What changed in this filing

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Item 1A. Risk Factors

2022-08-03 compared with 2022-05-06 · 50 added, 50 removed, 1108 unchanged (8% of the section changed)

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We may not be successful in identifying and implementing any strategic transaction and any strategic transactions that we may consummate in the future may not be successful.

In April 2022, we made the decision to discontinue development of tovinontrine (IMR-687) in sickle cell disease, or SCD, β-thalassemia and heart failure with preserved ejection fraction, as well to discontinue its development plans with respect to IMR-261.

In connection with this decision, our Board of Directors, or Board, approved a reduction in our workforce designed to substantially reduce our operating expenses while we undertake a comprehensive assessment of strategic options to maximize stockholder value.

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We may not realize, in full or in part, the anticipated benefits and savings in operating expenses from these decisions due to unforeseen difficulties, delays or unexpected costs.

This may include higher than expected costs associated with winding down our Ardent Phase 2b clinical trial of tovinontrine in SCD and Forte Phase 2b clinical trial of tovinontrine in ß-thalassemia.

If we are unable to realize the expected cost savings, our financial condition would be adversely affected and it may be more difficult to complete a potential strategic transaction.

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In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that a strategic transaction will be completed and our Board may decide to pursue a dissolution and liquidation.

There can be no assurance that a strategic transaction will be completed and, whether or not such strategic transaction is completed, our Board may decide to pursue a dissolution and liquidation.

In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, as with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations.

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We may become involved in securities class action litigation that could divert management’s attention and harm the company’s business, and insurance coverage may not be sufficient to cover all costs and damages.

In the past, securities class action litigation has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials.

clinical trials.

These events may also result in or be concurrent with investigations by the SEC.

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Since inception, we have incurred significant operating losses.

Our net loss was $51.4 million for the year ended December 31, 2021 and $14.6 million for the three months ended March 31, 2022.

As of March 31, 2022, we had an accumulated deficit of $162.1 million.

Our net loss was $51.4 million for the year ended December 31, 2021 and $26.1 million for the six months ended June 30, 2022.

As of June 30, 2022, we had an accumulated deficit of $173.6 million.

To date, we have financed our operations primarily through the sale of common stock and the sale of convertible preferred stock.

We have devoted substantially all of our financial resources and efforts to research and development, including clinical trials and preclinical studies of tovinontrine.

While we recently made the decision to discontinue development of tovinontrine and are not currently developing product candidates, to become and remain profitable we must succeed in developing, and eventually commercializing, a product or products that generate significant revenue.

While we made the decision to discontinue development of tovinontrine and are not currently developing product candidates, to become and remain profitable we must succeed in developing, and eventually commercializing, a product or products that generate significant revenue.

The ability to achieve this success will require us to be effective in a range of challenging activities, including completing preclinical testing and clinical trials of any product candidates we may develop, obtaining regulatory approval for these product candidates and manufacturing, marketing and selling any products for which we may obtain regulatory approval.

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In April 2021, we entered into a sales agreement, or the Sales Agreement, with Cantor Fitzgerald & Co, LLC, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under a shelf registration statement on Form S-3.

As of March 31, 2022, we have issued and sold 231,291 shares of common stock under the Sales Agreement, resulting in net proceeds of $1.4 million after deducting commissions and offering expenses.

The extent to which we utilize the Sales Agreement as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, general market conditions, the extent to which we are able to secure funds from other sources, and restrictions on our ability to sell common stock pursuant to the Sales Agreement to the extent we are then subject to restrictions on our ability to utilize the Form S-3 shelf registration statement to sell more than one-third of the market value

of our public float, meaning the aggregate market value of voting and non-voting common stock held by non-affiliates, in any trailing 12-month period.

As of June 30, 2022, we have issued and sold 231,291 shares of common stock under the Sales Agreement, resulting in net proceeds of $1.4 million after deducting commissions and offering expenses.

Accordingly, we may not be able to sell shares under the Sales Agreement at prices or amounts that we deem acceptable, and there can be no assurance that we will sell any further common stock pursuant to the Sales Agreement.

As of March 31, 2022, we had cash, cash equivalents and investments of $72.9 million.

As of June 30, 2022, we had cash, cash equivalents and investments of $ 60.3 million.

Our future capital requirements will depend on many factors, including:

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our ability to consummate a strategic transaction and the nature and type of such transaction;

the time and cost necessary to close out our Ardent Phase 2b and open label extension clinical trials of tovinontrine in patients with SCD and our Forte Phase 2b clinical trial of tovinontrine in patients with β-thalassemia;

the time and cost necessary to complete the close out of our Ardent Phase 2b and open label extension clinical trials of tovinontrine in patients with SCD and our Forte Phase 2b clinical trial of tovinontrine in patients with β-thalassemia;

if we decide to pursue any future product development efforts, our ability to bring any such product candidate through preclinical and clinical development, and the timing and scope of these research and development activities;

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The COVID-19 pandemic continues to rapidly evolve and could more significantly impact our operations in the future.

Although we are not currently developing any product candidates, if we decide to pursue any future product development efforts t he COVID-19 pandemic may adversely affect our development activities, including our ability to recruit and retain patients in clinical trials, as a result of many factors, including :

diversion of healthcare resources away from the conduct of our clinical trials in order to focus on pandemic concerns, including the availability of necessary materials, the attention of physicians serving as clinical trial investigators, access to hospitals serving as clinical trial sites, availability of hospital staff supporting the conduct of clinical trials and the reluctance of patients enrolled in clinical trials to visit clinical trial sites;

Although we are not currently developing any product candidates, if we decide to pursue any future product development efforts the COVID-19 pandemic may adversely affect our development activities, including our ability to recruit and retain patients in clinical trials, as a result of many factors, including:

hospitals serving as clinical trial sites, availability of hospital staff supporting the conduct of clinical trials and the reluctance of patients enrolled in clinical trials to visit clinical trial sites;

potential interruptions in global shipping affecting the transport of clinical trial materials, such as investigational drug product, patient samples and other supplies used in clinical trials;

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For example, data from the interim analysis in our Ardent Phase 2b clinical trial of tovinontrine in SCD did not replicate our previously observed positive vaso-occlusive crisis data from our Phase 2a and OLE clinical trials of tovinontrine in SCD.

Similarly, data from the interim analysis in our Forte Phase 2b clinical trial of tovinontrine in β-thalassemia showed no meaningful benefit from treatment with tovinontrine as compared to

placebo, despite previous positive preclinical data for tovinontrine in β-thalassemia.

Similarly, data from the interim analysis in our Forte Phase 2b clinical trial of tovinontrine in β-thalassemia showed no meaningful benefit from treatment with tovinontrine as compared to placebo, despite previous positive preclinical data for tovinontrine in β-thalassemia.

In April 2022, we discontinued the Ardent and Forte trials as well as the further development of tovinontrine in SCD and β-thalassemia.

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Such changes may also require additional testing, FDA notification or FDA approval.

This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of the affected product candidate and jeopardize our ability to commence sales and generate revenue.

This could delay completion of clinical trials, require

the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of the affected product candidate and jeopardize our ability to commence sales and generate revenue.

If serious adverse events or unacceptable side effects are identified during the development of any product candidates we may develop, we may need to abandon or limit our development of those product candidates.

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There are risks involved with establishing our own sales, marketing and distribution capabilities.

For example, recruiting and training a sales force is expensive and time-consuming and could delay any product launch.

For example, recruiting and training a sales force is expensive and time-consuming and could

delay any product launch.

If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses.

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Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

If we decide to pursue any future product development efforts , o ur success may depend , in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties that, if they materialize, could harm our business.

If we decide to pursue any future product development efforts, our success may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties that, if they materialize, could harm our business.

If we decide to pursue any future product development efforts, our future profitability may depend, in part, on our ability to commercialize any product candidates we may develop in markets outside of the United States and the European Union.

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If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates and our business could be adversely affected.

As part of our assessment of strategic options following discontinuation of our development of tovinontrine, we may enter into collaboration, development, distribution or marketing arrangements with third parties with respect to tovinontrine, IMR-261 or other product candidates.

product candidates.

Our likely collaborators for any sales, marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.

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Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all.

If any collaborations that we enter into do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone

or royalty payments under the collaboration.

If we do not receive the funding we expect under these agreements, our development of any product candidates could be delayed and we may need additional resources to develop any product candidates.

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If we are not able to establish or maintain collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.

As part of our assessment of strategic options following discontinuation of our development of tovinontrine, we may decide to collaborate with pharmaceutical or biotechnology companies for the development and potential commercialization of those product candidates.

We face significant competition in seeking appropriate collaborators, and a number of more established companies may also be pursuing strategies to license or acquire third-party intellectual property rights that we consider attractive.

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If we decide to pursue any future product development efforts, we expect to rely on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, which may harm our business.

We historically have relied on third-party clinical research organizations to conduct our clinical trials, including our recently discontinued Ardent and Forte Phase 2b clinical trials in SCD and in β-thalassemia.

We historically have relied on third-party clinical research organizations to conduct our clinical trials, including our discontinued Ardent and Forte Phase 2b clinical trials in SCD and in β-thalassemia.

If we decide to pursue any future product development efforts, we do not expect to independently conduct clinical trials of any such product candidates.

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Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.

We also are required to register clinical trials and post the results of completed clinical trials on a

government-sponsored database, ClinicalTrials.gov, within specified timeframes.

We also are required to register clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.

Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

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If we fail to comply with our obligations under our existing license agreements, or under any future intellectual property licenses, or otherwise experience disruptions to our business relationships with our current or any future licensors, we could lose intellectual property rights that are important to our business.

We are party to a license agreement with Lundbeck pursuant to which we have been granted an exclusive worldwide license within the field of prevention, treatment or diagnosis of hemoglobinopathy disorders and/or other diseases or disorders, including

those directly or indirectly related to hemoglobinopathies.

The agreement grants us an exclusive license under the licensed technology to, among other things, develop and commercialize any product comprising or containing certain PDE9 inhibitors, including tovinontrine.

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In addition, the scope of patent protection outside of the United States is uncertain and laws of non-U.S.

countries may not protect our rights to the same extent as the laws of the United States

or vice versa.

countries may not protect our rights to the same extent as the laws of the United States or vice versa.

For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does.

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Moreover, our owned and in-licensed pending and future patent applications may not result in patents being issued that protect our technology and product candidates, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products.

Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents and our ability to obtain, protect, maintain, defend and enforce our patent rights, narrow the scope of our patent protection and, more generally, could affect the value of, or narrow the scope of, our patent rights .

Changes in either the patent laws or interpretation of the patent laws in the

United States and other countries may diminish the value of our patents and our ability to obtain, protect, maintain, defend and enforce our patent rights, narrow the scope of our patent protection and, more generally, could affect the value of, or narrow the scope of, our patent rights .

Moreover, we or our licensors may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, revocation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.

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If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed.

If we decide to pursue any future product development efforts, it may be necessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain a license from these third

If we are unable to license such technology, or if we are forced to license such technology on unfavorable terms, our business could be materially harmed.

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These changes include provisions that affect the way patent applications are prosecuted, redefine prior art, provide more efficient and cost-effective avenues for competitors to challenge the validity of patents, and enable third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent at USPTO-administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.

Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.

Assuming that other requirements for patentability are met, prior to March

2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.

After March 2013, under the Leahy-Smith Act, the United States transitioned to a first-to-file system in which, assuming that the other statutory requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third-party was the first to invent the claimed invention.

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The FDA may also withdraw approval if other evidence demonstrates that our product candidate is not shown to be safe or effective under the conditions of use, we fail to conduct any required post approval trial of our product candidate with due diligence or we disseminate false or misleading promotional materials relating to our product candidate.

product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

A failure to obtain accelerated approval or any other form of expedited development, review or approval for any product candidates we may develop, or withdrawal of a product candidate, would result in a longer time period for commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

Even if we do receive accelerated approval, we may not ultimately be able to obtain full FDA approval.

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As of May 26, 2021, the FDA noted it was continuing to ensure timely reviews of applications for medical products during the ongoing COVID-19 pandemic in line with its user fee performance goals and conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards.

However, the FDA may not be able to continue its current pace and review timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the ongoing COVID-19 pandemic and travel restrictions, the FDA is unable to complete such required inspections during the review period.

However, the FDA may not be able to continue its current pace and review timelines could be extended,

including where a pre-approval inspection or an inspection of clinical sites is required and due to the ongoing COVID-19 pandemic and travel restrictions, the FDA is unable to complete such required inspections during the review period.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

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the federal false statements statute prohibits 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;

the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with

specific exceptions) to report annually to the U.S.

Department of Health and Human Services information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by physicians, other healthcare providers and their family members ;

Department of Health and Human Services information related to

payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by physicians, other healthcare providers and their family members ;

analogous state laws and regulations, such as state anti- kickback and false claims laws, and transparency laws, may apply to sales or marketing arrangements, and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures.

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In addition, the GDPR provides that European Union member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

any third-party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the European Union.

Given the breadth and depth of changes in data protection obligations, complying with the GDPR’s requirements is rigorous and time intensive and requires significant resources and an ongoing review of our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the

European Union.

The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us and could have a material adverse effect on our business, financial condition or results of operations.

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These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031 under the CARES Act.

These Medicare sequester reductions have been suspended through the end of March 2022.

These Medicare sequester reductions were suspended through the end of March 2022.

From April 2022 through June 2022 a 1% sequester cut will be in effect, with the full 2% cut resuming thereafter.

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The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

On January 28, 2021, however, President Biden

issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access.

On January 28, 2021, however, President Biden issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to

health care, and consider actions that will protect and strengthen that access.

Under this Order, federal agencies are directed to re-examine:

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Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to control all matters submitted to stockholders for approval.

As of April 1, 2022, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially owned shares representing approximately 39% of our common stock.

As of June 30, 2022, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially owned shares representing approximately 58.7% of our common stock.

As a result, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.

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In July 2021, we issued and sold 8,333,333 shares of common stock with aggregate gross proceeds of approximately $50 million under this universal shelf registration statement.

Moreover, holders of an aggregate of 11,005,600 shares of our common stock have rights, subject to specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for

ourselves or other stockholders.

We have also registered all 4,654,296 shares of common stock that we may issue under our equity compensation plans and such shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates, vesting arrangements and exercise of options.

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We continuously evaluate these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

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government enacted the TCJA, which significantly reformed the Code.

in each case, for NOLs arising in taxable years beginning after December 31, 2017 (though any such NOLs may be carried forward indefinitely and such NOLs arising in taxable years beginning before January 1, 2021 are generally eligible to be carried back up to five years), the imposition of a one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, the elimination of U.S.

The TCJA, as amended by the CARES Act, among other things, contained significant changes to corporate taxation, including a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for NOLs to 80% of current year taxable income and the elimination of NOL carrybacks, in each case, for NOLs arising in taxable years beginning after December 31, 2017 (though any such NOLs may be carried forward indefinitely and such NOLs arising in taxable years beginning before January 1, 2021 are generally eligible to be carried back up to five years), the imposition of a one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, the

elimination of U.S.

tax on foreign earnings (subject to certain important exceptions), the allowance of immediate deductions for certain new investments instead of deductions for depreciation expense over time, and the modification or repeal of many business deductions and credits .

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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.

What changed 10-Q

Item 1A. Risk Factors