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If our product candidates are not successfully developed and approved, we may never generate any product revenue.
−Removed: Our net loss was $37.4 million for the year ended December 31, 2023.
+Added: Our net loss was $70.5 million for the fiscal year ended December 31, 2024.
As of December 31, 2024, we had an accumulated deficit of $414.6 million.
−Removed: We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as WTX-124 and WTX-330 advance through development, and any future product candidates advance through preclinical studies and into and through clinical trials, and as we expand our clinical, regulatory, quality and manufacturing
−Removed: capabilities and incur additional costs associated with operating as a public company.
+Added: We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as WTX-124 and WTX-330 advance through development, and any future product candidates advance through preclinical studies and into and through clinical trials, and as we expand our clinical, regulatory, quality and manufacturing capabilities and incur additional costs associated with operating as a public company.
If we obtain marketing approval for any of our product candidates, we will incur significant commercialization expenses for marketing, sales, manufacturing and distribution.
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As of December 31, 2024, we had cash and cash equivalents of $111.0 million.
−Removed: We expect that our cash and cash equivalents as of December 31, 2023, and gross proceeds of $17.7 million under the at-the-market sales facility received from January 1, 2024 through March 1, 2024, will allow us to complete the development of WTX-124 through dose escalation and expansion as a monotherapy or in combination with pembrolizumab and the development of WTX-330 through dose escalation and expansion as a monotherapy.
+Added: We expect that our cash and cash equivalents as of December 31, 2024, will allow us to complete the development of WTX-124 through dose escalation and expansion as a monotherapy or in combination with pembrolizumab and the development of WTX-330 through dose escalation and expansion as a monotherapy.
Our cash and cash equivalents will not be sufficient to complete development of WTX-124, WTX-330 or any other product candidate.
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Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline, and our stockholders may not agree with our financing plans or the terms of such financings.
+Added: For example, pursuant to the terms of our loan and security agreement, or the K2HV Loan Agreement, with K2 HealthVentures LLC, or K2HV, the lenders have the right to convert any portion of the outstanding principal amount of the first tranche part A term loan then outstanding into shares of our common stock, which right, if exercised, could have a dilutive impact on our stockholders’ ownership interests.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests will be diluted and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.
The incurrence of indebtedness would result in payment obligations and could require us to comply with certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to declare dividends, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
−Removed: Further, our ability to obtain additional debt financing may be limited by covenants we have made under our amended and restated loan and security agreement, or the Loan Agreement, with Pacific Western Bank, or PWB, including our pledge to PWB of substantially all of our assets, other than our intellectual property, as collateral.
+Added: Further, our ability to obtain additional debt financing may be limited by covenants we have made under the K2HV Loan Agreement, including our pledge of substantially all of our assets, other than our intellectual property, as collateral.
If we raise additional funds through collaborations and licensing arrangements with third parties, we may have to relinquish valuable rights to our platform technology or product candidates or grant licenses on terms unfavorable to us.
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We have a term loan facility that requires us to comply with certain operating covenants and places restrictions on our operating and financial flexibility.
−Removed: All outstanding obligations under the Loan Agreement are secured by our personal property (exclusive of any intellectual property), and are subject to acceleration upon an event of default.
−Removed: Under the Loan Agreement, we are required to comply with certain negative covenants, which among other things, restrict us from incurring future debt or granting liens, effectuating a merger or consolidation with or into any other business organization, paying dividends or making certain other distributions, selling or otherwise transferring our assets, and making investments in any entities or instruments, subject, in each case, to certain exceptions specified in the Loan Agreement.
−Removed: The Loan Agreement also contains standard affirmative covenants, including with respect to the issuance of audited consolidated financial statements, insurance, and maintenance of good standing and government compliance in our state of formation.
−Removed: We are required to maintain at all times at least $20.0 million of otherwise unrestricted cash in accounts with PWB.
−Removed: Our failure to comply with any of the foregoing covenants would result in an event of default under the Loan Agreement.
−Removed: Our financial obligations and contractual commitments under the Loan Agreement could have significant adverse consequences, including:
+Added: All outstanding obligations under the K2HV Loan Agreement are secured by our personal property (exclusive of any intellectual property) and are subject to acceleration upon an event of default.
+Added: Under the K2HV Loan Agreement, we are required to comply with certain negative covenants, which among other things, restrict us from incurring future debt or granting liens, effectuating a merger or consolidation with or into any other business organization, paying dividends or making certain other distributions or repurchasing our equity, disposing of our assets, and making investments in any entities or instruments, subject, in each case, to certain exceptions specified in the K2HV Loan Agreement.
+Added: The K2HV Loan Agreement also contains standard affirmative covenants, including with respect to the issuance of audited consolidated financial statements, insurance, and maintenance of good standing and government compliance in our state of formation.
+Added: Our failure to comply with any of the foregoing covenants would result in an event of default under the K2HV Loan Agreement.
+Added: Our financial obligations and contractual commitments under the K2HV Loan Agreement could have significant adverse consequences, including:
• requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing money available to fund working capital, capital expenditures, product development and other general corporate purposes;
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• placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
−Removed: Under our Loan Agreement, the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, assets or condition is an event of default.
+Added: Under the K2HV Loan Agreement, the occurrence of an event or circumstance that could be expected to have a material adverse effect on our business, operations, properties, assets or condition is an event of default.
If an event of default occurs and the lenders accelerate the amounts due, we may not be able to make accelerated payments, and the lenders could seek to enforce security interests in the collateral securing such indebtedness, which includes substantially all of our assets other than our intellectual property.
−Removed: In addition, the covenants under our Loan Agreement, the pledge of our assets as collateral and the negative pledge with respect to our intellectual property could limit our ability to obtain additional debt financing.
+Added: In addition, the covenants under the K2HV Loan Agreement, the pledge of our assets as collateral and the negative pledge with respect to our intellectual property could limit our ability to obtain additional debt financing.
Changes in tax laws or in their implementation or interpretation could adversely affect our business and financial condition.
Changes in tax laws or in their implementation or interpretation may adversely affect our business or financial condition.
−Removed: The Tax Cuts and Jobs Act of 2017, or TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or CARES
−Removed: Act, significantly revised the Internal Revenue Code of 1986, as amended, or the Code.
−Removed: The TCJA, among other things, contains significant changes to corporate taxation, including the reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% and the limitation of the deduction for net operating losses to 80% of current year taxable income for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely but no longer carried back).
+Added: The TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, significantly revised the Internal Revenue Code of 1986, as amended, or the Code.
+Added: The TCJA, among other things, contains significant changes to corporate taxation, including the reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% and, for taxable years beginning after December 31, 2020, the limitation of the deduction for net operating losses to 80% of current year taxable income for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely but no longer carried back).
In addition, beginning in 2022, the TCJA eliminated the option to deduct research and development expenditures currently and generally requires corporations to capitalize and amortize them over five years or 15 years (for expenditures attributable to foreign research).
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Regulatory guidance under the TCJA and such additional legislation is and continues to be forthcoming, and such guidance could ultimately increase or lessen their impact on our business and financial condition.
+Added: Congress may also enact additional legislation, some of which could have an impact on us.
In addition, it is uncertain if and to what extent various states will conform to the TCJA and additional tax legislation.
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As described above in “Changes in tax laws or in their implementation or interpretation could adversely affect our business and financial condition,” the TCJA, as amended by the CARES Act, includes changes to U.S.
−Removed: federal tax rates and rules governing net operating loss carryforwards that may significantly impact our ability to utilize net operating losses to offset taxable income in the future.
+Added: federal tax rates and rules governing net operating loss carryforwards that may significantly impact our ability to utilize net operating
+Added: losses to offset taxable income in the future.
In addition, state net operating losses generated in one state cannot be used to offset income generated in another state.
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Commencing clinical trials in the United States is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities.
−Removed: In the event that the FDA requires us to complete
−Removed: additional preclinical studies or we are required to satisfy other FDA requests prior to commencing clinical trials, the start of a clinical trial may be delayed.
+Added: In the event that the FDA requires us to complete additional preclinical studies or we are required to satisfy other FDA requests prior to commencing clinical trials, the start of a clinical trial may be delayed.
Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect.
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We may experience issues surrounding preliminary trial execution, such as delays in FDA acceptance of our INDs, revisions in trial design and finalization of trial protocols, difficulties with patient recruitment and enrollment, quality and provision of clinical supplies, or early safety signals.
−Removed: We are not permitted to market any biological product in the United States until we receive approval of a Biologics License Application, or BLA, or a new drug application, or NDA, from the FDA.
+Added: We are not permitted to market any biological product or drug product in the United States until we receive approval of a Biologics License Application, or BLA, or a new drug application, or NDA, from the FDA.
We have not previously submitted a BLA or an NDA to the FDA, or similar marketing application to comparable foreign regulatory authorities.
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The success of our business depends primarily upon our ability to discover, develop and commercialize products based on our novel PREDATOR platform.
−Removed: While we have had favorable preclinical study results related to WTX-124 and WTX-330, both of
−Removed: which we are developing by leveraging our PREDATOR platform, and have announced favorable early-stage clinical trial results related to WTX-124, we have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in clinical trials or in obtaining marketing approval thereafter.
+Added: While we have had favorable preclinical study results related to WTX-124 and WTX-330, both of which we are developing by leveraging our PREDATOR platform, and have announced favorable early-stage clinical trial results related to WTX-124 and WTX-330, we have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in clinical trials or in obtaining marketing approval thereafter.
We have no assurance that our PREDATOR platform will be able to produce product candidates that will successfully progress from preclinical studies into clinical development and ultimately marketing approval.
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As a result, the risk of delays or failure in the manufacture of our INDUKINE molecules is high.
−Removed: Additionally, each INDUKINE molecule that we may develop is unique, from a manufacturing perspective, so any learnings from the manufacture of other INDUKINE molecules may not apply to the manufacture of new INDUKINE molecules.
+Added: Additionally, each INDUKINE molecule that we may develop is unique, from a manufacturing perspective, so any learnings from the manufacture of other INDUKINE molecules may not apply to the manufacture of new INDUKINE
Before commencing clinical trials for new product candidates, the manufactured INDUKINE molecules must complete extensive analytical testing and be qualified for use in human studies.
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In particular, while we have conducted certain preclinical studies of WTX-124 and WTX-330 and have entered early clinical stage development, we do not know whether either of these product candidates will perform in our clinical trials as it has performed in these prior preclinical studies.
−Removed: Similarly, there can be no assurance that interim or preliminary clinical data or results, including, without limitation, the preliminary Phase 1/1b clinical data reported for WTX-124, will be predictive of future clinical data or results, and there can be no assurance that success in early clinical trials will lead to success in later clinical trials.
+Added: Similarly, there can be no assurance that interim or preliminary clinical data or results, including, without limitation, the Phase 1/1b clinical data reported for WTX-124 and Phase 1 clinical data reported for WTX-330, will be predictive of future clinical data or results, and there can be no assurance that success in early clinical trials will lead to success in later clinical trials.
Many companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks.
These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway, or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events.
−Removed: Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
+Added: Moreover, preclinical and clinical data are
+Added: often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
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 clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants.
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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.
−Removed: For example, in December 2022 with the passage of the Food and Drug Omnibus Reform Act of 2022, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
+Added: For example, in December 2022 with the passage of the Food and Drug Omnibus Reform Act of 2022, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.
−Removed: Specifically, actions plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them.
−Removed: In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.
+Added: Specifically, actions plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs.
+Added: Unlike most guidance documents issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.
Similarly, the regulatory landscape related to clinical trials in the European Union, or EU, recently evolved.
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In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
−Removed: Since the number of qualified clinical investigators 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 site.
+Added: Since the number of qualified clinical investigators 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.
Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to abandon one or more clinical trials altogether.
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With a limited number of patients and limited duration of exposure, rare and severe side effects of our product candidates may only be uncovered when a significantly larger number of patients is exposed to the product candidate.
−Removed: If our product candidates receive marketing approval and we or
−Removed: others identify undesirable side effects caused by such product candidates after such approval, a number of potentially significant negative consequences could result, including:
+Added: If our product candidates receive marketing approval and we or others identify undesirable side effects caused by such product candidates after such approval, a number of potentially significant negative consequences could result, including:
• regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
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Developments related to the third-party drug may also impact our clinical trials for the combination as well as our commercial prospects should we receive regulatory approval.
−Removed: Such developments may include changes to the third-party drug’s safety or efficacy
−Removed: profile, changes to the availability of the third-party drug, quality, and manufacturing and supply issues with respect to the third-party drug.
+Added: Such developments may include changes to the third-party drug’s safety or efficacy profile, changes to the availability of the third-party drug, quality, and manufacturing and supply issues with respect to the third-party drug.
If we are able to obtain marketing approval, the FDA or comparable foreign regulatory authorities may require that products used in conjunction with each other be cross labeled for combined use.
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We may not be able to build an effective sales and marketing organization in the United States, the European Union or other key global markets.
−Removed: To the extent we need to rely upon one or more third parties, we may have little or no control over the marketing and sales efforts of those third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves.
+Added: To the extent we need to rely upon one or more third parties, we may have little or no control over the marketing and sales efforts of those third parties and our revenue
+Added: from product sales may be lower than if we had commercialized our product candidates ourselves.
We will also face competition in any search for third parties to assist us with sales and marketing efforts for our product candidates.
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Our lead product candidate, WTX-124, if approved, may face competition from other Interleukin-2, or IL-2, based cancer therapies.
−Removed: Proleukin (aldesleukin), a synthetic protein very similar to IL-2, is approved and marketed for the treatment of metastatic renal cell carcinoma and melanoma.
−Removed: In addition, we are aware that a number of other companies have modified IL-2 programs in development for the treatment of cancer, including Anaveon AG, Anwita Biosciences, Inc., Ascendis Pharma A/S, Asher Biotherapeutics, Inc., Aulos Bioscience, Inc., BioNTech SE, Cue Biopharma, Inc., DEKA Biosciences, Inc., Merck & Co., Inc., Medicenna Therapeutics Corp., Mural Oncology PLC, F.
+Added: Proleukin (aldesleukin) has been approved and is marketed for the treatment of both metastatic renal cell carcinoma and metastatic melanoma.
+Added: In addition, we are aware of numerous clinical and preclinical IL-2 molecules using different platforms being developed for oncology indications, including programs from Anaveon AG, Anwita Biosciences, Inc., Ascendis Pharma A/S, Asher Biotherapeutics, Inc., Aulos Bioscience, Inc., BioNTech SE, Cue Biopharma, Inc., DEKA Biosciences, Inc., Merck & Co., Inc., Medicenna Therapeutics Corp., Mural Oncology PLC, F.
Hoffmann-La Roche AG, Synthekine, Inc., and Xilio Therapeutics, Inc.
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(Amunix), DEKA Biosciences, Inc., DragonFly Therapeutics, Inc., Juno Therapeutics, Inc.
−Removed: (Bristol-Myers Squibb Company), Turnstone Biologics Corp.
−Removed: (partnered with Takeda Pharmaceutical Company Limited), Philogen S.p.A., OncoSec Medical Incorporated, Sonnet BioTherapeutics, Inc., Xilio Therapeutics, Inc.
−Removed: and Zymeworks Inc.
+Added: (Bristol-Myers Squibb Company), Mural Oncology, OncoSec Medical Incorporated, Philogen S.p.A., Sonnet BioTherapeutics, Inc., Turnstone Biologics Corp.
+Added: (partnered with Takeda Pharmaceutical Company Limited), Xilio Therapeutics, Inc., and Zymeworks Inc.
Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.
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In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful.
−Removed: The availability of competing products could limit the demand and the price we are able to charge for product candidates we commercialize, if any.
+Added: The availability of competing products could limit the demand and the price we
+Added: are able to charge for product candidates we commercialize, if any.
The inability to compete with existing or subsequently introduced drugs would harm our business, financial condition and results of operations.
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It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product.
−Removed: Even if we show improved efficacy or
−Removed: improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates.
+Added: Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates.
These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates, if approved.
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Any third parties conducting our clinical trials will not be our employees and, except for remedies that may be available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our clinical trials.
−Removed: These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance
−Removed: on our behalf.
+Added: These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance on our behalf.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.
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Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, other supply disruptions and higher costs.
−Removed: If microbial, viral or other contaminations are discovered at the facilities of our contract manufacturing organizations, or CMOs, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials, result in higher costs of drug product and adversely affect our business.
+Added: If microbial, viral or other contaminations are discovered at the facilities of our contract manufacturing organizations, or CMOs, such facilities may need to be closed for an extended period of time to investigate and
+Added: remedy the contamination, which could delay clinical trials, result in higher costs of drug product and adversely affect our business.
We have engaged CMOs to provide certain services to support our clinical and preclinical development.
−Removed: Pursuant to the terms of separate contract manufacturing services agreements, we have engaged one CMO to provide drug substance manufacturing process development and to manufacture WTX-124 and WTX-330 drug substance to cGMP specifications for use in the further manufacture of clinical supply, a second CMO to provide drug product manufacturing process development and to manufacture clinical supply of WTX-124 and WTX-330 vialled drug product to cGMP specifications, and additional CMOs to provide drug substance and drug product manufacturing for JZP898.
+Added: Pursuant to the terms of separate contract manufacturing services agreements, we have engaged one CMO to provide drug substance manufacturing process development and to manufacture WTX-124 and WTX-330 drug substance to cGMP specifications for use in the further manufacture of clinical supply and a second CMO to provide drug product manufacturing process development and to manufacture clinical supply of WTX-124 and WTX-330 vialled drug product to cGMP specifications.
To support the manufacture of drug substance and drug product, our CMOs will conduct substantial analytical testing of drug substance and vialled drug product.
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The transfer of the manufacturing of biologic products to a new CMO and any additional process development that may be necessary can be lengthy and involve significant additional costs.
−Removed: If we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains
−Removed: facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
+Added: If we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
The delays associated with the verification of a new CMO would negatively affect our ability to develop product candidates in a timely manner or within budget.
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We may also enter into collaborations in connection with our platform technology in order to advance the development of programs beyond our initial focus in cytokines.
−Removed: Such collaborations may include the development and
−Removed: commercialization of any of our product candidates or the commercialization of any of our product candidates that are approved for marketing outside the United States.
+Added: Such collaborations may include the development and commercialization of any of our product candidates or the commercialization of any of our product candidates that are approved for marketing outside the United States.
Our likely collaborators for any collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.
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We cannot provide any assurances that any of our patents have, or that any of our pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our current and future product candidates or otherwise provide any competitive advantage.
−Removed: In addition, to the extent that we license intellectual property in the future, we cannot provide assurances that those licenses will remain in force.
+Added: addition, to the extent that we license intellectual property in the future, we cannot provide assurances that those licenses will remain in force.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
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While we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development efforts, including for example, our employees, external academic scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose our confidential or proprietary information before a patent application is filed, thereby endangering our ability to seek patent protection.
−Removed: In addition, publications of discoveries in the scientific and scholarly literature often lag behind
−Removed: the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
+Added: In addition, publications of discoveries in the scientific and scholarly literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
Consequently, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or pending patent applications.
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Licenses to additional third-party intellectual property, technology and materials that may be required for the development and commercialization of our product candidates or technology may not be available at all or on commercially reasonable terms.
−Removed: In that event, we may be required to expend significant time and resources to redesign our product candidates or to develop or license replacement technology, all of which may not be feasible
−Removed: on a technical or commercial basis.
+Added: In that event, we may be required to expend significant time and resources to redesign our product candidates or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis.
If we are unable to do so, we may be unable to develop or commercialize our future product candidates or technologies, which could materially harm our business, financial condition, results of operations and growth prospects.
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Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.
−Removed: Since patent applications in the United States
−Removed: and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates.
+Added: Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates.
Furthermore, for U.S.
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patent law, including provisions that affect the way patent applications are prosecuted, redefine prior art and establish a USPTO-administered post-grant review system that has affected patent litigation.
−Removed: The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
+Added: The America Invents Act and its implementation could increase the uncertainties and costs surrounding the
+Added: prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.
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We cannot be certain, however, that the claims in our pending patent applications, including those claims covering the 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 patents that have issued or may issue will be considered valid and enforceable by courts in the United States or foreign countries.
−Removed: Furthermore, in some cases, we may not be able to obtain issued claims covering compositions of matter relating to our product candidates, and instead may need to rely on filing patent applications with claims covering a method of use and/or method of manufacture.
+Added: Furthermore, in some cases, we may not be able to obtain issued
+Added: claims covering compositions of matter relating to our product candidates, and instead may need to rely on filing patent applications with claims covering a method of use and/or method of manufacture.
Method of use patents protect a specified method of using a product, such as a method of use for treating a particular medical indication.
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For example, significant elements of our product candidates and PREDATOR platform, including aspects of sample preparation, methods of manufacturing, cell culturing conditions, computational-biological algorithms and related processes are based on unpatented trade secrets that are not publicly disclosed.
−Removed: Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants,
−Removed: third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.
+Added: Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.
Thus, we may not be able to meaningfully protect our trade secrets.
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We have also adopted policies and conduct training that provides guidance on our expectations, and our advice for best practices, in protecting our trade secrets.
−Removed: However, we cannot provide assurance that these agreements and policies will not be breached by our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors and that our trade secrets and other proprietary and confidential information will not be disclosed to publicly or to competitors.
+Added: However, we cannot provide assurance that these agreements and policies will not be breached by our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors and that our trade secrets and other proprietary and confidential information will not be disclosed publicly or to competitors.
Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.
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and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates.
−Removed: As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.
+Added: As the biotechnology and pharmaceutical industries expand and more patents are issued, the
+Added: risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.
Moreover, it is not always clear to industry participants, including us, which patents cover various types of drugs, products or their methods of use or manufacture.
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Generally, conducting preclinical and clinical trials and other development activities in the United States is not considered an act of infringement.
−Removed: If WTX-124, WTX-330, JZP898, WTX-712, WTX-518 or another product candidate we develop in the future is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us.
+Added: If WTX-124, WTX-330, JZP898, WTX-712, WTX-518, WTX-921 or another product candidate we develop in the future is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us.
For example, we have received, and we may in the future receive, correspondence from third parties or their legal counsel disclosing that such third party owns patents that may encompass one or more of our product candidates.
It is also possible that a third party may file a lawsuit against us alleging infringement of its patents.
−Removed: The outcome of any such proceeding is uncertain and would likely result
−Removed: in the expenditure of significant financial resources and the diversion of management’s time and resources, which could harm our business.
+Added: The outcome of any such proceeding is uncertain and would likely result in the expenditure of significant financial resources and the diversion of management’s time and resources, which could harm our business.
While we do not believe that any claims that could otherwise have a materially adverse effect on the commercialization of our product candidates are valid and enforceable, we may be incorrect in this belief, or we may not be able to prove it in litigation.
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Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates.
−Removed: Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
+Added: Defense of these claims, regardless of their merit, could
+Added: involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
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We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.
−Removed: Presently we have certain intellectual property rights, under patents and patent applications that we own or will own and under the Harpoon Agreement, related to WTX-124, WTX-330, JZP898, WTX-712, WTX-518 and other product candidates we may develop in the future.
+Added: Presently we have certain intellectual property rights, under patents and patent applications that we own or will own and under the Harpoon Agreement, related to WTX-124, WTX-330, JZP898, WTX-712, WTX-518, WTX-921 and other product candidates we may develop in the future.
Our development of additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights.
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government patent agencies and to help us comply with other procedural, documentary and other similar requirements and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property.
−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
−Removed: 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.
+Added: 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.
Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
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Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.
−Removed: In addition, the United States continues to adapt to wide-ranging patent reform legislation that became effective starting in 2012.
+Added: In addition, the United States continues to adapt to wide-ranging
+Added: patent reform legislation that became effective starting in 2012.
Moreover, recent U.S.
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Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
−Removed: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of
−Removed: patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
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.
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In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
−Removed: If we or any of our licensors is 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 financial condition may be adversely affected.
+Added: If we or any of our licensors 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 financial condition may be adversely affected.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
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We rely on both registration and common law protection for our trademarks.
−Removed: We may not be able to protect our
−Removed: rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
+Added: We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
During the trademark registration process, we may receive Office Actions from the USPTO objecting to the registration of our trademark.
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The process of obtaining marketing approvals, both in the United States and abroad, is lengthy, expensive and uncertain.
−Removed: It may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type,
−Removed: complexity and novelty of the product candidates involved.
+Added: It may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information, including manufacturing information, to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.
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For any of our product candidates for which we are seeking regulatory approval in the U.S.
−Removed: or the EU, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.
+Added: or the EU, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other
+Added: requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.
+Added: Finally, we could be adversely affected by several significant administrative law cases decided by the U.S.
+Added: Supreme Court in 2024.
+Added: In Loper Bright Enterprises v.
+Added: Raimondo , for example, the court overruled Chevron U.S.A., Inc.
+Added: Natural Resources Defense Council, Inc ., which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or ambiguous on a particular topic.
+Added: Supreme Court stripped federal agencies of this presumptive deference and held that courts must exercise their independent judgment when deciding whether an agency such as the FDA acted within its statutory authority under the Administrative Procedure Act, or the APA.
+Added: Additionally, in Corner Post, Inc.
+Added: Board of Governors of the Federal Reserve System , the court held that actions to challenge a federal regulation under the APA can be initiated within six years of the date of injury to the plaintiff, rather than the date the rule is finalized.
+Added: The decision appears to give prospective plaintiffs a personal statute of limitations to challenge longstanding agency regulations.
+Added: Another decision, Securities and Exchange Commission v.
+Added: Jarkesy , overturned regulatory agencies’ ability to impose civil penalties in administrative proceedings.
+Added: These decisions could introduce additional uncertainty into the regulatory process and may result in additional legal challenges to actions taken by federal regulatory agencies, including the FDA and CMS, that we rely on.
+Added: In addition to potential changes to regulations as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays and other impacts, any of which could adversely impact our business and operations.
Any delay in obtaining or failure to obtain required approvals could negatively affect our ability or that of any future collaborators to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our stock price.
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regulatory requirements, our target markets will be reduced and our ability to realize the full market potential of our product candidates will be harmed and our business, financial condition, results of operations and prospects may be adversely affected.
−Removed: Additionally, we could face heightened risks with respect to obtaining marketing authorization in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit.
−Removed: The UK is no longer part of the European Single Market and EU Customs Union.
−Removed: As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas under the terms of the Northern Ireland Protocol, Northern Ireland is currently subject to EU rules.
−Removed: The UK and EU have however agreed to the Windsor Framework which fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK.
−Removed: Once implemented, the
−Removed: changes introduced by the Windsor Framework will see the MHRA be responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.
−Removed: Any delay in obtaining, or an inability to obtain, any marketing authorizations, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the UK for our product candidates, which could significantly and materially harm our business.
+Added: Additionally, we could face heightened risks with respect to obtaining marketing authorization in the U.K.
+Added: as a result of the withdrawal of the U.K.
+Added: from the EU, commonly referred to as Brexit.
+Added: is no longer part of the European Single Market and EU Customs Union.
+Added: As of January 1, 2025, the Medicines and Healthcare Products Regulatory Agency, or MHRA, is responsible for approving all medicinal products destined for the United Kingdom market (i.e., Great Britain and Northern Ireland).
+Added: At the same time, a new international recognition procedure, or IRP, will apply, which intends to facilitate approval of pharmaceutical products in the U.K.
+Added: The IRP is open to applicants that have already received an authorization for the same product from one of the MHRA’s specified Reference Regulators, or RRs.
+Added: The RRs notably include EMA and regulators in the EU/European Economic Area, or EEA, member states for approvals in the EU centralized procedure and mutual recognition procedure as well as the FDA (for product approvals granted in the U.S.).
+Added: However, the concrete functioning of the IRP is currently unclear.
+Added: Any delay in obtaining, or an inability to obtain, any marketing approvals may force us or our collaborators to restrict or delay efforts to seek regulatory approval in the U.K.
+Added: for our product candidates, which could significantly and materially harm our business.
In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted.
For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.
−Removed: The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.
+Added: The European Commission’s
+Added: proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.
The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026.
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Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.
+Added: In addition, to obtain orphan drug designation in the EU, we would need to demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the medicinal product will be of significant benefit to those affected by that condition.
+Added: There is no assurance that we would be able to meet that standard for any of our product candidates.
+Added: Further, if we do obtain orphan drug designation for a candidate product in the EU, we will not be able to maintain that designation if we are not able to show, to the satisfaction of the EU regulatory authorities, that the candidate product is of significant benefit to patients over available commercial products for the indication in the EU and any additional products that are ahead of our product candidate in clinical development for the indication.
Any product candidate for which we obtain marketing approval is subject to ongoing regulation and could be subject to restrictions or withdrawal from the market, and we may be subject to substantial penalties if we fail to comply with regulatory requirements, when and if any of our product candidates are approved.
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• litigation involving patients using our products.
−Removed: Finally, our ability to develop and market new drug products may be impacted by ongoing litigation challenging the FDA’s approval of mifepristone.
−Removed: Specifically, on April 7, 2023, the U.S.
−Removed: District Court for the Northern District of Texas stayed the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various conditions adopted under a REMS.
−Removed: In reaching that decision, the district court made a number of findings that may negatively impact the development, approval and distribution of drug products in the U.S.
−Removed: Among other determinations, the district court held that plaintiffs were likely to prevail in their claim that FDA had acted arbitrarily and capriciously in approving mifepristone without sufficiently considering evidence bearing on whether the drug was safe to use under the conditions identified in its labeling.
−Removed: Further, the district court read the standing requirements governing litigation in federal court as permitting a plaintiff to bring a lawsuit against the FDA in connection with its decision to approve an NDA or establish requirements under a REMS based on a showing that the plaintiff or its members would be harmed to the extent that FDA’s drug approval decision effectively compelled the plaintiffs to provide care for patients suffering adverse events caused by a given drug.
−Removed: On April 12, 2023, the district court decision was stayed, in part, by the U.S.
−Removed: Court of Appeals for the Fifth Circuit.
−Removed: Thereafter, on April 21, 2023, the U.S.
−Removed: Supreme Court entered a stay of the district court’s decision, in its entirety, pending disposition of the appeal of the district court decision in the Court of Appeals for the Fifth Circuit and the disposition of any petition for a writ of certiorari to the Supreme Court.
−Removed: The Court of Appeals for the Fifth Circuit held oral argument in the case on May 17, 2023 and, on August 16, 2023, issued its decision.
−Removed: The court declined to order the removal of mifepristone from the market, finding that a challenge to the FDA’s initial approval in 2000 is barred by the statute of limitations.
−Removed: However, the Appeals Court did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone that the FDA authorized in 2016 and 2021 were arbitrary and capricious.
−Removed: On September 8, 2023, the Justice Department and a manufacturer of mifepristone filed petitions for a writ of certiorari, requesting that the U.S.
−Removed: Supreme Court to review the Appeals Court decision.
−Removed: On December 13, 2023, the Supreme Court granted these petitions for writ of certiorari for the appeals court decision.
Post-approval restrictions apply to the approval of products in the EU.
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the manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory;
−Removed: and the marketing and promotion of authorized drugs, which are strictly regulated
−Removed: in the EU and are also subject to EU Member State laws.
+Added: and the marketing and promotion of authorized drugs, which are strictly regulated in the EU and are also subject to EU Member State laws.
The failure to comply with these and other EU requirements can also lead to significant penalties and sanctions.
+Added: Further, our ability to develop and market new products may be impacted by litigation challenging the FDA’s approval of another company’s drug product.
+Added: In April 2023, the U.S.
+Added: District Court for the Northern District of Texas invalidated the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various measures adopted under a REMS.
+Added: The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious.
+Added: In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs (anti-abortion doctors and organizations) did not have standing to bring this legal action against the FDA.
+Added: On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended complaint in the district court in Texas challenging FDA’s actions.
+Added: On January 16, 2025, the district court agreed to allow these states to file an amended complaint and continue to pursue this challenge.
+Added: Depending on the outcome of this litigation, our ability to develop new drug product candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted litigation.
Accordingly, if we receive marketing approval for one or more of our product candidates, we will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control.
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Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.
−Removed: For example, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies governing the distribution of scientific information on unapproved uses to healthcare providers.
−Removed: This draft guidance calls for such communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use.
+Added: For example, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.
+Added: The final guidance calls for such communications to be truthful, non-misleading and scientifically sound and to include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use of the approved product.
+Added: If a company engages in such communications consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved product.
+Added: We will need to carefully navigate the FDA’s various regulations, guidance and policies, along with recently enacted legislation, to ensure compliance with restrictions governing promotion of our products.
In addition, under some relatively recent guidance from the FDA and the Pre-Approval Information Exchange Act signed into law as part of the Consolidated Appropriations Act of 2023, companies may also promote information that is consistent with the prescribing information and proactively speak to formulary committee members of payors regarding data for an unapproved drug or unapproved uses of an approved drug.
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We may seek certain designations for one or more of our product candidates that could expedite review and approval by the FDA.
−Removed: A Breakthrough Therapy product is defined as a product that is intended, alone or in combination with one or more other products, to treat a serious condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
+Added: A Breakthrough Therapy product is defined as a product that is intended, alone or in combination with one or more other products, to treat a serious condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects
+Added: observed early in clinical development.
For products that have been designated as Breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
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We may also seek a priority review designation for one or more of our product candidates.
−Removed: If the FDA determines that a product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists, the FDA may designate the product candidate for priority review.
+Added: If the FDA determines that a product candidate is intended to treat a serious condition and, if approved, offers a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review.
+Added: Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation.
A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months.
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We may seek approval of any of our current and future product candidates using the FDA’s accelerated approval pathway.
−Removed: A product may be eligible for accelerated approval if it treats a serious or life-threatening condition, generally provides a meaningful advantage over available therapies, and demonstrates an effect on a surrogate endpoint that is reasonably likely to
−Removed: predict clinical benefit.
+Added: A product may be eligible for accelerated approval if it treats a serious or life-threatening condition, generally provides a meaningful advantage over available therapies, and demonstrates an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.
The FDA or other applicable regulatory agency makes the determination regarding whether a surrogate endpoint is reasonably likely to predict long-term clinical benefit.
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As a condition of approval, the FDA requires that a sponsor of a product receiving accelerated approval perform an adequate and well-controlled post-marketing confirmatory clinical trial or trials.
−Removed: These confirmatory trials must be completed with due diligence and we may be required to evaluate different or additional endpoints in these post-marketing confirmatory trials.
+Added: confirmatory trials must be completed with due diligence and we may be required to evaluate different or additional endpoints in these post-marketing confirmatory trials.
These confirmatory trials may require enrollment of more patients than we currently anticipate and will result in additional costs, which may be greater than the estimated costs we currently anticipate.
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A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidates, or withdrawal of a product candidate, would result in a longer time period for commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
−Removed: With passage of the Food and Drug Omnibus Reform Act, or FDORA, in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.
−Removed: Specifically, the new legislation authorized the FDA to:
−Removed: require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to the FDA every six months until the study is completed;
−Removed: and use expedited procedures to withdraw accelerated approval of an NDA or BLA after the confirmatory trial fails to verify the product’s clinical benefit.
−Removed: Further, FDORA requires the agency to publish on its website “the rationale for why a post-approval study is not appropriate or necessary” whenever it decides not to require such a study upon granting accelerated approval.
+Added: Further, there can be no assurance that we will satisfy all FDA requirements, including new provisions, that govern accelerated approval.
+Added: For example, with passage of the FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.
+Added: Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded and to submit progress reports on its post-approval studies to FDA every six months until the study is completed.
+Added: Moreover, FDORA established expedited procedures authorizing FDA to withdraw an accelerated approval if certain conditions are met, including where a required confirmatory study fails to verify and describe the predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.
+Added: The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the Commissioner or the Commissioner’s designee and a written appeal, among other things.
+Added: We will need to fully comply with these and other requirements in connection with the development and approval of any product candidate that qualifies for accelerated approval.
More recently, in March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval.
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To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.
−Removed: While this guidance is currently only in draft form and will not be legally binding even when finalized, we will need to consider the FDA’s guidance closely if we seek accelerated approval for any of our products.
−Removed: Accordingly, even if we do receive accelerated approval, we may not experience a faster development or regulatory review or approval process, and receiving accelerated approval does not provide assurance of ultimate full FDA approval.
+Added: Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidances relating to accelerated approval.
+Added: These guidances describe FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the agency plans to interpret whether such a study needs to be underway at the time of approval.
+Added: While these guidances are currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.
In the EU, a “conditional” marketing authorization may be granted in cases where all the required safety and efficacy data are not yet available.
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Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their regulatory activities.
+Added: Further, with the change in presidential administrations in 2025, there is substantial uncertainty as to how, if at all, the new administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates.
+Added: There is also uncertainty as to how other measures being implemented by the Trump Administration across the government will affect our activities and those of the FDA and its operations.
+Added: For example, the potential loss of FDA personnel could lead to further disruptions and delays in FDA review of our product candidates.
+Added: Similarly, efforts by the new administration to substantially reduce research funding by the National Institutes of Health of medical research could have substantial direct or indirect impacts on our research activities.
Accordingly, if a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
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Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.
+Added: During the first Trump Administration, the Congress and administration sought to overturn the ACA and related measures.
+Added: Shortly after taking office in January 2025, President Trump revoked numerous executive orders issued by President Biden, including at least two executive orders (e.g., EO 14009, Strengthening Medicaid and the Affordable Care Act, and EO 14070, Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage) where were designed to further implement the ACA.
+Added: We anticipate similar efforts to undermine the ACA, and the accompanying uncertainty, for the foreseeable future.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
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The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: These laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
+Added: These laws may result in additional
+Added: reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
The Consolidated Appropriations Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare program.
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The Consolidated Appropriations Act’s health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and lowers the payment reduction percentages in fiscal years 2030 and 2031.
−Removed: The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers or manufacturers of pharmaceuticals or medical devices.
−Removed: On January 28, 2021, however, President Biden issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’
−Removed: access to health care, and consider actions that will protect and strengthen that access.
−Removed: Under this Executive Order, federal agencies are directed to re-examine:
−Removed: policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19;
−Removed: demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements;
−Removed: policies that undermine the Health Insurance Marketplace or other markets for health insurance;
−Removed: policies that make it more difficult to enroll in Medicaid and the ACA;
−Removed: and policies that reduce affordability of coverage or financial assistance, including for dependents.
−Removed: This Executive Order also directs the U.S.
−Removed: Department of Health and Human Services, or HHS, to create a special enrollment period for the Health Insurance Marketplace in response to the COVID-19 pandemic.
In the EU, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
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That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or PhRMA, but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS.
−Removed: Nine states (Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Texas, Vermont and Wisconsin) have passed laws allowing for the importation of drugs from Canada.
−Removed: Certain of these states have submitted Section 804 Importation Program proposals and are awaiting FDA approval.
−Removed: On January 5, 2023, the FDA approved Florida’s plan for Canadian drug importation.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which has been delayed until January 1, 2032 by the Inflation Reduction Act, or IRA.
−Removed: On July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.
−Removed: The Executive Order directs HHS to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” On September 9, 2021, HHS released its plan to reduce pharmaceutical prices.
−Removed: The key features of that plan are to:
−Removed: (a) make pharmaceutical prices more affordable and equitable for all consumers and throughout the health care system by supporting pharmaceutical price negotiations with manufacturers;
−Removed: (b) improve and promote competition throughout the prescription pharmaceutical industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency;
−Removed: and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.
+Added: Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of drugs from Canada.
+Added: North Dakota and Virginia have passed legislation establishing working groups to examine the impact of a state importation program.
+Added: As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had submitted Section 804 Importation Program proposals to the FDA, and on January 5, 2023, the FDA approved Florida’s plan for Canadian drug importation.
+Added: That state now has authority to import certain drugs from Canada for a period of two years once certain conditions are met.
+Added: Florida will first need to submit a pre-import request for each drug selected for importation, which must be approved by the FDA.
+Added: The state will also need to relabel the drugs and perform quality testing of the products to meet FDA standards.
+Added: Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
+Added: The implementation of the rule has been delayed by the Biden administration until January 1, 2026 by the Infrastructure Investment and Jobs Act.
+Added: The final rule would eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees.
+Added: It originally was set to go into effect on January 1, 2022, but with the passage of the Inflation Reduction Act of 2022, or the IRA, has been delayed by Congress to January 1, 2032.
On August 16, 2022, the IRA was signed into law by President Biden.
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Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.
+Added: The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.
+Added: On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.
+Added: The prices of these ten drugs will become effective January 1, 2026.
+Added: On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations.
+Added: Thereafter, following the change in administrations, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.
+Added: The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.
Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.
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Chamber of Commerce, Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.
+Added: There have been various decisions by the courts considering these cases since they were filed.
+Added: The HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.
+Added: Certain of these cases are now on appeal, and oral arguments took place on October 30, 2024.
We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.
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At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs.
+Added: In addition, regional health care authorities and individual hospitals are
+Added: increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs.
These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
+Added: This may be increasingly true with respect to products approved pursuant to the accelerated approval pathway.
+Added: State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.
Finally, outside the United States, in some nations, including those of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control and access.
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Analogous State and Foreign Laws .
−Removed: Analogous state laws and regulations, such as state anti-kickback and false claims laws, and transparency laws, may apply to sales or marketing arrangements, and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures.
+Added: Analogous state laws and regulations, such as state anti-kickback and false claims laws, and transparency laws, may apply to sales or marketing arrangements, and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring manufacturers to report information related to payments to
+Added: physicians and other healthcare providers or marketing expenditures.
Many state laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations 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 these laws or any other
−Removed: governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, and reputational harm, any of which could substantially disrupt our operations.
+Added: If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, and reputational harm, any of which could substantially disrupt our operations.
If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
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In the United States, there are numerous federal and state laws and regulations related to the privacy and security of personal information that may be applicable to our current and future activities, and a wide range of enforcement agencies at both the state and federal levels that can review companies for privacy and data security concerns based on general consumer protection laws.
−Removed: The FTC and state Attorneys General all are aggressive in reviewing privacy and data security protections for consumers.
+Added: The FTC and state Attorneys General are all aggressive in reviewing privacy and data security protections for consumers.
New laws also are being considered at both the state and federal levels.
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For example, the California Consumer Privacy Act, or CCPA, which went into effect on January 1, 2020, imposed many requirements on businesses that process the personal information of California residents, including requiring businesses to provide notice to data subjects regarding the information collected about them and how such information is used and shared, and providing data subjects the right to request access to such personal information and, in certain cases, request the erasure of such personal information.
−Removed: Additionally, in November 2020, California voters approved a new privacy law, the California Privacy Rights Act, or CPRA, which expands the CCPA to incorporate additional provisions, including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information.
+Added: Additionally, in November 2020, California voters approved a new privacy law, the California Privacy Rights Act, or CPRA, which expands the CCPA to incorporate additional provisions, including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes
+Added: of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information.
Most CPRA provisions took effect on January 1, 2023, though the obligations apply to any personal information collected after January 1, 2022.
−Removed: In addition to California, at least eleven other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
+Added: In addition to California, at least 18 other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
These laws are either in effect or will go into effect sometime before the end of 2026.
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Some of the provisions of these laws may apply to our business activities.
−Removed: There are also states that are strongly considering or have already passed comprehensive privacy laws during the 2023 legislative sessions that will go into effect in 2024 and beyond, including New Hampshire and New Jersey.
−Removed: Other states will be considering these laws in the future, and Congress has also been debating passing a federal privacy law.
+Added: There are also states that are considering or have already passed comprehensive privacy laws during the 2023 legislative sessions that will go into effect in 2024 and beyond.
There are also states that are specifically regulating health information that may affect our business.
For example, Washington state recently passed a health privacy law that will regulate the collection and sharing of health information, and the law also has a private right of action, which further increases the relevant compliance risk.
−Removed: Connecticut and Nevada have also passed similar laws regulating consumer health data.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.
+Added: Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-related practices.
+Added: In particular, there have been a significant number of cases filed against companies for their use of pixels and other web trackers.
+Added: These cases often allege violations of the California Invasion of Privacy Act and other state laws regulating wiretapping, as well as the federal Video Privacy Protection Act.
+Added: The rise in these types of lawsuits creates potential risk for our business.
A wide range of enforcement agencies at both the state and federal levels can review companies for privacy and data security concerns based on general consumer protection laws.
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Data Privacy Framework.
−Removed: If these challenges are successful, they may not only impact the EU-U.S.
+Added: If these challenges are successful, or there are other developments involving the arrangements that underly this framework, they may not only impact the EU-U.S.
Data Privacy Framework, but also further limit the viability of the standard contractual clauses and other data transfer mechanisms.
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It requires significant resources and a review of our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data, and may require us to modify our data processing practices and policies, divert resources from other initiatives and projects, and restrict the way products and services involving data are offered.
−Removed: Further, current and future laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us.
+Added: Further, current and future laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business
+Added: practices and put in place additional compliance mechanisms, interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us.
Any of these events could have a material adverse effect on our business, financial condition, results of operations and prospects.
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In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.
+Added: Changes in U.S.
+Added: and international trade policies, particularly with respect to China, may adversely impact our business and operating results.
+Added: government has recently made statements and taken certain actions that may lead to potential changes to U.S.
+Added: and international trade policies, including imposing several rounds of tariffs and export control restrictions affecting certain products manufactured in China.
+Added: In March 2018, the Trump administration announced the imposition of tariffs on steel and aluminum entering the United States and in June 2018, the Trump administration announced further tariffs targeting goods imported from China.
+Added: Recently both China and the United States have each imposed tariffs indicating the potential for further trade barriers, including the U.S.
+Added: Commerce Department adding numerous Chinese entities to its “unverified list,” which requires U.S.
+Added: exporters to go through more procedures before exporting goods to such entities.
+Added: It is unknown whether and to what extent new tariffs, export controls, or other new laws or regulations will be adopted, or the effect that any such actions would have on us or our industry, and it is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.
+Added: Trade tensions and conflicts between the United States and China have been escalating in recent years and, as such, we are exposed to the possibility of product supply disruption and increased costs and expenses in the event of changes to the laws, rules, regulations and policies of the governments of the United States or China, or due to geopolitical unrest and unstable economic conditions.
+Added: Certain Chinese biotechnology companies may become subject to trade restrictions, sanctions, other regulatory requirements or proposed legislation by the U.S.
+Added: government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting their supply of material to us.
+Added: For example, in February 2024, U.S.
+Added: lawmakers called for investigations into and the imposition of possible economic sanctions against Chinese biotechnology companies WuXi AppTec and WuXi Biologics, or collectively WuXi, over alleged ties to the Chinese military.
+Added: In addition, in September 2024, the U.S.
+Added: House or Representatives passed the BIOSECURE Act (H.R.
+Added: 7085), and the Senate has advanced a substantially similar bill, which legislation, if passed by the Senate and enacted into law, would restrict the ability of U.S.
+Added: biotechnology companies like us to purchase services or products from, or otherwise collaborate with, specifically named Chinese biotechnology companies, including WuXi, and authorizes the U.S.
+Added: government to impose such restrictions on entities' transactions with additional Chinese biotechnology companies as a condition of U.S.
+Added: government contract, grant and loan funding.
+Added: If these bills become law, or similar laws are passed, they would have the potential to severely restrict the ability of companies to contract with certain Chinese biotechnology companies of concern without losing the ability
+Added: to contract with, or otherwise received funding from, the U.S.
+Added: Such disruptions could have adverse effects on the development of our product candidates and our business operations.
+Added: Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may increase the cost of manufacturing our product candidates and platform materials, affect the demand for our drug products (if and once approved), the competitive position of our product candidates, and import or export of raw materials and finished product candidate used in our and our collaborators’ preclinical studies and clinical trials, particularly with respect to any product candidates and materials that we import from China.
+Added: If any new tariffs, export controls, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if either the U.S.
+Added: or Chinese government takes retaliatory trade actions due to the recent trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.
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 harm our business.
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We are highly dependent on the management, research and development, clinical, financial and business development expertise of our executive officers, as well as the other members of our scientific and clinical teams.
−Removed: Although we have employment offer letters which outline the terms of employment with each of our executive officers, each of them may terminate their employment with us at any time.
+Added: Although we have employment offer letters which outline the terms of employment with each of our executive officers, each of them may terminate their
+Added: employment with us at any time.
As such, these employment offer letters do not guarantee our retention of our executive officers for any period of time.
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As of December 31, 2024, we had 46 employees.
−Removed: We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of clinical development, regulatory affairs, finance and, if any of our product candidates receive marketing approval, sales, marketing and distribution.
+Added: Over the next few years, assuming we are able to raise sufficient capital, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of clinical development, regulatory affairs, finance and, if any of our product candidates receive marketing approval, sales, marketing and distribution.
Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities to devote time to managing these growth activities.
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Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors, vendors, and consultants may be vulnerable to damage from cybersecurity risks, including attempts to gain unauthorized access to and to harm sensitive or confidential information and networks, insider threats, and ransomware.
−Removed: These vulnerabilities may be heightened as a result of flexible work arrangements, including hybrid or remote work policies implemented by us and our third-party contractors, that were first adopted in response to the COVID-19 pandemic and have continued by many businesses in an effort to attract and retain talent.
+Added: These vulnerabilities may be heightened as a result of flexible work arrangements, including hybrid or remote work policies implemented by us and our
+Added: third-party contractors, that were first adopted in response to the COVID-19 pandemic and have continued by many businesses in an effort to attract and retain talent.
Investigations into and remedial efforts in connection with any security incidents, even those with immaterial impact, can be costly and time-consuming and could be material, or cause significant disruption, to our business.
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Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations.
−Removed: In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive such difficult economic times, which could directly affect our ability to attain our operating goals.
+Added: In addition, there is a risk that one or more of our current service providers,
+Added: manufacturers and other partners may not survive such difficult economic times, which could directly affect our ability to attain our operating goals.
Any of the foregoing could harm our business, future revenue and financial condition.
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Risks Related to Ownership of Our Common Stock and Our Status as a Public Company
−Removed: An active trading market for our common stock may not continue to develop or be sustained and our stockholders may not be able to resell their shares of our common stock.
−Removed: Our common stock began trading on The Nasdaq Global Select Market, or Nasdaq, on April 30, 2021.
−Removed: Prior to April 30, 2021, there was no public market for our common stock.
−Removed: We cannot predict the extent to which an active market for our common stock will continue to develop or be sustained, or how the development of such a market might affect the market price for our common stock.
−Removed: As a result, it may be difficult for our stockholders to sell their shares of our common stock at an attractive price or at all.
The price of our common stock could be subject to volatility related or unrelated to our operations.
−Removed: Our stock price is likely be volatile.
+Added: Our stock price is likely to be volatile.
For example, from January 1, 2024, until March 5, 2025, our stock price has ranged from $1.03 to $8.19.
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We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
−Removed: In addition, the terms of the Loan Agreement and any future debt agreements may preclude us from paying dividends.
+Added: In addition, the terms of the K2HV Loan Agreement and any future debt agreements may preclude us from paying dividends.
Any return to stockholders will therefore be limited in the foreseeable future to the appreciation of their stock.
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Our management and other personnel have and will need to continue to devote a substantial amount of time to these compliance initiatives.
−Removed: Moreover, these rules and regulations will increase our legal and financial compliance costs, particularly as we hire additional financial and accounting employees to meet public company internal control and
−Removed: financial reporting requirements and will make some activities more time-consuming and costly compared to when we were a private company.
−Removed: We are evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
+Added: Moreover, these rules and regulations will increase our legal and financial compliance costs, particularly as we hire additional financial and accounting employees to meet public company internal control and financial reporting requirements and will make some activities more time-consuming and costly compared to when we were a private company.
+Added: We are continually evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
−Removed: We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
+Added: We intend to invest resources to comply with
+Added: evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
If notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
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If we identify one or more material weaknesses in our internal control over financial reporting, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
−Removed: In the second quarter of 2023, we identified a material weakness in our internal control over financial reporting, and that weakness has led to a conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of December 31, 2023.
−Removed: Our inability to remediate the material weakness, our discovery of additional weaknesses, and our inability to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting could adversely affect our results of operations, our stock price and investor confidence.
−Removed: Section 404 requires that companies evaluate and report on the effectiveness of their internal control over financial reporting.
+Added: In the past, we have identified material weaknesses in our internal control over financial reporting, and if we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may be materially adversely affected.
+Added: In the past, we have identified material weaknesses in our internal control over financial reporting.
+Added: All material weaknesses previously identified were fully remediated in the first quarter of 2024.
+Added: If, in the future we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.
+Added: We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall.
+Added: In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act.
+Added: Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the Nasdaq Global Select Market or other adverse consequences that would materially harm our business.
+Added: In addition, we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, and other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation and our financial condition, or divert financial and management resources from our core business
+Added: If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
+Added: As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.
−Removed: Failure to have effective internal control over financial reporting and disclosure controls and procedures can impair our ability to produce accurate financial statements on a timely basis and could lead to a restatement of our financial statements.
−Removed: If, as a result of the ineffectiveness of our internal control over financial reporting and disclosure controls and procedures, we cannot provide reliable financial statements, our business decision processes may be adversely affected, our business and results of operations could be harmed, investors could lose confidence in our reported financial information and our ability to obtain additional financing, or additional financing on favorable terms, could be adversely affected.
−Removed: We identified a material weakness in the second quarter of 2023 in our internal control over financial reporting.
−Removed: The material weakness that we identified related to design and operating deficiencies in our purchasing process, specifically related to the application of invoices to purchase orders and processes to estimate progress on open purchase orders and to identify inaccurate expense estimates within purchase orders.
−Removed: During 2023, we took a number of actions, including the efforts outlined in Part II, Item 9A of this Annual Report on Form 10-K, designed to improve our internal control over financial reporting to remediate these material weaknesses.
−Removed: We believe significant progress was made in 2023 to enhance and strengthen our internal control over financial reporting.
−Removed: However, while we believe our internal controls were properly designed and implemented as of December 31, 2023, they were not in all cases in place for a sufficient period of time to demonstrate operating effectiveness as of December 31, 2023.
−Removed: As a result, management has concluded that the material weaknesses were not fully remediated as of December 31, 2023, and that our internal control over financial reporting and our disclosure controls and procedures were not effective as of December 31, 2023.
−Removed: We expect to continue our efforts to improve our control processes, though there can be no assurance that our efforts will ultimately be successful or avoid potential future material weaknesses, and we expect to continue incurring additional costs as a result of these efforts.
−Removed: Management remains committed to the implementation of remediation efforts to address these material weaknesses.
−Removed: If we are unable to successfully remediate our existing or any future material weaknesses in our internal control
−Removed: over financial reporting, or if we identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result.
−Removed: We also could become subject to investigations by Nasdaq, the SEC or other regulatory authorities.
+Added: Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.
+Added: In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.
+Added: As discussed above, we have identified material weaknesses in the past which have since been remediated.
+Added: However, our remediation of previous material weaknesses may not prevent any future deficiency in our internal control over financial reporting.
+Added: Inferior internal controls could, also cause investors to lose confidence in our reported financial information, which could harm our business and have a negative effect on the trading price of our stock.
We are required to disclose changes made in our internal controls and procedures on a quarterly basis, and our management is required to assess the effectiveness of these controls annually.
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An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not.
−Removed: Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation, which could have a negative effect on the trading price of our stock.
+Added: Undetected material weaknesses in our internal control
+Added: over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation, which could have a negative effect on the trading price of our stock.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
−Removed: We are subject to certain reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
+Added: We are subject to certain reporting requirements of the Exchange Act.
Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
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• require the approval of the holders of at least two-thirds of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation or bylaws.
−Removed: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or the DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from
−Removed: merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
+Added: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or the DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Our restated certificate of incorporation designates the Court of Chancery of the State of Delaware and the federal district courts of the United States of America as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers and employees and increase the costs to our stockholders of bringing such claims.
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These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees, and increase the costs to such stockholders of bringing such a claim, either of which may discourage such lawsuits against us and our directors, officers and employees.
−Removed: If a court were to find the either exclusive forum provision contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could materially adversely affect our business, financial condition and operating results.
+Added: If a court were to find either exclusive forum provision contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could materially adversely affect our business, financial condition and operating results.
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.