6 unchanged sentences
• We have a history of net losses and we may not achieve or maintain profitability.
−Removed: • We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products.
−Removed: • Our biotherapeutic programs are early stage, highly regulated and expensive.
−Removed: • If either Nestlé Health Science or Takeda terminate their development programs under their respective license agreements with us, any potential revenue from those license agreements will be significantly reduced or non-existent.
−Removed: • We may need additional capital in the future in order to expand our business.
+Added: • Biotherapeutic programs are highly regulated and expensive.
• We are dependent on a limited number of customers.
2 unchanged sentences
• We are dependent on a limited number of contract manufacturers for large scale production of substantially all of our enzymes.
+Added: • We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products.
• If we are unable to develop and commercialize new products for the target markets, our business and prospects will be harmed.
1 unchanged sentence
• Ethical, legal and social concerns about genetically engineered products and processes could limit or prevent the use of our products, processes, and technologies and limit our revenues.
+Added: • We have recently enhanced our strategic focus to concentrate of certain programs and business lines.
+Added: As a result of this refined focus, we may fail to capitalize on other opportunities that may be more profitable or for which there is a greater likelihood of success.
+Added: • Given our recent change in strategic direction, we may receive limited revenue or no future value from certain of our existing license agreements.
+Added: • In connection with our recently announced change in strategic direction, we are closing operations at our San Carlos office and while we are looking to sublease such space, we may ultimately be unable to do so and still be obligated to pay the balance of the lease, which is substantial.
• We use hazardous materials in our business, and we must comply with environmental laws and regulations.
1 unchanged sentence
We may not complete needed improvements to our internal controls over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock and your investment.
−Removed: • We or our customers may not be able to obtain regulatory approval for the use of our products in food and food ingredients, if required.
+Added: • We may need additional capital in the future in order to expand our business.
• Our ongoing efforts to deploy our technology in the life science tools market may fail.
−Removed: • The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and we may be unable to obtain regulatory approval for our product candidates.
−Removed: • Clinical trials are difficult to design and implement, expensive, time-consuming and involve an uncertain outcome.
−Removed: • Results of preclinical studies and early clinical trials of product candidates may not be predictive of results of later studies or trials.
−Removed: • We may not be able to maintain orphan drug designations for certain of our product candidates and may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
−Removed: • We have obtained rare pediatric disease designation for CDX-6512 and CDX-6210, however, there is no guarantee that such designation will result in approval of CDX-6512 or CDX-6210, and even if we obtain approval of CDX-6512 or CDX-6210 for the indication for which we have been awarded rare pediatric disease designation, there is no guarantee that such approval will result in an aware of a rare pediatric disease priority review voucher.
−Removed: • Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain, or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, or commercialized in a timely manner, or at all, which could negatively impact our business.
−Removed: • Even if we obtain regulatory approval for any products that we develop alone or with collaborators, such products will remain subject to ongoing regulatory requirements.
−Removed: • Our business operations and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.
−Removed: • The successful commercialization of product candidates developed by us or our partners will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies.
−Removed: • We rely on third parties to conduct our clinical trials and perform some of our research and preclinical studies, which if not satisfactorily carried out or fail to meet expected deadlines, may have an adverse effect on our business and prospects.
−Removed: • We contract with third parties for the manufacturing and supply of product candidates, which supply may become limited or interrupted or may not be of satisfactory quality and quantity.
+Added: • Even if our customers or collaborators obtain regulatory approval for any products utilizing our enzymes, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.
+Added: • If we or our customers fail to comply with certain healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
+Added: • We contract with third parties for the manufacturing and supply of our performance enzymes, which supply may become limited or interrupted or may not be of satisfactory quality and quantity.
• Our efforts to prosecute, maintain, protect and/or defend our intellectual property rights may not be successful.
+Added: • Our ability to compete may decline if we do not adequately prosecute, maintain, protect and/or defend our proprietary technology, products or services or our intellectual property rights.
+Added: • Third parties may claim that we are infringing, violating or misappropriating their intellectual property rights, which may subject us to costly and time-consuming litigation and prevent us from developing or commercializing our technology, products or services.
• We may be involved in lawsuits to protect or enforce our intellectual property rights, which could be expensive, time-consuming and unsuccessful.
7 unchanged sentences
We have a history of net losses and we may not achieve or maintain profitability.
−Removed: We have incurred net losses since our inception, including losses of $33.6 million, $21.3 million, and $24.0 million for the years ended December 31, 2022, 2021, and 2020, respectively, and $22.6 million and $8.3 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: As of March 31, 2023 and December 31, 2022, we had an accumulated deficit of $443.9 million and $421.3 million, respectively.
−Removed: If we are unable to expand o ur business, through new or expanded col laborations, development of new products or services, or increased sales of existing products and services, our net losses may increase and we may never achieve profitability.
−Removed: In addition, some of our collaboration agreements, including our collaborations with Nestlé Health Science and Takeda, and our performance enzyme agreements, including the agreements with GSK, Merck and Novartis, provide for milestone payments, usage payments, and/or future royalty payments, which we will only receive if we and our collaborators develop and commercialize products.
−Removed: We also may fund development of additional proprietary performance enzymes and/or biotherapeutic products.
−Removed: There can be no assurance that any of these products will become commercially viable or that we will ever achieve profitability on a quarterly or annual basis.
+Added: We have incurred net losses since our inception, including losses of $33.6 million, $21.3 million, and $24.0 million for the years ended December 31, 2022, 2021, and 2020, respectively, and $34.1 million and $11.0 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: As of June 30, 2023 and December 31, 2022, we had an accumulated deficit of $455.4 million and $421.3 million, respectively.
+Added: If we are unable to continue to successfully develop and commercialize products in our pharmaceutical manufacturing business, increase sales of existing products and services, develop and commercialize our ECO Synthesis ™ Platform, and or develop new products or services, or otherwise expand our business, whether through new or expanded collaborations or other products and services, our net losses may increase and we may never achieve profitability.
+Added: In addition, some of our agreements, including the agreements with GSK, Merck and Novartis, provide for milestone payments, usage payments, and/or future royalty payments, which we will only receive if we and our collaborators develop and commercialize products.
+Added: We also intend to continue to fund the development of additional proprietary performance enzyme products and advance new technologies like our ECO Synthesis ™ Platform.
+Added: There can be no assurance that any of these products or services will become commercially viable or that we will ever achieve profitability on a quarterly or annual basis.
If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to continue our business.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
−Removed: We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products and achieving or sustaining profitability, and could lead to disagreements with our current or former collaborators.
−Removed: Our ability to maintain and manage collaborations in our markets is fundamental to the success of our business.
−Removed: We currently have license agreements, research and development agreements, supply agreements and/or distribution agreements with various collaborators.
−Removed: For example, we have ongoing collaborations and agreements with GSK, Merck, Novartis, Nestlé Health Science and Takeda that are important to our business and financial results.
−Removed: We may have limited or no control over the amount or timing of resources that any collaborator is able or willing to devote to our partnered products or collaborative efforts.
−Removed: Any of our collaborators may fail to perform its obligations.
−Removed: These collaborators may breach or terminate their agreements with us or otherwise fail to conduct their collaborative activities successfully and in a timely manner.
−Removed: Further, our collaborators may not develop products arising out of our collaborative arrangements or devote sufficient resources to the development, manufacture, marketing or sale of these products.
−Removed: Moreover, disagreements with a collaborator could develop, and any conflict with a collaborator could lead to litigation and could reduce our ability to enter into future collaboration agreements and negatively impact our relationships with one or more existing collaborators.
−Removed: If any of these events occur, especially if they occur in our collaborations with GSK, Merck, Novartis, Nestlé Health Science or Takeda, or if we fail to maintain our agreements with our collaborators, we may not be able to commercialize our existing and potential products or grow our business or generate sufficient revenues to support our operations, we may not receive contemplated milestone payments and royalties under the collaboration, and we may be involved in litigation.
−Removed: Our collaboration opportunities could be harmed and our financial condition and results of operations could be negatively affected if:
−Removed: • we do not achieve our research and development objectives under our collaboration agreements in a timely manner or at all;
−Removed: • we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators;
−Removed: • we, our collaborators and/or our contract manufacturers do not receive the required regulatory and other approvals necessary for the commercialization of the applicable product;
−Removed: • we disagree with our collaborators as to rights to intellectual property that are developed during the collaboration, or their research programs or commercialization activities;
−Removed: • we are unable to manage multiple simultaneous collaborations;
−Removed: • our collaborators or licensees are unable or unwilling to implement or use the technology or products that we provide or license to them;
−Removed: • our collaborators become competitors of ours or enter into agreements with our competitors;
−Removed: • our collaborators become unable or less willing to expend their resources on research and development or commercialization efforts due to general market conditions, their financial condition or other circumstances beyond our control;
−Removed: • our collaborators experience business difficulties, which could eliminate or impair their ability to effectively perform under our agreements.
−Removed: We are aware of media reports that Takeda has communicated internally its desire to end research, discovery and preclinical work in certain rare disease areas that may overlap with the programs on which we collaborate.
−Removed: We continue to engage in discussions with Takeda about their plans related to such programs.
−Removed: It is unclear how any such changes at Takeda, if they occur, might impact our collaborative programs.
−Removed: To our knowledge, Takeda has made no definitive decisions with regards to any programs covered by the Takeda Agreement.
−Removed: Even after collaboration relationships expire or terminate, some elements of the collaboration may survive.
−Removed: For instance, certain rights, licenses and obligations of each party with respect to intellectual property and program materials may survive the expiration or termination of the collaboration.
−Removed: Disagreements or conflicts between and among the parties could develop even though the collaboration has ended.
−Removed: These disagreements or conflicts could result in expensive arbitration or litigation, which may not be resolved in our favor.
−Removed: Finally, our business could be negatively affected if any of our collaborators or suppliers undergoes a change of control or were to otherwise assign the rights or obligations under any of our agreements.
−Removed: Our biotherapeutic programs are early stage, highly regulated and expensive.
−Removed: Our ability to obtain additional development partners or additional funding for the programs, to advance our product candidates to clinical trials and to ultimately receive regulatory approvals is highly uncertain.
−Removed: We are developing and have developed novel biotherapeutic candidates, including CDX-6114, the novel oral enzyme product candidate for the treatment of PKU that we licensed to Nestlé Health Science and CDX-7108, the oral recombinant lipase product candidate for the treatment of EPI that we are developing in collaboration with Nestlé Health Science.
−Removed: We are also developing protein sequences for use in gene therapy products for Fabry Disease, Pompe Disease, an undisclosed blood factor deficiency and a certain undisclosed rare genetic disorder for Takeda.
−Removed: The successful development of biotherapeutic candidates involves many risks and uncertainties, requires long timelines and may lead to uncertain results.
+Added: Biotherapeutic programs are highly regulated and expensive.
+Added: The ability of our customers, future customers of partners, including any company developing RNAi therapeutics, to advance product candidates utilizing our products to clinical trials and to ultimately receive regulatory approvals is highly uncertain.
+Added: Although we are no longer developing our own portfolio of biotherapeutics product candidates, we continue to develop enzyme products, including our ECO Synthesis ™ Platform, that may be used by our customers, future customers or partners in connection with their biotherapeutic product candidates, The successful development of biotherapeutic candidates involves many risks and uncertainties, requires long timelines and may lead to uncertain results.
In addition, drug development is highly regulated and requires areas of expertise and capital resources we do not currently possess.
−Removed: In order to market a biologic product in the United States, we or our collaborators must undergo the following process required by the FDA:
−Removed: • completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with GLP requirements;
−Removed: • submission to the FDA of an IND, which must become effective before human clinical studies may begin in the United States;
−Removed: • approval by an independent IRB representing each clinical site before the clinical study may be initiated at the site;
−Removed: • performance of adequate and well-controlled human clinical studies (generally divided into three phases) in accordance with GCP requirements to establish the safety, purity and potency (or efficacy) of the product candidate for each proposed indication;
+Added: In order to market a biologic product in the United States, our customers, future customers or partners must undergo the following process required by the United States Food and Drug Administration (“FDA”):
+Added: • completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with the FDA's Good Laboratory Practice requirements;
+Added: • submission to the FDA of an Investigational New Drug Application (“IND”), which must become effective before human clinical studies may begin in the United States;
+Added: • approval by an independent institutional review board (“IRB”) representing each clinical site before the clinical study may be initiated at the site;
+Added: • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice (“GCP”) requirements to establish the safety, purity and potency (or efficacy) of the product candidate for each proposed indication;
• preparation of and submission to the FDA of a Biologics License Application (“BLA”) after completion of all clinical studies;
• potential review of the product candidate by an FDA advisory committee;
−Removed: • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the product candidate is produced to assess compliance with cGMP requirements;
+Added: • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the product candidate is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements;
• FDA review and approval of a BLA prior to any commercial marketing or sale of the product in the United States.
−Removed: If we fail to comply with applicable FDA or other regulatory requirements at any time during the drug development process, clinical testing, the approval process or after approval, we may become subject to administrative or judicial penalties, including the FDA’s refusal to approve a pending application, withdrawal of an approval, warning letters, product recalls and additional enforcement actions.
−Removed: Our efforts to advance our biotherapeutic candidates that we develop are subject to numerous risks, including the following:
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and the results are inherently unpredictable.
−Removed: If we are ultimately unable to obtain regulatory approval for biotherapeutic product candidates, our business will be harmed.
−Removed: To obtain regulatory approval to market any product candidate, preclinical studies and costly and lengthy clinical trials are required, and the results of the studies and trials are highly uncertain.
−Removed: A failure of one or more preclinical or clinical trials can occur at any stage, and many companies that have believed their drug candidates performed satisfactorily in preclinical and clinical testing have nonetheless failed to obtain marketing approval of their product candidates.
−Removed: • We may find it difficult to enroll patients in our clinical trials for product candidates.
−Removed: Any enrollment difficulties could delay clinical trials and any potential product approval.
−Removed: • We may experience difficulty or delay in obtaining the FDA’s acceptance of an IND for product candidates we may seek to enter into clinical development, which would delay initiation of Phase 1 clinical testing.
−Removed: Delays in the commencement or completion of clinical testing could significantly affect our product development costs or the product development costs of our present and any future collaborators.
−Removed: We do not know whether planned clinical trials will begin on time or be completed on schedule, if at all.
−Removed: The commencement and completion of clinical trials can be delayed for a number of reasons.
−Removed: For example, a clinical trial may be suspended or terminated by us, by the IRB of the institution in which such trial is being conducted, or by the FDA due to a number of factors, including unforeseen safety issues, changes in governmental regulations or lack of adequate funding to continue the clinical trial.
−Removed: • We have limited experience in drug development or regulatory matters related to drug development.
−Removed: As a result, we rely or will rely on third parties to conduct our preclinical and clinical studies, assist us with drug manufacturing and formulation and perform other tasks for us.
−Removed: If these third parties do not successfully carry out their responsibilities or comply with regulatory requirements, we may receive lower quality products or services, suffer reputational harm and not be able to obtain regulatory approval for product candidates.
−Removed: • Our efforts to use CodeEvolver ® protein engineering technology platform to generate new lead biotherapeutic candidates, whether under our collaborations with Nestlé Health Science, Takeda or otherwise, may not be successful in creating candidates of value.
−Removed: • We will be exposed to potential product liability risks through the testing of experimental therapeutics in humans, which may expose us to substantial uninsured liabilities.
−Removed: • Third parties may develop intellectual property that could limit our ability to develop, market and commercialize product candidates.
−Removed: • Changes in methods of treatment of disease, such as gene therapy, could cause us to stop development of our product candidates or reduce or eliminate potential demand for CDX-6114 or CDX-7108, if approved, or any other product candidates that we may develop in the future.
−Removed: If either Nestlé Health Science or Takeda terminate their development programs under their respective license agreements with us, any potential revenue from those license agreements will be significantly reduced or non-existent, and our results of operations and financial condition will be materially and adversely affected.
−Removed: We have invested significant time and financial resources in the development of CDX-6114 and other product candidates for the treatment of hyperphenylalaninemia, now included in the Nestlé License Agreement, as well as in the development of candidates for the treatment of Fabry disease and Pompe disease, which are now included in the Takeda Agreement.
−Removed: Under the Nestlé License Agreement, we are eligible to receive payments from Nestlé Health Science that include (i) development and approval milestones of up to $85.0 million, (ii) sales-based milestones of up to $250.0 million in the aggregate, which aggregate amount is achievable if net sales exceed $1.0 billion in a single year, and (iii) tiered royalties, at percentages ranging from the mid-single digits to low double-di gits, of net sales of product.
−Removed: Under the Takeda Agreement, we are eligible to earn potential payments that include (i) reimbursement of research and development fees and preclinical development milestone payments for the three initial programs of $12.0 million, in aggregate, and $4.2 million for the fourth program, (ii) clinical development and commercialization-based milestone, per target gene, of up to $104.0 million, and (iii) tiered royalty payments based on net sales of applicable products at percentages ranging from the mid-single digits to low single-digits.
−Removed: While we have received milestone payments under the Nestlé License Agreement to date ther e is no guarantee that we will receive further milestone payments under the Nestlé License Agreement or Takeda Agreement in the future.
−Removed: As previously noted, we are aware of media reports that Takeda has communicated internally its desire to end research, discovery and preclinical work in certain rare disease areas that may overlap with the programs on which we collaborate.
−Removed: We continue to engage in discussions with Takeda about their plans related to such programs.
−Removed: It is unclear how any such changes at Takeda, if they occur, might impact our collaborative programs.
−Removed: Under the Nestlé License Agreement and the Takeda Agreement, either Nestlé Health Science and Takeda, as applicable, may each terminate the entire agreement or specified programs thereunder at will under certain circumstances.
−Removed: If Nestlé Health Science terminates its rights and obligations with respect to the Nestlé License Agreement and/or Takeda terminates its rights and obligations with respect to the Takeda Agreement, then depending on the timing of such event:
−Removed: • the development of our product candidates subject to the respective agreements may be terminated or significantly delayed;
−Removed: • our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to the development and commercialization of product candidates;
−Removed: • we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously the subject of the respective agreements, including the reimbursement of third parties;
−Removed: • in order to fund further development and commercialization of new product candidates or programs, we may need to seek out and establish alternative collaboration arrangements with third-party partners;
−Removed: this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us to limit the size or scope of one or more of our programs or increase our expenditures and seek additional funding by other means.
−Removed: We may need additional capital in the future in order to expand our business.
−Removed: Our future capital requirements may be substantial, particularly as we continue to develop our business.
−Removed: Although we believe that, based on our current level of operations, our existing cash, cash equivalents and equity securities will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next 12 months, we may need additional capital if our current plans and assumptions change.
−Removed: Our need for additional capital will depend on many factors, including the financial success of our performance enzyme business, our spending to develop and commercialize new and existing products and the amount of collaboration funding we may receive to help cover the cost of such expenditures, the effect of any acquisitions of other businesses, technologies or facilities that we may make or develop in the future, our spending on new market opportunities, including opportunities in the biotherapeutics markets, and the filing, prosecution, enforcement and defense of patent claims.
−Removed: If our capital resources are insufficient to meet our capital requirements, and we are unable to enter into or maintain collaborations with partners that are able or willing to fund our development efforts or commercialize any products that we develop or enable, we will have to raise additional funds to continue the development of our technology and products and complete the commercialization of products, if any, resulting from our technologies.
−Removed: In addition, we may choose to raise additional capital due to market conditions or strategic considerations, such as funding investments in our biotherapeutics business, even if we believe we have sufficient funds for our current or future operating plans.
−Removed: We may seek to obtain such additional capital through equity offerings, debt financings, credit facilities and/or strategic collaborations.
−Removed: If future financings involve the issuance of equity securities, our existing stockholders would suffer dilution.
−Removed: If we raise debt financing or enter into credit facilities, we may be subject to restrictive covenants that limit our ability to conduct our business.
−Removed: Strategic collaborations may also place restrictions on our business.
−Removed: We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all.
−Removed: If we fail to raise sufficient funds and fail to generate sufficient revenues to achieve planned gross margins and to control operating costs, our ability to fund our operations, take advantage of strategic opportunities, develop products or technologies, or otherwise respond to competitive pressures could be significantly limited.
−Removed: If this happens, we may be forced to delay or terminate research or development programs or the commercialization of products resulting from our technologies, curtail or cease operations or obtain funds through collaborative and licensing arrangements that may require us to relinquish commercial rights, or grant licenses on terms that are not favorable to us.
−Removed: If adequate funds are not available, we will not be able to successfully execute our business plan or continue our business.
+Added: If our customers, future customers or partners are ultimately unable to obtain regulatory approval for their biotherapeutic product candidates utilizing our enzyme products, our business will be harmed.
+Added: In addition, if we or our customers, future customers or partners fail to comply with applicable FDA or other regulatory requirements at any time during the drug development process, clinical testing, the approval process or after approval, we or they may become subject to administrative or judicial penalties, including the FDA’s refusal to approve a pending application, withdrawal of an approval, warning letters, product recalls and additional enforcement actions, any of which may have an adverse effect on our financial condition.
We are dependent on a limited number of customers.
Our current revenues are derived from a limited number of key customers.
−Removed: For the three months ended March 31, 2023 and 2022, customers that each individually contributed 10% or more of our total revenue accounted for 60% and 61% of our total revenues, respectively.
+Added: For the six months ended June 30, 2023 and 2022, customers that each individually contributed 10% or more of our total revenue accounted for 49% and 62% of our total revenues, respectively.
We expect a limited number of customers to continue to account for a significant portion of our revenues for the foreseeable future.
5 unchanged sentences
Any such termination or reduction could materially adversely affect our revenues, financial condition and results of operations.
−Removed: For the three months ended March 31, 2023, we derived a majority of our product revenue from these product supply agreements.
+Added: For the six months ended June 30, 2023, we derived a majority of our product revenue from these product supply agreements.
With respect to customers purchasing our products for the manufacture of active pharmaceutical ingredients (“API”) for which they have exclusivity due to patent protection, the termination or expiration of such patent protection and any resulting generic competition may materially and adversely affect our revenues, financial condition or results of operations.
12 unchanged sentences
Enzyme manufacturing capacity limitations at our third-party manufacturers and manufacturing delays could negatively affect our business, reputation, results of operations and financial condition.
−Removed: The failure of any contract manufacturer to supply us our required volumes of enzyme on a timely basis, or to manufacture our enzymes in compliance with our specifications or applicable quality requirements or in volumes sufficient to meet demand, would adversely affect our ability to sell pharmaceutical and fine and complex chemicals products, could harm our relationships with our collaborators or customers and could negatively affect our revenues and operating results.
+Added: The failure of any contract manufacturer to supply us our required volumes of enzyme on a timely basis, or to manufacture our enzymes in compliance with our specifications or applicable quality requirements or in volumes sufficient to meet demand, would adversely affect our ability to sell pharmaceutical and fine and complex chemicals products, could harm our relationships with our customers or collaborators and could negatively affect our revenues and operating results.
We may be forced to secure alternative sources of supply, which may be unavailable on commercially acceptable terms, and could cause delays in our ability to deliver products to our customers, increase our costs and decrease our profit margins.
4 unchanged sentences
Any resources we expend on acquiring or building internal manufacturing capabilities could be at the expense of other potentially more profitable opportunities.
−Removed: In addition, if we contract with other manufacturers, we may experience delays of several months in qualifying them, which could harm our relationships with our collaborators or customers and could negatively affect our revenues or operating results.
+Added: In addition, if we contract with other manufacturers, we may experience delays of several months in qualifying them, which could harm our relationships with our customers or collaborators and could negatively affect our revenues or operating results.
+Added: We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products and achieving or sustaining profitability, and could lead to disagreements with our current or former collaborators.
+Added: Our ability to maintain and manage collaborations in our markets is fundamental to the success of our business.
+Added: We currently have license agreements, research and development agreements, supply agreements and/or distribution agreements with various collaborators.
+Added: For example, we have ongoing collaborations and agreements with GSK, Merck and Novartis that are important to our business and financial results.
+Added: We may have limited or no control over the amount or timing of resources that any collaborator is able or willing to devote to our partnered products or collaborative efforts.
+Added: Any of our collaborators may fail to perform its obligations.
+Added: These collaborators may breach or terminate their agreements with us or otherwise fail to conduct their collaborative activities successfully and in a timely manner.
+Added: Further, our collaborators may not develop products arising out of our collaborative arrangements or devote sufficient resources to the development, manufacture, marketing or sale of these products.
+Added: Moreover, disagreements with a collaborator could develop, and any conflict with a collaborator could lead to litigation and could reduce our ability to enter into future collaboration agreements and negatively impact our relationships with one or more existing collaborators.
+Added: If any of these events occur, especially if they occur in our collaborations with GSK, Merck or Novartis, or if we fail to maintain our agreements with our collaborators, we may not be able to commercialize our existing and potential products or grow our business or generate sufficient revenues to support our operations, we may not receive contemplated milestone payments and royalties under the collaboration, and we may be involved in litigation.
+Added: Our collaboration opportunities could be harmed and our financial condition and results of operations could be negatively affected if:
+Added: • we do not achieve our research and development objectives under our collaboration agreements in a timely manner or at all;
+Added: • we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators;
+Added: • we, our collaborators and/or our contract manufacturers do not receive the required regulatory and other approvals necessary for the commercialization of the applicable product;
+Added: • we disagree with our collaborators as to rights to intellectual property that are developed during the collaboration, or their research programs or commercialization activities;
+Added: • we are unable to manage multiple simultaneous collaborations;
+Added: • our collaborators or licensees are unable or unwilling to implement or use the technology or products that we provide or license to them;
+Added: • our collaborators become competitors of ours or enter into agreements with our competitors;
+Added: • our collaborators become unable or less willing to expend their resources on research and development or commercialization efforts due to general market conditions, their financial condition or other circumstances beyond our control;
+Added: • our collaborators experience business difficulties, which could eliminate or impair their ability to effectively perform under our agreements.
+Added: Takeda recently confirmed that it will end research, discovery and preclinical work in certain rare disease areas that may overlap with the programs on which we collaborate.
+Added: We continue to engage in discussions with Takeda about the foregoing but we and Takeda has not terminated the Takeda Agreement as of the date of this report.
+Added: Even after collaboration relationships expire or terminate, some elements of the collaboration may survive.
+Added: For instance, certain rights, licenses and obligations of each party with respect to intellectual property and program materials may survive the expiration or termination of the collaboration.
+Added: Disagreements or conflicts between and among the parties could develop even though the collaboration has ended.
+Added: These disagreements or conflicts could result in expensive arbitration or litigation, which may not be resolved in our favor.
+Added: Finally, our business could be negatively affected if any of our collaborators or suppliers undergoes a change of control or were to otherwise assign the rights or obligations under any of our agreements.
If we are unable to develop and commercialize new products for the pharmaceutical, biotherapeutics, diagnostics and life science tools markets, our business and prospects will be harmed.
−Removed: We plan to launch new products for the pharmaceutical, biotherapeutics, diagnostics and other life science tools markets.
+Added: We plan to launch new products for the pharmaceutical, biotherapeutics, diagnostics and other life science tools markets such as our ECO Synthesis ™ Platform.
These efforts are subject to numerous risks, including the following:
2 unchanged sentences
• we may face difficulties in transferring the developed technologies to our customers and the contract manufacturers that we may use for commercial scale production of intermediates and enzymes in these markets;
+Added: • the biotherapeutics products we are designing our technologies for may not receive regulatory approval or be commercially viable;
• the contract manufacturers that we may use may be unable to scale their manufacturing operations to meet the demand for these products and we may be unable to secure additional manufacturing capacity;
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Competitors and potential competitors who have greater resources and experience than we do may develop products and technologies that make ours obsolete or may use their greater resources to gain market share at our expense.
−Removed: The biocatalysis industry and each of our target markets are characterized by rapid technological change.
+Added: The biocatalysis and performance enzyme industries and each of our target markets are characterized by rapid technological change.
Our future success will depend on our ability to maintain a competitive position with respect to technological advances.
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There is also competition in the enzyme customization and optimization area from several smaller companies, such as BRAIN AG, Arzeda, c-LEcta GmbH and Evocatal GmbH.
−Removed: There are numerous companies that participate in the biotherapeutics market generally and the PKU market specifically.
−Removed: Many of these companies are large, successful and well-capitalized.
−Removed: BioMarin Pharmaceutical Inc.
−Removed: (“BioMarin”) and Daiichi Sankyo Company market Kuvan ® in the United States, Europe and Japan for the treatment of a certain type of PKU.
−Removed: In addition, BioMarin gained US FDA approval in 2018 and began commercial sales of Palynziq TM as an injectable enzyme substitution therapy for the potential treatment of PKU.
−Removed: Several companies, i.e., Synlogic, Homology Medicines and Rubius have reported clinical efforts to develop biotherapeutic candidates for PKU.
−Removed: Beyond targeting PKU, Takeda (who acquired Shire Plc in 2019), Genzyme / Sanofi S.A., BioMarin and other companies market or are actively developing new enzyme therapeutics.
−Removed: There are numerous companies that are developing other forms of therapeutics, such as small molecules, gene therapies, as well as therapies based on gene editing, which could compete with biotherapeutics.
Our ability to compete successfully in any of these markets will depend on our ability to develop proprietary products that reach the market in a timely manner and are technologically superior to and/or are less expensive than other products on the market.
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Pfizer markets, sells and distributes nirmatrelvir, in combination with the active pharmaceutical ingredient ritonavir, as its PAXLOVID™ (nirmatrelvir tablets;
−Removed: ritonavir tablets) product, which received emergency use authorization (“EUA”) by the U.S.
−Removed: Food and Drug Administration (“FDA”) in late 2021, and which is authorized for the treatment of adults and pediatric patients (12 years of age and older weighing at least 40 kg) with a current diagnosis of mild-to-moderate COVID-19 and who are at high risk for progression to severe COVID-19, including hospitalization or death.
−Removed: The FDA has the authority to issue an EUA under certain circumstances, such as during a public health emergency (“PHE”), pursuant to a declaration by the Secretary of the Department of Health and Human Services (“HHS”), that an emergency exists justifying the issuance of EUAs for certain types of products (referred to as EUA declarations).
−Removed: On March 27, 2020, the Secretary of HHS declared that circumstances exist justifying authorization of drugs and biologics during the COVID-19 pandemic, subject to the terms of any EUA that is issued for a specific product.
−Removed: Once an EUA declaration has been issued, the FDA can issue EUAs for products that fall within the scope of that declaration.
−Removed: To issue an EUA, the FDA Commissioner must conclude that (1) the chemical, biological, radioactive or nuclear agent (“CBRN”) that is referred to in the EUA declaration can cause serious or life-threatening diseases or conditions;
−Removed: (2) based on the totality of scientific evidence available, it is reasonable to believe that the product may be effective in diagnosing, treating, or preventing the disease or condition attributable to the CBRN and that the product’s known and potential benefits outweigh its known and potential risks;
−Removed: and (3) there is no adequate, approved, and available alternative to the product.
−Removed: The authorization to market products under an EUA is limited to the period of time the EUA declaration is in effect.
−Removed: If the Secretary of HHS determines that the circumstances justifying the issuance of EUAs have also lapsed, the HHS Secretary will provide advance notice that the EUA declaration will be terminated.
−Removed: After an EUA declaration is terminated, all EUAs issued under that declaration also terminate and therefore emergency use of all products under the EUA declaration is no longer authorized.
−Removed: The FDA can also revoke an EUA in certain circumstances even if the EUA declaration has not been terminated.
−Removed: The FDA’s policies regarding an EUA can change unexpectedly.
−Removed: We cannot predict how long Pfizer’s EUA will remain in place.
−Removed: The FDA’s policies regarding products used to diagnose, treat or mitigate COVID-19 remain in flux as the FDA responds to new and evolving public health information and clinical evidence and it remains possible that Pfizer’s EUA may be revoked in due course.
−Removed: Moreover, the federal government has taken recent steps to terminate distinct emergency authorities related to COVID-19.
−Removed: For example, on April 10, 2023, President Biden signed legislation terminating a national emergency regarding COVID-19 although this action does not affect any EUAs granted by FDA with respect to its authority to authorize drugs and biologics for the diagnosis, treatment, or prevention of COVID-19 and related conditions, including Pfizer’s EUA, FDA has announced its intent to adjust policies and operations implemented during the COVID-19 pandemic to a resumption of normal operations, including a transition of products marketed under EUAs, to the ordinary FDA requirements, including premarket authorization requirements.
−Removed: Pfizer has submitted an application for full approval of PAXLOVID™, and an FDA advisory committee has recommend such approval.
−Removed: If the emergency use of the PAXLOVID™ becomes no longer authorized, and if Pfizer does not obtain full approval of the product, our financial condition and results of operations could be adversely affected.
+Added: ritonavir tablets) product, which received FDA approval in May 2023 for the treatment of mild-to-moderate COVID-19 in adults who are at high risk for progression to severe COVID-19, including hospitalization or death.
Revenues in 2023 and in future years from our sales of CDX-616 to Pfizer and other potential customers (including sublicensees of Pfizer technology from The Medicines Patent Pool (the “MPP”)) are subject to a number of factors which are outside of our control, including, without limitation, the following, all of which could reduce or eliminate our sales of CDX-616, and therefore materially and adversely affect our business, results of operations and financial condition:
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• to our knowledge, sublicensees of Pfizer technology from the MPP have no obligation to purchase CDX-616 from us under their sublicenses with the MPP;
−Removed: • the EUA granted by the FDA for the use of PAXLOVID™ for the treatment of COVID-19 infections in humans could be withdrawn at any time;
• future vaccine development and usage and the development and usage of other new therapies for the treatment or elimination of COVID-19 may eliminate or reduce demand for PAXLOVID™;
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We have investments in illiquid non-marketable equity securities acquired in private transactions.
−Removed: At March 31, 2023, 9.8% of our consolidated assets consisted of investment securities, which are illiquid investments.
+Added: As of June 30, 2023, 10.3% of our consolidated assets consisted of investment securities, which are illiquid investments.
Investments in illiquid, or non-marketable, securities are inherently risky and difficult to value.
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Ethical, legal and social concerns about genetically engineered products and processes could limit or prevent the use of our technology, products and processes and limit our revenues.
−Removed: Some of our technology, products and services are genetically engineered or involve the use of genetically engineered products or genetic engineering technologies.
+Added: Some of our technology, products and services, such as our ECO Synthesis ™ Platform, are genetically engineered or involve the use of genetically engineered products or genetic engineering technologies.
If we and/or our collaborators are not able to overcome the ethical, legal, and social concerns relating to genetic engineering, our technology, products and services may not be accepted.
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Any adverse effect resulting from such a release could have a material adverse effect on our business and financial condition, and we may have exposure to liability for any resulting harm.
+Added: We have recently enhanced our strategic focus to concentrate of certain programs and business lines.
+Added: As a result of this refined focus, we may fail to capitalize on other opportunities that may be more profitable or for which there is a greater likelihood of success.
+Added: Because we have limited financial and managerial resources, we have recently focused our efforts on developing certain programs and business lines.
+Added: As a result, we may forego or delay pursuit of opportunities with business opportunities that later prove to have greater commercial potential.
+Added: Further our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
+Added: In addition, our spending on current and future research and development programs, such as ECO Synthesis ™ Platform that is in development, may not yield any commercially viable products.
+Added: If we do not accurately evaluate the commercial potential or target market for a particular program or business line, our business and results of operations could be harmed.
+Added: Given our recent change in strategic direction, we may receive limited revenue or no future value from certain of our existing license agreements .
+Added: While we have historically invested significant time and financial resources in the development of CDX-7108 for the treatment of exocrine pancreatic insufficiency, now included in the Nestlé Strategic Collaboration Agreement, and CDX-6114 for the treatment of hyperphenylalaninemia, now included in the Nestlé License Agreement, as well as in the development of candidates for the treatment of Fabry disease and Pompe disease, which are now included in the Takeda Agreement, we recently announced we are terminating investment in our Biotherapeutics business and in other programs.
+Added: As a result, we are renegotiating these, along with other license agreements for product candidates in our Biotherapeutics business and food business.
+Added: While we are working to amend these agreements or enter into new agreements in such a way that we may be able to receive future revenue or other benefits, we may be unsuccessful in doing so.
+Added: As a result, it remains uncertain as to whether we will receive any value or benefit from these license agreements going forward.
+Added: Further, renegotiating these agreements may be costly and could divert management attention, which could have an adverse impact on our business and results of operations.
+Added: In connection with our recently announced change in strategic direction, we are closing operations at our San Carlos office and while we are looking to sublease such space, we may ultimately be unable to do so and still be obligated to pay the balance of the lease, which is substantial.
+Added: As previously announced in July 2023, we made significant changes to our strategic direction and partially due to those changes, we have determined to cease our operations at our San Carlos site and consolidate operations from our Redwood City office.
+Added: While we are actively looking to execute a sublease for our San Carlos office, such sublease will likely not cover the entire amount we owe.
+Added: As a result, we are likely to incur additional rent obligations for this location.
+Added: Further, we may not be able to successfully execute a sublease covering any meaningful amount, or any at all, of the outstanding lease for a variety of reasons, including many of which are outside of our control such as the office real estate market being depressed and our landlord not approving a particular subtenant.
+Added: If that were to occur, we would be exposed to substantial liabilities as the remaining balance under the lease is significant.
+Added: In addition, searching for a potential subtenant is time consuming and could harmfully divert management's attention from our business and operations.
+Added: If we are unable to execute a sublease covering a meaningful amount of the outstanding balance, or execute a sublease at all, our results of operations could be seriously harmed.
+Added: Irrespective of our ability to execute a sublease, we anticipate we may have to incur material impairment charges in connection with such relocation due to the expected write-down of certain long-lived assets.
+Added: Currently, we are not able to provide an estimate of the timing or the amount, if any, of these material impairments.
We use hazardous materials in our business and we must comply with environmental laws and regulations.
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In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and may seriously harm our business.
+Added: We may need additional capital in the future in order to expand our business.
+Added: Our future capital requirements may be substantial, particularly as we continue to develop our business.
+Added: Although we believe that, based on our current level of operations, our existing cash, cash equivalents and equity securities will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next 12 months, we may need additional capital if our current plans and assumptions change.
+Added: Our need for additional capital will depend on many factors, including the financial success of our performance enzyme business, our spending to develop and commercialize new and existing enzyme products and the amount of collaboration funding we may receive to help cover the cost of such expenditures, the effect of any acquisitions of other businesses, technologies or facilities that we may make or develop in the future, our spending on new market opportunities, including the ongoing commercialization of our ECO Synthesis ™ Platform , and the filing, prosecution, enforcement and defense of patent claims.
+Added: If our capital resources are insufficient to meet our capital requirements, and we are unable to enter into or maintain collaborations with partners that are able or willing to fund our development efforts or commercialize any enzyme products that we develop or enable, we will have to raise additional funds to continue the development of our technology and products and complete the commercialization of products, if any, resulting from our technologies.
+Added: In addition, we may choose to raise additional capital due to market conditions or strategic considerations, such as funding the ongoing commercialization of our ECO Synthesis ™ Platform , even if we believe we have sufficient funds for our current or future operating plans.
+Added: We may seek to obtain such additional capital through equity offerings, debt financings, credit facilities and/or strategic collaborations.
+Added: If future financings involve the issuance of equity securities, our existing stockholders would suffer dilution.
+Added: If we raise debt financing or enter into credit facilities, we may be subject to restrictive covenants that limit our ability to conduct our business.
+Added: Strategic collaborations may also place restrictions on our business.
+Added: We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all.
+Added: If we fail to raise sufficient funds and fail to generate sufficient revenues to achieve planned gross margins and to control operating costs, our ability to fund our operations, take advantage of strategic opportunities, develop products or technologies, or otherwise respond to competitive pressures could be significantly limited.
+Added: If this happens, we may be forced to delay or terminate research or development programs or the commercialization of products resulting from our technologies, curtail or cease operations or obtain funds through collaborative and licensing arrangements that may require us to relinquish commercial rights, or grant licenses on terms that are not favorable to us.
+Added: If adequate funds are not available, we will not be able to successfully execute our business plan or continue our business.
If we engage in any acquisitions, we will incur a variety of costs and may potentially face numerous risks that could adversely affect our business and operations.
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If we fail in our integration efforts with respect to any of our acquisitions and are unable to efficiently operate as a combined organization, our business and financial condition may be adversely affected.
−Removed: Risks Related to Government Regulation and Clinical Product Development
+Added: Risks Related to Government Regulation
We or our customers may not be able to obtain regulatory approval for the use of our products in food and food ingredients, if required, and, even if approvals are obtained, complying on an ongoing basis with the numerous regulatory requirements applicable to these products will be time-consuming and costly.
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Our ongoing efforts to deploy our technology in the life science tools markets may fail.
−Removed: We have recently begun to use our CodeEvolver ® protein engineering technology platform to develop new products for customers using NGS and PCR/qPCR for in vitro molecular diagnostic applications.
+Added: We have used our CodeEvolver ® protein engineering technology platform to develop new products for customers using NGS and PCR/qPCR for in vitro molecular diagnostic applications.
While we have entered into some license agreements for products in this market, we do not know if we can successfully compete in this new market.
4 unchanged sentences
The failure to successfully deploy products on timely basis in this space may limit our growth and have a material adverse effect on our financial condition, operating results and business prospects.
−Removed: The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
−Removed: We and any collaborators are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA.
−Removed: Foreign regulatory authorities impose similar requirements.
−Removed: The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable, but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including substantial discretion of the regulatory authorities.
−Removed: In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.
−Removed: We and any collaborators must complete additional preclinical or nonclinical studies and clinical trials to demonstrate the safety, purity and potency (or efficacy) of our product candidates in humans to the satisfaction of the regulatory authorities before we will be able to obtain these approvals.
−Removed: Our product candidates could fail to receive regulatory approval for many reasons, including the following:
−Removed: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our or our collaborators’ clinical trials;
−Removed: • we or our collaborators may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;
−Removed: • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
−Removed: • we or our collaborators may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
−Removed: • the FDA or comparable foreign regulatory authorities may disagree with our or our collaborators’ interpretation of data from preclinical studies or clinical trials;
−Removed: • the data collected from clinical trials of product candidates may not be sufficient to support the submission of a BLA to obtain regulatory approval in the United States or elsewhere;
−Removed: • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies;
−Removed: • the FDA or comparable foreign regulatory authorities may fail to approve the companion diagnostics we contemplate developing with collaborators;
−Removed: • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our or our collaborators’ clinical data insufficient for approval.
−Removed: This lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects.
−Removed: In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may impose significant limitations in the form of narrow indications, warnings, or a REMS.
−Removed: Regulatory authorities may not approve the price we or our collaborators intend to charge for products we may develop, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.
−Removed: Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.
−Removed: Clinical trials are difficult to design and implement, expensive, time-consuming and involve an uncertain outcome, and the inability to successfully conduct clinical trials and obtain regulatory approval for our product candidates would substantially harm our business.
−Removed: Clinical testing is expensive and usually takes many years to complete, and its outcome is inherently uncertain.
−Removed: Failure can occur at any time during the clinical trial process, and product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.
−Removed: We do not know whether planned clinical trials will begin on time, need to be redesigned, recruit and enroll patients on time or be completed on schedule, or at all.
−Removed: Clinical trials can be delayed, suspended or terminated for a variety of reasons, including in connection with:
−Removed: • the inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of clinical trials;
−Removed: • applicable regulatory authorities disagreeing as to the design or implementation of the clinical trials;
−Removed: • obtaining regulatory authorization to commence a trial;
−Removed: • reaching an agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
−Removed: • obtaining IRB approval at each site;
−Removed: • developing and validating the companion diagnostic to be used in a clinical trial, if applicable;
−Removed: • insufficient or inadequate supply or quality of product candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials;
−Removed: • recruiting and retaining enough suitable patients to participate in a trial;
−Removed: • having enough patients complete a trial or return for post-treatment follow-up;
−Removed: • adding a sufficient number of clinical trial sites;
−Removed: • inspections of clinical trial sites or operations by applicable regulatory authorities, or the imposition of a clinical hold;
−Removed: • clinical sites deviating from trial protocol or dropping out of a trial;
−Removed: • the inability to demonstrate the efficacy and benefits of a product candidate;
−Removed: • discovering that product candidates have unforeseen safety issues, undesirable side effects or other unexpected characteristics;
−Removed: • addressing patient safety concerns that arise during the course of a trial;
−Removed: receiving untimely or unfavorable feedback from applicable regulatory authorities regarding the trial or requests from regulatory authorities to modify the design of a trial;
−Removed: • non-compliance with applicable regulatory requirements by us or third parties or changes in such regulations or administrative actions;
−Removed: • suspensions or terminations by IRBs of the institutions at which such trials are being conducted, by the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number of factors, including those described above;
−Removed: • third parties being unable or unwilling to satisfy their contractual obligations to us;
−Removed: • changes in our financial priorities, greater than anticipated costs of completing a trial or our inability to continue funding the trial.
−Removed: 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: Additionally, we or our collaborators may experience unforeseen events during or resulting from clinical trials that could delay or prevent receipt of marketing approval for or commercialization of product candidates.
−Removed: For example, clinical trials of product candidates may produce negative, inconsistent or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs.
−Removed: Regulators may also revise the requirements for approving the product candidates, or such requirements may not be as we anticipate.
−Removed: If we or our collaborators are required to conduct additional clinical trials or other testing of product candidates beyond those that we or our collaborators currently contemplate, if we or our collaborators are unable to successfully complete clinical trials or other testing of such product candidates, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
−Removed: • incur unplanned costs;
−Removed: • be delayed in obtaining or fail to obtain marketing approval for product candidates;
−Removed: • obtain marketing approval in some countries and not in others;
−Removed: • obtain marketing approval for indications or patient populations that are not as broad as intended or desired;
−Removed: • obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;
−Removed: • be subject to additional post-marketing testing requirements;
−Removed: • be subject to changes in the way the product is administered;
−Removed: • have regulatory authorities withdraw or suspend their approval of the product or impose restrictions on its distribution;
−Removed: • experience damage to our reputation.
−Removed: If we or our collaborators experience delays in the commencement or completion of our clinical trials, or if we or our collaborators terminate a clinical trial prior to completion, we may experience increased costs, have difficulty raising capital and/or be required to slow down the development and approval process timelines.
−Removed: Furthermore, the product candidates that are the subject of such trials may never receive regulatory approval, and their commercial prospects and our ability to generate product revenues from them could be impaired or not realized at all.
−Removed: Results of preclinical studies and early clinical trials of product candidates may not be predictive of results of later studies or trials.
−Removed: Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.
−Removed: Preclinical and clinical drug development is expensive and can take many years to complete, and its outcome is inherently uncertain.
−Removed: Failure can occur at any time during the drug development process.
−Removed: Despite promising preclinical or clinical results, any product candidate can unexpectedly fail at any stage of preclinical or clinical development.
−Removed: The historical failure rate for product candidates in our industry is high.
−Removed: The results from preclinical studies or early clinical trials of a product candidate may not be predictive of the results from later preclinical studies or clinical trials, and interim results of a clinical trial are not necessarily indicative of final results.
−Removed: Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and initial clinical trials.
−Removed: Many companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks at later stages of development after achieving positive results in early stages of development, and we may face similar setbacks.
−Removed: These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including previously unreported adverse events.
−Removed: Moreover, non-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain regulatory approval.
−Removed: Even if any product candidates progress to clinical trials, these product candidates may fail to show the safety and efficacy in clinical development required to obtain regulatory approval, despite the observation of positive results in animal studies.
−Removed: Our or our collaborators’ failure to replicate positive results from early research programs and preclinical or greenhouse studies may prevent us from further developing and commercializing those or other product candidates, which would limit our potential to generate revenues from them and harm our business and prospects.
−Removed: For the foregoing reasons, we cannot be certain that any ongoing or future preclinical studies or clinical trials will be successful.
−Removed: Any safety or efficacy concerns observed in any one of our preclinical studies or clinical trials in a targeted area could limit the prospects for regulatory approval of product candidates in that and other areas, which could have a material adverse effect on our business and prospects.
−Removed: We may not be able to maintain orphan drug designations for certain of our product candidates, and may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
−Removed: Regulatory authorities in some jurisdictions, including the U.S.
−Removed: and Europe, may designate drugs for relatively small patient populations as orphan drugs.
−Removed: Under the Orphan Drug Act of 1983, the FDA may designate a product candidate as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the U.S., or a patient population of greater than 200,000 individuals in the U.S., but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the U.S.
−Removed: The FDA has granted orphan drug designation to CDX-6512 for the treatment of HCU and to CDX-6210 for the treatment of Maple Syrup Urine Disease (MSUD).
−Removed: In the U.S., orphan designation entitles a party to financial incentives such as opportunities for grant funding for clinical trial costs, tax advantages and user-fee waivers.
−Removed: In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity.
−Removed: Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same disease condition.
−Removed: Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same disease condition if such regulatory authority concludes that the later drug is clinically superior if it is shown to be safer, more effective or makes a major contribution to patient care.
−Removed: Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
−Removed: We have obtained rare pediatric disease designation for CDX-6512 and CDX-6120, however, there is no guarantee that such designation will result in approval of CDX-6512 or CDX-6210, and even if we obtain approval of CDX-6512 or CDX-6210 for the indications for which we have been awarded rare pediatric disease designation, there is no guarantee that such approval will result in an aware of a rare pediatric disease priority review voucher.
−Removed: In 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications.
−Removed: This program is designed to encourage development of new drug and biological products for the prevention and treatment of certain rare pediatric diseases.
−Removed: Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” that meets certain criteria may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product, even if that subsequent marketing application would not otherwise qualify for priority review on its own.
−Removed: The sponsor of a rare pediatric disease product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor.
−Removed: The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application.
−Removed: The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S.
−Removed: within one year following the date of approval.
−Removed: We have obtained rare pediatric disease designation for CDX-6512 for the treatment of HCU and for CDX-6210 for the treatment of MSUD.
−Removed: Even though we have obtained rare pediatric disease designations, there is no guarantee that we will be able to obtain a priority review voucher, even if CDX-6512 and/or CDX-6210 are approved by the FDA.
−Removed: Moreover, Congress included a sunset provision in the statute authorizing the rare pediatric disease priority review voucher program.
−Removed: On December 27, 2020, the Rare Pediatric Disease Priority Review Voucher Program was extended, and under the current statutory sunset provisions, after September 30, 2024, FDA may only award a voucher for an approved rare pediatric disease product application if the sponsor has rare pediatric disease designation for the drug, and that designation was granted by September 30, 2024.
−Removed: After September 30, 2026, FDA may not award any rare pediatric disease priority review vouchers (unless Congress amends the law to extend the program further).
−Removed: Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain, or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, or commercialized in a timely manner, or at all, which could negatively impact our business.
−Removed: The ability of the FDA and other government agencies to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, a government agency’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the government agency’s ability to perform routine functions.
−Removed: Average review times at the FDA and other government agencies have fluctuated in recent years as a result.
−Removed: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics or modifications to approved drugs or biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several years, the United States government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
−Removed: Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
−Removed: Even though the FDA has since resumed standard inspection operations of domestic facilities where feasible, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic, and any resurgence of the virus or emergence of new variants may lead to further inspectional delays.
−Removed: Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
−Removed: If a prolonged government shutdown occurs, or if global health concerns continue to hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: Even if we obtain regulatory approval for any products that we develop alone or with collaborators, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.
−Removed: Even if products we develop alone or with collaborators receive regulatory approval, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, distribution, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information, among other things.
+Added: Even if our customers, future customers or collaborators obtain regulatory approval for any products utilizing our enzymes, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.
+Added: Any products that receive FDA approval will remain subject to ongoing regulatory requirements for manufacturing, labeling, packaging, distribution, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information, among other things.
Any regulatory approvals received for such products may also be subject to limitations on the approved indicated uses for which they may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing and surveillance studies.
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In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the BLA or foreign marketing application.
−Removed: If we, our collaborators or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of that product, a regulatory agency may impose restrictions relative to that product, the manufacturing facility or us or our collaborators, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
−Removed: Moreover, if any of our product candidates are approved, our product labeling, advertising, promotion and distribution will be subject to regulatory requirements and continuing regulatory review.
−Removed: The FDA strictly regulates the promotional claims that may be made about drug products.
−Removed: In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling.
−Removed: If we or our collaborators fail to comply with applicable regulatory requirements following approval of any potential products we may develop, authorities may:
+Added: If our customers, future customers or our collaborators or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of that product, a regulatory agency may impose restrictions relative to that product, the manufacturing facility or our customers or collaborators, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
+Added: In addition, if we or our customers or collaborators fail to comply with applicable regulatory requirements, the FDA and other regulatory authorities may:
• issue an untitled enforcement letter or a warning letter asserting a violation of the law;
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• suspend or terminate any ongoing clinical trials or implement requirements to conduct post-marketing studies or clinical trials;
−Removed: • refuse to approve a pending BLA or comparable foreign marketing application (or any supplements thereto) submitted by us or our collaborators;
+Added: • refuse to approve a pending BLA or comparable foreign marketing application (or any supplements thereto);
• restrict the labeling, marketing, distribution, use or manufacturing of products;
• seize or detain products or otherwise require the withdrawal or recall of products from the market;
−Removed: • refuse to approve pending applications or supplements to approved applications that we or our collaborators submit;
+Added: • refuse to approve pending applications or supplements to approved applications;
• refuse to permit the import or export of products;
−Removed: • refuse to allow us or our collaborators to enter into government contracts.
+Added: • refuse government contracts.
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
−Removed: The occurrence of any event or penalty described above may inhibit our or our collaborators’ ability to commercialize products and our ability to generate revenues.
+Added: The occurrence of any event or penalty described above may also inhibit our customers or collaborators’ ability to commercialize products and our ability to generate revenues.
In addition, the FDA’s policies, and policies of foreign regulatory agencies, may change, and additional regulations may be enacted that could prevent, limit or delay regulatory approval of product candidates.
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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.
−Removed: Our business operations and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.
−Removed: Our business operations and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations.
−Removed: These laws may constrain the business or financial arrangements and relationships through which we will conduct our operations, including how we research, market, sell and distribute our product candidates, if approved.
−Removed: Such laws include:
−Removed: federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under U.S.
−Removed: federal and state healthcare programs such as Medicare and Medicaid.
−Removed: 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: federal false claims laws, including the civil False Claims Act, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the U.S.
−Removed: federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S.
−Removed: federal government.
−Removed: In addition, the government may assert that a claim including items and services resulting from a violation of the U.S.
−Removed: federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
−Removed: federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services;
−Removed: similar to the U.S.
−Removed: federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
−Removed: federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners such as physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;
−Removed: • analogous U.S.
−Removed: state laws and regulations, including:
−Removed: state anti-kickback and false claims laws, which may apply to our future business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private 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 U.S.
−Removed: federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
−Removed: and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities.
−Removed: Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs.
−Removed: It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance 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 the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.
−Removed: The successful commercialization of product candidates developed by us or our partners will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies.
−Removed: Failure to obtain or maintain coverage and adequate reimbursement for such product candidates, if approved, could limit our or our partners’ ability to market those products and decrease our ability to generate revenue.
−Removed: The availability and adequacy of coverage and reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidates, assuming FDA approval.
−Removed: Our ability to achieve acceptable levels of coverage and reimbursement for products by governmental authorities, private health insurers and other organizations will have an effect on our ability to successfully commercialize our product candidates.
−Removed: Assuming we obtain coverage for our product candidates by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.
−Removed: We cannot be sure that coverage and reimbursement in the United States, the EU or elsewhere will be available for our product candidates or any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future.
−Removed: Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs or biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available.
−Removed: It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product.
−Removed: Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates.
−Removed: These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates.
−Removed: For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.
−Removed: Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.
−Removed: If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our product candidates, and may not be able to obtain a satisfactory financial return on our product candidates.
−Removed: No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States.
−Removed: Therefore, coverage and reimbursement for products can differ significantly from payor to payor.
−Removed: As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
−Removed: Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.
−Removed: Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries have and will continue to put pressure on the pricing and usage of our product candidates.
−Removed: In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems.
−Removed: Other countries allow companies to fix their own prices for medical products, but monitor and control company profits.
−Removed: Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates.
−Removed: Accordingly, in markets outside the United States, the reimbursement for our product candidates may be reduced compared with the United States and may be insufficient to generate commercially-reasonable revenue and profits.
−Removed: Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
−Removed: We expect to experience pricing pressures in connection with the sale of our product candidates due to the trend toward managed health care, the increasing influence of health maintenance organizations and additional legislative changes.
−Removed: The downward pressure on healthcare costs in general, particularly prescription drugs and biologics and surgical procedures and other treatments, has become intense.
−Removed: As a result, increasingly high barriers are being erected to the entry of new products.
−Removed: Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for our partners to obtain marketing approval for and commercialize product candidates developed by us.
−Removed: In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we develop and our partners obtain marketing approval.
−Removed: In particular, there have been and continue to be a number of initiatives at the U.S.
−Removed: federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare.
−Removed: For example, in March 2010, the Affordable Care Act (the “ACA”) was enacted in the United States.
−Removed: The ACA established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents;
−Removed: extended manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
−Removed: expanded eligibility criteria for Medicaid programs;
−Removed: expanded the entities eligible for discounts under the 340B drug pricing program;
−Removed: increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
−Removed: established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research;
−Removed: and establishes a Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
−Removed: Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA, and on June 17, 2021, the U.S.
−Removed: Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
−Removed: Prior to the Supreme Court’s decision, President Biden had issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.
−Removed: The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
−Removed: It is unclear how the healthcare reform measures will impact our business.
−Removed: In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
−Removed: In March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory cap on the Medicaid drug rebate, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.
−Removed: Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.
−Removed: Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient assistance programs, and reform government program reimbursement methodologies for products.
−Removed: Most recently, the Inflation Reduction Act of 2022 (the “IRA”), included a number of significant drug pricing reforms, which include the establishment of a drug price negotiation program within the U.S.
−Removed: Department of Health and Human Services (“HHS”) (beginning in 2026) that requires manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation (first due in 2023), and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs (beginning in 2025).
−Removed: The IRA permits the HHS Secretary to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
−Removed: Additional drug pricing proposals could appear in future legislation.
−Removed: Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
−Removed: At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects.
−Removed: In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
−Removed: This could reduce the ultimate demand for any product candidate we develop, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.
−Removed: We expect that these new laws and other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product.
−Removed: Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize any product candidates we develop, if approved.
+Added: If we or our customers fail to comply with certain healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
+Added: Our business operations and future arrangements with investigators, healthcare professionals, and consultants may expose us and our customers to broadly applicable fraud and abuse and other healthcare laws and regulations.
+Added: These laws may constrain the business or financial arrangements and relationships through which we will conduct our operations, including how we and our customers research, market, sell and distribute our product candidates, if approved.
+Added: Because of the breadth of these laws and narrowness of available statutory and regulatory exceptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
+Added: If we or our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, imprisonment and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.
Compliance with European Union chemical regulations could be costly and adversely affect our business and results of operations.
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In addition, if we or our contract manufacturers fail to comply with REACH, we may be subject to penalties or other enforcement actions, which could have a material adverse effect on our business and results of operations.
−Removed: Risks Related to our Dependence on Third Parties
−Removed: We rely on third parties to conduct our clinical trials and perform some of our research and preclinical studies.
−Removed: If these third parties do not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our development programs may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.
−Removed: We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves.
−Removed: As a result, we are and expect to remain dependent on third parties to conduct clinical trials of our product candidates.
−Removed: Specifically, we expect CROs, clinical investigators, and consultants to play a significant role in the conduct of these trials and the subsequent collection and analysis of data.
−Removed: However, we will not be able to control all aspects of their activities.
−Removed: Nevertheless, we are responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.
−Removed: We and our CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for all of our product candidates in clinical development.
−Removed: Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, clinical trial investigators and clinical trial sites.
−Removed: If we or any of our CROs or clinical trial sites fail to comply with applicable GCP requirements, the data generated in our clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
−Removed: In addition, our clinical trials must be conducted with product produced under cGMP regulations.
−Removed: Our failure to comply with these regulations may require us to stop and/or repeat clinical trials, which would delay the marketing approval process.
−Removed: There is no guarantee that any such CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development activities or perform as contractually required.
−Removed: If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated.
−Removed: If any of our clinical trial sites terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trials unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.
−Removed: In addition, clinical trial investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services.
−Removed: If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA or comparable foreign regulatory authorities concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any marketing application we submit by the FDA or any comparable foreign regulatory authority.
−Removed: Any such delay or rejection could prevent us from commercializing our product candidates.
−Removed: We contract with third parties for the manufacturing and supply of product candidates for use in preclinical testing and clinical trials and related services, which supply may become limited or interrupted or may not be of satisfactory quality and quantity.
−Removed: We do not have any manufacturing facilities.
−Removed: We produce in our laboratory relatively small quantities of products for evaluation in our research programs.
−Removed: We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture if any of our product candidates are approved.
−Removed: We currently have limited manufacturing arrangements and expect that each of our product candidates will only be covered by single source suppliers for the foreseeable future.
−Removed: This reliance increases the risk that we will not have sufficient quantities of our product candidates or products, if approved, or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
−Removed: Furthermore, all entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing contract manufacturers for our product candidates, are subject to extensive regulation.
−Removed: Components of a finished therapeutic product approved for commercial sale or used in clinical trials must be manufactured in accordance with cGMP requirements.
−Removed: These regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.
−Removed: Poor control of production processes can lead to the introduction of contaminants, or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.
−Removed: We or our contract manufacturers must supply all necessary documentation in support of a BLA on a timely basis and must adhere to the FDA’s cGMP regulations enforced by the FDA through its facilities inspection program.
−Removed: Comparable foreign regulatory authorities may require compliance with similar requirements.
−Removed: The facilities and quality systems of our third-party contractor manufacturers must pass a pre-approval inspection for compliance with the applicable regulations as a condition of marketing approval of our product candidates.
−Removed: We do not control the manufacturing activities of, and are completely dependent on, our contract manufacturers for compliance with cGMP regulations.
−Removed: In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able to do on commercially reasonable terms, if at all.
−Removed: In particular, any replacement of our manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements.
−Removed: In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty transferring such skills or technology to another third party and a feasible alternative may not exist.
−Removed: In addition, certain of our product candidates and our own proprietary methods have never been produced or implemented outside of our company, and we may therefore experience delays to our development programs if and when we attempt to establish new third party manufacturing arrangements for these product candidates or methods.
−Removed: These factors would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third party manufacture our product candidates.
−Removed: If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
−Removed: The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.
−Removed: Our or a third party’s failure to execute on our manufacturing requirements, do so on commercially reasonable terms and comply with cGMP could adversely affect our business in a number of ways, including:
−Removed: • an inability to initiate or continue clinical trials of our product candidates under development;
−Removed: • delay in submitting regulatory applications, or receiving marketing approvals, for our product candidates;
−Removed: • loss of the cooperation of future collaborators;
−Removed: • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities;
−Removed: • requirements to cease development or to recall batches of our product candidates;
−Removed: • in the event of approval to market and commercialize our product candidates, an inability to meet commercial demands for our product or any other future product candidates.
Risks Related to Intellectual Property and Information Technology
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We have adopted a strategy of seeking patent protection in the United States and in foreign countries with respect to certain of the technology used in or relating to our products, services, and processes.
−Removed: As such, as of March 31, 2023 , we owned or controlled approximately 2,090 issued patents and pending patent applications in the United States and in various foreign jurisdictions.
−Removed: Our patents and patent applications, if issued, as of March 31, 2023, have terms that expire between 2023 and approximately 2044.
+Added: As such, as of June 30, 2023 , we owned or controlled approximately 2,090 issued patents and pending patent applications in the United States and in various foreign jurisdictions.
+Added: Our patents and patent applications, if issued, as of June 30, 2023, have terms that expire between 2023 and approximately 2044.
We also have license rights to a number of issued patents and pending patent applications in the United States and in various foreign jurisdictions.
−Removed: Our owned and licensed patents and patent applications include those directed to our enabling technology and to the methods and products that support our business in the biotherapeutics, pharma manufacturing, life sciences, food and other markets.
+Added: Our owned and licensed patents and patent applications include those directed to our enabling technology and to the methods and products that support our business in the pharmaceutical manufacturing, life sciences and other markets.
We intend to continue to apply for patents relating to our technology, methods, services and products as we deem appropriate.
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However, trade secrets and confidential information are difficult to protect and we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes and we may not enter into such agreements with all employees, consultants and third parties who have been involved in the development of our intellectual property rights.
−Removed: Nevertheless, without our permission or awareness, our confidential and proprietary information may be disclosed to third parties, used by the respective individuals for purposes other than for the Company’s business, or obtained through illegal means, such that third parties could reverse engineer our biocatalysts, product candidates, and processes, to attempt to develop the same technology or develop substantially equivalent technology.
+Added: Nevertheless, without our permission or awareness, our confidential and proprietary information may be disclosed to third parties, used by the respective individuals for purposes other than for the Company’s business, or obtained through illegal means, such that third parties could reverse engineer our biocatalysts, enzyme products and processes, to attempt to develop the same technology or develop substantially equivalent technology.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential and proprietary rights, and failure to protect our trade secrets could adversely affect our competitive business position.
If any of our trade secrets were lawfully obtained, we may be unable to prevent them, or those to whom they communicate it, from using that technology or information to compete with us or disclosing it publicly.
−Removed: Therefore, these events could have a material adverse effect ob our business, financial condition and results of operations.
+Added: Therefore, these events could have a material adverse effect on our business, financial condition and results of operations.
In particular, a failure to protect our proprietary rights may allow competitors to copy our technology, which could adversely affect our pricing and market share.
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• our ability to achieve or maintain profitability;
−Removed: • our relationships with, and dependence on, collaborators in our principal markets;
• our dependence on a limited number of customers,;
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• our reliance on a limited number of contract manufacturers for large scale production of substantially all of our enzyme products;
+Added: • our relationships with, and dependence on, collaborators in our principal markets;
• our ability to develop and successfully commercialize new products for the markets we serve;
−Removed: • our ability to obtain additional development partners for our novel biotherapeutic programs;
−Removed: • potential of Nestlé Health Science or Takeda terminating any development program under their license agreements with us;
• potential of GSK, Merck, Novartis or any other performance enzyme customer terminating their agreements with us;
• the success of our customers’ products in the market and the ability of such customers to obtain regulatory approvals for products and processes;
−Removed: • our or our customers’ ability to obtain regulatory approval for the sale and manufacturing of food products using our enzymes;
• our ability to deploy our technology platform in life science tools markets;
−Removed: • our ability to successfully achieve domestic and foreign regulatory approval for product candidates;
−Removed: • our ability to successfully design and execute clinical testing at a reasonable cost and on an acceptable time-frame;
−Removed: • our dependence on product candidates which could unexpectedly fail at any stage of preclinical or clinical development;
−Removed: • our dependence on product candidates which may lack the ability to work as intended or cause undesirable side effects;
−Removed: • our dependency on third parties to conduct clinical trials, research, and preclinical studies;
+Added: • our dependence on our collaborators or customers’ product candidates which could unexpectedly fail at any stage of preclinical or clinical development;
+Added: • our dependence on our collaborators or customers’ product candidates which may lack the ability to work as intended or cause undesirable side effects;
• our ability to successfully prosecute and protect our intellectual property;
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Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.
−Removed: At our 2023 Annual Meeting of Stockholders, we are asking our stockholders to approve various proposals including increasing the number of authorized shares of our common stock and the shares available for equity awards under our equity incentive plan, as well as adopting an Employee Stock Purchase Plan (“ESPP”).
−Removed: If any of these proposals are not approved, our competitive position, business and prospects could be seriously harmed.
−Removed: As included in the definitive proxy statement we filed with the SEC on April 27, 2023, at our 2023 Annual Meeting of Stockholders, our board of directors and management is requesting our stockholders approve three proposals that relate to our ability to raise capital and attract and retain talent.
−Removed: We are actively soliciting proxies from our stockholders and encouraging our stockholders to vote for these three proposals.
−Removed: However, our stockholders may not vote for one or more of these proposals.
−Removed: If our stockholders do not approve the proposed amendment to our certificate of incorporation to increase our authorized common stock, we may not be able to access the capital markets, which could impede our ability to finance our operations including the ongoing and planned research and development and clinical and regulatory activities necessary to advance our biotherapeutic candidates and performance enzymes.
−Removed: Further, if our authorized number of common stock is not increased, it may inhibit or even prevent us from being able to complete future corporate collaborations and partnerships.
−Removed: In addition, if we do not have sufficient shares of common stock reserved for issuance upon the exercise of equity awards, we may not be able to offer such awards which could adversely impact our ability to attract, retain and motivate employees, officers, directors, consultants and/or advisers.
−Removed: Likewise, if our stockholders do not approve the proposed amendment to our 2019 Incentive Award Plan and or the ESPP, our ability to attract, retain and motivate employees, officers, directors, consultants and/or advisers will be hindered.
−Removed: As a result of the foregoing, the failure of any of these three proposals to gain enough stockholder votes to be approved could have a material adverse effect on our competitive position, business and prospects.
General Risk Factors
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The systems of these external vendors may contain defects in design or manufacture or other problems that could unexpectedly compromise information security of our own systems, and we are dependent on these third parties to deploy appropriate security programs to protect their systems.
−Removed: If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counter-parties and data subjects could be material.
+Added: If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material.
Our remediation efforts may not be successful.
59 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.