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If any of the following risks and uncertainties actually occurs, our business, prospects, financial condition and results of operations could be materially and adversely affected.
−Removed: The risks described below are not intended to be exhaustive and are not the only risks that we face.
−Removed: New risk factors can emerge from time to time, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations.
−Removed: Risks related to our financial position and capital requirements
−Removed: Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
−Removed: We are a biotechnology company with a limited operating history.
−Removed: We commenced operations in December 2014, and our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, undertaking preclinical studies and establishing arrangements with third parties for the manufacture of initial quantities of our product candidates and component materials.
−Removed: Most of our product candidates are still in preclinical development.
−Removed: We have not yet demonstrated our ability to successfully conduct or complete any clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization.
−Removed: Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
−Removed: In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.
−Removed: We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities.
−Removed: We may not be successful in such a transition.
−Removed: We have incurred significant losses since inception, and we expect to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future.
−Removed: Investment in biopharmaceutical product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.
−Removed: We are still in the early stages of development of our product candidates.
−Removed: We have begun enrollment and dosing of patients in the Phase 1 portion of our MasterKey-01 trial to pursue a tumor-agnostic development strategy.
−Removed: We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations.
−Removed: We have financed our operations primarily through private placements of our preferred stock.
−Removed: We have incurred significant net losses in each period since we commenced operations in December 2014.
−Removed: For the years ended December 31, 2019 and 2018, we reported net losses of $35.3 million and $8.9 million, respectively.
−Removed: As of December 31, 2019, we had an accumulated deficit of $51.0 million.
−Removed: We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:
−Removed: • continue our research and development efforts and submit INDs for our lead product candidates;
−Removed: • conduct preclinical studies and clinical trials for our current and future product candidates based on our Mutation—Allostery—Pharmacology, or MAP, platform;
−Removed: • seek marketing approvals for any product candidates that successfully complete clinical trials;
−Removed: • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges;
−Removed: • establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities, whether alone or with third parties, to commercialize any product candidates for which we may obtain regulatory approval, if any;
−Removed: • obtain, expand, maintain, enforce and protect our intellectual property portfolio;
−Removed: • hire additional clinical, regulatory and scientific personnel;
−Removed: • operate as a public company.
−Removed: Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses we will incur or when, if ever, we will be able to achieve profitability.
−Removed: Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop, seek regulatory approval for and market additional product candidates.
−Removed: We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
−Removed: The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue.
−Removed: Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
−Removed: We have not generated any revenue from our product candidates and may never be profitable.
−Removed: Our ability to become profitable depends upon our ability to generate revenue.
−Removed: To date, we have not generated any revenue from any of our product candidates.
−Removed: We do not expect to generate significant revenue unless or until we successfully complete clinical development and obtain regulatory approval of, and then successfully commercialize, at least one of our product candidates.
−Removed: Most of our product candidates are in the preclinical stages of development and will require additional preclinical studies, clinical development, regulatory review and approval, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales.
−Removed: BDTX-189, our most advanced product candidate targeting ErbB family receptors.
−Removed: We have begun enrollment and dosing of patients in the Phase 1 portion of our MasterKey-01 trial to pursue a tumor-agnostic development strategy.
−Removed: Our other product candidates are in various stages of preclinical development.
−Removed: We face significant translational risk as our product candidates in preclinical development advance to the clinical stage, as promising results in preclinical studies may not be replicated in subsequent clinical trials, and testing on animals may not accurately predict human experience.
−Removed: Our ability to generate revenue depends on a number of factors, including, but not limited to:
−Removed: • timely completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;
−Removed: • our ability to complete IND-enabling studies and successfully submit INDs or comparable applications;
−Removed: • whether we are required by the U.S.
−Removed: Food and Drug Administration, or the FDA, or similar foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;
−Removed: • our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, potency, purity, efficacy and acceptable risk to benefit profile of our product candidates or any future product candidates and such regulatory authorities’ acceptance of our tumor-agnostic development strategy (i.e., our pursuit of approval based on a biomarker rather than a specific cancer indication);
−Removed: • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future product candidates, if any;
−Removed: • the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
−Removed: • the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or future product candidates over alternative or more conventional therapies, such as chemotherapy, to treat solid tumors;
−Removed: • the actual and perceived availability, cost, risk profile and side effects and efficacy of our product candidates, if approved, relative to existing and future alternative cancer therapies and competitive product candidates and technologies;
−Removed: • our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory authorities and develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP;
−Removed: • our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others;
−Removed: • patient demand for our product candidates and any future product candidates, if approved;
−Removed: • our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates.
−Removed: Many of the factors listed above are beyond our control and could cause us to experience significant delays or prevent us from obtaining regulatory approvals or commercializing our product candidates.
−Removed: Even if we are able to commercialize our product candidates, we may not achieve profitability soon after generating product sales, if ever.
−Removed: If we are unable to generate sufficient revenue through the sale of our product candidates or any future product candidates, we may be unable to continue operations without continued funding.
−Removed: We will need substantial additional funding.
−Removed: If we are unable to raise capital when needed, we would be compelled to delay, reduce or eliminate our product development programs or commercialization efforts.
−Removed: We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical development activities to identify new product candidates and initiate clinical trials of, and seek marketing approval for, our product candidates.
−Removed: In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
−Removed: Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
−Removed: However, we have estimated our current additional funding needs based on assumptions that may prove to be wrong.
−Removed: Additionally, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.
−Removed: We cannot be certain that additional funding will be available on acceptable terms, or at all.
−Removed: Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of public or private equity offerings, debt financings, governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties.
−Removed: If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our discovery and preclinical development programs or any future commercialization efforts.
−Removed: We had cash and cash equivalents of $154.7 million as of December 31, 2019.
−Removed: Our net proceeds from our initial public offering were $212.4 million, based the initial public offering price of $19.00 per share, after deducting underwriting discounts and commissions and offering expenses payable by us.
−Removed: We believe that, based upon our current operating plan, our existing capital resources, including net proceeds from our initial public offering will be sufficient to fund our anticipated operations into 2023, including the Phase 1/2 development of BDTX-189, the identification of a lead product candidate and IND-enabling studies in our glioblastoma program, with additional resources for continued development of our MAP platform.
−Removed: Our future capital requirements will depend on many factors, including:
−Removed: • the scope, progress, results and costs of discovery, preclinical development and clinical trials for our product candidates;
−Removed: • the extent to which we enter into collaboration arrangements with regard to product discovery or acquire or in-license products or technologies;
−Removed: • our ability to establish discovery collaborations on favorable terms, if at all;
−Removed: • the costs, timing and outcome of regulatory review of our product candidates;
−Removed: • the costs of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
−Removed: • revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;
−Removed: • the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, enforcing and protecting our intellectual property rights and defending intellectual property-related claims.
−Removed: Identifying potential product candidates and conducting preclinical testing and clinical trials 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 marketing approval and achieve product sales.
−Removed: In addition, our product candidates, if approved, may not achieve commercial success.
−Removed: Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all.
−Removed: Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
−Removed: Adequate additional financing may not be available to us on acceptable terms, or at all.
+Added: The risks and uncertainties summarized and described below are not intended to be exhaustive and are not the only ones we face.
+Added: Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business, prospects, financial condition and results of operations.
+Added: Certain statements in this Annual Report are forward-looking statements.
+Added: Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”
Risks related to the development of our product candidates
−Removed: Our discovery and preclinical development is focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is novel and may never lead to marketable products.
−Removed: The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new.
−Removed: The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited.
−Removed: Although we believe, based on our preclinical work, that the mutations targeted by our programs are oncogenic drivers, clinical results may not confirm this hypothesis or may only confirm it for certain mutations or certain tumor types.
−Removed: The patient populations for our product candidates are limited to those with specific target mutations and may not be completely defined but are substantially smaller than the general treated cancer population, and we will need to screen and identify these patients with the targeted mutations.
−Removed: Successful identification of patients is dependent on several factors, including achieving certainty as to how specific genetic alterations respond to our product candidates and developing companion diagnostics to identify such genetic alterations.
−Removed: Furthermore, even if we are successful in identifying patients, we cannot be certain that the resulting patient populations for each mutation will be large enough to allow us to successfully obtain approval for each mutation type and commercialize our products and achieve profitability.
−Removed: In addition, even if our approach is successful in showing clinical benefit for tumors harboring the targeted mutations affecting the ErbB proteins EGFR and HER2, we may never successfully identify additional oncogenic mutations for other receptor tyrosine kinases.
−Removed: Therefore, we do not know if our approach of treating patients with genetically defined cancers will be successful, and if our approach is unsuccessful, our business will suffer.
−Removed: In addition, we are pursuing a tumor-agnostic development strategy (i.e., pursuing approval based on a biomarker rather than a specific cancer indication).
−Removed: There is currently a limited number of approved tumor-agnostic therapies.
−Removed: We may not receive approval for a tumor-agnostic indication or may be delayed in receiving tumor-agnostic approval.
+Added: Risks related to clinical development
We are very early in our development efforts and are substantially dependent on our lead product candidate, BDTX-189.
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• maintaining a continued acceptable safety profile of our products following approval;
+Added: • factors we may not be able to control, such as current or potential pandemics that may limit patients, principal investigators or staff or clinical site availability (e.g.
+Added: the COVID-19 pandemic).
There is no guarantee that the results obtained in current preclinical studies or our open-label Phase 1/2 clinical trial of BDTX-189 will be sufficient to obtain regulatory approval or marketing authorization for such product candidate.
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Moreover, anti-tumor activity may be different in each of the different tumor types we plan on evaluating in the clinical trial.
−Removed: Therefore, even though we plan on pursuing tumor
−Removed: agnostic clinical development of BDTX-189, the tumor response may be low in patients with some cancers compared to others.
+Added: Therefore, even though we plan on pursuing tumor-agnostic clinical development of BDTX-189, the tumor response may be low in patients with some cancers compared to others.
This may result in discontinuation of development of BDTX-189 for patients with these tumor types and/or mutations due to insufficient clinical benefit while continuing development for a more limited population of patients more likely to benefit.
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In addition, because we have limited financial and personnel resources and are placing significant focus on the development of our lead product candidate, we may forgo or delay pursuit of opportunities with other future product candidates that later prove to have greater commercial potential.
−Removed: Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
+Added: Our resource allocation decisions may cause us to
+Added: fail to capitalize on viable commercial products or profitable market opportunities.
Our spending on current and future research and development programs and other future product candidates for specific indications may not yield any commercially viable future product candidates.
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The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.
−Removed: Although product candidates may demonstrate promising results in preclinical studies and
−Removed: early clinical trials, they may not prove to be effective in subsequent clinical trials.
+Added: Although product candidates may demonstrate promising results in preclinical studies and early clinical trials, they may not prove to be effective in subsequent clinical trials.
For example, testing on animals occurs under different conditions than testing in humans and therefore, the results of animal studies may not accurately predict human experience.
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Any delay or failure by us or third- party collaborators to develop or obtain regulatory approval of a companion diagnostic could delay or prevent approval of our related product candidates.
−Removed: Since the number of patients that we plan to dose in our open-label Phase 1/2 clinical trial of BDTX-189 is small, the results from such clinical trial, once completed, may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.
−Removed: In our open-label Phase 1/2 clinical trial of BDTX-189, we are evaluating the safety profile of BDTX-189 and establish the recommended Phase 2 dose in patients with bladder cancer, endometrial cancer, breast cancer, gastric cancer, colon cancer and non-small cell lung cancer, or NSCLC, and other solid tumors.
+Added: Since the number of patients that we plan to dose in our open-label Phase 1/2 clinical trial of BDTX-189 is small, the results from such a clinical trial, once completed, may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.
+Added: In our open-label Phase 1/2 clinical trial of BDTX-189, we are evaluating the safety profile of BDTX-189 and establishing the recommended Phase 2 dose in patients with bladder cancer, endometrial cancer, breast cancer, gastric cancer, colon cancer and non-small cell lung cancer, or NSCLC, and other solid tumors.
The Phase 1 portion of the trial is expected to enroll up to 100 patients with solid tumors that have alterations likely to be associated with anti-tumor activity based on preclinical studies as well as some patients with the targeted genetic mutations and is designed to establish the recommended dose for the Phase 2 portion of the trial.
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We believe that any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidates and could substantially increase the costs of commercializing our product candidates, if approved, and significantly impact our ability to successfully commercialize our product candidates and generate revenues.
−Removed: Business or economic disruptions or global health concerns could seriously harm our development efforts and increase our costs and expenses.
−Removed: Broad-based business or economic disruptions could adversely affect our ongoing or planned research and development activities.
−Removed: For example, in December 2019 an outbreak of a novel strain of coronavirus originated in Wuhan, China, and has since spread to other regions, including the United States and Europe.
−Removed: Global health concerns, such as coronavirus, could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.
−Removed: We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the suppliers, clinical trial sites, service providers, regulators and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted.
−Removed: It is also possible that global health concerns such as this one could disproportionately impact our target patient populations as well as the hospitals and clinical sites in which we conduct any of our clinical trials, which could lead to delays in completing enrollment of our clinical trials and could have a material adverse effect on our business and our results of operation and financial condition.
Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future clinical trial results.
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Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates.
−Removed: Our pre-clinical studies and future clinical trials may not be successful.
+Added: Our preclinical studies and future clinical trials may not be successful.
We cannot be certain that our preclinical study and clinical trial results will be sufficient to support regulatory approval of our product candidates.
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In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
−Removed: Given that our open-label Phase 1/2 clinical trial of BDTX-189 includes an open-label dosing design, the results from this clinical trial may not be predictive of future clinical trial results with this or other product candidates for which we conduct an open-label clinical trial when studied in a controlled environment with a placebo or active control.
+Added: Given that our Phase 1/2 clinical trial of BDTX-189 includes an open-label dosing design, the results from this clinical trial may not be predictive of future clinical trial results with this or other product candidates for which we conduct an open-label clinical trial when studied in a controlled environment with a placebo or active control.
We may experience delays in obtaining the FDA’s authorization to initiate clinical trials under future INDs, completing ongoing preclinical studies of our other product candidates, and initiating our planned preclinical studies and clinical trials.
Additionally, we cannot be certain that preclinical studies or clinical trials for our product candidates will begin on time, not require redesign, enroll an adequate number of subjects on time, or be completed on schedule, if at all.
+Added: For example, at a meeting with the FDA in March 2021, the FDA notified us that, because the Phase 2 portion of our ongoing Phase 1/2 clinical trial of BDTX-189 is potentially registrational and may support a new drug application, we may only enroll up to 50 patients in Phase 2 before results of routine three-month good laboratory practice, or GLP, toxicology studies have been submitted and accepted by the FDA.
Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to:
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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.
−Removed: This could result in a delay in approval, or rejection,
−Removed: 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.
+Added: 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.
If we experience delays in the completion, or termination, of any preclinical study or clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate revenues from any of these product candidates will be delayed or not realized at all.
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In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
−Removed: If one or more of our product candidates generally prove to be ineffective, unsafe or commercially unviable, our entire pipeline and MAP platform would have little, if any, value, which would have a material and adverse effect on our business, financial condition, results of operations and prospects.
+Added: If one or more of our product candidates generally prove to be ineffective, unsafe or commercially unviable, our entire pipeline and MAP platform could have little, if any, value, which would have a material and adverse effect on our business, financial condition, results of operations and prospects.
We may in the future conduct clinical trials for product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials.
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If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.
+Added: Risks related to our approach
+Added: Our discovery and preclinical development is focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is novel and may never lead to marketable products.
+Added: The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new.
+Added: The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited.
+Added: Although we believe, based on our preclinical work, that the mutations targeted by our programs are oncogenic drivers, clinical results may not confirm this hypothesis or may only confirm it for certain mutations or certain tumor types.
+Added: The patient populations for our product candidates are limited to those with specific target mutations and may not be completely defined but are substantially smaller than the general treated cancer population, and we will need to screen and identify these patients with the targeted mutations.
+Added: Successful identification of patients is dependent on several factors, including achieving certainty as to how specific genetic alterations respond to our product candidates and developing companion diagnostics to identify such genetic alterations.
+Added: Furthermore, even if we are successful in identifying patients, we cannot be certain that the resulting patient populations for each mutation will be large enough to allow us to successfully obtain approval for each mutation type and commercialize our products and achieve profitability.
+Added: In addition, even if our approach is successful in showing clinical benefit for tumors harboring the targeted mutations affecting the ErbB proteins EGFR and HER2, we may never successfully identify additional oncogenic mutations for other receptor tyrosine kinases.
+Added: Therefore, we do not know if our approach of treating patients with genetically defined cancers will be successful, and if our approach is unsuccessful, our business will suffer.
+Added: In addition, we are pursuing a tumor-agnostic development strategy (i.e., pursuing approval based on a biomarker rather than a specific cancer indication).
+Added: There is currently a limited number of approved tumor-agnostic therapies.
+Added: We may not receive approval for a tumor-agnostic indication or may be delayed in receiving tumor-agnostic approval.
Our approach to the discovery and development of product candidates is unproven, and we may not be successful in our efforts to use and expand our MAP platform to build a pipeline of product candidates with commercial value.
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If we do not successfully develop and commercialize product candidates, we will not be able to generate product revenue in the future, which likely would result in significant harm to our financial position and adversely affect our stock price.
+Added: The market opportunities for our product candidates may be relatively small as it will be limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.
+Added: Cancer therapies are sometimes characterized as first line, second line, or third line, and the FDA often approves new therapies initially only for a particular line of use.
+Added: When cancer is detected early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure.
+Added: Whenever first line therapy, usually chemotherapy, antibody drugs, tumor-targeted small molecules, hormone therapy, radiation therapy, surgery, or a combination of these, proves unsuccessful, second line therapy may be administered.
+Added: Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these.
+Added: Third line therapies can include chemotherapy, antibody drugs and small molecule tumor-targeted therapies, more invasive forms of surgery and new technologies.
+Added: We expect to initially seek approval of our product candidates in most instances at least as a second or third line therapy, for use in patients with relapsed or refractory metastatic cancer.
+Added: Subsequently, for those product candidates that prove to be sufficiently safe and beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved as a second or third or subsequent line of therapy, would be approved for an earlier line of therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.
+Added: Our projections of both the number of people who have the cancers we are targeting, who may have their tumors genetically sequenced, as well as the subset of people with these cancers in a position to receive a particular line of therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.
+Added: These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect.
+Added: Further, new therapies may change the estimated incidence or prevalence of the cancers that we are targeting.
+Added: Consequently, even if our product candidates are approved for a second or third line of therapy, the number of patients that may be eligible for treatment with our product candidates may turn out to be much lower than expected.
+Added: In addition, we have not yet conducted market research to determine how treating physicians would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for each such tumor type.
+Added: Risks related to the COVID-19 pandemic
+Added: Business or economic disruptions or global health concerns could seriously harm our development efforts and increase our costs and expenses.
+Added: Broad-based business or economic disruptions could adversely affect our ongoing or planned research and development activities.
+Added: For example, in December 2019, an outbreak of a novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease (COVID-19) was reported to have surfaced in Wuhan, China, and has since spread to other regions and countries worldwide.
+Added: In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.
+Added: Almost all U.S.
+Added: states and many local jurisdictions issued “shelter-in-place” orders, quarantines, executive orders and similar government orders, restrictions, and recommendations for their residents to control the spread of COVID-19.
+Added: Such orders, restrictions and recommendations, and the perception that additional orders, restrictions or recommendations could occur, have resulted in widespread closures of businesses not deemed “essential,” work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, as well as volatility in stock prices, among other effects.
+Added: There is a risk that government actions will not be effective at containing COVID-19 or other infectious diseases, and that government actions, including the orders and restrictions described above, that are intended to contain the spread of COVID-19 will have a devastating negative impact on the world economy at large, in which case the risks to our operating results and financial condition described herein would be elevated significantly.
+Added: The continued spread of COVID-19 or other global health matters, has impacted and may continue to impact our target patient populations as well as the hospitals and clinical sites in which we conduct any of our clinical trials, which could lead to delays in completing enrollment of our clinical trials.
+Added: For instance, the COVID-19 outbreak may continue to impair our ability to recruit and retain patients and engage principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography or due to prioritization of hospital resources toward the outbreak and restrictions on travel.
+Added: Furthermore, some patients may be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.
+Added: COVID-19 already has affected and may further negatively affect the operations of third party contract research organizations that we rely upon to carry out our discovery work, clinical trials or the operations of our third party manufacturers, which could result in delays or disruptions in the supply of our product candidates and the conduct of experiments and studies.
+Added: Any negative impact COVID-19 has to patient enrollment or treatment or the timing and execution of our preclinical studies or clinical trials could cause costly delays to our development programs, which could adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses and have a material adverse effect on our business and financial results.
+Added: COVID-19 has also caused, and may continue to cause for an extended period, volatility in the global financial markets and threatened a slowdown in the global economy, which would reduce our ability to access capital and could negatively affect our liquidity.
+Added: Although states have implemented “shelter-in-place” orders, quarantines and similar restrictions, the regulations vary on a state by state basis and the effectiveness of those restrictions on controlling the spread of COVID-19 varies.
+Added: While our lab-based employees have returned to our labs with enhanced safety measures, our office-based employees continue to work primarily from home and we expect this to continue for an extended period.
+Added: Furthermore, there has been a resurgence of COVID-19 cases, which could prompt a reinstatement of “shelter-in-place” orders and restrictions at the state and local levels impacting our reentry to the workplace and causing hospital and clinical sites to suspend our clinical trials or could deter patients from continuing to participate in our trials.
+Added: Three vaccines for COVID-19 were granted Emergency Use Authorization by the FDA in late 2020 and early 2021, and more are likely to be authorized in the coming months.
+Added: The resultant demand for vaccines and potential for manufacturing facilities and materials to be commandeered under the Defense Production Act of 1950, or equivalent foreign legislation, may make it more difficult to obtain materials or manufacturing slots for the products needed for our clinical trials, which could lead to delays in these trials.
+Added: The global outbreak of COVID-19 continues to rapidly evolve.
+Added: The extent to which COVID-19 impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, travel restrictions, new information that may emerge concerning the severity of COVID-19 or the effectiveness of actions taken in the United States and other countries to contain COVID-19 or treat its impact, among others.
+Added: We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the suppliers, clinical trial sites, service providers, regulators and other third parties with whom we conduct business, were to experience prolonged business shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted.
+Added: Risks related to manufacturing and supply
We will rely on third parties to manufacture our clinical product supplies, and we may rely on third parties to produce and process our product candidates, if approved.
18 unchanged sentences
These third-party manufacturing providers may not be able to provide adequate resources or capacity to meet our needs.
−Removed: The market opportunities for our product candidates may be relatively small as it will be limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.
−Removed: Cancer therapies are sometimes characterized as first line, second line, or third line, and the FDA often approves new therapies initially only for a particular line of use.
−Removed: When cancer is detected early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure.
−Removed: Whenever first line therapy, usually
−Removed: chemotherapy, antibody drugs, tumor-targeted small molecules, hormone therapy, radiation therapy, surgery, or a combination of these, proves unsuccessful, second line therapy may be administered.
−Removed: Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these.
−Removed: Third line therapies can include chemotherapy, antibody drugs and small molecule tumor-targeted therapies, more invasive forms of surgery and new technologies.
−Removed: We expect to initially seek approval of our product candidates in most instances at least as a second or third line therapy, for use in patients with relapsed or refractory metastatic cancer.
−Removed: Subsequently, for those product candidates that prove to be sufficiently safe and beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved as a second or third or subsequent line of therapy, would be approved for an earlier line of therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.
−Removed: Our projections of both the number of people who have the cancers we are targeting, who may have their tumors genetically sequenced, as well as the subset of people with these cancers in a position to receive a particular line of therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.
−Removed: These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect.
−Removed: Further, new therapies may change the estimated incidence or prevalence of the cancers that we are targeting.
−Removed: Consequently, even if our product candidates are approved for a second or third line of therapy, the number of patients that may be eligible for treatment with our product candidates may turn out to be much lower than expected.
−Removed: In addition, we have not yet conducted market research to determine how treating physicians would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for each such tumor type.
+Added: Risks related to sales, marketing, and competition
We currently have no marketing and sales organization and have no experience in marketing products.
29 unchanged sentences
Our spending on current and future discovery and preclinical development programs and product candidates for specific indications may not yield any commercially viable products.
+Added: Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.
+Added: The use of precision medicines as a potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical community.
+Added: Various factors will influence whether our product candidates are accepted in the market, including:
+Added: • the clinical indications for which our product candidates are licensed;
+Added: • physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe and effective treatment;
+Added: • the potential and perceived advantages of our product candidates over alternative treatments;
+Added: • our ability to demonstrate the advantages of our product candidates over other cancer medicines;
+Added: • the prevalence and severity of any side effects;
+Added: • the prevalence and severity of any side effects for other precision medicines and public perception of other precision medicines;
+Added: • product labeling or product insert requirements of the FDA or other regulatory authorities;
+Added: • limitations or warnings contained in the labeling approved by the FDA;
+Added: • the timing of market introduction of our product candidates as well as competitive products;
+Added: • the cost of treatment in relation to alternative treatments;
+Added: • the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities;
+Added: • the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities;
+Added: • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies;
+Added: • the effectiveness of our sales and marketing efforts.
+Added: If our product candidates are licensed but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue.
+Added: In addition, although our product candidates differ in certain ways from other precision medicine approaches, serious adverse events or deaths in other clinical trials involving precision medicines, even if not ultimately attributable to our product or product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.
+Added: Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
5 unchanged sentences
Product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
−Removed: Specifically, we expect that BDTX-189 will compete against approved drugs, including neratinib, which is marketed by Puma Biotechnology, Inc., under the trade name Nerlynx, osimertinib, which is marketed by AstraZeneca plc under the trade name Tagrisso, and trastuzumab deruxtecan (DS-8201), which is marketed by Daiichi Sankyo Company Ltd.
−Removed: and AstraZeneca plc under the trade name Enhertu.
−Removed: In the allosteric HER2 patient population we expect competition from drugs in late-stage clinical development, including ZW25 and ZW49, which are under development by Zymeworks Inc.
−Removed: and Beigene Co., Ltd.
−Removed: We also expect BDTX-189 will compete in the exon 20 insertion patient population against other drugs under development, including poziotinib, which is under development by Spectrum Pharmaceuticals, Inc., tarloxotinib, which is under development by Rain Therapeutics Inc., TAK-788, which is under development by Takeda Pharmaceutical Company Ltd, and JNJ-61186372, which is under development by Janssen Research & Development, LLC.
+Added: Specifically for BDTX-189, we expect competition primarily in the EGFR and HER2 Exon 20 insertion NSCLC patient populations, including:
+Added: mobocertinib (TAK-788), which is under development by Takeda Pharmaceutical Company Ltd;
+Added: amivantamab (JNJ-61186372), which is under development by Janssen Research & Development, LLC;
+Added: trastuzumab deruxtecan (DS-8201), marketed by Daiichi Sankyo Company Ltd.
+Added: and AstraZeneca plc under the trade name Enhertu, which is currently approved for HER2+ breast cancer, but under development for HER2 mutan t solid tumors;
+Added: poziotinib, which is under development by Spectrum Pharmaceuticals, Inc;
+Added: CLN-081 (formerly TAS6417), which is under development by Cullinan Oncology, LLC;
+Added: and DZD9008, which is under development by Dizal Pharmaceutical Co., Ltd.
In addition, there are other small molecule and precision oncology-focused companies with whom we may eventually compete, including Loxo Oncology, Inc.
6 unchanged sentences
For additional information regarding our competition, see “Business—Competition.”
+Added: Risks related to our financial position and capital requirements
+Added: Risks related to past financial condition
+Added: Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
+Added: We are a biotechnology company with a limited operating history.
+Added: We commenced operations in December 2014, and our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, undertaking preclinical studies and establishing arrangements with third parties for the manufacture of initial quantities of our product candidates and component materials.
+Added: Most of our product candidates are still in preclinical development.
+Added: We have not yet demonstrated our ability to successfully conduct or complete any clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization.
+Added: Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
+Added: In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.
+Added: We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities.
+Added: We may not be successful in such a transition.
+Added: We have incurred significant losses since inception, and we expect to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future.
+Added: Investment in biopharmaceutical product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.
+Added: We are still in the early stages of development of our product candidates.
+Added: We have begun enrollment and dosing of patients in the Phase 1 portion of our MasterKey-01 trial to pursue a tumor-agnostic development strategy.
+Added: We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations.
+Added: We have financed our operations primarily through private placements of our preferred stock.
+Added: We have incurred significant net losses in each period since we commenced operations in December 2014.
+Added: For the years ended December 31, 2020 and 2019, we reported net losses of $67.3 million and $35.3 million, respectively.
+Added: As of December 31, 2020, we had an accumulated deficit of $118.2 million.
+Added: We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:
+Added: • continue our research and development efforts and submit INDs for our lead product candidates;
+Added: • conduct preclinical studies and clinical trials for our current and future product candidates based on our Mutation—Allostery—Pharmacology, or MAP, platform;
+Added: • seek marketing approvals for any product candidates that successfully complete clinical trials;
+Added: • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges;
+Added: • establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities, whether alone or with third parties, to commercialize any product candidates for which we may obtain regulatory approval, if any;
+Added: • obtain, expand, maintain, enforce and protect our intellectual property portfolio;
+Added: • hire additional clinical, regulatory and scientific personnel;
+Added: • operate as a public company.
+Added: Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses we will incur or when, if ever, we will be able to
+Added: achieve profitability.
+Added: Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop, seek regulatory approval for and market additional product candidates.
+Added: We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
+Added: The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue.
+Added: Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
+Added: We have not generated any revenue from our product candidates and may never be profitable.
+Added: Our ability to become profitable depends upon our ability to generate revenue.
+Added: To date, we have not generated any revenue from any of our product candidates.
+Added: We do not expect to generate significant revenue unless or until we successfully complete clinical development and obtain regulatory approval of, and then successfully commercialize, at least one of our product candidates.
+Added: Most of our product candidates are in the preclinical stages of development and will require additional preclinical studies, clinical development, regulatory review and approval, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales.
+Added: We have begun enrollment and dosing of patients in the Phase 1 portion of our MasterKey-01 trial to pursue a tumor-agnostic development strategy.
+Added: Our other product candidates are in various stages of preclinical development.
+Added: We face significant translational risk as our product candidates in preclinical development advance to the clinical stage, as promising results in preclinical studies may not be replicated in subsequent clinical trials and testing on animals may not accurately predict human experience.
+Added: Our ability to generate revenue depends on a number of factors, including, but not limited to:
+Added: • timely completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;
+Added: • our ability to complete IND-enabling studies and successfully submit INDs or comparable applications;
+Added: • whether we are required by the U.S.
+Added: Food and Drug Administration, or the FDA, or similar foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;
+Added: • our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety, potency, purity, efficacy and acceptable risk to benefit profile of our product candidates or any future product candidates and such regulatory authorities’ acceptance of our tumor-agnostic development strategy (i.e., our pursuit of approval based on a biomarker rather than a specific cancer indication);
+Added: • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future product candidates, if any;
+Added: • the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;
+Added: • the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or future product candidates over alternative or more conventional therapies, such as chemotherapy, to treat solid tumors;
+Added: • the actual and perceived availability, cost, risk profile and side effects and efficacy of our product candidates, if approved, relative to existing and future alternative cancer therapies and competitive product candidates and technologies;
+Added: • our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory authorities and develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP;
+Added: • our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others;
+Added: • patient demand for our product candidates and any future product candidates, if approved;
+Added: • our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates.
+Added: Many of the factors listed above are beyond our control and could cause us to experience significant delays or prevent us from obtaining regulatory approvals or commercializing our product candidates.
+Added: Even if we are able to commercialize our product candidates, we may not achieve profitability soon after generating product sales, if ever.
+Added: If we are unable to generate sufficient revenue through the sale of our product candidates or any future product candidates, we may be unable to continue operations without continued funding.
+Added: Risks related to future financial condition
+Added: We will need substantial additional funding.
+Added: If we are unable to raise capital when needed, we would be compelled to delay, reduce or eliminate our product development programs or commercialization efforts.
+Added: We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical development activities to identify new product candidates and initiate clinical trials of, and seek marketing approval for, our product candidates.
+Added: In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
+Added: Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
+Added: However, we have estimated our current additional funding needs based on assumptions that may prove to be wrong.
+Added: Additionally, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.
+Added: We cannot be certain that additional funding will be available on acceptable terms, or at all.
+Added: Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of public or private equity offerings, debt financings, governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties.
+Added: If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our discovery and preclinical development programs or any future commercialization efforts.
+Added: We had cash, cash equivalents and investments of $315.1 million as of December 31, 2020.
+Added: Our net proceeds from our initial public offering were $212.1 million, based the initial public offering price of $19.00 per share, after deducting underwriting discounts and commissions and offering expenses payable by us.
+Added: We believe that, based upon our current operating plan, our existing capital resources, including net proceeds from our initial public offering will be sufficient to fund our anticipated operations into 2023, including the Phase 1/2 clinical trial of BDTX-189 and the identification of a lead product candidate and IND-enabling studies in our glioblastoma program, with additional resources for continued development of our MAP platform.
+Added: Our future capital requirements will depend on many factors, including:
+Added: • the scope, progress, results and costs of discovery, preclinical development and clinical trials for our product candidates;
+Added: • the extent to which we enter into collaboration arrangements with regard to product discovery or acquire or in-license products or technologies;
+Added: • our ability to establish discovery collaborations on favorable terms, if at all;
+Added: • the costs, timing and outcome of regulatory review of our product candidates;
+Added: • the costs of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
+Added: • revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;
+Added: • the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, enforcing and protecting our intellectual property rights and defending intellectual property-related claims.
+Added: Identifying potential product candidates and conducting preclinical testing and clinical trials 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 marketing approval and achieve product sales.
+Added: In addition, our product candidates, if approved, may not achieve commercial success.
+Added: Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all.
+Added: Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
+Added: Adequate additional financing may not be available to us on acceptable terms, or at all.
Risks related to government regulation
77 unchanged sentences
For example, the FDA has expressed concerns regarding the regulatory considerations for orphan drug designation as applied to tissue agnostic therapies, and the FDA may interpret the FD&C Act and regulations promulgated thereunder in a way that limits or blocks our ability to obtain orphan drug designation or orphan drug exclusivity, if our product candidates are approved, for our targeted indications.
−Removed: On August 3, 2017, the Congress passed the FDA Reauthorization Act of 2017, or FDARA.
−Removed: FDARA, among other things, codified the FDA’s pre-existing regulatory interpretation, to require that a drug sponsor demonstrate the
−Removed: clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity.
+Added: On August 3, 2017, Congress passed the FDA Reauthorization Act of 2017, or FDARA.
+Added: FDARA, among other things, codified the FDA’s pre-existing regulatory interpretation, to require that a drug sponsor demonstrate the clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity.
The legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period regardless of a showing of clinical superiority.
+Added: Moreover, in the Consolidated Appropriations Act of 2021, Congress did not further change this interpretation when it clarified that the interpretation codified in FDARA would apply in cases where FDA issued an orphan designation before the enactment of FDARA but where product approval came after the enactment of FDARA.
The FDA may further reevaluate the Orphan Drug Act and its regulations and policies.
11 unchanged sentences
Thus, even though we intend to seek Breakthrough Therapy designation for BDTX-189 and some or all of our future product candidates for the treatment of various cancers, there can be no assurance that we will receive breakthrough therapy designation.
−Removed: A Fast Track designation by the FDA, even if granted for BDTX-189 or any other future product candidates, 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: A Fast Track 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.
If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for FDA Fast Track designation for a particular indication.
−Removed: We may seek Fast Track designation for BDTX-189 and certain of our future product candidates, but there is no assurance that the FDA will grant this status to any of our proposed product candidates.
+Added: We have been granted Fast Track designation for BDTX-189 for the treatment of adult patients with solid tumors harboring an allosteric human epidermal growth factor receptor 2 (HER2) mutation or an epidermal growth factor receptor (EGFR) or HER2 Exon 20 insertion mutation who have progressed following prior treatment and who have no satisfactory treatment options.
+Added: We may seek Fast Track designation for other indications or for certain of our future product candidates, but there is no assurance that the FDA will grant this status to any of our other proposed product candidates.
Marketing applications filed by sponsors of products in Fast Track development may qualify for priority review under the policies and procedures offered by the FDA, but the Fast Track designation does not assure any such qualification or ultimate marketing approval by the FDA.
35 unchanged sentences
If we fail to comply with the regulatory requirements in international markets and/or 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.
+Added: Risks related to ongoing regulatory obligations
Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.
97 unchanged sentences
Since its enactment, there have been judicial, administrative, executive and Congressional legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
−Removed: various portions of the ACA are currently undergoing constitutional challenges in the Fifth Circuit Court and the United States Supreme Court, and the Trump Administration has issued various Executive Orders eliminating cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
−Removed: Additionally, Congress has introduced several pieces of legislation aimed at significantly revising or repealing the ACA.
−Removed: It is unclear whether the ACA will be overturned, repealed, replaced, or further amended, and we cannot predict what affect further changes to the ACA would have on our business.
+Added: For example,.
+Added: various portions of the ACA are currently undergoing constitutional challenges in the Fifth Circuit Court and the United States Supreme Court, and the Trump Administration issued various Executive Orders eliminating cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
+Added: Additionally, Congress introduced several pieces of legislation aimed at significantly revising or repealing the ACA.
+Added: It is unclear whether the ACA will be overturned, repealed, replaced, or further amended.
+Added: We cannot predict what affect further changes to the ACA would have on our business, especially given the new administration.
Members of the U.S.
−Removed: Congress and the Trump administration have expressed an intent to pass legislation or adopt executive orders to fundamentally change or repeal parts of the Affordable Care Act.
−Removed: While Congress has not passed repeal legislation to date, the Tax Cuts and Jobs Act of 2017, or TCJA, repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, a federal district court in Texas ruled the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well.
−Removed: The Trump Administration and CMS have both stated that the ruling will have no immediate effect, and on December 18, 2019, the Fifth Circuit U.S.
+Added: Congress and the Trump administration expressed an intent to pass legislation or adopt executive orders to fundamentally change or repeal parts of the ACA.
+Added: While Congress has not passed repeal legislation to date, the Tax Cuts and Jobs Act of 2017, or TCJA, repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, a federal district court in Texas ruled the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well.
+Added: The Trump Administration and CMS both stated that the ruling will have no immediate effect, and on December 18, 2019, the Fifth Circuit U.S.
Court of Appeals held that the individual mandate is unconstitutional, and remanded the case to the lower court to reconsider its earlier invalidation of the full ACA.
2 unchanged sentences
We will continue to evaluate the effect that the ACA and its possible repeal and replacement has on our business.
−Removed: Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the Affordable Care Act to waive, defer, grant exemptions from, or delay the implementation of any provision of the Affordable Care Act that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
−Removed: On October 13, 2017, President Trump signed an Executive Order terminating the cost-sharing subsidies that reimburse insurers under the Affordable Care Act.
−Removed: The Trump administration has concluded that cost-sharing reduction, or CSR, payments to insurance companies required under the ACA have not received necessary appropriations from Congress and announced that it will discontinue these payments immediately until those appropriations are made.
+Added: Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
+Added: On October 13, 2017, President Trump signed an Executive Order terminating the cost-sharing subsidies that reimburse insurers under the ACA.
+Added: The Trump administration concluded that cost-sharing reduction, or CSR, payments to insurance companies required under the ACA have not received necessary appropriations from Congress and announced that it will discontinue these payments immediately until those appropriations are made.
The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA.
Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017.
−Removed: The loss of the cost share reduction payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA.
+Added: On August 14, 2020, the U.S.
+Added: Court of Appeals for the Federal Circuit ruled in two separate cases that the federal government is liable for the full amount of unpaid CSRs for the years preceding and including 2017.
+Added: For CSR claims made by health insurance companies for years 2018 and later, further litigation will be required to determine the amounts due, if any.
Further, on June 14, 2018, the U.S.
Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay to third-party payors more than $12 billion in ACA risk corridor payments that they argued were owed to them.
−Removed: On December 10, 2019, the U.S.
−Removed: Supreme Court heard arguments in Moda Health Plan, Inc.
−Removed: United States , which will determine whether the government must make risk corridor payments.
−Removed: Supreme Court’s decision will be released in the coming months, but we cannot predict how the U.S.
−Removed: Supreme Court will rule.
+Added: On April 27, 2020, the United States Supreme Court reversed the U.S.
+Added: Court of Appeals for the Federal Circuit decision and remanded the case to the U.S.
+Added: Court of Federal Claims, concluding the government has an obligation to pay these risk corridor payments under the relevant formula.
+Added: On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and held oral arguments on November 10, 2020.
+Added: The Supreme Court’s decision in this case is forthcoming.
The effects of this gap in reimbursement on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet known.
−Removed: Moreover, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices.
−Removed: However, on December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act (H.R.
−Removed: 1865), which repeals the Cadillac tax, the health insurance provider tax, and the medical device excise tax.
−Removed: It is impossible to determine whether similar
−Removed: taxes could be instated in the future.
+Added: On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act (H.R.
+Added: 1865), which repealed the so called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee
+Added: imposed on certain health insurance providers based on market share, and the medical devise excise tax on non-exempt medical devises.
+Added: It is impossible to determine whether similar taxes could be instated in the future.
The Bipartisan Budget Act of 2018, also amended the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” CMS published a final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment.
−Removed: In addition, CMS has recently published a final rule that would give states greater flexibility, starting in 2020, in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
−Removed: Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.
+Added: In addition, CMS published a final rule that gives states greater flexibility, as of 2020, in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
+Added: Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.
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This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.
−Removed: The American Taxpayer Relief Act of 2012, or ATRA, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
+Added: Pursuant to the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, as well as subsequent legislation, these reductions have been suspended from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic.
+Added: Proposed legislation, if passed, would extend this suspension until the end of the pandemic.
+Added: In January 2013, the American Taxpayer Relief Act of 2012, or ATRA, was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.
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Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
−Removed: At the federal level, the Trump administration’s budget for fiscal year 2020 contains further drug price control measures that could be enacted during the budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low- income patients.
−Removed: Additionally, the Trump administration released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers.
−Removed: HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.
+Added: Additionally, the Trump administration also previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers.
+Added: HHS solicited feedback on some of these measures and has implemented others under its existing authority.
For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.
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There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
−Removed: Additionally, in December 2019, the FDA issued a notice of proposed rulemaking that, if finalized, would allow for the importation of certain prescription drugs from Canada.
−Removed: FDA also issued a Draft Guidance document outlining a potential pathway for manufacturers to obtain an additional National Drug Code, or NDC, for an FDA-approved drug that was originally intended to be marketed in a foreign country and that was authorized for sale in that foreign country.
−Removed: The regulatory and market implications of the notice of proposed rulemaking and Draft Guidance are unknown at this time, but legislation, regulations or policies allowing the reimportation of drugs, if enacted and implemented, could decrease the price we receive for our products and adversely affect our future revenues and prospects for profitability.
+Added: Additionally, the FDA published a final rule, effective November 30, 2020, that allows for the importation of certain prescription drugs from Canada.
+Added: Under the final rule, states and Indian Tribes, and in certain future circumstances pharmacists and wholesalers, may submit importation program proposals to the FDA for review and authorization.
+Added: On September 25, 2020, CMS stated drugs imported by States under this rule will not be eligible for federal rebates under Section 1927 of the Social Security Act and manufacturers would not report these drugs for “best price” or Average Manufacturer Price purposes.
+Added: Since these drugs are not considered covered outpatient drugs, CMS further stated it will not publish a National Average Drug Acquisition Cost for these drugs.
+Added: Separately, the FDA also issued a final guidance document outlining a potential pathway for manufacturers to obtain an additional National Drug Code, or NDC, for an FDA-approved drug that was originally intended to be marketed in a foreign country and that was authorized for sale in that foreign country.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient 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.
In addition, regional health care 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 health care programs.
+Added: Some of these proposed measures, including drug importation and pharmacy benefit manager rebate rule changes, face legal challenges from industry groups and participants.
These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
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There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
−Removed: We cannot predict the initiatives that may be adopted in the future, including repeal, replacement or significant revisions to the Affordable Care Act.
+Added: We cannot predict the initiatives that may be adopted in the future, including repeal, replacement or significant revisions to the ACA.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:
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In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.
−Removed: For example, over the last several years, including beginning on December 22, 2018, the U.S.
−Removed: government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.
−Removed: If a prolonged government shutdown occurs, it
−Removed: could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
+Added: government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough
+Added: critical FDA, SEC and other government employees and stop critical activities.
+Added: Additionally, as of June 23, 2020, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals;
+Added: however, FDA may not be able to continue its current pace and approval timelines could be extended, including where a pre-approval manufacturing inspection or an inspection of clinical sites is required and due to the COVID-19 pandemic and travel restrictions FDA is unable to complete such required inspections during the review period.
+Added: On March 10, 2020 the FDA announced its intention to postpone most inspections of foreign manufacturing facilities while local, national and international conditions warrant.
+Added: On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials which the FDA continues to update.
+Added: As of June 23, 2020, the FDA noted it was conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards.
+Added: On July 10, 2020, the FDA announced its goal of restarting domestic on-site inspections during the week of July 20, 2020, but such activities will depend on data about the virus’ trajectory in a given state and locality and the rules and guidelines that are put in place by state and local governments.
+Added: The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections.
+Added: Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, FDA has stated that it generally intends to issue a complete response letter.
+Added: Further, if there is inadequate information to make a determination on the acceptability of a facility, FDA may defer action on the application until an inspection can be completed.
+Added: In 2020, several companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.
+Added: Regulatory authorities outside the U.S.
+Added: may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.
+Added: If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
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A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
−Removed: Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.
+Added: Violations are subject to civil and criminal fines and penalties for each violation, plus
+Added: up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
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When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;
−Removed: • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises,
−Removed: any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
+Added: • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;
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HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
−Removed: • the federal Physician Payment Sunshine Act, created under the Affordable Care Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
+Added: • the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners;
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• analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;
−Removed: state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources;
+Added: state laws that
+Added: require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources;
state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities;
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It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
−Removed: If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant criminal, civil and administrative
−Removed: sanctions including monetary penalties, damages, fines, disgorgement, individual imprisonment, and exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and we may be required to curtail or restructure our operations, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant criminal, civil and administrative sanctions including monetary penalties, damages, fines, disgorgement, individual imprisonment, and exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and we may be required to curtail or restructure our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
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Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
−Removed: Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
−Removed: In the event we decide to conduct clinical trials or continue to enroll subjects in our ongoing or future clinical trials, we may be subject to additional privacy restrictions.
−Removed: The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.
−Removed: The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
−Removed: The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
−Removed: The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
−Removed: In addition, the GDPR includes restrictions on cross-border data transfers.
−Removed: The GDPR increased our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.
−Removed: Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
−Removed: Further, the United Kingdom’s vote in favor of exiting the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.
−Removed: In particular, it is unclear how data transfers to and from the United Kingdom will be regulated.
−Removed: In addition, California recently enacted the California Consumer Privacy Act, or CCPA, which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
−Removed: The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
−Removed: The CCPA went into effect on January 1, 2020, and the California Attorney General may bring enforcement actions for violations beginning July 1, 2020.
−Removed: The CCPA was amended on September 23, 2018, and it remains unclear what, if any, further modifications will be made to this legislation or how it will be interpreted.
−Removed: As currently written, the CCPA may impact our business activities and exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.
−Removed: Compliance with U.S.
−Removed: and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
−Removed: Failure to comply with U.S.
−Removed: and international data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and business.
−Removed: Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.
−Removed: Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
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Risks related to our intellectual property
+Added: Risks related to protecting our intellectual property
We do not currently own or in-license any issued patents relating to our product candidates or technology, including BDTX-189.
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Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to our product candidates, including BDTX-189, their respective components, formulations, combination therapies, methods used to manufacture them and methods of treatment and development that are important to our business, as well as successfully defending these patents against third-party challenges.
−Removed: If we do not adequately protect our intellectual property rights, competitors may be able to
−Removed: erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
+Added: If we do not adequately protect our intellectual property rights, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
We intend to rely upon a combination of patent applications, confidentiality agreements, trade secret protection and license agreements to protect the intellectual property related to our product candidates and technologies.
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We do not currently own or in-license any issued patents relating to BDTX-189, including its composition of matter, and we do not currently own or in-license any issued patents relating to any of our other product candidates or technology.
−Removed: We own one Patent Cooperation Treaty, or PCT, patent application that covers the composition of matter for BDTX-189, as well as methods of using and making BDTX-189.
−Removed: This PCT application may never result in an issued patent.
−Removed: This pending PCT patent application is not eligible to become an issued patent until, among other things, we file a national stage patent application within 30 months in the countries in which we seek patent protection.
+Added: We own six U.S.
+Added: provisional patent applications, one pending U.S.
+Added: patent application, and one Patent Cooperation Treaty, or PCT, patent application that collectively cover the composition of matter for BDTX-189,
+Added: polymorphs of BDTX-189, as well as methods of using and making BDTX-189.
+Added: provisional patent applications, the U.S.
+Added: patent application, or the PCT application may never result in an issued patent.
+Added: provisional patent applications may not be eligible to become an issued patent until, among other things, we convert the U.S.
+Added: provisional patent applications to one or more non-provisional patent applications within 12 months.
+Added: If we do not timely convert the U.S.
+Added: provisional patent applications to any non-provisional application, we may lose our priority date with respect to our U.S.
+Added: provisional patent applications and any patent protection on the inventions disclosed in such U.S.
+Added: provisional patent applications.
+Added: The pending PCT patent application is not eligible to become an issued patent until, among other things, we file a national stage patent application within 30 months in the countries in which we seek patent protection.
If we do not timely file any national stage patent applications, we may lose our priority date with respect to our PCT patent application and any patent protection on the inventions disclosed in such PCT patent application.
−Removed: While we intend to timely file a national stage patent application relating to our PCT patent application, we cannot predict whether any of our future patent applications for BDTX-189 or any of our other product candidates will result in the issuance of patents that effectively protect BDTX-189 or our other product candidates.
+Added: While we intend to timely convert the U.S.
+Added: provisional patent applications to one or more non-provisional patent applications and to timely file a national stage patent application relating to our PCT patent application, we cannot predict whether any of our future patent applications for BDTX-189 or any of our other product candidates will result in the issuance of patents that effectively protect BDTX-189 or our other product candidates.
If we do not successfully obtain patent protection, or, even if we do obtain patent protection, if the scope of the patent protection we or our potential licensors obtain with respect to BDTX-189 or our other product candidates and technology is not sufficiently broad, we will be unable to prevent others from using our technology or from developing or commercializing technology and products similar or identical to ours or other competing products and technologies.
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Moreover, some of our intellectual property, including any patents we may own or in-license in the future, may be co-owned with third parties.
−Removed: If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such intellectual property, including patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and
+Added: If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such intellectual property, including patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology.
In addition, we or our future licensors may need the cooperation of any such co-owners of our owned and in-licensed intellectual property, including patents and patent applications, in order to enforce such intellectual property against third parties, and such cooperation may not be provided to us or our future licensors.
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As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.
−Removed: If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, financial condition, results of operations and future prospects.
+Added: If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish
+Added: or maintain a competitive advantage in our market, which could materially adversely affect our business, financial condition, results of operations and future prospects.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.
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Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.
+Added: We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.
+Added: Presently we own six U.S.
+Added: provisional patent applications, one pending U.S.
+Added: patent application, and one PCT patent application related to BDTX-189.
+Added: Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights.
+Added: Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others.
+Added: Similarly, efficient production or delivery of our product candidates may also require specific compositions or methods, and the rights to these may be owned by third parties.
+Added: We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations.
+Added: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, which would harm our business.
+Added: We may need to cease use of the compositions or methods covered by such third-party intellectual property rights, and may need to seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible.
+Added: Even if we are able to obtain a license, it may be nonexclusive, thereby giving our competitors access to the same technologies licensed to us.
+Added: In that event, we may be required to expend significant time and resources to develop or license replacement technology.
+Added: Moreover, the molecules that will be used with our product candidates may be covered by the intellectual property rights of others.
+Added: Additionally, we sometimes collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions.
+Added: In certain cases, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration.
+Added: Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us.
+Added: 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 and allowing third parties to compete with us.
+Added: If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.
+Added: The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which 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 product candidates.
+Added: More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.
+Added: In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
+Added: We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.
+Added: There can be no assurance that we will be able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to acquire.
+Added: If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business, results of operations, financial condition and prospects could suffer.
+Added: Any issued patents we may own or in-license in the future covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad, including the USPTO.
+Added: If we or our future licensors or strategic partners initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable.
+Added: In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent.
+Added: Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of patentable subject matter, lack of written description, lack of novelty, obviousness, or non-enablement.
+Added: Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
+Added: Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
+Added: Such mechanisms include re-examination, inter partes review, post grant review and equivalent proceedings in foreign jurisdictions (such as opposition proceedings).
+Added: Such proceedings could result in revocation or amendment to our patent applications or any patents we may own or in-license in the future in such a way that they no longer cover our product candidates.
+Added: The outcome following legal assertions of invalidity and unenforceability is unpredictable.
+Added: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, any rights we may have from our patent applications or any patents we may own or in-license in the future, allow third parties to commercialize our product candidates or other technologies and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
+Added: Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge our or priority of invention or other features of patentability with respect to our patent applications and any patents we may own or in-license.
+Added: Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our product candidates and other technologies.
+Added: With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we or our future licensing partners and the patent examiner were
+Added: unaware during prosecution.
+Added: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
+Added: Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize or license our technology and product candidates.
+Added: 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.
+Added: If we are unsuccessful in any such proceeding or other priority or inventorship dispute, we may be required to obtain and maintain licenses from third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes.
+Added: Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive.
+Added: If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and commercialization of one or more of the product candidates we may develop.
+Added: The loss of exclusivity or the narrowing of our patent application claims could limit our ability to stop others from using or commercializing similar or identical technology and products.
+Added: Any of the foregoing could have a material adverse effect on our business, results of operations, financial condition and prospects.
+Added: Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and patent protection could be reduced or eliminated for non-compliance with these requirements.
+Added: Periodic maintenance fees, renewal fees, annuity fees and various other government fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent.
+Added: The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent.
+Added: While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
+Added: Noncompliance events that could result in abandonment or lapse of a patent include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
+Added: In such an event, our competitors might be able to enter the market with similar or identical products or platforms, which could have a material adverse effect on our business prospects and financial condition.
+Added: We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.
+Added: We may not be able to pursue generic coverage of our product candidates or MAP platform outside of the United States.
+Added: Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
+Added: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
+Added: Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
+Added: Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the United States.
+Added: These products may compete with our product candidates and in jurisdictions where we do not have any issued patents our patent applications or other intellectual property rights may not be effective or sufficient to prevent them from competing.
+Added: Our patent portfolio is at the very early stage.
+Added: We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines.
+Added: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to
+Added: biopharmaceutical products, which could make it difficult for us to stop the infringement of any patents we may own or in-license in the future or marketing of competing products in violation of our proprietary rights generally.
+Added: Proceedings to enforce any rights we may have in our patent applications or any patents we may own or in-license in the future in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put any patents we may own or in-license in the future at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
+Added: We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
+Added: Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
+Added: Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
+Added: In addition, many countries limit the enforceability of patents against government agencies or government contractors.
+Added: In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
+Added: If we are forced to grant a license to third parties with respect to any patents we may own or license in the future that are relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations, and prospects may be adversely affected.
+Added: If we do not obtain patent term extension and data exclusivity for any of our current or future product candidates we may develop, our business may be materially harmed.
+Added: Depending upon the timing, duration and specifics of any FDA marketing approval of any of our current or future product candidates we may develop, one or more U.S.
+Added: patents we may own or in-license in the future may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments.
+Added: The Hatch-Waxman Amendments permit a patent term extension of up to five years as compensation for patent term lost during the FDA regulatory review process.
+Added: A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.
+Added: However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.
+Added: Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
+Added: If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request, our competitors may obtain approval of competing products following expiration of any patents that issue from our patent applications, and our business, financial condition, results of operations, and prospects could be materially harmed.
+Added: If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest and our business may be adversely affected.
+Added: Our trademarks or trade names may be challenged, infringed, diluted, circumvented or declared generic or determined to be infringing on other marks.
+Added: We intend to rely on both registration and common law protection for our trademarks.
+Added: We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
+Added: During the trademark registration process, we may receive Office Actions from the USPTO objecting to the registration of our trademark.
+Added: Although we would be given an opportunity to respond to those objections, we may be unable to overcome such rejections.
+Added: In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks.
+Added: Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.
+Added: If we are unable to obtain a registered trademark or establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.
+Added: Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.
+Added: The degree of future protection afforded by our intellectual property rights, whether owned or in-licensed, is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage.
+Added: Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights.
+Added: The following examples are illustrative:
+Added: • patent applications that we own or may in-license in the future may not lead to issued patents;
+Added: • patents, should they issue, that we may own or in-license in the future, may not provide us with any competitive advantages, may be narrowed in scope, or may be challenged and held invalid or unenforceable;
+Added: • others may be able to develop and/or practice technology, including compounds that are similar to the chemical compositions of our product candidates, that is similar to our technology or aspects of our technology but that is not covered by the claims of any patents we may own or in-license in the future, should any patents issue;
+Added: • third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;
+Added: • we, or our future licensors or collaborators, might not have been the first to make the inventions covered by a patent application that we own or may in-license in the future;
+Added: • we, or our future licensors or collaborators, might not have been the first to file patent applications covering a particular invention;
+Added: • others may independently develop similar or alternative technologies without infringing, misappropriating or otherwise violating our intellectual property rights;
+Added: • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
+Added: • we may not be able to obtain and/or maintain necessary licenses on reasonable terms or at all;
+Added: • third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property;
+Added: • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how;
+Added: • we may not be able to maintain the confidentiality of our trade secrets or other proprietary information;
+Added: • we may not develop or in-license additional proprietary technologies that are patentable;
+Added: • the patents of others may have an adverse effect on our business.
+Added: Should any of these events occur, they could significantly harm our business, financial condition, results of operations and prospects.
+Added: Risks related to intellectual property litigation
Third-party claims of intellectual property infringement, misappropriation or other violations may be costly and time consuming and may prevent or delay our product discovery and development efforts.
1 unchanged sentence
Our commercial success depends upon our ability to develop, manufacture, market and sell our current and future product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property rights of third parties.
−Removed: There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including derivation, interference, reexamination, inter partes review, and post grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
+Added: There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including derivation, interference, reexamination, inter partes review, and post grant review
+Added: proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
We or any of our future licensors or strategic partners may be party to, exposed to, or threatened with, future adversarial proceedings or litigation by third parties having patent or other intellectual property rights alleging that our current or future product candidates and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights.
13 unchanged sentences
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.
−Removed: In addition, any uncertainties resulting from the initiation and
−Removed: continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
+Added: In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or prospects.
4 unchanged sentences
The costs of these opposition proceedings could be substantial, and may consume our time or other resources.
−Removed: If we fail to obtain a favorable result at the USPTO, EPO or other patent office then we may be exposed to litigation by a third party alleging that the patent may be infringed by our product candidates or proprietary technologies.
+Added: If we fail to obtain a favorable result
+Added: at the USPTO, EPO or other patent office then we may be exposed to litigation by a third party alleging that the patent may be infringed by our product candidates or proprietary technologies.
Third parties may assert that we are employing their proprietary technology without authorization.
16 unchanged sentences
Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
−Removed: In the event of a successful claim of infringement, misappropriation or other violation against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or
−Removed: require substantial time and monetary expenditure.
+Added: In the event of a successful claim of infringement, misappropriation or other violation against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.
2 unchanged sentences
In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.
−Removed: We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.
−Removed: Presently we own one PCT patent application related to BDTX-189.
−Removed: Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights.
−Removed: Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others.
−Removed: Similarly, efficient production or delivery of our product candidates may also require specific compositions or methods, and the rights to these may be owned by third parties.
−Removed: We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations.
−Removed: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, which would harm our business.
−Removed: We may need to cease use of the compositions or methods covered by such third-party intellectual property rights, and may need to seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible.
−Removed: Even if we are able to obtain a license, it may be nonexclusive, thereby giving our competitors access to the same technologies licensed to us.
−Removed: In that event, we may be required to expend significant time and resources to develop or license replacement technology.
−Removed: Moreover, the molecules that will be used with our product candidates may be covered by the intellectual property rights of others.
−Removed: Additionally, we sometimes collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions.
−Removed: In certain cases, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration.
−Removed: Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us.
−Removed: 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 and allowing third parties to compete with us.
−Removed: If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.
−Removed: The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which 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 product candidates.
−Removed: More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.
−Removed: In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
−Removed: We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.
−Removed: There can be no assurance that we will be able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to acquire.
−Removed: If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business, results of operations, financial condition and prospects could suffer.
We may be involved in lawsuits to protect or enforce our intellectual property rights, including any patents we may own or in-license in the future, which could be expensive, time-consuming and unsuccessful.
28 unchanged sentences
Such legal defenses may make it impossible for us to enforce any patents we may own or in-license against such third party.
−Removed: Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and patent protection could be reduced or eliminated for non-compliance with these requirements.
−Removed: Periodic maintenance fees, renewal fees, annuity fees and various other government fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent.
−Removed: The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent.
−Removed: While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
−Removed: Noncompliance events that could result in abandonment or lapse of a patent include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
−Removed: In such an event, our competitors might be able to enter the market with similar or identical products or platforms, which could have a material adverse effect on our business prospects and financial condition.
−Removed: Any issued patents we may own or in-license in the future covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad, including the USPTO.
−Removed: If we or our future licensors or strategic partners initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable.
−Removed: In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent.
−Removed: Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of patentable subject matter, lack of written description, lack of novelty, obviousness, or non-enablement.
−Removed: Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
−Removed: Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
−Removed: Such mechanisms include re-examination, inter partes review, post grant review and equivalent proceedings in foreign jurisdictions (such as opposition proceedings).
−Removed: Such proceedings could result in revocation or amendment to our patent applications or any patents we may own or in-license in the future in such a way that they no longer cover our product candidates.
−Removed: The outcome following legal assertions of invalidity and unenforceability is unpredictable.
−Removed: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, any rights we may have from our patent applications or any patents we may own or in-license in the future, allow third parties to commercialize our product candidates or other technologies and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
−Removed: Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge our or priority of invention or other features of patentability with respect to our patent applications and any patents we may own or in-license.
−Removed: Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our product candidates and other technologies.
−Removed: With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we or our future licensing partners and the patent examiner were unaware during prosecution.
−Removed: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the
−Removed: patent protection on our product candidates.
−Removed: Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize or license our technology and product candidates.
−Removed: 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.
−Removed: If we are unsuccessful in any such proceeding or other priority or inventorship dispute, we may be required to obtain and maintain licenses from third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes.
−Removed: Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive.
−Removed: If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and commercialization of one or more of the product candidates we may develop.
−Removed: The loss of exclusivity or the narrowing of our patent application claims could limit our ability to stop others from using or commercializing similar or identical technology and products.
−Removed: Any of the foregoing could have a material adverse effect on our business, results of operations, financial condition and prospects.
−Removed: Changes to patent law in the United States and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
−Removed: As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.
−Removed: Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.
−Removed: Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.
−Removed: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
−Removed: Depending on decisions by the U.S.
−Removed: Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we might obtain in the future.
−Removed: For example, in the case Assoc.
−Removed: for Molecular Pathology v.
−Removed: Myriad Genetics, Inc., the U.S.
−Removed: Supreme Court held that certain claims to DNA molecules are not patentable.
−Removed: Any adverse changes in the patent laws of other jurisdictions could have a material adverse effect on our business and financial condition.
−Removed: Changes in the laws and regulations governing patents in other jurisdictions could similarly have an adverse effect on our ability to obtain and effectively enforce any rights we may have in our patent applications or any patents we may own or in-license in the future.
−Removed: Recent or future patent reform legislation could also increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any patents we may own or in-license in the future.
−Removed: The United States has enacted and implemented wide-ranging patent reform legislation.
−Removed: On September 16, 2011, the Leahy-Smith America Invents Act, or America Invents Act, was signed into law, which includes a number of significant changes to U.S.
−Removed: These include provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation, establish a new post-grant review system and switch the U.S.
−Removed: patent system from a “first-to-invent” system to a “first-to-file” system.
−Removed: Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier.
−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 were the first to either (i) file any patent application related to our product candidates or other technologies or (ii) invent any of the inventions claimed in our patent applications or any patents we may own or in-license.
−Removed: These changes also allow third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.
−Removed: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
−Removed: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
−Removed: An adverse determination in any such proceeding could reduce the scope of, or
−Removed: invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
−Removed: Accordingly, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents we may own or in-license in the future, all of which could have a material adverse effect on our business and financial condition.
−Removed: We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.
−Removed: We may not be able to pursue generic coverage of our product candidates or MAP platform outside of the United States.
−Removed: Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
−Removed: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
−Removed: Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
−Removed: Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the United States.
−Removed: These products may compete with our product candidates and in jurisdictions where we do not have any issued patents our patent applications or other intellectual property rights may not be effective or sufficient to prevent them from competing.
−Removed: Our patent portfolio is at the very early stage.
−Removed: We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines.
−Removed: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
−Removed: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of any patents we may own or in-license in the future or marketing of competing products in violation of our proprietary rights generally.
−Removed: Proceedings to enforce any rights we may have in our patent applications or any patents we may own or in-license in the future in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put any patents we may own or in-license in the future at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
−Removed: We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
−Removed: Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
−Removed: Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
−Removed: 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 of such patent.
−Removed: If we are forced to grant a license to third parties with respect to any patents we may own or license in the future that are relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations, and prospects may be adversely affected.
We may be subject to claims challenging the inventorship or ownership of any intellectual property, including any patents we may own or in-license in the future.
1 unchanged sentence
For example, we may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our product candidates or other technologies.
−Removed: We generally enter into confidentiality
−Removed: and intellectual property assignment agreements with our employees, consultants, and contractors.
+Added: We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors.
These agreements generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property.
20 unchanged sentences
A loss of key personnel or their work product could hamper or prevent our ability to commercialize product candidates, which could have an adverse effect on our business, results of operations and financial condition.
−Removed: In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
+Added: In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, it could have a substantial
+Added: adverse effect on the price of our common stock.
This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities.
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Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.
−Removed: If we do not obtain patent term extension and data exclusivity for any of our current or future product candidates we may develop, our business may be materially harmed.
−Removed: Depending upon the timing, duration and specifics of any FDA marketing approval of any of our current or future product candidates we may develop, one or more U.S.
−Removed: patents we may own or in-license in the future may be eligible
−Removed: for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments.
−Removed: The Hatch-Waxman Amendments permit a patent term extension of up to five years as compensation for patent term lost during the FDA regulatory review process.
−Removed: A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.
−Removed: However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.
−Removed: Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
−Removed: If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request, our competitors may obtain approval of competing products following expiration of any patents that issue from our patent applications, and our business, financial condition, results of operations, and prospects could be materially harmed.
−Removed: If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest and our business may be adversely affected.
−Removed: Our trademarks or trade names may be challenged, infringed, diluted, circumvented or declared generic or determined to be infringing on other marks.
−Removed: We intend to rely on both registration and common law protection for our trademarks.
−Removed: We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
−Removed: During the trademark registration process, we may receive Office Actions from the USPTO objecting to the registration of our trademark.
−Removed: Although we would be given an opportunity to respond to those objections, we may be unable to overcome such rejections.
−Removed: In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks.
−Removed: Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.
−Removed: If we are unable to obtain a registered trademark or establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.
−Removed: Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.
−Removed: The degree of future protection afforded by our intellectual property rights, whether owned or in-licensed, is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage.
−Removed: Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights.
−Removed: The following examples are illustrative:
−Removed: • patent applications that we own or may in-license in the future may not lead to issued patents;
−Removed: • patents, should they issue, that we may own or in-license in the future, may not provide us with any competitive advantages, may be narrowed in scope, or may be challenged and held invalid or unenforceable;
−Removed: • others may be able to develop and/or practice technology, including compounds that are similar to the chemical compositions of our product candidates, that is similar to our technology or aspects of our technology but that is not covered by the claims of any patents we may own or in-license in the future, should any patents issue;
−Removed: • third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;
−Removed: • we, or our future licensors or collaborators, might not have been the first to make the inventions covered by a patent application that we own or may in-license in the future;
−Removed: • we, or our future licensors or collaborators, might not have been the first to file patent applications covering a particular invention;
−Removed: • others may independently develop similar or alternative technologies without infringing, misappropriating or otherwise violating our intellectual property rights;
−Removed: • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as
−Removed: in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
−Removed: • we may not be able to obtain and/or maintain necessary licenses on reasonable terms or at all;
−Removed: • third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property;
−Removed: • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how;
−Removed: • we may not be able to maintain the confidentiality of our trade secrets or other proprietary information;
−Removed: • we may not develop or in-license additional proprietary technologies that are patentable;
−Removed: • the patents of others may have an adverse effect on our business.
−Removed: Should any of these events occur, they could significantly harm our business, financial condition, results of operations and prospects.
Risks related to our reliance on third parties
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For example, we contract with Ridgeline for services related to our drug discovery and preclinical work, but we are continuing to build our internal chemistry, manufacturing and controls, biology and preclinical development capabilities to assume activities conducted by Ridgeline on our behalf.
−Removed: We are transitioning from our current service model to a more limited consulting arrangement with Ridgeline.
+Added: We have transitioned from our old service model to a more limited consulting arrangement with Ridgeline.
As part of this transition, we may incur additional costs or experience delays in engaging directly with other third-party CROs and CMOs.
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These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf.
−Removed: If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.
+Added: If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully
+Added: commercialize our product candidates.
As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.
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Risks related to managing growth and employee matters
+Added: Risks related to our employee matters
We are highly dependent on our key personnel and anticipate hiring new key personnel.
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Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel.
−Removed: We are highly dependent on our management, scientific and medical personnel, including our Chief Executive Officer and President, our newly-hired Chief Financial Officer and Chief Scientific Officer, our Executive Vice President of Discovery and Translational Sciences and our Senior Vice President, Clinical Development.
−Removed: Our Senior Vice President, Clinical Development, Karsten Witt, M.D., is not our employee and provides services under a consulting agreement.
−Removed: We are transitioning from our current service model with Ridgeline to a more limited consulting arrangement.
−Removed: While we expect to engage in an orderly transition process as we integrate newly appointed officers and managers, we face a variety of risks and uncertainties relating to management transition, including diversion of management attention from business concerns, failure to retain other key personnel or loss of institutional knowledge.
+Added: We are highly dependent on our management, scientific and medical personnel, including our President and Chief Executive Officer, our Chief Financial Officer, Chief Scientific Officer, Chief Medical Officer, Executive Vice President of Discovery and Translational Sciences, and our Senior Vice President, Non-Clinical Development.
+Added: Our Senior Vice President, Non-Clinical Development, Karsten Witt, M.D., is not our employee and provides services under a consulting agreement.
+Added: We have transitioned from our old service model with Ridgeline to a more limited consulting arrangement.
+Added: While we have engaged in an orderly transition process as we integrate newly appointed officers and managers, we face a variety of risks and uncertainties relating to management transition, including diversion of management attention from business concerns, failure to retain other key personnel or loss of institutional knowledge.
In addition, the loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements could result in delays in product development and harm our business.
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Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.
+Added: Risks related to our business operations and growth
We will need to grow the size of our organization, and we may experience difficulties in managing this growth.
−Removed: As of February 29, 2020, we had 32 full-time employees and contracted for the services of four full-time equivalent employees through our agreement with Ridgeline.
−Removed: We intend to hire new employees to assume activities and responsibilities from Ridgeline personnel and conduct our research and development activities in the future.
−Removed: Any delay in hiring such new employees or disruption in the transition of activities and responsibilities from Ridgeline personnel could result in delays in our research and development activities and would harm our business.
+Added: As of December 31, 2020, we had 69 full-time employees.
+Added: We intend to hire new employees to conduct our research and development activities in the future.
+Added: Any delay in hiring such new employees could result in delays in our research and development activities and would harm our business.
As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations.
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Our internal computer systems, or those used by our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of the development programs of our product candidates.
−Removed: Despite the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, and telecommunication and electrical failures.
+Added: Despite the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants may be vulnerable to damage from computer viruses, unauthorized access, natural disasters, and telecommunication and electrical failures.
While we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations.
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Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.
−Removed: Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.
−Removed: The use of precision medicines as a potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical community.
−Removed: Various factors will influence whether our product candidates are accepted in the market, including:
−Removed: • the clinical indications for which our product candidates are licensed;
−Removed: • physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe and effective treatment;
−Removed: • the potential and perceived advantages of our product candidates over alternative treatments;
−Removed: • our ability to demonstrate the advantages of our product candidates over other cancer medicines;
−Removed: • the prevalence and severity of any side effects;
−Removed: • the prevalence and severity of any side effects for other precision medicines and public perception of other precision medicines;
−Removed: • product labeling or product insert requirements of the FDA or other regulatory authorities;
−Removed: • limitations or warnings contained in the labeling approved by the FDA;
−Removed: • the timing of market introduction of our product candidates as well as competitive products;
−Removed: • the cost of treatment in relation to alternative treatments;
−Removed: • the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities;
−Removed: • the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities;
−Removed: • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies;
−Removed: • the effectiveness of our sales and marketing efforts.
−Removed: If our product candidates are licensed but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue.
−Removed: In addition, although our product candidates differ in certain ways from other precision medicine approaches, serious adverse events or deaths in other clinical trials involving precision medicines, even if not ultimately attributable to our product or product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.
−Removed: Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.
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For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale.
−Removed: Any such product liability claims may include allegations of defects in
−Removed: manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties.
+Added: 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 or a breach of warranties.
Claims could also be asserted under state consumer protection acts.
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Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.
−Removed: Changes in tax law could adversely affect our business and financial condition.
−Removed: The rules dealing with U.S.
−Removed: federal, state, and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S.
−Removed: Treasury Department.
−Removed: Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock.
−Removed: In recent years, many such changes have been made and changes are likely to continue to occur in the future.
−Removed: Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
−Removed: We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.
+Added: Risks related to tax
Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
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federal and state net operating loss carryforwards of $96,644 and U.S.
−Removed: federal research and development tax credit carryforwards of
−Removed: $1,014, each of which will begin to expire at various dates through 2039 and which could be limited if we experience an “ownership change.”
−Removed: Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
−Removed: As widely reported, global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
−Removed: There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
−Removed: Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
−Removed: If the current equity and credit markets deteriorate, or do not improve, 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 or abandon clinical development plans.
−Removed: In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget.
−Removed: Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.
−Removed: We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure.
−Removed: We rely on information technology systems that we or our third-party providers operate to process, transmit and store electronic information in our day-to-day operations.
−Removed: In connection with our MAP platform and product discovery efforts, we may collect and use a variety of personal data, such as name, mailing address, email addresses, phone number and clinical trial information.
−Removed: A successful cyberattack could result in the theft or destruction of intellectual property, data, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations.
−Removed: Cyberattacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect.
−Removed: Cyberattacks could include wrongful conduct by hostile foreign governments, industrial espionage, wire fraud and other forms of cyber fraud, the deployment of harmful malware, denial-of-service, social engineering fraud or other means to threaten data security, confidentiality, integrity and availability.
−Removed: A successful cyberattack could cause serious negative consequences for us, including, without limitation, the disruption of operations, the misappropriation of confidential business information, including financial information, trade secrets, financial loss and the disclosure of corporate strategic plans.
−Removed: Although we devote resources to protect our information systems, we realize that cyberattacks are a threat, and there can be no assurance that our efforts will prevent information security breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our results of operations and financial condition.
−Removed: Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under state ( e.g.
−Removed: , state breach notification laws), federal ( e.g.
−Removed: , HIPAA, as amended by HITECH), and international law ( e.g.
−Removed: , the GDPR) and may cause a material adverse impact to our reputation, affect our ability to conduct new studies and potentially disrupt our business.
−Removed: In addition, the computer systems of various third parties on which we rely, including our CROs and other contractors, consultants and law and accounting firms, may sustain damage from computer viruses, unauthorized access, data breaches, phishing attacks, cybercriminals, natural disasters (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures.
−Removed: We rely on our third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches.
−Removed: If we or our third-party providers fail to maintain or protect our information technology systems and data integrity effectively or fail to
−Removed: anticipate, plan for or manage significant disruptions to our information technology systems, we or our third-party providers could have difficulty preventing, detecting and controlling such cyber-attacks and any such attacks could result in losses described above as well as disputes with physicians, patients and our partners, regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows.
−Removed: Any failure by such third parties to prevent or mitigate security breaches or improper access to or disclosure of such information could have similarly adverse consequences for us.
−Removed: If we are unable to prevent or mitigate the impact of such security or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business.
+Added: federal research and development tax credit carryforwards of $2,477, each of which will begin to expire at various dates through 2039 and which could be limited if we experience an “ownership change.”
Risks related to ownership of our common stock
+Added: Risks related to investments in our securities
The price of our stock is volatile, and you could lose all or part of your investment.
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If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.
−Removed: We have broad discretion in the use of our existing cash, cash equivalents and marketable securities andmay not use them effectively.
+Added: We have broad discretion in the use of our existing cash, cash equivalents and marketable securities and may not use them effectively.
Our management will have broad discretion in the application of our existing cash, cash equivalents and marketable securities.
3 unchanged sentences
We currently anticipate that we will retain future earnings for the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
−Removed: In addition, we may enter into agreements that prohibit us from paying cash dividends without prior written consent from our contracting
−Removed: parties, or which other terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock.
+Added: In addition, we may enter into agreements that prohibit us from paying cash dividends without prior written consent from our contracting parties, or which other terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock.
Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.
−Removed: Our executive officers, directors, and 5% stockholders beneficially owned approximately 55.84% of our outstanding voting stock as of February 3, 2020.
+Added: Based upon our common stock outstanding as of December 31, 2020, our executive officers, directors, and their affiliates beneficially owned over a majority of our outstanding voting stock.
These stockholders, acting together, are able to significantly influence all matters requiring stockholder approval.
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If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
+Added: As of June 30, 2020, the market value of our stock held by non-affiliates was greater than $700 million.
+Added: As of January 1, 2021, we ceased to be a smaller reporting company.
We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company.
−Removed: We will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which will require, among other things, that we file with the Securities and Exchange Commission,
−Removed: or SEC, annual, quarterly, and current reports with respect to our business and financial condition.
+Added: We will be subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC, annual, quarterly, and current reports with respect to our business and financial condition.
In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Global Select Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
11 unchanged sentences
Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.
−Removed: If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lockup and other legal restrictions on resale discussed in this Annual Report lapse, the trading price of our common stock could decline.
−Removed: As of February 3, 2020, over 50.12% of our common stock was held by members of our Board and shareholders affiliated with our Board of Directors and if any of them were to sell a portion of their holdings of our common stock, our stock price could be negatively affected.
−Removed: In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our 2020 Plan and our 2020 Employee Stock Purchase Plan, each of which became effective upon the effectiveness of the registration statement of which this Annual Report forms a part, 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 of 1933, as amended, or the Securities Act.
−Removed: 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.
+Added: Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could depress the market price of our common shares, could make it more difficult for you to sell your common stock at a time and price that you deem appropriate and could impair our ability to raise capital through the sale of additional equity securities.
+Added: We are unable to predict the effect that sales may have on the prevailing market price of our common stock.
+Added: Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
+Added: The global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
+Added: We believe that the state of global economic conditions are particularly volatile and uncertain, not only in light of the COVID-19 pandemic and the potential global recession resulting therefrom, but also due to recent and expected shifts in political, legislative and regulatory conditions concerning, among other matters, international trade and taxation, and that an uneven recovery or a renewed global downturn may negatively impact our ability to conduct clinical trials on the scale and timelines anticipated.
+Added: There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
+Added: Our general business strategy may be adversely affected by any such economic downturn, volatile business or political environment or continued unpredictable and unstable market conditions.
+Added: If the current equity and credit markets deteriorate, it may make obtaining any necessary debt or equity financing more difficult, more costly and more dilutive.
+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 or abandon clinical development plans.
+Added: In addition, there is a risk that 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 operating goals on schedule and on budget.
+Added: To the extent that our profitability and strategies are negatively affected by downturns or volatility in general economic conditions, our business and results of operations may be materially adversely affected.
+Added: If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
+Added: The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
+Added: If one or more of the analysts who cover us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
+Added: If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
+Added: Risks related to our charter and bylaws
Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.
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The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.
−Removed: We have identified material weaknesses in our internal control over financial reporting.
−Removed: If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.
−Removed: In preparation of our financial statements to meet the requirements of our initial public offering, we determined that material weaknesses in our internal control over financial reporting existed during fiscal 2017 and remained unremediated as of December 31, 2019.
+Added: Risks related to internal control over financial reporting
+Added: We have recently remediated material weaknesses in our internal control over financial reporting.
+Added: If we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.
+Added: In preparation of our financial statements to meet the requirements of our initial public offering, we determined that material weaknesses in our internal control over financial reporting existed during fiscal year 2017 until they were recently remediated in the fourth quarter of 2020.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
3 unchanged sentences
Specifically, the material weaknesses resulted in errors in our accounting for and reporting of derivative liabilities, loss on extinguishment of convertible promissory notes and expense classification.
−Removed: We are in the process of building a finance organization and implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to these material weaknesses, including hiring additional finance and accounting personnel and the establishment of controls to account for and disclose complex transactions.
−Removed: If we are unable to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable Nasdaq Global Select Market listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.
+Added: We have implemented a variety of controls to remediate the material weaknesses identified which enabled us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to enhance our internal control procedures.
+Added: We believe that these efforts have remediated the material weaknesses, but we cannot assure that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
+Added: If we are unable to successfully remediate any future material weaknesses in our internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable Nasdaq Global Select Market listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.
In addition, we could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.
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In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our stock price and make it more difficult for us to effectively market and sell our service to new and existing customers.
−Removed: If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
−Removed: The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
−Removed: Securities and industry analysts do not currently, and may never, publish research on our company.
−Removed: If no securities or industry analysts commence coverage of our company, the trading price for our stock would likely be negatively impacted.
−Removed: In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
−Removed: If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
+Added: General risk factors
+Added: Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
+Added: In the event we decide to conduct clinical trials or continue to enroll subjects in our ongoing or future clinical trials, we may be subject to additional privacy restrictions.
+Added: The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.
+Added: The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data
+Added: relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
+Added: The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
+Added: The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
+Added: In addition, the GDPR includes restrictions on cross-border data transfers.
+Added: The GDPR increased our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.
+Added: Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
+Added: Further, the United Kingdom’s vote in favor of exiting the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.
+Added: In particular, it is unclear how data transfers to and from the United Kingdom will be regulated.
+Added: In addition, California recently enacted the California Consumer Privacy Act, or CCPA, which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
+Added: The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
+Added: The CCPA went into effect on January 1, 2020, and the California Attorney General commenced enforcement actions for violations beginning July 1, 2020.
+Added: The CCPA was amended on September 23, 2018, and it remains unclear what, if any, further modifications will be made to this legislation or how it will be interpreted.
+Added: As currently written, the CCPA may impact our business activities and exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.
+Added: Compliance with U.S.
+Added: and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
+Added: Failure to comply with U.S.
+Added: and international data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and business.
+Added: Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.
+Added: Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.
+Added: Changes to patent law in the United States and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
+Added: As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.
+Added: Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.
+Added: Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.
+Added: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
+Added: Depending on decisions by the U.S.
+Added: Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we might obtain in the future.
+Added: For example, in the case Assoc.
+Added: for Molecular Pathology v.
+Added: Myriad Genetics, Inc., the U.S.
+Added: Supreme Court held that certain claims to DNA molecules are not patentable.
+Added: Any adverse changes in the patent laws of other jurisdictions could have a material adverse effect on our business and financial condition.
+Added: Changes in the laws and regulations governing patents in other jurisdictions could similarly have an adverse effect on our ability to obtain and effectively enforce any rights we may have in our patent applications or any patents we may own or in-license in the future.
+Added: Recent or future patent reform legislation could also increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any patents we may own or in-license in the future.
+Added: The United States has enacted and implemented wide-ranging patent reform legislation.
+Added: On September 16, 2011, the Leahy-Smith America Invents Act, or America Invents Act, was signed into law, which includes a number of significant changes to U.S.
+Added: These include provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation, establish a new post-grant review system and switch the U.S.
+Added: patent system from a “first-to-invent” system to a “first-to-file” system.
+Added: Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier.
+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 were the first to either (i) file any patent application related to our product candidates or other technologies or (ii) invent any of the inventions claimed in our patent applications or any patents we may own or in-license.
+Added: These changes also allow third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.
+Added: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
+Added: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
+Added: An adverse determination in any such proceeding could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
+Added: Accordingly, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents we may own or in-license in the future, all of which could have a material adverse effect on our business and financial condition.
+Added: Changes in tax law could adversely affect our business and financial condition.
+Added: The rules dealing with U.S.
+Added: federal, state, and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S.
+Added: Treasury Department.
+Added: Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock.
+Added: In recent years, many such changes have been made and changes are likely to continue to occur in the future.
+Added: Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
+Added: We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.
+Added: We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure.
+Added: We rely on information technology systems that we or our third-party providers operate to process, transmit and store electronic information in our day-to-day operations.
+Added: In connection with our MAP platform and product discovery efforts, we may collect and use a variety of personal data, such as name, mailing address, email addresses, phone number and clinical trial information.
+Added: A successful cyberattack could result in the theft or destruction of intellectual property, data, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations.
+Added: Cyberattacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect.
+Added: Cyberattacks could include wrongful conduct by hostile foreign governments, industrial espionage, wire fraud and other forms of cyber fraud, the deployment of harmful malware, denial-of-service, social engineering fraud or other means to threaten data security, confidentiality, integrity and availability.
+Added: A successful cyberattack could cause serious negative consequences for us, including, without limitation, the disruption of operations, the misappropriation of confidential business information, including financial information, trade secrets, financial loss and the disclosure of corporate strategic plans.
+Added: Although we devote resources to protect our information systems, we realize that cyberattacks are a threat, and there can be no assurance that our efforts will prevent information security breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our results of operations and financial condition.
+Added: Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under state ( e.g.
+Added: , state breach notification laws), federal ( e.g.
+Added: , HIPAA, as amended by HITECH), and international law ( e.g.
+Added: , the GDPR) and may cause a material adverse impact to our reputation, affect our ability to conduct new studies and potentially disrupt our business.
+Added: In addition, the computer systems of various third parties on which we rely, including our CROs and other contractors, consultants and law and accounting firms, may sustain damage from computer viruses, unauthorized access, data breaches, phishing attacks, cybercriminals, natural disasters (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures.
+Added: We rely on our third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches.
+Added: If we or our third-party providers fail to maintain or protect our information technology systems and data integrity effectively or fail to anticipate, plan for or manage significant disruptions to our information technology systems, we or our third-party providers could have difficulty preventing, detecting and controlling such cyber-attacks and any such attacks could result in losses described above as well as disputes with physicians, patients and our partners, regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows.
+Added: Any failure by such third parties to prevent or mitigate security breaches or improper access to or disclosure of such information could have similarly adverse consequences for us.
+Added: If we are unable to prevent or mitigate the impact of such security or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business.
Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.