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Risks Related to Regulatory Approval and Other Legal Compliance Matters
−Removed: • The regulatory approval processes of the FDA, EMA and comparable foreign regulatory authorities are lengthy and inherently unpredictable.
+Added: • The regulatory approval processes of the FDA, European Medicines Agency ("EMA") and comparable foreign regulatory authorities are lengthy and inherently unpredictable.
If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue.
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Risks Related to Our Reliance on Third Parties
−Removed: • We expect to depend on collaborations with third parties for the research, development and commercialization of certain product candidates.
+Added: • We depend on collaborations with third parties for the research, development and commercialization of certain product candidates.
If any such collaborations are not successful, we may not be able to realize the market potential of those product candidates.
−Removed: • We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily.
+Added: • We rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily.
• We contract with third parties for the manufacture of materials for our research programs, preclinical studies and clinical trials.
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We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future.
−Removed: We have incurred significant net losses since our inception, including net losses of $60.7 million and $130.7 million for the three and six months ended June 30, 2021, respectively, and $58.8 million and $115.5 million for the three and six months ended June 30, 2020, respectively .
−Removed: As of June 30, 2021, we had an accumulated deficit of $485.1 million .
+Added: We have incurred significant net losses since our inception, including net losses of $84.6 million and $215.3 million for the three and nine months ended September 30, 2021, respectively, and $58.2 million and $173.7 million for the three and nine months ended September 30, 2020, respectively .
+Added: As of September 30, 2021, we had an accumulated deficit of $569.7 million .
We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates and our TV platform.
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The continued impact of the COVID-19 pandemic may materially and adversely affect our business, operations and financial condition.
−Removed: We are actively monitoring, evaluating and responding to developments relating to COVID-19, including new strains of the disease that have emerged in certain locations, vaccination status both locally and globally, and reduced restriction on travel and other protocols as set forth by the CDC and other state, local and government authorities.
+Added: We are actively monitoring, evaluating and responding to developments relating to COVID-19, including new strains of the disease that have emerged in certain locations such as the Delta variant, vaccination status both locally and globally, and other COVID-19 and Delta variant-related protocols and travel restrictions as set forth by the CDC and other state, local and government authorities.
In response to the COVID-19 pandemic in 2020, we implemented policies that enabled some of our employees to work remotely, and such policies may continue for an indefinite period.
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Our priority is to protect the health and safety of our employees, community, partners and clinical trial participants, while working to ensure the sustainability of our business operations.
−Removed: Although restrictions related to the COVID-19 pandemic have been eased in many locations in which we do business, a resurgence in cases of COVID-19 could occur at any time, resulting in new disruptions to our business.
+Added: Although restrictions related to the COVID-19 pandemic were relaxed in many locations in which we do business for a period of time, some of those restrictions have been put back into place as a result of the Delta variant and the associated resurgence in COVID-19 cases.
+Added: Additional resurgences could occur at any time, which may cause new disruptions to our business going forward.
Examples of disruptions to our business from COVID-19 have included:
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On June 11, 2021, the Executive Department of the State of California issued Executive Orders N-07-21 and N-08-21, rescinding previous executive orders requiring various pandemic-related restrictions.
−Removed: Should COVID-19 cases in California increase, however, the relevant counties or state may re-institute a "shelter in place" order at any time or implement other restrictions.
+Added: Should COVID-19 cases in California significantly increase, however, the relevant counties or state may re-institute a "shelter in place" order at any time or implement other restrictions.
Our primary operations are located in South San Francisco and prior to the rescinding of such California state orders, many of our employees have chosen to telecommute.
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Should these developments continue or worsen, our operations and program timelines may be negatively impacted and could result in the incurrence of additional costs.
−Removed: We have clinical trial sites for our clinical studies in the United States and Europe, certain of which may be affected by new variants of the coronavirus, and the availability of vaccines at the clinical trial site locations.
+Added: We have clinical trial sites for our clinical studies in the United States, Europe and New Zealand, certain of which may be affected by the Delta variant and any subsequent variants of the coronavirus, and the availability of vaccines at the clinical trial site locations.
If healthcare facilities and offices are required to focus limited resources on non-clinical trial matters such as treatment of COVID-19 patients, patient screening, new patient enrollment, and monitoring and data collection could be affected.
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Should the FDA issue additional guidance with respect to COVID-19 protocols as relates to the implementation of our clinical trials, the costs of such clinical trials may increase.
−Removed: Further, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the COVID-19 virus and any new variants of the coronavirus that emerge in the future.
+Added: Further, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the COVID-19 virus, the Delta variant, and any new variants of the coronavirus that may emerge in the future.
To the extent the COVID-19 pandemic continues to adversely affect our business, operations and financial condition, it may also have the effect of heightening many of the risks described in this “Risk Factors” section.
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Even if we are successful in developing our product candidates, obtaining regulatory approvals and launching and commercializing any product candidate will require substantial additional funding.
−Removed: As of June 30, 2021, we had $1.4 billion in cash, cash equivalents and marketable securities.
+Added: As of September 30, 2021, we had $1.36 billion in cash, cash equivalents and marketable securities.
We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our projected operations through at least the next 12 months.
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We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all.
−Removed: We cannot be sure that submission of an investigational new drug application ("IND"), or a clinical trial application ("CTA"), will result in the FDA or European Medicines Agency ("EMA"), as applicable, allowing clinical trials to begin in a timely manner, if at all.
+Added: We cannot be sure that submission of an investigational new drug application ("IND"), or a clinical trial application ("CTA"), will result in the FDA or EMA, as applicable, allowing clinical trials to begin in a timely manner, if at all.
Moreover, even if these trials begin, issues may arise that could suspend or terminate such clinical trials.
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If our manufacturing partners are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or become infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.
−Removed: The same risks would apply to our internal manufacturing facilities and capabilities, which we are actively working towards building.
+Added: The same risks would apply to our internal manufacturing facilities and capabilities, which we are actively building.
In addition, building internal manufacturing capacity carries significant risks in terms of being able to plan, design and execute on a complex project to build manufacturing facilities in a timely and cost-efficient manner, and our efforts to scale our internal manufacturing capabilities may not succeed.
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In February 2019, the FDA granted orphan drug designation for our DNL310 program in Hunter syndrome.
−Removed: We plan to seek orphan drug designations for some other product candidates and may be unable to obtain such designations.
+Added: We plan to seek orphan drug designations for some other product candidates, but we may be unable to obtain such designations.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other NDA or BLA applications to market the same drug or biologic for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan exclusivity or if FDA finds that the holder of the orphan exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition for which the drug was designated.
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Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product.
+Added: We may seek Fast Track designation from the FDA for one or more of our product candidates.
+Added: Even if one or more of our product candidates receive Fast Track designation, we may be unable to obtain or maintain the benefits associated with the Fast Track designation.
+Added: Recently, the FDA granted Fast Track designation to DNL788 (SAR443820).
+Added: Fast Track designation is designed to facilitate the development and expedite the review of therapies to treat serious conditions and fill an unmet medical need.
+Added: Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the ability to submit a rolling application for regulatory review.
+Added: Fast Track designation applies to both the product candidate and the specific indication for which it is being studied.
+Added: However, if we do not continue to meet the criteria of the Fast Track designation, or if our clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program.
+Added: Furthermore, Fast Track designation does not change the standards for approval.
+Added: Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.
+Added: Fast track designation also does not guarantee our product candidate will be approved in a timely manner, if at all.
Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.
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Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business.
−Removed: Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA, including judicial challenges in the Fifth Circuit Court and the United States Supreme Court.
+Added: In July 2021, the Biden administration released an executive order, "Promoting Competition in the American Economy," with multiple provisions aimed at increasing competition for prescription drugs.
+Added: In response to this executive order, the Department of Health and Human Services ("HHS") has released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these principles.
+Added: In addition, Congress is considering legislation that, if passed, could have significant impact on prices of prescription drugs covered by Medicare, including limitations on drug price increases, which may adversely affect our profitability.
+Added: At the state level, a number of states are considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products.
+Added: Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA.
In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA.
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A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.
−Removed: This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in 2013, and will remain in effect through 2030, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken.
+Added: This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in 2013, and will remain in effect through 2030, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken.
The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
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Department of Health and Human Services under the Open Payments Program, information related to payments or other transfers of value made to physicians, as defined by law, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
−Removed: Effective January 1, 2022, these reporting and transparency requirements will extend to include payments and transfers of value made during the previous year to certain non-physician covered recipients, including physician assistants, nurse practitioners and other mid-level practitioners;
+Added: Effective January 1, 2022, for data collected in 2021 and reported to CMS in 2022, these reporting and transparency requirements have been extended to include payments and transfers of value made during the previous year to certain non-physician covered recipients, including physician assistants, nurse practitioners and other mid-level practitioners;
• federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
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The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.
−Removed: Average review times at the agency have fluctuated in recent years as a result.
+Added: Average review times at the FDA have fluctuated in recent years as a result.
In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
+Added: Disruptions at the FDA and other government agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
For example, over the last several years, including from December 22, 2018 until January 25, 2019, the U.S.
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If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
+Added: Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain the funding necessary to properly capitalize and continue our operations.
Risks Related to Our Reliance on Third Parties
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This reliance on third parties may increase the risk that we will not have sufficient quantities of such materials, product candidates, or any medicines that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.
−Removed: We do not have any manufacturing facilities.
−Removed: We currently rely on third-party manufacturers for the manufacture of our materials for preclinical studies and clinical trials and expect to continue to do so for preclinical studies, clinical trials and for commercial supply of any product candidates that we may develop.
+Added: We do not have any operational manufacturing facilities.
+Added: We currently rely on third-party manufacturers for the manufacture of our materials for preclinical studies and clinical trials and expect to continue to do so for some or all of our materials for preclinical studies, clinical trials and for commercial supply of any product candidates that we may develop.
We may be unable to establish any further agreements with third-party manufacturers or to do so on acceptable terms.
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We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.
−Removed: As of June 30, 2021, we had 334 emplo yees, all of whom were full-time.
+Added: As of September 30, 2021, we had 360 emplo yees, all of whom were full-time.
As our development plans and strategies develop, we must add a significant number of additional managerial, operational, financial, and other personnel.
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In the United States, notice of breaches must be made to affected individuals, the U.S.
−Removed: Secretary of the Department of Health and Human Services ("HHS"), and for extensive breaches, notice may need to be made to the media or U.S.
+Added: Secretary of the HHS, and for extensive breaches, notice may need to be made to the media or U.S.
state attorneys general.
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Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval.
−Removed: As of June 30, 2021, our directors, executive officers, holders of more than 5% of our outstanding stock and their respective affiliates beneficially own shares representing more than 50.0% of our outstanding common stock.
+Added: Our directors, executive officers, holders of more than 5% of our outstanding stock and their respective affiliates beneficially own a significant percentage of our outstanding common stock.
As a result, these stockholders, if they act together, may significantly influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.