What changed in this filing

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Item 1A. Risk Factors

2024-11-07 compared with 2024-08-08 · 179 added, 155 removed, 1074 unchanged (24% of the section changed)

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• Our near-term prospects are wholly dependent on RYTELO.

If we are unable to successfully commercialize RYTELO in the U.S.

We have limited experience with the commercialization of RYTELO, and if we are unable to successfully commercialize RYTELO in the U.S.

for lower-risk MDS, or to expand its indication of use, our ability to generate meaningful revenue or achieve profitability will be materially and adversely affected.

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• Although orphan drug designation has been granted to RYTELO for the treatment of MDS and MF in the U.S.

and in the EU, these designations may not be maintained, which would eliminate the benefits associated with orphan drug designation, including market exclusivity, which could limit the period of exclusivity we are able to maintain for the commercialization of RYTELO, and would likely harm our business and business prospects.

and in the EU, these designations may not be maintained, which would eliminate the benefits associated with orphan drug

designation, including market exclusivity, which could limit the period of exclusivity we are able to maintain for the commercialization of RYTELO, and would likely harm our business and business prospects.

Risks Related to Compliance with Healthcare Laws

• The FDA and other regulatory agencies actively enforce regulations prohibiting the promotion of any drug product for off-label uses, and if we were found to have improperly promoted off-label use of RYTELO, we could be subject to significant civil, criminal and administrative penalties.

• If we fail to comply with federal, state and international healthcare laws, including fraud and abuse, transparency, and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.

• The FDA, the Department Of Justice, or DOJ, and other regulatory authorities actively enforce regulations related to the promotion and advertisement of pharmaceutical products, and if we were found to have violated the Food, Drug and Cosmetic Act, we could be subject to significant penalties, including civil, criminal and administrative penalties.

• If our business activities become subject to challenge under supranational, national, federal, state or international healthcare laws, including fraud and abuse, transparency, and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.

• The adoption of health policy changes and healthcare reform both in the U.S.

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If our operating results are below the expectations of securities analysts or investors, the trading price of our common stock could decline.

• Our failure to obtain additional capital would force us to further delay, reduce or eliminate the further development of imetelstat, or to halt the commercialization of RYTELO, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

Risks Related to Our Indebtedness

• Our failure to obtain additional capital when needed would force us to further delay, reduce or eliminate the further development of imetelstat, or to halt the commercialization of RYTELO, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

Risks Related to Our Indebtedness and Liabilities

• 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.

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Our business faces significant risks and uncertainties, and those described below may not be the only risks and uncertainties we face.

You should carefully consider the following risk factors, together with the information contained in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 28, 2024, including our consolidated financial statements and the related notes, and our other filings with the SEC, before deciding whether to invest in our common stock.

You should carefully consider the following risk factors, together with the information contained herein and in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 28, 2024, including our consolidated financial statements and the related notes, and our other filings with the SEC, before deciding whether to invest in our common stock.

Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also significantly impair our business, financial condition or results of operations.

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Our near-term prospects are wholly dependent on RYTELO.

If we are unable to successfully commercialize RYTELO in the U.S.

We have limited experience with the commercialization of RYTELO, and if we are unable to successfully commercialize RYTELO in the U.S.

for lower-risk MDS, or to expand its indication of use, our ability to generate meaningful revenue or achieve profitability will be materially and adversely affected.

In June 2024, we received FDA approval to commercialize RYTELO in the U.S.

for lower-risk MDS, and we have initiated a commercial launch of RYTELO in the U.S.

for certain patients with lower-risk MDS, and we initiated a commercial launch of RYTELO in the U.S.

in that indication.

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• physicians may be reluctant to prescribe RYTELO until longer-term efficacy and safety data exists;

• our lack of historical experience in marketing, selling and distributing RYTELO;

• our limited historical experience in marketing, selling and distributing RYTELO;

• reimbursement and coverage policies of government and private payers such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan administrators;

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• the relatively low incidence and prevalence of patients in RYTELO’s approved indication, including the reliability of our market and sales estimates;

• future competitive or other market factors may adversely affect the commercial potential of RYTELO;

• we may not be able to obtain and maintain regulatory approvals for RYTELO in any other jurisdictions or for any other indications, including in the EU for lower-risk MDS or in any other jurisdiction for relapsed/refractory MF;

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• changes to the label for RYTELO that further restrict how we market and sell RYTELO, including adverse events observed in ongoing and future studies of imetelstat such as our Phase 3 IMpactMF clinical trial;

• we may not have adequate financial or other resources to successfully commercialize RYTELO;

• the capabilities of third party manufacturers may adversely affect the success of our commercialization of RYTELO;

• we may need additional financial or other resources to successfully commercialize RYTELO;

• we may not be able to maintain adequate commercial supplies of RYTELO to meet demand or at an acceptable cost or at all.

If we are unable to successfully commercialize RYTELO in the U.S.

Moreover, successful commercialization of RYTELO may not generate sufficient revenue from product sales, and we may not become profitable in the near term, or at all.

In any event, if we are unable to successfully commercialize RYTELO in the U.S.

for lower-risk MDS, or to expand its indications of use, our ability to generate meaningful revenue from product sales and achieve profitability will be materially and adversely affected, which in turn would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

We have limited experience as a commercial company and our sales, marketing, and distribution of RYTELO may be unsuccessful or less successful than anticipated.

As a company, we have no prior experience in selling and marketing or commercializing an approved drug product.

The success of our commercialization efforts is difficult to predict and subject to, among other things, continued development of our internal sales, marketing, and distribution capabilities and our ability to navigate the significant expenses and risks involved with the development and management of such capabilities.

For example, our commercial launch may not develop as planned or anticipated, which may require us to, among others, adjust or amend our commercialization plan and incur significant expenses.

Further, given our lack of historical experience commercializing drug products, we do not have a track record of successfully executing a commercial launch.

If we are unsuccessful in accomplishing our objectives or if our commercialization efforts do not proceed as planned, we may not be able to successfully commercialize RYTELO in lower-risk MDS, we may require significant additional capital and financial resources, we may not become profitable, and we may not be able to compete against more established companies in our industry, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

As a company, we have limited prior experience in selling and marketing or commercializing an approved drug product in the U.S., and we have no experience marketing or commercializing an approved drug outside of the U.S.

The success of our commercialization efforts is subject to, among other things, managing our internal sales, marketing, and distribution capabilities and our ability to navigate the significant expenses and risks involved with the management of such capabilities.

For example, our commercial launch of RYTELO in the U.S.

may not continue as planned or anticipated, which may require us to, among others, adjust or amend our commercialization plan and incur significant expenses.

Further, given our limited historical experience commercializing drug products, we do not have a track record of successfully executing a commercial launch.

If we are unsuccessful in accomplishing our objectives or if our commercialization efforts do not continue as planned, we may not be able to successfully commercialize RYTELO in lower-risk MDS, we may require significant additional capital and financial resources, we may not become profitable, and we may not be able to compete against more established companies in our industry, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

If we are unable to continue to execute on our sales, marketing and distribution plans to commercialize RYTELO, we may be unable to generate meaningful product revenue.

To successfully commercialize RYTELO, we need to continue to execute on our sales, marketing and distribution plans.

The ongoing execution of our sales, marketing and distribution plans is, and will continue to be, expensive and time-consuming and we cannot be certain that we will be able to execute on these plans successfully.

To successfully commercialize RYTELO in the U.S., we need to continue to execute on our sales, marketing and distribution plans.

The ongoing execution of our sales, marketing and distribution plans is, and will continue to be, expensive and time-consuming and we cannot be certain that we will be able to continue to execute on these plans successfully.

In addition, we compete with many companies that currently have extensive, experienced and well-funded sales, distribution and marketing operations to recruit, hire, train and retain marketing and sales personnel.

If we are unable to recruit as needed, and to retain and effectively train marketing and sales personnel and equip them with compliant and effective materials, our efforts to successfully commercialize RYTELO could be adversely affected.

In addition, if we receive regulatory approval to commercialize RYTELO in any other regions, such as the EU, we may seek strategic partnerships, collaborations, alliances or licensing arrangements, at an appropriate time, to assist us in the potential development and commercialization of RYTELO, or we may need to establish business operations in such regions.

We currently have no marketing or sales organization outside of the U.S.

We do not yet have any products approved for sale outside of the U.S, and we, as a company, have no experience selling and marketing approved drugs outside of the U.S.

To successfully commercialize any approved drugs outside of the U.S, we will need to develop these capabilities, either on our own or with others.

Doing so will be expensive, difficult and time-consuming.

If we receive regulatory approval to commercialize RYTELO in any other regions, such as the EU, we may seek strategic partnerships, collaborations, alliances or licensing arrangements, at an appropriate time, to assist us in the potential development and commercialization of RYTELO, or we may seek to self-commercialize and need to establish business operations in such regions.

We may be unsuccessful in our efforts to recruit, hire, train and retain personnel to support such business operations;

or we may be unable to enter into and conduct successful strategic partnerships, collaborations, alliances or licensing arrangements with third parties to commercialize RYTELO in such regions, should we seek to do so.

Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of RYTELO outside the U.S..

Further, given our lack of prior experience in marketing and selling our product, our initial estimate of the size of the required sales force may be materially more or less than the size of the sales force actually required to effectively commercialize our product.

As such, we may be required to hire substantially more sales representatives and medical support liaisons to adequately support the commercialization of RYTELO, if approved, or we may incur excess costs as a result of hiring more sales representatives than necessary.

With respect to certain geographical markets, we may enter into arrangements with other entities to utilize their local marketing and distribution capabilities, but we may be unable to enter into such arrangements on favorable terms, if at all.

If our potential future partners do not commit sufficient resources to commercialize our future products, if any, and we are unable to develop the necessary marketing capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business.

If we are unable to establish sales and marketing capabilities for RYTELO, whether on our own or through collaborations, our results of operations will be negatively impacted.

Any of the foregoing would negatively impact our business and business prospects, severely and adversely affect our financial results, and might cause us to cease operations.

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Government payors, such as the Medicare and Medicaid programs, and other third-party payors, such as private health insurers and health maintenance organizations, determine which medications they will cover and the reimbursement levels.

Assuming we obtain coverage for RYTELO by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require significant restrictions on use or increased co-payments from commercially insured patients that patients may find unacceptably high.

Although we have received a permanent and product-specific J-code (J0870) for RYTELO which will become effective on January 1, 2025, the resulting reimbursement payment rates may not be adequate or may require significant restrictions on use or increased co-payments from commercially insured patients that patients may find unacceptably high.

Patients are unlikely to use RYTELO unless coverage is provided, and reimbursement is adequate to cover all or a significant portion of its cost.

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J-Codes are reimbursement codes maintained by the Centers for Medicare and Medicaid Services, or CMS, that are a component of the Healthcare Common Procedure Coding System and are typically used to report drugs that ordinarily cannot be self-administered.

We do not currently have a specific J-Code for RYTELO, and cannot guarantee that a J-Code will be granted.

To the extent separate coverage or reimbursement is available for RYTELO, and a specific J-Code is not available, physicians would need to use a non-specific miscellaneous J-Code to bill third-party payors for RYTELO.

On October 3, 2024, CMS assigned a permanent and product specific J-code (J0870) for RYTELO, which will become effective on January 1, 2025.

For the remainder of 2024, and until CMS systems are updated, physicians will continue to use the non-specific miscellaneous J-Code to bill third-party payors for RYTELO.

Because miscellaneous J-Codes may be used for a wide variety of products, health plans may have more difficulty determining the actual product used and billed for the patient.

These claims must often be submitted with additional information and manually processed, which can delay claims processing times as well as increase the likelihood for claim denials and claim errors.

These claims increase the provider administrative burden and must often be submitted with additional information and manually processed, which can delay claims processing times as well as increase the likelihood for claim denials and claim errors.

In addition, government authorities and other third-party payors in the U.S.

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We cannot be sure that coverage and reimbursement will be available for RYTELO, and, if reimbursement is available, what the level of reimbursement will be.

There may also be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar international regulatory authorities.

Although we have received a permanent and product-specific J-code (J0870) for RYTELO which will become effective on January 1, 2025, there may also be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar international regulatory authorities.

Coverage and reimbursement may impact the demand for, or the price of RYTELO.

If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize RYTELO, which would negatively impact our business and business prospects.

If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize RYTELO, which would negatively impact our business and business prospects.

To be commercially successful, RYTELO must be accepted by the healthcare community, which can be slow to adopt or unreceptive to new technologies and products.

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for lower-risk MDS or any other indication that might be approved in the future, or achieve the potential U.S.

or international revenue we believe may be possible, since hospitals, physicians, patients or the medical community in general may decide not to accept and utilize RYTELO.

or international revenue we believe may be possible if approved outside the U.S., since hospitals, physicians, patients or the medical community in general may decide not to accept and utilize RYTELO.

RYTELO competes with a number of conventional and widely accepted drugs and therapies manufactured and marketed by major pharmaceutical companies.

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

If the healthcare community does not accept RYTELO for any of the

foregoing reasons, or for any other reasons, our ability to commercialize RYTELO in the U.S.

If the healthcare community does not accept RYTELO for any of the foregoing reasons, or for any other reasons, our ability to commercialize RYTELO in the U.S.

for lower-risk MDS may be negatively impacted or precluded altogether, which would seriously and adversely affect our business and business prospects.

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Future regulatory approvals for RYTELO, if any, could be conditioned upon label restrictions that materially limit the addressable patient population.

Our market opportunity may also be limited by the pricing we are able to achieve for RYTELO, the quality and expiration of our intellectual property rights and regulatory exclusivity, duration of RYTELO treatment in lower-risk MDS and future competitor treatments that enter the market.

Our market opportunity may also be limited by the pricing, reimbursement and access we are able to achieve for RYTELO, the quality and expiration of our intellectual property rights and regulatory exclusivity, duration of RYTELO treatment in lower-risk MDS and future competitor treatments that enter the market.

If any of our estimates prove to be inaccurate, the market opportunities for RYTELO that we or any potential future collaborative partners develop could be significantly diminished, which would have a material adverse impact on our business and business prospects, and would adversely affect our ability to achieve profitability.

We rely on a select network of third party distributors, specialty pharmacies and other vendors to distribute RYTELO, and any failure by such distributors, specialty pharmacies and vendors could adversely affect our revenues, financial condition, or results of operations.

We rely on a select network of third party distributors, specialty pharmacies and other vendors to distribute RYTELO in the U.S., and any failure by such distributors, specialty pharmacies and vendors could adversely affect our revenues, financial condition, or results of operations.

We rely on a select network of third party distributors, specialty pharmacies and other vendors to distribute RYTELO, and the financial failure of any of these parties could adversely affect our revenues, financial condition or results of operations.

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In the event that such network fails to properly meet our or our patients’ needs, we may need to partner with other distributors, specialty pharmacies or vendors to replace or supplement our current network and there is no guarantee that we will be able to do so on commercially reasonable terms or at all.

We are seeking regulatory approval to commercialize RYTELO in the EU, and any such approval, if received, will be subject to pricing, drug marketing and reimbursement regulations in the EU, which may materially affect our ability to commercialize and receive reimbursement coverage for RYTELO in the EU.

We are seeking regulatory approval to commercialize RYTELO in the EU, and any such approval, if received, will be subject to pricing, drug marketing, post-market and reimbursement regulations in the EU, which may materially affect our ability to commercialize and receive reimbursement coverage for RYTELO in the EU.

We are seeking approval to market RYTELO in the EU for lower-risk MDS.

If we obtain approval for RYTELO in the EU, we will be subject to rules and regulations in the EU, and the pricing of RYTELO will be subject to governmental control and other market regulations which could put pressure on the pricing and usage of RYTELO.

Even if we obtain approval for RYTELO in the EU, t he competent regulatory authorities may still impose significant restrictions on the indicated uses or marketing of our product or impose ongoing requirements for potentially costly post-approval studies, post-market surveillance or patient or drug restrictions.

We will also be subject to rules and regulations in the EU applicable to the manufacturing, marketing, promotion and sale of medicinal products .

If we or a regulatory authority discovers previously unknown problems with RYTELO, such as adverse events of unanticipated severity or frequency, or problems with a facility where RYTELO is manufactured, a regulatory authority may impose restrictions relative to RYTELO or the manufacturing facility, including requiring recall or withdrawal of RYTELO from the market or suspension of manufacturing.

Moreover, product labeling, advertising and promotion for RYTELO will be subject to regulatory requirements and continuing regulatory review.

Failure to comply with EU and EU Member State laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products and marketing of such products, both before and after grant of the marketing authorization, or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.

These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

In addition, the pricing of RYTELO will be subject to governmental control and other market regulations which could put pressure on the pricing and usage of RYTELO.

In the EU, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate.

In addition, if approved, market acceptance and sales of RYTELO will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for RYTELO and may be affected by existing and future healthcare reform measures.

Much like the federal Anti-Kickback Statute prohibition in the U.S., the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.

The provision of benefits or advantages to physicians is governed by the national laws of EU member states.

Infringement of these laws could result in substantial fines and imprisonment.

Payments made to physicians in certain EU member states must be publicly disclosed.

Moreover, agreements with physicians often must be the subject of prior notification and/or approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU member states.

These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU member states.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

The requirements governing drug pricing and reimbursement vary widely from country to country.

For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

Reference pricing used by various EU member

states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced EU Member States, can further reduce prices.

An EU Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

If RYTELO is approved for commercialization in the EU, in some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of RYTELO to other available therapies in order to obtain or maintain reimbursement or pricing approval.

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If pricing is set at unsatisfactory levels or if reimbursement of RYTELO is unavailable or limited in scope or amount, our revenues from sales and the potential profitability of RYTELO in those countries would be negatively affected.

Much like the federal Anti-Kickback Statute prohibition in the U.S., the provision of benefits or advantages to physicians and other healthcare professionals to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.

Interactions between pharmaceutical companies and health care professionals are governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.Infringement of related laws could result in substantial fines and imprisonment.

Payments made to physicians and other healthcare professionals in certain EU Member States must be publicly disclosed.

Moreover, agreements with physicians may require prior notification or approval by the physician’s or healthcare professional’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.

These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU Member States.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

If our competitors have existing products or develop new products, product candidates or technologies that are superior to or more cost-effective than RYTELO, this could significantly impact the commercial viability and further development of RYTELO, which would severely and adversely affect our financial results, business and business prospects.

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clinical data to date;

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.

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.

RYTELO will compete with other products and therapies that currently exist, are being developed or will in the future be developed, some of which we may not currently be aware of.

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Any of these events could prevent us from achieving or maintaining market acceptance for RYTELO, could substantially increase the costs and expenses of commercializing RYTELO, or could limit its commercial potential, which in turn could delay or prevent us from generating any meaningful revenues from the sale of the RYTELO.

If RYTELO is approved outside the U.S., we will be subject to similar requirements, considerations and risks in other regions.

Our regulatory approval for RYTELO in the U.S.

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In addition, RYTELO and the manufacturing processes and facilities, post-approval clinical data, labeling, advertising and promotional activities related to RYTELO will be subject to continual requirements of, and review by, the FDA and comparable regulatory authorities.

These requirements include submissions of safety and other post-marketing information and reports, registration requirements, current Good Manufacturing Practice (cGMP) requirements relating to quality control, quality assurance and corresponding maintenance of records and documents, and requirements regarding promotional interactions with healthcare professionals.

These requirements include submissions of safety and other post-marketing information and reports, registration requirements, current Good Manufacturing Practice, or cGMP, requirements relating to quality control, quality assurance and corresponding maintenance of records and documents, and requirements regarding promotional interactions with healthcare professionals.

Failure to comply with these post-marketing requirements and commitments or any other regulatory requirements, or later discovery of previously unknown problems with RYTELO, or our manufacturers, or manufacturing processes for RYTELO, may result in actions such as:

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warning letters, withdrawal of RYTELO from the market;

• product recalls;

• suspension or termination of ongoing clinical trials of imetelstat in other indications;

• fines, restitutions or disgorgement of profits or revenues;

• significant civil, criminal and administrative penalties, including fines, restitutions or disgorgement of profits or revenues;

• refusal to permit the import or export of RYTELO;

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Under such circumstances, we or our respective service providers may be subject to the actions listed above, including losing marketing approval for RYTELO, which would severely and adversely affect our business and business prospects, and might cause us to cease operations.

If RYTELO is approved outside the U.S., we will be subject to similar requirements, considerations and risks in other regions.

We may be unable to obtain regulatory approval to commercialize RYTELO in any other jurisdictions or for any new indications, or may experience significant delays in doing so, any of which could severely and adversely affect our business and business prospects, and might cause us to cease operations.

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Securing marketing approval requires the submission of extensive non-clinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish to the satisfaction of such regulatory authorities the product candidate’s safety and efficacy, as well as information about the product manufacturing process and any inspections of manufacturing facilities conducted by regulatory authorities through the filing of an NDA in the U.S.

and an MAA in Europe.

and an MAA in the EU.

Although RYTELO is approved in the U.S.

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Regulatory authorities may also not approve the labeling claims that are necessary or desirable for the successful commercialization of a drug, such as RYTELO.

For example, although we received regulatory approval from the FDA in June 2024 to

commercialize RYTELO in lower-risk MDS, any future regulatory clearances that we might obtain for RYTELO may be limited to fewer or narrower indications than we might request, or may be granted subject to the performance of post-marketing studies, which may impose further requirements or restrictions on the distribution or use of RYTELO, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria, and requiring treated patients to enroll in a registry.

For example, although we received regulatory approval from the FDA in June 2024 to commercialize RYTELO in lower-risk MDS, any future regulatory clearances that we might obtain for RYTELO may be limited to fewer or narrower indications than we might request, or may be granted subject to the performance of post-marketing studies, which may impose further requirements or restrictions on the distribution or use of RYTELO, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria, and requiring treated patients to enroll in a registry.

These limitations and restrictions may limit the size of the market for RYTELO and affect reimbursement by third-party payors.

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may disagree with the design, implementation or results of our clinical trials or our interpretation of data from nonclinical studies or clinical trials;

• approval policies or regulations of EMA or other regulatory authorities outside of the U.S.

• approval policies or regulations in the EU or of regulatory authorities outside of the U.S.

may significantly change in a manner rendering our clinical data insufficient for potential approval;

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RISKS RELATED TO COMPLIANCE WITH HEALTHCARE LAWS

The FDA and other regulatory agencies actively enforce regulations prohibiting the promotion of any drug product for off-label uses, and if we were found to have improperly promoted off-label use of RYTELO, we could be subject to significant civil, criminal and administrative penalties.

The FDA, DOJ and other regulatory authorities actively enforce regulations related to the promotion and advertisement of pharmaceutical products, and if we were found to have violated the Food, Drug and Cosmetic Act, we could be subject to significant civil, criminal and administrative penalties.

The FDA strictly regulates the promotional claims that may be made about drug products.

In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling.

The FDA and other agencies actively enforce regulations prohibiting the promotion of any drug product for off-label uses.

If we were found to have improperly promoted off-label use of RYTELO, we could be subject to significant civil, criminal and administrative penalties, which could inhibit our ability to commercialize RYTELO and generate revenue, require us to expend significant time and resources in response, and generate negative publicity.

The FDA, DOJ and other agencies actively enforce regulations related to the promotion and advertisement of pharmaceutical products.

If we were found to have violated the Food, Drug, and Cosmetic Act, we could be subject to significant civil, criminal and administrative penalties, which could inhibit our ability to commercialize RYTELO and generate revenue, require us to expend significant time and resources in response, and generate negative publicity.

Enforcement actions include, among others:

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The imposition of any of these penalties or other commercial limitations, including equivalent penalties or commercial limitations imposed by foreign regulatory authorities, could severely and adversely affect our financial results, business and business prospects, including the commercialization of RYTELO, and might cause us to cease operations.

If we fail to comply with federal, state and international healthcare laws, including fraud and abuse, transparency, and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.

Similar requirements and related consequences apply outside the U.S.

If our business activities become subject to challenge under supranational, national, federal, state or international healthcare laws, including fraud and abuse, transparency, and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including federal and state fraud and abuse laws, including anti-kickback and false claims laws;

data privacy and security laws, including the Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH;

data privacy and security laws, including the

Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH;

and transparency laws related to payments and/or other transfers of value made to physicians, other healthcare professionals and teaching hospitals.

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• the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement and imprisonment;

• possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs;

• possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs or comparable foreign programs;

• reputational harm;

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If future legislation were to impose direct governmental price controls and access restrictions, it could have a significant adverse impact on our business and financial results.

Managed care organizations, as well as Medicaid and other government agencies, continue to seek price discounts.

Managed care organizations, as well as Medicaid and other government authorities, continue to seek price discounts.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biologic product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, to encourage importation from other countries and bulk purchasing.

Due to the volatility in the current economic and market dynamics, we are unable to predict the impact of any unforeseen or unknown legislative, regulatory, payor or policy actions, which may include cost

containment and healthcare reform measures.

Such policy actions could have a material adverse impact on future sales of RYTELO in the U.S.

and outside the U.S.

RISKS RELATED TO THE FURTHER DEVELOPMENT OF RYTELO (IMETELSTAT)

We cannot be certain that we will be able to continue to develop RYTELO (imetelstat) or advance it in clinical trials, or that we will be able to receive regulatory approval for RYTELO in any other indications in the U.S., the EU or any other region, on a timely basis or at all.

We are wholly dependent on the success of RYTELO (imetelstat), which is our only product approved for marketing by the FDA and our ability to generate revenue from product sales and achieve profitability is wholly dependent on our ability to successfully commercialize RYTELO or to expand its indications of use.

In this regard, in addition to lower-risk MDS, which is the only indication for which RYTELO has received marketing approval in the U.S., we are developing imetelstat for the treatment of several myeloid hematologic malignancies.

In this regard, in addition to lower-risk MDS, which is the only indication for which RYTELO has received marketing approval in the U.S., we are developing imetelstat for the treatment

of several myeloid hematologic malignancies.

Our ability to further develop imetelstat and to expand its indications of use to other myeloid hematologic malignancies is subject to significant risks and uncertainties, including, among other things, our ability to:

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• enter into and maintain commercially reasonable arrangements with third parties to provide services needed to further research, develop and commercialize RYTELO, including maintaining the agreements with our contract research organizations, or CROs, and third-party manufacturers;

• recruit and retain sufficient qualified and experienced personnel to support the development and commercialization of RYTELO in potential other approved indications;

• recruit and retain sufficient qualified and experienced personnel to support the development and commercialization of RYTELO in potential other approved indications and outside the U.S.

• enter into and maintain arrangements with third parties to provide services needed to support the commercialization of RYTELO for territories outside of the U.S.

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RYTELO (imetelstat) has been administered only to a limited number of patients in clinical trials.

While the FDA granted approval of RYTELO based on the data included in our NDA, including data from the Phase 3 IMerge trial, we do not know whether

the results when a larger number of patients receive RYTELO from commercial use, including results related to safety, will be consistent with the results from earlier clinical trials that served as the basis for its approval.

While the FDA granted approval of RYTELO based on the data included in our NDA, including data from the Phase 3 IMerge trial, we do not know whether the results when a larger number of patients receive RYTELO from commercial use, including results related to safety, will be consistent with the results from earlier clinical trials that served as the basis for its approval.

In addition, because remaining patients in ongoing clinical trials continue to receive imetelstat, additional or more severe toxicities or safety issues may be observed, and the benefit-risk profile of imetelstat will continue to be assessed, including the risk of hepatotoxicity, severe cytopenias, fatal bleeding with or without any associated thrombocytopenia, patient injury or death.

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If patients who receive RYTELO as a result of commercialization or in any clinical trials experience similar or more severe adverse events, or new or unusual adverse events, or if the FDA or other similar international regulatory authorities determine that efficacy and safety data from our commercialization efforts or in clinical trials do not support an adequate benefit-risk profile to justify continued treatment of patients, then the FDA or other similar international regulatory authorities may halt or restrict the commercialization of RYTELO or place one or more of our INDs on clinical hold, as occurred in March 2014.

If this were to occur, there could be a significant delay in, or possible termination of, one or more of of our clinical trials, and our commercialization efforts could be halted, which might cause us to cease operations.

If this were to occur, there could be a significant delay in, or possible termination of, one or more of our clinical trials, and our commercialization efforts could be halted, which might cause us to cease operations.

If such toxicities or other safety issues identified as a result of our commercialization of RYTELO or in any clinical trial are determined by us, the FDA or similar international regulatory authorities to result in an unacceptable benefit-risk profile, then:

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If we or any of our CROs fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, or similar international regulatory authorities, may require us to perform additional clinical trials.

We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP or other applicable regulations.

We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our

clinical trials comply with GCP or other applicable regulations.

In addition, our clinical trials must be conducted with imetelstat produced under applicable GMP regulations.

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In addition, certain principal investigators for our clinical trials serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services.

Under certain circumstances, we may be required to report some of these relationships to the FDA.

The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected conduct of the trial.

The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.

This could result in a delay in approval, or rejection, of any future applications for regulatory approval of imetelstat in any additional indications by the FDA.

Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities.

The FDA or comparable foreign regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected conduct of the trial.

The FDA or comparable foreign regulatory authorities may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.

This could result in a delay in approval, or rejection, of any future applications for regulatory approval of imetelstat, including in any additional indications by the FDA.

We do not control the conduct of current or any potential future investigator-led clinical trials, and data from such trials could show marginal efficacy and/or clinically relevant safety concerns related to imetelstat resulting in an unfavorable benefit-risk assessment that could materially and adversely impact our ongoing clinical trials, or our imetelstat development program as a whole.

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The process of manufacturing RYTELO is complex and subject to several risks, including:

• the ability to consistently manufacture and attain sufficient production yields with appropriate quality control and quality assurance to meet market demand for our commercialization of RYTELO, as well as the needs for continuing clinical trials;

• the ability to consistently manufacture and attain sufficient production yields with acceptable quality control and quality assurance to meet market demand for our commercialization of RYTELO, as well as the needs for continuing clinical trials;

• our ability to maintain existing commercial supply agreements and to establish additional or alternative supply agreements if necessary, including our ability to successfully transfer manufacturing technology and attain regulatory approval at any such additional or alternative suppliers;

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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 commercialize RYTELO and/or pursue further development of RYTELO on our own, increase our costs, result in lost sales, and otherwise negatively affect our financial results, business and business prospects.

In this regard, recent FDA inspections of one of our third-party manufacturers identified certain deficiencies in the manufacturer’s processes and facilities which, while not directly related to the FDA approval or ongoing production of RYTELO, could impact the manufacturer’s ability to produce and deliver products, including RYTELO, 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.

We expect to rely on third-party manufacturers to produce and deliver sufficient quantities of RYTELO and other materials to support commercialization and

clinical trials on a timely basis and to comply with applicable regulatory requirements.

In this regard, recent FDA inspections of one of our third-party drug product manufacturers identified certain deficiencies in the manufacturer’s processes and facilities which, while not directly related to the FDA approval or ongoing production of RYTELO, could impact the manufacturer’s ability to produce and deliver products, including RYTELO, 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.

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

We do not have direct control over these third-party personnel or operations.

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• capacity limitations and scheduling constraints experienced by third-party manufacturers due to scheduling and other commitments, and queued manufacturing activities in contracted facilities;

• requirements by regulatory authorities to validate and qualify significant activities for any current or additional manufacturer, which could involve technology transfer, new testing, compliance inspections, and would likely require FDA approval;

• the inability of third-party manufacturers to timely formulate and manufacture RYTELO or to produce or ship RYTELO in the quantities or of the quality required to meet commercial and clinical needs;

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We are incurring and have incurred net losses every year since our operations began in 1990, except for one.

As of June 30, 2024, our accumulated deficit was approximately $1.7 billion.

As of September 30 2024, our accumulated deficit was approximately $1.7 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.

In addition, we 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 continue with the commercialization of RYTELO, including as a result of our obligation to pay Royalty Pharma revenue interest payments under the Royalty Pharma Agreement.

Although we have recently begun to commercialize RYTELO, our revenue and profit potential is unproven and our very limited operating history as a commercial company makes our future operating results difficult to predict.

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We may never achieve consistent future profitability.

Even if we do become profitable in the future, we

may not be able to sustain or increase profitability on a quarterly or annual basis.

Even if we do become profitable in the future, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Our failure to achieve consistent future profitability could negatively impact the market price of our common stock and our ability to sustain operations.

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Our operating results are difficult to predict and will likely fluctuate from quarter to quarter and year to year.

Due to the recent approval by the FDA of RYTELO for lower-risk MDS and the lack of historical sales data, RYTELO sales will be difficult to predict from period to period and as a result, you should not rely on RYTELO sales results in any period as being indicative of future performance and sales of RYTELO may be below our own guidance or the expectations of securities analysts or investors in the future.

Due to the approval by the FDA in June 2024 of RYTELO for lower-risk MDS and the limited historical sales data, RYTELO sales will be difficult to predict from period to period and as a result, you should not rely on RYTELO sales results in any period as being indicative of future performance.

Sales of RYTELO may be below our own guidance or the expectations of securities analysts or investors in the future.

To the extent that we do not meet our guidance or the expectations of analysts or investors, our stock price may be adversely impacted, perhaps significantly.

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• the extent to which coverage and reimbursement for RYTELO is available from government and health administration authorities, private health insurers, managed care programs and other third-party payors;

• changes in the amount of deductions from gross sales, including government-mandated rebates, chargebacks and discounts that can vary because of changes to the government discount percentage, including increases in the government discount percentage resulting from price increases we may take in the future, or due to different levels of utilization by entities entitled to government rebates and discounts and changes in patient demographics;

discount percentage resulting from price increases we may take in the future, or due to different levels of utilization by entities entitled to government rebates and discounts and changes in patient demographics;

• increases in the scope of eligibility for customers to purchase RYTELO at the discounted government price or to obtain government-mandated rebates on purchases of RYTELO;

• changes in our cost of sales;

• the timing and level of revenue interest payments under the Royalty Pharma Agreement;

• the timing, cost and level of investment in our sales and marketing efforts to support RYTELO sales;

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As a result, our operating results in future periods could be below our guidance or the expectations of securities analysts or investors, which could cause the trading price of our common stock to decline, perhaps significantly.

Our failure to obtain additional capital would force us to further delay, reduce or eliminate the further development of RYTELO, or to halt the commercialization of RYTELO, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

Our failure to obtain additional capital when needed would force us to further delay, reduce or eliminate the further development of RYTELO, or to halt the commercialization of RYTELO, any of which would severely and adversely affect our financial results, business and business prospects, and might cause us to cease operations.

Successful drug development and commercialization requires significant amounts of capital.

As of June 30, 2024, we had approximately $430.4 million in cash, cash equivalents, restricted cash and current and noncurrent marketable securities.

Based on our current operating plans and assumptions, we believe that our existing cash, cash equivalents, and current and noncurrent marketable securities, together with projected revenues from U.S.

sales of RYTELO, will be sufficient to fund our projected operating requirements into the second quarter of 2026.

We will require substantial additional funding to further advance the development of imetelstat, including through the completion of our ongoing clinical trials and any potential future clinical trials, as well as conducting the clinical, regulatory and commercialization activities necessary to potentially bring imetelstat to market in relapsed/refractory MF and any other indications we are pursuing or may in the future pursue, and our need for additional funds may arise sooner than planned.

As of September 30, 2024, we had approximately $378.9 million in cash, cash equivalents, restricted cash and marketable securities.

On a pro forma basis, including gross proceeds from the upfront payment under the Royalty Pharma Agreement and the Tranche A Loan, and after repayment of our existing debt under the Hercules Loan Agreement, we had approximately $542.4 million in cash, cash equivalents, restricted cash, and marketable securities as of September 30, 2024.

Based on our current operating plans and assumptions, we believe that our existing cash, cash equivalents, and marketable securities (including the $250 million received under the Pharmakon Loan Agreement and the Royalty Pharma Agreement), together with anticipated revenues from U.S.

sales of RYTELO, will be sufficient to fund our projected operating requirements for at least the next 12 months from the date of this filing.

We believe that our projected financial resources will be sufficient to (i) support commercial launch of RYTELO in the U.S.

and potential launch in the EU, (ii) complete the Phase 3 IMpactMF trial in relapsed/refractory MF, (iii) invest in supply chain redundancy for RYTELO, and (iv) fund our general working capital requirements.

If we do not generate sufficient funds from commercial sales of RYTELO, or if we experience regulatory delays or other unforeseen events or choose to make other investments in our business, we may require additional funding, which could include a combination of public or private equity offerings, debt financings (including additional tranches under the Pharmakon Loan Agreement, if available), collaborations, strategic alliances, licensing arrangements or marketing and distribution arrangements, which may not be possible.

If adequate funds are not available on a timely basis, if at all, our RYTELO commercialization efforts may be adversely affected and we may be unable to pursue further development of imetelstat, which would severely harm our business and we might cease operations.

Despite recent FDA approval of RYTELO, the outcome of any clinical activities and/or regulatory approval process is highly uncertain, we cannot reasonably estimate whether our future development activities may succeed;

Despite FDA approval of RYTELO in June 2024, the outcome of any clinical activities and/or regulatory approval process is highly uncertain, and we cannot reasonably estimate whether our future development activities may succeed;

whether we will obtain regulatory approval for RYTELO in the EU in lower-risk MDS, or in any other jurisdictions or indications we are pursuing or may in the future pursue, or whether we will be able to effectively commercialize RYTELO in the U.S.

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• the extent to which we acquire or in-license other drugs and technologies, or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions, or to which we out-license RYTELO;

• the extent to which we are able to enter into and conduct successful strategic partnerships, collaborations, alliances or licensing arrangements with third parties, including for the commercialization and marketing of RYTELO in certain regions outside of the U.S., if approved for commercialization;

• the extent to which we are able to enter into and conduct successful arrangements with third parties, including for the commercialization and marketing of RYTELO in certain regions outside of the U.S., if approved for commercialization;

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

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Additional financing through public or private debt or equity financings, including pursuant to the 2023 Sales Agreement with B.

Riley Securities, Inc., the final $25.0 million tranche under the Loan Agreement, which is subject to the approval by an investment committee comprised of Hercules and SVB;

Riley Securities, Inc., the Tranche B Loan and the Tranche C Loan under the Pharmakon Loan Agreement, which are subject to certain funding conditions;

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.

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.

The receptivity of the public and private debt and equity markets to proposed financings has been substantially affected by uncertainty in the general economic, market and political climate due to the effects of macroeconomic or other global conditions, such as inflation, rising interest rates, prospects of a recession, government shutdowns, bank failures and other disruptions to financial systems, civil or political unrest, military conflicts, pandemics or other health crises and supply chain and resource issues, and may in the future be affected by other factors which are unpredictable and over which we have no control.

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If the equity and credit markets deteriorate, including as a result of macroeconomic or other global conditions, such as inflation, rising interest rates, prospects of a recession, government shutdowns, bank failures and other disruptions to financial systems, civil or political unrest, military conflicts, pandemics or other health crises and supply chain and resource issues, 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.

If we are unable to effectively commercialize RYTELO, or raise additional capital or establish alternative collaborative arrangements with third-party collaborative partners for RYTELO, the development and commercialization of RYTELO may be further delayed, altered or abandoned, which might cause us to cease operations.

If we are unable to effectively commercialize RYTELO, or raise additional capital or establish alternative collaborative arrangements with third-party collaborative partners for

RYTELO when needed, the development and commercialization of RYTELO may be further delayed, altered or abandoned, which might cause us to cease operations.

In addition, we may seek additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, including pursuant to the 2023 Sales Agreement, your ownership interest as a stockholder may be diluted, and the terms may include liquidation or other preferences that materially and adversely affect your rights as a stockholder.

In addition, we have borrowed, and in the future may borrow, additional capital from institutional and commercial banking sources to fund imetelstat development and our future growth, including pursuant to our Loan Agreement or potentially pursuant to new arrangements with different lenders.

We may borrow funds on terms under agreements, such as the Loan Agreement, that include restrictive covenants, including covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

In addition, we have borrowed, and in the future may borrow, additional capital from institutional and commercial banking sources to fund imetelstat development and our future growth, including pursuant to our Pharmakon Loan Agreement or potentially pursuant to new arrangements with different lenders.

We may borrow funds on terms under agreements, such as the Pharmakon Loan Agreement, that include restrictive covenants, including covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Moreover, if we raise additional funds through alliance, collaborative or licensing arrangements with third parties, we may have to relinquish valuable rights to RYTELO or our technologies or grant licenses on terms that are not favorable to us.

We cannot assure you that our existing capital resources, future interest income, future revenues from sales of RYTELO, potential future sales of our common stock, including under the 2023 Sales Agreement, will be sufficient to fund our operating plans.

Moreover, while we did not hold cash deposits or securities at SVB, if other banks and financial institutions enter receivership, become insolvent or otherwise fail in the future in response to financial conditions affecting the banking system and financial markets or otherwise, our ability to access our cash, cash equivalents and marketable securities may be delayed or precluded, which could have a material adverse effect on our business, business prospects and financial position.

Risks Related to our Indebtedness

Risks Related to our Indebtedness and liabilities

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, 2024, the total outstanding principal amount under the Loan Agreement was $80.0 million.

The tranches for the remaining $45.0 million available to us under the Loan Agreement are as follows:

(a) the first remaining tranche of $20.0 million is available until December 15, 2024;

and (b) the second remaining tranche of $25.0 million is available through December 31, 2024, subject to approval by an investment committee comprised of Hercules and SVB.

If we do not receive investment committee approval, we will not be eligible to draw funds under the second remaining tranche under the Loan Agreement.

In addition, before we would consider drawing down any of the remaining tranches under the Loan Agreement, if available, we must first satisfy ourselves that we will have access to future alternate sources of capital, such as from commercial revenues or the equity capital markets or debt capital markets, in order to repay any additional principal borrowed, which we may be unable to do, in which case, our liquidity and ability to fund our operations may be substantially impaired.

All obligations under the Loan Agreement are secured by substantially all of our assets, excluding intellectual property, which is subject to a negative pledge.

Further, the terms of the Loan Agreement place restrictions on our operating and financial flexibility, and limit or prohibit our ability to dispose of certain assets, change our line of business, and engage in other significant transactions.

On November 1, 2024, we entered into the Pharmakon Loan Agreement.

We drew the Tranche A Loan of $125.0 million on November 1, 2024 and as of November 1, 2024, the total outstanding principal amount under the Pharmakon Loan Agreement was $125.0 million.

The tranches for the remaining $125.0 million available to us under the Pharmakon Loan Agreement are as follows:

(a) a Tranche B Loan of $75.0 million, which is available until December 31, 2025 and is available at our option, subject to certain customary and limited conditions;

and (b) the Tranche C Loan of $50.0 million, which is available through December 31, 2025, subject to certain conditions including achieving a certain revenue milestone on or prior to November 30, 2025.

If we do not achieve such revenue milestone within the required timeline, we will not be eligible to draw funds under the Tranche C Loan under the Pharmakon Loan Agreement.

In addition, before we would consider drawing down any of the remaining tranches under the Pharmakon Loan Agreement, if available, we must first satisfy ourselves that we will have access to future alternate sources of capital, such as from commercial revenues or the equity capital markets or debt capital markets, in order to repay any additional principal borrowed, which we may be unable to do, in which case, our liquidity and ability to fund our operations may be substantially impaired.

All obligations under the Pharmakon Loan Agreement are secured by substantially all of our assets, including our intellectual property.

Further, the terms of the Pharmakon Loan Agreement place restrictions on our operating and financial flexibility, and limit or prohibit our ability to dispose of certain assets, change our line of business, and engage in other significant transactions.

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 Pharmakon 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:

• we will need to repay the indebtedness by making payments of interest and principal, which will reduce the amount of cash available to finance our operations, our research and development efforts and other general corporate activities;

• our failure to comply with the obligations of our affirmative and restrictive covenants in the Loan Agreement could result in an event of default that, if not cured or waived, would accelerate our obligation to repay this indebtedness, and Hercules and SVB could seek to enforce their security interest in the assets securing such indebtedness.

In addition, we may borrow additional capital in the future to fund imetelstat development and our future growth, including pursuant to the Loan Agreement or potentially pursuant to new arrangements with different lenders.

• our failure to comply with the obligations of our affirmative and restrictive covenants in the Pharmakon Loan Agreement could result in an event of default that, if not cured or waived, would permit the Lenders to accelerate our obligation to repay this indebtedness, and the Lenders could seek to enforce their security interest in the assets securing such indebtedness.

In addition, we may borrow additional capital in the future to fund imetelstat development and our future growth, including pursuant to the Pharmakon Loan Agreement or potentially pursuant to new arrangements with different lenders.

To the extent additional debt is added to our current debt levels, the risks described above could increase.

The terms of the Loan Agreement place restrictions on our operating and financial flexibility.

The Loan Agreement imposes operating and other restrictions on us.

The terms of the Pharmakon Loan Agreement place restrictions on our operating and financial flexibility.

The Pharmakon Loan Agreement imposes operating and other restrictions on us.

Such restrictions will affect, and in many respects limit or prohibit, our ability and the ability of any future subsidiaries to, among other things:

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• engage in certain transactions with affiliates.

The Loan Agreement also contains financial covenants, including that we must maintain a minimum cash balance.

The breach of any of these restrictive covenants or any other terms of the Loan Agreement would accelerate our obligation to repay our indebtedness under the Loan Agreement, which could have a material adverse effect on our business, business prospects and financial position.

We may not have cash available in an amount sufficient to enable us to make interest or principal payments on our indebtedness when due.

Our ability to make scheduled payments on or to refinance our indebtedness depends on our future performance and ability to raise additional sources of cash, which is subject to economic, financial, competitive and other factors beyond our control.

Our ability to make scheduled interest payments on or to refinance our indebtedness depends on our future performance and ability to raise additional sources of cash, which is subject to economic, financial, competitive and other factors beyond our control.

If we are unable to generate sufficient cash to service our debt, we may be required to adopt one or more alternatives, such as selling assets, restructuring our debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

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We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Failure to satisfy our current and future debt obligations under the Loan Agreement or to comply with certain covenants in the Loan Agreement could result in an event of default, the occurrence and continuance of which provide Hercules and SVB with the right to demand immediate repayment of all outstanding obligations under the Loan Agreement, and to exercise remedies against us and the collateral securing the Loan Agreement.

Failure to satisfy our current and future debt obligations under the Pharmakon Loan Agreement or to comply with certain covenants in the Pharmakon Loan Agreement could result in an event of default, the occurrence and continuance of which provide the Lenders with the right to demand immediate repayment of all outstanding obligations under the Pharmakon Loan Agreement (and in the case of certain insolvency, liquidation, bankruptcy or similar events, automatically requires immediate repayment of all outstanding obligations under the Pharmakon Loan Agreement), and to exercise remedies against us and the collateral securing the Pharmakon Loan Agreement.

These events of default include, among other things:

• insolvency, liquidation, bankruptcy or similar events;

• failure to observe any covenant or secured obligation under the Loan Agreement, which failure, in most cases, is not cured within 15 days;

• occurrence of an event that could reasonably be expected to have a material adverse effect on our business, operations, properties, assets or financial condition;

• failure to observe covenants under the Pharmakon Loan Agreement and ancillary collateral documents, which failure, in certain limited cases, is not cured within 10 or 20 days;

• the occurrence of a material adverse change or a withdrawal event in respect to RYTELO;

• material misrepresentations;

• occurrence of any default under any other agreement involving indebtedness in excess of specified amounts, or the occurrence of a default under any agreement that could reasonably be expected to have a material adverse effect on us;

• certain money judgments being entered against us or any portion of our assets are attached or seized.

In the event of default, Hercules and SVB could accelerate all of the amounts due under the Loan Agreement.

Under such circumstances, we may not have enough available cash or be able to raise additional funds through equity or debt financings to repay

such indebtedness at the time of such acceleration.

• certain cross-default of third-party indebtedness or certain default or termination events of hedging assessments;

• certain money judgments being entered against us which are not timely paid, discharged or stayed;

• our assets are attached or seized.

In the event of default, the Lenders could accelerate all of the amounts due under the Pharmakon Loan Agreement.

Under such circumstances, we may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time of such acceleration.

In that case, we may be required to delay, limit, reduce or terminate our RYTELO development or commercialization efforts or grant to others rights to develop and market RYTELO.

Hercules and SVB could also exercise their rights to take possession and dispose of the collateral securing the Loan Agreement, which collateral includes substantially all of our property other than intellectual property.

The Lenders could also exercise their rights to take possession and dispose of the collateral securing the Pharmakon Loan Agreement, which collateral includes substantially all of our property including, without limitation, our intellectual property, subject to certain exceptions.

Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.

The Royalty Pharma Agreement places restrictions on our operational flexibility.

The Royalty Pharma Agreement contains covenants that impose on us certain obligations with respect to revenue payments, diligence, reporting, indemnification and includes restriction on intellectual property transfers and out-licenses, and certain other actions.

The Royalty Pharma Agreement also limits our ability to create or incur liens or dispose of certain assets related to imetelstat.

We have no rights to repurchase the revenue interests in RYTELO sold to Royalty Pharma (other than in connection with a change of control event), thereby limiting our ability to eliminate future applicability of the covenants contained in the Royalty Pharma Agreement.

Compliance with these covenants may limit our flexibility in operating our business and our ability to take actions that might otherwise be advantageous to us and our stockholders.

Risks Related to Protecting Our Intellectual Property

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In the U.S., the Hatch-Waxman Act permits one patent per approved product to receive a patent term extension of up to five years beyond its normal expiration.

The length of the patent term extension is typically calculated as one half of the clinical trial period plus the entire period of time during the review of the NDA by the FDA, minus any time of delay by us during these periods.

The length of the patent term extension is typically calculated as one half of the clinical trial

period plus the entire period of time during the review of the NDA by the FDA, minus any time of delay by us during these periods.

There is also a limit on the patent term extension to a term that is no greater than fourteen years from drug approval.

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

In Europe and other countries, our composition of matter patent coverage expires in September 2024, and our method of treatment patent rights for MDS and MF expire in November 2033.

In Europe and other countries, our composition of matter patent coverage expired in September 2024, and our method of treatment patent rights for MDS and MF expire in November 2033.

Our method of treatment patents may be eligible for patent term extension of up to five years under a Supplementary Protection Certificate, or SPC, permitted under European Council (EC) Regulation No.

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The validity, scope and enforceability of any patents listed in the Orange Book that cover RYTELO or its methods of use can be challenged by third parties and may not protect us from generic or innovator competition.

If a third party files an application under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act or an abbreviated new drug application (“ANDA”) under Section 505(j) to obtain permission to sell a generic version of RYTELO, and relies in whole or in part on studies conducted by or for us, the third-party will be required to certify to the FDA that either:

If a third party files an application under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act or an abbreviated new drug application, or ANDA, under Section 505(j) to obtain permission to sell a generic version of RYTELO, and relies in whole or in part on studies conducted by or for us, the third-party will be required to certify to the FDA that either:

(1) there is no patent information listed in the Orange Book with respect to our NDA for RYTELO;

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or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third-party’s generic product.

A certification that the new product will not infringe the Orange Book-listed patents for RYTELO, or that such patents are invalid, is called a

paragraph IV certification.

A certification that the new product will not infringe the Orange Book-listed patents for RYTELO, or that such patents are invalid, is called a paragraph IV certification.

If the third-party submits a paragraph IV certification to the FDA, a notice of the paragraph IV certification must also be sent to us once the third-party’s ANDA is accepted for filing by the FDA.

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

patent protection for the same technology in patent

applications that are subject to the law before the implementation of the AIA, the Patent Office may declare an interference proceeding in order to ascertain the party to which the patent should be issued.

patent protection for the same technology in patent applications that are subject to the law before the implementation of the AIA, the Patent Office may declare an interference proceeding in order to ascertain the party to which the patent should be issued.

Patent interferences are typically complex, highly contested legal proceedings, subject to appeal.

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For example, we are aware that certain third parties have or may be prosecuting patents and patent estates that may relate to RYTELO, and while these patents have expired, or we believe that a reasonable court should find they are invalid and/or would not be infringed by the manufacture, use or sale of RYTELO, it is possible that the owner(s) of these patents will assert claims against us in the future.

In the event our technologies infringe the rights of others or require the use of discoveries and technologies controlled by third parties, we may be prevented from pursuing research, development, manufacturing or commercialization of RYTELO, or may be required to obtain unblocking licenses from such third parties, develop alternative non-infringing technologies, which we may not be able to do at an acceptable cost or on acceptable terms, or at all, or cease the commercialization and continued development of

If we are unable to resolve an infringement claim successfully, we could be subject to an injunction that would prevent us from commercializing RYTELO and could also require us to pay substantial damages.

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In May 2016, the Defend Trade Secrets Act of 2016, or the DTSA, was enacted, providing a federal cause of action for misappropriation of trade secrets.

Under the DTSA, an employer may not collect enhanced damages or attorney fees from an

employee or contractor in a trade secret dispute brought under the DTSA, unless certain advanced provisions are observed.

Under the DTSA, an employer may not collect enhanced damages or attorney fees from an employee or contractor in a trade secret dispute brought under the DTSA, unless certain advanced provisions are observed.

We cannot provide assurance that our existing agreements with employees and contractors contain notice provisions that would enable us to seek enhanced damages or attorneys’ fees in the event of any dispute for misappropriation of trade secrets brought under the DTSA.

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for lower-risk MDS and potentially in the EU for the same indication.

We may seek a collaborative partner or partners, at an appropriate time, to assist us in the potential development and commercialization of RYTELO, especially in the EU and other regions outside the U.S., and to provide funding for such activities.

We may seek to self-commercialize or seek a collaborative partner or partners, at an appropriate time, to assist us in the potential development and commercialization of RYTELO outside the U.S., and to provide funding for such activities.

We face significant competition in seeking appropriate collaborative partners, and these potential collaborative arrangements are complex and time consuming to negotiate, document and implement.

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Any such lawsuits, or other lawsuits to which we are subject, will be costly to defend or pursue and are uncertain in their outcome.

Securities-related class action lawsuits and/or derivative lawsuits have often been brought against companies, including biotechnology and biopharmaceutical companies, that experience volatility in the market price of their securities.

We are not currently a party to any material pending legal proceedings.

However, securities class action lawsuits and/or derivative lawsuits have often been brought against companies, including biotechnology and biopharmaceutical companies, that experience volatility in the market price of their securities.

This risk is especially relevant for us because we often experience significant stock price volatility in connection with our activities.

In 2020, three securities class action lawsuits were filed against us and certain of our officers.

One of the lawsuits was voluntarily dismissed.

The other two lawsuits, filed in the U.S.

District Court for the Northern District of California, were consolidated by the Court.

In September 2022, the parties agreed to a settlement and entered into a Stipulation and Agreement of Settlement, which was subject to court approval.

The Court granted final approval of the settlement in September 2023 and final judgment was entered in October 2023.

In 2020 and 2021, seven shareholder derivative actions were filed in a number of courts, naming as defendants certain of our then

current officers and certain of our then current and former members of our board.

In May 2023, the Delaware Court of Chancery approved a settlement of the derivative case pending before it, and the case was dismissed with prejudice.

Subsequently, each of the remaining derivative cases were dismissed with prejudice.

One of the lawsuits was voluntarily dismissed, and final judgment with respect to the other two lawsuits was entered in October 2023.

In 2020 and 2021, seven shareholder derivative actions were filed in a number of courts, naming as defendants certain of our then current officers and certain of our then current and former members of our board.

All seven of the shareholder derivative actions have been dismissed with prejudice.

While we have settled these lawsuits, it is possible that additional lawsuits might be filed, or allegations might be received from stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants.

Such lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors.

The outcome of such lawsuits is necessarily uncertain.

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

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

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.

A decision adverse to our interests in similar or related litigation, could result in the payment of substantial damages, or possibly fines, and could have a material adverse effect on our business, our stock price, cash flow, results of operations and financial condition.

A decision adverse to our interests in any legal proceedings, could result in the payment of substantial damages, or possibly fines, and could have a material adverse effect on our business, our stock price, cash flow, results of operations and financial condition.

We may be subject to third-party litigation, and such litigation would be costly to defend or pursue and uncertain in its outcome.

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These threats are prevalent, continue to increase, and come from a variety of sources such as traditional “hackers,” threat actors, “hacktivist,” organized criminal threats actors, 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 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, telecommunication and electrical failures and attacks enhanced or facilitated by artificial intelligence, or AI, and other similar threats.

These threats include, but are not limited to, social-engineering attacks, targeted phishing campaigns, 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, telecommunication and electrical failures and attacks enhanced or facilitated by artificial intelligence, or AI, and other similar threats.

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.

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We may also experience security breaches that may remain undetected for an extended period.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and

techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

Unremediated high risk or critical vulnerabilities pose material risks to our business.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using

tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

Unremediated high risk or critical vulnerabilities pose material risks to our business, particularly due to the reliance on software vendors to adequately patch and implement fixes to address critical or high-risk vulnerabilities in a timely manner.

Further, we may be materially impacted by software updates applied by our software vendors if such updates cause significant downtime to our systems.

If we or third parties upon which we rely experience or are perceived to have experienced a breach, we may experience adverse consequences.

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If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Some EEA regulators have prevented companies from transferring personal data out of the EEA for allegedly violating the GDPR’s cross-border data transfer limitations.

Some EEA regulators have prevented companies from transferring personal data out of the EEA for allegedly violating the EU GDPR’s cross-border data transfer limitations.

Likewise, we expect that there will continue to be new proposed laws, regulations and industry standards relating to data privacy and security in the U.S.

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or revision or restructuring of our operations.

Moreover, clinical trial participants or research subjects about whom we or our vendors obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.

Moreover, clinical trial participants or research subjects about whom we or our vendors obtain

information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.

Risks Related to Our Common Stock and Financial Reporting

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Historically, our stock price has been extremely volatile.

Between July 1, 2014 and June 30, 2024, our stock has traded as high as $6.38 per share and as low as $0.89 per share.

Between July 1, 2023 and June 30, 2024, the price has ranged between a high of $5.09 per share and a low of $1.74 per share.

Between October 1, 2014 and September 30, 2024, our stock has traded as high as $6.38 per share and as low as $0.89 per share.

Between October 1, 2023 and September 30, 2024, the price has ranged between a high of $5.34 per share and a low of $1.64 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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Any payment of cash dividends will depend upon our financial condition, results of operations, capital requirements and other factors, and will be at the discretion of our board of directors.

In addition, the terms of our Loan Agreement prevent us from paying dividends and any future debt agreements may continue to preclude us from paying dividends.

In addition, the terms of our Pharmakon Loan Agreement prevent us from paying dividends and any future debt agreements may continue to preclude us from paying dividends.

As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future.

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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