−Removed: Summary of Risk Factors
−Removed: We are providing the following summary of the risk factors contained in this annual report to enhance the readability and accessibility of our risk factor disclosures.
−Removed: This summary does not address all of the risks that we face.
−Removed: We encourage you to carefully review the full risk factors contained in this annual report on Form 10-K in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky.
−Removed: The primary categories by which we classify risks include:
−Removed: (i) general risks related to our company;
−Removed: (ii) risks relating to our business;
−Removed: (iii) risks relating to the development, testing and commercialization of our products;
−Removed: (iv) risks relating to our intellectual property;
−Removed: (v) risks relating to our dependence on third parties;
−Removed: and (vi) risks relating to ownership of our common shares.
−Removed: Set forth below within each of these categories is a summary of the principal factors that make an investment in our common shares speculative or risky.
−Removed: General Risks Related to the Company
−Removed: We may not achieve our publicly announced milestones on time, or at all.
−Removed: We are heavily dependent on the success of our lead drug candidate.
−Removed: We may not be able to maximize value from our de-prioritized drug candidates, GTX-102 and GTX-101, through either development, out-licensing or sale.
−Removed: We may not be able to maintain our operations and advance our research and development and commercialization of our lead drug candidate, GTX-104 without additional funding.
−Removed: Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.
−Removed: We may be subject to foreign exchange rate fluctuations.
−Removed: If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.
−Removed: Risk Factors Relating to our Business
−Removed: Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
−Removed: We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations and our ability to compete.
−Removed: We face potential product liability, and if claims are brought against us, we may incur substantial liability.
−Removed: We rely significantly on information technology and any failure, inadequacy, interruption, or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively.
−Removed: Risks Related to Development, Testing and Commercialization of Our Products
−Removed: Even if our drug candidates receive regulatory approval in the United States, we may never obtain regulatory approval or successfully commercialize our products outside of the United States.
−Removed: We are subject to uncertainty relating to healthcare reform measures and reimbursement policies which, if not favorable to our drug candidates, could hinder or prevent our drug candidates’
−Removed: commercial success.
−Removed: Our commercial success depends upon attaining significant market acceptance of our drug candidates and drug products, if approved, among physicians, nurses, pharmacists, patients and the medical community.
−Removed: Guidelines and recommendations published by government agencies can reduce the use of our drug candidates and drug products, if approved, and negatively impact our ability to gain market acceptance and market share.
−Removed: If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our drug candidates, we may be unable to generate any revenue.
−Removed: If we obtain approval to commercialize any approved drug products outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.
−Removed: If we are unable to differentiate our drug candidates from branded reference drugs or existing generic therapies for similar treatments, or if the FDA or other applicable regulatory authorities approve generic products that compete with any of our drug candidates, our ability to successfully commercialize our drug candidates would be adversely affected.
−Removed: We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.
−Removed: We could incur substantial costs and disruption to our business and delays in the launch of our drug candidates if our competitors and/or collaborators bring legal actions against us, which could harm our business and operating results.
−Removed: The COVID-19 pandemic, or a similar pandemic, epidemic, or outbreak of an infectious disease, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our drug candidates.
−Removed: We are subject to numerous complex regulatory requirements and failure to comply with these regulations, or the cost of compliance with these regulations, may harm our business.
−Removed: If the FDA does not conclude that our drug candidates satisfy the requirements for the 505(b)(2) regulatory approval pathway, or if the requirements for approval of any of our drug candidates under Section 505(b)(2) are not as we expect, the approval pathway for our drug candidates will likely take significantly longer, cost significantly more and encounter significantly greater complications and risks than anticipated, and in any case may not be successful.
−Removed: Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.
−Removed: Failure can occur at any stage of clinical development.
−Removed: Delays in clinical trials are common and have many causes, and any delay could result in increased costs to us and could jeopardize or delay our ability to obtain regulatory approval and commence drug product sales.
−Removed: We may also find it difficult to enroll patients in our clinical trials, which could delay or prevent development of our drug candidates.
−Removed: Our drug products or drug candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance, or result in significant negative consequences following marketing approval, if any.
−Removed: The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.
−Removed: An NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that would delay or prevent the review or approval of our drug candidate.
−Removed: The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
−Removed: Our drug development strategy relies heavily upon the 505(b)(2) regulatory pathway, which requires us to certify that we do not infringe upon third-party patents covering approved drugs.
−Removed: Such certifications often result in third-party claims of intellectual property infringement, the defense of which can be costly and time consuming, and an unfavorable outcome in any such litigation may prevent or delay our development and commercialization efforts, which would harm our business.
−Removed: Our business is subject to extensive regulatory requirements and our drug candidates that obtain regulatory approval will be subject to ongoing and continued regulatory review, which may result in significant expense and limit our ability to commercialize such products.
−Removed: Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
−Removed: Any relationships with healthcare professionals, principal investigators, consultants, customers (actual and potential) and third-party payors are and will continue to be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, marketing expenditure tracking and disclosure, or sunshine laws, government price reporting and health information privacy and security laws.
−Removed: If we are unable to comply, or have not fully complied, with such laws, we could face penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations.
−Removed: We are required to obtain regulatory approval for each of our drug candidates in each jurisdiction in which we intend to market such products, and the inability to obtain such approvals would limit our ability to realize their full market potential.
−Removed: Risks Relating to our Intellectual Property
−Removed: If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.
−Removed: We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed alleged confidential information or trade secrets of their other clients or former employers to us.
−Removed: Our success depends in part upon our ability to protect our intellectual property for our branded drug products and drug candidates.
−Removed: If we fail to comply with our obligations in the agreements under which we license rights to technology from third parties, or if the license agreements are terminated for other reasons, we could lose license rights that are important to our business.
−Removed: We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.
−Removed: We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
−Removed: Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
−Removed: Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect any of our other future drug candidates.
−Removed: We may not be able to protect our intellectual property rights throughout the world.
−Removed: If our estimates or judgments relating to our critical accounting policies for intangible assets prove to be incorrect, further impairment charges could result.
−Removed: Risks Related to Our Dependence on Third Parties
−Removed: We do not have internal manufacturing capabilities, and if we fail to develop and maintain supply relationships with various third-party manufacturers, we may be unable to develop or commercialize our drug candidates.
−Removed: Our contract manufacturers may encounter manufacturing failures that could delay the clinical development or regulatory approval of our drug candidates, or their commercial production, if approved.
−Removed: We rely on third parties to conduct our pre-clinical studies and clinical trials.
−Removed: If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug candidates and our business could be substantially harmed.
−Removed: We rely on third parties to manufacture commercial and clinical supplies of our drug candidates, and we intend to rely on third parties to manufacture commercial supplies of any approved drug products.
−Removed: The commercialization of any of our drug products could be stopped, delayed, or made less profitable if those third parties fail to provide us with sufficient quantities of active pharmaceutical ingredients, excipients, or drug products, or fail to do so at acceptable quality levels or prices or fail to maintain or achieve satisfactory regulatory compliance.
−Removed: The design, development, manufacture, supply, and distribution of our drug candidates is highly regulated and technically complex.
−Removed: We may not be successful in establishing development and commercialization collaborations which could adversely affect, and potentially prohibit, our ability to develop our drug candidates.
−Removed: We may not be successful in maintaining development and commercialization collaborations, and any partner may not devote sufficient resources to the development or commercialization of our drug candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop certain of our drug candidates and our financial condition and operating results.
−Removed: Risks Related to Tax
−Removed: There is a significant risk that we may be classified as a PFIC for U.S.
−Removed: federal income tax purposes.
−Removed: We may not be able to use our net operating loss carry forwards to offset future taxable income for Canadian or U.S.
−Removed: federal income tax purposes.
−Removed: The Internal Revenue Service (“IRS”) may not agree that we should be treated as a foreign corporation for U.S.
−Removed: federal tax purposes.
−Removed: Risks Relating to Ownership of our Common Shares
−Removed: We do not expect to pay any cash dividends for the foreseeable future.
−Removed: The price of our common shares may be volatile.
−Removed: Raising additional capital may cause dilution to our existing shareholders, restrict our operations, or require us to relinquish rights to our technologies or drug candidates.
−Removed: The market price of our common shares could decline if our operating results fall below the expectations of investors or fluctuate.
−Removed: There can be no assurance that an active market for our common shares will be sustained.
−Removed: If we fail to meet applicable listing requirements, the Nasdaq Stock Market may delist our common shares from trading, in which case the liquidity and market price of our common shares could decline.
−Removed: We may pursue opportunities or transactions that adversely affect our business and financial condition.
−Removed: We are a Québec incorporated company headquartered in Canada, and U.S.
−Removed: investors may be unable to enforce certain judgments against us.
−Removed: Any investment in our common shares involves a high degree of risk.
−Removed: The following risk factors and other information included in this annual report should be carefully considered.
−Removed: If any of these risks actually occur, our business, financial condition, prospects, results of operations or cash flow could be materially and adversely affected, and you could lose all or a part of the value of your investment.
−Removed: Additional risks or uncertainties not currently known to us, or that we deem immaterial, may also negatively affect our business operations.
−Removed: General Risks Related to the Company
+Added: Risks Factors Relating to our Business
We may not achieve our publicly announced milestones on time, or at all.
−Removed: From time to time, we may publicly announce the timing of certain events that we expect to occur, such as the anticipated timing of results from our clinical trials and the timing of an upcoming NDA filing.
+Added: From time to time, we may publicly announce the timing of certain events that we expect to occur, such as the anticipated timing of results from our clinical trials and the timing of an upcoming new drug application ("NDA”) filing.
These statements are forward-looking and are based on the best estimate of management at the time relating to the occurrence of the events.
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As part of our recent strategic realignment plan, we determined to focus primarily on the development of GTX-104, which concentrates the level of our drug development risk on one drug candidate.
−Removed: We cannot provide assurance that we will be able to obtain approval for GTX-104 or any other of our drug candidates from the FDA or any foreign regulatory authority or that we will obtain such approval in a timely manner.
+Added: We cannot provide assurance that we will be able to obtain approval for GTX-104 or any other of our drug candidates from the U.S.
+Added: Food and Drug Administration (the “FDA”) or any foreign regulatory authority or that we will obtain such approval in a timely manner.
We may not be able to maximize value from our de-prioritized drug candidates, GTX-102 and GTX-101, through either development, out-licensing or sale.
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We expect that additional time and capital will be required by us to file an NDA to obtain FDA approval for GTX-104 in the United States, to further scale up our manufacturing capabilities, and to complete marketing and other pre-commercialization activities.
−Removed: Consequently, we expect to require additional capital to fund our daily operating needs beyond the next twelve months.
+Added: Consequently, we expect our existing cash and cash equivalents will be sufficient to fund our operations into the second calendar quarter of 2026.
Based on the steps we are taking in our strategic realignment plan to focus primarily on the development of GTX-104 and to de-emphasize the development of GTX-102 and GTX-101, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements beyond the completion of our Phase 3 trials for GTX-104.
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If we determine to continue development of GTX-102 and GTX-101, significant additional funding will be needed.
−Removed: Unexpected negative results in our clinical programs for our lead drug candidate may affect our ability to raise additional capital and/or complete strategic development and/or distribution partnerships to support the commercial launch of our drug candidate.
−Removed: Additional funding from third parties may not be available on acceptable terms or at all to enable us to continue with the research and development and commercialization of our lead drug candidate.
+Added: Unexpected negative results in our clinical programs for our lead drug candidate may affect our ability to raise additional capital and/or complete strategic development and/or distribution partnerships to support the commercial launch of our lead drug candidate.
+Added: Additional funding from
+Added: third parties may not be available on acceptable terms or at all to enable us to continue with the research and development and commercialization of our lead drug candidate.
Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.
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Our ability to obtain supplies of drug candidate products could be disrupted if the operations of our manufacturers and suppliers are affected by a man-made or natural disaster or other business interruption.
−Removed: We may be subject to foreign exchange rate fluctuations.
−Removed: Our functional currency is the U.S.
−Removed: However, many of our expenses currently are and/or are expected to be, denominated in foreign currencies, including Canadian dollars.
−Removed: As we previously completed financings in both Canadian and U.S.
−Removed: dollars, both currencies are maintained and used to make required payments in the applicable currency.
−Removed: Though we plan to implement measures designed to reduce our foreign exchange rate exposure, the U.S.
−Removed: dollar/Canadian dollar and U.S.
−Removed: dollar /European euro exchange rates have fluctuated significantly in the recent past and may continue to do so, which could have a material adverse effect on our business, financial position and results of operations.
−Removed: If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.
−Removed: The trading market for our common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business.
−Removed: We currently have limited research coverage by securities and industry analysts.
−Removed: If few or no securities or industry analysts cover our company, the trading price for our common shares could be negatively impacted.
−Removed: If one or more of the analysts who covers us downgrades our common shares or publishes inaccurate or unfavorable research about our
−Removed: business, our share price would likely decline.
−Removed: If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common shares could decrease, which could cause our share price and trading volume to decline.
−Removed: Risk Factors Relating to our Business
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
−Removed: We recently appointed several new members to our executive team and are highly dependent on the principal members of our executive team.
−Removed: While members of our executive team have significant industry experience, they have not been with our company for long.
−Removed: Any of our executive officers could leave our employment at any time, as all of our employees are “at will”
−Removed: Also, as part of our strategic realignment, we have significantly reduced the number of our employees while we shift the base of our operations from Canada to the United States.
+Added: We are highly dependent on the principal members of our executive team.
+Added: While members of our executive team have significant industry experience, they have not been with the Company for long.
+Added: Any of our executive officers could leave our employment at any time, as all of our employees are “at will” employees.
+Added: Also, as part of our strategic realignment, we significantly reduced the number of our employees while we shift the base of our operations from Canada to the United States.
As a result, in the process of shifting the base of our operations to the United States, we will have to recruit employees from the industry employment market in the United States.
19 unchanged sentences
• costs due to related litigation
−Removed: distraction of management’s attention from our primary business
+Added: • distraction of management’s attention from our primary business
• substantial monetary awards to patients or other claimants;
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regulatory approvals to commercialize GTX-104, we may not be able to do so in other international jurisdictions.
−Removed: We are subject to uncertainty relating to healthcare reform measures and reimbursement policies which, if not favorable to our drug candidates, could hinder or prevent our drug candidates ’
−Removed: commercial success.
+Added: We are subject to uncertainty relating to healthcare reform measures and reimbursement policies which, if not favorable to our drug candidates, could hinder or prevent our drug candidates ’ commercial success.
Our ability to commercialize our drug candidates successfully will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our drug candidates and related treatments.
26 unchanged sentences
• relative convenience and ease of administration;
−Removed: any negative publicity related to our or our competitors’
−Removed: drug products that include the same active ingredient;
−Removed: the prevalence and severity of adverse side effects, including limitations or warnings contained in a drug product’s FDA-approved labeling;
+Added: • any negative publicity related to our or our competitors’ drug products that include the same active ingredient;
+Added: • the prevalence and severity of adverse side effects, including limitations or warnings contained in a drug product’s FDA-approved labeling;
• the effectiveness of our sales and marketing efforts.
If our drug candidates or drug products, if approved, fail to achieve an adequate level of acceptance by physicians, nurses, pharmacists, patients, and the medical community, we will be unable to generate significant revenues, and we may not become or remain profitable.
−Removed: Guidelines and recommendations published by government agencies can reduce the use of our drug candidates and drug products, if approved and negatively impact our ability to gain market acceptance and market share.
−Removed: Government agencies promulgate regulations and guidelines applicable to certain drug classes which may include our drug products and product candidates that we are developing.
−Removed: Recommendations of government agencies may relate to such matters as usage, dosage, route of administration and use of concomitant therapies.
−Removed: Regulations or guidelines suggesting the reduced use of certain drug classes which may include our drug products and product candidates that we are developing or the use of competitive or alternative drug products as the standard of care to be followed by patients and healthcare providers could result in decreased use of our drug candidates or negatively impact our ability to gain market acceptance and market share.
If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our drug candidates, we may be unable to generate any revenue.
1 unchanged sentence
We believe that GTX-102 could also be marketed by a small, focused, specialty sales and marketing organization if and when we decide to resume development of GTX-102.
−Removed: Given the size of its potential market, we anticipate that commercializing GTX-101 would require entering into a strategic partnership with a larger marketing partner, if GTX-101 is approved by the
−Removed: FDA for marketing, and the ability to find any such strategic partnership would be uncertain.
+Added: Given the size of its potential market, we anticipate that commercializing GTX-101 would require entering into a strategic partnership with a larger marketing partner, if GTX-101 is approved by the FDA for marketing, and the ability to find any such strategic partnership would be uncertain.
If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able to generate sufficient product revenue and may not become profitable.
19 unchanged sentences
In addition to existing branded reference drugs and the related generic products, the FDA or other applicable regulatory authorities may approve generic products that compete directly with our drug candidates, if approved.
−Removed: Once an NDA, including a 505(b)(2) application, is approved, the product covered thereby becomes a “listed drug”
−Removed: which can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application (“ANDA”).
−Removed: The Federal Food, Drug, and Cosmetic Act, FDA regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA for generic substitutes.
+Added: Once an NDA, including a 505(b)(2) application, is approved, the product covered thereby becomes a “listed drug” which can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application (“ANDA”).
+Added: The Federal Food, Drug, and Cosmetic Act (“FDCA”), FDA regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA for generic substitutes.
These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as our product candidate and that the generic product is bioequivalent to ours, meaning it is absorbed in the body at the same rate and to the same extent as our drug product.
13 unchanged sentences
If we are forced to defend any such lawsuits, whether they are with or without merit or are ultimately determined in our favor, we may face costly litigation and diversion of technical and management personnel.
−Removed: These lawsuits could hinder our ability to enter the market early with our drug candidates and thereby hinder our ability to influence usage patterns when fewer, if any, of our potential competitors have entered such market, which could adversely impact our potential revenue from such drug candidates.
+Added: These lawsuits could hinder our ability to enter the market early with our drug candidates and thereby hinder our ability to influence usage patterns when fewer, if any, of our potential competitors have entered such
+Added: market, which could adversely impact our potential revenue from such drug candidates.
Some of our competitors have substantially greater resources than we do and could be able to sustain the cost of litigation to a greater extent and for longer periods of time than we could.
Furthermore, an adverse outcome of a dispute may require us:
−Removed: to pay damages, potentially
−Removed: including treble damages and attorneys’
−Removed: fees, if we are found to have willfully infringed a party’s patent or other intellectual property rights;
+Added: to pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s patent or other intellectual property rights;
to cease making, licensing or using products that are alleged to incorporate or make use of the intellectual property of others;
2 unchanged sentences
Royalty or licensing agreements, if required, may be unavailable on terms acceptable to us, or at all.
−Removed: The COVID-19 pandemic, or a similar pandemic, epidemic, or outbreak of an infectious disease, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our drug candidates.
−Removed: Public health crises such as pandemics or similar outbreaks could adversely impact our business.
−Removed: The coronavirus pandemic is evolving, and has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures.
−Removed: While to date, the coronavirus pandemic has not had a material adverse effect on our business, any negative impact COVID-19 has to patient enrollment or treatment, or the research and development of our drug candidates could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our drug candidates, increase our operating expenses, and have a material adverse effect on our financial results.
−Removed: Additionally, timely enrollment in planned clinical trials is dependent upon clinical trial sites which could be adversely affected by global health matters, such as pandemics.
We are subject to numerous complex regulatory requirements and failure to comply with these regulations, or the cost of compliance with these regulations, may harm our business.
The research, testing, development, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, marketing, distribution, possession and use of our drug candidates, among other things, are subject to regulation by numerous governmental authorities in the United States and elsewhere.
−Removed: The FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, and implementing regulations.
+Added: The FDA regulates drugs under the FDCA, and implementing regulations.
Non-compliance with any applicable regulatory requirements can result in refusal of the governmental authority to approve products for marketing, criminal prosecution and fines, warning letters, product recalls or seizure of products, total or partial suspension of production, prohibitions or limitations on the commercial sale of products or refusal to allow the entering into of federal and state supply contracts.
3 unchanged sentences
We intend to seek FDA approval through the 505(b)(2) regulatory pathway for our lead drug candidate GTX-104.
−Removed: The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the Federal Food, Drug and Cosmetic Act (“FDCA”).
+Added: The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA.
Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant.
3 unchanged sentences
Even if we are allowed to pursue the 505(b)(2) regulatory pathway for a drug candidate, we cannot assure you that we will receive the requisite or timely approvals for commercialization of such drug candidate.
−Removed: In addition, it is possible that our competitors may file citizens’
−Removed: petitions with the FDA in an attempt to persuade the FDA that our drug candidates, or the clinical studies that support their approval, contain deficiencies.
+Added: In addition, it is possible that our competitors may file citizens’ petitions with the FDA in an attempt to persuade the FDA that our drug candidates, or the clinical studies that support their approval, contain deficiencies.
Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2).
19 unchanged sentences
• imposition of a clinical hold for safety reasons or following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities;
−Removed: delays in reaching agreement on acceptable terms with prospective contract manufacturing organizations (CMOs), or contract research organizations (“CROs”), and clinical trial sites, or failure by such CMOs to complete the manufacturing of clinical trial materials or CROs to follow and carry out the clinical study protocol at each site in accordance with the terms of our agreements with them;
−Removed: delays in obtaining required institutional review board, or IRB, approval at each site;
−Removed: difficulties or delays in having patients’
−Removed: complete participation in a trial or return for post-treatment follow-up;
+Added: • delays in reaching agreement on acceptable terms with prospective contract manufacturing organizations (“CMOs”), or contract research organizations (“CROs”), and clinical trial sites, or failure by such CMOs to complete the manufacturing of clinical trial materials or CROs to follow and carry out the clinical study protocol at each site in accordance with the terms of our agreements with them;
+Added: • delays in obtaining required institutional review board (“IRB”), approval at each site;
+Added: • difficulties or delays in having patients’ complete participation in a trial or return for post-treatment follow-up;
• clinical sites electing to terminate their participation in one of our clinical trials, which would likely have a detrimental effect on subject enrollment;
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• ability to monitor patients adequately during and after treatment.
−Removed: Our drug products or drug candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance, or result in significant negative consequences following marketing approval, if any.
−Removed: As with many pharmaceutical and biological products, treatment with our drug products or drug candidates may produce undesirable side effects or adverse reactions or events.
−Removed: Although the nature of our drug products or drug candidates as containing active ingredients that have already been approved means that the side effects arising from the use of the active ingredient or class of drug in our drug products or drug candidates is generally known, our drug products or drug candidates may still cause undesirable side effects, which may harm our business, financial condition and prospects significantly.
−Removed: Further, if any of our drug products cause serious or unexpected side effects after receiving market approval, a number of potentially significant negative consequences could result, including:
−Removed: regulatory authorities may withdraw their approval of the drug product or impose restrictions on its distribution;
−Removed: the FDA may require implementation of a Risk Evaluation and Mitigation Strategy (“REMS”);
−Removed: regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
−Removed: we may be required to change the way the drug product is administered or conduct additional clinical studies;
−Removed: we could be sued and held liable for harm caused to patients;
−Removed: our reputation may suffer.
−Removed: Any of these events could prevent us from achieving or maintaining market acceptance of the affected drug product or drug candidate and could substantially increase the costs of commercializing our drug products and drug candidates.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.
The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.
−Removed: In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a drug candidate’s clinical development and may vary among jurisdictions.
+Added: In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a drug candidate’s clinical development and may vary among jurisdictions.
It is possible that none of our existing drug candidates or any drug candidates we may seek to develop will ever obtain regulatory approval in the United States or other jurisdictions.
3 unchanged sentences
• the results of any clinical trials we conduct may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
−Removed: we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks;
+Added: • we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks;
• the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
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If the markets for patients or indications that we are targeting are not as significant as we estimate, we may not generate significant revenue from sales of such drug products, if approved.
−Removed: An NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that would delay or prevent the review or approval of our drug candidate.
−Removed: The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
−Removed: Our drug candidates will be submitted to the FDA for approval under Section 505(b)(2) of the FDCA.
−Removed: Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies that were not conducted by, or for, the applicant and on which the applicant has not obtained a right of reference.
−Removed: The 505(b)(2) application would enable us to reference published literature and/or the FDA’s previous findings of safety and effectiveness for the branded reference drug.
−Removed: For NDAs submitted under Section 505(b)(2) of the FDCA, the patent certification and related provisions of the Hatch-Waxman Act apply.
−Removed: In accordance with the Hatch-Waxman Act, such NDAs may be required to include certifications, known as paragraph IV certifications, that certify that any patents listed in the Patent and Exclusivity Information Addendum of the FDA’s publication, Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book, with respect to any product referenced in the 505(b)(2) application, are invalid, unenforceable or will not be infringed by the manufacture, use or sale of the product that is the subject of the 505(b)(2) NDA.
−Removed: Companies that produce branded reference drugs routinely bring litigation against 505(b)(2) applicants that seek regulatory approval to manufacture and market generic and reformulated forms of their branded products.
−Removed: These companies often allege patent infringement or other violations of intellectual property rights as the basis for filing suit against a 505(b)(2) applicant.
−Removed: Likewise, patent holders may bring patent infringement suits against companies that are currently marketing and selling their approved generic or reformulated products.
−Removed: When a drug, such as GTX-104, has orphan drug exclusivity, the FDA may not approve any other application to market the same drug for the same indication for a period of up to seven years, except in limited circumstances, such as a showing of clinical superiority over the drug product with orphan exclusivity.
−Removed: In the United States, pediatric exclusivity adds six months to any existing exclusivity period.
Our drug development strategy relies heavily upon the 505(b)(2) regulatory pathway, which requires us to certify that we do not infringe upon third-party patents covering approved drugs.
Such certifications often result in third-party claims of intellectual property infringement, the defense of which will be costly and time consuming, and an unfavorable outcome in any litigation may prevent or delay our development and commercialization efforts which would harm our business.
−Removed: Litigation or other proceedings to enforce or defend intellectual property rights are often complex in nature, may be very expensive and time-consuming, may divert our management’s attention from other aspects of our business and may result in unfavorable outcomes that could adversely impact our ability to launch and market our drug candidates, or to prevent third parties from competing with our drug products and drug candidates.
+Added: Litigation or other proceedings to enforce or defend intellectual property rights are often complex in nature, may be very expensive and time-consuming, may divert our management’s attention from other aspects of our business and may result in unfavorable outcomes that could adversely impact our ability to launch and market our drug candidates, or to prevent third parties from competing with our drug products and drug candidates.
In particular, our commercial success depends in large part on our avoiding infringement of the patents and proprietary rights of third parties for existing approved drug products.
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Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
−Removed: In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’
−Removed: fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products or manufacturing processes, which may be impossible or require substantial time and monetary expenditure.
+Added: In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products or manufacturing processes, which may be impossible or require substantial time and monetary expenditure.
We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.
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We cannot provide any assurances that third-party patents do not exist which might be enforced against our products, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties.
−Removed: Our business is subject to extensive regulatory requirements and our drug candidates that obtain regulatory approval will be subject to ongoing and continued regulatory review, which may result in significant expense and limit our ability to commercialize such products.
−Removed: Even after a drug product is approved, we will remain subject to ongoing FDA and other regulatory requirements governing the labeling, packaging, storage, distribution, safety surveillance, advertising, promotion, import, export, record-keeping and reporting of safety and other post-market information.
−Removed: The holder of an approved NDA is obligated to monitor and report adverse events, and any failure of a drug product to meet the specifications in the NDA.
−Removed: The holder of an approved NDA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved drug product, product labeling or manufacturing process.
−Removed: Advertising and promotional materials must comply with FDA laws and regulations and are subject to FDA review, in addition to other potentially applicable federal and state laws.
−Removed: In addition, the FDA may impose significant restrictions on the approved indicated uses for which the drug product may be marketed or on the conditions of approval.
−Removed: For example, a product’s approval may contain requirements for potentially costly post-approval studies and surveillance to monitor the safety and efficacy of the drug product, or the imposition of a REMS program.
−Removed: In addition, the FDA’s regulations, policies, or guidance may change and new or additional statutes or government regulations in the United States and other jurisdictions may be enacted that could prevent or delay regulatory approval of our drug product candidates or further restrict or regulate post-approval activities.
−Removed: We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from pending or future legislation or administrative action, either in the United States or abroad.
−Removed: If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market our drug products and/or drug candidates, which would adversely affect our ability to generate revenue and achieve or maintain profitability.
Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
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If any such actions are instituted against us, and we are not successful in defending ourselves, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
−Removed: Any relationships with healthcare professionals, principal investigators, consultants, customers (actual and potential) and third-party payors are and will continue to be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, marketing expenditure tracking and disclosure, or sunshine laws, government price reporting and health information privacy and security laws.
−Removed: If we are unable to comply, or have not fully complied, with such laws, we could face penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations.
−Removed: Our business operations and activities may be directly or indirectly, subject to various federal, state, and local fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act.
−Removed: These laws may impact, among other things, our current activities with principal investigators and research subjects, as well as proposed and future sales, marketing, and education programs.
−Removed: In addition, we may be subject to patient privacy regulation by the federal government, state governments and foreign jurisdictions in which we conduct our business.
−Removed: The laws that may affect our ability to operate include, but are not limited to:
−Removed: the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs;
−Removed: federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other third-party payors that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government;
−Removed: the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;
−Removed: HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the iprivacy, security and transmission of individually identifiable health information without appropriate authorization;
−Removed: the federal Physician Payment Sunshine Act, created under Section 6002 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, (collectively, “ACA,”), and its implementing regulations requires manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the United States Department of Health and Human Services, or HHS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) (and beginning on January 1, 2021 this also includes Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, Certified Registered Nurse Anesthetists, and Certified Nurse Midwives (CNM) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, with data collection required beginning August 1, 2013 and reporting to the Centers for Medicare & Medicaid Services required by March 31, 2014 and by the 90th day of each subsequent calendar year;
−Removed: federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
−Removed: federal government price reporting laws, changed by ACA to, among other things, increase the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program and offer such rebates to additional populations, that require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our marketed drugs.
−Removed: Participation in these programs and compliance with the applicable requirements may subject us to potentially significant discounts on our drug products, increased infrastructure costs and potentially limit our ability to offer certain marketplace discounts;
−Removed: the Foreign Corrupt Practices Act, a United States law which regulates certain financial relationships with foreign government officials (which could include, for example, certain medical professionals);
−Removed: state law equivalents of each of the above federal laws.
−Removed: In addition, any sales of our drug products or drug candidates, if and once commercialized outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.
−Removed: If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to, without limitation, civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate.
We are required to obtain regulatory approval for each of our drug candidates in each jurisdiction in which we intend to market such products, and the inability to obtain such approvals would limit our ability to realize their full market potential.
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and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing drug candidates.
−Removed: Because patent applications can take many years to issue, there may be currently pending applications, which may later result in issued patents that our product candidates or proprietary technologies may infringe.
+Added: Because patent applications can take many years to issue, there may be currently pending applications,
+Added: which may later result in issued patents that our product candidates or proprietary technologies may infringe.
Similarly, there may be issued patents relevant to our drug candidates of which we are not aware.
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If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to:
−Removed: infringement and other intellectual property claims which, with or without merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business;
−Removed: substantial damages for infringement, including, but not limited to, treble damages, punitive damages, loss of profits and attorneys’
−Removed: fees, which we may have to pay if a court decides that the drug product or proprietary technology at issue infringes on or violates the third-party’s rights;
+Added: • infringement and other intellectual property claims which, with or without merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business;
+Added: • substantial damages for infringement, including, but not limited to, treble damages, punitive damages, loss of profits and attorneys’ fees, which we may have to pay if a court decides that the drug product or proprietary technology at issue infringes on or violates the third-party’s rights;
• if a license is available from the third-party, we may have to pay substantial royalties, fees and/or grant cross licenses to our technology;
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• others may independently develop similar or alternative technologies or duplicate any of our technologies;
−Removed: it is possible that none of our or our licensors’
−Removed: pending patent applications will result in issued patents;
−Removed: any patents we obtain, or our licensors’
−Removed: issued patents may not encompass commercially viable products, may not provide us with any competitive advantages, or may be challenged by third parties for lack of novelty, obviousness, lack of demonstrated or predicted utility, or other technical reasons related to the drafting of the patent itself;
+Added: • it is possible that none of our or our licensors’ pending patent applications will result in issued patents;
+Added: • any patents we obtain, or our licensors’ issued patents may not encompass commercially viable products, may not provide us with any competitive advantages, or may be challenged by third parties for lack of novelty, obviousness, lack of demonstrated or predicted utility, or other technical reasons related to the drafting of the patent itself;
• any patents we obtain, or our in-licensed issued patents may not be valid or enforceable;
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In the event that any of our important technology licenses were to be terminated by the licensor, we would likely cease further development of the related program or be required to spend significant time and resources to modify the program to not use the rights under the terminated license.
−Removed: We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.
−Removed: We employ individuals who were previously employed at other biotechnology or pharmaceutical companies.
−Removed: We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’
−Removed: former employers or other third parties.
−Removed: We may also be subject to claims that former employers or other third parties have an ownership interest in our patents.
−Removed: Litigation may be necessary to defend
−Removed: against these claims.
−Removed: There is no guarantee of success in defending these claims, and if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
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Should any of these events occur, they could significantly harm our business, results of operations and prospects.
−Removed: Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect any of our other future drug candidates.
−Removed: Numerous recent changes to the patent laws and proposed changes to the rules of the various patent offices around the world may have a significant impact on our ability to protect our technology and enforce our intellectual property rights.
−Removed: These changes may lead to increasing uncertainty with regard to the scope and value of our issued patents and to our ability to obtain patents in the future.
−Removed: Once granted, patents may remain open to opposition, re-examination, post-grant review, inter partes review, nullification derivation and opposition proceedings in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against the initial grant.
−Removed: In the course of any such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims attacked or may lose the allowed or granted claims altogether.
−Removed: Depending on decisions by authorities in various jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’
−Removed: ability to obtain new patents or to enforce existing patents we and our licensors or partners may obtain in the future.
We may not be able to protect our intellectual property rights throughout the world.
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Risks Related to Our Dependence on Third Parties
−Removed: We do not have internal manufacturing capabilities, and if we fail to develop and maintain supply relationships with various third-party manufacturers, we may be unable to develop or commercialize our drug candidates.
−Removed: Our ability to develop and commercialize our drug candidates depends, in part, on our ability to outsource their manufacturing at a competitive cost, in accordance with regulatory requirements and in sufficient quantities for clinical testing and eventual commercialization.
−Removed: All of our manufacturing is outsourced to third parties, and we do not plan to build manufacturing capabilities.
Our contract manufacturers may encounter manufacturing failures that could delay the clinical development or regulatory approval of our drug candidates, or their commercial production, if approved.
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Our manufacturers may encounter difficulties involving, among other things, production yields, regulatory compliance, quality control and quality assurance, as well as shortages of qualified personnel.
−Removed: Approval of our drug candidates could be delayed, limited, or denied if the FDA does not approve and maintain the approval of our contract manufacturer’s processes or facilities.
+Added: Approval of our drug candidates could be delayed, limited, or denied if the FDA does not approve and maintain the approval of our contract manufacturer’s processes or facilities.
Moreover, our contract manufacturers may encounter difficulties that have a negative impact on our operations and business.
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If any of our manufacturers fail to deliver the required commercial quantities or quantities needed for our pre-clinical studies and clinical trials on a timely basis and upon terms that we find acceptable, we may be unable to meet demand for any of our drug candidates that are approved and could lose potential revenue.
−Removed: Certain changes in the manufacturing process or procedure, including a change in the location where the drug candidate is manufactured or a change of a third-party manufacturer, generally require prior FDA, or foreign regulatory authority, review and/or approval of the manufacturing process and procedures in accordance with cGMP.
−Removed: We may need to conduct additional pre-clinical studies and clinical trials to support approval of such changes.
+Added: Certain changes in the manufacturing process or procedure, including a change in the location where the drug candidate is manufactured or a change of a third-party manufacturer, generally require prior FDA, or foreign regulatory authority, review and/or approval of the manufacturing process and procedures in accordance with current Good Manufacturing Practice (“cGMP”).
+Added: We may need to conduct
+Added: additional pre-clinical studies and clinical trials to support approval of such changes.
This review may be costly and time-consuming and could delay or prevent the launch of a drug candidate.
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Nevertheless, we are responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
−Removed: We and our CROs are required to comply with FDA laws and regulations regarding current good clinical practice ( “GCP”
−Removed: ), which are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization, guidelines for all of our drug candidates in clinical development.
+Added: We and our CROs are required to comply with FDA laws and regulations regarding current good clinical practice (“GCP”), which are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization, guidelines for all of our drug candidates in clinical development.
Regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators, and trial sites.
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Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.
−Removed: The design, development, manufacture, supply, and distribution of our drug candidates is highly regulated and technically complex.
−Removed: All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing contract manufacturers for our drug candidates, are subject to extensive regulation.
−Removed: Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with cGMP and equivalent foreign standards.
−Removed: These regulations govern manufacturing processes and procedures (including record-keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.
−Removed: Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of our drug candidates that may not be detectable in final product testing.
−Removed: The development, manufacture, supply, and distribution of our drug candidates is highly regulated and technically complex.
−Removed: We, along with our third-party providers, must comply with all applicable regulatory requirements of the FDA and foreign authorities.
−Removed: Regulatory authorities also may, at any time following approval of a drug product for sale, audit our manufacturing facilities or those of our third-party contractors.
−Removed: If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third-party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a facility.
−Removed: Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.
−Removed: If we or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new drug product or biological product or revocation of a pre-existing approval.
−Removed: As a result, our business, financial condition, and results of operations may be materially harmed.
−Removed: We may not be successful in establishing development and commercialization collaborations which could adversely affect, and potentially prohibit, our ability to develop our drug candidates.
+Added: We may not be successful in establishing or maintaining development and commercialization collaborations, and any partner may not devote sufficient resources to the development or commercialization of our drug candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop certain of our drug candidates and our financial condition and operating results.
Because developing pharmaceutical products, conducting clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products are expensive, we are exploring collaborations with third parties outside of the United States that have more resources and experience.
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If we are unable to enter into any development and commercial collaborations and/or sales and marketing arrangements on acceptable terms, if at all, we may be unable to successfully develop and seek regulatory approval for our drug candidates and/or effectively market and sell future approved drug products, if any, in all of the territories outside of the United States where it may otherwise be valuable to do so.
−Removed: We may not be successful in maintaining development and commercialization collaborations, and any partner may not devote sufficient resources to the development or commercialization of our drug candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop certain of our drug candidates and our financial condition and operating results.
Even if we are able to establish collaboration arrangements, any such collaboration may not ultimately be successful, which could have a negative impact on our business, results of operations, financial condition and prospects.
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Additionally, if we are classified as a PFIC in any taxable year with respect to which a U.S.
−Removed: shareholder owns common shares, we generally will continue to be treated as a PFIC with respect to such U.S.
+Added: shareholder owns common shares, we generally will
+Added: continue to be treated as a PFIC with respect to such U.S.
shareholder in all succeeding taxable years, regardless of whether we continue to meet the tests described above, unless the U.S.
−Removed: shareholder makes a “deemed sale election.”
+Added: shareholder makes a “deemed sale election.”
We may not be able to use our net operating loss carry forwards to offset future taxable income for Canadian or U.S.
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At March 31, 2024, Acasti Pharma U.S.
−Removed: had net operating loss carry forwards (“NOLs”) for U.S.
+Added: had net operating loss carry forwards (“NOLs”) for U.S.
federal income tax purposes of approximately $15.4 million, which have no expiry.
Acasti Pharma U.S.
−Removed: underwent an “ownership change”
−Removed: within the meaning of Section 382 of the Code as a result of the merger, and therefore Acasti Pharma U.S.
+Added: underwent an “ownership change” within the meaning of Section 382 of the Code as a result of the merger with Grace Therapeutics, and therefore Acasti Pharma U.S.
may become subject to an annual limit on the amount of NOLs that may be used to offset future taxable income of Acasti Pharma U.S.
federal income tax purposes.
−Removed: Such annual limit is generally equal to the product of (i) the total value of the loss company’s (in this case, Acasti Pharma U.S.) outstanding equity immediately prior to an “ownership change”
−Removed: (subject to certain adjustments);
−Removed: and (ii) the applicable federal long-term tax-exempt interest rate for the month that includes the “ownership change”.
+Added: Such annual limit is generally equal to the product of (i) the total value of the loss company’s (in this case, Acasti Pharma U.S.) outstanding equity immediately prior to an “ownership change” (subject to certain adjustments);
+Added: and (ii) the applicable federal long-term tax-exempt interest rate for the month that includes the “ownership change.”
At March 31, 2024, we had NOLs for Canadian federal income tax purposes of approximately $130.1 million, which expire at various dates through 2043.
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The NOLs may expire before we can generate sufficient taxable income to use the NOLs.
−Removed: The IRS may not agree that we should be treated as a foreign corporation for U.S.
+Added: The IRS may not agree that we should be treated as a foreign Company for U.S.
federal tax purposes.
Although we are incorporated in Quebec, Canada, the IRS may assert that we should be treated as a U.S.
−Removed: corporation (and, therefore, a U.S.
+Added: Company (and, therefore, a U.S.
tax resident) for U.S.
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Internal Revenue Code of 1986, as amended (the "Code").
−Removed: federal tax purposes, a corporation generally is considered a tax resident in the jurisdiction of its organization or incorporation.
−Removed: Because we are an entity incorporated in Canada, we would generally be classified as a foreign corporation (and, therefore, not a U.S.
+Added: federal tax purposes, a Company generally is considered a tax resident in the jurisdiction of its organization or incorporation.
+Added: Because we are an entity incorporated in Canada, we would generally be classified as a foreign Company (and, therefore, not a U.S.
tax resident) for U.S.
federal tax purposes.
−Removed: Section 7874 of the Code provides an exception under which a foreign corporation may, in certain circumstances, be treated as a U.S.
−Removed: corporation for U.S.
+Added: Section 7874 of the Code provides an exception under which a foreign Company may, in certain circumstances, be treated as a U.S.
+Added: Company for U.S.
federal tax purposes.
Under Section 7874, if (1) former Grace Therapeutics shareholders owned (within the meaning of Section 7874) 80% or more (by vote or value) of our ordinary shares after the merger by reason of holding Grace Therapeutics common stock (such ownership percentage, the "Section 7874 ownership percentage"), and (2) our "expanded affiliated group" did not have "substantial business activities" in Canada ("the substantial business activities test"), we will be treated as a U.S.
−Removed: corporation for U.S.
+Added: Company for U.S.
federal tax purposes.
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tax liabilities.
−Removed: Based on the terms of the merger, the rules for determining share ownership under Section 7874 and certain factual assumptions, we believe that former Grace Therapeutics shareholders owned (within the meaning of Section 7874) less than 60% (by both vote and value) of our ordinary shares after the merger by reason of holding shares of Grace common stock.
+Added: Based on the terms of the merger, the rules for determining share ownership under Section 7874 and certain factual assumptions, we believe that former Grace Therapeutics shareholders owned (within the meaning of Section 7874) less than 60% (by both vote and value) of our ordinary shares after the merger by reason of holding shares of Grace Therapeutics common stock.
Therefore, under current law, we believe that we should not be treated as a U.S.
−Removed: corporation for U.S.
+Added: Company for U.S.
federal tax purposes and that Section 7874 should otherwise not apply to us or our affiliates as a result of the merger with Grace Therapeutics.
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results or delays of pre-clinical and clinical studies by us or others;
−Removed: any delay in our regulatory filings for our drug candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings;
+Added: any delay in our regulatory filings for our drug candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings;
a change of regulations;
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In the past, securities class action litigation has often been instituted against pharmaceutical companies following periods of volatility in the market price of their securities.
−Removed: This type of litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results or financial condition.
+Added: This type of litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results or financial condition.
Raising additional capital may cause dilution to our existing shareholders, restrict our operations, or require us to relinquish rights to our technologies or drug candidates.
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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our shareholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our shareholders.
−Removed: We have in place an “at-the-market”
−Removed: sales agreement where we may issue and sell from time-to-time common shares having an aggregate offering price of up to $75,000,000, but due to our market capitalization, under applicable SEC rules, the availability of our access to this program is currently significantly limited.
The incurrence of indebtedness by us would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or drug candidates, or grant licenses on terms unfavorable to us.
−Removed: The market price of our common shares could decline if our operating results fall below the expectations of investors or fluctuate.
−Removed: Our net losses and expenses may fluctuate significantly and any failure to meet financial or clinical expectations may disappoint securities analysts or investors and result in a decline in the price of our common shares.
−Removed: Our net losses and expenses have fluctuated in the past and are likely to do so in the future.
−Removed: The market price of our common shares has fluctuated significantly in the past and may continue to do so.
−Removed: Some of the factors that could cause the market price for our common shares to fluctuate include the following:
−Removed: results of pre-clinical studies and clinical trials, or the addition or termination of pre-clinical studies, clinical trials or funding support;
−Removed: the timing of the release of results from any pre-clinical studies and clinical trials;
−Removed: an inability to complete drug product development in a timely manner that results in a failure or delay in receiving the required regulatory responses, approvals, or allowances to commercialize drug candidates;
−Removed: the timing of regulatory responses, submissions, and approvals;
−Removed: the timing and willingness of any current or future collaborators to invest the resources necessary to commercialize our drug products;
−Removed: the outcome of any litigation;
−Removed: changes in foreign currency fluctuations;
−Removed: the timing of achievement and the receipt of milestone payments from current or future third parties;
−Removed: failure to enter into new or the expiration or termination of current agreements with third parties;
−Removed: failure to introduce our drug products to the market in a manner that generates anticipated revenues;
−Removed: execution of any new collaboration, licensing or similar arrangement, and the timing of payments we may make or receive under such existing or future arrangements or the termination or modification of any such existing or future arrangements;
−Removed: additions and departures of key personnel;
−Removed: strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy;
−Removed: if any of our drug candidates receives regulatory, or fails to receive approval, market acceptance and demand for such drug candidates;
−Removed: regulatory developments affecting our drug candidates or those of our competitors;
−Removed: changes in general market and economic conditions.
−Removed: If our quarterly operating results fall below the expectations of investors or securities analysts, the market price of our common shares could decline substantially.
−Removed: Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the market price of our common shares to fluctuate substantially.
−Removed: We believe that quarterly comparisons of our financial results for a company at our stage of operation are not necessarily meaningful and should not be relied upon as an indication of our future performance.
−Removed: There can be no assurance that an active market for our common shares will be sustained.
−Removed: There can be no assurance that an active market for our common shares will be sustained.
−Removed: Holders of common shares may be unable to sell their investments on satisfactory terms.
−Removed: As a result of any risk factor discussed herein, the market price of our common shares at any given point in time may not accurately reflect our long-term value.
−Removed: Furthermore, responding to these risk factors could result in substantial costs and divert management’s attention and resources.
−Removed: Substantial and potentially permanent declines in the value of our common shares may adversely affect the liquidity of the market for our common shares.
−Removed: Other factors unrelated to our performance that may have an effect on the price and liquidity of our common shares include positive or negative industry or competitor news;
−Removed: extent of analyst coverage;
−Removed: lessening in trading volume and general market interest in our common shares;
−Removed: the size of our public float;
−Removed: our access to funding;
−Removed: and any event resulting in a delisting of our common shares.
−Removed: If we fail to meet applicable listing requirements, the Nasdaq Stock Market may delist our common shares from trading, in which case the liquidity and market price of our common shares could decline.
−Removed: Our common shares are currently listed on the Nasdaq Stock Market, but we cannot assure you that our securities will continue to be listed on the Nasdaq Stock Market in the future.
−Removed: On July 27, 2022, we received written notification from the Nasdaq Listing Qualifications Department for failing to maintain a minimum bid price of $1.00
−Removed: per common share for the last 30 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2) - bid price (the “Minimum Bid Price Rule”).
+Added: If we fail to meet applicable listing requirements, Nasdaq may delist our common shares from trading, in which case the liquidity and market price of our common shares could decline.
+Added: Our common shares are currently listed on the Nasdaq Stock Market LLC (“Nasdaq”), but we cannot assure you that our securities will continue to be listed on Nasdaq in the future.
+Added: On July 27, 2022, we received written notification from the Nasdaq Listing Qualifications Department for failing to maintain a minimum bid price of $1.00 per common share for the last 30 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2) - bid price (the “Minimum Bid Price Rule”).
The Nasdaq notification had no immediate effect on the listing of our common shares, and we had 180 calendar days, or until January 23, 2023, to regain compliance.
−Removed: On January 24, 2023, we received notification from Nasdaq that we are eligible for an additional 180 calendar days, or until July 24, 2023, to regain compliance with the Minimum Bid Price Rule.
−Removed: We were granted the second extension because we meet the continued listing requirements for the market value of publicly held shares and all other initial listing standards for Nasdaq Capital Market, except for the bid price requirement.
−Removed: If at any time over this additional 180 calendar day period the bid price of our common shares closes at $1.00 per share or more for at least a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed.
−Removed: We intend to monitor the closing bid price of our common shares and, if necessary, evaluate all available options to resolve the deficiency and regain compliance with the Minimum Bid Price Rule.
−Removed: If we fail to comply with listing standards and the Nasdaq Stock Market delists our common shares, we and our shareholders could face significant material adverse consequences, including:
+Added: On January 24, 2023, we received notification from Nasdaq that we were eligible for an additional 180 calendar days, or until July 24, 2023, to regain compliance with the Minimum Bid Price Rule.
+Added: We were granted the second extension because we meet the continued listing requirements for the market value of publicly held shares and all other initial listing standards for Nasdaq, except for the bid price requirement.
+Added: On July 24, 2023, we received notification from Nasdaq that we had regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq.
+Added: The notification was sent following the implementation of a 1-for-6 reverse split of our common shares which became effective on July 10, 2023.
+Added: If we fail to comply with listing standards and Nasdaq delists our common shares, we and our shareholders could face significant material adverse consequences, including:
• a limited availability of market quotations for our common shares;
• reduced liquidity for our common shares;
−Removed: a determination that our common shares are “penny stock”, which would require brokers trading in our common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common shares;
+Added: • a determination that our common shares are “penny stock,” which would require brokers trading in our common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common shares;
• a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.
5 unchanged sentences
There can be no assurance that investors who buy or sell common shares are doing so at a time when we are not pursuing a particular strategic opportunity or transaction that, when announced, would have a significant effect on the price of our common shares.
−Removed: In addition, any such future corporate development may be accompanied by certain risks, including exposure to unknown liabilities of the strategic opportunities and transactions, higher than anticipated transaction costs and expenses, the difficulty and expense of integrating operations and personnel of any acquired companies, disruption of our ongoing business, diversion of management’s time and attention, and possible dilution to shareholders.
+Added: In addition, any such future corporate development may be accompanied by certain risks, including exposure to unknown liabilities of the strategic opportunities and transactions, higher than anticipated transaction costs and expenses, the difficulty and expense of integrating operations and personnel of any acquired companies, disruption of our ongoing business, diversion of management’s time and attention, and possible dilution to shareholders.
We may not be able to successfully overcome these risks and other problems associated with any future acquisitions and this may adversely affect our business and financial condition.
−Removed: We are a Qu é
−Removed: bec incorporated company headquartered in Canada, and U.S.
+Added: We are a Qu é bec incorporated company, and U.S.
investors may be unable to enforce certain judgments against us.
−Removed: We are a company existing under the Business Corporations Act (Québec).
−Removed: Some of our directors and officers are residents of Canada, and certain of our assets are located outside the United States.
−Removed: As a result, it may be difficult to effect service within the United States upon us or upon some of our directors and officers.
+Added: We are a company existing under the Business Corporations Act (Québec), and certain of our assets are located outside the United States.
+Added: As a result, it may be difficult to effect service within the United States upon us.
Execution by U.S.
−Removed: courts of any judgment obtained against us or any of our directors or officers in U.S.
+Added: courts of any judgment obtained against us in U.S.
courts may be limited to assets located in the United States.
It may also be difficult for holders of our securities who reside in the United States to realize in the United States upon judgments of U.S.
−Removed: courts predicated upon civil liability of us and our directors and executive officers under the U.S.
+Added: courts predicated upon civil liability of us under the U.S.
federal securities laws.
There may be doubt as to the enforceability in Canada against non-U.S.
−Removed: entities or their controlling persons, directors and officers who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S.
+Added: entities, in original actions or in actions for enforcement of judgments of U.S.
courts, of liabilities predicated solely upon U.S.
federal or state securities laws.
−Removed: Unresolved Staff Comments
−Removed: Not applicable.
−Removed: Our head office and operations are located at 3009 boul.
−Removed: de la Concorde East, Suite 102, Laval, Québec, Canada H7E 2B5 and our research and development and quality control laboratories are located at Espace Lab, 2650 Maximilien-Chagnon, Sherbrooke, Québec, Canada, J1E 0M8.
−Removed: We currently lease our office and laboratory space.
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.