Item 1A. Risk Factors
Item 1A. Risk Factors
Except as described below, there have been no
material changes to the Risk Factors previously disclosed in our 2025 Form 10-K. The risks described in our 2025 Form 10-K and below are
not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial
also may materially adversely affect our business, financial condition, and/or operating results.
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Risks Relating to Our Business and Industry
We rely and will continue to rely on third
parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected
deadlines or do not successfully perform and comply with regulatory requirements, we may not be able to obtain regulatory approval of
or commercialize our product candidates.
We depend, and will continue
to depend, on third parties, including, but not limited to, contract research organizations (“CROs”), clinical trial sites
and clinical trial principal investigators, contract laboratories, IRBs, manufacturers, suppliers, and other third parties to conduct
our clinical trials, including those for our drug candidates bezisterim (NE3107) and BIV201. We rely heavily on these third parties over
the course of our clinical trials, and we control only certain aspects of their activities. Nevertheless, we retain ultimate responsibility
for ensuring that each of our studies is conducted in accordance with the protocol and applicable legal, regulatory, and scientific standards
and regulations, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties
are required to comply with cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities
for the conduct of clinical trials on product candidates in clinical development. Regulatory authorities enforce cGCPs through periodic
inspections and for-cause inspections of clinical trial principal investigators and trial sites. If, due to the failure of either the
Company or a third party, a clinical trial fails to comply with applicable cGCPs, FDA’s IND requirements, other applicable regulatory
requirements, or requirements set forth in the applicable IRB-approved protocol, the Company may be required to conduct additional clinical
trials to support our marketing applications, which would delay the regulatory approval process. For example, our drug product candidate
bezisterim (NE3107) was cleared by FDA for use in a Phase 3, randomized, double blind, placebo controlled, parallel group, multicenter
study in subjects who have mild to moderate AD. Enrollment in that trial began in August 2021, with a planned primary completion in late
2022/early 2023. On November 29, 2023, the Company announced topline efficacy data from its Phase 3 clinical trial (NCT04669028) of bezisterim
(NE3107) in the treatment of mild to moderate AD. Upon trial completion, as the Company began the process of analyzing the trial data,
the Company found significant deviations from the protocol and cGCP violations at 15 study sites (virtually all of which were from one
geographic area). This highly unusual level of suspected improprieties led the Company to exclude all patients from these sites. We subsequently
notified FDA’s OSI of such significant deviations from study protocol, the suspected improprieties, and the study sites involved.
The identification of significant deviations from study protocol and numerous GCP violations at multiple study sites raised questions
regarding the validity and robustness of data from these study sites. The unplanned exclusion of so many patients left the trial underpowered
for its primary endpoints. However, based on the remaining dataset from those other sites determined to be in compliance with the protocol
and GCP’s, a preliminary signal of efficacy was detected. The Company is considering: (1) employing the adaptive trial feature of
the protocol to continue enrolling patients to achieve statistical significance; and/or (2) designing a new Phase 3 study of bezisterim
(NE3107) that leverages the most recent scientific literature relating to AD along with the company's understanding regarding the effects
of bezisterim (NE3107) in persons with mild-moderate AD.
Although we design the
clinical trials for our product candidates, our CROs are tasked with facilitating and monitoring these trials. As a result, many aspects
of our clinical development programs, including site and investigator selection, and the conduct, timing, and monitoring of the study,
is outside our direct control, either partially or in whole. Our reliance on third parties to conduct clinical trials also results in
less direct control over the collection, management, and quality of data developed through clinical trials than would be the case if we
were relying entirely upon our own employees. Communicating with third parties can also be challenging, potentially leading to mistakes
as well as difficulties in coordinating activities. Our business may be impacted if any of these third parties violates applicable federal,
state, or foreign laws and/or regulations, including but not limited to FDA’s IND regulations, cGCPs, fraud and abuse or false claims
laws, healthcare privacy and data security laws, or provide us or government agencies with inaccurate, misleading, or incomplete data.
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Risks Relating To Our Common Stock
You may experience future dilution as a
result of future equity offerings or if we issue shares subject to options, warrants, stock awards or other arrangements.
In order to raise additional capital, we may in
the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock in any
other offering at a price per share that is less than the current market price of our securities, and investors purchasing shares or other
securities in the future could have rights superior to existing stockholders. The sale of additional shares of our Common Stock or other
securities convertible into or exchangeable for our Common Stock would dilute all of our stockholders, and if such sales of convertible
securities into or exchangeable into our Common Stock occur at a deemed issuance price that is lower than the current exercise price of
our outstanding warrants sold to Acuitas Group Holdings, LLC (“Acuitas”) in August 2022 (the “Acuitas Warrants”),
the exercise price for those warrants would adjust downward to the deemed issuance price pursuant to price adjustment protection contained
within those warrants.
As of September 30, 2025, there were warrants
outstanding to purchase an aggregate of 8,307,038 shares of our Common Stock at exercise prices ranging from $0.0001 to $582.00 per share,
84,872 shares issuable upon exercise of outstanding options at exercise prices ranging from $19.00 to $4,209.00 per share and restricted
stock units totaling 5,457. We may also grant additional options, warrants or equity awards. To the extent such shares are issued, the
interest of holders of our Common Stock will be diluted.
Moreover, we are obligated to issue shares of
our Common Stock upon achievement of certain clinical, regulatory and commercial milestones with respect to certain of our drug candidates
(i.e., bezisterim (NE3107), NE3291, NE3413, and NE3789) pursuant to the asset purchase agreement, dated April 27, 2021, by and among the
Company, NeurMedix and Acuitas, as amended on May 9, 2021. The achievement of these milestones could result in the issuance of up to 180,000
shares of our Common Stock, further diluting the interest of holders of our Common Stock.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.