3 unchanged sentences
our operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations.
−Removed: Therefore, while you should carefully consider the following risks, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
+Added: Therefore, while you should carefully consider the following risks, together with all of the other information in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
our financial statements and the related notes thereto.
1 unchanged sentence
Summary of Key Risk Factors
−Removed: We are an early-stage biopharmaceutical company and have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future.
+Added: We have incurred significant losses since our inception and we expect to incur losses for the foreseeable future.
We have no products approved for commercial sale and may never achieve or maintain profitability.
−Removed: Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability
−Removed: We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved.
+Added: We may require additional funding in order to complete development of our product candidates and commercialize our products, if approved.
Additional funding may not be available on acceptable terms, or at all.
−Removed: If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs, our efforts to access manufacturing capacity and our commercialization efforts.
−Removed: Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates.
−Removed: Public health crises such as pandemics or other events could materially and adversely affect our business operations, workforce, product development activities, research and development activities, preclinical and clinical trials, toxicology studies, and financial condition.
−Removed: Our TOBI TM platform is based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.
−Removed: We may not be successful in our efforts to use and expand our technology platform to develop and commercialize our product candidates, or may experience significant delays in doing so.
+Added: If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs, our efforts to establish manufacturing capacity and our commercialization efforts.
+Added: Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all.
+Added: We and our chief executive officer are currently involved in legal proceedings with Altor BioScience, LLC and NantCell (collectively, "Altor/NantCell") in which Altor/NantCell have alleged, among other things, a claim of trade secret misappropriation and other related claims against us in federal court and breach of contract and fiduciary duty, among other claims, against our chief executive officer in arbitration, and an adverse result could have a negative material impact on our business and operations.
Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates or any future product candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization.
−Removed: Preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.
−Removed: Clinical drug development is a lengthy and expensive process with uncertain outcomes.
−Removed: If clinical trials of our product candidates are prolonged or delayed, we or any collaborators may be unable to obtain required regulatory approvals, and therefore be unable to commercialize our product candidates on a timely basis or at all.
−Removed: Our product candidates may have serious adverse, undesirable, or unacceptable side effects or other properties that may delay or prevent marketing approval.
−Removed: If we experience delays or difficulties enrolling patients in our clinical trials, our research and development efforts and business, financial condition, and results of operations could be materially adversely affected.
−Removed: The development and commercialization of biopharmaceutical products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and
−Removed: inherently unpredictable.
+Added: Preliminary, topline or interim data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.
+Added: The development and commercialization of biopharmaceutical products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable.
If we are ultimately unable to obtain regulatory approval for our product candidates on a timely basis if at all, our business will be substantially harmed.
−Removed: We operate in highly competitive and rapidly changing industries, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.
−Removed: We rely on third parties to manufacture biological materials and our product candidates.
−Removed: The manufacture of our product candidates is complex.
−Removed: We rely on patents and other intellectual property rights to protect our technology, including product candidates from our TOBI TM platform, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.
+Added: Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes.
+Added: If clinical trials of our product candidates are prolonged or delayed, we or any collaborators may be unable to obtain required regulatory approvals, and therefore be unable to commercialize our product candidates on a timely basis or at all.
+Added: Even if our product candidates obtain regulatory approval, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
+Added: Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
+Added: We expect to rely on patents and other intellectual property rights to protect our technology, including product candidates and our immunotherapy platform technology, the prosecution, enforcement, defense, and maintenance of which may be challenging, time-consuming and costly.
+Added: Failure to defend, protect or enforce these rights adequately, and costs and expenses associated with the same, could impact our financial condition and results of operations or otherwise harm our ability to compete and impair our business.
+Added: We rely on third parties to manufacture our product candidates.
+Added: Any failure by a third-party manufacturer to produce acceptable drug substance for us or to obtain authorization from the FDA or comparable regulatory authorities may delay or impair our ability to initiate or complete our clinical trials, obtain regulatory approvals or commercialize approved products.
+Added: Our information technology systems, or those used by our third-party contractors or consultants, may fail or suffer security breaches, which could adversely affect our business.
Risks Related to our Financial Position and Need for Additional Capital
We have incurred significant losses since our inception and we expect to incur losses for the foreseeable future.
−Removed: We may never achieve or maintain profitability.
+Added: We have no products approved for commercial sale and may never achieve or maintain profitability.
Since our inception, we have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and our clinical trials, and have incurred significant operating losses.
For the years ended December 31, 2021 and 2022, we reported a net loss of $12.9 million and $14.9 million, respectively.
−Removed: As of December 31, 2021, we had $11.7 million in cash and cash equivalents, $25.0 million in short-term investments held in U.S.
−Removed: Treasury bills, and $9.9 million in long-term investments held in U.S.
−Removed: Treasury notes.
+Added: As of December 31 2022, we had $22.3 million in cash and cash equivalents, including money market investments, and $9.7 million held in U.S.
+Added: Treasury notes and presented in Short-term investments in the balance sheet included in our audited financial statements included elsewhere in this Annual Report.
From inception to December 31, 2022, we incurred cumulative net losses of $42.8 million.
−Removed: To date, we have financed our operations primarily through our initial public offering, or the IPO, the sale of our redeemable preferred stock, and to a lesser extent, upfront payments received under our exclusive worldwide license with Wugen Inc.
−Removed: (“Wugen License”) for certain rights to two of our internally-developed molecules and proceeds from an SBA Paycheck Protection Loan (“PPP loan”) obtained through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which was forgiven.
+Added: To date, we have financed our operations primarily through our initial public offering, or the IPO, the sale of our redeemable preferred stock, and to a lesser extent, payments received under our Wugen License for certain rights to two of our internally-developed molecules and proceeds from a Paycheck Protection Program (“PPP”) loan obtained through the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which was forgiven.
Our losses have resulted principally from expenses incurred in the research and development of our product candidates and from management and administrative costs and other expenses that we have incurred while building our business infrastructure.
We expect to continue to incur significant operating losses for the foreseeable future.
−Removed: The only revenue we have generated to date relates to our Wugen License.
+Added: The only revenue we have generated to date relates to our Wugen License and the clinical material supply agreement.
We have not generated any revenues from product sales.
−Removed: We anticipate that our expenses will increase substantially as we:
−Removed: undertake our initial Phase 1b/2 clinical trial for HCW9218 in pancreatic cancer;
−Removed: continue to advance the preclinical and clinical development in pursuit of immunotherapeutic treatments for other indications such as fibrotic diseases and autoimmune diseases using our lead product candidates, HCW9218 and HCW9302;
−Removed: initiate preclinical studies and clinical trials for additional product candidates that we may identify in the future;
−Removed: scale up our manufacturing process and capabilities to support our clinical trials of our product candidates;
−Removed: expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts;
−Removed: continue to develop, perfect, and defend our intellectual property portfolio;
−Removed: incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
+Added: We anticipate that our expenses will increase substantially as we initiate preclinical and clinical studies, scale up our manufacturing process and capabilities to support our clinical studies and grow to scale.
We have no products for which we have obtained marketing approval and have not generated any revenue from product sales.
5 unchanged sentences
We may never succeed in these activities and, even if we do, we may never generate revenue that is sufficient to achieve profitability.
−Removed: Because of the numerous risks and uncertainties associated with pharmaceutical products and biological development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.
−Removed: If we are required by the FDA, or other regulatory authorities to perform studies in addition to those we currently anticipate, if there are any delays in completing our clinical trials or the development of any of our product candidates or if there are any third-party challenges to our intellectual property or we need to defend against any intellectual property-related claim, our expenses could increase and commercial revenue could be further delayed and more uncertain.
Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
3 unchanged sentences
Consequently, any predictions you may make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
−Removed: We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved.
+Added: We may require additional funding in order to complete development of our product candidates and commercialize our products, if approved.
However, this additional financing may not be available on acceptable terms, or at all.
−Removed: If we are unable raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.
−Removed: Based on our current business plans, including anticipated revenues from out-license agreements, we believe that our existing cash and cash equivalents and short-term investments, will enable us to fund our operating expenses through the end of 2023.
−Removed: We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect, requiring us to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations.
+Added: If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.
+Added: Based on our current business plans, including anticipated revenues from out-license agreements, we believe that our existing cash and cash equivalents, including money market investments, and short-term investments as of December 31, 2022, will be sufficient to meet our capital requirements and fund our operations for at least the next 12 months.
+Added: We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect, requiring us to seek
+Added: additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
+Added: We may also attempt to seek additional funding of our operations through the issuance of additional shares of common stock, or other equity or debt securities convertible into common stock.
+Added: Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidates.
−Removed: Our future capital requirements will depend on many factors, including:
−Removed: the scope, timing, progress, costs, and results of discovery, preclinical development, laboratory testing, and clinical trials for our product candidates;
−Removed: the costs, timing, and outcome of regulatory review of any of our product candidates;
−Removed: the cost of manufacturing clinical supplies of our product candidates;
−Removed: the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;
−Removed: the extent to which we earn additional revenues under our licensing agreement with Wugen to develop certain cellular therapy products or enter into, maintain, and derive revenues from other licensing agreements, including agreements to out-license HCW9302 and HCW9213 and other product candidates, research and other collaborations, joint ventures and other business arrangements;
−Removed: the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;
−Removed: the cost of building a sales force in anticipation of product commercialization;
−Removed: the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
−Removed: the effect of competing technological and market developments;
−Removed: the extent to which we acquire or invest in business, products, and technologies.
−Removed: Our ability to raise additional funds will depend on financial, economic, and market conditions and other factors, over which we may have no or limited control.
−Removed: Market volatility resulting from the COVID-19 pandemic or other factors could also adversely impact our ability to access capital as and when needed.
+Added: Our future capital requirements will depend on many factors, and our ability to raise additional funds will depend on financial, economic, and market conditions and other factors, over which we may have no or limited control.
+Added: Market volatility resulting from the lingering effects of the COVID-19 pandemic, increasing inflationary pressures, rising interest rates, ongoing global geopolitical tensions such as the war between Russia and Ukraine, Chinese aggression towards Taiwan, financial market volatility and currency movements could also adversely impact our ability to access capital as and when needed.
Additional funds may not be available when we need them, on terms that are acceptable to us or at all.
1 unchanged sentence
delay, limit, reduce, or terminate preclinical studies, clinical trials, or other research and development activities, or eliminate one or more of our development programs altogether;
−Removed: delay, limit, reduce, or terminate our efforts to access manufacturing capacity, establish sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates, or reduce our flexibility in developing or maintaining our sales and marketing strategy.
−Removed: Raising additional capital may cause dilution to our stockholders, restrict our operations, or require us to relinquish rights to our technology or product candidates.
−Removed: Until such time, if ever, as we can generate substantial product revenues, we expect to finance our operations with our existing cash and cash equivalents and accounts receivable, equity or debt financings, and upfront and milestone and royalty payments, if any, received from future licenses or collaborations.
−Removed: If we raise additional capital through the sale of equity or convertible debt securities, our stockholders’
−Removed: ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock.
−Removed: In addition, the possibility of such issuance may cause the market price of our common stock to decline.
−Removed: Debt financing, if available, may result in increased fixed payment obligations and involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, or acquiring, selling, or licensing intellectual property rights, which could adversely impact our ability to conduct our business.
−Removed: If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, technology, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us.
−Removed: We could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable.
−Removed: Any of these occurrences may have a material adverse effect on our business, operating results, and prospects.
−Removed: Public health crises such as pandemics or similar outbreaks could materially and adversely affect our preclinical and clinical trials, business, financial condition, and results of operations.
−Removed: In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a national emergency with respect to COVID-19.
−Removed: In response to the COVID-19 pandemic, we have implemented recommended public health guidance measures, limited the number of on-site staff and operated on a staggered schedule, which has altered our operations and processes.
−Removed: Similar changes from normal business activities have occurred at our key vendors and partners.
−Removed: We have experienced delays in the development of our lead product candidates as a result of the ongoing COVID-19 pandemic as new variants spread and prolong its impacts, including delays with certain third-party vendors conducting preclinical IND-enabling studies.
−Removed: Additionally, the worldwide demand and rapid development of COVID-19 diagnostics, vaccines and therapeutics has limited and may continue to limit the availability of services and materials necessary for our product candidates’
−Removed: manufacture and testing.
−Removed: While we are using our best efforts to mitigate these disruptions, we expect that our clinical development program timelines, including the timing of the IND submissions, may continue to be negatively affected by COVID-19, which could materially and adversely affect our business, financial condition, and results of operations.
−Removed: As a result of the COVID-19 pandemic, or similar pandemics, and related public health guidance measures and orders, we have and may in the future experience disruptions that could materially and adversely impact our clinical trials, business, financial condition, and results of operations.
−Removed: Potential disruptions include but are not limited to:
−Removed: COVID-19-related delays or interruptions at the contract testing or manufacturing operations, our laboratories, or in the supply chain;
−Removed: delays or difficulties in enrolling patients in our clinical trials;
−Removed: delays or difficulties in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical site investigators and clinical site staff;
−Removed: patients withdrawing from our future clinical trials following enrollment as a result of contracting COVID-19 or other health conditions or being forced to quarantine;
−Removed: delays in clinical sites receiving the supplies and materials needed to conduct our planned clinical trials;
−Removed: interruption of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, processing and analyses, due to limitations on travel imposed or recommended by federal, state, or local governments, employers, and others or interruption of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical study endpoints;
−Removed: diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
−Removed: delays or disruptions in preclinical experiments and IND-enabling studies including toxicology studies due to restrictions of on-site staff and unforeseen circumstances at vendors;
−Removed: interruption or delays in the operations of the FDA and comparable foreign regulatory agencies;
−Removed: delays in receiving approval from local regulatory authorities to initiate our planned clinical trials;
−Removed: limitations on employee or other resources that would otherwise be focused on the conduct of our clinical trials and preclinical work, including because of sickness of employees or their families, the desire of employees to avoid travel or contact with large groups of people, an increased reliance on working from home, school closures, or mass transit disruptions;
−Removed: changes in regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;
−Removed: delays in necessary interactions with regulators, ethics committees, and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor personnel;
−Removed: refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
−Removed: The extent to which the COVID-19 or outbreaks of its variants may affect our clinical trials, business, financial condition, and results of operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, such as the potential spread of the vaccine/treatment-resistant disease, the duration of the outbreaks, travel restrictions, and actions to contain the outbreaks or treat their impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures, or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
−Removed: Future developments in these and other areas present material uncertainty and risk with respect to our clinical trials, business, financial condition, and results of operations.
+Added: delay or terminate the Company's plan to build its own manufacturing facility at its new headquarters;
+Added: delay, limit, reduce, or terminate our efforts to establish manufacturing capacity, establish sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates, or reduce our flexibility in developing or maintaining our sales and marketing strategy.
+Added: Risks Related to our Business
If we or any collaborators we work with in the future are unable to successfully develop and commercialize our product candidates, or experience significant delays in doing so, our business, financial condition, and results of operations will be materially adversely affected.
1 unchanged sentence
We currently generate no revenue from sales of any products, and we may never be able to develop or commercialize a marketable product.
−Removed: Each of our product candidates and any future product candidates we develop will require significant clinical development;
−Removed: management of clinical, preclinical, and manufacturing activities;
−Removed: regulatory approval in multiple jurisdictions;
−Removed: establishing manufacturing supply, including commercial manufacturing supply;
−Removed: and require us to build a commercial organization and make substantial investment and significant marketing efforts before we generate any revenue from product sales.
+Added: Each of our product candidates and any future product candidates we develop will require significant clinical development, management of clinical, preclinical, and manufacturing activities, regulatory approval in multiple jurisdictions, establishing manufacturing supply, including commercial manufacturing supply, and require us to build a commercial organization and make substantial investment and significant marketing efforts before we generate any revenue from product sales.
We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates.
−Removed: The successful development of our product candidates will depend on several factors, including the following:
−Removed: timely completion of successful clinical trials and preclinical studies for which the FDA, or any comparable foreign regulatory authority agree with the design, endpoints, or implementation;
−Removed: sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;
−Removed: receiving regulatory approvals or authorizations for conducting our planned clinical trials or future clinical trials;
−Removed: initiation and successful patient enrollment in, and completion of, additional clinical trials on a timely basis;
−Removed: our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate is safe and effective as a treatment for our targeted indications or, in the case of an applicable product candidate which is regulated as a biological product, that the applicable product is safe, pure, and potent for our targeted indications;
−Removed: our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate’s risk-benefit ratio for its proposed indication is acceptable;
−Removed: timely receipt of marketing approvals for our product candidates from applicable regulatory authorities;
−Removed: the extent of any required post-marketing approval commitments to applicable regulatory authorities;
−Removed: establishing and scaling up, either alone or with third-party manufacturers, manufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing, if any of our product candidates are approved.
−Removed: If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which would materially adversely affect our business, financial condition, and results of operations.
−Removed: A key element of our strategy is to enter into out-licensing arrangements for certain rights to HCW internally-developed molecules that we do not intend to develop into lead product candidates on our own or together with co-development partners.
+Added: If we do not successfully execute or address these matters in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which would materially adversely affect our business, financial condition, and results of operations.
+Added: A key element of our strategy is to enter into out-licensing arrangements for certain rights to HCWB internally-developed molecules that we do not intend to develop into lead product candidates on our own or together with co-development partners.
We may not be able to identify licensees, which could lower any return on our investments and increase our need for external funding.
4 unchanged sentences
For example, we have an exclusive worldwide license arrangement with Wugen pursuant to the development of certain cellular therapy products under which we may earn additional milestone or royalty payments, but there can be no assurance that Wugen will be successful in commercializing any products related to this license or that any such payments will ever be earned.
−Removed: If we fail to successfully out-license to third parties internally-developed molecules that are outside our focus areas, our revenues and return on our research and development activities would be negatively affected and we could be required to seek additional funding of our operations through the issuance of additional shares of common stock, or other equity or debt securities convertible into common stock, which could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.
−Removed: Our immunotherapy platform technology is based on novel technology that is unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.
−Removed: We are developing a pipeline of product candidates using our internally-developed immunotherapy platform technology.
−Removed: We have not received regulatory approval for any of our product candidates.
−Removed: The scientific research that forms the basis of our efforts to develop product candidates with our immunotherapy platform technology is still ongoing.
−Removed: Further, the scientific evidence to support the feasibility of developing therapeutic treatments based on our immunotherapy platform technology is both preliminary and limited.
−Removed: Given the novelty of our technology, we intend to work closely with the FDA and other regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for our product candidates.
−Removed: The validation process takes time and resources, may require independent third-party analyses, and may not be accepted by the FDA and other regulatory authorities.
−Removed: We cannot be certain that our approach will lead to the development of approvable or marketable products, alone or in combination with other therapies.
−Removed: Moreover, the FDA or other regulatory agencies may lack experience in evaluating the safety and efficacy of our immunotherapy platform technology, which could result in a longer than expected regulatory review process, increase our expected development costs, and delay or prevent commercialization of our product candidates.
−Removed: Additionally, even if our lead product candidates, such as HCW9218 and HCW9302, are approved, we will need to educate medical personnel regarding the potential efficacy and safety benefits of incorporating product candidates, such as HCW9218 and HCW9302 into existing treatment regimens, including in combination with other treatments for certain types of cancer.
−Removed: If we do not continue to successfully develop and begin to commercialize product candidates, we will face difficulty in obtaining product revenues in future periods, which could result in significant harm to our financial position and adversely affect our share price.
−Removed: The potential long-term growth of our business depends on our efforts to leverage our immunotherapy platform technology to expand our portfolio of molecules and product candidates, which may require substantial financial resources and may ultimately be unsuccessful.
−Removed: The potential long-term growth of our business depends upon our ability to utilize our internally-developed immunotherapy technology platform to build a pipeline of molecules and product candidates and either progress those product candidates through clinical development for the treatment of a variety of different types of diseases or out-license those molecules to third parties.
−Removed: Although our research and development efforts to date have resulted in a pipeline of product candidates directed at various cancers and aging-associated diseases, as well as other immunotherapy molecules, we may not be able to develop product candidates that are safe and effective.
−Removed: Research programs to identify new molecules, indications, and product candidates require substantial technical, financial, and human resources whether or not we ultimately identify any product candidates.
−Removed: Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including:
−Removed: the research methodology used may not be successful in identifying potential product candidates;
−Removed: potential product candidates may on further study be shown to have harmful side effects or other characteristics that indicate they are unlikely to be effective drugs.
−Removed: Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.
−Removed: There are a number of FDA requirements that we must satisfy before we can commence a clinical trial.
−Removed: If we are able to identify additional potential product candidates, satisfaction of these regulatory requirements will entail substantial time, effort, and financial resources.
−Removed: We may never satisfy these requirements.
−Removed: Any time, effort, and financial resources we expend on development of other product candidates may impair our ability to continue development and commercialization of HCW9218 for oncological and other indications, and we may never commence clinical trials of such development programs despite expending significant resources in pursuit of their development.
−Removed: If we do commence clinical trials of other product candidates, these product candidates may never demonstrate sufficient safety and efficacy to be approved by the FDA or other regulatory authorities.
−Removed: If any of these events occur, we may be forced to abandon our development efforts for such program or programs, which would harm our business.
+Added: If we fail to successfully out-license to third parties internally-developed molecules that are outside our focus areas, our revenues and return on our research and development activities would be negatively affected and we could be required to seek additional funding.
We expect to continue to expand our capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
−Removed: As of December 31, 2021, we had 44 full-time employees.
+Added: A s of December 31, 2022, we had 44 full-time employees.
We expect to experience continued growth in the number of our employees and the scope of our operations, particularly in the areas of drug development and regulatory affairs.
−Removed: To manage our anticipated future growth, we must continue to implement and improve our managerial, operational, and financial systems;
−Removed: and continue to recruit and train additional qualified personnel.
+Added: To manage our anticipated future growth, we must continue to implement and improve our managerial, operational, and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel.
Due to our limited financial resources and the limited experience of our management team in managing a public company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.
9 unchanged sentences
There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.
−Removed: Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel.
−Removed: Our success depends upon the continued contributions of our key management, scientific, and technical personnel, many of whom have been instrumental for us and have substantial experience with our product candidates and related technology.
−Removed: The loss of key managers and senior scientists could delay our research and development activities.
−Removed: Despite our efforts to retain valuable employees, members of our management, scientific, and development teams may terminate their employment with us on short notice.
−Removed: Although we have employment agreements with certain of our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.
−Removed: In addition, the competition for qualified personnel in the biotechnology and pharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly-skilled scientific, technical, and managerial employees.
−Removed: We face competition for personnel from other companies, universities, public and private research institutions, and other organizations.
−Removed: If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement our business strategy, which could have a material adverse effect on our business.
+Added: Our business and operations are subject to risks related to climate change.
+Added: The long-term effects of global climate change present risks to our business.
+Added: Extreme weather or other conditions caused by climate change could adversely impact our supply chain and the operation of our business.
+Added: Such conditions could also result in physical damage to our Miramar headquarters, clinical trial materials, clinical sites, or the facilities of our third-party manufacturing partners.
+Added: These events could adversely affect our operations and our financial performance.
+Added: The potential impacts of climate change may also include increased operating costs associated with additional regulatory requirements and investments in reducing energy, water use and greenhouse gas emissions.
Risks Related to the Development and Clinical Testing of Our Product Candidates
2 unchanged sentences
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
−Removed: Failure can occur at any time during the clinical development process.
+Added: occur at any time during the clinical development process.
Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization.
3 unchanged sentences
Clinical trials that we conduct may not demonstrate the efficacy and safety necessary to obtain regulatory approval to market our product candidates.
−Removed: In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in
−Removed: the size and type of the patient populations, changes in and adherence to the clinical trial protocols, and the rate of dropout among clinical trial participants.
+Added: In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols, and the rate of dropout among clinical trial participants.
If the results of our clinical trials are inconclusive with respect to the efficacy of our product candidates, if we do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with our product candidates, we may be delayed in obtaining marketing approval, if at all.
−Removed: Additionally, any safety concerns observed in any one of our clinical trials could limit the prospects for regulatory approval of that product candidate or other product candidates in any indications.
+Added: Additionally, any safety concerns observed in any one of our clinical trials, including adverse safety events in later trials that were not observed in prior trials, could limit the prospects for regulatory approval of that product candidate or other product candidates in any indications.
Even if the trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses, and we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval.
−Removed: We cannot guarantee that the FDA or comparable foreign regulatory authorities will view our product candidates as having efficacy even if positive results are observed in clinical trials.
+Added: We cannot guarantee that the FDA or comparable foreign regulatory authorities will view our product candidates as demonstrating substantial evidence of efficacy even if positive results are observed in clinical trials.
Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction.
1 unchanged sentence
Even if regulatory approval is secured for a product candidate, the terms of such approval may limit the scope and use of the specific product candidate, which may also limit its commercial potential.
−Removed: In the near term, we are dependent on the success of HCW9218.
−Removed: If we are unable to complete the clinical development of, obtain marketing approval for or successfully commercialize HCW9218, or if we experience significant delays in doing so, our business would be substantially harmed.
−Removed: We do not currently have products approved for sale and are investing a significant portion of our efforts and financial resources in the development of HCW9218.
−Removed: Although we have other programs in preclinical development and we intend to develop additional product candidates in the coming years, it will take additional investment and time for such product candidates to reach the same stage of development as HCW9218, and there can be no assurance that they will ever do so.
−Removed: Our prospects are substantially dependent on our ability to develop and obtain marketing approval for, and successfully commercialize, HCW9218 in one or more disease indications.
Preliminary, topline or interim data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.
4 unchanged sentences
As a result, topline data should be viewed with caution until the final data are available.
−Removed: From time to time, we may also disclose data from planned interim analyses of our clinical trials.
−Removed: Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
−Removed: Adverse differences between interim data and final data could significantly harm our business prospects.
−Removed: Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product, and our company in general.
−Removed: If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.
−Removed: Results of preclinical studies of our product candidates may not be predictive of the results of future preclinical studies or clinical trials.
−Removed: To obtain the requisite regulatory approvals to market and sell any of our product candidates, we or any collaborator for such candidates must demonstrate through extensive preclinical studies and clinical trials that our product candidates are safe, pure, and potent in humans.
−Removed: Before IND can be submitted to the FDA and become effective, which is a prerequisite for conducting clinical trials on human subjects in the United States, a product candidate must successfully progress through extensive preclinical studies, which include preclinical laboratory testing, animal studies, and formulation studies in accordance with Good Laboratory Practices.
−Removed: Success in preclinical studies does not ensure that later preclinical studies or clinical trials will be successful.
−Removed: A number of companies in the biotechnology and pharmaceutical industries have suffered significant setbacks in clinical trials, even after positive results in earlier preclinical studies.
−Removed: These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway and safety or efficacy observations made in clinical trials, including previously unreported adverse events.
−Removed: The design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced.
−Removed: In addition, preclinical and clinical data are often susceptible to varying interpretations and analyses.
−Removed: Notwithstanding any potential promising results in earlier studies, we cannot be certain that we will not face similar setbacks.
−Removed: In addition, the results of our preclinical animal studies, including our non-human primate studies, may not be predictive of the results of outcomes in subsequent clinical trials on human subjects.
−Removed: Product candidates in clinical trials may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through preclinical studies.
−Removed: If we fail to receive positive results in preclinical studies or clinical trials of our product candidates, the development timeline and regulatory approval and commercialization prospects for our most advanced product candidates, and, correspondingly, our business and financial prospects would be negatively impacted.
−Removed: All of our product candidates are in preclinical or early-stage clinical development.
+Added: From time to time, we may also disclose data from planned interim analyses of our clinical trials.
+Added: Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available and could result in volatility in the price of our common stock.
+Added: Adverse differences between interim data and final data could significantly harm our business, operating results, prospects, or financial condition.
Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes.
6 unchanged sentences
We may experience delays in our clinical trials, and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time, or be completed on schedule, if at all.
−Removed: Clinical trials can be delayed, suspended, or terminated for a variety of reasons, including the following:
−Removed: delays in or failure to obtain regulatory authorization to commence a trial;
−Removed: delays in or failure to obtain institutional review board (“IRB”), approval at each site;
−Removed: delays in or failure to reach agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites —
−Removed: we are currently engaged in negotiations with a sponsor for an IND for HCW9218, but these negotiations, and any other discussions with potential clinical sites may not reach an agreement;
−Removed: difficulty in recruiting clinical trial investigators of appropriate competencies and experience;
−Removed: delays in establishing the appropriate dosage levels in clinical trials;
−Removed: delays in or failure to recruit and enroll suitable patients to participate in a trial, particularly considering study inclusion and exclusion criteria and patients’
−Removed: prior lines of therapy and treatment;
−Removed: the difficulty in certain countries in identifying the sub-populations that we are trying to treat in a particular trial, which may delay enrollment and reduce the power of a clinical trial to detect statistically significant results;
−Removed: lower than anticipated retention rates of patients in clinical trials;
−Removed: failure to have patients complete a trial or return for post-treatment follow-up;
−Removed: clinical sites deviating from trial protocol or dropping out of a trial;
−Removed: delays adding new investigators or clinical trial sites;
−Removed: safety or tolerability concerns could cause us or our collaborators or governmental authorities, as applicable, to suspend or terminate a trial if it is found that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unfavorable characteristics of the product candidate, or if such undesirable effects or risks are found to be caused by a chemically or mechanistically similar therapeutic or therapeutic candidate;
−Removed: our third-party research contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
−Removed: changes in regulatory requirements, policies, and guidelines;
−Removed: manufacturing sufficient quantities of a product candidate for use in clinical trials;
−Removed: the quality or stability of a product candidate falling below acceptable standards;
−Removed: changes in the treatment landscape for our target indications that may make our product candidates no longer relevant;
−Removed: third-party actions claiming infringement by our product candidates in clinical trials outside the United States and obtaining injunctions interfering with our progress;
−Removed: business interruptions resulting from geo-political actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods, and fires, or disease, including the COVID-19 pandemic.
+Added: These clinical trials can be delayed, suspended, or terminated for a variety of reasons, including but not limited to delays in or failure to obtain regulatory authorization to commence a trial and IRB approval at each site, to reach agreement on acceptable terms with prospective clinical trial sites, or to recruit and enroll suitable patients to participate in a trial.
In addition, even if the regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or similar application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.
These considerations also apply to new clinical trials we may submit as amendments to existing INDs.
−Removed: Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities’
+Added: Clinical trials must be conducted in accordance with the FDA's and other applicable regulatory authorities’
legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and Ethics Committees or IRBs at the medical institutions where the clinical trials are conducted.
We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or Ethics Committees of the institutions in which such trials are being conducted, by the Data Review Committee or Data Safety Monitoring Board for such trial or by the FDA, or other regulatory authorities.
−Removed: Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial.
If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed.
1 unchanged sentence
Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates and impair our ability to commercialize our product candidates and may harm our business and results of operations.
−Removed: In addition, clinical trials must be conducted with supplies of our product candidates produced under current good manufacturing practices, or cGMP, requirements and other regulations.
+Added: In addition, clinical trials must be conducted with supplies of our product candidates produced under cGMP requirements and other regulations.
Furthermore, we rely on clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance.
−Removed: We depend on our collaborators and on medical institutions to conduct our clinical trials in compliance with good clinical practice (“GCP”) requirements.
−Removed: To the extent our collaborators fail to enroll participants for our clinical trials, fail to conduct the study in accordance with GCP, or are delayed for a significant time in the execution of trials, including achieving full
−Removed: enrollment, we may be affected by increased costs, program delays, or both, which may harm our business.
+Added: We depend on our collaborators and on medical institutions to conduct our clinical trials in compliance with GCP requirements.
+Added: To the extent our collaborators fail to enroll participants for our clinical trials, fail to conduct the study in accordance with GCP, or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays, or both, which may harm our business.
In addition, clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, and additional regulatory requirements, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening, and medical care.
−Removed: Our lead product candidate, HCW9218, has been cleared by the FDA to proceed with two initial Phase 1/1(b) clinical trials in cancer indications.
−Removed: If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of HCW9218 could be harmed, and our ability to generate revenues from HCW9218 may be delayed.
−Removed: In addition, any delays in our clinical trials could increase our costs, slow down the development and approval process and jeopardize our ability to commence product sales and generate revenues.
+Added: Our lead product candidate, HCW9218, is currently being evaluated in two initial Phase 1/1b clinical trials in cancer indications:
+Added: a Phase 1 dose escalation trial in patients with advanced solid tumors with progressive disease after prior chemotherapies, and a Phase 1b/2 trial in patients with advanced pancreatic cancer.
+Added: We expect the Phase 1 advanced solid tumors study and the Phase 1b portion of the Phase 1b/2 advanced pancreatic study to be completed in 2023.
+Added: Our ability to advance HCW9218 to Phase 2 clinical trials depends on timely completion of Phase 1/1b studies, successfully meeting those studies’
+Added: objectives, including dose finding and/or optimization for Phase 2, and obtaining FDA authorization to proceed to Phase 2 trials.
+Added: If the FDA does not allow our Phase 2 clinical trials to proceed, we may be required to undertake additional IND-enabling activities or dose finding activities, which would result in further delay and additional costs.
+Added: If we experience delays in the progression and completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of HCW9218 could be harmed, and our ability to generate revenues from HCW9218 may be delayed.
+Added: In addition, any delays in our clinical trials would require us to store material which could expose us to inventory risk, increased costs, slow down in development and approval process, as well as jeopardize our ability to commence product sales and generate revenues.
Any of these occurrences may harm our business, financial condition and results of operations.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
−Removed: We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
−Removed: We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:
−Removed: regulators or IRBs or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
−Removed: we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;
−Removed: regulators may decide the design of our clinical trials is flawed, for example if our trial protocol does not evaluate treatment effects in trial subjects for a sufficient length of time;
−Removed: clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
−Removed: preclinical testing may produce results based on which we may decide, or regulators may require us, to conduct additional preclinical studies before we proceed with certain clinical trials, limit the scope of our clinical trials, halt ongoing clinical trials or abandon product development programs;
−Removed: the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;
−Removed: our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
−Removed: regulators, IRBs or ethics committees may require us to perform additional or unanticipated clinical trials to obtain approval or we may be subject to additional post-marketing testing requirements to maintain regulatory approval;
−Removed: regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate;
−Removed: the cost of clinical trials of our product candidates may be greater than we anticipate;
−Removed: the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate;
−Removed: new lots of our product candidates may not be approved for use in clinical trials;
−Removed: our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate the trials;
−Removed: regulators may withdraw their approval of a product or impose restrictions on its distribution, such as in the form of a risk evaluation and mitigation strategy (“REMS”).
−Removed: We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are conducted or their ethics committees, by the data review committee or data safety monitoring board for such trial or by the FDA, European Medicines Agency (“EMA”) or other foreign regulatory authorities.
−Removed: Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA or other foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, including those relating to the class of products to which our product candidates belong.
−Removed: If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
−Removed: be delayed in obtaining marketing approval for our product candidates;
−Removed: not obtain marketing approval at all;
−Removed: obtain approval for indications or patient populations that are not as broad as intended or desired;
−Removed: obtain approval with labeling or a REMS that includes significant use or distribution restrictions or safety warnings;
−Removed: be subject to additional post-marketing testing requirements;
−Removed: have the product removed from the market after obtaining marketing approval.
−Removed: Our development costs will also increase if we experience delays in preclinical studies or clinical trials or in obtaining marketing approvals.
−Removed: We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all.
−Removed: We may also determine to change the design or protocol of one or more of our clinical trials, including to add additional patients or arms, which could result in increased costs and expenses and/or delays.
−Removed: Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
−Removed: We may not be able to file INDs or IND amendments to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA or a comparable foreign regulatory may not permit us to proceed.
−Removed: We may not be able to file INDs for any of our product candidates on the timelines we expect, if at all.
−Removed: Moreover, we cannot be sure that submission of an IND will result in the FDA allowing further clinical trials to begin, or that, once begun, issues will not arise that require us to suspend or terminate clinical trials.
−Removed: Commencing each of these clinical trials will be subject to finalizing the trial design and selection of relevant endpoints based on discussions with the FDA and other regulatory authorities.
−Removed: Any guidance we receive from the FDA or other regulatory authorities is subject to change.
−Removed: These regulatory authorities could change their position, including, on the acceptability of our trial designs or the clinical endpoints selected, which may require us to complete additional clinical trials or impose stricter approval conditions than we currently expect.
−Removed: Successful completion of our clinical trials is a prerequisite to submitting a BLA to the FDA for each drug candidate and, consequently, the ultimate approval and commercial marketing of each drug candidate.
−Removed: There is also no assurance that, even if completed, our ongoing or any future clinical trials of drug candidates will be successful or will generate positive clinical data.
−Removed: Our product candidates may have serious adverse, undesirable, or unacceptable side effects or other properties that may delay or prevent marketing approval.
−Removed: If such side effects are identified following approval, if any, the commercial profile of any approved label may be limited, or we may be subject to other significant negative consequences following marketing approval, if any.
−Removed: Undesirable side effects that may be caused by our product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.
−Removed: Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects.
−Removed: In such an event, our clinical trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.
−Removed: The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims.
−Removed: Any of these occurrences may harm our business, financial condition, and prospects significantly.
−Removed: Further, clinical trials by their nature utilize a sample of the potential patient population.
−Removed: With a limited number of patients and limited duration of exposure, rare and severe side effects of our product candidates may only be uncovered with a significantly larger number of patients exposed to the product candidate.
−Removed: In the event that any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products, a number of potentially significant negative consequences could result, including:
−Removed: regulatory authorities may withdraw or limit approvals of such products and require us to take our approved product off the market;
−Removed: regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies, or issue other communications containing warnings or other safety information about the product;
−Removed: regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a REMS to ensure that the benefits of the product outweigh its risks;
−Removed: we may be required to change the dose or the way the product is administered, conduct additional clinical trials, or change the labeling of the product;
−Removed: we may be subject to limitations on how we may promote or manufacture the product;
−Removed: sales of the product may decrease significantly;
−Removed: we may be subject to litigation or product liability claims;
−Removed: our reputation may suffer.
−Removed: Any of these events could prevent us, our collaborators, or our potential future partners from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of any products.
−Removed: The manufacture of our product candidates is complex.
−Removed: Our third-party manufacturers may encounter difficulties in production, which could delay or entirely halt their ability to supply our product candidates for clinical trials or, if approved, for commercial sale.
−Removed: Our product candidates are considered to be biologics and the process of manufacturing biologics is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.
−Removed: We do not own or operate any cGMP manufacturing facilities.
−Removed: We rely, and expect to continue to rely, on third-party contract development and manufacturing organizations for the manufacture of our product candidates for preclinical and clinical testing.
−Removed: To date, we and our contract manufacturers have limited experience in the manufacturing of cGMP batches of our product candidates.
−Removed: Our contract manufacturers must comply with cGMP, regulations, and guidelines for the manufacturing of biologics used in clinical trials and, if approved, marketed products.
−Removed: To date, we and our contract manufacturers have only produced smaller cGMP batches of our product candidates and have not scaled up the manufacturing process for later-stage clinical trials and commercialization.
−Removed: Some of our product candidates may require the development of new processes to scale up, which could cause delays in the scale-up of manufacturing, as well as greater costs that could negatively impact the financial viability of our product candidates.
−Removed: The process of manufacturing our biologic product candidates is extremely susceptible to product loss due to contamination, oxidation, equipment failure, or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics, and difficulties in scaling the production process.
−Removed: Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions.
−Removed: If microbial, viral, or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are
−Removed: made, this could lead to withdrawal of our products from the market, and such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
−Removed: Moreover, if the FDA determines that our third-party manufacturers are not in compliance with FDA laws and regulations, including those governing cGMP, the FDA may not approve our BLA until the deficiencies are corrected, or we replace the manufacturer in our BLA with a manufacturer that is in compliance.
−Removed: Any adverse developments affecting manufacturing operations for our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products.
−Removed: We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications as a result of defects or storage over an extended period of time, undertake costly remediation efforts, or seek more costly manufacturing alternatives.
−Removed: As part of our process development efforts, we also may make changes to our manufacturing processes at various points during development, for various reasons, such as controlling costs, achieving scale, decreasing processing time, increasing manufacturing success rate, or other reasons.
−Removed: Such changes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of our clinical trials or future clinical trials.
−Removed: In some circumstances, changes in the manufacturing process may require us to perform ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.
+Added: Our other lead product candidate, HCW9302, is currently completing activities required to submit an IND for a clinical trial to evaluate this immunotherapeutic drug in an autoimmune indication.
+Added: We rely on third-party providers for toxicology testing services for information required to be included in the submission of an IND.
+Added: Any delays in completing toxicology studies and other IND-enabling activities will increase our costs, slow down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenues.
+Added: Significant delays in commencing clinical trials could also allow our
+Added: competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates and impair our ability to commercialize our product candidates and may harm our business and results of operations.
We depend on enrollment of patients in our clinical trials for our product candidates.
1 unchanged sentence
Successful and timely completion of clinical trials will require that we enroll a sufficient number of patient candidates.
−Removed: These trials and other trials we conduct may be subject to delays for a variety of reasons, including as a result of patient enrollment taking longer than anticipated, patient withdrawal, or adverse events.
−Removed: For example, there were delays in commencing clinical trials of HCW9201 as a result of the ongoing pandemic.
+Added: These trials and other trials we conduct may be subject to delays for a variety of reasons, including delays in completion of internal procedures required to open a clinical site, patient enrollment taking longer than anticipated, patient withdrawal, or adverse events.
+Added: For example, there were delays in commencing clinical trials of HCW9218 as a result of the ongoing pandemic and staffing shortages at clinical sites.
These types of developments could cause us to delay the trial or halt further development.
6 unchanged sentences
Additionally, patients who have failed approved therapies will typically have more advanced cancer and a poorer long-term prognosis.
−Removed: Because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites.
−Removed: Patient enrollment depends on many factors, including:
−Removed: the size and nature of the patient population;
−Removed: the severity of the disease under investigation;
−Removed: eligibility criteria for the trial;
−Removed: the proximity of patients to clinical sites;
−Removed: the design of the clinical protocol;
−Removed: the ability to obtain and maintain patient consents;
−Removed: the ability to recruit clinical trial investigators with the appropriate competencies and experience;
−Removed: the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our product candidates or trial completion;
−Removed: the availability of competing clinical trials;
−Removed: the availability of new drugs approved for the indication the clinical trial is investigating;
−Removed: clinicians’
−Removed: and patients’
−Removed: perceptions as to the potential advantages of the drug being studied in relation to other available therapies.
−Removed: These factors may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner.
+Added: Patient enrollment depends on many factors, including but not limited to the size and nature of the patient population, the severity of the disease under investigation, and the availability of competing clinical trials, which may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner.
Delays in the completion of any clinical trial of our product candidates will increase our costs, slow down our product candidate development and approval process, and delay or potentially jeopardize our ability to commence product sales and generate revenue.
23 unchanged sentences
Although we maintain adequate product liability insurance for our product candidates, it is possible that our liabilities could exceed our insurance coverage.
−Removed: We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for any of our product candidates.
+Added: We intend to expand our insurance coverage to include the sale of commercial products if we obtain
+Added: marketing approval for any of our product candidates.
However, we may be unable to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise.
4 unchanged sentences
The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting, including the submission of safety and other post-marketing information and reports, and other possible activities relating to our product candidates are subject to extensive regulation.
−Removed: In the United States, marketing approval of biologics requires the submission of a BLA to the FDA, and we are not permitted to market any product
−Removed: candidate in the United States until we obtain approval from the FDA of the BLA for that product candidate.
+Added: In the United States, marketing approval of biologics requires the submission of a BLA to the FDA, and we are not permitted to market any product candidate in the United States until we obtain approval from the FDA of the BLA for that product candidate.
A BLA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology, chemistry, manufacturing, and controls.
4 unchanged sentences
We also would not be permitted to market our product candidates in countries outside of the United States until we receive marketing approval from applicable regulatory authorities in those countries.
−Removed: Our product candidates could fail to receive regulatory approval for many reasons, including the following:
−Removed: the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
−Removed: we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;
−Removed: the results of clinical trials 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 product candidate’s clinical and other benefits outweigh its safety risks;
−Removed: the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
−Removed: the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere, or regulatory authorities may not accept a submission due to, among other reasons, the content or formatting of the submission;
−Removed: 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;
−Removed: the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
−Removed: This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects.
+Added: Our product candidates could fail to receive regulatory approval for many reasons including but not limited to flaws in trial design, dose selection, patient enrollment criteria and failure to demonstrate an acceptable risk:benefit profile, and failure in clinical trials can occur at any stage.
+Added: Companies in the biologics industry frequently suffer setbacks in the advancement of clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials.
+Added: In addition, data obtained from clinical trials is susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may further delay, limit or prevent marketing approval.
+Added: The lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects.
The FDA and other regulatory authorities have substantial discretion in the approval process, and determining when or whether regulatory approval will be obtained for any of our product candidates.
6 unchanged sentences
If the FDA or a comparable foreign regulatory authority approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, import, export, adverse event reporting, storage, advertising, promotion, and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements.
−Removed: These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.
+Added: These requirements include
+Added: submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.
In addition, any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.
8 unchanged sentences
In addition, if we have any product candidate approved, our product labeling, advertising, and promotion will be subject to regulatory requirements and continuing regulatory review.
−Removed: In the United States, the FDA and the Federal Trade Commission (“FTC”), strictly regulate the promotional claims that may be made about pharmaceutical products to ensure that any claims about such products are consistent with regulatory approvals, not misleading or false in any particular, and adequately substantiated by clinical data.
+Added: In the United States, the FDA and the Federal Trade Commission (“FTC”), strictly regulate the promotional claims that may be made about pharmaceutical products to ensure that any claims about such products are consistent with regulatory approvals, not misleading or false in any particular way, and adequately substantiated by clinical data.
The promotion of a drug product in a manner that is false, misleading, unsubstantiated, or for unapproved (or off-label) uses may result in enforcement letters, inquiries and investigations, and civil and criminal sanctions by the FDA or the FTC.
6 unchanged sentences
If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
−Removed: If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:
−Removed: issue warning or untitled letters;
−Removed: issue, or require us to issue, safety-related communications, such as safety alerts, field alerts, “Dear Doctor”
−Removed: letters to healthcare professionals, or import alerts;
−Removed: impose civil or criminal penalties;
−Removed: suspend, limit, or withdraw regulatory approval;
−Removed: suspend any of our preclinical studies and clinical trials;
−Removed: refuse to approve pending applications or supplements to approved applications submitted by us;
−Removed: impose restrictions on our operations, including closing our contract manufacturers’
−Removed: seize or detain products, refuse to permit the import or export of products, or require us to conduct a product recall.
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
2 unchanged sentences
Moreover, the policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit, or delay regulatory approval of our product candidates.
−Removed: We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
−Removed: In addition, if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.
−Removed: Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain, or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, or commercialized in a timely manner or at all, which could negatively impact our business.
−Removed: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
−Removed: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies may also slow the time necessary for new biologics or modifications to licensed biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
−Removed: government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
−Removed: Separately, in response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities, and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities.
−Removed: Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system.
−Removed: The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities.
−Removed: Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
−Removed: If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, including product pre-approval inspections reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing.
−Removed: Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans.
−Removed: Animal testing activities have been the subject of controversy and adverse publicity.
−Removed: Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means.
−Removed: To the extent the activities of these groups are successful, our research and development activities may be interrupted, delayed, or become more expensive.
−Removed: Our business operations and current and future relationships with healthcare professionals, principal investigators, consultants, vendors, customers, and third-party payors in the United States and elsewhere are subject to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, and other healthcare laws and regulations, which could expose us to substantial penalties, contractual damages, reputation harm, administrative burdens, and diminished profits.
−Removed: Healthcare providers, healthcare facilities and institutions, physicians, and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
−Removed: Our current and future arrangements with healthcare professionals, healthcare facilities and institutions, principal investigators, consultants, customers, and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we research, sell, market, and distribute any product candidates for which we obtain marketing approval.
−Removed: In addition, we may be subject to physician payment transparency laws and regulation by the federal government and by the states and foreign jurisdictions in which we conduct our business.
−Removed: The applicable federal, state, and foreign healthcare laws that affect our ability to operate include, but are not limited to, the following:
−Removed: the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving, or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, 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 any U.S.
−Removed: federal healthcare program, such as Medicare and Medicaid.
−Removed: The term “remuneration”
−Removed: has been broadly interpreted to include anything of value, including stock options.
−Removed: The federal Anti-Kickback Statute has also been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other the other hand.
−Removed: Any arrangements with prescribers must be for bona fide services and compensated at fair market value.
−Removed: A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
−Removed: federal civil and criminal false claims and civil monetary penalties laws, including the civil False Claims Act, which prohibit, among other things, including through civil whistleblower or qui tam actions, individuals or entities from knowingly presenting, or causing to be presented, to the U.S.
−Removed: federal government, claims for payment or approval that are false or fraudulent, knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease, or conceal an obligation to pay money to the U.S.
−Removed: federal government.
−Removed: Pharmaceutical manufacturers can cause false claims to be presented to the U.S.
−Removed: federal government by, among other things, engaging in impermissible marketing practices, such as the off-label promotion of a product for an indication for which it has not received FDA approval.
−Removed: In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;
−Removed: the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items, or services.
−Removed: Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation;
−Removed: Physician Payments Sunshine Act and its implementing regulations, which requires, among other things, certain manufacturers of drugs, devices, biologics, and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare and Medicaid Services (“CMS”), information related to certain payments and other transfers of value to physicians, as defined by statute, physician assistant, certain types of advance practice nurses and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
−Removed: analogous U.S.
−Removed: state laws and regulations, including:
−Removed: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements, and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers;
−Removed: state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S.
−Removed: federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
−Removed: state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other
−Removed: remuneration and items of value provided to healthcare professionals and entities;
−Removed: and state and local laws requiring the registration of pharmaceutical sales representatives;
−Removed: similar healthcare laws and regulations in foreign jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
−Removed: Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs.
−Removed: It is not always possible to identify and deter employee misconduct or business noncompliance, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
−Removed: Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs.
−Removed: We have entered into consulting and scientific advisory board arrangements with physicians and other healthcare providers, including some who could influence the use of our product candidates, if approved.
−Removed: Compensation under some of these arrangements includes the provision of stock or stock options in addition to cash consideration.
−Removed: Because of the complex and far-reaching nature of these laws, it is possible that governmental authorities could conclude that our payments to physicians may not be fair market value for bona fide services or that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.
−Removed: If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal, and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid, or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of noncompliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.
−Removed: If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business.
−Removed: Further, defending against any such actions can be costly, time-consuming, and may require significant personnel resources.
−Removed: Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.
+Added: The standards that the FDA and its foreign counterparts use when regulating us require judgment and can change, which makes it difficult to predict with certainty their application.
+Added: We may also encounter unexpected delays or increased costs due to new government regulations, for example, from future legislation or administrative action, or from changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.
+Added: It is impossible to predict whether legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or the impact of such changes, if any.
+Added: For example, the Oncology Center of Excellence within the FDA has recently advanced Project Optimus, which is an initiative to reform the dose optimization and dose selection paradigm in oncology drug development to emphasize selection of an optimal dose, which is a dose or doses that maximizes not only the efficacy of a drug but the safety and tolerability as well.
+Added: This shift from the prior approach, which generally determined the
+Added: maximum tolerated dose, may require sponsors to spend additional time and resources to further explore a product candidate’s dose-response relationship to facilitate optimum dose selection in a target population.
+Added: Other recent Oncology Center of Excellence initiatives have included Project FrontRunner, a new initiative with a goal of developing a framework for identifying candidate drugs for initial clinical development in the earlier advanced setting rather than for treatment of patients who have received numerous prior lines of therapies or have exhausted available treatment options, and Project Equity, which is an initiative to ensure that the data submitted to the FDA for approval of oncology medical products adequately reflects the demographic representation of patients for whom the medical products are intended.
+Added: We are considering these and other policy changes as they relate to our programs.
Our employees, independent contractors, principal investigators, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other misconduct.
−Removed: We cannot ensure that our compliance controls, policies, and procedures will in every instance protect us from acts committed by our employees, agents, contractors, or collaborators that would violate the laws or regulations of the jurisdictions in which we operate, including, without limitation, employment, foreign corrupt practices, trade restrictions and sanctions, environmental, competition, and patient privacy and other privacy laws and regulations.
+Added: We cannot ensure that our compliance controls, policies, and procedures will in every instance protect us from acts committed by our employees, agents, contractors, or collaborators that would violate the laws or regulations of the jurisdictions in which we operate, including, without limitation, employment, foreign corrupt practices, trade restrictions and sanctions, environmental, competition, theft of trade secrets as well as patient privacy and other privacy laws and regulations.
Misconduct by employees could include failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, comply with federal and state healthcare fraud and abuse laws and regulations, report financial information or data accurately, or disclose unauthorized activities to us.
4 unchanged sentences
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations, and prospects, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, individual imprisonment, disgorgement of profits, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of noncompliance with the law, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy.
−Removed: Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain.
−Removed: In the United States and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our future results of operations.
−Removed: In particular, there have been and continue to be a number of initiatives at the U.S.
−Removed: federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare.
−Removed: For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”), was enacted, which substantially changed the way healthcare is financed by both governmental and private payors.
−Removed: Among the provisions of the ACA of importance to the pharmaceutical and biotechnology industries, which includes biologics, are those which increased manufacturers’
−Removed: rebate liability under the Medicaid Drug Rebate Program, imposed a significant annual fee on companies that manufacture or import branded prescription drug products, required manufacturers to provide a discount off the negotiated price of prescriptions filled by beneficiaries in the Medicare Part D coverage gap, referred to as the “donut hole,”
−Removed: which is now 70% of the negotiated price, required the reporting certain payments or transfers of values (described above), and provided a licensure framework for follow-on biologics.
−Removed: Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and there may be additional challenges and amendments to the ACA in the future.
−Removed: For example, the Tax Cuts and Jobs Act of 2017, repealed the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage that is commonly referred to as the “individual mandate.”
−Removed: On June 17, 2021, the United States Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the individual mandate was repealed by Congress.
−Removed: Thus, the ACA will remain in effect in its current form.
−Removed: In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted which, among other things, have reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers.
−Removed: These new laws or any other similar laws introduced in the future, as well as regulatory actions that may be taken by CMS, may result in additional reductions in Medicare and other healthcare funding, which could negatively affect our customers and accordingly, our financial operations.
−Removed: Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.
−Removed: For example, in July 2021, President Biden issued an executive order pertaining to drug pricing, which expressed support for legislation allowing direct negotiation in Medicare Part D and inflationary rebates and directed various executive branch agencies to take actions to lower drug prices and promote generic competition.
−Removed: Several pending legislative efforts, including President Biden’s larger Build Back Better legislative agenda and draft bill text, incorporate these drug pricing reforms in addition to inflationary rebates on Part B and Part D drugs that would be payable on commercial and governmental program utilization, policies aimed at redesigning the Medicare Part D benefit and adopting drug price transparency measures.
−Removed: Drug manufacturers who are unwilling to negotiate with Medicare would be subject to additional excise taxes.
−Removed: Additionally, the plan would impose tax penalties on drug manufacturers that increase the prices of drug products faster than the rate of inflation.
−Removed: If elements of the recently announced prescription drug pricing plan become law, our pricing strategy and commercial prospects may be adversely affected.
−Removed: Additionally, on September 9, 2021, the Biden administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment.
−Removed: This plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency.
−Removed: Many similar proposals, including the plans to give Medicare Part D authority to negotiate drug prices, require drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation, and cap out-of-pocket costs, have already been included in policy statements and legislation currently being considered by Congress.
−Removed: It is unclear to what extent these new proposals or any future legislation or regulations by the Biden Administration will have on our business.
−Removed: Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing and costs.
−Removed: Similar developments have occurred outside of the United States, including in the European Union where healthcare budgetary constraints have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.
−Removed: To obtain reimbursement or pricing approval in some European Union member states, we may be required to conduct studies that compare the cost-effectiveness of our product candidates to other therapies that are considered the local standard of care.
−Removed: We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative action in the United States or any other jurisdiction.
−Removed: If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.
−Removed: Even if we are able to commercialize any product candidate, coverage and adequate reimbursement may not be available or such product candidate may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business.
−Removed: The regulations that govern regulatory approvals, pricing, and reimbursement for drug products vary widely from country to country.
−Removed: Some countries require approval of the sale price of a drug product before it can be marketed.
−Removed: In many countries, the pricing review period begins after marketing approval is granted.
−Removed: In some foreign markets, prescription drug product pricing remains subject to continuing governmental control even after initial approval is granted.
−Removed: As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country.
−Removed: Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain regulatory approval.
−Removed: Our ability to commercialize any products successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from third-party payors, such as government authorities, private health insurers, and other organizations.
−Removed: Even if we succeed in bringing one or more products to the market, these products may not be considered cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis.
−Removed: Because our programs are in the early stages of development, we are unable at this time to determine their cost effectiveness or the likely level or method of coverage and reimbursement.
−Removed: Increasingly, the third-party payors who reimburse patients or healthcare providers are requiring that drug companies provide them with predetermined discounts from list prices, and are seeking to reduce the prices charged or the amounts reimbursed for drug products.
−Removed: If the price we are able to charge for any products we develop, or the coverage and reimbursement provided for such products, is inadequate in light of our development and other costs, our return on investment could be affected adversely.
−Removed: There may be significant delays in obtaining reimbursement for newly-approved drug products, and coverage may be more limited than the purposes for which the drug product is approved by the FDA or similar foreign regulatory authorities.
−Removed: Moreover, eligibility for reimbursement does not imply that any drugs product will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture, sale, and distribution.
−Removed: Interim reimbursement levels for new drug products, if applicable, may also be insufficient to cover our costs and may not be made permanent.
−Removed: Reimbursement rates may be based on payments allowed for lower cost drug products that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
−Removed: Net prices for drug products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of drug products from countries where they may be sold at lower prices than in the United States.
−Removed: Obtaining coverage and adequate reimbursement for our product candidates may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician.
−Removed: Similarly, because some of our product candidates will be physician-administered subcutaneous injectables, separate reimbursement for the product itself may or may not be available.
−Removed: Instead, the administering physician may or may not be reimbursed for providing the treatment or procedure in which our product is used.
−Removed: Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.
−Removed: Third-party payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.
−Removed: As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
−Removed: Decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis.
−Removed: One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage and adequate reimbursement for the drug.
−Removed: Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.
−Removed: There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal, and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
−Removed: We cannot predict the initiatives that may be adopted in the future, including repeal, replacement, or significant revisions to the ACA.
−Removed: The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:
−Removed: the demand for our product candidates, if we obtain regulatory approval;
−Removed: our ability to set a price that we believe is fair for our products;
−Removed: our ability to obtain coverage and reimbursement approval for a product;
−Removed: our ability to generate revenue and achieve or maintain profitability;
−Removed: the level of taxes that we are required to pay;
−Removed: the availability of capital.
−Removed: We face potential liability related to the privacy of health information we obtain from clinical trials sponsored by us or our collaborators, from research institutions and our collaborators, and directly from individuals.
−Removed: We and our partners and vendors are subject to various federal, state, and foreign data protection laws and regulations (i.e., laws and regulations that address data privacy and security).
−Removed: If we fail to comply with these laws and regulations we may be subject to litigation, regulatory investigations, enforcement notices, enforcement actions, fines, and criminal or civil penalties, as well as negative publicity and a potential loss of business.
−Removed: In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.
−Removed: For example, most healthcare providers, including research institutions from which we or our collaborators obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”).
−Removed: Under HIPAA, we could potentially face substantial criminal or civil penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information, or otherwise violate applicable HIPAA requirements related to the protection of such information.
−Removed: Even when HIPAA does not apply, failing to take appropriate steps to keep consumers’
−Removed: personal information secure may constitute a violation of the Federal Trade Commission Act.
−Removed: In addition, we may maintain sensitive personally identifiable information, including health information, that we receive throughout the clinical trial process, in the course of our research collaborations, and directly from individuals (or their healthcare providers) who enroll in our patient assistance programs.
−Removed: As such, we may be subject to state laws requiring notification of affected individuals and state regulators in the event of a breach of personal information.
−Removed: These state laws include the recently enacted California Consumer Privacy Act, which establishes additional data privacy rights for residents of the State of California.
−Removed: Similar laws have been proposed in other states and at the federal level, and if passed, such laws may have potentially conflicting requirements that would make compliance challenging.
−Removed: Our clinical trial programs and research collaborations outside the United States may implicate international data protection laws, including, in Europe, the General Data Protection Regulation (“GDPR”), which became effective in 2018.
−Removed: The GDPR imposes stringent operational requirements for processors and controllers of personal data.
−Removed: Among other things, the GDPR requires detailed notices for clinical trial subjects and investigators, as well as requirements regarding the security of personal data and notification of data processing obligations or security incidents to appropriate data protection authorities or data subjects.
−Removed: If our privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions requiring us to change the way we use personal data and/or fines.
−Removed: In addition to statutory enforcement, a personal data breach can lead to negative publicity and a potential loss of business.
−Removed: Further, following the United Kingdom’s withdrawal from the E.U.
−Removed: effective as of December 31, 2020, we have to comply with the GDPR and the GDPR as incorporated into United Kingdom national law, which may have differing requirements.
−Removed: If we fail to comply with United Kingdom data protection laws we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions, as well as negative publicity and a potential loss of business.
−Removed: We are also subject to evolving EEA laws on data export, as we may transfer personal data from the EEA to other jurisdictions.
−Removed: Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States.
−Removed: For example, on July 16, 2020, the Court of Justice of the European Union (“CJEU”), invalidated the EU-US Privacy Shield Framework (“Privacy Shield”), under which personal data could be transferred from the EEA to United States entities who had self-certified under the Privacy Shield scheme.
−Removed: Moreover, it is uncertain whether the standard contractual clauses will also be invalidated by the European courts or legislature.
−Removed: As government authorities issue further guidance on personal data export mechanisms and/or start taking enforcement action, we could suffer additional costs, complaints, and/or regulatory investigations or
−Removed: fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
−Removed: These laws and regulations may apply, not only to us, but also to vendors that store or otherwise process data on our behalf, such as information technology vendors.
−Removed: If such a vendor misuses data we have provided to it, or fails to safeguard such data, we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions, as well as negative publicity and a potential loss of business.
−Removed: We are likely to be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws.
−Removed: Claims that we have violated individuals’
−Removed: privacy rights or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend, and could result in adverse publicity that could harm our business.
−Removed: Moreover, even if we take all necessary action to comply with regulatory requirements, we could be subject to a hack or data breach, which could subject us to fines and penalties, as well as reputational damage.
−Removed: If we or any collaborators fail to comply with applicable federal, state, or local regulatory requirements, we could be subject to a range of regulatory actions that could affect our or any collaborators’
−Removed: ability to seek to commercialize our clinical candidates.
−Removed: Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business.
−Removed: If we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
−Removed: We are subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment, and disposal of hazardous materials and wastes.
−Removed: Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials.
−Removed: Our operations also produce hazardous waste products.
−Removed: We generally contract with third parties for the disposal of these materials and wastes.
−Removed: We cannot eliminate the risk of contamination or injury from these materials.
−Removed: In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.
−Removed: We also could incur significant costs associated with civil or criminal fines and penalties.
−Removed: Although we maintain workers’
−Removed: compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.
−Removed: We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.
−Removed: In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations.
−Removed: These current or future laws and regulations may impair our research, development or commercialization efforts.
−Removed: Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
Risks Related to Commercialization of Our Product Candidates
9 unchanged sentences
Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
−Removed: The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceutical industries could render our product candidates or our technology obsolete, less competitive or uneconomical.
−Removed: Our competitors may, among other things:
−Removed: have significantly greater financial, manufacturing, marketing, drug development, technical, and human resources than we do;
−Removed: develop and commercialize products that are safer, more effective, less expensive, more convenient or easier to administer, or have fewer or less severe side effects;
−Removed: obtain quicker regulatory approval;
−Removed: establish superior proprietary positions covering our products and technology;
−Removed: implement more effective approaches to sales and marketing;
−Removed: form more advantageous strategic alliances.
−Removed: Should any of these factors occur, our business, financial condition, and results of operations could be materially adversely affected.
−Removed: In addition, any collaborators may decide to market and sell products that compete with the product candidates that we have agreed to license to them, and any competition by our collaborators could also have a material adverse effect on our future business, financial condition, and results of operations.
−Removed: Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
−Removed: These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
−Removed: If the market opportunity for any product candidate that we or our strategic partners develop is smaller than we believe, our revenue may be adversely affected and our business may suffer.
−Removed: We intend to initially focus our product candidate development on treatments for various oncology indications.
−Removed: Our projections of addressable patient populations that may benefit from treatment with our product candidates are based on our estimates.
−Removed: These estimates, which have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, and market research, may prove to be incorrect.
−Removed: Further, new studies may change the estimated incidence or prevalence of these cancers.
−Removed: Additionally, the potentially addressable patient population for our product candidates may not ultimately be amenable to treatment with our product candidates.
−Removed: Our market opportunity may also be limited by future competitor treatments that enter the market.
−Removed: If any of our estimates prove to be inaccurate, the market opportunity for any product candidate that we or our strategic partners develop could be significantly diminished and have an adverse material impact on our business.
−Removed: We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
−Removed: Because we have limited financial and managerial resources, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential.
−Removed: Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
−Removed: Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
−Removed: If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate or the third-party to whom we relinquish such rights may not take full advantage or be properly qualified to take full advantage of such valuable rights.
−Removed: Failure to allocate resources or capitalize on strategies in a successful manner will have an adverse impact on our business.
+Added: The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceutical industries could render our product candidates or our technology obsolete, less competitive or uneconomical, which could adversely impact our business, financial condition, or results of operations.
Failure to successfully identify, develop, and commercialize additional product candidates could impair our ability to grow.
1 unchanged sentence
Because we have limited financial and managerial resources, research programs to identify product candidates may require substantial additional technical, financial and human resources, whether or not any new potential product candidates are ultimately identified.
−Removed: may depend in part upon our ability to identify, select, and develop promising product candidates and therapeutics.
+Added: Our success may depend in part upon our ability to identify, select, and develop promising product candidates and therapeutics.
We may expend resources and ultimately fail to discover and generate additional product candidates suitable for further development.
5 unchanged sentences
If these products do not achieve an adequate level of acceptance, we may not generate significant product revenues or any profits from operations.
−Removed: The degree of market acceptance of any of our product candidates will depend on a variety of factors, including:
−Removed: the timing of market introduction;
−Removed: the terms of any approvals and the countries in which approvals are obtained;
−Removed: the number and clinical profile of competing products;
−Removed: our ability to provide acceptable evidence of safety and efficacy;
−Removed: the prevalence and severity of any side effects;
−Removed: relative convenience and ease of administration;
−Removed: cost-effectiveness;
−Removed: patient diagnostics and screening infrastructure in each market;
−Removed: marketing and distribution support;
−Removed: adverse publicity about our product candidates;
−Removed: availability of coverage, adequate reimbursement, and sufficient payment from health maintenance organizations and other insurers, both public and private, for our product candidates, or the procedures utilizing our product candidates, if approved;
−Removed: the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities;
−Removed: other potential advantages over alternative treatment methods.
−Removed: If our product candidates fail to gain market acceptance, this will have a material adverse impact on our ability to generate revenues to provide a satisfactory, or any, return on our investments.
−Removed: Even if some products achieve market acceptance, the market may prove not to be large enough to allow us to generate significant revenues.
+Added: The degree of market acceptance of any of our product candidates will depend on a variety of factors including but not limited to the terms of any approvals and the countries in which approvals are obtained, the number and clinical profile of competing products, and the availability of coverage and adequate reimbursement from insurers for our product candidates.
+Added: If our product candidates fail to gain market acceptance, our ability to generate revenues to provide a satisfactory, or any, return on our investments may be materially and adversely impacted.
+Added: Even if some product candidates achieve market acceptance, the market may prove not to be large enough to allow us to generate significant revenues.
We currently have no marketing, sales, or distribution infrastructure and we intend to either establish a sales and marketing infrastructure or outsource this function to a third party.
1 unchanged sentence
We currently have no marketing, sales, and distribution capabilities because all of our product candidates are still in clinical or preclinical development.
−Removed: If any of our product candidates are approved, we intend to either establish a sales and marketing
−Removed: organization with technical expertise and supporting distribution capabilities to commercialize our product candidates in a legally compliant manner, or to outsource this function to a third party.
+Added: If any of our product candidates are approved, we intend to either establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize our product candidates in a legally compliant manner, or to outsource this function to a third party.
There are risks involved if we decide to establish our own sales and marketing capabilities or enter into arrangements with third parties to perform these services.
−Removed: To the extent that we enter into collaboration agreements with respect to marketing, sales or distribution, our product revenue may be lower than if we directly marketed or sold any approved products.
+Added: To the extent that we enter into collaboration agreements with respect to marketing, sales or distribution, our product revenue may be lower than if we were to directly market or sell any approved products.
Such collaborative arrangements with partners may place the commercialization of our products outside of our control and would make us subject to a number of risks including that we may not be able to control the amount or timing of resources that our collaborative partner devotes to our products or that our collaborator’s willingness or ability to complete its obligations, and our obligations under our arrangements may be adversely affected by business combinations or significant changes in our collaborator’s business strategy.
1 unchanged sentence
If we are not successful in commercializing any approved products, either on our own or through collaborations with one or more third parties, our future product revenue will suffer and we may incur significant additional losses, which would have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Our product candidates for which we intend to seek approval as biologic products may face competition sooner through an abbreviated pathway.
−Removed: The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
−Removed: Under the BPCIA, an application for a highly similar or “biosimilar”
−Removed: product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA.
−Removed: In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved.
−Removed: During this 12‑year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of their product.
−Removed: The law is complex and is still being interpreted and implemented by the FDA.
−Removed: As a result, its ultimate impact, implementation, and meaning are subject to uncertainty.
−Removed: We believe that any of our product candidates approved as a biological product under a BLA should qualify for the 12-year period of exclusivity.
−Removed: However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated.
−Removed: Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.
−Removed: Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
−Removed: Jurisdictions in addition to the United States have established abbreviated pathways for regulatory approval of biological products that are biosimilar to earlier approved reference products.
−Removed: For example, the European Union has had an established regulatory pathway for biosimilars since 2004.
−Removed: However, biosimilars can only be authorized once the period of data exclusivity on the reference biological medicine has expired.
−Removed: The increased likelihood of biosimilar competition has increased the risk of loss of innovators’
−Removed: market exclusivity.
−Removed: Due to this risk, and uncertainties regarding patent protection, if our clinical candidates are approved for marketing, it is not possible to predict the length of market exclusivity for any particular product with certainty based solely on the expiration of the relevant patent(s) or the current forms of regulatory exclusivity.
−Removed: It is also not possible to predict changes in United States regulatory law that might reduce biological product regulatory exclusivity.
−Removed: The loss of market exclusivity for a product would likely materially and negatively affect revenues, and we may not generate adequate or sufficient revenues from them or be able to reach or sustain profitability.
Risks Related to Our Dependence on Third Parties
14 unchanged sentences
In addition, the FDA and other regulatory authorities require that our product candidates be manufactured according to cGMP and similar foreign standards relating to methods, facilities, and controls used in the manufacturing, processing, and packing of the product, which are intended to ensure that biological products are safe and that they consistently meet applicable requirements and specifications.
−Removed: Pharmaceutical manufacturers are required to register their facilities and list their products manufactured after beginning drug manufacturing and then annually thereafter with the FDA and certain state and foreign agencies.
If the FDA or a comparable foreign regulatory authority does not approve the manufacture of our product candidates at any of our proposed contract manufacturer’s facilities, or if any contract manufacturer fails to maintain a compliance status acceptable to the FDA or a comparable foreign authority, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for, or market our product candidates, if approved.
−Removed: Any discovery of problems with a product, or a manufacturing or laboratory facility used by us or our strategic partners, may result in restrictions on the product or on the manufacturing or laboratory facility, including marketed product recall, suspension of manufacturing, product seizure, or a voluntary withdrawal of the drug from the market.
+Added: Any discovery of problems with a product, or a manufacturing facility used by us, may result in restrictions on the product or on the manufacturing facility, including marketed product recall, suspension of manufacturing, product seizure, or a voluntary withdrawal of the drug from the market.
We may have little to no control regarding the occurrence of third-party manufacturer incidents.
7 unchanged sentences
Any failure by one of our contract manufacturers to comply with cGMP or to provide adequate and timely corrective actions in response to deficiencies identified in a regulatory inspection could result in enforcement action that could lead to a shortage of products and harm our business, including withdrawal of approvals previously granted, seizure, injunction or other civil or criminal penalties.
−Removed: The failure of a manufacturer to address any concerns raised by the FDA or foreign regulators could also lead to plant shutdown or the delay or withholding of product approval by the FDA in additional indications, or by foreign regulators in any indication.
+Added: The failure of a manufacturer to address any concerns raised by the FDA or foreign regulators or to maintain a compliance status acceptable to the FDA or foreign regulators could also lead to the delay or withholding of product approval by the FDA or by foreign regulators or could lead to plant shutdown.
Certain countries may impose additional requirements on the manufacturing of drug products or drug substances, and on manufacturers, as part of the regulatory approval process for products in such countries.
The failure by our third-party manufacturers to satisfy such requirements could impact our ability to obtain or maintain approval of our products in such countries.
+Added: Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all.
+Added: We rely on our manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical trials.
+Added: The manufacturing capabilities of our suppliers have been impacted as a result of ongoing supply
+Added: chain delays and due to the lingering effects of the COVID-19 pandemic, and it may not be possible for us to timely manufacture our product candidates at desired levels.
+Added: There are a limited number of suppliers for raw materials that we use to manufacture our product candidates, and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, ultimately for commercial sale.
+Added: Reductions or interruptions in any of our third-party manufacturing processes as a result of supply chain delays caused by supply chain delays, public health emergencies (including a resurgence of a variant of the COVID-19 pandemic or future pandemic) or other reasons could have a material adverse effect on our business, results of operations, financial condition and cash flows.
+Added: We do not have any control over the process or timing of the acquisition of the raw materials we need to produce our product candidates by our manufacturers.
+Added: Moreover, we currently do not have any agreements for the commercial production of these raw materials.
+Added: We cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these materials for our intended purpose.
+Added: In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and we may experience delays in meeting demand in the event a new supplier must be used.
+Added: The time and effort to qualify a new supplier could result in additional costs, diversion of resources, or reduced manufacturing yields, any of which would negatively impact our operating results.
+Added: Although we will not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing, and potential regulatory approval of our product candidates.
+Added: If our manufacturers or we are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates.
We expect to rely on third parties, including independent clinical investigators, to conduct our preclinical studies and clinical trials.
4 unchanged sentences
Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators, and trial sites.
−Removed: If we fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
+Added: If we fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed
+Added: unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations.
−Removed: In addition, our clinical trials must be conducted with product produced under cGMP regulations.
+Added: In addition, our clinical trials must be conducted with products produced under cGMP regulations.
Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
7 unchanged sentences
Switching or adding additional laboratories or investigators involves additional cost and requires management time and focus.
−Removed: In addition, there is a natural transition period when a new laboratory commences work.
+Added: In addition, there is a natural transition period when a
+Added: new laboratory commences work.
As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.
8 unchanged sentences
We may not be able to negotiate collaborations on acceptable terms, or at all.
−Removed: If our strategic collaborations do not result in the successful development and commercialization of product candidates, or if one of our collaborators terminates its
−Removed: agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration.
−Removed: In instances where we do enter into collaborations, we could be subject to the following risks, each of which may materially harm our business, commercialization prospects, and financial condition:
−Removed: we may not be able to control the amount and timing of resources that is required of us to complete our development obligations or that the collaboration partner devotes to the product development or marketing programs;
−Removed: the collaboration partner may experience financial difficulties;
−Removed: collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing;
−Removed: we may be required to relinquish important rights such as marketing, distribution, and intellectual property rights;
−Removed: collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to litigation or potential liability;
−Removed: collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
−Removed: a collaborator could move forward with a competing product developed either independently or in collaboration with third parties, including our competitors;
−Removed: we and our collaboration partner may disagree regarding the development plan for product candidates on which we are collaborating (for example, we may disagree with a collaboration partner regarding target indications, inclusion or exclusion criteria for a clinical trial, or the decision to seek front line therapy approval versus second, third, or fourth line therapy approval);
−Removed: disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources;
−Removed: business combinations or significant changes in a collaborator’s business strategy may adversely affect our willingness to complete our obligations under any arrangement;
−Removed: collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
+Added: If our strategic collaborations do not result in the successful development and commercialization of product candidates, or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration.
+Added: In instances where we do enter into collaborations, we could be subject to a number of risks which may materially harm our business, commercialization prospects, and financial condition.
+Added: For example, we may not be able to control the amount and timing of resources that is required of us to complete our development obligations or that the collaboration partner devotes to the product development or marketing programs, the collaboration partner may experience financial difficulties, or we may be required to relinquish important rights such as marketing, distribution, and intellectual property rights.
If we license products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.
6 unchanged sentences
Manufacturers of biologic products often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing process (including the absence of contamination).
−Removed: problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.
+Added: These problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified personnel, as well as compliance with strictly enforced federal, state, and foreign regulations.
Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
1 unchanged sentence
The time and effort to qualify a new manufacturer could result in additional costs, diversion of resources, or reduced manufacturing yields, any of which would negatively impact our operating results.
−Removed: Our reliance on a single third-party manufacturer exposes us to certain risks, including the following:
−Removed: we may be unable to identify replacement manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve the use of any manufacturers of our product candidates.
−Removed: This approval would require new testing and cGMP compliance inspections by the FDA.
−Removed: In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our products;
−Removed: initial replacement manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately or timely;
−Removed: under our exclusive license agreement with Wugen, we are contractually obligated to oversee the manufacturing and supply of our internally-developed fusion molecules HCW9201 and HCW9206 in the manufacture of Wugen’s cellular therapeutics, and if our single third-party manufacturer is unable to timely manufacture our product or produce the quantity and quality required to meet our and Wugen’s clinical needs, then Wugen has priority over us which could result in our financial results and the commercial prospects for our product candidates being harmed, our costs could increase and our ability to generate revenue could be delayed;
−Removed: our ability to develop our product candidates could be materially and adversely impacted if the single third-party manufacturer upon which we rely were to experience a significant business challenge, disruption or failure due to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues, or other financial, legal, regulatory, or reputational issues.
Moreover, to meet anticipated demand, our third-party manufacturer may need to increase manufacturing capacity, which could involve significant challenges.
−Removed: This may require us and our vendor to invest substantial additional funds and hire and retain the technical personnel who have the necessary experience.
+Added: This may require us and our vendor to invest substantial additional funds and hire and retain the
+Added: technical personnel who have the necessary experience.
Neither we nor our third-party manufacturer may successfully complete any required increase to existing manufacturing capacity in a timely manner, or at all.
−Removed: If we are unable to obtain sufficient raw and intermediate materials on a timely basis or if we experience other manufacturing or supply difficulties, our business may be adversely affected.
−Removed: The manufacture of certain of our product candidates requires the timely delivery of sufficient amounts of raw and intermediate materials.
−Removed: We work closely with our suppliers to ensure the continuity of supply, but cannot guarantee these efforts will always be successful.
−Removed: Further, while efforts are made to diversify our sources of raw and intermediate materials, in certain instances we acquire raw and intermediate materials from a sole supplier.
−Removed: While we believe that alternative sources of supply exist where we rely on sole supplier relationships, there can be no assurance that we will be able to quickly establish additional or replacement sources for some materials.
−Removed: A reduction or interruption in supply, and an inability to develop alternative sources for such supply, could adversely affect our ability to manufacture our product candidates in a timely or cost-effective manner.
−Removed: Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all.
−Removed: We rely on our manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical trials.
−Removed: There are a limited number of suppliers for raw materials that we use to manufacture our drugs, and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, ultimately for commercial sale.
−Removed: We do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers.
−Removed: Moreover, we currently do not have any agreements for the commercial production of these raw materials.
−Removed: We cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these materials for our intended purpose.
−Removed: In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and
−Removed: we may experience delays in meeting demand in the event a new supplier must be used.
−Removed: The time and effort to qualify a new supplier could result in additional costs, diversion of resources, or reduced manufacturing yields, any of which would negatively impact our operating results.
−Removed: Although we will not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing, and potential regulatory approval of our product candidates.
−Removed: If our manufacturers or we are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates.
−Removed: Risks Related to Intellectual Property and Information Technology
+Added: Risks Related to Intellectual Property
We expect to rely on patents and other intellectual property rights to protect our technology, including product candidates and our immunotherapy platform technology, the prosecution, enforcement, defense, and maintenance of which may be challenging and costly.
1 unchanged sentence
Our commercial success depends in part on obtaining and maintaining patents and other forms of intellectual property rights for technology related to our product candidates, including, but not limited to, our immunotherapy platform technology, product candidates, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.
−Removed: Given that the development of our technology and product candidates is at an early stage, our intellectual property portfolio with respect to certain aspects of our technology and product candidates is also at an early stage.
+Added: Given that the development of our technology and product candidates is at an early stage, our intellectual
+Added: property portfolio with respect to certain aspects of our technology and product candidates is also at an early stage.
We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel platform technology and product candidates that are important to our business.
4 unchanged sentences
It is possible that we will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.
−Removed: Our pending and future patent applications may not result in patents being issued which protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and product candidates.
+Added: Our pending and future patent applications may not result in the issuance of patents that protect our technology or product candidates, in whole or in part, or that effectively prevent others from commercializing competitive technologies and product candidates.
The patent examination process may require us to narrow the scope of the claims of our pending and future patent applications, which may limit the scope of patent protection that may be obtained.
2 unchanged sentences
If such prior art exists, it can invalidate or narrow the scope of a patent or prevent a patent from issuing from a pending patent application.
−Removed: Even if patents do successfully issue and even if such patents cover our product candidates, third parties may initiate opposition, interference, re-examination, post-grant review, inter partes review, nullification, or derivation actions in court or before patent offices, or similar proceedings challenging the validity, ownership, enforceability, or scope of such patents, which may result in the patent claims being narrowed, invalidated, or held unenforceable or circumvented.
+Added: Even if patents do successfully issue and even if such patents cover our product candidates, third parties have initiated or may initiate opposition, interference, re-examination, post-grant review, inter partes review, nullification, or derivation actions in court or before patent offices, or similar proceedings challenging the validity, ownership, enforceability, or scope of such patents, which may result in the patent claims being narrowed, invalidated, or held unenforceable or circumvented.
+Added: For example, as described further below, we are engaged in legal proceedings with Altor/NantCell pursuant to which Altor/NantCell is seeking specific performance for assignment of and a constructive trust over certain of our patents, which if successful would materially impact our core intellectual property assets.
Because patent applications in the United States and other jurisdictions are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file any patent applications related to such inventions.
−Removed: Our patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.
−Removed: Furthermore, even where we have a valid and enforceable patent, we may not be able to exclude others from practicing our invention where the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license.
+Added: Our patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent is issued from such applications, and then only to the extent the issued claims cover the technology.
+Added: Furthermore, even where we have a valid and enforceable patent, we may not be able to exclude others from practicing our invention where the other party can show that it used the invention in commerce before our filing date or that the other party benefits from a compulsory license.
Additionally, our competitors or other third parties may be able to evade our patent rights by developing new biologics, biosimilars, or alternative technologies or products in a non-infringing manner.
4 unchanged sentences
interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology.
−Removed: In addition, we may need the cooperation of any such co-owners of our owned patents in order to enforce such patents
−Removed: against third parties, and such cooperation may not be provided to us or our licensors.
+Added: In addition, we may need the cooperation of any such co-owners of our owned patents in order to enforce such patents against third parties, and such cooperation may not be provided to us or our licensors.
Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other provisions during the patent application process.
−Removed: There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
+Added: There are situations in which noncompliance
+Added: can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.
1 unchanged sentence
Patent positions of life sciences companies can be uncertain and involve complex factual, scientific, and legal questions.
−Removed: Changes in either the patent laws or their interpretation in any jurisdiction that we seek patent protection may diminish our ability to protect our inventions, maintain and enforce our intellectual property rights;
−Removed: and, more generally, may affect the value of our intellectual property, including the narrowing of the scope of our patents and any that we may license.
+Added: Changes in either patent laws or their interpretation in any jurisdiction where we seek patent protection may diminish our ability to protect our inventions, maintain and enforce our intellectual property rights, and more generally may affect the value of our intellectual property, including the narrowing of the scope of our patents and any that we may license.
Failure to protect or to obtain, maintain or extend adequate patent and other intellectual property rights could materially adversely affect our ability to develop and market our product candidates.
2 unchanged sentences
Competitors may infringe our patents or other intellectual property that relate to our immunotherapy platform technology and product candidates, their respective methods of use, manufacture, and formulations thereof.
−Removed: To protect our competitive position and counter infringement or unauthorized use, we may from time to time need to resort to litigation to enforce or defend any patents or other intellectual property rights owned or licensed by us by filing infringement claims.
+Added: Third parties may in the future claim that our operations infringe their intellectual property rights.
+Added: To defend against such claims, protect our competitive position and counter infringement or unauthorized use, we may from time to time need to resort to litigation to enforce or defend any patents or other intellectual property rights owned or licensed by us by filing infringement claims.
+Added: We may be subject to further litigation in the future, involving claims that we have misappropriated or misused other parties’
+Added: trade secrets or information.
+Added: To the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property infringement claims, which is not uncommon with respect to the biopharmaceutical industry.
As enforcement of intellectual property rights is difficult, unpredictable, time-consuming, and expensive, we may fail in enforcing our rights, in which case our competitors may be permitted to use our technology without being required to pay us any license fees.
−Removed: In addition, litigation involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable.
+Added: In addition, litigation involving our patents carries the risk that one or more of our patents will be held invalid (in whole, in part, or on a claim-by-claim basis) or held unenforceable.
Such an adverse court ruling could allow third parties to commercialize our product candidates or methods, or our immunotherapy platform technology, and then compete directly with us, without payment to us.
5 unchanged sentences
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
−Removed: If we were to initiate legal proceedings against a third party to enforce a patent related to one of our product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable.
−Removed: In patent litigation in the United States or in certain jurisdictions in Europe, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
−Removed: Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, novelty, non-obviousness, written description or enablement.
−Removed: Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
−Removed: Third parties may also raise similar invalidity and/or unenforceability claims before administrative bodies in the United States or abroad, even outside the context of litigation through opposition, interference, re-examination, post-grant review, inter partes review, nullification, or derivation actions or proceedings.
−Removed: The outcome following legal assertions of invalidity and unenforceability during patent litigation or administrative proceedings is unpredictable.
−Removed: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our technologies, product candidates, methods or certain aspects of our immunotherapy platform technology.
−Removed: Such a loss of patent protection could have a material adverse impact on our business.
−Removed: There is also a risk that, even if the validity of our patents is upheld, the court will construe our patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover our own products or the other party’s products.
−Removed: Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
−Removed: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation.
−Removed: Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without infringing our patents or other intellectual property rights.
−Removed: We may fail to identify relevant third-party patents or may incorrectly interpret the relevance, scope, or expiration of a third-party patent which might adversely affect our ability to develop our immunotherapy platform technology and product candidates.
−Removed: We cannot guarantee that our operations and activities do not, or will not in the future, infringe existing or future patents.
−Removed: We also cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to our immunotherapy platform technology or necessary for the commercialization of our product candidates in any jurisdiction.
−Removed: Numerous U.S.
−Removed: and foreign patents and pending patent applications exist in our market that are owned by third parties.
−Removed: Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit, or otherwise interfere with our ability to make, use, and sell our product candidates or any products, if approved.
−Removed: We do not always conduct independent reviews of pending patent applications of and patents issued to third parties.
−Removed: Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date.
−Removed: applications that will not be filed outside the United States can remain confidential until patents are issued.
−Removed: In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, and unintentionally abandoned patents or applications can be revived.
−Removed: Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technology, our product candidates, or the use thereof.
−Removed: As such, there may be applications of third parties now pending or recently revived patents of which we are unaware.
−Removed: These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit, or otherwise interfere with our ability to make, use, or sell our product candidates or any products, if approved.
−Removed: The scope of a patent claim is determined by an interpretation of law and, among other considerations, the written disclosure in a patent and the patent’s prosecution history.
−Removed: The claim scope sought in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted or further altered even after patent issuance, including through interferences, post-grant proceedings, opposition proceedings, or other intellectual property proceedings to address issues or errors that may render claims of the issued patent either wholly or partially invalid or unenforceable.
−Removed: Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our product candidates.
−Removed: We may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.
−Removed: Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates.
−Removed: We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, including our immunotherapy platform technology, product candidates and their respective methods of use, manufacture, and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.
+Added: We and our chief executive officer are currently involved in legal proceedings with Altor/NantCell, in which Altor/NantCell has alleged, among other things, a claim of trade secret misappropriation and other related claims against us in federal court and breach of contract and fiduciary duty, among other claims, against our chief executive officer in arbitration, and an adverse result could have a negative material impact on our business and operations.
+Added: On December 23, 2022, a lawsuit was filed by Altor BioScience, LLC and NantCell, Inc., collectively, Altor/NantCell, against the Company in U.S.
+Added: District Court for the Southern District of Florida (the “Court”), alleging misappropriation of trade secrets under state and federal laws, inducement of breach of contract and breach of fiduciary duty, tortious interference with contractual relations, specific performance, conversion, unjust enrichment, specific performance for assignment of patents and patent applications, constructive trust, and replevin.
+Added: The complaint against the Company is based on very similar allegations as those alleged by Altor/NantCell in an arbitration commenced in December 2022 against the Company’s Founder and Chief Executive Officer, Dr.
+Added: Wong, who was formerly employed by Altor/NantCell.
+Added: Altor/NantCell alleges that Dr.
+Added: Wong purportedly took Altor/ NantCell’s confidential and trade-secret information and used it to form and build competing products for the Company.
+Added: We have incurred and expect to continue to incur significant expenses in connection with our litigation with Altor/NantCell.
+Added: Altor/ NantCell has considerable resources available to it;
+Added: we, on the other hand, are a company in the early stages of our clinical trials with
+Added: comparatively few resources available to us to engage in costly and protracted litigation.
+Added: These claims asserted against us could be costly to defend and could limit our ability to use some technologies in the future.
+Added: They will be time consuming, will divert our chief executive officer’s, management’s and scientific personnel’s attention, may be used by Altor/NantCell in an effort to generate negative publicity with our customers and investors, and may result in liability for substantial damages.
+Added: For example, we have incurred and anticipate that we will continue to incur significant expense and substantial time in defending ourselves in the current dispute with Altor/NantCell.
+Added: We anticipate that Altor/NantCell may use options available to it through the court, including filing amended or new complaints, other court filings, public statements and press releases, regardless of merit, in an attempt to disrupt our business and create uncertainty about our future prospects, which could create volatility in the trading price of our common stock or damage to our reputation.
+Added: An adverse judgment in the Altor/NantCell legal proceedings could require us to pay damages, attorneys’
+Added: fees, costs and expenses, or result in injunctive relief, or generate negative publicity, any of which could materially adversely affect our business, financial condition, results of operations, and prospects.
+Added: We may also in the future be involved with other litigation.
+Added: We expect that the number of such claims may increase as our scale and the level of competition in our industry segments grows.
+Added: Further, while Dr.
+Added: Wong’s legal expenses in connection with the arbitration with Altor/NantCell are covered by the provisions of the advancement agreement between these two parties, under certain circumstances, the Company may be required to advance legal fees.
+Added: Accordingly, there can be no assurance that we will not be required to advance significant expenses to Dr.
+Added: Wong in connection with these matters
Intellectual property rights of third parties could adversely affect our ability to develop or commercialize our product candidates, such that we could be required to litigate or obtain licenses from third parties in order to develop or market our product candidates.
1 unchanged sentence
Our competitive position may suffer if patents issued to third parties or other third-party intellectual property rights cover our methods or product candidates or elements thereof, our manufacture or uses relevant to our development plans, our product candidates or other attributes of our product candidates, or our immunotherapy platform technology.
−Removed: In such cases, we may not be in a position to develop or commercialize product candidates unless we successfully pursue litigation to nullify or invalidate the third-party
−Removed: intellectual property right concerned, which can be expensive and time-consuming, or have to enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms at all.
+Added: In such cases, we may not be in a position to develop or commercialize product candidates unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned, which can be expensive and time-consuming, or have to enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms at all.
There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our product candidates.
5 unchanged sentences
If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage or continue costly, unpredictable, and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product candidates.
−Removed: Our involvement in litigation, and in any interferences, post-grant proceedings, opposition proceedings, or other intellectual property proceedings inside and outside of the United States may divert management from focusing on business operations, and even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations.
+Added: In addition, indemnity provisions in various agreements and our corporate documents potentially expose us to substantial liability for intellectual property infringement and other claims.
+Added: In the ordinary course of business, we enter into agreements that may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement or other liabilities relating to or arising from our clinical trials, breach of warranties or other contractual obligations.
+Added: In some cases, the indemnification will continue after the termination of the applicable agreement.
+Added: In addition, in accordance with our bylaws and pursuant to indemnification agreements entered into with directors, officers and certain employees, we have indemnification obligations for claims brought against these persons arising out of certain events or occurrences while they are serving at our request in such capacities.
+Added: For example, our founder and chief executive officer is subject to a claim from a former employer.
+Added: We agreed to advance certain defense costs and other expenses, subject to an undertaking to repay us such amounts if, and to the extent that, it is ultimately determined that he is not entitled to indemnification.
+Added: The matter is ongoing.
+Added: If this matter is resolved in favor of the third party and if we are required to indemnify our founder and chief executive officer for a loss, we may be required to make an indemnity payment.
+Added: While we maintain directors’
+Added: and officers’
+Added: liability insurance, such insurance may not be applicable, be adequate, or cover all liabilities that we may incur.
+Added: Large indemnity payments, individually or in the aggregate, could have a material impact on our financial position.
+Added: Our involvement in litigation, and in any interferences, post-grant proceedings, opposition proceedings, or other intellectual property proceedings inside and outside of the United States may divert management from focusing on business operations, and even
+Added: if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations.
In addition, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
−Removed: Any current and potential intellectual property litigation also could force us to do one or more of the following:
−Removed: stop marketing, selling, incorporating, manufacturing, or using our product candidates or any products, if approved, in the United States and/or other jurisdictions that use the subject intellectual property;
−Removed: obtain from a third party asserting its intellectual property rights, a license to sell or use the relevant technology, including the obligation to pay royalties, which license may not be available on reasonable terms, or at all, or may be non-exclusive thereby giving our competitors access to the same technologies licensed to us;
−Removed: redesign those products or processes that use any allegedly infringing or misappropriated technology, which may result in significant cost or delay to us, or which redesign could be impossible or technically infeasible;
−Removed: pay damages, including the possibility of treble damages and attorneys’
−Removed: fees in a patent case if a court finds us to have willfully infringed certain intellectual property rights.
We may need to obtain licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.
6 unchanged sentences
The inability to obtain any third-party license required to develop or commercialize any of our product candidates could cause us to abandon any related efforts, which could seriously harm our business and operations.
−Removed: In addition, our product candidates may require specific formulations to work effectively and efficiently and the rights to these formulations may be held by others.
−Removed: We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates.
−Removed: The licensing
−Removed: and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.
−Removed: These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
2 unchanged sentences
If we are unable to successfully obtain a license to third-party intellectual property rights necessary for the development of a product candidate or program, we may have to abandon development of that product candidate or program and our business and financial condition could suffer.
−Removed: If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
−Removed: Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, or declared generic or determined to be infringing on other marks.
−Removed: We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition by potential collaborators, partners, or customers in our markets of interest.
−Removed: Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.
−Removed: If other entities use trademarks similar to ours in different jurisdictions, or have senior rights to ours, it could interfere with our use of our current trademarks throughout the world.
−Removed: During trademark registration proceedings, we may receive rejections.
−Removed: Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.
−Removed: In addition, in both the USPTO and comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.
−Removed: Opposition or cancellation proceedings may be filed against our trademarks, which may not survive such proceedings.
−Removed: If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.
−Removed: We may license our trademarks and trade names to third parties, such as distributors.
−Removed: Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.
−Removed: Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
−Removed: Patents have a limited lifespan.
−Removed: In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.
−Removed: non-provisional or PCT filing date.
−Removed: Various extensions may be available, but the life of a patent, and the protection it affords, is limited.
−Removed: Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from competitive medications, including biosimilar medications.
−Removed: In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution.
−Removed: If we do not have sufficient patent life to protect our product candidates and any products, if approved, our business and results of operations will be adversely affected.
−Removed: Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
−Removed: As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
−Removed: If we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S.
−Removed: legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed.
−Removed: Depending upon the timing, duration, and conditions of FDA marketing approval of our product candidates, one or more of our U.S.
−Removed: patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, and similar legislation in the European Union.
−Removed: The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process.
−Removed: A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended.
−Removed: However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents, or otherwise fail to satisfy applicable requirements.
−Removed: Moreover, the length of the extension could be less than we request.
−Removed: If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.
−Removed: As a result, our revenue from applicable products could be reduced, possibly materially.
−Removed: We expect there may be only limited geographical protection with respect to certain patents and may not be able to protect our intellectual property rights throughout the world.
−Removed: Patents are of national or regional effect.
−Removed: While we will endeavor to try to protect our technology, products, and product candidates with intellectual property rights such as patents throughout the world, as appropriate, the process of obtaining patents is time-consuming, expensive, and sometimes unpredictable in other countries.
−Removed: We may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent rights at a commercially reasonable cost or in a timely manner.
−Removed: In addition, we may not pursue or obtain patent protection in all markets.
−Removed: As such, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
−Removed: International applications under the Patent Cooperation Treaty (“PCT”), are usually filed within 12 months after the priority filing.
−Removed: Based on the PCT filing, national and regional patent applications may be filed in additional jurisdictions where we believe our product candidates may be marketed.
−Removed: We have not, and will not, file for patent protection in all national and regional jurisdictions where such protection may be available.
−Removed: Filing, prosecuting, and defending patents on all of our research programs and product candidates in all countries throughout the world would be prohibitively expensive, and, therefore, the scope and strength of our intellectual property rights will vary from jurisdiction to jurisdiction.
−Removed: In addition, we may decide to abandon national and regional patent applications before grant.
−Removed: Finally, the grant proceeding of each national/regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant patent offices, while granted by others.
−Removed: Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably.
−Removed: It is common that depending on the country, the scope of patent protection may vary for the same product candidate and/or technology.
−Removed: As such, we do not know the degree of future protection that we will have on our technology and product candidates in different jurisdictions.
−Removed: Competitors may use our or our collaboration partners’
−Removed: technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we or our collaboration partners have patent protection, but enforcement is not as strong as that in the United States.
−Removed: These products may compete with our product candidates, and our or our collaboration partners’
−Removed: patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
−Removed: The laws of some jurisdictions, particularly certain developing countries, do not protect intellectual property rights, particularly those relating to pharmaceuticals or biologics, to the same extent as laws in the United States, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions.
−Removed: Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
−Removed: If we encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions.
−Removed: Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
−Removed: We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
−Removed: Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain significant commercial advantage from the intellectual property that we develop or license.
−Removed: Some countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
−Removed: In addition, some countries limit the enforceability of patents against government agencies or government contractors.
−Removed: In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
−Removed: If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired and our business and results of operations may be adversely affected.
−Removed: We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
+Added: We are and may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors.
3 unchanged sentences
Disputes regarding ownership or inventorship of intellectual property can also arise in other contexts, such as collaborations and sponsored research.
−Removed: If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time consuming.
+Added: If we are subject to a dispute challenging our rights in or to patents or other intellectual property such as the lawsuit as we are currently facing in our legal proceedings with Altor/NantCell, such a dispute could be expensive and time consuming.
If we were unsuccessful, we could lose valuable rights in intellectual property that we regard as our own.
7 unchanged sentences
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
−Removed: Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
−Removed: The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage.
−Removed: Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights.
−Removed: The following examples are illustrative:
−Removed: others may be able to make product candidates similar to our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed;
−Removed: the patents of third parties may have an adverse effect on our business;
−Removed: we or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;
−Removed: we or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;
−Removed: others may independently develop similar or alternative technologies or duplicate any of our technology without infringing, misappropriating, or otherwise violating our intellectual property rights;
−Removed: it is possible that our pending patent applications will not lead to issued patents;
−Removed: issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;
−Removed: we cannot predict the degree and range of protection any issued patents will afford us against competitors, whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications, or whether we will need to initiate litigation or administrative proceedings which may be costly whether we win or lose;
−Removed: our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
−Removed: third parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property of others without obtaining a proper license;
−Removed: we may not develop additional technologies that are patentable.
−Removed: Should any of these events occur, they could significantly harm our business, results of operations, and prospects.
−Removed: Composition of matter patents for biological and pharmaceutical products such as our product candidates are generally considered to be the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use.
−Removed: We cannot be certain that the claims in our pending patent applications covering composition of matter of our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries.
−Removed: Method of use patents protect the use of a product for the specified method.
−Removed: This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.
−Removed: Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.”
−Removed: Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.
−Removed: Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
−Removed: As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.
−Removed: Obtaining and enforcing patents in the biopharmaceutical industry involve both technological complexity and legal complexity.
−Removed: Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.
−Removed: Therefore, obtaining and enforcing biopharmaceutical patents is costly, time-consuming, and inherently uncertain.
−Removed: In September 2011, the America Invents Act (the “AIA”), was enacted in the United States, resulting in significant changes to the U.S.
−Removed: patent system.
−Removed: An important change introduced by the AIA was a transition to a “first-to-file”
−Removed: system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention, which went into effect on March 16, 2013.
−Removed: Therefore, a third party that now files a patent application in the USPTO before we do could be awarded a patent covering an invention of ours even if we created the invention before it was created by the third party.
−Removed: While we are cognizant of the time from invention to filing of a patent application, circumstances could prevent us from promptly filing patent applications for our inventions.
−Removed: Among some of the other changes introduced by the AIA were changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO.
−Removed: This applies to all of our U.S.
−Removed: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S.
−Removed: federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
−Removed: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
−Removed: The AIA and its continued implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications, and the patent applications of our collaborators, and the enforcement or defense of our issued patents.
−Removed: Depending on decisions by the U.S.
−Removed: Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
−Removed: For example, in the case, Assoc.
−Removed: for Molecular Pathology v.
−Removed: Myriad Genetics, Inc.
−Removed: Supreme Court held that certain claims to DNA molecules are not patentable.
−Removed: While we do not believe that any of the patents owned by us will be found invalid based on this decision, we cannot predict how future decisions by the courts, the U.S.
−Removed: Congress or the USPTO may impact the value of our patents.
−Removed: Similarly, there is complexity and uncertainty related to European patent laws.
−Removed: For example, European patent laws are stringent in the type of amendments that are allowed during prosecution, and the complexity and uncertainty of European patent laws have also increased in recent years.
−Removed: These limitations and requirements could adversely affect our ability to obtain new patents in the future that may be important for our business.
We may rely on trade secret and proprietary know-how, which can be difficult to trace and enforce and, if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
−Removed: In addition to seeking patents for some of our technology and product candidates, we may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed to be of limited value, to maintain our competitive position with respect to our research programs and product candidates.
−Removed: Elements of our product candidates, including
−Removed: processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.
+Added: In addition to seeking patents for some of our technology and product candidates, we may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed to be of limited value, to maintain our
+Added: competitive position with respect to our research programs and product candidates.
+Added: Elements of our product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.
Any disclosure, either intentional or unintentional, by our employees or by other third parties of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus adversely eroding our competitive position in our market.
−Removed: Trade secrets and/or confidential know-how can be difficult to protect or maintain as confidential.
−Removed: To protect this type of information against disclosure or appropriation by competitors, we generally require our employees, consultants, contractors, collaborators, advisors, and other third parties to enter into confidentiality agreements with us.
−Removed: Despite these efforts, any of these parties may unintentionally or willfully breach the agreements and disclose our confidential information, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
−Removed: Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our internally-developed technology will be effective.
−Removed: Enforcing a claim that a third party obtained illegally and is using trade secrets and/or confidential know-how is also expensive, time-consuming, and unpredictable.
+Added: Further, monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our internally-developed technology will be effective.
+Added: Enforcing a claim that a third party illegally obtained and is using trade secrets and/or confidential know-how is also expensive, time-consuming, and unpredictable.
The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction.
12 unchanged sentences
If successful in obtaining such patent protection, our competitors could limit our use of our trade secrets and/or confidential know-how.
−Removed: Under certain circumstances and to make it more likely that we have our freedom to operate, we may also decide to publish some know-how to make it difficult for others to obtain patent rights covering such know-how, at the risk of potentially exposing our trade secrets to our competitors.
−Removed: We may be subject to third-party claims asserting that our employees, consultants, contractors, collaborators, or advisors have misappropriated or wrongfully used or disseminated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
+Added: Under certain circumstances and to make it more likely that we have freedom to operate, we may also decide to publish some know-how to make it difficult for others to obtain patent rights covering such know-how, at the risk of potentially exposing our trade secrets to our competitors.
+Added: We are currently and may be in the future subject to third-party claims asserting that our employees, consultants, contractors, collaborators, or advisors have misappropriated or wrongfully used or disseminated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
Many of our employees, including our senior management, were previously employed at universities or at other biopharmaceutical companies, including our competitors or potential competitors.
1 unchanged sentence
Similarly, we work with consultants, contractors, collaborators, advisors, or other third parties who have worked with, and do currently work with, other companies, including our competitors or potential competitors, and have executed proprietary rights, non-disclosure, and non-competition agreements in connection with such other companies.
−Removed: Although we try to ensure that our employees, consultants, contractors, collaborators, advisors, or other third parties do not use or disclose the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees or individuals that we work with have used or disclosed confidential information or intellectual property of others, including trade secrets or other proprietary information, or that we caused an individual to breach the terms of his or her non-competition or non-solicitation agreement with a current or former employer or competitor.
+Added: Although we try to ensure that our employees, consultants, contractors, collaborators, advisors, or other third parties do not use or disclose the proprietary information or know-how of others in their work for us, we are and may become subject to claims that we or these employees or individuals that we work with have used or disclosed confidential information or intellectual property of others, including trade secrets or other proprietary information, or that we caused an individual to breach the terms of his or her non-competition or non-solicitation agreement with a current or former employer or competitor.
+Added: For example, as described above, we are engaged in legal proceedings with Altor/NantCell, which alleges misappropriation of trade secrets, inducement of breach of contract and breach of fiduciary duty, among other claims against the company relating to our founder and chief executive officer’s former employment with Altor/NantCell.
Litigation may be necessary to defend against these claims and, even if we are successful, could result in substantial costs and could be a distraction to management, our employees, and our routine business.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages.
−Removed: Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to develop or commercialize our technology or product candidates.
+Added: Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to
+Added: develop or commercialize our technology or product candidates.
Such a license may not be available on commercially reasonable terms or at all.
Moreover, any such litigation or the threat thereof may adversely affect our reputation and our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations, and financial condition.
−Removed: Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.
−Removed: Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign governmental patent agencies in several stages over the lifetime of the patent.
−Removed: The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process.
−Removed: While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
−Removed: Noncompliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents within prescribed time limits.
−Removed: If we fail to maintain the patents and patent applications covering our product candidates or if we otherwise allow our patents or patent applications to be abandoned or lapse, our competitors might be able to enter the market, which would have an adverse effect on our business.
−Removed: Our information technology systems, or those used by other contractors or consultants, may fail or suffer security breaches, which could adversely affect our business.
+Added: Risks Related to Data Privacy and Cybersecurity
+Added: Our information technology systems, or those used by our third-party contractors or consultants, may fail or suffer security breaches, which could adversely affect our business.
We collect and maintain information in digital form that is necessary to conduct our business, and we are dependent on our information technology systems and those of third parties to operate our business.
−Removed: In the ordinary course of our business, we collect, store, and transmit large amounts of confidential information, including intellectual property, proprietary business information, and personal information, and data to comply with cGMP and data integrity requirements.
−Removed: It is critical that we do so in a secure manner to maintain data security and data integrity of such information.
+Added: In the ordinary course of our business, we collect, store, and transmit large amounts of confidential information, including intellectual property, proprietary business information, and personal information, and data to comply with cGMP, clinical and data integrity requirements.
We have established physical, electronic, and organizational measures to safeguard and secure our systems to prevent a data compromise.
2 unchanged sentences
Future acquisitions could expose us to additional cybersecurity risks and vulnerabilities from any newly acquired information technology infrastructure.
−Removed: Cybersecurity attacks are constantly increasing in sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage) and expertise, including by organized criminal groups, “hacktivists,”
−Removed: nation states, and others.
−Removed: Our systems may be subject to attacks and could be targeted by foreign actors for purposes of economic espionage.
−Removed: Due to the nature of some of such attacks, there is a risk that an attack may remain undetected for a period of time.
While we continue to make investments to improve the protection of data and information technology, there can be no assurance that our efforts will prevent service interruptions or security breaches.
4 unchanged sentences
We could also incur substantial remediation costs, including the costs of investigating the incident, repairing or replacing damaged systems, restoring normal business operations, implementing increased cybersecurity protections, and paying increased insurance premiums.
+Added: We face potential liability related to the privacy of health information we obtain from clinical trials sponsored by us or our collaborators, from research institutions and our collaborators, and directly from individuals.
+Added: We and our partners and vendors are subject to various federal, state, and foreign data protection laws and regulations ( i.e.
+Added: , laws and regulations that address data privacy and security).
+Added: If we fail to comply with these laws and regulations, we may be subject to litigation, regulatory investigations, enforcement notices, enforcement actions, fines, and criminal or civil penalties, as well as negative publicity and a potential loss of business.
+Added: In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.
+Added: For example, most healthcare providers, including research institutions from which we or our collaborators obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA, as amended HITECH.
+Added: Under HIPAA, we could potentially face substantial criminal or civil penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information, or otherwise violate applicable HIPAA requirements related to the protection of such information.
+Added: Even when HIPAA does not apply, failing to take appropriate steps to keep consumers’
+Added: personal information secure may constitute a violation of the Federal Trade Commission Act.
+Added: In addition, we may maintain sensitive personally identifiable information, including health information, that we receive throughout the clinical trial process, in the course of our research collaborations, and directly from individuals (or their healthcare providers) who enroll in our patient assistance programs.
+Added: As such, we may be subject to state laws (for example, the CCPA and the California Privacy Rights Act) requiring notification of affected individuals and state regulators in the event of a breach of personal information.
+Added: Our clinical trial programs and research collaborations outside the United States may implicate international data protection laws, including in Europe the GDPR.
+Added: If our privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions requiring us to change the way we use personal data and/or fines.
+Added: In addition to statutory enforcement, a personal data breach can lead to negative publicity and a potential loss of business.
+Added: Further, following the United Kingdom’s withdrawal from the E.U.
+Added: effective as of December 31, 2020, we have to comply with the GDPR and the GDPR as incorporated into United Kingdom national law, which may have differing requirements.
+Added: If we fail to comply with United Kingdom data protection laws, we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions, as well as negative publicity and a potential loss of business.
+Added: We are also subject to evolving EEA laws on data export, as we may transfer personal data from the EEA to other jurisdictions.
+Added: Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States.
+Added: For example, on July 16, 2020, the CJEU invalidated the Privacy Shield, under which personal data could be transferred from the EEA to United States entities who had self-certified under the Privacy Shield scheme.
+Added: Moreover, it is uncertain whether the standard contractual clauses will also be invalidated by the European courts or legislature.
+Added: As government authorities issue further guidance on personal data export mechanisms and/or start taking enforcement action, we could suffer additional costs, complaints, and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
+Added: These laws and regulations may apply, not only to us, but also to vendors that store or otherwise process data on our behalf, such as information technology vendors.
+Added: If such a vendor misuses data we have provided to it, or fails to safeguard such data, we may be subject to litigation, regulatory investigations, enforcement notices, and/or enforcement actions, as well as negative publicity and a potential loss of business.
Risks Related to Ownership of Our Common Stock
2 unchanged sentences
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors described in this “Risk Factors”
−Removed: section and elsewhere in this Annual Report on Form 10-K.
+Added: section and elsewhere in this Annual Report.
In addition, the stock market in general, and the Nasdaq Stock Market, or Nasdaq, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
−Removed: Additionally, the trading prices for pharmaceutical, biopharmaceutical and biotechnology companies have been highly volatile as a result of the COVID-19 pandemic.
+Added: Additionally, the trading prices for pharmaceutical, biopharmaceutical and biotechnology companies have been highly volatile as a result of the lingering effects of the COVID-19 pandemic.
Also, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
−Removed: We could be subject to securities class action litigation.
−Removed: In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities.
−Removed: This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.
−Removed: Additionally, the dramatic increase in the cost of directors’
−Removed: and officers’
−Removed: liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
−Removed: As of December 31, 2021, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 50% of our outstanding voting stock (excluding any stock options exercisable within 60 days of such date held by such persons).
+Added: As of December 31, 2022, our executive officers, directors and their respective affiliates beneficially owned approximately 45% of our outstanding voting stock (excluding any stock options exercisable within 60 days of such date held by such persons).
Therefore, these stockholders have the ability to influence us through this ownership position.
2 unchanged sentences
This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.
−Removed: Future sales of our common stock in the public market could cause our common stock price to fall.
−Removed: Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
−Removed: In addition, in the future, we may issue additional shares of common stock, or other equity or debt securities convertible into common stock, in connection with a financing, acquisition, employee arrangement, or otherwise.
−Removed: Any such issuance could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.
−Removed: If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
−Removed: We may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses.
−Removed: Any potential acquisition or strategic partnership may entail numerous risks, including:
−Removed: increased operating expenses and cash requirements;
−Removed: the assumption of additional indebtedness or contingent liabilities;
−Removed: assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;
−Removed: our inability to achieve desired efficiencies, synergies or other anticipated benefits from such acquisitions or strategic partnerships;
−Removed: the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;
−Removed: retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;
−Removed: risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals;
−Removed: our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
−Removed: In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.
−Removed: Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.
−Removed: If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline.
−Removed: The trading market for our common stock depends in part upon the research and reports that securities or industry analysts may publish about us, our business, our market, or our competitors.
−Removed: If one or more of these analysts initiate research with an unfavorable rating or downgrade our common stock, provide a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.
−Removed: If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the trading price or trading volume of our common stock to decline.
−Removed: We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.
+Added: We are an emerging growth company as well as a “smaller reporting company”, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies or smaller reporting companies could make our common stock less attractive to investors.
We are an “emerging growth company”
9 unchanged sentences
December 31, 2026.
−Removed: We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded to emerging growth companies.
+Added: Additionally, we are a “smaller reporting company”
+Added: as defined in Item 10(f)(1) of Regulation S-K.
+Added: Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
+Added: We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
+Added: We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded to emerging growth companies or smaller reporting companies.
If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile.
10 unchanged sentences
The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
−Removed: To comply with the requirements of being a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have implemented and will continue to implement additional financial and management controls, reporting systems and procedures and we have hired and intend to continue to hire additional accounting and finance staff.
+Added: To comply with the requirements of being a reporting company under the Exchange Act, we have implemented and will continue to implement additional financial and management controls, reporting systems and procedures and we have hired and intend to continue to hire additional accounting and finance staff.
We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
2 unchanged sentences
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
−Removed: Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
−Removed: We are subject to the periodic reporting requirements of the Exchange Act.
−Removed: We have designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.
−Removed: We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
−Removed: These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
−Removed: For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure.
−Removed: Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
−Removed: Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.
−Removed: We do not currently intend to pay dividends on our common stock and, consequently, our stockholders’
−Removed: ability to achieve a return on their investment will depend on appreciation of the value of our common stock.
−Removed: We have never declared or paid cash dividends on our common stock.
−Removed: We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business.
−Removed: We do not intend to declare or pay any cash dividends on our capital stock in the foreseeable future.
−Removed: As a result, any investment return on our common stock will depend upon increases in the value for our common stock, which is not certain.
Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock.
1 unchanged sentence
These provisions, among other things:
−Removed: establish a staggered Board divided into three classes serving staggered three-year terms, such that not all members of the Board will be elected at one time;
+Added: establish a staggered board of directors (the “Board”) divided into three classes serving staggered three-year terms, such that not all members of the Board will be elected at one time;
authorize our Board to issue new series of redeemable preferred stock without stockholder approval and create, subject to applicable law, a series of redeemable preferred stock with preferential rights to dividends or our assets upon liquidation, or with superior voting rights to our existing common stock;
12 unchanged sentences
Our amended and restated certificate of incorporation, provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (3) any action asserting a claim against us or any director, officer, or other employee arising pursuant to the Delaware General Corporation Law, (4) any action to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws, or (5) any other action asserting a claim that is governed by the internal affairs doctrine, shall be the Court of Chancery of the State of Delaware (or another state court or the federal court located within the State of Delaware if the Court of Chancery does not have or declines to accept jurisdiction), in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants.
−Removed: In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the "Securities Act") but that the forum selection provision will not apply to claims brought to enforce a duty or liability created by the Exchange Act.
−Removed: Although we believe these provisions benefit us by
−Removed: providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers.
+Added: In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act but that the forum selection provision will not apply to claims brought to enforce a duty or liability created by the Exchange Act.
+Added: Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers.
These provisions may limit an investor’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, including by increasing the cost of such lawsuits, which may discourage such claims.
−Removed: Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results.
+Added: Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of
+Added: incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results.
For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
−Removed: Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
−Removed: Our ability to use our net operating loss carryforwards and other tax attributes may be limited.
−Removed: As of December 31, 2020, and 2021, we had available federal net operating loss (“NOL”) carryforwards of $14.8 million and $26.1 million, respectively.
−Removed: We also had available state NOLs carryforwards of approximately $15.2 million and $26.8 million, as of December 31, 2020 and 2021, respectively.
−Removed: As of December 31, 2021, we also had federal tax credits of $218,015, which may be used to offset future tax liabilities.
−Removed: The federal and state NOLs will carryforward indefinitely and be available to offset up to 100% of taxable income for taxable years before 2021 and 80% of taxable years staring after 2020.
−Removed: Use of our NOL carryforwards and tax credit carryforwards depends on many factors, including having current or future taxable income, which cannot be assured.
−Removed: NOL and tax credit carryforwards could expire unused and be unavailable to offset future taxable income or income tax liabilities because of their limited duration or because of restrictions under U.S.
−Removed: In addition, for taxable years beginning after December 31, 2020, the deductibility of federal NOLs generated in taxable years beginning after December 31, 2017 is limited to 80% of our taxable income in such year (after taking into account utilization of NOLs generated in taxable years beginning before January 1, 2018), where taxable income is determined without regard to such NOL deduction itself.
−Removed: In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and certain corresponding provisions of state law, a corporation that undergoes an “ownership change”
−Removed: is subject to limitations on its ability to utilize its pre-change NOL and tax credit carryforwards to offset future taxable income or taxes.
−Removed: For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders (or groups of stockholders), each of whom owns at least 5% of a corporation’s stock, increases by more than 50 percentage points over its lowest ownership percentage within a specified testing period.
−Removed: We believe we may have experienced ownership changes in the past, and we believe it is likely that we will experience an additional ownership change in the future as a result of this offering or subsequent shifts in our stock ownership, some of which are outside our control.
−Removed: If finalized, Treasury Regulations currently proposed under Section 382 of the Code may further limit our ability to utilize our pre-change NOL and tax credit carryforwards if we undergo an additional ownership changes in the future.
−Removed: If we earn taxable income in the future, we expect that our ability to use existing NOL and tax credit carryforwards to offset such taxable income will be materially limited as a result of such ownership changes.
−Removed: The application of such limitations may cause U.S.
−Removed: federal income taxes (and possibly state income taxes) to be paid by us earlier than they otherwise would be paid if such limitations were not in effect and could cause such NOLs and tax credit carryforwards to expire unused, in each case reducing or eliminating the benefit of such NOLs and tax credit carryforwards.
−Removed: To the extent we are not able to offset our future taxable income with our NOLs or offset future taxes with our tax credit carryforwards, this would adversely affect our operating results and cash flows.
−Removed: These same risks can arise in the context of state income and franchise tax given many states conform to federal law and rely on federal authority for determining state NOLs.
−Removed: Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.
−Removed: Recent changes in tax law may adversely affect our business or financial condition.
−Removed: On December 22, 2017, the U.S.
−Removed: government enacted the Tax Cuts and Jobs Act (“TCJA”), which significantly reformed the Code.
−Removed: The TCJA, among other things, contains significant changes to corporate taxation, including reducing the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limiting the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), limiting the deduction for net operating losses, or NOLs, arising in taxable years beginning after December 31, 2017 to 80% of current year taxable income and elimination of NOL carrybacks for losses arising in taxable years ending after December 31, 2017 (though any such NOLs may be carried forward indefinitely), imposing a one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, eliminating U.S.
−Removed: tax on foreign earnings (subject to certain important exceptions), allowing
−Removed: immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits.
−Removed: As part of Congress’
−Removed: response to the COVID-19 pandemic, the Families First Coronavirus Response Act (“FFCR Act”), was enacted on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), was enacted on March 27, 2020.
−Removed: Both contain numerous tax provisions.
−Removed: The CARES Act did not have any material effect to the Company.
−Removed: We urge prospective investors in our common stock to consult with their legal and tax advisors with respect to any recently enacted tax legislation, or proposed changes in law, and the potential tax consequences of investing in or holding our common stock.
+Added: Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder, or maintain profitability.
+Added: General Risk Factors
+Added: Unfavorable global economic conditions could adversely affect our business, financial condition, stock price and results of operations.
+Added: Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
+Added: For example, volatility associated with the COVID-19 pandemic has caused significant instability and disruptions in the capital and credit markets and, in recent months, our operations and the global economy have been impacted by increasing interest rates and inflation.
+Added: Likewise, the capital and credit markets may be adversely affected by the conflict between Russia and Ukraine, and the possibility of a wider European or global conflict, global sanctions imposed in response thereto, or an energy crisis.
+Added: A severe or prolonged economic downturn, such as the global financial crisis, could result in a variety of risks to our business, including a decrease in the demand for our product candidates and in our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: A weak or declining economy also could strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.
+Added: We cannot anticipate all of the ways in which the foregoing, and the current economic climate and financial market conditions generally, could adversely impact our business.
+Added: Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.
+Added: Our money market or other investments or bank deposits may be subject to market, interest and credit risk that may reduce in value.
+Added: The value of our investments may decline due to increases in interest rates, downgrades of the bonds and other securities included in our money market or other investments and instability in the global financial markets that reduces the liquidity of securities included in our portfolio.
+Added: In addition, we are aware of the closure of Silicon Valley Bank and appointment of the Federal Deposit Insurance Corporation as receiver.
+Added: Furthermore, a possible recession, rising inflation, and the lingering effects of the COVID-19 pandemic has and may continue to adversely affect the financial markets in some or all countries worldwide.
+Added: Each of these events may cause us to record charges to reduce the carrying value of our money market or other investments or sell investments for less than our acquisition cost.
+Added: Although we attempt to mitigate these risks through diversification of our investments and continuous monitoring of our portfolio’s overall risk profile, the value of our investments may nevertheless decline.
+Added: Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel.
+Added: Our success depends upon the continued contributions of our key management, scientific, and technical personnel, many of whom have been instrumental for us and have substantial experience with our product candidates and related technology.
+Added: The loss of key managers and senior scientists could delay our research and development activities.
+Added: Despite our efforts to retain valuable employees, members of our management, scientific, and development teams may terminate their employment with us on short notice.
+Added: Although we have employment agreements with certain of our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.
+Added: In addition, the competition for qualified personnel in the biotechnology and pharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly-skilled scientific, technical, and managerial employees.
+Added: We face competition for personnel from other companies, universities, public and private research institutions, and other organizations.
+Added: If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement our business strategy, which could have a material adverse effect on our business.
Item 1B Unresolved Staff Comments.
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.