion of ongoing and future clinical trials with favorable results in accordance with good clinical practice (GCP) requirements and other applicable rules and regulations;
−Removed: ● acceptance of regulatory submissions by the FDA or comparable foreign regulatory authorities for the conduct of nonclinical studies and clinical trials of furmonertinib, including clinical trials conducted outside the United States, including China, and our proposed design of planned nonclinical studies and clinical trials of furmonertinib;
+Added: ● acceptance of regulatory submissions by the FDA or comparable foreign regulatory authorities for the conduct of nonclinical studies and clinical trials of firmonertinib, including clinical trials conducted outside the United States, including China, and our proposed design of planned nonclinical studies and clinical trials of firmonertinib;
● the frequency, severity, and types of adverse events observed, or that we may observe, in nonclinical studies and clinical trials;
−Removed: ● maintaining relationships with contract research organizations (CROs) and clinical sites for the clinical development of furmonertinib, and ability of such CROs and clinical sites to comply with clinical trial protocols, current GCP and other applicable requirements;
−Removed: ● demonstrating the safety and efficacy of furmonertinib to the satisfaction of applicable regulatory authorities, including by establishing a safety database of a size satisfactory to regulatory authorities;
+Added: ● maintaining relationships with contract research organizations (CROs) and clinical sites for the clinical development of firmonertinib, and ability of such CROs and clinical sites to comply with clinical trial protocols, current GCP and other applicable requirements;
+Added: ● demonstrating the safety and efficacy of firmonertinib to the satisfaction of applicable regulatory authorities, including by establishing a safety database of a size satisfactory to regulatory authorities;
● receipt and maintenance of marketing approvals from applicable regulatory authorities for the initial indication for use and any additional indications, including approvals of NDAs from the FDA, and maintaining any such approvals;
● maintain relationships with our third-party manufacturers and their ability to comply with current Good Manufacturing Practice (cGMP) requirements as well as making arrangements with our third-party manufacturers for, or establishing our own, clinical or commercial manufacturing capabilities at a cost and scale sufficient to support commercialization;
−Removed: ● establishing sales, marketing and distribution capabilities and launching commercial sales of furmonertinib, if and when approved, whether alone or in collaboration with others;
−Removed: ● obtaining, establishing, maintaining and enforcing patent and any potential trade secret protection or regulatory exclusivity for furmonertinib;
−Removed: ● maintaining an acceptable safety profile of furmonertinib following regulatory approval, if any;
−Removed: ● maintaining and growing an organization of people who can develop and, if approved, commercialize, market and sell furmonertinib, if approved;
−Removed: ● acceptance of furmonertinib, if approved, by patients, the medical community and third-party payors.
−Removed: If we are unable to develop, receive marketing approval for and successfully commercialize furmonertinib, or if we experience delays as a result of any of the above factors or otherwise, our business would be significantly harmed.
−Removed: Clinical and preclinical development of new biopharmaceutical products involves a lengthy and expensive process with uncertain timelines and outcomes, and results of prior clinical trials and studies of furmonertinib are not necessarily predictive of future results.
−Removed: Furmonertinib may not achieve favorable results in our clinical trials or receive regulatory approval on a timely basis, if at all.
+Added: ● establishing sales, marketing and distribution capabilities and launching commercial sales of firmonertinib, if and when approved, whether alone or in collaboration with others;
+Added: ● obtaining, establishing, maintaining and enforcing patent and any potential trade secret protection or regulatory exclusivity for firmonertinib;
+Added: ● maintaining an acceptable safety profile of firmonertinib following regulatory approval, if any;
+Added: ● maintaining and growing an organization of people who can develop and, if approved, commercialize, market and sell firmonertinib, if approved;
+Added: ● acceptance of firmonertinib, if approved, by patients, the medical community and third-party payors.
+Added: If we are unable to develop, receive marketing approval for and successfully commercialize firmonertinib, or if we experience delays as a result of any of the above factors or otherwise, our business would be significantly harmed.
+Added: Clinical and preclinical development of new biopharmaceutical products involves a lengthy and expensive process with uncertain timelines and outcomes, and results of prior clinical trials and studies of firmonertinib and our other product candidates are not necessarily predictive of future results.
+Added: Firmonertinib and our other product candidates may not achieve favorable results in our clinical trials or receive regulatory approval on a timely basis, if at all.
Clinical and preclinical development of new biopharmaceutical candidates is expensive and can take many years to complete, and its outcome is inherently uncertain.
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The historical failure rate for product candidates in our industry is high, particularly in the earlier stages of development.
−Removed: The results from preclinical studies or clinical trials of a product candidate or a competitor’s product candidate in the same class may not predict the results of later clinical trials of our product candidate, and interim, topline, or preliminary results of a clinical trial are not necessarily indicative of final results.
+Added: The results from preclinical studies or clinical trials of product candidates or a competitor’s product candidate in the same class may not predict the results of later clinical trials of our product candidate, and interim, topline, or preliminary results of a clinical trial are not necessarily indicative of final results.
Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and initial clinical trials.
−Removed: We do not know how furmonertinib will perform in on-going and future clinical trials.
+Added: We do not know how firmonertinib or our other product candidates, including ARR-217, will perform in on-going and future clinical trials.
It is not uncommon to observe results in clinical trials that are unexpected based on earlier clinical trials and preclinical studies, and many product candidates fail in clinical trials despite very promising early results.
−Removed: Furthermore, although furmonertinib is currently approved and commercially distributed by Allist in China as a first-line therapy to treat classical EGFRm NSCLC based on successful clinical trials conducted within China, there is no guarantee that we will be able to replicate all the results of any prior trials in the indications and doses we are exploring in our on-going and future clinical trials or even if we do, whether such results would lead to approval of the product candidate by the FDA or other health authorities.
+Added: Furthermore, although firmonertinib is currently approved and commercially distributed by Allist in China as a first-line therapy to treat classical EGFRm NSCLC based on successful clinical trials conducted within China, there is no guarantee that we will be able to replicate all the results of any prior trials in the indications and doses we are exploring in our on-going and future clinical trials or even if we do, whether such results would lead to approval of the product candidate by the FDA or other health authorities.
Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses.
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As a result, we cannot be certain that our ongoing and planned clinical trials will be successful.
−Removed: Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of furmonertinib in those and other indications, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of firmonertinib or our other product candidates in those and other indications, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Any difficulties or delays in the commencement or completion, or the termination or suspension, of our current or planned clinical trials or nonclinical studies could result in increased costs to us, delay or limit our ability to generate revenue or adversely affect our commercial prospects.
−Removed: Before obtaining marketing approval from regulatory authorities for the sale of furmonertinib or any future product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates for their intended use(s) in humans.
+Added: Before obtaining marketing approval from regulatory authorities for the sale of firmonertinib or any of our other or future product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates for their intended use(s) in humans.
Before we can initiate clinical trials for any future product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND or similar regulatory submission.
The FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our nonclinical development programs.
−Removed: For example, we have not yet sought alignment on the design of our planned adjuvant study of furmonertinib with the FDA or comparable foreign regulatory authorities.
−Removed: Such authorities may ask us to collect more clinical data prior to permitting us to initiate the planned global registrational Phase 3 clinical trial to investigate the potential benefit of furmonertinib in the adjuvant setting.
+Added: For example, we have not yet sought alignment with the FDA on the ex-China design of the adjuvant study of firmonertinib initiated by Allist, which we may participate in.
+Added: Such authorities may ask us to collect more clinical data prior to permitting us to participate in the global registrational Phase 3 clinical trial to investigate the potential benefit of firmonertinib in the adjuvant setting.
Moreover, even if we commence clinical trials, issues relating to the safety and efficacy of current or future drug candidates may arise that could cause regulatory authorities to suspend, delay, or terminate such clinical trials.
−Removed: Any such delays in the commencement or completion, or the termination or suspension, of our ongoing and planned clinical trials or nonclinical studies for furmonertinib and any future product candidate could significantly affect our product development timelines and product development costs and harm our financial position.
+Added: Any such delays in the commencement or completion, or
+Added: the termination or suspension, of our ongoing and planned clinical trials or nonclinical studies for firmonertinib, our other product candidates, and any future product candidates could significantly affect our product development timelines and product development costs and harm our financial position.
We do not know whether our planned clinical trials and nonclinical studies will begin on time or be completed on schedule, if at all.
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● failure by our CROs to perform in accordance with GCP requirements or applicable regulatory rules and guidelines in other countries;
−Removed: ● obtaining raw materials for manufacturing sufficient quantities of furmonertinib or obtaining sufficient quantities of combination therapies or other materials needed for use in clinical trials and nonclinical studies;
+Added: ● obtaining raw materials for manufacturing sufficient quantities of firmonertinib, our other product candidates, including ARR-002, and ARR-217, or obtaining sufficient quantities of combination therapies or other materials needed for use in clinical trials and nonclinical studies;
● obtaining adequate materials for packaging clinical trial material;
● expiration of the shelf life of clinical material for use in clinical trials prior to the enrollment of any of our clinical trials;
−Removed: ● subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials due to movement restrictions, heath reasons or otherwise resulting from any public health concerns, such as COVID-19;
−Removed: ● individuals choosing an alternative product for the indications for which we are developing furmonertinib or any future product candidates, or participating in competing clinical trials;
+Added: ● subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials due to movement restrictions, health reasons or otherwise resulting from any public health concerns, such as COVID-19;
+Added: ● individuals choosing an alternative product for the indications for which we are developing firmonertinib or any other current or future product candidates, or participating in competing clinical trials;
● lack of adequate funding to continue the clinical trials, nonclinical studies, manufacturing or incurring greater costs than we anticipate;
−Removed: ● research subjects experiencing severe or serious unexpected drug-related adverse effects;
−Removed: ● occurrence of serious adverse events in trials of the same class of agents conducted by other companies that could be considered similar to furmonertinib or any future product candidates;
+Added: ● research subjects experiencing severe or serious unexpected treatment-related adverse effects;
+Added: ● occurrence of serious adverse events in trials of the same class of agents conducted by other companies that could be considered similar to firmonertinib or any other current or future product candidates;
● selection of clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data;
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Amendments may require us to resubmit our clinical trial protocols to regulators or IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.
−Removed: Further, conducting clinical trials in foreign countries, as has been done for furmonertinib and intended to be done in the future for furmonertinib or any future product candidates, presents additional risks that may delay completion of our clinical trials.
+Added: Further, conducting clinical trials in foreign countries, as has been done for firmonertinib and intended to be done in the future for firmonertinib or any other current or future product candidates, presents additional risks that may delay completion of our clinical trials.
These risks include the failure of enrolled subjects in foreign countries to adhere to clinical protocols as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, and political and economic risks, including war, relevant to such foreign countries.
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The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study results.
−Removed: comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
+Added: The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
In addition, many of the factors that cause, or lead to, the termination or suspension of, or a delay in the commencement or completion of, clinical trials, whether in whole or in part, may also ultimately lead to the denial of regulatory approval of a product candidate.
−Removed: We may make formulation or manufacturing changes to furmonertinib or any future product candidates as a result of changes in U.S.
+Added: We may make formulation or manufacturing changes to firmonertinib or any other current or future product candidates as a result of changes in U.S.
legislation or otherwise, in which case we may need to conduct additional nonclinical studies or clinical trials to bridge our modified product candidates to earlier versions.
Any resulting delays to our clinical trials could shorten any period during which we may have the exclusive right to commercialize our product candidates.
−Removed: In such cases, our competitors may be able to bring products to market before we do, and the commercial viability of furmonertinib or any future product candidates could be significantly reduced.
+Added: In such cases, our competitors may be able to bring products to market before we do, and the commercial viability of firmonertinib or any other current or future product candidates could be significantly reduced.
Any of these occurrences may harm our business, financial condition and prospects.
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Clinical trials may be prolonged, or we may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate as required by the FDA or applicable foreign authorities.
−Removed: For certain of our product candidates, including furmonertinib, the conditions which we may evaluate include limited patient pools from which to draw.
+Added: For certain of our product candidates, including firmonertinib, the conditions which we may evaluate include limited patient pools from which to draw.
In some cases, patient populations are located at specific academic sites focused on such indications, which often host multiple competing clinical trials.
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Furthermore, even if we are able to enroll a sufficient number of patients for our clinical trials, we may have difficulty maintaining enrollment of such patients in our clinical trials.
−Removed: Use of furmonertinib or any future product candidates could be associated with adverse side effects, adverse events or other safety risks, which could delay or preclude regulatory approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of an approved drug label or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.
−Removed: As is the case with biopharmaceuticals generally, adverse side effects associated with the use of furmonertinib have been observed and it is likely there may be adverse side effects with any future product candidates we may develop.
−Removed: Results of our ongoing and future clinical trials of furmonertinib or other product candidates could reveal a high and unacceptable severity and prevalence of expected or unexpected side effects or unexpected characteristics.
−Removed: side effects caused by our product candidates when used alone or in combination with approved or investigational drugs could cause us or regulatory authorities to interrupt, delay or partially or completely halt clinical trials and could result in a restrictive prescription drug label, post-approval requirements, or lead to the delay of the planned clinical development, or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
+Added: Use of firmonertinib or any other current or future product candidates could be associated with adverse side effects, adverse events or other safety risks, which could delay or preclude regulatory approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of an approved drug label or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.
+Added: As is the case with biopharmaceuticals generally, adverse side effects associated with the use of firmonertinib have been observed and it is likely there may be adverse side effects with our other product candidates and any future product candidates we may develop.
+Added: Results of our ongoing and future clinical trials of firmonertinib or other product candidates could reveal a high and unacceptable severity and prevalence of expected or unexpected side effects or unexpected characteristics.
+Added: Undesirable side effects caused by our product candidates when used alone or in combination with approved or investigational drugs could cause us or regulatory authorities to interrupt, delay or partially or completely halt clinical trials and could result in a restrictive prescription drug label, post-approval requirements, or lead to the delay of the planned clinical development, or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
Drug-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.
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TRAEs leading to discontinuation of study drug(s) are commonly reported to indicate the manageability of treatment-related toxicities.
−Removed: In the FURLONG trial, TRSAEs were observed in ten out of 178 treated patients and six out of 178 patients discontinued participation in the trial as a result of TRAEs.
+Added: In the FURLONG trial, TRSAEs were observed in ten out of
+Added: 178 treated patients and six out of 178 patients discontinued participation in the trial as a result of TRAEs.
In the FAVOUR trial, as of the June 15, 2023 interim data cut-off date, TRSAEs were observed in six out of 86 of the treated patients and two out of 86 patients discontinued participation in the trial as a result of TRAEs.
The most frequent TRAEs in the FAVOUR trial as of June 15, 2023 were diarrhea, anemia, aspartate aminotransferase increased, alanine aminotransferase increased, blood creatinine increased, mouth ulceration, rash, electrocardiogram QT prolonged, white blood cell count decreased, decreased appetite, weight decreased, skin fissures, and paronychia.
−Removed: Isolated cases of Grade ≥3 reversible hepatic transaminases accompanied with increased total bilirubin have been observed at furmonertinib dose levels higher than 80 mg daily.
−Removed: In the FURTHER trial, based on data as of June 15, 2023, TRSAEs were observed in four out of 54 of the treated patients and three out of 54 patients discontinued participation in the trial as a result of TRAEs.
−Removed: The most common TRSAEs (defined as ≥1%), across the FURLONG, FAVOUR and FURTHER trials were diarrhea, 1.9% (six out of 318), and liver enzyme elevation, 1.9% (six out of 318).
−Removed: The discontinuation rate due to TRAEs across the FURLONG, FAVOUR and FURTHER trials was 3.5% (eleven out of 318), including one patient who discontinued due to diarrhea and one patient who discontinued due to liver enzyme elevation.
−Removed: See “Business — Furmonertinib:
+Added: Isolated cases of Grade ≥3 reversible hepatic transaminases accompanied with increased total bilirubin have been observed at firmonertinib dose levels higher than 80 mg daily.
+Added: In the FURTHER trial, based on data as of July 5, 2024, TRSAEs were observed in eleven out of 116 of the treated patients and six out of 116 patients discontinued participation in the trial as a result of TRAEs.
+Added: The most common TRSAEs (defined as ≥1%), across the FURLONG, FAVOUR and FURTHER trials were diarrhea, 1.1% (4 out of 380), liver enzyme elevation, 1.1% (4 out of 380), and pneumonitis/ILD, 1.1% (4 out of 380).
+Added: The discontinuation rate due to TRAEs across the FURLONG, FAVOUR and FURTHER trials was 3.7% (14 out of 318).
+Added: See “Business — Firmonertinib:
Our Lead Development Candidate” for additional information.
−Removed: Moreover, if furmonertinib or any future product candidates are associated with undesirable side effects in clinical trials or demonstrate characteristics that are unexpected in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, we may elect to interrupt, delay, or abandon their development in whole or in part or limit their development to more narrow uses, lower doses, or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the potential approval and commercial expectations for the product candidate if approved.
+Added: Moreover, if firmonertinib or any other current or future product candidates are associated with undesirable side effects in clinical trials or demonstrate characteristics that are unexpected in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, we may elect to interrupt, delay, or abandon their development in whole or in part or limit their development to more narrow uses, lower doses, or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the potential approval and commercial expectations for the product candidate if approved.
We may also be required to modify our development and clinical trial plans based on findings in our ongoing clinical trials or based on the findings of our competitors’ ongoing clinical trials of molecules in the same class.
Many compounds that showed promise initially have later been found to cause side effects that prevented further development of the compounds.
−Removed: If furmonertinib or any future product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including:
+Added: If firmonertinib or any other current or future product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including:
● regulatory authorities may withdraw, suspend or limit approvals of such product, or seek an injunction against its manufacture or distribution;
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Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.
−Removed: We may not be successful in our efforts to investigate furmonertinib in additional indications.
−Removed: We may expend our limited resources to pursue, acquire or license a new product candidate or a particular indication for furmonertinib and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
−Removed: Because we have limited financial and managerial resources, we focus on specific indications for furmonertinib to treat NSCLC.
−Removed: We may fail to generate additional clinical development opportunities for furmonertinib for a number of reasons, including that furmonertinib may, in indications we are seeking or may seek in the future, on further study, be shown to have harmful side effects, limited to no efficacy, or other characteristics that suggest it is unlikely to receive marketing approval and achieve market acceptance in such additional potential indications.
−Removed: Our resource allocation and other decisions may cause us to fail to identify and capitalize on viable potential product candidates or additional indications for furmonertinib.
+Added: We may not be successful in our efforts to investigate firmonertinib in additional indications.
+Added: We may expend our limited resources to pursue, acquire or license a new product candidate or a particular indication for firmonertinib and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
+Added: Because we have limited financial and managerial resources, we focus on specific indications for firmonertinib to treat NSCLC.
+Added: We may fail to generate additional clinical development opportunities for firmonertinib for a number of reasons, including that firmonertinib may, in indications we are seeking or may seek in the future, on further study, be shown to have harmful side effects, limited to no efficacy, or other characteristics that suggest it is unlikely to receive marketing approval and achieve market acceptance in such additional potential indications.
+Added: Our resource allocation and other decisions may cause us to fail to identify and capitalize on viable potential product candidates or additional indications for firmonertinib.
Our spending on current and future research and development programs for new product candidates or additional indications for existing product candidates may not yield any commercially viable product candidates or indications.
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We are currently developing and may in the future develop our product candidates in combination with one or more cancer therapies.
−Removed: For example, we are evaluating use of furmonertinib in combination with ICP-189, a SHP2 inhibitor, in collaboration with InnoCare.
+Added: For example, we are evaluating use of firmonertinib in combination with ICP-189, a SHP2 inhibitor, in collaboration with InnoCare.
Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product candidates or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies.
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If the FDA or a similar regulatory authority outside of the United States does not approve these other drugs or revokes approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to obtain approval of or market such product.
−Removed: Several of the ongoing clinical trials for our lead product candidate, furmonertinib, are being conducted outside the United States, including in China.
+Added: Several of the ongoing clinical trials for our lead product candidate, firmonertinib, are being conducted outside the United States, including in China, and we expect to conduct future clinical trials of firmonertinib and our other product candidates outside the United States, including in China.
However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.
−Removed: Several of the ongoing clinical trials for our lead product candidate, furmonertinib, are being conducted both inside and outside of the United States, including in China.
+Added: Several of the ongoing clinical trials for our lead product candidate, firmonertinib, are being conducted both inside and outside of the United States, including in China.
Specifically, we are enrolling patients globally in our FURVENT and FURTHER trials.
Furthermore, our partner Allist is conducting the FAVOUR trial in China and our partner InnoCare is conducting the SHP2i combination trial in China.
+Added: We expect the initial clinical study of ARR-217 to be conducted outside the United States, including China.
The acceptance of study data from clinical trials conducted outside the U.S.
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In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary.
−Removed: In February 2022, the FDA publicly rebuked an oncology product sponsor for submitting a marketing application with Phase III clinical data solely from China.
Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met.
+Added: In February 2022, the FDA publicly rebuked an oncology product sponsor for submitting a marketing application with Phase III clinical data solely from China.
+Added: More recently, members of Congress have raised national security concerns related to U.S.
+Added: clinical trial sponsors utilizing study sites in China that may be owned or operated by the Chinese military.
+Added: It remains to be seen whether the current administration and/or the 119th Congress (2025-26) take steps to restrict or limit the conduct of clinical research activities in China or other jurisdictions, or to otherwise require additional due diligence checks or oversight by sponsors.
Many foreign regulatory authorities have similar approval requirements.
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● inconsistent standards for reporting and evaluating clinical data and adverse events;
−Removed: ● COVID-19 or any other pandemic or epidemic or any future public health emergencies;
+Added: ● infectious disease pandemics or epidemics or any other form of future public health emergency;
● diminished protection of intellectual property in some countries;
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From time to time, we may publicly disclose interim, topline or preliminary data from our clinical trials and preclinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
+Added: For example, in September 2024, we announced positive interim proof-of-concept data from the FURTHER trial of firmonertinib in first-line patients with locally advanced or metastatic EGFRm NSCLC with PACC mutations.
+Added: In this interim readout, 64% of patients (n=14 out of 22 patients) were observed to experience a reduction in tumor size of at least 30% from the baseline in a patient without evidence of progression as measured by RECIST 1.1 criteria.
+Added: Median DOR had not yet been reached, with 90.9% (n=20/22) of patients with confirmed responses remaining on study.
We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
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Moreover, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.
−Removed: If the interim, topline, or preliminary 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, furmonertinib and any future product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
+Added: If the interim, topline, or preliminary 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, firmonertinib, our other product candidates, and any future product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
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The process of obtaining such regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population.
−Removed: Approval policies or regulations may change, and the FDA and comparable regulatory authorities have substantial discretion in the approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons.
+Added: Approval policies or regulations may change, and the FDA and comparable
+Added: regulatory authorities have substantial discretion in the approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons.
Despite the time and expense invested in clinical development of product candidates, regulatory approval of a product candidate is never guaranteed.
−Removed: Of the large number of drugs in
−Removed: development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.
+Added: Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.
Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
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Even if we believe available nonclinical or clinical data support the safety or efficacy of our product candidates, such data may not be sufficient to obtain approval from the FDA and comparable foreign regulatory authorities.
−Removed: The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.
+Added: The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional nonclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:
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With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities.
−Removed: Even if we eventually complete clinical trials and receive approval of an NDA or comparable foreign marketing application for our product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials and/or the implementation of a Risk Evaluation and Mitigation Strategy (REMS), which may be required because the FDA believes it is necessary to ensure safe use of the
−Removed: product after approval.
+Added: Even if we eventually complete clinical trials and receive approval of an NDA or comparable foreign marketing application for our product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials and/or the implementation of a Risk Evaluation and Mitigation Strategy (REMS), which may be required because the FDA believes it is necessary to ensure safe use of the product after approval.
Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects.
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Obtaining and maintaining marketing approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain marketing approval in any other jurisdiction.
−Removed: For example, Furmonertinib has been approved by the National Medical Products Administration (NMPA) of China and is currently commercially distributed in China by Allist as a first-line treatment of locally advanced or metastatic NSCLC patients with classical EGFRm as well as pre-treated patients with T790M mutations.
+Added: For example, firmonertinib has been approved by the National Medical Products Administration (NMPA) of China and is currently commercially distributed in China by Allist as a first-line treatment of locally advanced or metastatic NSCLC patients with classical EGFRm as well as pre-treated patients with T790M mutations.
Even if the NMPA or a foreign regulatory authority grants marketing approval of one of our product candidates, it does not mean that the FDA or comparable regulatory authorities in other jurisdictions must also approve the manufacturing, marketing and promotion and reimbursement of the product candidate in such countries, including the United States.
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If we or any future collaborator fail to comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed, which would adversely affect our business, prospects, financial condition, and results of operations.
−Removed: A Breakthrough Therapy Designation by the FDA may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
−Removed: We received Breakthrough Therapy Designation for furmonertinib for the treatment of first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations from the FDA in October 2023, and we may seek such designation in the future for other product candidates.
+Added: Firmonertinib has been granted Breakthrough Therapy Designation for the treatment of first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations from the FDA and we may seek Breakthrough Therapy Designation for other product candidates in the future.
+Added: Even if we apply for Breakthrough Therapy Designation in the future, we might not receive such designation, and even if received, such designation may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
+Added: We received Breakthrough Therapy Designation for firmonertinib for the treatment of first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations from the FDA in October 2023, and we may seek such designation in the future for other product candidates.
A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
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Accordingly, even if we believe, after completing early clinical trials, that one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation.
−Removed: In any event, the receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to product candidates considered for approval under conventional FDA procedures and does not change the standard for approval by the FDA.
+Added: In any event, the receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or
+Added: approval compared to product candidates considered for approval under conventional FDA procedures and does not change the standard for approval by the FDA.
In addition, even after granting Breakthrough Therapy Designation to our product candidates, the FDA may later decide that such product candidates no longer meet the conditions for qualification and withdraw such designation.
−Removed: Furmonertinib has been granted Fast Track Designation by the FDA for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations and we may seek Fast Track Designation for other product candidates in the future.
+Added: Firmonertinib has been granted Fast Track Designation by the FDA for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations and we may seek Fast Track Designation for other product candidates in the future.
Even if we apply for Fast Track Designation in the future, we might not receive such designation, and even if received, such designation may not actually lead to a faster development or regulatory review or approval process.
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Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied.
−Removed: The sponsor of a Fast Track designated product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.
−Removed: An NDA submitted for a Fast Track designated product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
+Added: The sponsor of a Fast Track designated product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA/BLA is submitted, the application may be eligible for priority review.
+Added: An NDA/BLA submitted for a Fast Track designated product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA/BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA/BLA, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
If we seek Fast Track designation from the FDA, we may not receive it and even if we receive such designation, it does not ensure that we will receive marketing approval or that approval will be granted in any particular time frame.
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Fast Track designation alone also does not guarantee qualification for the FDA’s priority review procedures for marketing applications.
−Removed: In January 2022, the FDA granted Fast Track designation to furmonertinib for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations.
−Removed: We may seek to utilize the FDA’s accelerated approval pathway for certain furmonertinib indications and may pursue this pathway for future therapeutic candidates.
−Removed: There is no assurance that, upon receipt of such future marketing application, if any, the FDA will agree to file it and conduct a substantive review of the data or that FDA will agree that we have met the substantial evidence of effectiveness standard necessary to support marketing approval.
−Removed: If unable to obtain approval under the accelerated approval pathway, we may be required to conduct additional nonclinical studies or clinical trials beyond those that we currently contemplate for certain furmonertinib indications, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals.
−Removed: Even if we receive accelerated approval from the FDA for certain furmonertinib indications, or for other future therapeutic candidates for which the accelerated approval pathway may be appropriate, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.
−Removed: We previously announced that, based on discussions with the FDA, there is potential to pursue an accelerated approval for furmonertinib for the treatment of NSCLC patients diagnosed with PACC mutations using ORR as the surrogate endpoint.
−Removed: Under the accelerated approval provisions in the FDC Act and the FDA’s implementing regulations, the FDA may grant accelerated approval to a therapeutic product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint, or intermediate clinical endpoint, that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
+Added: In January 2022, the FDA granted Fast Track designation to firmonertinib for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations.
+Added: We may seek to utilize the FDA’s accelerated approval pathway for certain firmonertinib indications and may pursue this pathway for future therapeutic candidates.
+Added: There is no assurance that, upon receipt of such future marketing application, if any, the FDA will agree to file it and conduct a substantive review of the data or that FDA will agree that we have met the substantial evidence of effectiveness and safety standard necessary to support marketing approval.
+Added: If unable to obtain approval under the accelerated approval pathway, we may be required to conduct additional nonclinical studies or clinical trials beyond those that we currently contemplate for certain firmonertinib indications, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals.
+Added: Even if we receive accelerated approval from the FDA for certain firmonertinib indications, or for other future therapeutic candidates for which the accelerated approval pathway may be appropriate, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.
+Added: We previously announced that, based on discussions with the FDA, there is potential to pursue an accelerated approval for firmonertinib for the treatment of NSCLC patients diagnosed with PACC mutations using ORR as the surrogate endpoint.
+Added: Under the accelerated approval provisions in the FDC Act and the FDA’s implementing regulations, the FDA may grant accelerated approval to a therapeutic product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint, or intermediate clinical endpoint, that is reasonably likely to predict clinical benefit or on
+Added: a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit.
−Removed: An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible
−Removed: morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity, mortality, or other clinical benefit.
−Removed: The FDA may not accept any future application for accelerated approval for furmonertinib in NSCLC patients diagnosed with PACC mutations, may not grant marketing approval on a timely basis, or may not grant approval at all.
+Added: An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity, mortality, or other clinical benefit.
+Added: The FDA may not accept any future application for accelerated approval for firmonertinib in NSCLC patients diagnosed with PACC mutations, may not grant marketing approval on a timely basis, or may not grant approval at all.
The FDA or foreign regulatory authorities could require us to conduct further studies prior to considering our application or granting approval of any type.
We might not be able to fulfill the FDA’s requirements in a timely manner or at all, which would cause delays, or approval might not be granted because our submission is deemed incomplete by the FDA.
−Removed: A failure to obtain accelerated approval or any other form of expedited development, review, or approval for furmonertinib would result in a longer time period to commercialization of furmonertinib, would increase the cost of development of furmonertinib and could harm our competitive position in the marketplace.
+Added: A failure to obtain accelerated approval or any other form of expedited development, review, or approval for firmonertinib would result in a longer time period to commercialization of firmonertinib, would increase the cost of development of firmonertinib and could harm our competitive position in the marketplace.
Following high-profile voluntary withdrawals of accelerated approval indications by several oncology sponsors as a result of post-approval trials failing to verify their drug products’ clinical benefit for those indications, which resulted in December 2022 amendments by Congress to the FDA’s authorities related to accelerated approval, public scrutiny of the accelerated approval pathway is likely to continue and may lead to further legislative and/or administrative changes in the future.
−Removed: Moreover, even if we receive accelerated approval from the FDA for certain furmonertinib indications, we will be subject to rigorous post-marketing requirements, including the completion of one or more confirmatory post-approval clinical trials to verify the clinical benefit of the product in that patient population, and submission to the FDA of all promotional materials for review prior to their dissemination.
+Added: Moreover, even if we receive accelerated approval from the FDA for certain firmonertinib indications, we will be subject to rigorous post-marketing requirements, including the completion of one or more confirmatory post-approval clinical trials to verify the clinical benefit of the product in that patient population, and submission to the FDA of all promotional materials for review prior to their dissemination.
The FDA could also seek to withdraw accelerated approval for multiple reasons, including if we fail to conduct any required post-approval study, a post-approval study does not confirm the predicted clinical benefit, other evidence shows that the product is not safe or effective under the conditions of use, or we disseminate promotional materials that are found by the FDA to be false and misleading.
Products that receive accelerated approval may be subject to expedited withdrawal procedures if post-approval studies fail to verify the predicted clinical benefit.
−Removed: In addition, as part of the Consolidated Appropriations Act for 2023, Congress provided FDA new statutory authorities to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
+Added: In addition, as noted above, Congress recently provided the FDA with new statutory authorities to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
Under these amendments to the FDC Act, the agency may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.
−Removed: At this time, it has not been fully determined how a future confirmatory post-approval clinical trial for furmonertinib in NSCLC patients diagnosed with PACC mutations would be designed or implemented, whether more than one trial will become necessary, or what the FDA would expect with respect to the timing of initiating such a confirmatory clinical trial for furmonertinib, should it be granted accelerated approval.
−Removed: If we fail to receive accelerated approval for furmonertinib in this patient population or fail to comply with the post-marketing requirements, our business, results of operations, prospects and the price of our common stock may be materially and adversely affected.
−Removed: Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, reviewed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
+Added: At this time, it has not been fully determined how a future confirmatory post-approval clinical trial for firmonertinib in NSCLC patients diagnosed with PACC mutations would be designed or implemented, whether more than one trial will become necessary, or what the FDA would expect with respect to the timing of initiating such a confirmatory clinical trial for firmonertinib, should it be granted accelerated approval.
+Added: If we fail to receive accelerated approval for firmonertinib in this patient population or fail to comply with the post-marketing requirements, our business, results of operations, prospects and the price of our common stock may be materially and adversely affected.
+Added: Disruptions at the FDA and other government agencies caused by funding shortages, mass layoffs, or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, reviewed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA and other government agencies to review and approve new medical products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, a government agency’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the government agency’s ability to perform routine functions.
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In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
+Added: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would
+Added: adversely affect our business.
For example, over the last several years, the U.S.
government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities during that period.
+Added: In early 2025, following the inauguration of President Trump, the Trump Administration began terminating federal government employees, including at the FDA.
+Added: The impact of mass layoffs at the agency and other governmental offices with which we interact is unclear at this time.
+Added: However, it is expected that with a reduction in staff of up to 50%, the FDA in the future may be unlikely to meet its application review goals or to continue to be available for timely interactions with medical product developers.
+Added: It is currently unclear how the U.S.
+Added: biopharmaceutical industry will be affected by the Trump Administration’s major changes to the FDA and the federal government as a whole.
Separately, in response to COVID-19, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
Even though the FDA has since resumed standard inspection operations of domestic facilities where feasible, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to COVID-19, and any resurgence of the virus or emergence of new variants may lead to further inspectional delays.
−Removed: Regulatory authorities outside the United States may adopt similar policy measures in response to COVID-19.
+Added: Regulatory authorities outside the United States may adopt similar policy measures in response to COVID-19 or other emerging infectious disease outbreaks, epidemics or pandemics.
If a prolonged government shutdown or slowdown occurs, or if global health concerns similar to COVID-19 prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
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Risks Related to Our Reliance on Third Parties
−Removed: We heavily rely on our exclusive license with Allist to provide us with intellectual property rights to develop and commercialize furmonertinib.
−Removed: Any termination or loss of significant rights under our agreements with Allist would adversely affect our development or commercialization of furmonertinib.
−Removed: Under the Allist License Agreement we have, among other things, secured an exclusive, royalty-bearing, and sublicensable license under certain intellectual property (including patents and know-how) owned or controlled by Allist to develop and commercialize any product containing furmonertinib or any of its salts or derivatives (the Licensed Compound) as an active ingredient of a product (the Licensed Product), which is led by a joint collaboration committee (the Collaboration Committee), comprising of representatives from both Allist and us.
+Added: We heavily rely on our exclusive license with Allist to provide us with intellectual property rights to develop and commercialize firmonertinib.
+Added: Any termination or loss of significant rights under our agreements with Allist would adversely affect our development or commercialization of firmonertinib.
+Added: Under the Allist License Agreement we have, among other things, secured an exclusive, royalty-bearing, and sublicensable license under certain intellectual property (including patents and know-how) owned or controlled by Allist to develop and commercialize any product containing firmonertinib or any of its salts or derivatives (the Licensed Compound) as an active ingredient of a product (the Licensed Product), which is led by a joint collaboration committee (the Collaboration Committee), comprising of representatives from both Allist and us.
We granted Allist a non-exclusive sublicensable license to certain information, data, results and improvements related to the Licensed Product.
−Removed: Either party has the right to terminate the Allist License Agreement, subject to specified cure periods, for the material breach by the
−Removed: other party or the bankruptcy or insolvency of the other party.
+Added: Either party has the right to terminate the Allist License Agreement, subject to specified cure periods, for the material breach by the other party or the bankruptcy or insolvency of the other party.
If the Allist License Agreement is terminated for any reason, including as a result of our failure to meet our obligations under the Allist License Agreement to make any milestone payments or royalties to Allist, our business and operations would be materially harmed.
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Furthermore, we entered into the Allist Collaboration Agreement with Allist to govern the conduct of Global Study.
−Removed: See “Business — Licenses, Partnerships and Collaborations — Allist Agreements”.
−Removed: Pursuant to the Allist Collaboration Agreement, if either party or both parties wish to jointly conduct a Global Study, one or both parties, as the case may be, will prepare and submit the proposed strategy, internal process timeline, along with other required documents for such proposed Global Study to the Collaboration Committee for its review and approval before the protocol filing with any regulatory authorities.
−Removed: If the Collaboration Committee cannot come to a mutual agreement on the proposed strategy or any other particular matter, this could delay our ability to develop or commercialize furmonertinib, which could have a material adverse effect on our business and operations.
+Added: See “Business — Licenses, Partnerships and Collaborations — Allist Agreements.” Pursuant to the Allist Collaboration Agreement, if either party or both parties wish to jointly conduct a Global Study, one or both parties, as the case may be, will prepare and submit the proposed strategy, internal process timeline, along with other required documents for such proposed Global Study to the Collaboration Committee for its review and approval before the protocol filing with any regulatory authorities.
+Added: If the Collaboration Committee cannot come to a mutual agreement on the proposed strategy or any other particular matter, this could delay our ability to develop or commercialize firmonertinib, which could have a material adverse effect on our business and operations.
Additionally, if we do not receive all of the necessary products, information, reports and data from Allist to which we are entitled under the Allist Collaboration Agreement in a timely manner, our business could be materially harmed.
Reported data or other clinical development announcements by third parties, including Allist, may adversely affect our clinical development plan.
−Removed: Allist is currently conducting clinical studies in China, including a Phase 1b trial with furmonertinib, and previously completed a Phase 3 clinical trial in China.
−Removed: Allist is also commercializing furmonertinib in China.
−Removed: If announcements by Allist or other third parties with whom we collaborate, now or in the future, are unfavorable with respect to their clinical trials, or with respect to post-approval monitoring, our clinical development plans may be adversely affected.
−Removed: Further, even if announcements by such third parties are favorable with respect to their clinical trials, our planned clinical trials for furmonertinib, and any future clinical trials we may conduct, differ from their clinical trials and investors should not place undue reliance upon any of such third parties’ reported data or other clinical development announcements.
+Added: Allist is currently conducting clinical studies in China, including a Phase 1b trial with firmonertinib and a phase 2 trial in second line EGFRm NSCLC patients with exon 20 insertion mutations, and previously completed a Phase 3 clinical trial in China.
+Added: Allist is also commercializing firmonertinib in China.
+Added: If announcements by Allist or other third parties with whom we collaborate, or by third parties with whom Allist collaborates, now or in the future, are unfavorable with respect to their clinical trials, or with respect to post-approval monitoring, our clinical development plans may be adversely affected.
+Added: Further, even if announcements by such third parties are favorable with respect to their clinical trials, our planned clinical trials for firmonertinib, and any future clinical trials we may conduct, differ from their clinical trials and investors should not place undue reliance upon any of such third parties’ reported data or other clinical development announcements.
We rely on, and intend to continue to rely on, third parties to conduct, supervise and monitor our clinical trials and nonclinical studies.
−Removed: If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize furmonertinib and any future product candidates may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.
+Added: If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize firmonertinib, our other product candidates, and any future product candidates may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.
We are dependent on third parties to conduct our clinical trials and preclinical and nonclinical studies.
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Further, while we have and will have agreements governing the activities of our third-party contractors, we have limited influence over their actual performance.
−Removed: Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards and requirements, and our reliance on our CROs and other third parties does not relieve us of our
−Removed: regulatory responsibilities.
+Added: Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards and requirements, and our reliance on our CROs and other third parties does not relieve us of our regulatory responsibilities.
In addition, we and our CROs are required to comply with GLP and GCP requirements, as applicable, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities related to the conduct of nonclinical studies and clinical trials, respectively.
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If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the study, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA of any NDA we submit.
−Removed: Any such delay or rejection could prevent us from receiving regulatory approval for, or commercializing, furmonertinib and any future product candidates.
+Added: Any such delay or rejection could prevent us from receiving regulatory approval for, or commercializing, firmonertinib, our other product candidates, and any future product candidates.
Our CROs have the right to terminate their agreements with us in the event of an uncured material breach and under other specified circumstances.
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Though we work to carefully manage our relationships with our CROs, investigators and other third parties, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
−Removed: We currently rely on a Chinese third party for the manufacture of furmonertinib for clinical development and expect to continue to rely on third parties for the foreseeable future.
−Removed: This reliance on third parties increases the risk that we will not have sufficient quantities of furmonertinib or such quantities at an acceptable cost, which could delay, prevent or impair our development or potential commercialization efforts.
+Added: We currently rely on a Chinese third party for the manufacture of firmonertinib and other product candidates, including ARR-217, for clinical development and potential future commercial supply of firmonertinib, and expect to continue to rely on third parties for the foreseeable future.
+Added: This reliance on third parties increases the risk that we will not have sufficient quantities of firmonertinib or ARR-217, or such quantities at an acceptable cost, which could delay, prevent or impair our development or potential commercialization efforts.
We do not own or operate manufacturing facilities and have no plans to develop our own clinical or commercial-scale manufacturing capabilities.
−Removed: We rely on a third party, and expect to continue to rely, on third parties for the manufacture of furmonertinib and related raw materials for clinical development, as well as for commercial manufacture if furmonertinib receives marketing approval.
−Removed: The facilities used by third-party manufacturers to manufacture furmonertinib must be approved by the FDA and any comparable foreign regulatory authority pursuant to inspections that will be conducted after we submit an NDA to the FDA or make any comparable submission to a foreign regulatory authority.
+Added: We rely on a third party, and expect to continue to rely, on third parties for the manufacture of firmonertinib, other product candidates, including ARR-217, and related raw materials for clinical development, as well as for commercial manufacture of firmonertinib and our other product candidates, including ARR-217, receives marketing approval.
+Added: The facilities used by third-party manufacturers to manufacture firmonertinib must be approved by the FDA and any comparable foreign regulatory authority pursuant to inspections that will be conducted after we submit an NDA to the FDA or make any comparable submission to a foreign regulatory authority.
We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP requirements for manufacture of products.
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In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
−Removed: If the FDA or any comparable foreign regulatory authority does not approve
−Removed: these facilities for the manufacture of furmonertinib or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market furmonertinib, if approved.
−Removed: Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations also could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of furmonertinib or other future products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products and our financial position.
+Added: If the FDA or any comparable foreign regulatory authority does not approve these facilities for the manufacture of firmonertinib, or our other product candidates, including ARR-217 or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market firmonertinib, and our other product candidates, including ARR-217, if approved.
+Added: Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations also could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of firmonertinib or our other product candidates, including ARR-217, future products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products and our financial position.
Our or a third party’s failure to execute on our manufacturing requirements on commercially reasonable terms, in a timely manner and in compliance with cGMP or other regulatory requirements could adversely affect our business in a number of ways, including:
−Removed: ● an inability to initiate or complete clinical trials of furmonertinib or any future product candidates in a timely manner;
−Removed: ● delay in submitting regulatory applications, or receiving marketing approvals, for furmonertinib or any future product candidates;
+Added: ● an inability to initiate or complete clinical trials of firmonertinib, our other product candidates, including ARR-217 or any other future product candidates in a timely manner;
+Added: ● delay in submitting regulatory applications, or receiving marketing approvals, for firmonertinib, our other product candidates, including ARR-217, or any other future product candidates;
● subjecting third-party manufacturing facilities or our potential future manufacturing facilities to additional inspections by regulatory authorities;
−Removed: ● requirements to cease development or to recall batches of furmonertinib or any future product candidates;
−Removed: ● in the event of approval to market and commercialize furmonertinib or any future product candidates, an inability to meet commercial demands for furmonertinib or any future product candidates.
+Added: ● requirements to cease development or to recall batches of firmonertinib or any other current or future product candidates;
+Added: ● in the event of approval to market and commercialize firmonertinib or any other current or future product candidates, an inability to meet commercial demands for firmonertinib or any other current or future product candidates.
In addition, we do not have any long-term commitments or supply agreements with any third-party manufacturers.
−Removed: We may be unable to establish any long-term supply agreements with third-party manufacturers or to do so on acceptable terms, which increases the risk of failing to timely obtain sufficient quantities of furmonertinib or such quantities at an acceptable cost.
+Added: We may be unable to establish any long-term supply agreements with third-party manufacturers or to do so on acceptable terms, which increases the risk of failing to timely obtain sufficient quantities of firmonertinib, other potential
+Added: product candidates, including ARR-217, or such quantities at an acceptable cost.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
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● termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
−Removed: Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval or jeopardize our ability to commence or continue commercialization of furmonertinib or any future product candidates, and any related remedial measures may be costly or time consuming to implement.
+Added: Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval or jeopardize our ability to commence or continue commercialization of firmonertinib, our other product candidates, including ARR-217, or or any future product candidates, and any related remedial measures may be costly or time consuming to implement.
We do not currently have arrangements in place for redundant supply or a second source for all required raw materials used in the manufacture of our product candidates.
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Without additional suppliers of required raw materials, we may also be unable to meet the commercial needs of a commercial launch of any future product candidates.
−Removed: In addition, our current and anticipated future dependence upon others for the manufacture of furmonertinib and any future product candidates may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.
−Removed: A portion of our product development and manufacturing for our product candidate furmonertinib takes place in China through third-party manufacturers.
+Added: In addition, our current and anticipated future dependence upon others for the manufacture of firmonertinib, other product candidates, including ARR-217, and any future product candidates may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.
+Added: A portion of our product development and manufacturing for our product candidate firmonertinib and other product candidates, including ARR-217, takes place in China through third-party manufacturers.
A significant disruption in the operation of those manufacturers, a trade war or political unrest in China, or a change in the regulatory framework in the United States or China, could materially adversely affect our business, financial condition and results of operations.
−Removed: Currently, we rely on and have agreements with two third-party contract manufacturers, Raybow and WuXi STA to supply the drug substance for furmonertinib to be used in planned clinical trials and with WuXi STA, with whom we have executed technology transfer related to the manufacture of drug product, to manufacture the clinical trial supplies of furmonertinib drug product.
+Added: Currently, we rely on and have agreements with two third-party contract manufacturers, Raybow and WuXi STA to supply the drug substance for firmonertinib to be used in planned clinical trials and with WuXi STA, with whom we have executed technology transfer related to the manufacture of drug product, to manufacture the clinical trial supplies of firmonertinib drug product.
Both of third-party contract manufacturers are located in China, and we expect to continue to use such third-party manufacturers for such product candidates.
+Added: We expect to rely on manufacturers in China for ARR-217 drug substance and drug product for use in initial clinical studies and also expect to rely on WuXi XDC for the manufacture of ARR-002 for initial clinical studies.
Any disruption in production or inability of our manufacturers in China to produce adequate quantities to meet our needs, whether as a result of a natural disaster, or other causes could impair our ability to operate our business on a day-to-day basis and to continue our development of our product candidates.
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or Chinese governments, political unrest or unstable economic conditions in China.
−Removed: For example, a trade war could lead to tariffs on the chemical intermediates we use that are manufactured in China.
−Removed: The recently proposed BIOSECURE Act is aimed at discouraging federal contracting with certain Chinese biotechnology companies for biotechnology equipment or services, including WuXi AppTec Co., Ltd.
+Added: For example, a trade war could lead to tariffs that ultimately result in increased manufacturing costs.
+Added: The BIOSECURE Act considered by the U.S.
+Added: Congress 2024 was aimed at discouraging federal contracting with certain Chinese biotechnology companies for biotechnology equipment or services, including WuXi AppTec Co., Ltd.
(WuXi AppTec) and its subsidiaries, parent affiliates, or successors on the development or manufacturing of pharmaceutical products.
−Removed: Finally, in February 2024, certain U.S.
−Removed: Senators and Representatives sent a letter to the Biden administration requesting that both WuXi AppTec, WuXi STA’s parent company, and the affiliated WuXi Biologics be added to the Department of Defense’s Chinese Military Companies List (1260H list), the Department of Commerce’s Bureau of Industry and Security Entity List, and the Department of Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List.
−Removed: While the Biden administration has yet to take action on this letter, adding WuXi STA on any or all of the aforementioned lists could materially impact supply of furmonertinib from WuXi STA.
−Removed: The enactment and implementation of the BIOSECURE Act, may similarly impact supply of furmonertinib from WuXi STA.
+Added: In February 2024, certain U.S.
+Added: Senators and Representatives sent a letter to the Biden administration requesting that both WuXi AppTec, WuXi STA’s parent company, and the affiliated WuXi Biologics be
+Added: added to the Department of Defense’s Chinese Military Companies List (1260H list), the Department of Commerce’s Bureau of Industry and Security Entity List, and the Department of Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List.
+Added: The companies were also named in the initial version of the BIOSECURE Act, which has yet to be reintroduced in the current Congress and the bill’s prospects under the Trump Administration are currently uncertain.
+Added: Adding WuXi STA or related entities on any or all of the aforementioned lists could materially impact supply of firmonertinib or ARR-002 from WuXi STA and related entities.
+Added: The re-introduction, enactment and implementation of the original BIOSECURE Act, or similar legislation that could develop in the 119 th Congress, may similarly impact supply of firmonertinib or ARR-002 from WuXi STA or related entities.
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
−Removed: For example, in the event that we need to switch our third-party manufacturer of furmonertinib from WuXi STA, we anticipate that the complexity of the manufacturing process may impact the amount of time it may take to secure a replacement manufacturer.
+Added: For example, in the event that we need to switch our third-party manufacturer of firmonertinib or ARR-002 from WuXi STA or related entities, we anticipate that the complexity of the manufacturing process may impact the amount of time it may take to secure a replacement manufacturer.
The delays associated with the verification of a new manufacturer, once we are able to identify an alternative source, could negatively affect our ability to develop product candidates in a timely manner or within budget, which could materially adversely affect our business, financial condition and results of operations.
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We are currently collaborating with third parties to develop certain of our potential drug candidates.
−Removed: For example, we are collaborating with Allist with respect to certain aspects of furmonertinib.
−Removed: In the future, we may seek to enter into collaborations, joint ventures, license agreements and other similar arrangements for the development or commercialization of furmonertinib and any future product candidates, due to capital costs required to develop or commercialize the product candidate or manufacturing constraints.
+Added: For example, we are collaborating with Allist with respect to certain aspects of firmonertinib and are collaborating with Lepu Biopharma with respect to ARR-217.
+Added: In the future, we may seek to enter into collaborations, joint ventures, license agreements and other similar arrangements for the development or commercialization of firmonertinib, our other product candidates, and any future product candidates, due to capital costs required to develop or commercialize the product candidate or manufacturing constraints.
For example, certain of the cancer disease areas that we believe our product candidates address require large, costly and later-stage clinical trials, which a collaboration partner may be better positioned to finance and/or conduct.
In addition, a component of our strategy is to maximize the commercial value of our current and future product candidates, which may also strategically align with partnering commercial rights with partners that have large and established sales organizations.
−Removed: To the extent that we decide to enter
−Removed: into collaborations, joint ventures, license agreements and other similar arrangements, we may not be successful in our efforts to establish or maintain such collaborations because our research and development pipeline may be insufficient, any future product candidates may be deemed to be at too early of a stage of development for collaborative effort or third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity.
+Added: To the extent that we decide to enter into collaborations, joint ventures, license agreements and other similar arrangements, we may not be successful in our efforts to establish or maintain such collaborations because our research and development pipeline may be insufficient, any future product candidates may be deemed to be at too early of a stage of development for collaborative effort or third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity.
In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time-consuming and complex.
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Furthermore, we may not be able to maintain such collaborations if, for example, the development or approval of a product candidate is delayed, the safety of a product candidate is questioned or the sales of an approved product candidate are unsatisfactory.
−Removed: Collaborations involving furmonertinib or any future product candidates would pose significant risks to us, including the following:
+Added: Collaborations involving firmonertinib or any other current or future product candidates would pose significant risks to us, including the following:
● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
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● collaborations may be terminated, including for the convenience of the collaborator, prior to or upon the expiration of the agreed upon terms and, if terminated, we may find it more difficult to enter into future collaborations or be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
−Removed: Any termination of collaborations we currently depend on or may enter into in the future, or any delay in entering into collaborations related to furmonertinib or any future product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Risks Related to Commercialization of Furmonertinib and any Future Product Candidates
−Removed: Even if we receive regulatory approval for furmonertinib or any future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.
−Removed: Additionally, furmonertinib and any future product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, if any of them are approved.
−Removed: Any regulatory approvals that we may receive for furmonertinib or any future product candidates will require the submission of various post-marketing reports to regulatory authorities, will subject us to surveillance requirements to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications and may include burdensome post-approval study or risk management requirements.
−Removed: For example, the FDA may require REMS as a condition of approval of furmonertinib or any future product candidates, which could include requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
−Removed: In addition, if the FDA or a comparable foreign regulatory authority approves furmonertinib or any future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for such products will be subject to extensive and ongoing regulatory requirements.
+Added: Any termination of collaborations we currently depend on or may enter into in the future, or any delay in entering into collaborations related to firmonertinib or any other current or future product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Risks Related to Commercialization of Firmonertinib, Our Other Product Candidates, and any Future Product Candidates
+Added: Even if we receive regulatory approval for firmonertinib or any other current or future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.
+Added: Additionally, firmonertinib, our other product candidates, and any future product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, if any of them are approved.
+Added: Any regulatory approvals that we may receive for firmonertinib or any other current or future product candidates will require the submission of various post-marketing reports to regulatory authorities, will subject us to surveillance requirements to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications and may include burdensome post-approval study or risk management requirements.
+Added: For example, the FDA may require REMS as a condition of approval of firmonertinib or any other current or future product candidates, which could include requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
+Added: In addition, if the FDA or a comparable foreign regulatory authority approves firmonertinib or any other current or future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for such products will be subject to extensive and ongoing regulatory requirements.
These requirements include submissions of safety and other post-marketing information and reports, facility registration, and continued compliance with cGMPs for product manufacturing and GCP requirements for any clinical trials that we conduct post-approval.
−Removed: Manufacturers of approved products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other
−Removed: regulatory authorities for compliance with cGMP regulations and standards.
+Added: Manufacturers of approved products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards.
+Added: In addition, should accelerated approval be granted to any of our product candidates, we will be required to complete confirmatory clinical trials to verify the drug’s clinical benefit(s) and to make certain mandatory submissions to the FDA that are not applicable to drug products with “full” or traditional FDA marketing approvals ( i.e.
+Added: , those not subject to accelerated approval requirements).
Failure to comply with regulatory requirements or later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, may result in a regulatory agency imposing restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
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● injunctions and the imposition of civil or criminal penalties.
−Removed: The occurrence of any event or penalty described above may inhibit our ability to commercialize furmonertinib or any future product candidates and to generate revenue, could require us to expend significant time and resources in response and could generate negative publicity.
+Added: The occurrence of any event or penalty described above may inhibit our ability to commercialize firmonertinib or any other current or future product candidates and to generate revenue, could require us to expend significant time and resources in response and could generate negative publicity.
The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product candidates we develop.
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The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
−Removed: The FDA and other regulatory agencies strictly regulate the marketing, labeling, advertising, and promotional claims that may be made about prescription drug products, such as furmonertinib or any future product candidates, if approved.
+Added: The FDA and other regulatory agencies strictly regulate the marketing, labeling, advertising, and promotional claims that may be made about prescription drug products, such as firmonertinib or any other current or future product candidates, if approved.
These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored scientific and educational activities, promotional activities involving the internet and off-label promotion.
In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling.
−Removed: While physicians in the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote any products will be narrowly limited to those indications that are specifically approved by the FDA.
−Removed: If we are found to have promoted such off-label uses, however, we may become subject to significant liability.
+Added: However, companies may share truthful and not misleading information that is not inconsistent with the labeling, and the FDA has recently published guidance for industry outlining modernized recommendations for how drug manufacturers can share scientifically sound and clinically relevant information on unapproved uses with health care providers so long as such presentations are not promotional.
+Added: While physicians in the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote or advertise any future commercial products will be narrowly limited to those indications that are specifically approved by the FDA.
+Added: If we are found to have promoted off-label uses for an FDA-approved drug product, or to have promoted an investigational drug before it has been granted some form of marketing approval, we may become subject to significant liability.
federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion.
The government has also required companies to enter into consent decrees or imposed permanent injunctions under which specified promotional conduct is changed or curtailed.
−Removed: If we cannot successfully manage the promotion of furmonertinib or any future product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
+Added: If we cannot successfully manage the promotion of firmonertinib or any other current or future product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
If we are required by the FDA to obtain approval of a companion diagnostic in connection with approval of any of our product candidates, and we do not obtain, or face delays in obtaining, FDA approval of such companion diagnostic, we will not be able to commercialize such product candidate and our ability to generate revenue will be materially impaired.
−Removed: According to FDA guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic is not also approved or cleared for that indication.
−Removed: We are working with a diagnostics company to develop a diagnostic for FDA approval to identify patients with EGFR Exon 20 insertion mutations and we may be required to pursue a similar approach for EGFR PACC mutations.
+Added: According to FDA guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or
+Added: new therapeutic product indication if the companion diagnostic is not also approved or cleared for that indication.
+Added: We are working with a diagnostics company to develop a companion diagnostic for firmonertinib to identify patients with EGFR exon 20 insertion mutations and we may be required to pursue a similar approach for EGFR PACC mutations.
The process of obtaining or creating such diagnostic is time consuming and costly.
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Any delay or failure by us or third-party collaborators to develop or obtain regulatory approval or clearance of a companion diagnostic could delay or prevent approval or continued marketing of the relevant product.
−Removed: For example, our EGFR exon 20 insertion mutations clinical trials may generate insufficient data to enable the approval by the FDA of the diagnostic that we are working with a diagnostics company to develop.
+Added: For example, our EGFR exon 20 insertion mutations clinical trials may generate insufficient data to enable the approval by the FDA of the companion diagnostic that we are working with a diagnostics company to develop.
We or our collaborators may also experience delays in developing a sustainable, reproducible and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our product candidates, if approved, on a timely or profitable basis, if at all.
−Removed: The commercial success of furmonertinib or any future product candidates will depend upon the degree of market acceptance of such product candidates by healthcare providers, product recipients, healthcare payors and others in the medical community.
−Removed: If furmonertinib or any future product candidates fail to achieve the broad degree of adoption by the medical community necessary for commercial success, our operating results and financial condition will be adversely affected, which may delay, prevent or limit our ability to generate revenue and continue our business.
−Removed: Even if furmonertinib or any future product candidates receive regulatory approval, they may not be commercially successful and may not gain market acceptance among healthcare providers, individuals within our target population, healthcare payors or the medical community.
−Removed: The commercial success of furmonertinib or any future product candidates will depend significantly on the broad adoption and use of the resulting product by these individuals and organizations for approved indications.
+Added: The commercial success of firmonertinib or any other current or future product candidates will depend upon the degree of market acceptance of such product candidates by healthcare providers, product recipients, healthcare payors and others in the medical community.
+Added: If firmonertinib or any other current or future product candidates fail to achieve the broad degree of adoption by the medical community necessary for commercial success, our operating results and financial condition will be adversely affected, which may delay, prevent or limit our ability to generate revenue and continue our business.
+Added: Even if firmonertinib or any other current or future product candidates receive regulatory approval, they may not be commercially successful and may not gain market acceptance among healthcare providers, individuals within our target population, healthcare payors or the medical community.
+Added: The commercial success of firmonertinib or any other current or future product candidates will depend significantly on the broad adoption and use of the resulting product by these individuals and organizations for approved indications.
The degree of market acceptance of our products will depend on a number of factors, including:
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● acceptance of a new drug for the relevant indication by healthcare providers and their patients;
+Added: ● the establishment of compliant, timely and secure product distribution networks;
● the pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies;
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● unfavorable publicity relating to the product.
−Removed: If furmonertinib or any future product candidate is approved for marketing but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors or patients, we may not generate sufficient revenue from that product and may not become or remain profitable.
+Added: If firmonertinib or any other current or future product candidate is approved for marketing but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors or patients, we may not generate sufficient revenue from that product and may not become or remain profitable.
Our efforts to educate the medical community and third-party payors regarding the benefits of our products may require significant resources and may never be successful.
−Removed: The successful commercialization of furmonertinib or any future product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels and favorable pricing policies.
+Added: The successful commercialization of firmonertinib or any other current or future product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels and favorable pricing policies.
Failure to obtain or maintain coverage and adequate reimbursement for our products could limit our ability to market those products and decrease our ability to generate revenue.
−Removed: The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford prescription medications such as furmonertinib and any future product candidates, if approved.
+Added: The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford prescription medications such as firmonertinib, our other product candidates, and any future product candidates, if approved.
Our ability to achieve coverage and acceptable levels of reimbursement for our products by third-party payors will have an effect on our ability to successfully commercialize those products.
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Payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development.
−Removed: reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our future products and may not be able to obtain a satisfactory financial return on products that we may develop.
+Added: If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our future products and may not be able to obtain a satisfactory financial return on products that we may develop.
There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
−Removed: In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered.
+Added: In the United States, third-party payors, including private and governmental payors, such as the Medicare and
+Added: Medicaid programs, play an important role in determining the extent to which new drugs will be covered.
Some third-party payors may require pre-approval of coverage for new or innovative drugs before they will reimburse healthcare providers who use such therapies.
−Removed: It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for furmonertinib and any future product candidates, if approved.
+Added: It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for firmonertinib, our other product candidates and any future product candidates, if approved.
Obtaining and maintaining reimbursement status is time-consuming, costly and uncertain.
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Furthermore, rules and regulations regarding reimbursement change frequently and, in some cases, at short notice, and we believe that changes in these rules and regulations are likely.
−Removed: Additionally, the IRA authorized the Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices annually for a select number of single source Medicare Part D drugs without generic competition starting in payment year 2026, and to negotiate drug prices for a select number of Medicare Part B drugs starting for payment year 2028.
+Added: Additionally, the IRA authorized the CMS to negotiate drug prices annually for a select number of single source Medicare Part D drugs without generic competition starting in payment year 2026, and to negotiate drug prices for a select number of Medicare Part B drugs starting for payment year 2028.
If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.
−Removed: CMS has begun to implement these new regulations but their impact on the biopharmaceutical industry in the United States remains uncertain, in part due to several pending federal lawsuits challenging the constitutionality of the program.
+Added: CMS has begun to implement these new statutory requirements but their impact on the biopharmaceutical industry in the United States remains uncertain, in part due to several pending federal lawsuits challenging the constitutionality of the program.
+Added: The outcome of such ongoing lawsuits, as well as potential legislative changes enacted by Congress or programmatic changes implemented at CMS by the Trump Administration, may impact the IRA drug price negotiation program in the future.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize in the future and, if reimbursement is available, what the level of reimbursement will be.
−Removed: Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of our products candidates, if approved in these jurisdictions.
+Added: Outside of the United States, international biopharmaceutical sales are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of our product candidates, if approved in these jurisdictions.
In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems.
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Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products.
−Removed: We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes.
+Added: We expect to experience pricing pressures in connection with the sale of any of our product candidates, if approved, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes.
The downward pressure on healthcare costs in general, and prescription drugs, surgical procedures and other treatments in particular, has become very intense.
As a result, increasingly high barriers are being erected to the entry of new products.
−Removed: We face significant competition, and if our competitors develop and commercialize technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective, safer, or less expensive than furmonertinib and any future product candidates we develop, our business and our ability to develop and successfully commercialize products will be adversely affected.
+Added: We face significant competition, and if our competitors develop and commercialize technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective, safer, or less expensive than firmonertinib, our other product candidates, and any future product candidates we develop, our business and our ability to develop and successfully commercialize products will be adversely affected.
The biopharmaceutical industry is characterized by rapid advancing technologies, intense competition and a strong emphasis on proprietary and novel products and product candidates.
−Removed: Our competitors have developed, are developing or may develop products, product candidates and processes competitive with furmonertinib.
−Removed: Furmonertinib and any future product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
+Added: Our competitors have developed, are developing or
+Added: may develop products, product candidates and processes competitive with firmonertinib.
+Added: Firmonertinib, our other product candidates, and any future product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
Our competitors include larger and better-funded pharmaceutical, biopharmaceutical, biotechnological and therapeutics companies.
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Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
−Removed: We believe that our current and future competition for resources and eventually for customers comes from companies that are commercializing or developing candidates targeting EGFRm-positive NSCLC, including, but not limited to, AstraZeneca, Johnson & Johnson, Takeda Pharmaceutical Company Limited, Blueprint Medicines Corp, Dizal Pharmaceutical, Oric Pharmaceuticals, Black Diamond Therapeutics, Inc., Taiho Pharmaceutical Co., Ltd., Boehringer Ingelheim and Bayer AG.
+Added: We believe that our current and future competition for resources and eventually for customers comes from companies that are commercializing or developing candidates targeting EGFRm-positive NSCLC, including, but not limited to, AstraZeneca, Johnson & Johnson, Blossom Hill Therapeutics, Dizal Pharmaceutical, Oric Pharmaceuticals, Black Diamond Therapeutics, Inc., Cullinan Therapeutics, Inc.,Taiho Pharmaceutical Co., Ltd., Boehringer Ingelheim and Bayer AG.
+Added: In March 2024 and October 2024, chemotherapy in combination with the anti-EGFR anti-MET bispecific antibody amivantamab was approved in the United States and Europe, respectively, for first line EGFRm NSCLC patients with exon 20 insertion mutations.
In October 2023, Johnson & Johnson presented the results of the Phase 3 PAPILLON study of chemotherapy in combination with the anti-EGFR anti-MET bispecific antibody amivantamab in first-line NSCLC patents with EGFR exon 20 insertion mutations, and announced in July 2023 that the PAPILLON study met its primary endpoint.
In October 2023, Dizal Pharmaceutical and Oric Pharmaceuticals provided updates on their oral EGFR inhibitors sunvozertinib and ORIC- 114, respectively, each of which is being studied in Phase 1 trials in first-line NSCLC patients with EGFR exon 20 insertion mutations.
+Added: In January 2025, Taiho Therapeutics and Cullinan Therapeutics announced that their study of the oral EGFR inhibitor zipalertinib met the primary endpoint in a phase 2B clinical trial of patents in second or later line NSCLC patients with EGFR exon 20 insertion mutations.
Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than we do.
−Removed: If we successfully obtain approval for furmonertinib or any future product candidate, we will face competition based on many different factors, including the safety and effectiveness of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position.
+Added: If we successfully obtain approval for firmonertinib or any other current or future product candidate, we will face competition based on many different factors, including the safety and effectiveness of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position.
Competing products could present superior treatment alternatives, including by being more effective, safer, more convenient, less expensive or marketed and sold more effectively than any products we may develop.
−Removed: Competing products may render furmonertinib or any future product candidates we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates.
+Added: Competing products may render firmonertinib or any other current or future product candidates we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates.
If we are unable to compete effectively, our opportunity to generate revenue from the sale of our products we may develop, if approved, could be adversely affected.
See “Business — Competition.”
−Removed: We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may need to invest significant resources to develop these capabilities.
+Added: We currently have limited marketing and no market access or sales organizations and have no experience as a company in commercializing products, and we may need to invest significant resources to develop these capabilities.
If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.
−Removed: We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product.
−Removed: If furmonertinib or any future product candidate ultimately receives regulatory approval, we must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
−Removed: We have no prior experience as a company with the marketing, sale or
−Removed: distribution of biopharmaceutical products and there are significant risks involved in the building and managing of a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, monitor compliance on an ongoing basis, and effectively manage a geographically dispersed sales and marketing team.
+Added: We have limited marketing and no internal sales or distribution capabilities, nor have we commercialized a product.
+Added: If firmonertinib or any other current or future product candidate ultimately receives regulatory approval, we must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
+Added: We have no prior experience as a company with the marketing, sale or distribution of biopharmaceutical products and there are significant risks involved in the building and managing of a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, monitor compliance on an ongoing basis, and
+Added: effectively manage a geographically dispersed sales and marketing team.
Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products.
We compete with many companies that currently have extensive, experienced and well-funded market access, marketing and sales operations to recruit, hire, train and retain marketing and sales personnel, and will have to compete with those companies to recruit, hire, train and retain any of our own market access, marketing and sales personnel.
−Removed: If we are unable to expand our sales and marketing team, we may be unable to compete successfully against these more established companies We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all.
+Added: If we are unable to expand our sales and marketing team, we may be unable to compete successfully against these more established companies.
+Added: We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all.
In addition, our product revenue and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves.
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If we are not successful in commercializing our products, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.
−Removed: If the market opportunities for furmonertinib and any future product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.
−Removed: The precise incidence and prevalence for the various mutations of NSCLC we aim to address with furmonertinib or any future product candidates are unknown.
+Added: If the market opportunities for firmonertinib and any other current or future product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.
+Added: The precise incidence and prevalence for the various mutations of NSCLC we aim to address with firmonertinib or any other current or future product candidates are unknown.
Our projections of both the number of people who have EGFRm NSCLC or other diseases we target, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on a number of internal and third-party estimates.
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While we believe our assumptions and the data underlying our estimates are reasonable, we have not independently verified the accuracy of the third-party data on which we have based our assumptions and estimates, and these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, including as a result of factors outside our control, thereby reducing the predictive accuracy of these underlying factors.
−Removed: The total addressable market across all of the potential indications for furmonertinib and any future product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
+Added: The total addressable market across all of the potential indications for firmonertinib, our other product candidates, and any future product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product candidates or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our business, financial condition and results of operations.
Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
−Removed: Our future growth may depend, in part, on our ability to develop and commercialize furmonertinib and any future product candidates in foreign markets.
−Removed: We are not permitted to market or promote any product candidate before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for furmonertinib or any future product candidates.
−Removed: To obtain separate regulatory approval in many other countries we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of furmonertinib and any future product candidates.
−Removed: Approval procedures may be more onerous than those in the United States and may require that we conduct additional preclinical studies or clinical trials.
−Removed: If we obtain regulatory approval of product candidates and
−Removed: ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including:
+Added: Our future growth may depend, in part, on our ability to develop and commercialize firmonertinib, our other product candidates, and any future product candidates in foreign markets.
+Added: We are not permitted to market or promote any product candidate before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for firmonertinib or any other current or future product candidates.
+Added: To obtain separate regulatory approval in many other countries we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of firmonertinib, our other product candidates and any future product candidates.
+Added: Approval procedures may be more onerous than those in the United States and may require that we conduct additional nonclinical studies or clinical trials.
+Added: If we obtain regulatory approval of product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including:
● different regulatory requirements for approval of drugs in foreign countries;
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● workforce uncertainty in countries where labor unrest is common;
−Removed: ● differing regulatory requirements with respect to manufacturing of products;
+Added: ● differing regulatory requirements with respect to manufacturing, packaging or distribution of products;
● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires;
−Removed: ● disruptions resulting from the impact of public health pandemics or epidemics (including, for example, COVID-19).
+Added: ● disruptions resulting from the impact of public health pandemics or epidemics.
We may not successfully identify, acquire, develop or commercialize new potential product candidates.
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These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:
−Removed: ● the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to furmonertinib or any future product candidates, which may change from time to time;
−Removed: ● the timing and success or failure of preclinical studies or clinical trials for furmonertinib or any future product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners;
−Removed: ● coverage and reimbursement policies with respect to furmonertinib or any future product candidates, if approved, and potential future drugs that compete with our products;
+Added: ● the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to firmonertinib or any other current or future product candidates, which may change from time to time;
+Added: ● the timing and success or failure of preclinical studies or clinical trials for firmonertinib or other current or any future product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners;
+Added: ● coverage and reimbursement policies with respect to firmonertinib or any other current or future product candidates, if approved, and potential future drugs that compete with our products;
● expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies;
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We are a clinical-stage company, and, as of December 31, 2024, had 52 full-time employees.
−Removed: We are highly dependent on the research and development, clinical and business development expertise of Zhengbin (Bing) Yao, Ph.D., our co-founder, Chief Executive Officer and Chairman, and Stuart Lutzker, M.D., Ph.D., our co-founder and President of Research and Development, as well as the other principal members of our management, scientific and clinical team.
+Added: We are highly dependent on the research and development, clinical and business development expertise of our executive officers, as well as the other principal members of our management, scientific and clinical team.
Although we have entered into offer letters with our executive officers, each of them may terminate his or her employment with us at any time.
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If the perceived benefits of our stock awards decline, either because we are a public company or for other reasons, it may harm our ability to recruit and retain highly skilled employees.
−Removed: Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock, particularly after the expiration of the lock-up agreements described herein.
+Added: Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock.
We will need to expand and effectively manage our managerial, operational, financial and other resources in order to successfully pursue our clinical development and commercialization efforts.
−Removed: We may not be successful in maintaining our company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology and other
+Added: We may not be successful in maintaining our company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology and other businesses.
Our industry has experienced a high rate of turnover of management personnel in recent years.
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As of December 31, 2024, we had 52 full-time employees.
−Removed: As we continue development and pursue the potential commercialization of furmonertinib and any future product candidates, as well as transition to functioning as a public company, we will need to expand our financial, accounting, development, regulatory, manufacturing, information technology, marketing and sales capabilities or contract with third parties to provide these capabilities for us.
+Added: As we continue development and pursue the potential commercialization of firmonertinib, our other product candidates and any future product candidates, as well as continue
+Added: to function as a public company, we will need to expand our financial, accounting, development, regulatory, manufacturing, information technology, marketing and sales capabilities or contract with third parties to provide these capabilities for us.
We may have difficulty identifying, hiring and integrating new personnel.
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As our operations expand, we expect that we will need to manage additional relationships with various strategic partners, suppliers and other third parties and we may not be successful in doing so.
−Removed: Our future financial performance and our ability to develop and commercialize furmonertinib and any future product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
+Added: Our future financial performance and our ability to develop and commercialize firmonertinib, our other product candidates and any future product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
We are subject to various U.S.
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● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;
−Removed: some state laws require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
−Removed: some state laws that require biotechnology companies to report information on the pricing of certain drug products;
−Removed: and some state and local laws that require the registration or pharmaceutical sales representatives.
+Added: ● some state or local laws that require biotechnology companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
+Added: to report information on the pricing of certain drug products;
+Added: and the registration of pharmaceutical sales representatives doing business within the jurisdiction, among other potentially applicable state and local laws and regulations.
Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare and privacy laws and regulations will involve ongoing substantial costs.
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Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business are found not to be in compliance with applicable laws or regulations, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government-funded healthcare programs.
−Removed: Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize furmonertinib and any future product candidates and may affect the prices we may set.
+Added: Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize firmonertinib, our other product candidates, and any future product candidates and may affect the prices we may set.
In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
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Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.
−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 assistance programs, and reform government program reimbursement methodologies for products.
+Added: 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 assistance programs, and reform government program
+Added: reimbursement methodologies for products.
Most recently, the IRA introduced a number of significant drug pricing reforms, including the establishment of a drug price negotiation program within the HHS (beginning in 2026) that requires manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation (first due in 2023), and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs (beginning in 2025).
The program being implemented by HHS is currently the subject of several federal lawsuits, and its ultimate form remains uncertain.
−Removed: Additional drug pricing proposals could also appear in future legislation.
+Added: Additional drug pricing proposals could also appear in future legislation as the Trump Administration and the 119 th Congress begin to develop and articulate policy proposals related to prescription drug pricing and the biopharmaceutical industry more broadly.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmacy benefit managers (PBMs), and other members of the health care and pharmaceutical supply chain, an important decision that had led to further and more aggressive efforts by states in this area.
−Removed: The FTC in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements, and Congress has been convening hearings to learn more about PBM practices and the pharmaceutical supply chain more broadly.
+Added: The FTC in mid-2022 also launched sweeping investigations into the practices of the PBM industry, and published interim reports with its findings in mid-2024 and January 2025, that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements, including in the current 2025-2026 congressional session where PBM reform continues to be a bipartisan priority.
+Added: During the previous congressional session, numerous PBM reforms were considered in both the Senate and the House of Representatives;
+Added: they included diverse legislative proposals such as eliminating rebates;
+Added: divorcing service fees from the price of a drug, discount, or rebate;
+Added: prohibiting spread pricing;
+Added: limiting administrative fees;
+Added: requiring PBMs to report formulary placement rationale;
+Added: promoting transparency.
Significant efforts to change the PBM industry as it currently exists in the U.S.
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In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
−Removed: This could reduce the ultimate demand for furmonertinib and any future product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.
+Added: This could reduce the ultimate demand for firmonertinib, our other product candidates, and any future product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.
We expect that these new laws and other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize furmonertinib and any future product candidates, if approved.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize firmonertinib, our other product candidates and any future product candidates, if approved.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit, delay or cease commercialization of any products we may develop.
−Removed: We face an inherent risk of product liability as a result of the clinical trials of furmonertinib and any future product candidates and will face an even greater risk if we commercialize our product candidates, especially if our products are prescribed for off-label uses, even if we do not promote such uses.
+Added: We face an inherent risk of product liability as a result of the clinical trials of firmonertinib, our other product candidates, and any future product candidates and will face an even greater risk if we commercialize our product candidates, especially if our products are prescribed for off-label uses, even if we do not promote such uses.
For example, we may be sued if our product candidates allegedly cause injury or are found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties.
−Removed: Claims may be brought against us by clinical trial participants, patients or others using, administering or selling products that may be approved in the future.
+Added: Claims may be brought against us by clinical trial participants, patients or others using,
+Added: administering or selling products that may be approved in the future.
Claims could also be asserted under state consumer protection acts.
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● significant negative financial impact;
−Removed: ● the inability to commercialize furmonertinib or any future product candidates;
+Added: ● the inability to commercialize firmonertinib or any other current or future product candidates;
● a decline in our stock price.
We currently hold approximately $10.0 million in product liability insurance coverage in the aggregate.
−Removed: We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of furmonertinib or any future product candidates.
+Added: We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of firmonertinib or any other current or future product candidates.
Insurance coverage is increasingly expensive.
−Removed: Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of furmonertinib or any future product candidates.
+Added: Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of firmonertinib or any other current or future product candidates.
Although we will maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.
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We do not carry insurance for all categories of risk that our business may encounter.
−Removed: Some of the policies we currently maintain include property, general liability, employment benefits liability, business automobile, workers’ compensation, products liability, malicious invasion of our electronic systems, and directors’ and officers’, and employment practices insurance.
+Added: Some of the policies we currently maintain include property, general liability, employment benefits liability, workers’ compensation, products liability, malicious invasion of our electronic systems, and directors’ and officers’, and employment practices insurance.
We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
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Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.
−Removed: We are subject to stringent and evolving U.S.
−Removed: and foreign laws, regulations, rules, contractual obligations, and policies related to data privacy and security.
−Removed: Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;
+Added: We are subject to complex and evolving U.S.
+Added: and foreign laws, regulations, and rules, as well as contractual obligations, and policies related to data privacy and data protection.
+Added: Our, or those of collaborators or other third parties on which we rely, actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;
fines and penalties;
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and other adverse business consequences.
−Removed: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process or processing) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, employee data, intellectual property, data we collect about trial participants in connection with clinical trials, and other sensitive third-party data (collectively, sensitive data).
−Removed: Our data processing activities may subject us to numerous data privacy and security
−Removed: obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
−Removed: Various federal, state, local and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws, rules or regulations, enact new laws, rules or regulations or issue revised rules or guidance regarding data privacy and security.
−Removed: 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, consumer protection laws, e.g., Section 5 of the Federal Trade Commission Act, and other similar laws, e.g., wiretapping laws.
+Added: In the ordinary course of business, we collect and process personal data and other sensitive information, including proprietary and confidential business data, trade secrets, employee data, intellectual property, data we collect about trial participants in connection with clinical trials, and other sensitive third-party data.
+Added: Our data processing activities may subject us to numerous privacy and data protection obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to privacy and data protection.
+Added: Various federal, state, local and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand or amend current laws, rules or regulations, enact new laws, rules or regulations or issue revised rules or guidance regarding privacy and data protection.
+Added: In the United States, federal, state, and local governments have enacted numerous privacy and data protection laws, including data breach notification laws, personal data privacy laws, consumer protection laws, e.g., Section 5 of the Federal Trade Commission Act, and other similar laws, e.g., wiretapping laws.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations (collectively, HIPAA), imposes certain privacy and security requirements for individually identifiable health information on certain entities, namely certain healthcare providers, health plans, and healthcare clearinghouses (covered entities) and their respective “business associates” who directly or as a subcontractor provide services involving the creation, use, maintenance or disclosure of individually identifiable health information on covered entities’ behalf.
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Any investigation of or enforcement against us or the third parties with whom we contract, including a research collaborator, regardless of the outcome, would be costly and time consuming, and may negatively affect our ability to conduct clinical trials, results of operations and financial condition.
−Removed: Additionally, the California Consumer Privacy Act (CCPA) applies to personal information of consumers, business representatives, and employees, and among other things requires covered businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights, including the right to opt out of certain disclosures of their information.
−Removed: The CCPA provides for civil penalties of up to $7,500 per violation as well as a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.
−Removed: Although the law includes limited exceptions, including for certain information collected as part of clinical trials, the CCPA may impact our processing of personal information and increase our compliance costs.
−Removed: Additionally, the California Privacy Rights Act of 2020 (CPRA) significantly expands the CCPA, such as granting additional rights to California residents, including the right to correct personal information and additional opt-out rights.
−Removed: The CPRA also establishes a regulatory agency dedicated to enforcing the CCPA and the CPRA.
−Removed: Other states, such as Connecticut, Colorado, Indiana, Iowa, Texas and Utah, have also passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
−Removed: While these state privacy laws, like the CCPA, also exempt some data processed in the context of clinical trials (and most also exempt employee and business personal data), these developments further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
−Removed: The scope and enforcement of these laws is uncertain and subject to rapid change.
−Removed: For example, increasing concerns about health information privacy have recently prompted the federal government to take a newly expansive view of the scope of existing privacy laws and regulations.
−Removed: Congress and some states are considering (and in some cases have passed) new laws and regulations that further and more broadly protect the privacy and security of personal health information.
+Added: Other federal and state laws establish additional requirements for protecting the privacy and security of health information that is not protected by HIPAA.
+Added: For instance, Washington state recently passed the “My Health My Data” Act, which came into force in 2024 and regulates “consumer health data,” which is defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data” Act provides exemptions for personal data used or shared in connection with certain research activities, including data subject to 45 C.F.R.
+Added: Parts 46, 50 and 56.
+Added: Notably, the “My Health My Data” Act contains a private right of action.
+Added: In addition, Nevada recently enacted a consumer health data privacy bill, SB 370, which also took effect in 2024, and regulates “consumer health data.” SB 370 shares many similarities with Washington’s “My Health My Data” Act, and Connecticut recently amended its comprehensive privacy law to include heighted regulation of “consumer health data.” Additional states may adopt health-specific privacy laws that could impact our business activities and our collection and handling of health-related data.
+Added: More broadly, various U.S.
+Added: states now regulate the processing of personal data.
+Added: For example, California was the first of an ever-increasing number of states to enact comprehensive state privacy legislation with the California Consumer Privacy Act (CCPA), which went into effect in January of 2020.
+Added: The CCPA established a privacy framework for covered businesses by creating an expanded definition of personal data, establishing data privacy rights for California residents, requiring covered businesses to provide disclosures to California residents, and creating a statutory damages framework with the potential for severe damages for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches, as well as a private right of action for certain data breaches.
+Added: Additionally, in 2020 California voters passed the California Privacy Rights Act of 2020 (CPRA), which went into effect on January 1, 2023.
+Added: The CPRA significantly amends and expands the CCPA, such as granting additional rights to California residents, including the right to correct personal data and additional opt-out rights.
+Added: Among other things, the CPRA also establishes a regulatory agency, the California Privacy Protection Agency, which enacts new regulations under the CCPA and has expanded enforcement authority.
+Added: In 2023, comprehensive privacy laws in Virginia, Colorado, Connecticut, and Utah all took effect, and laws in Montana, Oregon, and Texas took effect during 2024.
+Added: Laws in a number of other U.S.
+Added: states took effect, or are set to take effect, in 2025, in 2026, and beyond.
+Added: Additional U.S.
+Added: states have proposals under consideration, all of which are likely to increase our regulatory compliance costs and risks, exposure to regulatory enforcement action, and other liabilities.
+Added: While these state privacy laws, such as the CCPA, contain exemptions for certain types of personal data, such as personal data processed in the context of clinical trials, these laws may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
+Added: The scope and enforcement of these laws is uncertain and evolving.
In addition to government activity, privacy advocacy groups and technology and other industries are considering various new, additional or different self-regulatory standards that may place additional burdens on us.
−Removed: There are also various laws and regulations in other jurisdictions outside the United States relating to data privacy and security, with which we may need to comply.
−Removed: For example, the EU GDPR and the United Kingdom’s equivalent (UK GDPR, and together with the EU GDPR, the GDPR), impose strict requirements for processing personal data.
−Removed: Notably, the EU GDPR and UK GDPR impose large penalties for noncompliance, including the potential for fines of up to €20 million under the EU GDPR / £17.5 million under the UK GDPR, or 4% of the annual global revenue of the noncompliant entity, whichever is greater.
−Removed: The EU GDPR and UK GDPR also provide for private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
−Removed: Additionally, EU member states may introduce further conditions, including limitations, and
−Removed: make their own laws and regulations further limiting the processing of ‘special categories of personal data, including personal data related to health, biometric data used for unique identification purposes and genetic information, which could limit our ability to collect, use and share EU data, and could cause our compliance costs to increase, ultimately adversely affecting our business, financial condition, results of operations and prospects.
−Removed: In addition to the GDPR and U.S.
−Removed: data privacy laws, virtually every international jurisdiction in which we operate has established its own legal framework relating to privacy, data protection, and information security matters to which we may also be subject.
+Added: Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal data as well.
+Added: For example, the European Parliament and the Council of the European Union adopted a comprehensive general data privacy framework called the General Data Protection Regulation (GDPR), which went into effect in 2018 and implemented a broad data protection framework that expanded the scope of EU data protection law, and applies to entities located inside and outside of the EU that process, or control the processing of, personal data relating to individuals located in the EU, including clinical trial data.
+Added: The GDPR also imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification, and the use of third-party processors in connection with the processing of the personal data.
+Added: In particular, medical or health data, and genetic and biometric data used to uniquely identify an individual, are all classified as “special category” data under the GDPR and are subject to heightened restrictions and compliance obligations.
+Added: Further, EU member states have a broad right to impose additional conditions – including restrictions – on these data categories.
+Added: This is because the GDPR allows EU member states to derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes).
+Added: As EU member states continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant EU member states’ laws and regulations, including where permitted derogations from the GDPR are introduced, all of which could limit our ability to collect, use and share EU data, and could cause our compliance costs to increase, ultimately adversely affecting our business, financial condition, results of operations and prospects.
+Added: Relatedly, following Brexit and the expiry of the Brexit transition period, which ended on December 31, 2020, the EU GDPR has been implemented in the United Kingdom (as the UK GDPR).
+Added: The UK GDPR sits alongside the United Kingdom Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law.
+Added: Under the UK GDPR, companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the United Kingdom , or to monitor their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the GDPR and as such, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of global turnover.
+Added: Transfers of personal data to certain countries outside of the EU and the UK are also highly regulated under the GDPR and UK GDPR.
+Added: For example, the GDPR only permits exports of personal data outside of the EU to “non-adequate” countries where there is a suitable data transfer mechanism in place to safeguard personal data (e.g., the EU Commission approved Standard Contractual Clauses or certification under the Data Privacy Framework).
+Added: On July 16, 2020, the Court of Justice of the EU, or the CJEU, issued a landmark opinion in the case Maximilian Schrems vs.
+Added: Facebook (Case C-311/18) (Schrems II).
+Added: This decision called into question certain data transfer mechanisms as between the EU member states and the U.S.
+Added: The CJEU is the highest court in Europe and the Schrems II decision heightened the burden to assess U.S.
+Added: national security laws on their business, and future actions of EU data protection authorities are difficult to predict at this time.
+Added: While the Data Privacy Framework was meant to address the concerns raised by the CJEU in Schrems II, it will likely be subject to future legal challenges.
+Added: Consequently, there is some risk of any data transfers from the EU being halted.
+Added: If we have to rely on third parties to carry out services for us, including processing personal data on our behalf, we are required under GDPR to enter into contractual arrangements to flow down or help
+Added: ensure that these third parties only process such data according to our instructions and have sufficient security measures in place.
+Added: Any security breach or non-compliance with our contractual terms or breach of applicable law by such third parties could result in enforcement actions, litigation, fines and penalties or adverse publicity and could cause customers to lose trust in us, which would have an adverse impact on our reputation and business.
+Added: Any contractual arrangements requiring the processing of personal data from the EU to us in the U.S.
+Added: will require greater scrutiny and assessments as required under Schrems II and may have an adverse impact on cross-border transfers of personal data or increase costs of compliance.
+Added: In addition to privacy and data protection laws in the U.S, E.U, and U.K,, various other international jurisdictions in which we operate have established legal frameworks relating to privacy, data protection, and information security matters to which we may also be subject.
For example, we are also subject to laws in China.
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The PIPL is intended to clarify the scope of application, the definitions of personal information and sensitive personal information, the legality of personal information processing and the basic requirements of notice and consent, among other things.
−Removed: The PIPL also sets out data localization requirements for CIIOs
−Removed: and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities.
+Added: The PIPL also sets out data localization requirements for CIIOs and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities.
The PIPL also includes a list of rules which must be complied with prior to the transfer of personal information outside of China, such as compliance with a security assessment or certification by an agency designated by the relevant authorities or entering into standard form model contracts approved by the relevant authorities with the overseas recipient.
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It is also generally unclear how the laws will be interpreted and enforced in practice by the relevant government authorities as often the abovementioned laws are drafted broadly and thus leaves great discretion to the relevant government authorities to exercise.
−Removed: The evolving and overarching complexity of privacy and data protection laws and regulations around the world may require us to design, implement and maintain different types of state- or country-based, privacy-related compliance controls and programs simultaneously in multiple jurisdictions, thereby further increasing the complexity and cost of compliance.
−Removed: These costs, including others relating to increased regulatory oversight and compliance, could materially and adversely affect our business or our growth plans and result in damages or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls, or the malicious or inadvertent breach of applicable privacy and data protection requirements by us, our employees, our business partners, or our customers.
−Removed: In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
−Removed: Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
−Removed: In particular, the European Economic Area (EEA) and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate.
−Removed: Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and the UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, these
−Removed: mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
−Removed: If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
−Removed: Additionally, companies that transfer personal data out of the EEA and the UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
−Removed: Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
−Removed: In addition to data privacy and security laws, we are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
−Removed: Each of these laws, rules, regulations and contractual obligations relating to data privacy and security, and any other such changes or new laws, rules, regulations or contractual obligations could impose significant limitations, require changes to our business, or restrict our collection, use, storage or processing of personal information, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
−Removed: In addition, any such changes could compromise our ability to develop an adequate marketing strategy and pursue our growth strategy effectively or even prevent us from providing certain products in jurisdictions in which we currently operate and in which we may operate in the future or incur potential liability in an effort to comply with such legislation, which, in turn, could adversely affect our business, financial condition, results of operations and prospects.
−Removed: Complying with these numerous, complex and often changing laws, regulations and contractual requirements is expensive and difficult, and suspected and actual failure to comply with any data privacy or security requirements, whether by us, one of our CROs, business partners or another third party, could adversely affect our business, financial condition, results of operations and prospects, including but not limited to:
+Added: We also publicly post privacy policies and notices that describe our practices concerning our collection, use, disclosure and other processing of personal data.
+Added: Although we endeavor to comply with our public-facing privacy policies and notices, we may at times fail to do so or be perceived to have failed to do so, and we may be subject us to enforcement actions if our privacy policies and notices are found to be deceptive, unfair or misrepresentative of our actual practices, which could result in, regulatory inquiries and investigations or adverse publicity and could cause our customers and collaborators to lose trust in us, any of which could adversely affect our business, financial condition, results of operations and prospects.
+Added: Applicable data privacy and data protection laws may conflict with each other, and by complying with the laws or regulations of one jurisdiction, the Company may find that it is violating the laws or regulations of another jurisdiction.
+Added: Despite the Company’s efforts, the Company may not have fully complied in the past and may not in the future.
+Added: Evolving legal, contractual, and other privacy and data protection obligations, could impose significant limitations, require changes to our business, or restrict our collection, use, storage or processing of personal data, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
+Added: In addition, any such
+Added: changes could impact our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, or even prevent us from providing certain products in jurisdictions in which we currently operate, and in which we may operate in the future, or incur potential liability in an effort to comply, which, in turn, could adversely affect our business, financial condition, results of operations and prospects.
+Added: Complying with these numerous, complex and often evolving requirements is expensive and difficult, and suspected and actual failure to comply, whether by us, our service providers, CROs, business partners or other third parties, or any inadvertent or unauthorized access to or use or disclosure of data that we store or handle as part of operating our business, could adversely affect our business, financial condition, results of operations and prospects, including but not limited to:
+Added: loss of customers;
+Added: interruptions or stoppages in our business operations (including clinical trials);
+Added: inability to process personal data or to operate in certain jurisdictions;
+Added: limit our ability to develop or commercialize our products;
+Added: expenditure of time and resources;
investigation costs;
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and injunctive relief.
−Removed: The recent implementation of the CCPA, EU GDPR and UK GDPR have increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the CCPA and other applicable state laws, EU GDPR and UK GDPR and other applicable laws and regulations, which could divert management’s attention and increase our cost of doing business.
−Removed: In addition, new regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business.
−Removed: In this regard, we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the EEA and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.
−Removed: Any actual or perceived failure by us or our third-party service providers to comply with any federal, state or foreign laws, rules, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy, data protection, data security or consumer protection could adversely affect our reputation, brand and business.
−Removed: We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any standards, laws, rules and regulations or other legal obligations relating to privacy or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business.
−Removed: Any of these events could adversely affect our reputation, business, or financial condition, including but not limited to:
−Removed: loss of customers;
−Removed: interruptions or stoppages in our business operations (including clinical trials);
−Removed: inability to process personal data or to operate in certain jurisdictions;
−Removed: limited ability to develop or commercialize our products;
−Removed: expenditure of time and resources to defend any claim or inquiry;
−Removed: adverse publicity;
−Removed: or substantial changes to our business model or operations.
−Removed: We cannot assure you that our CROs, CMOs or other third-party service providers with access to our or our suppliers’, manufacturers’, collaborators’, trial participants’ and employees’ sensitive information in relation to which we are responsible will not breach contractual obligations imposed by us, or that they will not experience data security incidents, which could have a
−Removed: corresponding effect on our business, including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, financial condition, results of operations and prospects.
−Removed: We cannot assure you that our contractual measures and our own privacy and security-related safeguards will protect us from the risks associated with the third-party processing of such information.
−Removed: Any of the foregoing could adversely affect our business, financial condition, results of operations and prospects.
−Removed: We also publicly post our privacy policies and practices concerning our collection, use, disclosure and other processing of the personal information provided to us by our website visitors and by our customers.
−Removed: Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be perceived to have failed to do so.
−Removed: Our publication of our privacy policies and other statements we publish that provide promises and assurances about privacy and security can subject us to potential state and federal action if they are found to be deceptive, unfair or misrepresentative of our actual practices.
−Removed: Any actual or perceived failure by us to comply with federal, state or foreign laws, rules or regulations, industry standards, contractual or other legal obligations, or any actual, perceived or suspected cybersecurity incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personal information or other data, may result in enforcement actions and prosecutions, private litigation, significant fines, penalties and censure, claims for damages by customers and other affected individuals, regulatory inquiries and investigations or adverse publicity and could cause our customers and collaborators to lose trust in us, any of which could adversely affect our business, financial condition, results of operations and prospects.
+Added: We may also be contractually required to indemnify and hold harmless third parties.
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 deductible or co-insurance requirements), could have an adverse effect on our business.
In addition, we cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
−Removed: If our internal information technology systems, or those used by our CROs, clinical sites, or other contractors or consultants upon which we rely, are or were compromised, become unavailable or suffer security breaches, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, litigation, fines, penalties and liability, compromise of sensitive information related our business, and other adverse consequences.
−Removed: In the ordinary course of our business, we, and the third parties upon which we rely, process sensitive data and as a result, we and the third parties upon which we rely face a variety of evolving threats which could cause security incidents.
−Removed: Our internal information technology systems and those of our CROs, clinical sites, and other contractors and consultants upon which we rely are vulnerable to cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware, including as a result of advanced persistent threat intrusions, and other attacks by computer hackers, cracking, application security attacks, social engineering, including through phishing attacks, supply chain attacks and vulnerabilities through our third-party service providers, denial-of-service attacks, such as credential stuffing, credential harvesting, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
+Added: If our internal information technology systems, or those used by our CROs, clinical sites, or other contractors or consultants upon which we rely, are or were compromised, become unavailable or suffer cybersecurity incidents, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, litigation, fines, penalties and liability, compromise of sensitive information related our business, and other adverse consequences.
+Added: In the ordinary course of our business, we, and the third parties upon which we rely, process sensitive data and as a result, we and the third parties upon which we rely face a variety of evolving threats which could cause cybersecurity incidents.
+Added: Despite our implementation of security measures, our internal information technology systems and those of our CROs, clinical sites, and other contractors and consultants upon which we rely are vulnerable to cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware, including as a result of advanced persistent threat intrusions, and other attacks by computer hackers, cracking, application security attacks, social engineering, including through phishing attacks, supply chain attacks and vulnerabilities through our third-party service providers, denial-of-service attacks, such as credential stuffing, credential harvesting, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
+Added: Finally, developments in artificial intelligence and machine learning provide threat actors with the capability to use more sophisticated means to attack our systems and may exacerbate cybersecurity risk.
+Added: There can be no assurance that we will be successful in preventing cybersecurity incidents or successfully mitigating their effects.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel, such as through theft or misuse, sophisticated nation states, and nation-state-supported actors.
In particular, 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, loss of data, including sensitive customer information, loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds.
−Removed: To alleviate the negative 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.
−Removed: Some actors also 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: To alleviate the negative impact of a ransomware attack, it may be preferable to make payments to the threat actors, but we may be unwilling or unable to do so, including, for example, if applicable laws or regulations prohibit such payments.
+Added: Some threat actors also 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.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain and ability to produce, sell and distribute our goods and services.
−Removed: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
+Added: In addition to experiencing a cybersecurity incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
Furthermore, future or past business transactions, such as acquisitions or integrations, could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
−Removed: Additionally, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: Additionally, we may discover security vulnerabilities or risks that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
While we take steps to detect and remediate vulnerabilities, we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit such vulnerabilities change frequently and are often sophisticated in nature.
−Removed: Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred.
+Added: Therefore, such vulnerabilities could be exploited but may not be detected until after a cybersecurity incident has occurred, if at all.
Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
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Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: If our third-party service providers experience a cybersecurity incident or other interruption, we could experience adverse consequences.
While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains 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 information technology systems, including our services, or the third-party information technology systems that support us and our services.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely.
−Removed: A security incident or other interruption could disrupt our ability, and that of third parties upon whom we rely, to provide our products and services and conduct clinical trials.
+Added: Any of the previously identified or similar threats could cause a cybersecurity incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely.
+Added: A cybersecurity incident or other interruption could disrupt our ability, and that of third parties upon whom we rely, to provide our products and services and conduct clinical trials.
The costs related to significant security breaches or disruptions could be material and cause us to incur significant expenses.
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recover or reproduce the data or may limit our ability to effectively execute a product recall, if required in the future.
−Removed: To the extent that any disruption or security incident were to result in the loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of any product candidates could be delayed.
−Removed: Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
+Added: To the extent that any disruption or cybersecurity incident were to result in the loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of any product candidates could be delayed.
+Added: Applicable data privacy and security obligations may require us to notify relevant stakeholders, regulatory authorities and other individuals of cybersecurity incidents, and take other remedial measures.
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
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Our business, operations and clinical development timelines and plans are subject to risks arising from epidemic or pandemic diseases.
−Removed: COVID-19, which was recently declared no longer a public health emergency both globally and in the United States, presented substantial public health and economic challenges and affected our employees, patients, physicians and other healthcare providers, communities and business operations, as well as the U.S.
+Added: Our business, financial condition, and results of operations could be adversely affected by public health threats, including epidemics and pandemics, that disrupt our commercial operations, supply chains, clinical trials, and other essential activities.COVID-19, which is no longer considered a public health emergency both globally and in the United States, presented substantial public health and economic challenges and affected our employees, patients, physicians and other healthcare providers, communities and business operations, as well as the U.S.
and global economies and financial markets.
−Removed: International and U.S.
+Added: During the COVID-19 pandemic, international and U.S.
governmental authorities in impacted regions took multiple and diverse actions in an effort to slow the spread of COVID-19 and variants of the virus, including issuing varying forms of “stay-at-home” orders.
−Removed: To date we have not experienced material disruptions in our business operations due to COVID-19.
−Removed: Such measures taken by the governmental authorities to respond to any future epidemic or pandemic disease outbreaks could disrupt the supply chain and the manufacture or shipment of drug substances and finished drug products for furmonertinib for use in our clinical trials and research and nonclinical studies and, delay, limit or prevent our employees and CROs from continuing research and development activities, impede our clinical trial initiation and recruitment and the ability of patients to continue in clinical trials, including due to measures taken that may limit social interaction or prevent reopening of high-transmission settings, impede testing, monitoring, data collection and analysis and other related activities, any of which could delay our nonclinical studies and clinical trials and increase our development costs, and have a material adverse effect on our business, financial condition and results of operations.
−Removed: Any future epidemic or pandemic disease outbreak could also potentially further affect the business of the FDA, the European Medical Association (EMA) or other regulatory authorities, which could result in delays in meetings related to our planned clinical trials.
+Added: Such measures taken by the governmental authorities to respond to any future epidemic or pandemic disease outbreaks could disrupt the supply chain and the manufacture or shipment of drug substances and finished drug products for firmonertinib and our other product candidates for use in our clinical trials and research and nonclinical studies and, delay, limit or prevent our employees and CROs from continuing research and development activities, impede our clinical trial initiation and recruitment and the ability of patients to continue in clinical trials, including due to measures taken that may limit social interaction or prevent reopening of high-transmission settings, impede testing, monitoring, data collection and analysis and other related activities, any of which could delay our nonclinical studies and clinical trials and increase our development costs, and have a material adverse effect on our business, financial condition and results of operations.
+Added: Any future epidemic or pandemic disease outbreak could also potentially further affect the business of the FDA, the European Medicines Agency (EMA) or other comparable regulatory authorities, which could result in delays in meetings related to our planned clinical trials.
Any future epidemic disease outbreak may have an adverse impact on global economic conditions which could have an adverse effect on our business and financial condition, including impairing our ability to raise capital when needed.
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Our business could be affected by litigation, government investigations and enforcement actions.
−Removed: We currently operate in a number of jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States or foreign jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, employment and other claims
−Removed: and legal proceedings which may arise from conducting our business.
+Added: We currently operate in a number of jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States or foreign
+Added: jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, employment and other claims and legal proceedings which may arise from conducting our business.
Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, civil and criminal penalties, equitable remedies, including disgorgement, injunctive relief and/or other sanctions against us, and remediation of any such findings could have an adverse effect on our business operations.
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We may not be able to find suitable partners or acquisition candidates, and we may not be able to complete such transactions on favorable terms, if at all.
−Removed: Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
−Removed: Future acquisitions may also require us to obtain additional financing, which may not be available
−Removed: on favorable terms or at all.
+Added: Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity
+Added: securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
+Added: Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all.
These transactions may never be successful and may require significant time and attention of our management.
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Accordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions of the nature described above, any additional transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition and prospects.
−Removed: Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the recent initial public offering or other ownership changes.
+Added: Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection our initial public offering completed in January 2024 or other ownership changes.
We have incurred substantial losses during our history, do not expect to become profitable in the near future and may never achieve profitability.
To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, subject to limitations, until such unused losses expire, if at all.
−Removed: At December 31, 2023, we had net operating loss (NOL) carryforwards of $38.7 million for federal income tax purposes and $1.1 million for state income tax purposes.
+Added: At December 31, 2024, we had gross net operating loss (NOL) carryforwards of $67.4 million for federal income tax purposes and $58.8 million for state income tax purposes.
Our federal NOL carryforwards will not expire but may generally only be used to offset 80% of taxable income, which may require us to pay federal income taxes in future years despite generating federal NOL carryforwards in prior years.
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Furthermore, in general, under Section 382 of the U.S.
−Removed: Internal Revenue Code of 1986, as amended (the Code), our federal NOL carryforwards may be or become subject to an annual limitation in the event we have had or have in the future an “ownership change.” For these purposes, an “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
+Added: Internal Revenue Code of 1986, as amended (the Code), our federal and state NOL carryforwards and research and development tax credit carryforwards may be or become subject to an annual limitation in the event we have had or have in the future an “ownership change.” For these purposes, an “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
Similar rules may apply under state tax laws.
−Removed: We have not yet determined the amount of the cumulative change in our ownership resulting from our recently completed initial public offering or other transactions, or any resulting limitations on our ability to utilize our NOL carryforwards and other tax attributes.
−Removed: However, we believe that our ability to utilize our NOL carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes including changes related to our recently completed initial public offering.
+Added: We have not yet determined the amount of the cumulative change in our ownership resulting from our initial public offering completed in January 2024 or other transactions, or any resulting limitations on our ability to utilize our NOL carryforwards and other tax attributes.
+Added: However, we believe that our ability to utilize our NOL carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes including changes related to our initial public offering completed in January 2024.
If we earn taxable income, such limitations could result in increased future income tax liability to us and our future cash flows could be adversely affected.
−Removed: We have recorded a full valuation allowance related to our NOL carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
+Added: We have recorded a full valuation allowance related to our NOL and credit carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
New tax legislation may impact our results of operations and financial condition.
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The likelihood of these changes being enacted or implemented is unclear.
−Removed: We are currently unable to predict the ultimate impact of the Inflation Reduction Act or any such further changes on our business.
+Added: We are currently unable to predict the ultimate impact of the IRA or any such further changes on our business.
Inflation could adversely affect our business and results of operations.
While inflation in the United States has been relatively low in recent years, from 2021 to 2023, the economy in the United States encountered a material level of inflation.
−Removed: The impact of COVID-19, geopolitical developments such as the Russia-Ukraine and Middle East conflicts and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate.
−Removed: Increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial
−Removed: Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
+Added: Inflation and fluctuations in inflation rates have had in the past, and may in the future have, negative effects on economies and financial markets, particularly in emerging economies.
+Added: For example, increases in inflation raise our costs for commodities, labor, materials and services and other costs required
+Added: to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition.
+Added: Governmental efforts to curb inflation often have negative effects on the level of economic activity.
+Added: There can be no assurance that inflation will not become a serious problem in the future and have an adverse impact on the Company's returns.
+Added: The geopolitical developments such as the Russia-Ukraine and Middle East conflicts and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, as well as the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.
+Added: In light of the presidential transition in 2025, global trade disputes may be magnified, including the continuing trade dispute between the United States and China, pursuant to which both countries have, among other things, imposed tariffs on one another, has had an adverse economic effect on U.S.
+Added: markets and international trade more broadly.
+Added: This adverse economic effect is likely to become more pronounced if the dispute remains unresolved, which could have a material adverse impact on our financial condition, results of operations or cash flows.
Risks Related to Our Intellectual Property
−Removed: If we are unable to obtain and maintain, sufficient intellectual property protection for furmonertinib or future product candidates or technology, or if the scope of our intellectual property rights is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize furmonertinib or any future product candidates may be adversely affected.
+Added: If we are unable to obtain and maintain, sufficient intellectual property protection for firmonertinib, our other product candidates or future product candidates or technology, or if the scope of our intellectual property rights is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize firmonertinib or any other current or future product candidates may be adversely affected.
Our commercial success depends in large part on our ability to obtain, maintain, enforce, and defend patent rights, trademarks and our proprietary know-how of sufficient scope in the United States and other countries with respect to our product candidates and other proprietary technologies we may develop.
If we are unable to obtain, maintain or enforce our intellectual property rights of sufficient scope, our business, financial condition, results of operations and prospects could be materially harmed.
−Removed: We rely on patent rights in-licensed from Allist to protect furmonertinib.
+Added: We rely on patent rights in-licensed from Allist to protect firmonertinib, in-licensed from Lepu Biopharma to protect ARR-217 and in-licensed from Aarvik to protect ARR-002.
Changes in either the patent laws or their interpretation in the United States and other jurisdictions may diminish our or our licensor’s ability to protect our intellectual property, obtain, maintain and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our protection.
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Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, third-party collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our or our licensors’ ability to seek patent protection.
−Removed: Consequently, we may not be able to prevent any third party from using any of our technology that is in the public domain to compete with furmonertinib and any future product candidates or technologies.
+Added: Consequently, we may not be able to prevent any third party from using any of our technology that is in the public domain to compete with firmonertinib, other current product candidates, and any future product candidates or technologies.
In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable in light of the prior art.
Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
−Removed: Therefore, we cannot be certain that we or our licensors were the first to invent the inventions claimed in any of our licensed patents or pending patent applications, or that we or our licensors were the first to make the inventions claimed in those owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.
+Added: Therefore, we cannot be certain that we or our licensors were the first to invent the inventions
+Added: claimed in any of our licensed patents or pending patent applications, or that we or our licensors were the first to make the inventions claimed in those owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.
If a third party can establish that we or our licensors were not the first to make or the first to file for patent protection of such inventions, our owned or licensed patents and patent applications may not issue as patents and even if issued, may be challenged and invalidated or rendered unenforceable.
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Method of use patents protect the use of a product for the specified method.
−Removed: This type of patent does not prevent a competitor from making and marketing
−Removed: a product that is identical to our product for an indication that is outside the scope of the patented method.
+Added: This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.
Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.
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In the event we experience noncompliance events that cannot be corrected and we lose our patent rights, competitors could enter the market, which would have a material adverse effect on our business.
−Removed: Further, any issued patents that we license or may license or own covering our furmonertinib or any future product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or other countries, including the United States Patent and Trademark Office (USPTO).
+Added: Further, any issued patents that we license or may license or own covering our firmonertinib or any other current or future product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or other countries, including the United States Patent and Trademark Office (USPTO).
Also, patent terms, including any extensions or adjustments that may or may not be available to us, may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and we may be subject to claims challenging the inventorship, validity, or enforceability of our patents and/or other intellectual property.
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Our competitors or other third parties may avail themselves of safe harbors under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments) to conduct research and clinical trials.
−Removed: Consequently, we do not know whether furmonertinib or any of our future product candidates and other proprietary technology will be protectable or remain protected by valid and enforceable patents.
+Added: Consequently, we do not know whether firmonertinib or any of our other current or future product candidates and other proprietary technology will be protectable or remain protected by valid and enforceable patents.
Even if a patent is granted, our competitors or other third parties may be able to circumvent the patent by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects.
−Removed: In addition, given the amount of time required for the development, testing and regulatory review of our future product candidates, patents protecting the product candidates might expire before or shortly after such product candidates are commercialized.
+Added: In addition, given the amount of time required for the development, testing and regulatory review of our current and future product candidates, patents protecting the product candidates might expire before or shortly after such product candidates are commercialized.
As a result, our patents may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
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In addition, we may become involved in opposition, derivation, revocation, reexamination, reissue, post-grant and inter partes review or interference proceedings and other similar proceedings in foreign jurisdictions challenging the validity, priority or other features of patentability of our patent rights.
−Removed: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or
−Removed: invalidate or render unenforceable, our patent rights, allow third parties to commercialize our product candidates and other proprietary technologies we may develop and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize our products without infringing third-party patent rights.
+Added: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our product candidates and other proprietary technologies we may develop and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize our products without infringing third-party patent rights.
Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us.
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Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
−Removed: We depend heavily on intellectual property licensed from a third party, and our licensors may not always act in our best interest.
+Added: We depend heavily on intellectual property licensed from third parties, and our licensors may not always act in our best interest.
If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated or if disputes regarding these licenses arise, we could lose significant rights that are important to our business.
−Removed: We are a party to the Allist License Agreement under which we are granted rights to intellectual property that are critical to furmonertinib and our business and we may enter into additional license agreements in the future with other third parties.
−Removed: The Allist License Agreement imposes, and we expect that any future license agreements where we in-license intellectual property, will impose on us, various development, regulatory and/or commercial diligence obligations, payment of milestones and/or royalties and other obligations.
+Added: We are a party to the Allist License Agreement, the Amended and Restated Aarvik Collaboration Agreement and the Lepu Biopharma Agreement (collectively, License Agreements) under which we are granted rights to intellectual property that are critical to our product candidates and our business and we may enter into additional license agreements in the future with other third parties.
+Added: The License Agreements impose, and we expect that any future license agreements where we in-license intellectual property, will impose on us, various development, regulatory and/or commercial diligence obligations, payment of milestones and/or royalties and other obligations.
We may need to devote substantial time and attention to ensuring that we are compliant with our obligations under such agreements, which may divert management’s time and attention away from our research and development programs or other day-to-day activities.
If we fail to comply with our obligations under these agreements, or we are subject to bankruptcy-related proceedings, the licensor may have the right to terminate the license, in which event we would not be able to develop or market products covered by the license, or we may be subject to litigation for breach of these agreements.
−Removed: If we or our licensors fail to adequately prosecute, maintain and protect our licensed intellectual property, our ability to commercialize furmonertinib or any future product candidates could suffer.
+Added: If we or our licensors fail to adequately prosecute, maintain and protect our licensed intellectual property, our ability to commercialize our current or any future product candidates could suffer.
We do not have complete control over the maintenance, prosecution and litigation of our in-licensed patents and patent applications and may have limited control over future intellectual property that may be in-licensed.
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In addition, the agreements under which we license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
−Removed: The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant patents, know-how and proprietary technology, or increase what we believe to be our financial or other obligations under the relevant agreement.
+Added: The resolution of any
+Added: contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant patents, know-how and proprietary technology, or increase what we believe to be our financial or other obligations under the relevant agreement.
Disputes that may arise between us and our licensors regarding intellectual property subject to a license agreement could include disputes regarding:
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● our right to sublicense patent and other rights to third parties under collaborative development relationships;
−Removed: ● our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of furmonertinib or any future product candidates and what activities satisfy those diligence obligations;
+Added: ● our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our current or any future product candidates and what activities satisfy those diligence obligations;
● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.
−Removed: If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected technology or furmonertinib or any future product candidates.
−Removed: As a result, any termination of or disputes over our intellectual property licenses could result in the loss of our ability to develop and commercialize furmonertinib or any future product candidates, or we could lose other significant rights, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected technology or our current product candidates or any future product candidates.
+Added: As a result, any termination of or disputes over our intellectual property licenses could result in the loss of our ability to develop and commercialize our current product candidates or any future product candidates, or we could lose other significant rights, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We may not be able to protect our intellectual property and proprietary rights throughout the world.
−Removed: Filing, prosecuting, maintaining, enforcing and defending patents covering or relating to furmonertinib and any future product candidates in all countries throughout the world is expensive, and the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States.
+Added: Filing, prosecuting, maintaining, enforcing and defending patents covering or relating to our current product candidates and any future product candidates in all countries throughout the world is expensive, and the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States.
Prosecution of patent applications is often a longer process and patents may grant at a later date, and with a shorter term, than in the United States.
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In addition, many countries limit the enforceability of patents against government agencies or government contractors.
−Removed: In these countries, the patent owner may have limited remedies, which could materially diminish the value
−Removed: of such patent.
+Added: In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
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In some cases, a foreign filing license may be obtained retroactively in accordance with the applicable rules.
−Removed: There are situations, however, in which non-compliance can result in abandonment of a pending patent application or can be grounds for revoking or invalidating an issued patent, resulting in the loss of patent rights in the relevant jurisdiction.
+Added: There are situations, however, in which non-compliance can result in abandonment of a pending patent application or can be grounds for revoking or invalidating an issued patent, resulting in the loss of patent rights in the relevant
+Added: jurisdiction.
In such an event, potential competitors might be able to enter the relevant markets with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
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Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
−Removed: Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to
−Removed: invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.
+Added: Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.
After March 2013, under the Leahy-Smith America Invents Act (the America Invents Act) enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.
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This will require us to be cognizant going forward of the time from invention to filing of a patent application.
−Removed: Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to furmonertinib or any of our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our patents or patent applications.
+Added: Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our current product candidates or any of our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our patents or patent applications.
The America Invents Act also included a number of significant changes that affected the way patent applications are prosecuted and also affect patent litigation.
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The EU Patent Package was implemented on June 1, 2023.
−Removed: As a result, all European patents, including those issued prior to ratification of the European Patent Package, now by default automatically fall under the jurisdiction of the UPC.
+Added: As a result, all European patents, including those issued prior to ratification of the European Patent Package, now by default automatically fall under the
+Added: jurisdiction of the UPC.
The UPC provides third parties, including our competitors, with a new forum to seek to centrally revoke our European patents and to seek to obtain pan-European injunctions.
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Under the current EU Patent Package, we have the right to opt our patents out of the UPC for the first seven years of the UPC’s existence, but doing so may preclude us from realizing the benefits of this new unified court.
−Removed: Issued patents covering furmonertinib or our future product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.
+Added: Issued patents covering our current product candidates or our future product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.
Our patent rights may be subject to priority, validity, inventorship and enforceability disputes.
Legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming and likely to divert significant resources from our core business, including distracting our management and scientific personnel from their normal responsibilities and generally harm our business.
−Removed: If we or our licensors are unsuccessful in any of these proceedings, such patents and patent applications may be narrowed, invalidated or held unenforceable, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms or at all, or we may be required to cease the development, manufacture and commercialization of furmonertinib or future product candidates.
+Added: If we or our licensors are unsuccessful in any of these proceedings, such patents and patent applications may be narrowed, invalidated or held unenforceable, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms or at all, or we may be required to cease the development, manufacture and commercialization of our current product candidates or future product candidates.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: If we or our licensors initiate legal proceedings against a third party to enforce a patent covering furmonertinib or any of our future product candidates, the defendant could counterclaim that such patent is invalid or unenforceable.
+Added: If we or our licensors initiate legal proceedings against a third party to enforce a patent covering our current product candidates or any of our future product candidates, the defendant could counterclaim that such patent is invalid or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
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With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we or our licensing partners and the patent examiner were unaware during prosecution.
−Removed: If a third party 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 furmonertinib and any future product candidates.
+Added: If a third party 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 current product candidates and any future product candidates.
Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.
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● whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose;
−Removed: ● whether the patent applications that we own, or in-license will result in issued patents with claims that cover furmonertinib or any of our future product candidates or uses thereof in the United States or in other foreign countries.
−Removed: The claims in our pending patent applications directed to furmonertinib and any of our future product candidates and/or technologies may not be considered patentable by the USPTO or by patent offices in foreign countries.
+Added: ● whether the patent applications that we own, or in-license will result in issued patents with claims that cover our current product candidates or any of our future product candidates or uses thereof in the United States or in other foreign countries.
+Added: The claims in our pending patent applications directed to our current product candidates and any of our future product candidates and/or technologies may not be considered patentable by the USPTO or by patent offices in foreign countries.
Any such patent applications may not issue as granted patents.
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If we do not obtain patent term extension in the United States and equivalent extensions outside of the United States for our product candidates, our business may be materially harmed.
−Removed: Depending upon the timing, duration and specifics of any FDA marketing approval of furmonertinib or any future product candidate we may develop, one or more of our in-licensed issued U.S.
+Added: Depending upon the timing, duration and specifics of any FDA marketing approval of our current product candidates or future product candidate we may develop, one or more of our in-licensed issued U.S.
patents or issued U.S.
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In addition, to the extent we wish to pursue patent term extension based on a patent that we in-license from a third-party, we may need the cooperation of that third party.
−Removed: If we are unable to obtain patent term extension, or the foreign equivalent, or if the term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and prospects could be materially harmed.
+Added: If we are unable to obtain patent term extension, or the foreign equivalent, or if the term of any such extension is less than we request, our
+Added: competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and prospects could be materially harmed.
We may be subject to claims challenging the inventorship of our patents and other intellectual property.
We or our licensors may be subject to claims that former employees, consultants, collaborators or other third parties have an interest in our patent rights, any potential trade secrets, or other intellectual property as an inventor, co-inventor or owner of any potential trade secrets.
−Removed: For example, we may have inventorship disputes arise from conflicting
−Removed: obligations of consultants or others who are involved in developing our product candidates and other proprietary technologies we may develop.
+Added: For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates and other proprietary technologies we may develop.
Litigation may be necessary to defend against these and other claims challenging inventorship or our patent rights, any potential trade secrets or other intellectual property.
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Our commercial success depends in part on our ability to avoid infringing, misappropriating and otherwise violating the patents and other intellectual property rights of third parties.
−Removed: There is a substantial amount of complex litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation and reexamination proceedings
−Removed: before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
+Added: There is a substantial amount of complex litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical products and techniques without payment, or limit the duration of the patent protection of our technology.
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Numerous U.S.
−Removed: and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we are commercializing or plan to commercialize furmonertinib.
−Removed: As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that furmonertinib or any future product candidates, and commercializing activities may give rise to claims of infringement of the patent rights of others.
−Removed: We cannot assure you that furmonertinib or any future product candidates will not infringe existing or future patents owned by third parties.
−Removed: We may not be aware of patents that have already been issued for which a third party, such as a competitor in the fields in which we are developing furmonertinib or our future product candidates, might accuse us of infringing.
+Added: and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we plan to commercialize our current product candidates .
+Added: As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our current product candidates or any future product candidates, and commercializing activities may give rise to claims of infringement of the patent rights of others.
+Added: We cannot assure you that our current product candidates or any future product candidates will not infringe existing or future patents owned by third parties.
+Added: We may not be aware of patents that have already been issued for which a third party, such as a competitor in the fields in which we are developing our current product candidates or our future product candidates, might accuse us of infringing.
It is also possible that patents owned by third parties of which we are aware, but which we do not believe we infringe or that we believe we have valid defenses to any claims of patent infringement, could be found to be infringed by us.
−Removed: It is not unusual that corresponding patents issued in different countries have different scopes of coverage, such that in one country a third-party patent does not pose a material risk, but in another country, the corresponding third-party patent may pose a material risk to furmonertinib and any future product candidates.
+Added: It is not unusual that corresponding patents issued in different countries have different scopes of coverage, such that in one country a third-party patent does not pose a material risk, but in another country, the corresponding third-party patent may pose a material risk to our current product candidates and any future product candidates.
As such, we monitor third-party patents in the relevant pharmaceutical markets.
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We may not have sufficient financial or other resources to conduct such proceedings adequately.
−Removed: Some of our competitors may be able to sustain the costs of litigation or administrative proceedings more effectively than we can because of greater financial resources.
+Added: Some of our competitors may be able to sustain the
+Added: costs of litigation or administrative proceedings more effectively than we can because of greater financial resources.
Such proceedings may also absorb significant time of our technical and management personnel and distract them from their normal responsibilities.
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Opposition or cancellation proceedings may be filed against our trademarks, which may not survive such proceedings.
−Removed: Moreover, any name we may propose to use with furmonertinib or any future product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.
+Added: Moreover, any name we may propose to use with our current product candidates or any future product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.
Similar requirements exist in Europe.
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If the FDA or an equivalent administrative body in a foreign jurisdiction objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe, misappropriate or otherwise violate the existing rights of third parties and be acceptable to the FDA.
−Removed: Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
+Added: Furthermore, in many countries, owning and maintaining a trademark registration
+Added: may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
We may not be able to obtain, protect or enforce our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.
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In addition, there could be potential trade name or trademark infringement, misappropriation, dilution or other claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.
−Removed: Over the long term, if we are unable
−Removed: to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.
+Added: Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.
Our efforts to obtain, enforce or protect our proprietary rights related to trademarks, trade names, domain name or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.
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The growth of our business may depend in part on our ability to acquire, in-license or use third-party intellectual property and proprietary rights.
−Removed: For example, furmonertinib or any future product candidates may require specific formulations to work effectively and efficiently, we may develop product candidates containing our compounds and pre-existing pharmaceutical compounds, or we may be required by the FDA or comparable foreign regulatory authorities to provide a companion diagnostic test or tests with our product candidates, any of which could require us to obtain rights to use intellectual property held by third parties.
+Added: For example, our current product candidates or any future product candidates may require specific formulations to work effectively and efficiently, we may develop product candidates containing our compounds and pre-existing pharmaceutical compounds, or we may be required by the FDA or comparable foreign regulatory authorities to provide a companion diagnostic test or tests with our product candidates, any of which could require us to obtain rights to use intellectual property held by third parties.
In addition, with respect to any patent or other intellectual property rights we may co-own with third parties, we may require licenses to such co-owners’ interest to such patents.
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If we are unable to do so, the institution may offer the intellectual property rights to others, potentially blocking our ability to pursue our program.
−Removed: The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies that may be more established or have greater resources than we do may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize furmonertinib or any future product candidates.
+Added: The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies that may be more established or have greater resources than we do may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our current product candidates or any future product candidates.
More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.
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Our current or future licensors may retain certain rights under their agreements with us, including the right to use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and scholarly disclosures of information relating to the technology.
−Removed: For example, pursuant to the Allist License Agreement, Allist retains its rights for any and all purposes in certain retained territories regarding its patent rights, improvements and know-how related to any product containing furmonertinib or any of its derivatives as an active ingredient, including to research, develop, make, have made, use, sell, have sold, offer for sale, import, export and license products and processes in such retained territory.
−Removed: It is difficult to
−Removed: monitor whether our licensors will limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
+Added: For example, pursuant to the Allist License Agreement, Allist retains its rights for any and all purposes in certain retained territories regarding its patent rights, improvements and know-how related to any product containing firmonertinib or any of its derivatives as an active ingredient, including to research, develop, make, have made, use, sell, have sold, offer for sale, import, export and license products and processes in such retained territory.
+Added: The the Lepu Biopharma Agreement contain similar provisions in which Lepu Biopharma retains certain rights in the retained territory.
+Added: It is difficult to monitor whether our licensors will limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
Government agencies may provide funding, facilities, personnel or other assistance in connection with the development of the intellectual property rights owned by or licensed to us.
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The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.
−Removed: ● others may be able to make products that are similar to furmonertinib or any future product candidates or utilize similar technology but that are not covered by the claims of the patents that we license or may own;
+Added: ● others may be able to make products that are similar to our current product candidates or any future product candidates or utilize similar technology but that are not covered by the claims of the patents that we license or may own;
● we or our licensors might not have been the first to make the inventions covered by our or our licensors’ current or future patent applications;
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Our reliance on third parties requires us to share potential trade secrets, which increases the possibility that a competitor or other third party will discover them or that potential trade secrets will be misappropriated or disclosed.
−Removed: Because we currently rely on a third party to manufacture furmonertinib and to perform quality testing, we must, at times, share our proprietary technology and confidential information, including potential trade secrets, with them.
+Added: Because we currently rely on, or expect to rely on, a third parties to manufacture our current product candidates and to perform quality testing, we must, at times, share our proprietary technology and confidential information, including potential trade secrets, with them.
We seek to protect our proprietary technology, in part, by entering into confidentiality agreements, and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information.
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In addition to seeking patent protection for our product candidates and proprietary technologies, we may also rely on trade secret protection and confidentiality agreements to protect our unpatented know-how, technology, and other proprietary information and to maintain our competitive position.
−Removed: We seek to protect any potential trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, third-party collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
+Added: We seek to protect any potential trade secrets and
+Added: other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, third-party collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
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We cannot guarantee that we have entered into applicable agreements with each party that may have or have had access to any potential trade secrets or proprietary technology and processes.
−Removed: Despite these efforts, any of these parties may breach the agreements and disclose our proprietary
−Removed: information, including any potential trade secrets, and we may not be able to obtain adequate remedies for such breaches.
+Added: Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including any potential trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.
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Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.
−Removed: In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with the listing requirements of Nasdaq.
+Added: In the event of a delisting, we can provide no assurance that any action taken by
+Added: us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with the listing requirements of Nasdaq.
The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses.
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● our ability to enroll subjects in our future clinical trials;
−Removed: ● our ability to obtain and maintain regulatory approval of furmonertinib or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process;
+Added: ● our ability to obtain and maintain regulatory approval of our current product candidates or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process;
● regulatory or legal developments in the United States and foreign countries, particularly in China;
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● an inability to obtain additional funding or obtaining funding on unattractive terms;
−Removed: ● sales of our stock by us, our insiders or our stockholders, as well as the anticipation of lock-up releases;
+Added: ● sales of our stock by us, our insiders or our stockholders,;
● general economic, industry and market conditions other events or factors, many of which are beyond our control;
● actual or anticipated fluctuations in our financial condition and results of operations;
−Removed: ● publication of news releases by Allist, other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls;
+Added: ● publication of news releases by our partners, including Allist, other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls;
● announcement or progression of geopolitical events, including in relation to the conflicts in the Middle East and between Russia and Ukraine;
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Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to significantly influence all matters submitted to stockholders for approval and may prevent new investors from influencing significant corporate decisions.
−Removed: As of March 22, 2024, our executive officers, directors and greater than 5% stockholders, in the aggregate, own a substantial portion of our outstanding common stock.
+Added: As of February 28, 2025, our executive officers, directors and greater than 5% stockholders, in the aggregate, own a substantial portion of our outstanding common stock.
As a result, such persons, acting together, have the ability to significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transactions, as well as our management and business affairs, which may prevent new investors from influencing some or all of the foregoing.
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Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity or equity-linked securities.
−Removed: In connection with our initial public offering, our directors and executive officers and holders of substantially all of our outstanding securities have entered into lock-up agreements with the underwriters pursuant to which they may not, with limited exceptions, for a period of 180 days from the date of our initial public offering, offer, sell or otherwise transfer or dispose of any of our securities, without the prior written consent of Goldman Sachs & Co.
−Removed: LLC, Jefferies LLC and Citigroup Global Markets Inc.
−Removed: Such underwriters may permit our officers, directors and other securityholders who are subject to the lock-up agreements to sell shares prior to the expiration of the lock-up agreements at any time in their sole discretion.
−Removed: Sales of these shares, or perceptions that they will be sold, could cause the trading price of our common stock to decline.
−Removed: After the lock-up agreements expire, these shares of common stock will be eligible for sale in the public market, except that shares held by directors, executive officers and other affiliates will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended (the Securities Act).
−Removed: In addition, as of December 31, 2023, 1,683,156 shares of common stock that are subject to outstanding options under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act.
+Added: In addition, as of December 31, 2024, we had 2,531,144 shares of common stock that are subject to outstanding options under our employee benefit plans.
+Added: All of the shares of common stock issuable upon the exercise of stock options and the shares reserved for future issuance under our employee benefit plans have been registered on a registration statement on Form S-8 under the Securities Act.
+Added: Accordingly, these shares can be freely sold in the public market upon issuance, subject to volume limitations under Rule 144 for our executive officers and directors and applicable vesting requirements.
If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
−Removed: The holders of 19,567,306 shares of our outstanding common stock, or approximately 58.4% of our total outstanding common stock based on shares outstanding as of December 31, 2023, are entitled to rights with respect to the registration of their shares under the Securities Act, subject to the 180-day lock-up agreements entered into in connection with our initial public offering.
−Removed: Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act.
−Removed: Any sales of securities by these stockholders, or the registration of such shares, could have a material adverse effect on the trading price of our common stock.
We are an emerging growth company and a smaller reporting company, and the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
−Removed: We are an emerging growth company, as defined in the JOBS Act, and may remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the closing of our recently completed initial public offering.
+Added: We are an emerging growth company, as defined in the JOBS Act, and may remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the closing of our initial public offering completed in January 2024.
However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer”, as defined under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
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We have taken advantage of reduced reporting burdens in this Annual Report.
−Removed: In particular, in this Annual Report, we have provided only two years of audited financial statements and have not included all of the executive compensation
−Removed: related information that would be required if we were not an emerging growth company.
+Added: In particular, in this Annual Report, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company.
We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.
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These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer or proxy contest involving our company.
−Removed: These provisions could also discourage proxy contests and make it more difficult for you and other
−Removed: stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.
+Added: These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.
Any delay or prevention of a change in control transaction or changes in our board of directors could cause the market price of our common stock to decline.
Our amended and restated certificate of incorporation designates certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
−Removed: Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers, employees or agents to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or bylaws (in each case, as they may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or bylaws, (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware, or (vi) any action asserting a claim against us or any of our directors, officers or employees that is governed by the internal affairs doctrine;
+Added: Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of
+Added: fiduciary duty owed by any of our current or former directors, officers, employees or agents to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or bylaws (in each case, as they may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or bylaws, (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware, or (vi) any action asserting a claim against us or any of our directors, officers or employees that is governed by the internal affairs doctrine;
provided, however, that this exclusive forum provision does not apply to any action arising under the Exchange Act.
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We are subject to certain reporting requirements of the Exchange Act.
−Removed: Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within
−Removed: the time periods specified in the rules and even if we are successful in remediating our material weaknesses, any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
+Added: Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake.
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The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
−Removed: We have identified material weaknesses in our internal control over financial reporting related to our control environment.
−Removed: If we do not remediate the material weaknesses in our internal control over financial reporting, or if we fail to establish and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our stock.
−Removed: Pursuant to Section 404 of the Sarbanes-Oxley Act, our management will be required to report on the effectiveness of our internal control over financial reporting beginning with the annual report for our fiscal year ending December 31, 2024.
+Added: If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our stock.
+Added: Pursuant to Section 404 of the Sarbanes-Oxley Act, our management is required to report on the effectiveness of our internal control over financial reporting.
When we lose our status as an “emerging growth company” and do not otherwise qualify as a “smaller reporting company” with less than $100.0 million in annual revenue, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.
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and hire additional accounting and finance staff.
−Removed: If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective,
−Removed: investors may lose confidence in our financial reporting and the trading price of our common stock may decline.
+Added: If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.
The identification of material weaknesses could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
The PCAOB has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”
−Removed: We determined that we had material weaknesses relating to our control environment, risk assessment and control activities.
−Removed: Specifically, we had insufficient accounting resources which resulted in the following ineffective risk assessment activities:
−Removed: (a) We did not effectively design and implement controls related to the review and approval of manual journal entries.
−Removed: (b) We had ineffectively designed process-level controls associated with accounting for certain non-routine transactions.
−Removed: We are in the process of implementing our remediation plans with respect to the material weaknesses.
−Removed: We have increased the number of resources (internal and third-party) dedicated to our accounting and finance team, including personnel with additional knowledge, experience, and training, to ensure we have adequate staff, to segregate key duties, and to comply with company policies and procedures.
−Removed: We also plan to engage a third-party provider to help us assess and improve our internal controls in preparation for compliance with the Sarbanes-Oxley Act.
−Removed: Additionally, we are in the process of developing written policies and implementing process level and management review controls for our manual journal entries.
−Removed: However, we cannot assure you that we will be successful in remediating the material weaknesses we identified or that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
−Removed: We cannot assure you that management will be successful in identifying and retaining appropriate personnel;
−Removed: that newly engaged staff or outside consultants will be successful in identifying material weaknesses in the future;
−Removed: or that appropriate personnel will be identified and retained prior to these deficiencies resulting in material and adverse effects on our business.
−Removed: Any failure to remediate the material weaknesses we identified or develop or to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
−Removed: If we are unable to remediate the material weaknesses we identified or to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
−Removed: Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
+Added: Although we determined that our internal controls over financing reporting were effective as of December 31, 2024, we may in the future identify internal control deficiencies that could rise to the level of a material weakness or uncover other errors in financial reporting.
+Added: During the course of our evaluation of these material weaknesses, we may identify areas requiring improvement and may be required to design additional enhanced processes and controls to address issues identified through this review.
+Added: There can be no assurance that such remediation efforts will be successful, that our
+Added: internal control over financial reporting will be effective as a result of these efforts or that any such future deficiencies identified may not be material weaknesses that would be required to be reported in future periods.
+Added: In addition, we cannot assure you that our independent registered public accounting firm will be able to attest that such internal controls are effective when they are required to do so.
+Added: If we fail to maintain effective disclosure controls and procedures or internal control over financial reporting or remediate any future material weaknesses, you may not be able to rely on the integrity of our financial results, which could result in inaccurate or late reporting of our financial results, as well as delays or the inability to meet our reporting obligations or to comply with the rules and regulations of the Securities and Exchange Commission.
+Added: Any of these events could result in delisting actions by the Nasdaq Stock Market, investigation and sanctions by regulatory authorities, and stockholder investigations and lawsuits, in addition to adversely affecting our business and the trading price of our common stock.
We are subject to U.S.
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Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
+Added: In February 2025, President Trump issued an executive order directing the DOJ to pause enforcement of the FCPA and to issue new enforcement guidelines that take into consideration U.S.
+Added: national security and the competitiveness of U.S.
+Added: companies abroad.
+Added: It is unclear how this presidential directive may affect the biopharmaceutical industry as a whole or our business in particular.
Furthermore, U.S.
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Federal, state and local laws and regulations govern the use, generation, manufacture, storage, handling and disposal of these materials and wastes.
−Removed: Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our product development efforts.
+Added: Compliance with applicable
+Added: environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our product development efforts.
In addition, our third-party manufacturers and suppliers cannot eliminate the risk of accidental injury or contamination from these materials or wastes.
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Our operations and the operations of our suppliers, CROs, CMOs and clinical sites could be subject to earthquakes, power shortages, telecommunications or infrastructure failures, cybersecurity incidents, physical security breaches, water shortages, floods, hurricanes, typhoons, blizzards and other extreme weather conditions, fires, public health pandemics or epidemics and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured.
−Removed: We rely on third-party manufacturers or suppliers to produce furmonertinib and its components and on CROs and clinical sites to conduct our clinical trials, and do not have a redundant source of supply for all components of our
−Removed: product candidate.
−Removed: Our ability to obtain clinical or, if approved, commercial, supplies of furmonertinib or any future product candidates could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption, and our ability to commence, conduct or complete our clinical trials in a timely manner could be similarly adversely affected by any of the foregoing.
+Added: We rely on, or expect to rely on, third-party manufacturers or suppliers to produce our current product candidates and its components and on CROs and clinical sites to conduct our clinical trials, and do not have a redundant source of supply for all components of our product candidate.
+Added: Our ability to obtain clinical or, if approved, commercial, supplies of our current product candidates or any future product candidates could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption, and our ability to commence, conduct or complete our clinical trials in a timely manner could be similarly adversely affected by any of the foregoing.
The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
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If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
−Removed: Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us 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, or on less favorable terms than we would otherwise choose.
+Added: Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay, limit, reduce, or terminate our product development
+Added: 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, or on less favorable terms than we would otherwise choose.
In addition, one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our clinical development goals on schedule and on budget.
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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.