What changed in this filing

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Item 1. Legal Proceedings

2022-11-07 compared with 2022-08-11 · 149 added, 119 removed, 1245 unchanged (18% of the section changed)

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Risks Related to COVID-19

The COVID-19 pandemic has affected and continues to affect our ability to conduct clinical trial activities, causing delays in our current Phase 3 clinical trials, IMerge Phase 3 and IMpactMF, and may delay IMproveMF, our Phase 1 combination clinical trial in frontline Intermediate-2 or High-risk myelofibrosis, or frontline MF, and our planned investigator-led clinical trials in acute myeloid leukemia, or AML, and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS.

Additionally, the COVID-19 pandemic may delay and disrupt regulatory activities and our manufacturing and supply chain and have other adverse effects on our business and operations.

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Our level of indebtedness and debt service obligations could adversely affect our financial condition, and may make it more difficult for us to fund our operations.

The global economic slowdown, as well as inflation, rising interest rates and the prospects for recession, could materially and adversely affect our ability to raise additional capital, which could negatively affect our liquidity, our business and business prospects and the future of imetelstat.

Risks Related to Regulatory Compliance Matters and Commercialization of Imetelstat

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If imetelstat is approved for marketing and commercialization and we are unable to establish sales, marketing and distribution capabilities, we will be unable to successfully commercialize imetelstat if and when it is approved.

If imetelstat is approved for marketing and commercialization and we are unable to obtain coverage and adequate third-party payor reimbursement, we may be unable to successfully commercialize imetelstat if and when it is approved.

If we are not successful in commercializing imetelstat, we will not be able to achieve our projections for future revenue, if any.

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We rely on third parties to manufacture and supply imetelstat, and may be unable to ensure that we have adequate quantities of imetelstat for current and potential future clinical trials and potential commercial uses.

Regulatory inspections of third-party manufacturers may identify deficiencies in manufacturing processes or facilities which could impact the ability of third-party manufacturers to produce and deliver products, including imetelstat.

Risks Related to Information Technology Systems, Data Security and Data Privacy

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RISKS RELATED TO THE DEVELOPMENT OF IMETELSTAT

Our future success depends solely on imetelstat, our only product candidate, and we cannot be certain that we will be able to continue to develop imetelstat or advance imetelstat to subsequent clinical trials, or that we will be able to receive regulatory approval for imetelstat on a timely basis, or at all.

Imetelstat is our sole product candidate, upon whose success we are wholly dependent.

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ascertain that the use of imetelstat does not result in significant systemic or organ toxicities, including hepatotoxicity, or other safety issues resulting in an unacceptable benefit-risk profile;

achieve adequate efficacy in IMerge Phase 3 to obtain regulatory approval, (i) in light of our decision to shorten the follow-up period after the last patient has been enrolled from 15 months to 12 months to enable an earlier clinical cut-off date for the primary analysis, which may result in the exclusion of clinical responses that could occur after the earlier clinical cut-off date for the primary analysis, (ii) inability to conduct the primary analysis for IMerge Phase 3, including due to further difficulties in retaining patients in the treatment or follow-up phases of the trial or (iii) for any other reasons;

achieve adequate efficacy in IMerge Phase 3 to obtain regulatory approval, (i) in light of our decision to shorten the follow-up period after the last patient has been enrolled from 15 months to 12 months to enable an earlier clinical cut-off date for the primary analysis, which may result in the exclusion of clinical responses that could occur after the earlier clinical cut-off date for the primary analysis, (ii) our inability to conduct the primary analysis for IMerge Phase 3, including due to further difficulties in retaining patients in the treatment or follow-up phases of the trial or (iii) for any other reasons;

obtain substantial additional capital in order to enable us to conduct our operations and further advance the imetelstat program, including through the completion of IMpactMF, IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF;

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enter into and maintain arrangements with third parties to provide services needed to further research and develop imetelstat, including maintaining the agreements with our CROs, or to manufacture imetelstat, in each case at commercially reasonable costs;

enter into and maintain arrangements with third parties, or establish internal capabilities, to provide sales, marketing, distribution and other commercialization functions in compliance with applicable laws, and maintain sufficient commercial resources to launch imetelstat;

enter into and maintain arrangements with third parties, or establish internal capabilities, to provide sales, marketing, distribution and other functions to support the potential commercialization of imetelstat in compliance with applicable laws, and maintain sufficient commercial resources to launch imetelstat;

achieve acceptance of imetelstat, if approved, by patients and the relevant medical communities;

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If we are not able to successfully achieve the above-stated goals and overcome other challenges that we may encounter in the research, development, manufacturing and potential commercialization of imetelstat, we may be forced to abandon our development of imetelstat, which would severely harm our business, prospects and our ability to raise additional capital, and might cause us to cease operations.

Our current and potential future clinical trials of imetelstat, could be interrupted, delayed, terminated or abandoned for a variety of reasons, including due to the COVID-19 pandemic, civil unrest or military conflicts around the world, including the current military conflict between Ukraine and Russia, which could severely and adversely affect our financial results, business and business prospects, and the future of imetelstat, and might cause us to cease operations.*

Our current and potential future clinical trials of imetelstat, could be interrupted, delayed, terminated or abandoned for a variety of reasons, including due to the COVID-19 pandemic, or civil unrest or military conflicts around the world, such as the current military conflict between Ukraine and Russia, which could severely and adversely affect our financial results, business and business prospects, and the future of imetelstat, and might cause us to cease operations.*

Currently, the active clinical trials of imetelstat are IMerge Phase 2, IMerge Phase 3, IMpactMF, and IMproveMF, which was opened for enrollment in May 2022.

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Site personnel resources for IMpactMF remain constrained in the countries where we plan to conduct the trial, due to the negative impact of COVID-19, as well as a number of competing trials in MF and other oncology indications.

Under current planning assumptions for IMpactMF, we expect that the interim analysis may occur in 2024 and the final analysis in 2025.

However, because the analyses for IMpactMF are event-driven, the results may be available at different times than currently expected.

In addition, the conduct and completion of IMerge Phase 3, IMpactMF, and IMproveMF, and commencement and conduct of any potential future clinical trials of imetelstat, including the investigator-led clinical trials in AML and higher risk MDS that we plan to support, could be interrupted, delayed or abandoned for a variety of reasons, including as a result of the COVID-19 pandemic, the conflict between Ukraine and Russia or failures or delays related to:

Based on assumptions for enrollment and event (death) rates in the trial, we expect the interim analysis for OS for IMpactMF may occur in 2024 and the final analysis in 2025.

Because these analyses are event-driven and it is uncertain whether actual rates for enrollment and events will reflect current planning assumptions, the results may be available at different times than currently expected.

In addition, the conduct and completion of IMpactMF, and IMproveMF, and commencement and conduct of any potential future clinical trials of imetelstat, including the investigator-led clinical trials in AML and higher risk MDS that we plan to support, could be interrupted, delayed or abandoned for a variety of reasons, including as a result of the COVID-19 pandemic, the conflict between Ukraine and Russia, which has and may continue to cause delays and suspensions in clinical trial activities at clinical sites, or failures or delays related to:

successfully retaining patients in, and conducting and completing, IMerge Phase 3, including completing the primary analysis for IMerge Phase 3;

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third-party contractors becoming debarred, disqualified or suspended or otherwise penalized by the FDA or other similar international regulatory authorities for violations of applicable regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of any applications for regulatory approval;

obtaining timely review and clearances by regulatory authorities for any clinical protocol amendments, modifications to our manufacturing process which may be sought for current and potential future clinical trials of imetelstat, including responding to questions or comments from these authorities in a timely and adequate manner, which could, for example,

prevent us from conducting or completing IMerge Phase 3, IMpactMF or IMproveMF, or commencing potential future clinical trials of imetelstat;

obtaining institutional review board or ethics committee approvals for clinical trial protocols or protocol amendments, including any future refinements to the trial design we may seek for IMerge Phase 3, IMpactMF or IMproveMF, or as a result of changes in regulatory requirements and policies, which could, for example, prevent us from conducting or completing IMerge Phase 3, IMpactMF or IMproveMF, and commencing potential future clinical trials of imetelstat.

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changes in governmental regulations or administrative actions.

Failures or delays with respect to any of the aforementioned events could adversely affect our ability to conduct or complete IMerge Phase 3, IMpactMF and IMproveMF, or to commence, conduct and complete potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, which could increase development costs, or interrupt, further delay or halt our development or potential commercialization of imetelstat, any of which could severely and adversely affect our financial results, business and business prospects, and the future of imetelstat, and might cause us to cease operations.

further delay or halt our development or potential commercialization of imetelstat, any of which could severely and adversely affect our financial results, business and business prospects, and the future of imetelstat, and might cause us to cease operations.

Further difficulties retaining patients in IMerge Phase 3 and enrolling or retaining patients in IMpactMF, whether as a result of the effects of the COVID-19 pandemic, the military conflict between Ukraine and Russia or for any other reasons, could further delay or otherwise adversely affect our clinical development and commercialization activities, which would cause our business and business prospects to be severely harmed, and we might cease operations.*

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If this were to occur, there would be a significant delay in, or possible termination of, such clinical trial or all the imetelstat clinical trials, which might cause us to cease operations.

For example, we recently became aware of a case in our IMpactMF clinical trial of a patient with myelofibrosis associated with underlying progressive bone marrow failure, who died from febrile neutropenia, pulmonary hemorrhage and bilateral pneumonia, which, at the time of reporting, the investigator related to the study drug (imetelstat)/disease.

In any event, if such toxicities or other safety issues in any clinical trial of imetelstat are determined by us, the FDA or similar regulatory authorities in other countries to result in an unacceptable benefit-risk profile, then:

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Patients in both the initial and expansion cohorts were naïve to both HMA and lenalidomide and were non-del(5q).

We believe the observed difference in eight-week RBC-TI rate between the 13-patient initial cohort and the 25-patient expansion

cohort may be attributable to factors such as the maturity of the data at the time of the data snapshot, since the median follow-up time of the expansion cohort at the time of the data snapshot was less than half the length of time the 13-patient initial cohort had been followed when their data were first reported, or the higher overall baseline transfusion burden of the expansion cohort.

We believe the observed difference in eight-week RBC-TI rate between the 13-patient initial cohort and the 25-patient expansion cohort may be attributable to factors such as the maturity of the data at the time of the data snapshot, since the median follow-up time of the expansion cohort at the time of the data snapshot was less than half the length of time the 13-patient initial cohort had been followed when their data were first reported, or the higher overall baseline transfusion burden of the expansion cohort.

Although the latest reported eight-week RBC-TI rate of 42% in June 2020 is higher than that reported in the data snapshot from the second quarter of 2018, we cannot assure you that the eight-week RBC-TI rate of patients enrolled in IMerge Phase 3 will be comparable to what has been reported in the 13-patient initial cohort, the 25-patient expansion cohort, or the combined cohorts in IMerge Phase 2.

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However, similar activity was not observed in the MF patients enrolled in IMbark, as shown by the one partial remission observed in the IMbark primary analysis.

We believe that differences in the IMbark study design when compared to the Pilot Study design, such as more restrictive patient enrollment criteria requiring either documented objective lack of response to a JAK inhibitor or evidence of progressive disease while on treatment with a JAK inhibitor, may have contributed to the data observed in IMbark differing significantly from data reported from the Pilot Study, but we cannot assure you that any future clinical trials of imetelstat in MF will yield results comparable to IMbark or the Pilot Study.

We believe that differences in the IMbark

study design when compared to the Pilot Study design, such as more restrictive patient enrollment criteria requiring either documented objective lack of response to a JAK inhibitor or evidence of progressive disease while on treatment with a JAK inhibitor, may have contributed to the data observed in IMbark differing significantly from data reported from the Pilot Study, but we cannot assure you that any future clinical trials of imetelstat in MF will yield results comparable to IMbark or the Pilot Study.

In addition, the potential improvement in survival observed in the 9.4 mg/kg dosing arm in IMbark will need to be further assessed in IMpactMF, and similar results, including potential improvement in survival, if any, with respect to any patient population or patient population subgroup, may not be observed in IMpactMF.

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From time-to-time, preliminary or interim safety and efficacy data from previous and current imetelstat clinical trials have been reported or announced by us, clinical investigators or our former collaboration partner.

For example, preliminary data from IMerge Phase 2 were reported at the ASH Annual Meetings in December 2017, December 2018, December 2020 and December 2021, and at the EHA Annual Congress meetings in June 2018, June 2019, June 2020 and June 2021.

For example, preliminary data from IMerge Phase 2 were reported at the ASH Annual Meetings in December 2017, December 2018, December 2020 and December 2021 and an abstract for the 2022 ASH Annual Meeting, released in November 2022, and at the EHA Annual Congress meetings in June 2018, June 2019, June 2020 and June 2021.

Preliminary or interim results may not be reproduced in any current or potential future clinical trials of imetelstat, and thus should be considered carefully and with caution, and not relied upon as indicative of future clinical results.

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Based on data from IMbark, we believe that testing a lower dose regimen would likely result in a lower median OS, which is the trial’s primary endpoint, in the imetelstat treatment arm.

Existing data also suggest that lowering the dose would not result in a clinically meaningful reduction in toxicity, and for these reasons we therefore determined not to add a third dosing arm to the trial design and the FDA did not object to our proposed imetelstat dose and schedule of 9.4 mg/kg every three weeks.

Existing data also suggest that lowering the dose would not result in a clinically meaningful reduction in toxicity, and

for these reasons we therefore determined not to add a third dosing arm to the trial design and the FDA did not object to our proposed imetelstat dose and schedule of 9.4 mg/kg every three weeks.

Our belief may ultimately be incorrect.

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In addition, failure by our former collaborator to comply with applicable regulatory guidelines prior to our assumption of sponsorship of the imetelstat program could result in administrative or judicially imposed sanctions on us, including warning letters, civil and criminal penalties, injunctions, product seizures or detention, product recalls, total or partial suspension of manufacturing activities, and the potential refusal to approve any NDAs.

Any delay in obtaining or failure to obtain required approvals of imetelstat, or limitations on any regulatory approval that we might receive in the future, if any, could reduce the potential commercial use of imetelstat, and potential market demand for imetelstat and therefore result in decreased revenue for us from any commercialization of imetelstat, any of which would severely and adversely affect our financial results, the price of our common stock, our business and business prospects, and the future of imetelstat, and might cause us to cease operations.

Any delay in obtaining or failure to obtain required approvals of imetelstat, or limitations on any regulatory approval that we might receive in the future, if any, could reduce the potential commercial use of imetelstat, and potential market demand for imetelstat and therefore result in decreased revenue for us from any commercialization of imetelstat, any of which would severely and adversely affect our financial results and ability to raise additional capital, the price of our common stock, our business and business prospects, and the future of imetelstat, and might cause us to cease operations.

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In addition, we may not be successful in entering into arrangements with third parties to sell and market imetelstat or may be unable to do so on terms that are favorable to us.

In entering into third-party marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties, and we cannot assure you that such third parties will establish adequate sales and distribution capabilities or devote the necessary resources and attention to sell and market imetelstat effectively.

In entering into third-party

marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties, and we cannot assure you that such third parties will establish adequate sales and distribution capabilities or devote the necessary resources and attention to sell and market imetelstat effectively.

Our inability to successfully establish commercialization capabilities for imetelstat, if we receive regulatory approval to do so, would severely and adversely affect our financial results, business and business prospects, and the future of imetelstat, and might cause us to cease operations.

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Key benefits of being within ILAP include a potential 150-day accelerated assessment and rolling review of an MAA, as well as opportunities for frequent interactions with the review staff at the MHRA and its partner agencies to discuss imetelstat’s development, regulatory and reimbursement plans.

Although the goal of ILAP and the Innovation Passport is to reduce the time to market and enable earlier patient access, it does not accelerate conduct of clinical trials or mean that the regulatory requirements are less stringent, nor does it ensure that any imetelstat MAA will be approved or that any approval will be granted within any particular timeframe.

imetelstat MAA will be approved or that any approval will be granted within any particular timeframe.

Despite receiving Innovation Passport designation, we may decide to delay or forego the commercialization of imetelstat in the U.K.

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selling and marketing;

medical information;

distribution.

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While we have established arrangements with third parties for the manufacture of imetelstat, our manufacturing supply chain is highly specialized, and as such we are reliant upon a small group of third-party manufacturers to supply starting materials, drug substance and drug product.

Failure by such third-party manufacturers to perform in a timely manner, or at all, could further delay, perhaps substantially, or preclude our ability to pursue imetelstat development on our own, increase our costs and otherwise negatively affect our financial results, business and business prospects.

We may not be able to obtain imetelstat from third-party manufacturers on acceptable terms, or at all.

Failure by such third-party manufacturers to perform in a timely manner and in compliance with all regulatory requirements, or at all, could further delay, perhaps substantially, or preclude our ability to pursue imetelstat development on our own, increase our costs and otherwise negatively affect our financial results, business and business prospects.

In this regard, a recent FDA inspection of one of our third-party manufacturers identified certain deficiencies in the manufacturer’s processes and facilities which, while not directly related to the production of imetelstat, could impact the manufacturer’s ability to produce and deliver products, including imetelstat, if not remediated by the manufacturer, and could lead to delays or shortages in drug supply, or the inability to manufacture or ship drug supply necessary for non-clinical and clinical activities, and commercialization.

In addition, we may not be able to obtain imetelstat from third-party manufacturers on acceptable terms, or at all.

We expect to rely on third-party manufacturers to produce and deliver sufficient quantities of imetelstat and other materials to support clinical trials on a timely basis and to comply with applicable regulatory requirements.

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decisions by third-party manufacturers to exit the contract manufacturing business during the time required to supply clinical trials or to successfully produce, store and distribute imetelstat to meet commercial needs;

compliance by third-party manufacturers with GMP standards mandated by the FDA and state agencies and other government regulations corresponding to similar regulatory authorities in other countries;

compliance by third-party manufacturers with GMP standards mandated by the FDA and state agencies and other government regulations corresponding to similar regulatory authorities in other countries, including any deficiencies identified during regulatory inspections, such as those identified in a recent FDA inspection of one of our third-party manufacturers;

breach or termination of manufacturing or supply contracts;

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In addition, third-party manufacturers and/or any other manufacturers may need to make substantial investments to enable sufficient capacity increases and cost reductions, and to implement those regulatory and compliance standards necessary for successful Phase 3 clinical trials and commercial production of imetelstat.

These third-party manufacturers may not be willing or able to achieve such capacity increases, cost reductions, or regulatory and compliance standards, and even if they do, such achievements may not be at commercially reasonable costs.

These third-party manufacturers may not be willing or able to achieve

such capacity increases, cost reductions, or regulatory and compliance standards, and even if they do, such achievements may not be at commercially reasonable costs.

Changing manufacturers may be prolonged and difficult due to inherent technical complexities and because the number of potential manufacturers is limited.

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The effects of the ongoing COVID-19 global pandemic have negatively impacted, and will likely continue to negatively impact, our business and healthcare resources around the world, including a significant number of clinical sites involved with IMerge Phase 3 and planned clinical sites for IMpactMF and IMproveMF.

Our business and business prospects, our financial condition and the future of imetelstat generally could be materially and adversely affected by the effects of the ongoing global COVID-19 pandemic.

Our business and business prospects, our financial condition and ability to raise additional capital, and the future of imetelstat generally could be materially and adversely affected by the effects of the ongoing global COVID-19 pandemic.

The ongoing COVID-19 pandemic and public health safety measures taken in response to COVID-19 have had a significant impact, both direct and indirect, on businesses, as significant reductions in business-related activities have occurred, clinical development and regulatory activities have been curtailed, delayed or suspended and supply chains have been disrupted.

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As such, we have experienced and expect to continue to experience disruption in clinical trial activities and delays in enrollment, as well as constraints on available sites and site personnel.

Given these challenges, under current planning assumptions, we expect that the interim analysis may occur in 2024 and the final analysis in 2025.

Because these analyses are event-driven, the results may be available at different times than currently expected.

If the effects of the COVID-19 pandemic continue and/or become more severe, we could experience further disruptions to our clinical development timelines, including continued delays in enrollment and clinical trial site initiation in IMpactMF and potential delays in IMproveMF and planned investigator-led clinical trials in AML and higher risk MDS, and other disruptions that could severely impact our business and the imetelstat development program, including those resulting from:

Based on assumptions for enrollment and event (death) rates in the trial, we expect the interim analysis for OS for IMpactMF may occur in 2024 and the final analysis in 2025.

If the effects of the COVID-19 pandemic continue and/or become more severe, we could experience further disruptions to our clinical development timelines, including continued delays in enrollment and clinical trial site initiation in IMpactMF and potential delays in IMproveMF and the planned investigator-led clinical trials in AML and higher risk MDS, and other disruptions that could severely impact our business and the imetelstat development program, including those resulting from:

new, continued or heightened difficulties in opening clinical trial sites for patient screening and enrollment and recruiting clinical site investigators and clinical site staff;

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potential refusal by the FDA to accept data, including from clinical trials in affected geographies or failure to comply with updated FDA guidance and expectations related to the conduct of clinical trials during the COVID-19 pandemic;

continued or heightened delays or disruptions in clinical trial activities due to reduced availability of personnel at CROs and vendors;

continued or heightened delays or disruptions in clinical trial activities, including executing clinical site contracts, due to reduced availability of personnel at CROs, clinical site legal groups and vendors, or for any other reasons;

substantial reduction of healthcare resources available for the conduct of clinical trials, including the temporary postponement of clinical trial activities at certain hospitals serving as our clinical trial sites and diversion of hospital staff away from the conduct of our clinical trials, such as those experienced by us to date;

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efforts and attention on the approval of other therapeutics or other activities related to COVID-19 could likewise impact the timeliness of regulatory authority responses and the processing of regulatory submissions for imetelstat.

In any event, if the effects of the COVID-19 pandemic become more severe, we may experience more significant disruptions to our clinical development timelines, which would materially and adversely affect our business and business prospects, our financial condition and the future of imetelstat.

While at this time we believe that we have sufficient drug supply for IMerge Phase 3 and IMpactMF, we could experience disruptions to our supply chain, as well as delays or limitations in our ability to obtain sufficient materials for the manufacture of imetelstat for our current and potential future clinical trials.

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Accordingly, we do not yet know the full extent of potential delays or impacts on our business, our regulatory and clinical development activities, clinical supply chain and other business operations or the global economy as a whole.

However, these effects could materially and adversely affect our business and business prospects, our financial condition and the future of imetelstat.

However, these effects could materially and adversely affect our business and business prospects, our financial condition and ability to raise additional capital, and the future of imetelstat.

In addition, to the extent the effects of the COVID-19 pandemic adversely affect our business and financial condition, they may also have the effect of heightening many of the other risks and uncertainties described elsewhere under the heading “Risk Factors”.

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Successful drug development and commercialization requires significant amounts of capital.

Under current planning assumptions, we believe our existing capital resources, including the potential future proceeds of up to $124.3 million from the exercise of currently outstanding warrants and potential drawdowns of up to $50.0 million under the recently expanded Loan Agreement that are subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, would be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

Under planning assumptions for positive top-line results from IMerge Phase 3, we believe our existing capital resources, potential future proceeds of up to $120.7 million from the exercise of currently outstanding warrants and up to $50.0 million in potential available drawdowns under the Loan Agreement that are subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, would be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the middle of 2024.

Absent these potential warrant proceeds and availability of debt drawdowns under the Loan Agreement, under current planning assumptions, we believe our existing capital resources will be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the end of the third quarter of 2023.

Importantly, our ability to raise additional capital to fund our operations after the end of the third quarter of 2023 will be substantially dependent on the top-line results from IMerge Phase 3.

If the top-line results from IMerge Phase 3 are negative, inconclusive or otherwise do not meet the expectations of investors, analysts and our lenders, our ability to raise additional capital to fund our operations after the end of the third quarter of 2023 will be substantially impaired, which might cause us to cease operations.

In any event, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF.

If the top-line results from IMerge Phase 3 are negative, inconclusive or otherwise do not meet the expectations of investors, analysts and our lenders, our ability to raise additional capital to fund our operations, including receiving any potential future proceeds from the exercise of currently outstanding warrants, as well as availability of debt drawdowns under the Loan Agreement, will be substantially impaired and such additional capital may not be available, which might cause us to cease operations.

Absent these potential future warrant proceeds and availability of debt drawdowns under such a negative scenario, any potential commercial preparatory activities would be deferred.

Hence, under the planning assumptions which would apply in such a negative scenario, we believe our existing capital resources would be sufficient to fund those projected level of operations until the end of 2023.

In any event, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led studies in AML and higher risk MDS, IMpress and TELOMERE, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF.

In addition, our ability to commercialize imetelstat in the U.S., if regulatory approval is granted, depends on us being able to establish sales and marketing capabilities.

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the availability of coverage and adequate third-party reimbursement for imetelstat;

expenses associated with the pending securities class action lawsuits and derivative lawsuits, as well as any other potential litigation;

expenses associated with settlement of the pending securities class action lawsuits, and the ongoing derivative lawsuits, as well as any other potential litigation;

the extent and scope of our general and administrative expenses, including expenses associated with potential future litigation;

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the costs of enabling our personnel to work remotely, including providing supplies, equipment and technology necessary for them to perform their responsibilities.

Until we can generate a sufficient amount of revenue from imetelstat to finance our cash requirements, which we may never achieve, we expect to finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements, which may not be possible.

Availability of such financing sources may be negatively impacted with any further delays in reporting results from IMerge Phase 3 or IMpactMF.

Availability of such financing sources may be negatively impacted by any further delays in reporting results from IMerge Phase 3 or IMpactMF, as well as factors such as the global economic slowdown caused by inflation, rising interest rates and the prospects for recession.

Additional financing through public or private debt or equity financings, including pursuant to the 2020 Sales Agreement with B.

Riley Securities, the remaining tranches of up to $75.0 million available under the Loan Agreement, subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, including approval by an investment committee comprised of Hercules and SVB, capital lease transactions or other financing sources may not be available on acceptable terms, or at all.

Riley Securities;

the remaining tranches of up to $75.0 million available under the Loan Agreement, subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, including approval by an investment committee comprised of Hercules and SVB;

capital lease transactions or other financing sources, may not be available on acceptable terms, or at all.

We may be unable to raise equity capital, or may be forced to do so at a stock price or on other terms that could result in substantial dilution of ownership for our stockholders.

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In this regard, the effects of the COVID-19 pandemic have increased market volatility and could result in a significant long-term disruption of global financial markets, which could reduce or eliminate our ability to raise additional funds through financings, and could negatively impact the terms upon which we may raise those funds.

Similarly, political and civil unrest, such as the current military conflict between Ukraine and Russia and the related significant sanctions imposed against Russia, has created extreme volatility and disruption in the capital markets and is expected to have further global economic consequences.

Similarly, inflation, rising interest rates, the prospects for recession and political and civil unrest, such as the current military conflict between Ukraine and Russia and the related significant sanctions imposed against Russia, has created extreme volatility and disruption in the capital markets and is expected to have further global economic consequences.

If the equity and credit markets deteriorate, including as a result of a resurgence of COVID-19, the current military conflict between Ukraine and Russia or other political unrest or war, including the possibility of expanded regional or global conflict, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.

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Riley Securities or potential future drawdowns, if available, of the remaining up to $75.0 million under the Loan Agreement, will be sufficient to fund our operating plans.

In this regard, under the Loan Agreement, our

ability to draw down any funds is subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization requirements and other conditions, including approval by an investment committee comprised of Hercules and SVB.

In this regard, under the Loan Agreement, our ability to draw down any funds is subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization requirements and other conditions, including approval by an investment committee comprised of Hercules and SVB.

Without such approval, we will not be eligible to draw down any funds under the final $25.0 million tranche of the Loan Agreement, and we will need to obtain additional or alternative financing to advance our development of imetelstat.

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In addition, we are incurring and have incurred operating losses every year since our operations began in 1990, except for one.

As of June 30, 2022, our accumulated deficit was approximately $1.3 billion.

As of September 30, 2022, our accumulated deficit was approximately $1.4 billion.

Losses have resulted principally from costs incurred in connection with our research and development activities and from general and administrative costs associated with our operations.

Substantially all of our revenues to date have been payments under collaboration agreements and milestones, royalties and other revenues from our licensing arrangements.

Our license agreements related to our hTERT technology have expired or been terminated due to expiration of the underlying hTERT patents, and will not generate any significant revenues.

Our license agreements related to our hTERT technology have expired or been terminated due to expiration of the underlying hTERT patents, and will not generate any further revenues.

We have no ongoing collaborations related to imetelstat and have no current plans to enter into any corporate collaboration, partnership or license agreements that result in revenues, although we may seek a collaborative partner or partners, at an appropriate time, to assist us in the potential development and commercialization of imetelstat, especially outside the U.S., and to provide funding for such activities.

We also expect to experience increased negative cash flow for the foreseeable future as we fund our operations and imetelstat clinical development activities advance and research programs continue.

We also expect to experience increased negative cash flow for the foreseeable future as we fund our operations and imetelstat clinical development activities and research programs continue, and we prepare for potential commercialization of imetelstat.

This will result in decreases in our working capital, total assets and stockholders’

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Our level of indebtedness and debt service obligations could adversely affect our financial condition, and may make it more difficult for us to fund our operations.

As of June 30, 2022, the total outstanding principal amount under the Loan Agreement is $50.0 million.

As of September 30, 2022, the total outstanding principal amount under the Loan Agreement is $50.0 million.

The tranches for the remaining $75.0 million available to us under the Loan Agreement are as follows:

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This indebtedness may create additional financing risk for us, particularly if our business or prevailing financial market conditions are not conducive to paying off or refinancing the outstanding debt obligations at maturity.

If we are able to draw down any of the remaining tranches under the Loan Agreement, our indebtedness will increase, which would further increase our risk of being unable to pay off or refinance our outstanding debt obligations at maturity.

If we are able to draw down any of the remaining tranches under the Loan Agreement, our indebtedness will

increase, which would further increase our risk of being unable to pay off or refinance our outstanding debt obligations at maturity.

Our indebtedness could also have important negative consequences, including:

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Our ability to successfully develop imetelstat in the future and to potentially commercialize imetelstat depends to a significant extent on the skills, experience and efforts of our executive officers and key members of our staff.

In addition, we need to recruit, maintain, motivate and integrate additional personnel with expertise and experience in clinical science, biostatistics, clinical operations, pharmacovigilance, quality, manufacturing, regulatory affairs, medical affairs, legal affairs, sales, and marketing, to enable us to further develop and potentially commercialize imetelstat.

In addition, we need to recruit, maintain, motivate and integrate additional personnel with expertise and experience in clinical science, biostatistics, clinical operations, pharmacovigilance, quality, manufacturing, regulatory affairs, medical affairs, legal affairs, market access, pricing, commercial operations, sales, and marketing, to enable us to further develop and potentially commercialize imetelstat.

We face intense competition for qualified individuals from numerous pharmaceutical, biopharmaceutical and biotechnology companies, as well as academic and other research institutions, and competition in our geographic regions is particularly intense.

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to accommodate our growing workforce in that location.

Our business needs and the expansion of our workforce may require us to establish additional business offices or entities in additional jurisdictions outside of the U.S., or to retain third parties to manage employment-related matters in new countries, jurisdictions and locations.

Our business needs and the expansion of our workforce may require us to establish additional business offices or entities in additional jurisdictions outside of the U.S., including additional subsidiaries, or to retain third parties to manage employment-related matters in new countries, jurisdictions and locations.

Because the legal and regulatory requirements related to the operation and maintenance of such entities, and the employment of personnel in such countries, jurisdictions and regions is multi-national and complex, we may be unable to effectively operate and maintain such entities, or be unable to attract and retain ex-U.S.

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increase our expenditures and undertake development or commercialization activities at our own expense, which will require substantial additional capital than our current resources.

In order to advance the imetelstat program, including through completion of IMerge Phase 3, IMpactMF and IMproveMF, or to commence, conduct and complete potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, as well as undertaking potential commercialization activities for imetelstat in the U.S., we will need to raise substantial additional capital.

In order to advance the imetelstat program, including through completion of IMpactMF and IMproveMF, or to commence, conduct and complete potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, as well as undertaking potential commercialization activities for imetelstat in the U.S., we will need to raise substantial additional capital.

In addition, if we elect to increase our expenditures to fund imetelstat development or commercialization activities outside the U.S., we will be required to substantially increase our personnel resources and we will need to obtain substantial further capital, which may not be available to us on acceptable terms, or at all.

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To date, we have not entered into derivative instruments to offset the impact of foreign exchange fluctuations, which fluctuations could have an adverse effect on our financial condition and results of operations.

We may not be able to obtain or maintain sufficient insurance on commercially reasonable terms or with adequate coverage against potential liabilities in order to protect ourselves against product liability claims related to clinical trial conduct or claims related to data protection.

We may not be able to obtain or maintain sufficient insurance on commercially reasonable terms or with adequate coverage against potential liabilities in order to protect ourselves against product liability claims or claims related to clinical trial conduct, or claims related to data protection.

Our business exposes us to potential product liability and other risks that are inherent in the testing, manufacturing and marketing of human therapeutic and diagnostic products.

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motion for class certification.

Discovery has commenced and will be completed by October 14, 2022.

Trial is scheduled to begin on January 17, 2023.

On September 2, 2022, the parties agreed to a settlement and entered into a Stipulation and Agreement of Settlement, or the Stipulation, which is subject to court approval.

On October 13, 2022, the Court preliminarily approved the parties’

settlement, permitted notice to be distributed to the class members, and scheduled a final approval hearing for March 30, 2023.

Final approval of the settlement is subject to a number of conditions and contingencies out of our control.

There can be no guarantee that all of these conditions and contingencies will occur.

Should a material condition or contingency to the settlement fail to occur, one or both of the parties to the settlement may exercise their right to terminate the settlement agreement.

Between April 23, 2020 and June 8, 2021, seven shareholder derivative actions were filed, naming as defendants certain of our current officers and certain current and former members of our board.

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On October 12, 2021, we filed our motion to dismiss the consolidated amended complaint.

The Court of Chancery of the State of Delaware heard oral argument on the motion on February 15, 2022, and, on June 22, 2022, issued an order staying its decision on our motion to dismiss until after the trial in the consolidated class action lawsuit described above;

The Court of Chancery of the State of Delaware heard oral argument on the motion on February 15, 2022, and, on June 22, 2022, issued an order staying its decision on our motion to dismiss until after final resolution of the consolidated class action lawsuit described above;

The consolidated shareholder derivative actions filed in the U.S.

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On July 6, 2022, the Northern District entered an order staying the consolidated shareholder derivative actions filed in the Northern District until the earlier of either a public announcement of a settlement in the consolidated class action lawsuit described above or a final, non-appealable judgment in the consolidated class action lawsuit described above.

The stay was continued on September 16, 2022, for an additional 60 days;

Our motion to dismiss the shareholder derivative action pursuant to the forum selection clause in our amended and restated bylaws was filed in the Superior Court of California for the County of San Mateo on August 5, 2021.

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We could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and we may not prevail.

In addition, we may incur substantial legal fees and costs in connection with such lawsuits.

We currently are not able to estimate the possible cost to us from these matters, as the pending lawsuits are currently at an early stage, and we cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages that we may be required to pay.

In addition, we have and may continue to incur substantial legal fees and costs in connection with such lawsuits.

As discussed in Note 5 on Contingencies and Uncertainties in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q, we have recorded the total settlement amount for the Stipulation on our condensed consolidated balance sheet as of September 30, 2022.

We currently are not able to estimate the possible additional costs to us, if any, from these matters, and we cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages or legal costs that we may be required to pay.

Monitoring, initiating and defending against legal actions is time-consuming for our management, is likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities.

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Additionally, we may not be successful in having any such lawsuits dismissed or settled within the limits of our insurance coverage.

We have not established any reserve for any potential liability relating to the pending lawsuits or any potential future lawsuits.

We have not established any reserve for any potential liability relating to the pending lawsuits, other than for the total settlement amount under the Stipulation, or any potential future lawsuits.

It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages.

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and in other countries.

Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or

commercializing imetelstat or our technology and/or limit the duration of the patent protection for imetelstat and our technology.

Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing imetelstat or our technology and/or limit the duration of the patent protection for imetelstat and our technology.

In the event that we are unsuccessful in obtaining, maintaining, enforcing and extending our patents and other intellectual property rights or having our licensors maintain the intellectual property rights we have licensed, the value of imetelstat and/or our technologies will be adversely affected, and we may not be able to further develop or potentially commercialize imetelstat.

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which would result in decreased sales for us.

Loss or impairment of our intellectual property rights related to imetelstat might further delay or halt ongoing or potential future clinical trials of imetelstat and any applications for regulatory approval, and therefore further delay or preclude any future development or commercialization of imetelstat by us.

development or commercialization of imetelstat by us.

Further, if imetelstat is approved for commercial sale, such loss of intellectual property rights could impair our ability to exclude others from commercializing products similar or identical to imetelstat and therefore result in decreased sales for us.

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If we fail to apply for applicable patent term extensions or adjustments, we will have a more limited time during which we can enforce our granted patent rights.

Should we seek a patent term extension, we may not be granted any such

patent term extension and/or the applicable time period of such patent term extension could be less than five years.

Should we seek a patent term extension, we may not be granted any such patent term extension and/or the applicable time period of such patent term extension could be less than five years.

Moreover, in some countries, including the U.S., the scope of protection for claims under such patent term extensions, if any, does not extend to the full scope of the claims but is limited to the product composition as approved and, for a method of treatment patent, is limited to the approved indication.

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and the EEA where we have imetelstat composition of matter patents, either:

(a) extension of patent term is not available, and the patents will expire in September 2024, or (b) we may not have marketing authorization in those countries in sufficient time to file an extension of patent term before our composition of matter patents expire in September 2024.

(a) extension of patent term is not available, and the patents will

expire in September 2024, or (b) we may not have marketing authorization in those countries in sufficient time to file an extension of patent term before our composition of matter patents expire in September 2024.

If we do not have sufficient patent life to protect imetelstat, our financial results, business and business prospects, and the future of imetelstat would be materially and adversely affected, which might cause us to cease operations.

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transitioned to a first-inventor-to-file system under which, assuming the other requirements for patentability are met, the first inventor to file a patent application is entitled to the patent.

However, since the publication of discoveries in scientific or patent literature tends to lag behind actual discoveries by at least several months and sometimes several years, we are not able to be certain upon filing that the persons or entities that we name as inventors in our patent applications were the first to invent the inventions disclosed therein, or the first to file patent applications for these inventions.

However, since the publication of discoveries in scientific or patent literature tends to lag behind actual discoveries by at least several months and sometimes several years, we are not able to be certain upon filing that the persons or entities that we name as inventors or applicants in our patent applications were the first to invent the inventions disclosed therein, or the first to file patent applications for these inventions.

Thus, our ability to protect our patentable intellectual property depends, in part, on our ability to be the first to file patent applications with respect to our inventions, or inventions that were developed by our former collaboration partner and assigned to us, for the future development, commercialization and manufacture of imetelstat.

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In 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing for a single pan-European Unitary Patent, and a new European Unified Patent Court, or UPC, for litigation of European patents.

It is possible that implementation of the EU Patent Package will occur in the fourth quarter of 2022 or the first half of 2023.

If the EU Patent Package is ratified and in effect, all European patents, including those issued prior to ratification, would by default

automatically fall under the jurisdiction of the UPC and allow for the possibility of obtaining pan-European injunctions.

It is possible that implementation of the EU Patent Package will occur in the first half of 2023.

If the EU Patent Package is ratified and in effect, all European patents, including those issued prior to ratification, would by default automatically fall under the jurisdiction of the UPC and allow for the possibility of obtaining pan-European injunctions.

Under the EU Patent Package as currently proposed, once the UPC is established, patent holders are permitted to “opt out”

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Challenges to our owned or licensed patent rights would result in costly and time-consuming legal proceedings that could prevent or limit development of imetelstat.

Our patents or those patent rights we have licensed, including patent rights that we may seek with respect to inventions made by past or future collaborators, may be challenged through administrative or judicial proceedings, which could result in the loss of important patent rights.

important patent rights.

For example, where more than one party seeks U.S.

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Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S.

These products may compete with imetelstat and our technologies and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

These products may

compete with imetelstat and our technologies and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in jurisdictions outside the U.S.

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We may not be able to obtain a license to a technology required to pursue the research, development, manufacture or commercialization of imetelstat on commercially favorable terms, or at all, or such licenses may be terminated on certain grounds, including as a result of our failure to comply with any material obligations under such licenses.

If we do not obtain a necessary license or if such a license is terminated, we may need to redesign such technologies or obtain rights to alternative technologies, which may not be possible, and even if possible, could cause further delays in the development efforts for imetelstat and

could increase the development and/or production costs of imetelstat.

In cases where we are unable to license necessary technologies, we could be subject to litigation and prevented from pursuing research, development, manufacturing or commercialization of imetelstat, which would materially and adversely impact our business.

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experience with the biological mechanisms related to imetelstat, telomeres and telomerase;

clinical data to date indicating potential

disease-modifying activity with imetelstat treatment;

clinical data to date indicating potential disease-modifying activity with imetelstat treatment;

and knowledge and expertise around the development of potential treatments for myeloid hematologic malignancies provide us with competitive advantages, we face competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions.

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If approved for commercial sale for the treatment of lower risk MDS, imetelstat would compete against a number of currently existing therapies, including ESAs and other hematopoietic growth factors that are indicated for anemia;

immunomodulators, such as Revlimid (lenalidomide) by Celgene Corporation, a Bristol-Myers Squibb Corporation, or Celgene;

immunomodulators, such as

Revlimid (lenalidomide) by Celgene Corporation, a Bristol-Myers Squibb Corporation, or Celgene;

hypomethylating agents, such as Vidaza (azacitidine) by Celgene and manufacturers of generic azacitidine;

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Onureg (oral azacytidine) by Bristol-Myers Squibb Corporation, or BMS;

and Hengqu (hetrombopag), an oral nonpeptide thrombopoietin receptor agonist, by Jiangsu Hengrui Pharmaceutical.

and Hengqu (hetrombopag), an oral nonpeptide thrombopoietin receptor agonist, by Jiangsu Hengrui Pharmaceuticals Co., Ltd.

In addition, there are multiple Phase 1 and Phase 2 clinical trials of other agents being developed for lower risk MDS, including but not limited to:

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a combination treatment regimen of luspatercept and lenalidomide by BMS;

and HuMax-IL8 (BMS-986253), an anti-IL-8 monoclonal antibody, by BMS.

and HuMax-IL8 (BMS-986253), an anti-IL-8 monoclonal antibody, by BMS and etavopivat, an oral, small molecule activator of erythrocyte pyruvate kinase (PKR) by Forma Therapeutics, Inc., a Novo Nordisk Company.

If approved for commercial sale for the treatment of MF, imetelstat would compete against currently approved JAK inhibitors:

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Drugs for the treatment of MF-associated anemia include ESAs, androgens, danazol, corticosteroids, thalidomide and lenalidomide.

Other therapies currently in Phase 3 development in MF, some of which may obtain regulatory approval earlier than imetelstat, include momelotinib, a JAK inhibitor, by Sierra Oncology, Inc., or Sierra Oncology, which in April 2022 entered into an acquisition agreement with GlaxoSmithKline plc;

or momelotinib plus AZD5153, a BET inhibitor in-licensed by Sierra Oncology from AstraZeneca in August 2021;

pelabresib (CPI-0610), a BET inhibitor, by Constellation Pharmaceuticals, Inc.

(acquired by MorphoSys AG in June 2021);

Other therapies currently in Phase 3 development in MF, some of which may obtain regulatory approval earlier than imetelstat, include momelotinib, a JAK inhibitor, by GlaxoSmithKline plc;

or momelotinib plus AZD5153, a BET inhibitor by GlaxoSmithKline plc;

pelabresib (CPI-0610), a BET inhibitor, by MorphoSys AG;

navitoclax, a BCLXL, BCL-2 and BCLW inhibitor, by AbbVie, Inc.;

and parsaclisib, a PI3K delta inhibitor, by Incyte.

Other approaches for MF currently under investigation that could compete with imetelstat in the future include luspatercept, in collaboration with Celgene;

PRM-151, an anti-fibrosis antibody, by Promedior, Inc.

(acquired by Roche in February 2020);

Other approaches for MF currently under investigation that could compete with imetelstat in the future include luspatercept;

zinpentraxin alfa (RG6354, formerly PRM-151), an anti-fibrosis antibody, by F.

Hoffmann-La Roche, Ltd.;

LCL-161, an inhibitor of apoptosis protein (IAP), by Novartis;

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We may be unable to demonstrate any therapeutic or economic advantage for imetelstat compared to established or standard-of-care therapies, or newly developed therapies, for myeloid hematologic malignancies.

Third-party payors may decide that any potential improvement that imetelstat may provide to clinical outcomes in myeloid hematologic malignancies is not adequate to justify the costs of treatment with imetelstat.

Third-party payors may decide that any potential benefit that imetelstat may provide to clinical outcomes in myeloid hematologic malignancies is not adequate to justify the costs of treatment with imetelstat.

If the healthcare community does not accept imetelstat for any of the foregoing reasons, or for any other reasons, our ability to further develop or potentially commercialize imetelstat may be negatively impacted or precluded altogether, which would seriously and adversely affect our business and business prospects, and might cause us to cease operations.

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While a number of reform measures may require additional authorization to become effective, Congress and the Biden Administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs.

Further, based on a recent executive order, the Biden administration expressed its intent to pursue certain policy initiatives to reduce drug prices.

For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,”

with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, the Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

Further, the Inflation Reduction Act of 2022, or the IRA, signed into law by President Biden on August 16, 2022, includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government.

Some of the specific provisions under the IRA that could impact us include:

Requirement that the federal government negotiate prices for certain single-source drugs covered under Medicare Part B and D with the highest total spending, beginning in 2026;

Requirement that drug companies pay rebates to Medicare if prices rise faster than inflation for drugs used by Medicare beneficiaries, beginning in 2023.

We expect that additional state and federal healthcare reform measures may be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could affect pricing for imetelstat if it is approved.

The effects of the COVID-19 pandemic may introduce temporary or permanent healthcare reform measures, which could have negative financial implications on our business.

The continued effects of the COVID-19 pandemic may introduce temporary or permanent healthcare reform measures, which could have negative financial implications on our business.

and some jurisdictions in other countries are considering or have enacted legislative and regulatory proposals to contain healthcare costs, as well as to improve quality and expand access.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA was signed into law, which included a number of provisions of importance to the biopharmaceutical industry.

There have been judicial and Congressional challenges to certain aspects of the ACA, and it is possible that the ACA will be subject to judicial or Congressional challenges in the future.

In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,”

with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of

potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

There have been judicial and Congressional

challenges to certain aspects of the ACA, and it is possible that the ACA will be subject to judicial or Congressional challenges in the future.

We expect that other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that may be charged for imetelstat.

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These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.

Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sanctions and

Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials or creating fraudulent data in our non-clinical studies or clinical trials, which could result in regulatory sanctions and

serious harm to our reputation.

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Historically, our stock price has been extremely volatile.

Between July 1, 2012 and June 30, 2022, our stock has traded as high as $7.79 per share and as low as $0.75 per share.

Between July 1, 2021 and June 30, 2022, the price has ranged between a high of $1.74 per share and a low of $0.99 per share.

Between October 1, 2012 and September 30, 2022, our stock has traded as high as $7.79 per share and as low as $0.75 per share.

Between October 1, 2021 and September 30, 2022, the price has ranged between a high of $3.06 per share and a low of $0.99 per share.

The significant market price fluctuations of our common stock have been due to and may in the future be influenced by a variety of factors, including:

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obtaining substantial additional capital, on commercially reasonable terms, necessary to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF;

preliminary, interim or final clinical trial data reported with respect to current or potential future clinical trials of imetelstat, and investor perceptions thereof;

preliminary, interim or final clinical trial data expected to be reported with respect to current or potential future clinical trials of imetelstat, and investor perceptions thereof;

not receiving timely regulatory clearances or approvals in any jurisdiction, whether within or outside of the U.S., including, if we do not obtain regulatory clearance to commence, modify, conduct or continue clinical trials of imetelstat in MF, MDS or any additional myeloid hematologic malignancies in a timely manner or at all;

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increased or continuing operating losses;

general domestic and international market conditions or market conditions relating to the biopharmaceutical and pharmaceutical industries, especially given the volatility caused by the COVID-19 pandemic and the current military conflict between Ukraine and Russia;

general domestic and international market conditions or market conditions relating to the biopharmaceutical and pharmaceutical industries, especially given the volatility caused by the COVID-19 pandemic, inflation, rising interest rates, prospects of a recession and the current military conflict between Ukraine and Russia;

perceptions of the biotechnology and pharmaceutical industry by the public, legislature, regulators and the investment community;

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comments by securities analysts or other third parties, including blogs, articles and other media;

large stockholders exiting their position in our common stock or an increase in the short interest in our common stock;

large stockholders increasing or exiting their position in our common stock or an increase in the short interest in our common stock;

announcements of or developments concerning pending and potential future litigation;

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Stock prices and trading volumes for many biopharmaceutical companies fluctuate widely for a number of reasons, including factors which may be unrelated to their businesses or results of operations, such as media coverage, statements made on message boards and social media forums, legislative and regulatory measures and the activities of various interest groups or organizations.

In addition to the risk factors described in this section, overall market volatility, as well as general domestic or international economic, market and political conditions, including those resulting from the effects of the COVID-19 pandemic or geopolitical events, including civil or political unrest (such as the current military conflict between Ukraine and Russia), could materially and adversely affect the market price of our common stock and the return on our stockholders’

In addition to the risk factors described in this section, overall market volatility, as well as general domestic or international economic, market and political conditions, including those resulting from the effects of the COVID-19 pandemic, inflation, rising interest rates, prospects of a recession or geopolitical events, including civil or political unrest (such as the current military conflict between Ukraine and Russia), could materially and adversely affect the market price of our common stock and the return on our stockholders’

investment in our securities.

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The sale of a substantial number of shares may adversely affect the market price of our common stock.

As of June 30, 2022, we had 675,000,000 shares of common stock authorized for issuance and 377,664,759 shares of common stock outstanding.

Additionally, as of June 30, 2022, we had reserved 199,327,500 shares of our common stock for future issuance pursuant to our stock option and equity incentive plans and outstanding warrants.

As of September 30, 2022, we had 675,000,000 shares of common stock authorized for issuance and 381,214,326 shares of common stock outstanding.

Additionally, as of September 30, 2022, we had reserved 200,777,933 shares of our common stock for future issuance pursuant to our stock option and equity incentive plans and outstanding warrants.

Future sales of our common stock or the perception that such sales could occur, or the issuance of common stock to fund our operations and imetelstat development, including pursuant to the 2020 Sales Agreement with B.

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threat or internal bad actors, personnel (such as through theft, error or misuse), sophisticated nation states and nation-state-supported actors.

These threats include, but are not limited to, social-engineering attacks, malicious code or intrusions, malware, denial-of-service attacks, personnel misconduct or errors, ransomware attacks, supply-chain attacks, software bugs, computer viruses, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, natural disasters, terrorism, war, and telecommunication and electrical failures.

These threats include, but are not limited to, social-engineering attacks, malicious code or malware, unauthorized intrusions, denial-of-service attacks, personnel misconduct or errors, ransomware attacks, supply-chain attacks, software bugs, computer viruses, server malfunctions, software, hardware or data center failures, loss of data or other information technology assets, natural disasters, terrorism, war, and telecommunication and electrical failures.

In particular, ransomware attacks are becoming increasingly prevalent and severe and can lead to significant interruptions in operations, loss of data and income, reputational harm, and diversion of funds.

If we were to experience such an attack, extortion payments might alleviate the negative impact of a ransomware attack, but we might be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’

supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products/services) or the third-party information technology systems that support us and our services.

Similarly, supply-chain attacks and attacks on clinical trial sites as well as regulatory and health authorities have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’

supply chains, or of clinical trial sites and regulatory and health authorities, have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including those related to imetelstat) or the third-party information technology systems that support us and the services provided to us.

These threats may result in unauthorized, unlawful or accidental loss, corruption, access, modification, destruction, alteration, acquisition or disclosure of sensitive information, such as clinical trial data or information, intellectual property, proprietary business data and personal data.

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In the ordinary course of business, we process personal data and other sensitive data, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.

We are therefore subject to or affected by numerous data privacy and security obligations, such as various federal,

state, local and foreign laws, regulations, guidances, industry standards, external and internal privacy and security policies, contracts, and other obligations governing the processing of personal data by us and on our behalf.

We are therefore subject to or affected by numerous data privacy and security obligations, such as various federal, state, local and foreign laws, regulations, guidances, industry standards, external and internal privacy and security policies, contracts, and other obligations governing the processing of personal data by us and on our behalf.

These obligations may change, are subject to differing interpretations and may be inconsistent among jurisdictions or conflict.

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.

This evolution may create uncertainty in our business, affect us or our collaborators’, service providers’

This evolution may create uncertainty in our business;

affect us or our collaborators’, service providers’

and contractors’

ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal data, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.

ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal data;

necessitate the acceptance of more onerous obligations in our contracts;

result in liability;

or impose additional costs on us.

The cost of compliance with these laws, regulations and guidances is high and is likely to increase in the future.

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Under the EU GDPR, government regulators may impose temporary or definitive bans on data processing, as well as fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

Certain jurisdictions, including the EU and the UK, have enacted data localization laws and cross-border personal data transfer laws, which would make it more difficult to transfer information across jurisdictions (such as transferring or receiving personal data that originates in the EU or in other foreign jurisdictions).

Certain jurisdictions, including the EU and the U.K., have enacted data localization laws and cross-border personal data transfer laws, which would make it more difficult to transfer information across jurisdictions (such as transferring or receiving personal data that originates in the EU or in jurisdictions in other countries).

Existing mechanisms that facilitate cross-border personal data transfers may change or be invalidated.

The processing of sensitive personal data, such as physical health conditions, is a topic of active interest among foreign regulators.

The processing of sensitive personal data, such as physical health conditions, is a topic of active interest among regulators from other countries.

As we expand into countries and jurisdictions outside the U.S., we may be subject to additional laws and regulations that may affect how we conduct business.

For example, absent appropriate safeguards or other circumstances, the EU GDPR generally restricts the transfer of personal data to countries outside of the European Economic Area, or EEA, that the European Commission does not consider to provide an adequate level of data privacy and security, such as the U.S.

The European Commission released a set of “Standard Contractual Clauses”

For example, absent appropriate safeguards or other circumstances, the EU GDPR generally restricts the transfer of personal data to countries outside of the European Economic Area, or EEA, that the European Commission considers do not provide an adequate level of data privacy and security, such as the U.S.

To address this, the European Commission has released a set of “Standard Contractual Clauses”

that are designed to be a valid mechanism by which entities can transfer personal data out of the EEA to jurisdictions that the European Commission has not found to provide an adequate level of protection.

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Moreover, due to potential legal challenges, there exists some uncertainty regarding whether the Standard Contractual Clauses will remain a valid mechanism for transfers of personal data out of the EEA.

In addition, the UK similarly restricts personal data transfers outside of those jurisdictions to countries such as the U.S.

Addressing this uncertainty, on October 7, 2022, President Biden signed an executive order implementing the EU-U.S.

Data Privacy Framework, to facilitate the cross-border transfer of personal information from the EU to the U.S.

in compliance with the EU GDPR.

The European Commission will conduct a determination as to whether the U.S.

commitments meet GDPR's adequacy standard for the transfer of personal data, a process anticipated to take about six months.

Once ratified by the European Commission, participation in the revised framework will require that companies self-certify their adherence with the U.S.

Department of Commerce.

In addition, the U.K.

similarly restricts personal data transfers outside of those jurisdictions to countries such as the U.S.

that do not provide an adequate level of personal data protection.

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For example, the CPRA establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of an enforcement action.

Other states have also enacted data privacy laws.

have also enacted data privacy laws.

For example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which differ from the CPRA and become effective in 2023.

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bans on processing personal data;

orders to destroy or not use personal

orders to destroy or not use personal data;

and imprisonment of company officials.

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inability to process personal data or to operate in certain jurisdictions;

limited ability to develop or commercialize our products;

limited ability to develop or commercialize imetelstat;

expenditure of time and resources to defend any claim or inquiry;

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Changes in corporate tax rates, the realization of net deferred tax assets relating to our U.S.

operations, the taxation of earnings from other countries, and the deductibility of expenses under the Tax Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years, and could increase our future U.S.

operations, the taxation of earnings from other countries, and the deductibility of expenses under the Tax

Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years, and could increase our future U.S.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

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Therefore, we cannot assure you that material weaknesses or significant deficiencies will not exist or otherwise be discovered in the future, particularly in light of our increased reliance on personnel working remotely as a result of the COVID-19 pandemic.

If material weaknesses or other significant deficiencies occur, such weaknesses or deficiencies could result in misstatements of our results of operations, restatements of our financial statements, a

decline in our stock price, or other material adverse effects on our business, reputation, results of operations, financial condition or liquidity.

If material weaknesses or other significant deficiencies occur, such weaknesses or deficiencies could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or other material adverse effects on our business, reputation, results of operations, financial condition or liquidity.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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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 1. Legal Proceedings