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• We are dependent on third parties to manufacture seralutinib.
−Removed: • We may not be successful in entering into or maintaining collaborations, licenses and other similar arrangements.
+Added: • We may not be successful in entering into or maintaining collaborations, licenses and other similar arrangements, including the maintenance of our collaboration with Chiesi.
• I f approved, the success of seralutinib will depend on meeting ongoing regulatory obligations, market acceptance and adequate coverage by governmental authorities and insurers.
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Risks Related to Our Limited Operating History, Financial Position and Capital Requirements
−Removed: We have a limited operating history, have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.
+Added: We have a relatively limited operating history, have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.
We may never generate any revenue or become profitable or, if we achieve profitability, we may not be able to sustain it.
Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk.
−Removed: We are a clinical-stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.
+Added: We are a clinical-stage biopharmaceutical company with a relatively limited operating history upon which you can evaluate our business and prospects.
We commenced operations in 2017, and to date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring and in-licensing product candidates and conducting preclinical studies and clinical trials.
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In addition, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry.
−Removed: Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are
−Removed: unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.
+Added: Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
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We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operations for at least the next 12 months from the date this annual report is filed with the SEC.
−Removed: In particular, we expect that these funds will allow us to continue our registrational Phase 3 clinical trial in PAH for seralutinib.
+Added: In particular, we expect that these funds will allow us to complete our registrational Phase 3 clinical trial in PAH for seralutinib.
We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
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In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
−Removed: For example, in July 2020, we, and certain of our subsidiaries, as borrowers, amended our credit, guaranty and security agreement, or the Credit Facility, with MidCap Financial Trust, or MidCap, an agent and as a lender, and the additional lenders party thereto from time to time, or together with MidCap, the Lenders, pursuant to which the Lenders, including affiliates of MidCap and Silicon Valley Bank agreed to make a $30.0 million term loan that was funded in May 2019.
Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop seralutinib.
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In addition, we may seek additional capital due to favorable market conditions or liquidity or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.
−Removed: The terms of our Credit Facility place restrictions on our operating and financial flexibility.
−Removed: On May 2, 2019, we entered into the Credit Facility, as further amended on September 18, 2019, July 2, 2020 and December 7, 2022.
−Removed: The outstanding principal balance under the credit facility was $12.6 million as of December 31, 2023.
−Removed: The Credit Facility includes affirmative and negative covenants applicable to us.
−Removed: The affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage, maintain property, pay taxes, satisfy certain requirements regarding accounts and comply with laws and regulations.
−Removed: The negative covenants include, among others, restrictions on transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, amending material agreements and organizational documents, selling assets and suffering a change in control, in each case subject to certain exceptions.
−Removed: The Credit Facility also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 3.0% and would provide MidCap, as agent, with the right to exercise remedies against us, and the collateral securing the Credit Facility, including foreclosure against our properties securing the credit facilities, including our cash.
−Removed: These events of default include, among other things, our failure to pay any amounts due under the credit facility, a breach of covenants under the Credit Facility, our insolvency or the occurrence of insolvency events, the occurrence of a change in control, the occurrence of certain FDA and regulatory events, our failure to remain registered with the SEC and listed for trading on Nasdaq, the occurrence of a material adverse change, the occurrence of a default under a material agreement reasonably expected to result in a material adverse change, the occurrence of certain defaults under certain other indebtedness in an amount greater than $2.5 million and the occurrence of certain defaults under subordinated indebtedness and convertible indebtedness.
−Removed: The occurrence of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline.
−Removed: 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.
−Removed: 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.
−Removed: If we desire to refinance our indebtedness, our ability to do so will depend on the capital markets and our financial condition at such time.
−Removed: 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.
−Removed: If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the notes.
−Removed: As of December 31, 2023, we have sold $200.0 million aggregate principal amount 5.00% convertible senior notes due 2027, and, excluding intercompany indebtedness, we, including our subsidiaries, had approximately $52.6 million of additional indebtedness and other liabilities, including trade payables, of which approximately $12.4 million was secured
−Removed: indebtedness under our Credit Facility.
−Removed: We may also incur additional indebtedness to meet future financing needs.
−Removed: Our indebtedness could have significant negative consequences for our stockholders and our business, results of operations and financial condition by, among other things:
+Added: As of December 31, 2024, we have sold $200.0 million in aggregate principal amount of 5.00% convertible senior notes due 2027 and have approximately $88.3 million of other liabilities, including trade payables.
+Added: We may also incur additional indebtedness or liabilities to meet our future financing needs.
+Added: Our indebtedness and liabilities could have significant
+Added: negative consequences for our stockholders and our business, results of operations and financial condition by, among other things:
• increasing our vulnerability to adverse economic and industry conditions;
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Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the notes, and our cash needs may increase in the future.
−Removed: In addition, our existing Credit Facility contains, and any future indebtedness that we may incur may contain, financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness.
+Added: In addition, any future indebtedness that we may incur may contain, financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness.
If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or seralutinib .
−Removed: Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, such as our Credit Facility, including potentially collaborations, licenses and other similar arrangements.
+Added: Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings, debt financings or other capital sources including potentially collaborations, licenses and other similar arrangements.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
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If we raise funds through future collaborations, licenses and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock.
−Removed: Risks Related to the Discovery, Development and Regulatory Approval of Seralutinib
−Removed: We depend heavily on the success of seralutinib , which is currently in Phase 3 clinical development.
+Added: Risks Related to the Development and Regulatory Approval of Seralutinib
+Added: We depend entirely on the success of seralutinib , which is currently in Phase 3 clinical development.
If we are unable to advance seralutinib in clinical development, obtain regulatory approval and ultimately commercialize seralutinib, or experience significant delays in doing so, our business will be materially harmed.
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We are conducting an open-label extension of our Phase 2 clinical trial of seralutinib in PAH which commenced in 2020, and we commenced a registrational Phase 3 clinical trial of seralutinib in PAH in the fourth quarter of 2023.
−Removed: Our assumptions about why seralutinib is worthy of future development and potential approval in PAH, or any indications, are based in part on data collected by other companies.
+Added: We expect to activate clinical sites for a global registrational Phase 3 for the treatment of PH-ILD in the second half of 2025.
+Added: Our assumptions about why seralutinib is worthy of future development and potential approval in PAH, or any additional indications including PH-ILD, are based in part on data collected by other companies.
Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of seralutinib.
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• demonstrating safety and efficacy to the satisfaction of applicable regulatory authorities;
−Removed: • receipt of marketing approvals from applicable regulatory authorities, including new drug applications, or NDAs, from the FDA and maintaining such approvals;
+Added: • receipt of marketing approvals from applicable regulatory authorities, including NDAs from the FDA and maintaining such approvals;
• making arrangements with our third-party manufacturers for, or establishing, commercial manufacturing capabilities;
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• maintaining and growing an organization of people who can develop seralutinib and our technology.
−Removed: Seralutinib is subject to regulation as combination product, which means that it is composed of both a drug product and device product.
+Added: Seralutinib is subject to regulation as a combination product, which means that it is composed of both a drug product and device product.
If marketed individually, each component would be subject to different regulatory pathways and reviewed by different centers within the FDA.
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In addition, some of our assumptions about why seralutinib is worthy of future development and potential approval are based on data collected by other companies.
−Removed: Seralutinib may not have favorable results in its Phase 3 clinical trial in PAH, or receive regulatory approval on a timely basis, if at all.
+Added: Seralutinib may not have favorable results in its Phase 3 clinical trial in PAH or the anticipated Phase 3 clinical trial in PH-ILD, or receive regulatory approval on a timely basis, if at all.
Clinical drug development is expensive and can take many years to complete, and its outcome is inherently uncertain.
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For the foregoing reasons, we cannot be certain that our ongoing and planned clinical trials and preclinical studies will be successful.
−Removed: Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of seralutinib in PAH and other indications, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of seralutinib in PAH and other indications including PH-ILD, which could have a material adverse effect on our business, financial condition and results of operations.
Any difficulties or delays in the commencement or completion, or termination or suspension, of our current or planned clinical trials could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
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In addition, before we can initiate clinical development for our product candidates, and in some cases, before we can pursue clinical development of a product candidate for a new potential indication, we must submit the results of preclinical studies to the FDA along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND, and we are also required to submit regulatory filings to foreign regulatory authorities for clinical trials outside of the United States.
−Removed: We do not know whether our planned trials will begin on time or be completed on schedule, if at all.
−Removed: The commencement and completion of clinical trials can be delayed for a number of reasons including delays related to:
−Removed: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies, including the doses and endpoints of our Phase 3 clinical trial of seralutinib;
+Added: We do not know whether our ongoing or planned trials will begin on time or be completed on schedule, if at all.
+Added: The commencement, data readouts and completion of clinical trials can be delayed for a number of reasons including delays related to:
+Added: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies, including the doses and endpoints of our ongoing and planned Phase 3 clinical trial of seralutinib;
• obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design;
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• subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials;
−Removed: • subjects choosing an alternative treatment for PAH or other indications for which we are developing seralutinib, or participating in competing clinical trials;
+Added: • subjects choosing an alternative treatment for PAH or other indications including PH-ILD for which we are developing seralutinib, or participating in competing clinical trials;
• lack of adequate funding to continue a clinical trial;
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Once the CTA is approved, clinical study development may proceed.
−Removed: The CTR foresees a three-year transition period.
−Removed: The extent to which ongoing and new clinical trials will be governed by the CTR varies.
−Removed: Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025.
−Removed: After this date, all clinical trials (including those which are ongoing) will become subject to the provisions of the CTR.
+Added: The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.
Compliance with the CTR requirements by us and our third-party service providers, such as contract research organizations, or CROs, may impact our developments plans.
It is currently unclear to what extent UK will seek to align its regulations with the EU.
−Removed: The UK, regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation).
−Removed: On January 17, 2022, the UK MHRA launched an eight-week consultation on reframing the UK legislation for clinical trials.
−Removed: The consultation closed on March 14, 2022 and aims to streamline clinical trials approvals, enable innovation, enhance clinical trials transparency, enable greater risk proportionality, and promote patient and public involvement in clinical
−Removed: The outcome of the consultation is being closely watched and will determine whether the UK chooses to align with the (EU) CTR or diverge from it to maintain regulatory flexibility.
+Added: The UK regulatory framework in relation to clinical trials is derived from the now-repealed EU Clinical Trials Directive (as implemented into UK law, through the Medicines for Human Use (Clinical Trials) Regulations 2004, as amended).
+Added: The extent to which the regulation of clinical trials in the UK will mirror the (EU) CTR in the long term is not yet certain, however, on December 12, 2024, the UK government introduced a legislative proposal - the Medicines for Human Use (Clinical Trials) Amendment Regulations 2024 - that, if implemented, will replace the current regulatory framework for clinical trials in the UK.
+Added: The legislative proposal aims to provide a more flexible regime to make it easier to conduct clinical trials in the UK, increase the transparency of clinical
+Added: trials conducted in the UK and make clinical trials more patient centered.
+Added: The UK government has provided the legislative proposal to the UK Parliament for its review and approval.
+Added: Once the legislative proposal is approved (with or without amendment), it will be adopted into UK law which is expected in early 2026.
Under the terms of the Protocol on Ireland/Northern Ireland, provisions of the (EU) CTR which relate to the manufacture and import of investigational medicinal products and auxiliary medicinal products apply in Northern Ireland.
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Clinical trial submissions in the UK will not be able to be bundled with those of EU member states within the EMA CTIS, adding further complexity, cost and potential risk to future clinical and development activity in the UK.
−Removed: Significant political and economic uncertainty remains about how much the relationship between the UK and EU will differ as a result of the UK’s withdrawal.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may also be impacted.
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Potential subjects for any planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials.
−Removed: For example, a limited number of patients are affected by PAH, which is our target indication for seralutinib, and we have encountered difficulties enrolling patients in our previous clinical trials of seralutinib in PAH patients.
+Added: For example, a limited number of patients are affected by PAH and other indications including PH-ILD, which are our target indication for seralutinib, and we have encountered difficulties enrolling patients in our previous clinical trials of seralutinib in PAH patients.
We also may encounter difficulties in identifying and enrolling subjects with a stage of disease appropriate for our Phase 3 trial of seralutinib and monitoring such subjects adequately during and after treatment.
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For example, PAH is a rare disease with limited patient pools from which to draw for our registrational Phase 3 trial.
−Removed: If patients are unwilling to participate in our trials for any reason, including the existence of concurrent clinical trials for similar patient populations in PAH, if they are unwilling to enroll in a clinical trial
−Removed: with a placebo-controlled design or the availability of approved therapies, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting subjects, conducting studies and obtaining regulatory approval of seralutinib may be delayed.
+Added: If patients are unwilling to participate in our trials for any reason, including the existence of concurrent clinical trials for similar patient populations in PAH, if they are unwilling to enroll in a clinical trial with a placebo-controlled design or the availability of approved therapies, or we otherwise have difficulty enrolling a sufficient
+Added: number of patients, the timeline for recruiting subjects, conducting studies and obtaining regulatory approval of seralutinib may be delayed.
Our inability to enroll a sufficient number of subjects for our Phase 3 trial of seralutinib or any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
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If such confirmatory studies fail to verify the drug’s predicted clinical benefit or of the sponsor fails to conduct such studies in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis.
−Removed: In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S.
−Removed: government through fiscal year 2023.
−Removed: Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA new statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
+Added: In addition, the Food and Drug Omnibus Reform Act of 2022, among other things, provided FDA statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.
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Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs.
−Removed: Under the Orphan Drug Act of 1983, the FDA may designate a product as
−Removed: an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
+Added: Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States,
+Added: but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
In the EU, the EC grants orphan designation based on the EMA’s Committee for Orphan Medicinal Products’ opinion to promote the development of products (1) that are intended for the diagnosis, prevention or treatment that is life-threatening or chronically debilitating, and (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would be unlikely to generate sufficient returns in the EU to justify the necessary investment, and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.
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If the topline, preliminary or interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, seralutinib may be harmed, which could harm our business, results of operations, prospects or financial condition.
−Removed: Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
+Added: Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA and foreign regulatory authorities to review and clear or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
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In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies, such as the EMA following its relocation to Amsterdam and resulting staff changes, may also slow the time necessary for new drugs or modifications to cleared or approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several years, the U.S.
+Added: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
+Added: For example, in recent years, the U.S.
government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
−Removed: Even though the FDA has since resumed standard inspection operations any resurgence of the virus or emergence of new variants may lead to inspectional or administrative delays.
−Removed: If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: If a prolonged government shutdown occurs, or if staffing or funding shortages or renewed global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Our business is subject to risks arising from pandemic and epidemic diseases.
−Removed: The COVID-19 worldwide pandemic presented substantial public health and economic challenges and affected our employees, clinical trial subjects, physicians and other healthcare providers, communities and business operations, as well as the United States and global economies, financial markets, labor markets and supply chains.
Any future pandemic or epidemic disease outbreaks, and any supply chain disruptions or staffing shortages, could disrupt the manufacture or shipment of supplies of seralutinib for use in our research and clinical trials, delay, limit or prevent our employees and CROs from continuing or timely advancing research and development activities, impede our clinical trial initiation and recruitment and the ability of subjects to continue in clinical trials, impact the results of the clinical trial based on participants contracting the disease or otherwise increasing the number of observed adverse events, impede testing, monitoring, data collection and analysis and other related activities, any of which could delay our clinical trials and increase our development costs, and have a material adverse effect on our business, financial condition and results of operations.
1 unchanged sentence
Risks Related to Our Reliance on Third Parties
−Removed: We rely on third parties to conduct many of our preclinical studies and clinical trials.
+Added: We rely on third parties to conduct many of our clinical trials and preclinical studies.
Any failure by a third party to conduct the clinical trials according to GCPs and other requirements and in a timely manner may delay or prevent our ability to seek or obtain regulatory approval for or commercialize seralutinib.
−Removed: We are dependent on third parties to conduct our clinical trials and preclinical studies, including our ongoing or potential future clinical trials for seralutinib.
+Added: We are dependent on third parties to conduct our clinical trials and preclinical studies, including our ongoing and potential future clinical trials for seralutinib.
Specifically, we have used and relied on, and intend to continue to use and rely on, medical institutions, clinical investigators, CROs and consultants to conduct our clinical trials in accordance with our clinical protocols and regulatory requirements.
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Our current and anticipated future dependence upon others for the manufacture of seralutinib may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.
+Added: We have entered into, and may in the future seek to enter into, collaborations, licenses and other similar arrangements and we may not realize the benefits of such relationships, or may not be successful in entering into such relationships
+Added: On May 3, 2024, we entered into the collaboration agreement with Chiesi for the development and commercialization of seralutinib around the world, and we may in the future seek to enter into other collaborations, joint ventures, licenses and other similar arrangements for the development or commercialization of our product candidates, due to capital costs required to develop or commercialize such product candidates or manufacturing constraints.
+Added: For additional information regarding our collaboration with Chiesi, see the section titled “Business—License and Collaboration Agreements” included in this Form 10-K.
+Added: We may not be successful in our efforts to establish or maintain collaborations, including our collaboration with Chiesi, because third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity.
+Added: In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time consuming and complex.
+Added: Further, in connection with any such collaborations, we may have to relinquish valuable rights to our future revenue streams, or grant licenses on terms that may not be favorable to us, as part of any such arrangement, and such arrangements may restrict us from entering into additional agreements with potential collaborators.
+Added: We cannot be certain that, following the entry into our collaboration with Chiesi or any other strategic transaction or license, we will achieve an economic benefit that justifies such transaction.
+Added: If we are successful in our efforts to establish any additional collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development or approval of seralutinib is delayed, the safety of seralutinib is questioned or sales of seralutinib, if approved, are unsatisfactory.
+Added: In addition, our collaboration with Chiesi and any potential future collaborations may be terminable by Chiesi or our other strategic partners in certain circumstances, and we may not be able to adequately protect our rights under these agreements.
+Added: Furthermore, our strategic partners may negotiate for certain rights to control decisions regarding the development and commercialization of seralutinib.
+Added: For example, under the Chiesi collaboration, Chiesi received such rights and may not conduct development and commercialization activities in the same manner as we do.
+Added: Any termination of the collaboration with Chiesi or of any other collaborations we enter into in the future, or any delay in entering into collaborations related to seralutinib, could delay the development and commercialization of seralutinib and reduce its competitiveness if it reaches the market, which could have a material adverse effect on our business, financial condition and results of operations.
Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
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Given that our proprietary position is based, in part, on our know-how and trade secrets and despite our efforts to protect our trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: We may seek to enter into collaborations, licenses and other similar arrangements and may not be successful in doing so, and even if we are, we may not realize the benefits of such relationships.
−Removed: We are currently seeking to enter into collaborations, joint ventures, licenses and other similar arrangements for the development or commercialization of our product candidates, due to capital costs required to develop or commercialize such product candidates or manufacturing constraints.
−Removed: We may not be successful in our efforts to establish or maintain such collaborations because third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity.
−Removed: In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time consuming and complex.
−Removed: Further, we may have to relinquish valuable rights to our future revenue streams, or grant licenses on terms on terms that may not be favorable to us, as part of any such arrangement, and such arrangements may restrict us from entering into additional agreements with potential collaborators.
−Removed: We cannot be certain that, following a strategic transaction or license, we will achieve an economic benefit that justifies such transaction.
−Removed: Even if we are successful in our efforts to establish such collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development or approval of seralutinib is delayed, the safety of seralutinib is questioned or sales of seralutinib, if approved, are unsatisfactory.
−Removed: In addition, any potential future collaborations may be terminable by our strategic partners, and we may not be able to adequately protect our rights under these agreements.
−Removed: Furthermore, strategic partners may negotiate for certain rights to control decisions regarding the development and commercialization of seralutinib, if approved, and may not conduct those activities in the same manner as we do.
−Removed: Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to seralutinib, could delay the development and commercialization of seralutinib and reduce its competitiveness if it reaches the market, which could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Commercialization of Seralutinib
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We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may attempt to develop product candidates.
−Removed: In particular, there is intense competition in the fields of PAH and other pulmonary indications.
+Added: In particular, there is intense competition in the fields of PAH and other PH indications including PH-ILD.
Our competitors include larger and better funded pharmaceutical, biopharmaceutical, biotechnological and therapeutics companies.
−Removed: Moreover, we may also compete with universities and other
−Removed: research institutions who may be active in the indications we are targeting and could be in direct competition with us.
+Added: Moreover, we may also compete with
+Added: universities and other research institutions who may be active in the indications we are targeting and could be in direct competition with us.
We also compete with these organizations to recruit management, scientists and clinical development personnel, which could negatively affect our level of expertise and our ability to execute our business plan.
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Seralutinib is a PDGFR, CSF1R and c-KIT inhibitor initially targeted for PAH and PH-ILD patients.
−Removed: We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), and Remodulin (United Therapeutics).
−Removed: We also may face some competition from products used in class I and II patients, such as the oral PDE5 inhibitors, including Revatio (Pfizer Inc.) and Adcirca (United Therapeutics);
+Added: We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), and Remodulin (United Therapeutics), and activin ligand traps, including Winrevair (Merck).
+Added: We also may face some competition from products used in Functional Class I and II patients, such as the oral PDE5 inhibitors, including Revatio (Pfizer Inc.) and Adcirca (United Therapeutics);
the sGC stimulator Adempas (Bayer AG);
and oral ERAs, including Tracleer (Janssen), Letairis (Gilead Sciences, Inc.) and Opsumit (Janssen);
−Removed: We believe that, if approved, seralutinib could be used alongside all three classes of approved therapies.
−Removed: PAH is also an active indication for investigational drugs, and we may face competition in the future from CS1 (Cereno Scientific), KER-012 (Keros Therapeutics, Inc.), L606 (Pharmosa Biopharm Inc.), MK-5475 (Merck & Co., Inc.), ralinepag (Pfizer and United Therapeutics) and sotatercept (Merck).
−Removed: Additionally, although not approved for the treatment of PAH, we may face competition from formulations of imatinib in development for the treatment of PAH, including those from Aerami Therapeutics, Aerovate Therapeutics and Tenax Therapeutics.
−Removed: We expect to face competition from Tyvaso (United Therapeutics) within the PH-ILD indication, as it is the only approved therapy for PH-ILD in the US.
+Added: and combination PDE5 inhibitor / ERA therapies, such as Opsynvi (Janssen).
+Added: We believe that, if approved, seralutinib could be used alongside all classes of approved therapies.
+Added: PAH is also an active indication for investigational drugs, and we may face competition in the future from CS1 (Cereno Scientific), L606 (Liquidia / Pharmosa Biopharm Inc.), treprostinil palmitil (Insmed), ralinepag (United Therapeutics), and REGN13335 (Regeneron Pharmaceuticals, Inc.).
+Added: Additionally, although not approved for the treatment of PAH, we may face competition from formulations of imatinib, including the one in development from Tenax Therapeutics and Inhibikase Therapeutics.
+Added: We expect to face competition from Tyvaso (United Therapeutics) within the PH-ILD indication, as it is the only approved therapy for PH-ILD in the United States.
There are no approved therapies for PH-ILD in the EU.
−Removed: PH-ILD is also an active indication for investigational drugs, and we may face competition in the future from L606 (Pharmosa Biopharm Inc.), MD-711 (Mochida Pharmaceutical Co., Ltd.), sirolimus (OrphAI Therapeutics) and treprostinil palmitil (Insmed, Inc.).
−Removed: Additionally, although not approved for the treatment of PH-ILD, we may face competition from formulations of imatinib, including those from Aerami Therapeutics, Aerovate Therapeutics and Tenax Therapeutics.
+Added: PH-ILD is also an active indication for investigational drugs, and we may face competition in the future from L606 (Liquidia / Pharmosa Biopharm Inc.), sirolimus (OrphAI Therapeutics), treprostinil palmitil (Insmed, Inc.), MK-5475 (Merck), and mosliciguat (Pulmovant, Inc.).
There may be other earlier stage clinical programs that, if approved, would compete with seralutinib.
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If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell seralutinib, we may not be able to generate product revenue.
−Removed: We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product.
−Removed: If seralutinib ultimately receives regulatory approval, we must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize seralutinib in major markets, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment
−Removed: our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
+Added: Although we have started to build a commercial infrastructure, we have no formal internal sales, marketing or distribution capabilities, nor have we commercialized a product.
+Added: If seralutinib ultimately receives regulatory approval, we, in collaboration with Chiesi, must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize seralutinib in the United States, which will be expensive and time consuming, or collaborate with
+Added: third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
We have no prior experience as a company in the marketing, sale and distribution of biopharmaceutical products, and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
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We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market seralutinib effectively.
−Removed: If we are not successful in commercializing seralutinib, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue, and we would incur significant additional losses.
−Removed: Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
−Removed: Our future growth may depend, in part, on our ability to develop and commercialize seralutinib in foreign markets.
−Removed: We are not permitted to market or promote seralutinib before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for seralutinib.
−Removed: To obtain separate regulatory approval in many other countries, we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of seralutinib.
−Removed: If we obtain regulatory approval of seralutinib and ultimately commercialize seralutinib in foreign markets, we would be subject to additional risks and uncertainties, including:
+Added: If we are not successful in commercializing seralutinib, either on our own in partnership with Chiesi or through arrangements with one or more third parties, we may not be able to generate any future product revenue, and we would incur significant additional losses.
+Added: Our future profitability may depend, in part, on Chiesi's ability to operate in foreign markets, where they would be subject to additional regulatory burdens and other risks and uncertainties.
+Added: Our future profitability may depend, in part, on Chiesi's ability to develop and commercialize seralutinib in foreign markets and pay us royalties on commercial sales.
+Added: Chiesi is not permitted to market or promote seralutinib before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for seralutinib.
+Added: To obtain separate regulatory approval in many other countries, Chiesi must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of seralutinib.
+Added: If we obtain regulatory approval of seralutinib and Chiesi ultimately commercializes seralutinib in foreign markets, we and Chiesi would be subject to additional risks and uncertainties, including:
• different regulatory requirements for approval of drugs in foreign countries;
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• the existence of additional third-party patent rights of potential relevance to our business;
−Removed: • unexpected changes in tariffs, trade barriers and regulatory requirements;
+Added: • new or unexpected changes in tariffs (including recent U.S.
+Added: tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries), trade barriers and regulatory requirements;
• economic weakness, including inflation, or political instability in particular foreign economies and markets;
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• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
−Removed: • business interruptions resulting from geopolitical actions, including war and terrorism, health epidemics such as COVID-19, or natural disasters including earthquakes, typhoons, floods and fires.
+Added: • business interruptions resulting from geopolitical actions, including war and terrorism, health epidemics, or natural disasters including earthquakes, typhoons, floods and fires.
Risks Related to Our Business Operations and Industry
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• the cost of manufacturing seralutinib, which may vary depending on the quantity of production and the terms of our agreements with third-party manufacturers;
−Removed: • the timing and amount of the milestone or other payments we must make to Pulmokine and other third parties from whom we have in-licensed seralutinib, including payments due upon a change in control of our subsidiaries;
+Added: • the timing and amount of the milestone or other payments we must make to Pulmokine and other third parties from whom we have in-licensed seralutinib, including payments due upon a change in control of our subsidiaries as well as timing and amount of the milestone or other payments we receive from Chiesi;
• expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies;
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Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel.
−Removed: We are highly dependent upon our senior management, particularly our Chief Executive Officer, as well as our senior scientists and other members of our senior management team.
−Removed: The loss of services of any of these individuals could delay or prevent the successful development of seralutinib, initiation or completion of our clinical trials or the commercialization of seralutinib.
+Added: The loss of services of any of these personnel could delay or prevent the successful development of seralutinib, initiation or completion of our clinical trials or the commercialization of seralutinib.
Executive leadership transitions can be inherently difficult to manage and, as a result, we may experience disruption or have difficulty in maintaining or developing our business.
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We may encounter difficulties in managing our growth and expanding our operations successfully.
−Removed: We had 135 full-time employees as of February 27, 2024.
−Removed: As we continue development and pursue the potential commercialization of seralutinib, as well as function as a public company, we may need to expand our financial, development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us.
+Added: We had 144 full-time employees as of March 6, 2025.
+Added: As we continue development and pursue the potential commercialization of seralutinib, as well as function as a public company, we may need to expand our financial, development,
+Added: regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us.
If our operations expand, we expect that we will need to manage additional relationships with various strategic partners, suppliers and other third parties.
−Removed: Our future financial performance and our ability to develop and
−Removed: commercialize seralutinib and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
+Added: Our future financial performance and our ability to develop and commercialize seralutinib and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
We are subject to various federal, state and foreign healthcare laws and regulations, and our failure to comply with these laws and regulations could harm our results of operations and financial condition.
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state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
−Removed: state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities;
+Added: state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration
+Added: and items of value provided to physicians, other healthcare providers and entities;
and state and local laws that require the registration of pharmaceutical sales representatives.
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Further, we may also be subject to other state laws governing the privacy, processing and protection of personal information.
−Removed: By way of example, California enacted the California Consumer Privacy Act, or CCPA, effective January 1, 2020, which gives California consumers expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.
−Removed: The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.
−Removed: Additionally, the California Privacy Rights Act, or CPRA, generally went into effect on January 1, 2023, and significantly amends the CCPA.
−Removed: The CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.
−Removed: It also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
+Added: By way of example, California enacted the California Consumer Privacy Act, as amended by the California Privacy Rights Act, or collectively, the CCPA, requires covered businesses that process the personal information of California residents to, among other things:
+Added: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;
+Added: (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information;
+Added: and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
Additional compliance investment and potential business process changes may also be required.
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Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
−Removed: Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States;
−Removed: , and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.
+Added: Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.
Case law from the Court of Justice of the European Union, or CJEU, states that reliance on the standard contractual clauses, or SCCs - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
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increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
−Removed: created a new Medicare Part D coverage gap discount program;
established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research;
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Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
−Removed: Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021, through August 15, 2021, for purposes of obtaining health insurance coverage through the ACA marketplace.
−Removed: The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
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On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was enacted into law.
−Removed: Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
+Added: Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
The IRA permits the Secretary of the Department of Health and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
−Removed: In August 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.
+Added: CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the Medicare drug price negotiation program is currently subject to legal challenges.
For that and other reasons, it is currently unclear how the IRA will be effectuated.
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The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize seralutinib, if approved.
−Removed: At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological 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, designed to encourage importation from other countries and bulk purchasing.
+Added: At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
+Added: Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states.
Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects.
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This could reduce the ultimate demand for seralutinib, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.
−Removed: In the EU, similar political, economic and regulatory developments may affect our ability to profitably commercialize, or co-commercialize, seralutinib, if approved.
+Added: In the EU, similar political, economic and regulatory developments may affect our or Chiesi's ability to profitably commercialize, or co-commercialize, seralutinib, if approved.
For instance, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
−Removed: While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim.
−Removed: Once applicable, it will have a phased implementation depending on the concerned products.
+Added: The Regulation entered into force in January 2022 and has been applicable since January 2025, with phased implementation based on the type of product, i.e.
+Added: oncology and advanced therapy medicinal products as of 2025, orphan medicinal products as of 2028, and all other medicinal products by 2030.
The Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.
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For example, we may be sued if seralutinib allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.
−Removed: Any such product liability claims may include
−Removed: allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in seralutinib, negligence, strict liability and a breach of warranties.
+Added: Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in seralutinib, negligence, strict liability and a breach of warranties.
Claims may be brought against us by clinical trial participants, patients or others using, administering or selling products that may be approved in the future.
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We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
−Removed: We and any of our potential future collaborators will be required to report to regulatory authorities if any of our approved products cause or contribute to adverse medical events, and any failure to do so would result in sanctions that would materially harm our business.
−Removed: If we and any of our potential future collaborators are successful in commercializing seralutinib, the FDA and foreign regulatory authorities would require that we and any of our potential future collaborators report certain information about adverse medical events if those products may have caused or contributed to those adverse events.
+Added: We, Chiesi and any of our potential future collaborators will be required to report to regulatory authorities if any of our approved products cause or contribute to adverse medical events, and any failure to do so would result in sanctions that would materially harm our business.
+Added: If we, Chiesi and any of our potential future collaborators are successful in commercializing seralutinib, the FDA and foreign regulatory authorities would require that we, Chiesi and any of our potential future collaborators report certain information about adverse medical events if those products may have caused or contributed to those adverse events.
The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event.
−Removed: We and any of our potential future collaborators or CROs may fail to report adverse events within the prescribed timeframe.
−Removed: If we or any of our potential future collaborators or CROs fail to comply with such reporting obligations, the FDA or a foreign regulatory authority could take action, including criminal prosecution, the imposition of civil monetary penalties, seizure of seralutinib or delay in approval or clearance of future products.
+Added: We, Chiesi and any of our potential future collaborators or CROs may fail to report adverse events within the prescribed timeframe.
+Added: If we, Chiesi or any of our potential future collaborators or CROs fail to comply with such reporting obligations, the FDA or a foreign regulatory authority could take action, including criminal prosecution, the imposition of civil monetary penalties, seizure of seralutinib or delay in approval or clearance of future products.
Our employees and independent contractors, including principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
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Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate:
−Removed: (1) the laws and regulations of the FDA and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, including cGMP and similar requirements,
−Removed: (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad or (4) laws that require the true, complete and accurate reporting of financial information or data.
+Added: (1) the laws and regulations of the FDA and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, including cGMP and similar requirements, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad or (4) laws that require the true, complete and accurate reporting of financial information or data.
Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials, or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.
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This license agreement imposes, and we expect that any future license agreements where we in-license intellectual property, will impose on us, various development, regulatory and/or commercial diligence obligations, payment of milestones and/or royalties and other obligations.
−Removed: If we fail to comply with our obligations under these agreements, or we are subject to bankruptcy-related proceedings, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.
+Added: If we fail to
+Added: comply with our obligations under these agreements, or we are subject to bankruptcy-related proceedings, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.
Additionally, our existing license agreement with Pulmokine includes sublicenses from a third party who is not the original licensor of the seralutinib intellectual property.
Under this agreement, we must rely on Pulmokine to comply with its obligations under the primary license agreements under which it obtained rights in the applicable intellectual property, where we do not have a relationship with the original licensor of such rights.
−Removed: If Pulmokine fails to comply with its obligations under the
−Removed: upstream license agreement, the original third-party licensor may have the right to terminate the original license, which may terminate our license.
+Added: If Pulmokine fails to comply with its obligations under the upstream license agreement, the original third-party licensor may have the right to terminate the original license, which may terminate our license.
If this were to occur, we would no longer have rights to the applicable intellectual property unless we are able to secure our own direct license with the owner of the relevant rights, which we may not be able to do on reasonable terms, or at all, which may impact our ability to continue to develop and commercialize seralutinib.
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Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.
−Removed: Even if patent applications we own or license currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage.
+Added: Even if patent applications we own or license currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other
+Added: third parties from competing with us, or otherwise provide us with any competitive advantage.
Any patents that we own or license may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties.
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Our predecessors or licensors often retain certain rights under their agreements with us, including the right to use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and scholarly disclosures of information relating to the technology.
−Removed: It is difficult to monitor whether our predecessors or licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
+Added: It is difficult
+Added: to monitor whether our predecessors or licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
If we are limited in our ability to utilize acquired or licensed technologies, or if we lose our rights to critical in-licensed technology, we may be unable to successfully develop, out-license, market and sell seralutinib, which could prevent or delay new product introductions.
−Removed: Our business strategy depends on the successful development of seralutinib, which is a
−Removed: licensed technologies, into a commercial product.
+Added: Our business strategy depends on the successful development of seralutinib, which is a licensed technologies, into a commercial product.
Therefore, any limitations on our ability to utilize these technologies may impair our ability to develop, out-license or market and sell seralutinib.
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We cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all.
−Removed: Moreover, even if we or our future strategic partners were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property.
+Added: Moreover, even if we or our future strategic partners were able to obtain a license, the
+Added: rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property.
In addition, we cannot be certain that we could redesign seralutinib or processes to avoid infringement, if necessary.
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Parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can, because they have substantially greater resources.
−Removed: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our
−Removed: confidential information could be compromised by disclosure.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
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Derivation or interference proceedings may be necessary to determine priority of inventions, and an unfavorable outcome may require us to cease using the related technology or to attempt to license rights from the prevailing party.
−Removed: Derivation or interference proceedings provoked by third parties or brought by us or declared by the USPTO or similar proceedings in foreign patent offices may be necessary to determine the priority of inventions with respect to our patents or patent applications.
+Added: Derivation or interference proceedings provoked by third parties or brought by us or declared by the USPTO or similar proceedings in foreign patent offices may be necessary to determine the priority of inventions with respect to our
+Added: patents or patent applications.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.
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Changes in either the patent laws or in the interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property and may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
−Removed: We cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents.
+Added: We cannot predict the breadth of claims
+Added: that may be allowed or enforced in our patents or in third-party patents.
In addition, Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us.
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Congress, the U.S.
−Removed: federal courts, the USPTO, or similar authorities in foreign jurisdictions, the laws and regulations governing patents could
−Removed: change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents we might obtain in the future.
+Added: federal courts, the USPTO, or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents we might obtain in the future.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
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Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
−Removed: We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any,
−Removed: may not be commercially meaningful.
+Added: We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
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Litigation may be necessary to defend against these claims.
−Removed: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely affect our business.
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or
+Added: personnel, which could adversely affect our business.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employees.
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Our stock price has been and is likely to be volatile.
−Removed: Since the shares were sold in our initial public offering, or IPO, in February 2019 at a price of $16.00 per share, the price per share of our common stock has ranged as low as $0.45 and as high as $27.15 through February 27, 2024.
+Added: Since the shares were sold in our initial public offering, or IPO, in February 2019 at a price of $16.00 per share, the price per share of our common stock has ranged as low as $0.45 and as high as $27.15 through March 6, 2025.
The stock market in general and the market for stock of biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
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• manufacturing, supply or distribution delays or shortages;
−Removed: • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners;
+Added: • any changes to our relationship with Chiesi or any manufacturers, suppliers, licensors, future collaborators or other strategic partners;
• achievement of expected product sales and profitability;
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• sales of our stock by insiders and stockholders;
−Removed: • general economic, industry and market conditions other events or factors, many of which are beyond our control, such as the COVID-19 pandemic, the military conflict between Russia and Ukraine, inflation and interest changes and financial institution instability;
+Added: • general economic, industry and market conditions other events or factors, many of which are beyond our control, such as health pandemics, the military conflict between Russia and Ukraine and Israel and Hamas, inflation and interest changes and financial institution instability;
• additions or departures of key personnel;
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Furthermore, many of our current directors were appointed by our principal stockholders.
−Removed: Our executive officers, directors and greater than 5% stockholders, in the aggregate, own approximately 27.6% of our outstanding common stock as of February 27, 2024.
+Added: Our executive officers, directors and greater than 5% stockholders, in the aggregate, own approximately 20.0% of our outstanding common stock as of March 6, 2025.
As a result, such persons or their appointees to our board of directors, acting together, have the ability to control or significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs.
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We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
−Removed: In addition, the terms of our Credit Facility preclude us from paying dividends, subject to certain exceptions, as may any future debt agreements we enter into.
Any return to stockholders will therefore be limited to the appreciation of their stock.
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Furthermore, our amended and restated bylaws also provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
−Removed: These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
+Added: These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees,
+Added: which may discourage such lawsuits against us and our directors, officers and other employees.
By agreeing to this provision, however, stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
−Removed: If a court were to find the choice of forum provisions in our amended and restated certificate of
−Removed: incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
+Added: If a court were to find the choice of forum provisions in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
Our ability to use net operating loss carryforwards and other tax attributes may be limited.
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As of December 31, 2024, we had federal and state net operating loss carryforwards, or NOLs, of approximately $398.1 million and $3.3 million, respectively.
−Removed: Our federal and state NOLs that are subject to expiration will begin to expire in 2034, unless previously utilized.
−Removed: Our federal NOLs generated in taxable years beginning after December 31, 2017 are not subject to expiration but may only be used to offset 80% of our taxable income in taxable years beginning after December 31, 2020.
+Added: Our state NOLs that are subject to expiration will begin to expire in 2036, unless previously utilized.
+Added: Our federal NOLs are not subject to expiration but may only be used to offset 80% of our taxable income.
As of December 31, 2024, the Company has foreign NOLs of approximately $113.0 million.
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In connection with our IPO in February 2019, we experienced an ownership change for purposes of Section 382 and 383 of the Code.
−Removed: Consequently, our federal NOLs and tax credits generated through February 2019 will be subject to annual limitations.
−Removed: However, our NOLs and tax credits are not expected to expire unused as a result of such annual limitations, assuming we otherwise have taxable income or income tax liabilities in future periods.
−Removed: We are currently completing our review of whether we experienced an ownership change for purposes of Section 382 and 383 of the Code through 2023.
−Removed: If additional ownership changes have occurred, including as a result of our private placements of common stock in 2022 and 2023, or additional ownership changes occur in the future as a result of changes in our stock ownership, many of which are outside our control, the NOL and credit carryforwards could be subject to further annual limitations.
+Added: We also experienced an ownership change in July 2023.
+Added: Consequently, our federal NOLs and tax credits generated through July 2023 will be subject to annual limitations.
+Added: Our NOLs are not expected to expire unused as a result of such annual limitations, assuming we otherwise have taxable income or income tax liabilities in future periods;
+Added: however, we expect that some or all of the federal credits generated through July 2023 will expire prior to utilization.
+Added: If additional ownership changes occur in the future as a result of changes in our stock ownership, many of which are outside our control, the NOL and credit carryforwards could be subject to further annual limitations.
If we earn taxable income, such annual limitations could result in increased future tax liability to us and our future cash flows could be adversely affected.
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We are a smaller reporting company.
−Removed: For so long as we qualify as a smaller reporting company, we will have the option to take advantage of certain exemptions from various reporting and other requirements that are applicable to other public companies that are not smaller reporting companies, including, but not limited to reduced disclosure obligations
−Removed: regarding executive compensation in our periodic reports and proxy statements.
+Added: For so long as we qualify as a smaller reporting company, we will have the option to take advantage of certain exemptions from various reporting and other requirements that are applicable to other public companies that are not smaller reporting companies, including, but not limited to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
In addition, for as long as we are deemed neither a large accelerated filer nor accelerated filer, we may continue to use the exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act.
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Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could materially adversely affect our business, financial condition, results of operations and prospects.
−Removed: Our information technology systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security breaches, which could result in a material disruption of our seralutinib development program, which could materially affect our results.
−Removed: We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business.
+Added: Our information technology, or IT, systems, or those of any of our CROs, manufacturers, other contractors or consultants or Chiesi or potential future collaborators, may fail or suffer security breaches, which could result in a material disruption of our seralutinib development program, which could materially affect our results.
+Added: We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on IT systems and infrastructure to operate our business.
In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information, clinical trial data, and personal information, or collectively, Confidential Information, of customers and our employees and contractors.
1 unchanged sentence
There can be no assurance that our cybersecurity program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and Confidential Information.
−Removed: Despite the implementation of security measures as part of our cybersecurity program, our information technology systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to attack and damage from computer viruses and malware (e.g., ransomware), misconfigurations, “bugs” or other vulnerabilities, cybersecurity threats, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
−Removed: Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and
+Added: Despite the implementation of security measures as part of our cybersecurity program, our IT systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to attack and damage from computer viruses and malware (e.g., ransomware), misconfigurations, “bugs” or other vulnerabilities, cybersecurity threats, unauthorized
+Added: access, natural disasters, terrorism, war and telecommunication and electrical failures.
+Added: Attacks upon IT systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
As a result of the continued hybrid working environment, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
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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.
−Removed: We and certain of our service providers are from time to time subject to cyberattacks and security incidents.
+Added: We, Chiesi and certain of our service providers are from time to time subject to cyberattacks and security incidents, including but not limited to persistent brute force attempts and password spraying, targeted spearphishing and smishing (text message phishing), email phishing including malware attempts, and third-party vendor cybersecurity incidents and related data breaches.
While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or result in the unauthorized disclosure of or access Confidential Information, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.
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The global credit and financial markets are currently, and have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
−Removed: The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine, terrorism or other geopolitical events.
+Added: The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine and Israel and Hamas, terrorism or other geopolitical events.
Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
−Removed: More recently, the closures of Silicon Valley Bank, or SVB, and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, or FDIC created bank-specific and broader financial institution liquidity risk and concerns.
−Removed: Although the Department of the Treasury, the Federal Reserve, and the FDIC jointly released a statement that depositors at SVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
−Removed: There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
−Removed: Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market
+Added: Additionally, any adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
+Added: For example, in 2023 the closures of Silicon Valley Bank, or SVB, and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, or FDIC created bank-specific and broader financial institution liquidity risk and concerns.
+Added: There can be no assurance that future credit and financial market instability and a deterioration in
+Added: confidence in economic conditions will not occur.
+Added: Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive.
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The rules and regulations applicable to public companies have increased and may continue to increase our legal and financial compliance costs and to make some activities more time consuming and costly.
−Removed: If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
−Removed: The increased costs will decrease our net income or increase our net loss
−Removed: and may require us to reduce costs in other areas of our business or increase the prices of our products or services.
+Added: If these requirements divert
+Added: the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
+Added: The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services.
For example, these rules and regulations make it more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.
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Changes in tax laws may materially adversely affect our financial condition, results of operations and cash flows.
−Removed: New income, sales, use or other tax laws, statutes, rules, regulations or ordinances, including in the United States, Ireland or Luxembourg, could be enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which could adversely affect our business operations and financial performance.
+Added: New income, sales, use or other tax laws, statutes, rules, regulations or ordinances, including in the United States or Ireland, could be enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which could adversely affect our business operations and financial performance.
We are currently unable to predict whether such changes will occur and, if such changes do occur, the ultimate impact on our business.
1 unchanged sentence
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.