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• We will be substantially dependent on the success of our product candidates and cannot guarantee that these product candidates will successfully complete development, receive regulatory approval or be successfully commercialized.
−Removed: • We may develop product candidates in combination with other therapies, which exposes us to additional risks.
+Added: • We are developing product candidates in combination with other therapies, which exposes us to additional risks.
• We may choose to expend our limited resources on programs that do not yield successful product candidates as opposed to indications that may be more profitable or for which there is a greater likelihood of success.
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Risks Related to Reliance on Third Parties
−Removed: • We have limited experience conducting clinical trials and have relied and will rely on third parties and related parties to conduct many of our preclinical studies and clinical trials, to manufacture products and to perform many essential services for any products that we commercialize, including services related to distribution, government price reporting, customer service, accounts receivable management, cash collection and adverse event (AE) reporting.
+Added: • We have limited experience conducting clinical trials and have relied and will rely on third parties and related parties to conduct many of our preclinical studies and clinical trials, to manufacture products and to perform many essential services for any products that we commercialize, including services related to distribution, government price reporting, customer service, accounts receivable management, cash collection and adverse event reporting.
Any failure by a third party, related party, or by us to perform as expected, to comply with legal and regulatory requirements or to conduct the clinical trials according to Good Clinical Practice (GCP) regulations, and in a timely manner, may delay or prevent our ability to seek or obtain regulatory approval for or commercialization of our product candidates and our ability to commercialize our current or future product candidates will be significantly impacted and we may be subject to regulatory sanctions.
+Added: • If third-party manufacturers, wholesalers and distributors fail to perform as expected, or fail to devote sufficient time and resources to our product candidates, our clinical development may be delayed, our costs may be higher than expected or our product candidates may fail to be approved, or we may fail to commercialize any product candidates if approved.
• We use the Clinic, a related party, in some of our clinical trials which may expose us to significant regulatory risks.
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• Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
−Removed: • If we fail to comply with U.S.
−Removed: and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties that could materially harm our business.
−Removed: For example, our GMP-in-a-Box will be regulated by the FDA as a medical device, and regulatory compliance for medical devices is expensive, complex and uncertain, and a failure to comply could lead to enforcement actions against us and other negative consequences for our business.
−Removed: • We are and will be subject to U.S.
−Removed: and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations.
−Removed: Compliance with these legal standards could impair our ability to compete in domestic and international markets.
−Removed: We can face criminal and/or civil liability and other serious consequences for violations, which can harm our business.
+Added: • Even if we receive regulatory approval for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, or any other product candidates, they will be subject to ongoing regulatory requirements, which may result in significant additional expenses.
+Added: Additionally, our product candidates, if approved, could be subject to labeling and other restrictions, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.
+Added: • If we are unable to establish sales, marketing and distribution capabilities, we may not be successful commercializing our product candidates if and when they are approved.
+Added: • Problems related to large scale commercial manufacturing could cause delays in product launches, an increase in costs or shortages of product candidates.
Risks Related to Intellectual Property
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patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
−Removed: Risks Related to Our Common Stock
+Added: Risks Related to Our Common Stock and CVRs
Patrick Soon-Shiong, our Executive Chairman, Global Chief Scientific and Medical Officer and our principal stockholder, has significant interests in other companies which may conflict with our interests.
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Our operations have consumed substantial amounts of cash since inception.
−Removed: A significant portion of our funding had been in the form of promissory notes totaling $609.0 million in indebtedness (consisting of related-party promissory notes and accrued and unpaid interest, less unamortized debt issuance costs) as of March 31, 2022 held by entities affiliated with Dr.
−Removed: As of March 31, 2022, we held cash, cash equivalents and marketable securities totaling $193.2 million.
+Added: A significant portion of our funding had been in the form of promissory notes totaling $612.6 million in indebtedness (consisting of related-party promissory notes and accrued and unpaid interest, less unamortized debt issuance costs) as of June 30, 2022 held by entities affiliated with Dr.
+Added: As of June 30, 2022, we held cash, cash equivalents and marketable securities totaling $83.9 million.
We will need to obtain additional financing to fund our future operations, including completing the development and commercialization of our product candidates.
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We have a significant amount of debt and may need to incur additional debt to support our growth.
−Removed: As of March 31, 2022, our indebtedness totals $609.0 million, (consisting of related-party promissory notes and accrued and unpaid interest, less unamortized debt issuance costs), held by entities affiliated with Dr.
+Added: As of June 30, 2022, our indebtedness totals $612.6 million, (consisting of related-party promissory notes and accrued and unpaid interest, less unamortized debt issuance costs), held by entities affiliated with Dr.
Our substantial amount of debt could have important consequences and could:
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Because of the numerous risks and uncertainties associated with our product development efforts, we are unable to predict when we may become profitable, if at all.
−Removed: Since the commencement of our operations, we have incurred significant losses each year, and, as of March 31, 2022 we had an accumulated deficit of $2.1 billion.
+Added: Since the commencement of our operations, we have incurred significant losses each year, and, as of June 30, 2022 we had an accumulated deficit of $2.2 billion.
We expect to continue to incur significant expenses as we seek to expand our business, including in connection with conducting research and development across multiple therapeutic areas, participating in clinical trial activities, continuing to acquire or in-license technologies, maintaining, protecting and expanding our intellectual property, seeking regulatory approvals, increasing our manufacturing capabilities and, upon successful receipt of FDA approval, commercializing our products.
Moreover, we do not expect to have significant product sales or revenue in the near term, if ever.
+Added: If we are required by the FDA or any equivalent foreign regulatory authority to perform clinical trials or studies in addition to those we currently expect to conduct, or if there are any delays in completing the clinical trials of our product candidates, our expenses could increase substantially.
+Added: Although we have submitted a BLA for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, which was accepted by the FDA for review, setting a PDUFA target action date of May 23, 2023, we may not receive approval by the PDUFA target action date, if at all, for commercialization and even if approved, the resulting revenue may not enable us to achieve profitability.
+Added: Even if we obtain regulatory approval to market a product candidate, our future revenues will depend upon the size of any markets in which our product candidates have received approval, and our ability to achieve sufficient market acceptance, reimbursement from third-party payors and adequate market share for our product candidates in those markets.
+Added: We expect our expenses and net losses to increase significantly as we prepare to potentially commercialize our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, if approved by the FDA, continue our development of, and seek regulatory approvals for, our other product candidates, and begin to commercialize other approved products, if any, as well as hire additional personnel, protect our intellectual property and incur additional costs associated with operating as a public company.
+Added: Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical studies and trials, associated manufacturing needs, commercialization activities if our product candidates are approved and our expenditures on other research and development activities.
If our research and development efforts are successful, we may also face the risks associated with the shift from development to commercialization of new products based on innovative technologies.
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In order to manage the risk to our investments, we maintain an investment policy that, among other things, limits the amount that we may invest in any one issue or any single issuer and requires us to only invest in high credit quality securities to preserve liquidity.
+Added: Our ability to use NOLs and research and development credits to offset future taxable income may be subject to certain limitations.
+Added: In general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs or credits, to offset future taxable income or taxes.
+Added: For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period.
+Added: We have not conducted a complete study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.
+Added: If we have experienced a change of control, as defined by Section 382, at any time since inception (including as a result of the Merger), utilization of the NOL carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382.
+Added: Any limitation may result in expiration of a portion of the NOL carryforwards or research and development tax credit carryforwards before utilization.
+Added: In addition, our NOLs or credits may also be impaired under state law.
+Added: Accordingly, we may not be able to utilize a material portion of our NOLs or credits.
+Added: Since we will need to raise substantial additional funding to finance our operations, we may experience further ownership changes in the future, some of which may be outside of our control.
+Added: Limits on our ability to use our pre-change NOLs or credits to offset U.S.
+Added: federal taxable income could potentially result in increased future tax liability to us if we earn net taxable income in the future.
+Added: In addition, under the legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (TCJA), as modified by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the amount of NOLs generated in taxable periods beginning after December 31, 2017, that we are permitted to deduct in any taxable year beginning after December 31, 2020 is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself.
+Added: The TCJA allows post-2017 unused NOLs to be carried forward indefinitely.
+Added: Similar rules may apply under state tax laws.
+Added: Our transfer pricing policies may be subject to challenge by the Internal Revenue Service or other taxing authorities.
+Added: Our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
+Added: The relevant taxing authorities may disagree with our determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions.
+Added: If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.
+Added: We believe that our financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard.
Risks Related to the Discovery, Development and Commercialization of our Product Candidates
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We have no clinical products approved for commercial sale and have not generated any revenue from therapeutic and vaccine product candidates that are under development.
−Removed: We have invested a significant portion of our efforts and financial resources in the development of our main product candidates, our novel antibody cytokine fusion protein ( Anktiva or N-803 ) , saRNA and second-generation hAd5 vaccine candidates, and aldoxorubicin, some of which are used in combination with our NK cell therapy candidates.
+Added: I n May 2022, we announced the submission of a BLA to the FDA for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease.
+Added: In July 2022, we announced the FDA has accepted our BLA for review and set a PDUFA target action date of May 23, 2023.
+Added: It is unclear when the FDA will approve our BLA, if at all.
+Added: We have invested a significant portion of our efforts and financial resources in the development of our main product candidates, our novel antibody cytokine fusion protein ( N-803 ) , saRNA and second-generation hAd5 vaccine candidates, and aldoxorubicin, some of which are used in combination with our NK cell therapy candidates.
Our product candidates will require additional clinical and non-clinical development, regulatory approval, commercial manufacturing arrangements, establishment of a commercial organization, significant marketing efforts, and further investment before we can generate any revenues from product sales.
We expect to invest heavily in these product candidates as well as in our other existing product candidates and in any future product candidates that we may develop.
−Removed: Our product candidates are susceptible to the risks of failure inherent at any stage of product development, including the appearance of unexpected AEs or failure to achieve primary endpoints in clinical trials.
+Added: Our product candidates are susceptible to the risks of failure inherent at any stage of product development, including the appearance of unexpected adverse events or failure to achieve primary endpoints in clinical trials.
Furthermore, we cannot assure you that we will meet our timelines for current or future clinical trials, which may be delayed or not completed for a number of reasons.
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We currently generate no meaningful revenues from the sale of any product candidates, and we may never be able to develop or commercialize a product.
−Removed: We may develop product candidates in combination with other therapies, which exposes us to additional risks.
−Removed: We may develop product candidates in combination with one or more other therapies.
−Removed: We are studying Anktiva therapy along with other products and product candidates, such as BCG, PD-L1 t-haNK, hAd5 and yeast tumor-associated antigens (TAAs), and aldoxorubicin.
+Added: We are developing product candidates in combination with other therapies, which exposes us to additional risks.
+Added: We are developing product candidates in combination with one or more other therapies.
+Added: We are studying N-803 therapy along with other products and product candidates, such as BCG, PD-L1 t-haNK, hAd5 and yeast tumor-associated antigens (TAAs), and aldoxorubicin.
If we choose to develop a product candidate for use in combination with an approved therapy, we are subject to the risk that the FDA, EMA or comparable foreign regulatory authorities in other jurisdictions could revoke approval of, or that safety, efficacy, manufacturing or supply issues could arise with the therapy used in combination with our product candidate.
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• following launch, assure that our product will be used as directed and that additional unexpected safety risks will not arise.
−Removed: Even if the FDA approves N-803 (Anktiva) for certain indications, and even if we obtain significant market share for it, because the potential target population may be small, we may never achieve profitability without obtaining regulatory approval for additional indications.
+Added: I n May 2022, we announced the submission of a BLA to the FDA for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease.
+Added: In July 2022, we announced the FDA has accepted our BLA for review and set a PDUFA target action date of May 23, 2023.
+Added: It is unclear when the FDA will approve our BLA, if at all.
+Added: Even if the FDA approves N-803 for certain indications or in combination with other therapeutic products, and even if we obtain significant market share for it, because the potential target population may be small, we may never achieve profitability without obtaining regulatory approval for additional indications.
The FDA often approves new therapies initially only for use in patients with r/r metastatic disease, which may limit our patient population.
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Additionally, in connection with the Merger with NantCell, we assumed the obligation to issue CVRs to the former stockholders of Altor in connection with the acquisition of Altor.
−Removed: These CVRs become payable upon the attainment of certain regulatory and sales milestones related to N-803.
+Added: These CVRs become payable contingent upon the attainment of certain regulatory and sales milestones related to N-803.
The former Altor stockholders have the ability to choose to receive these payments either in cash, in an equivalent value of our common stock or in a combination of both cash and stock at the time such payments are due, except that Dr.
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Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.
−Removed: Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, AEs or unexpected characteristics.
−Removed: Combination immunotherapy that includes our current product candidates may be associated with more frequent AEs or additional AEs.
+Added: Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, adverse events or unexpected characteristics.
+Added: Combination immunotherapy that includes our current product candidates may be associated with more frequent adverse events or additional adverse events.
Undesirable side effects or unacceptable toxicities caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials or order our clinical trials to be placed on clinical hold, and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications.
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Manufacturers are also subject to continuing FDA and other regulatory authority inspections following marketing approval.
−Removed: Further, we and our third-party CMOs must supply all necessary chemistry, manufacturing and quality control documentation in support of a BLA or NDA on a timely basis.
+Added: Further, we and our third-party CMOs must supply all necessary Chemistry, Manufacturing and Controls (CMC) documentation in support of a BLA or NDA on a timely basis.
Our or our CMOs’ manufacturing facilities may be unable to comply with our specifications, cGMP, and with other FDA, state, and foreign regulatory requirements, and there is no guarantee that we or our CMOs will be able to successfully pass all aspects of a pre-approval inspection by the FDA or other foreign regulatory authorities.
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We also may not successfully realize the anticipated benefits from the capital expenditure at such facilities based on factors such as delays and uncertainties regarding development, regulatory approval and commercialization of our product candidates, as well as the potential to lose access to the leased facilities.
−Removed: Further, if we transition from our current CMOs to our own manufacturing facilities for one or more of our product candidates in the future, we may need to conduct additional preclinical, analytical or clinical trials.
+Added: Further, in the future if we transition from our current CMOs to our own manufacturing facilities for one or more of our product candidates, including our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease for which we submitted a BLA in May 2022, we may need to conduct additional preclinical, analytical or clinical trials and obtain FDA approval before such manufacturing changes are implemented.
+Added: If we are unsuccessful in demonstrating the comparability of supplies before and after a manufacturing change, such manufacturing change can result in a delay or disruption in our clinical development plan or our ability to commercialize any approved product.
+Added: Any production shortfall that impairs the supply of our product candidates could negatively impact our ability to complete clinical trials, obtain regulatory approval and commercialize our product candidates.
+Added: If our product candidates receive approval, a product shortfall could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for our product candidates, which could materially and adversely affect our revenue and results of operations.
In addition, our planned operations, including our development, testing and future manufacturing activities, are subject to numerous environmental, health and safety laws and regulations.
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If such a change occurs for a product candidate that is already in clinical testing, the change may require us to perform both ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.
−Removed: Our ability to use NOLs and research and development credits to offset future taxable income may be subject to certain limitations.
−Removed: In general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs or credits, to offset future taxable income or taxes.
−Removed: For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period.
−Removed: We have not conducted a complete study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.
−Removed: If we have experienced a change of control, as defined by Section 382, at any time since inception (including as a result of the Merger), utilization of the NOL carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382.
−Removed: Any limitation may result in expiration of a portion of the NOL carryforwards or research and development tax credit carryforwards before utilization.
−Removed: In addition, our NOLs or credits may also be impaired under state law.
−Removed: Accordingly, we may not be able to utilize a material portion of our NOLs or credits.
−Removed: Since we will need to raise substantial additional funding to finance our operations, we may experience further ownership changes in the future, some of which may be outside of our control.
−Removed: Limits on our ability to use our pre-change NOLs or credits to offset U.S.
−Removed: federal taxable income could potentially result in increased future tax liability to us if we earn net taxable income in the future.
−Removed: In addition, under the legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (TCJA), as modified by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the amount of NOLs generated in taxable periods beginning after December 31, 2017, that we are permitted to deduct in any taxable year beginning after December 31, 2020 is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself.
−Removed: The TCJA allows post-2017 unused NOLs to be carried forward indefinitely.
−Removed: Similar rules may apply under state tax laws.
−Removed: Our transfer pricing policies may be subject to challenge by the Internal Revenue Service or other taxing authorities.
−Removed: Our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
−Removed: The relevant taxing authorities may disagree with our determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions.
−Removed: If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.
−Removed: We believe that our financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard.
Because our current product candidates represent, and our other potential product candidates will represent, novel approaches to the treatment of disease, there are many uncertainties regarding the development, market acceptance, public opinion, third-party reimbursement coverage and the commercial potential of our product candidates, which may impact public perception of us and our product candidates and which may adversely affect our ability to conduct our business and implement our business plans.
Human immunotherapy products are a new category of therapeutics.
−Removed: We use relatively novel technologies involving Anktiva, saRNA, hAd5 and yeast technologies, aldoxorubicin, and cell-based therapies, and our NK cell platform utilizes a relatively novel technology involving the genetic modification of human cells and utilization of those modified cells in other individuals.
+Added: We use relatively novel technologies involving N-803, saRNA, hAd5 and yeast technologies, aldoxorubicin, and cell-based therapies, and our NK cell platform utilizes a relatively novel technology involving the genetic modification of human cells and utilization of those modified cells in other individuals.
Because this is a relatively new and expanding area of novel therapeutic interventions, there are many uncertainties related to development, marketing, reimbursement and the commercial potential for our product candidates.
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More restrictive government regulations or negative public opinion could have an adverse effect on our business or financial condition and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop.
−Removed: AEs in our clinical trials, even if not ultimately attributable to our product candidates, and the resulting publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.
+Added: Adverse events in our clinical trials, even if not ultimately attributable to our product candidates, and the resulting publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.
There is no assurance that the approaches offered by our product candidates will gain broad acceptance among doctors or patients or that governmental agencies or third-party medical insurers will be willing to provide reimbursement coverage for our proposed product candidates.
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However, unless we can reduce those costs to an acceptable amount, we may never be able to develop a commercially viable product.
−Removed: If we do not successfully develop and commercialize products based upon our approach or find suitable and economical sources for materials used in the production of our potential products, we will not become profitable, which would materially and adversely affect the value of our common stock.
−Removed: Our Anktiva therapies and our other therapies may be provided to patients in combination with other agents provided by third parties or our affiliates.
+Added: If we do not successfully develop and commercialize products based upon our approach or find suitable and economical sources for materials
+Added: used in the production of our potential products, we will not become profitable, which would materially and adversely affect the value of our common stock.
+Added: Our N-803 therapies and our other therapies may be provided to patients in combination with other agents provided by third parties or our affiliates.
The cost of such combination therapy may increase the overall cost of therapy and may result in issues regarding the allocation of reimbursements between our therapy and the other agents, all of which may affect our ability to obtain reimbursement coverage for the combination therapy from governmental or private third-party medical insurers.
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Many of our competitors, either alone or with their strategic partners, have substantially greater financial, technical, and human resources than we do, as well as significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of treatments and commercializing those treatments.
−Removed: Accordingly, our competitors may be more successful in obtaining approval of treatments and achieving widespread market acceptance, rendering our treatments obsolete or non-competitive, possibly even before we are able to enter the market.
+Added: Accordingly, our competitors may be more successful in obtaining approval of treatments and achieving widespread market acceptance, rendering our treatments obsolete or
+Added: non-competitive, possibly even before we are able to enter the market.
Accelerated merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors.
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• the continued safety and efficacy of our product candidates;
−Removed: • the prevalence and severity of AEs associated with such product candidates;
+Added: • the prevalence and severity of adverse events associated with such product candidates;
• the clinical indications for which the products are approved and the approved claims that we may make for the products;
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If these third-party service providers fail to comply with applicable laws and regulations, fail to meet expected deadlines or otherwise do not carry out their contractual duties to us, or encounter physical or natural damage at their facilities, our ability to deliver product to meet commercial demand would be significantly impaired and we may be subject to regulatory enforcement action.
−Removed: In addition, we may engage in the future with third parties to perform various other services for us relating to AE reporting, safety database management, fulfillment of requests for medical information regarding our product candidates and related services.
−Removed: If the quality or accuracy of the data maintained by these service providers is insufficient, or these third parties otherwise fail to comply with regulatory requirements related to AE reporting, we could be subject to regulatory sanctions.
+Added: In addition, we may engage in the future with third parties to perform various other services for us relating to adverse event reporting, safety database management, fulfillment of requests for medical information regarding our product candidates and related services.
+Added: If the quality or accuracy of the data maintained by these service providers is insufficient, or these third parties otherwise fail to comply with regulatory requirements related to adverse event reporting, we could be subject to regulatory sanctions.
Additionally, we may contract in the future with a third party to calculate and report pricing information mandated by various government programs.
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We may also need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us.
−Removed: We also anticipate that part of our strategy for pursuing the wide range of indications potentially addressed by Anktiva will involve further investigator-initiated clinical trials.
+Added: We also anticipate that part of our strategy for pursuing the wide range of indications potentially addressed by N-803 will involve further investigator-initiated clinical trials.
While these trials generally provide us with valuable clinical data that can inform our future development strategy, we generally have less control over not only the conduct but also the design of these clinical trials.
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Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services.
+Added: If third-party manufacturers, wholesalers and distributors fail to perform as expected, or fail to devote sufficient time and resources to our product candidates, our clinical development may be delayed, our costs may be higher than expected or our product candidates may fail to be approved, or we may fail to commercialize any product candidates if approved.
+Added: Our reliance on third-party manufacturers, wholesalers and distributors exposes us to the following risks, any of which could delay FDA approval of our product candidates and commercialization of our product candidates if approved, result in higher costs, or deprive us of potential product revenues:
+Added: • our CMOs, or other third parties we rely on, may encounter difficulties in achieving the volume of production needed to satisfy commercial demand, may experience technical issues that impact quality or compliance with applicable and strictly enforced regulations governing the manufacture of pharmaceutical products, and may experience shortages of qualified personnel to adequately staff production operations;
+Added: • our wholesalers and distributors could become unable to sell and deliver our product candidates for regulatory, compliance and other reasons;
+Added: • our CMOs, wholesalers and distributors could breach or default on their agreements with us to meet our requirements for commercialization of our product candidates;
+Added: • our CMOs, wholesalers and distributors may not perform as agreed or may not remain in business for the time required to successfully produce, store, sell and distribute our product candidates and we may incur additional cost;
+Added: • our CMOs, wholesalers and distributors may misappropriate our proprietary information;
+Added: • if our CMOs, wholesalers and distributors were to terminate our arrangements or fail to meet their contractual obligations, we may be forced to delay our commercial programs.
+Added: Our reliance on third parties reduces our control over our product candidate development activities but does not relieve us of our responsibility to ensure compliance with all required legal, regulatory and industry standards.
+Added: For example, the FDA and other regulatory authorities require that our product candidates and any products that we may eventually commercialize be manufactured according to cGMP requirements.
+Added: Any failure by our third-party manufacturers to comply with cGMP or maintain a compliance status acceptable to the FDA or other regulatory authorities or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates.
+Added: In addition, our third-party manufacturers will be subject to periodic inspections by the FDA and other regulatory authorities, and failure to comply with cGMP could be the basis for the FDA to issue a warning or untitled letter, withdraw approvals for product candidates previously granted to us, or take other regulatory or legal action, including a request to recall or seize product candidates, total or partial suspension of production, suspension of clinical trials, refusal to approve pending applications or supplemental applications, detention of product, refusal to permit the import or export of product candidates, injunction, imposing civil penalties or pursuing criminal prosecution.
+Added: Additionally, as we scale up manufacturing of our product candidates and conduct required stability testing, we may encounter additional challenges or cGMP issues.
+Added: These issues may require refinement or resolution in order to proceed with commercial marketing of our product candidates if approved.
+Added: In addition, quality issues may arise during scale-up and validation of commercial manufacturing processes.
+Added: Any issues in our manufacturing process could result in increased scrutiny by regulatory authorities, delays in our regulatory approval process, increases in our operating expenses, or failure to obtain or maintain approval for our product candidates.
+Added: If such issues relate to an approved product, we may not be able to commercialize the approved product as we planned or fail to meet commercial demand, any of which can materially and adversely affect our position in the market.
We use the Clinic, a related party, in some of our clinical trials which may expose us to significant regulatory risks.
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We have formed, and may in the future form or seek, strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third and related parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop.
−Removed: For example, we have entered into an agreement whereby Viracta Therapeutics, Inc.
−Removed: (Viracta) granted to us exclusive world-wide rights to Viracta’s Phase 2 drug candidate, VRx-3996, for use in combination with our platform of NK cell therapies.
−Removed: However, if Viracta fails to raise sufficient capital to complete their Phase 2 trial, if their trial is unsuccessful, or if our future clinical trial of NK cell therapy in combination with VRx-3996 fails, the value of the Viracta license would be adversely affected.
−Removed: We plan to collaborate with governmental, academic and corporate partners, including affiliates, to improve and develop Anktiva, saRNA, hAd5 and yeast technologies, and other therapies for new indications for use in combination with other therapies and to improve and develop other product candidates, which may expose us to additional risks, or we may not realize the benefits of such collaborations.
−Removed: Because some of our collaborations are conducted at outside laboratories, and we do not have complete control over how the studies are conducted or reported or over the manufacturing methods used to manufacture our Anktiva product candidate, the results of such studies, which we may use as the basis for our conclusions, projections or decisions with respect to our current or future product candidates, may be incorrect or unreliable, or may have a negative impact on us if the results of such studies are imputed to our product candidates or proposed indications, even if such imputation is improper.
+Added: We plan to collaborate with governmental, academic and corporate partners, including affiliates, to improve and develop N-803, saRNA, hAd5 and yeast technologies, and other therapies for new indications for use in combination with other therapies and to improve and develop other product candidates, which may expose us to additional risks, or we may not realize the benefits of such collaborations.
+Added: Because some of our collaborations are conducted at outside laboratories, and we do not have complete control over how the studies are conducted or reported or over the manufacturing methods used to manufacture our N-803 product candidate, the results of such studies, which we may use as the basis for our conclusions, projections or decisions with respect to our current or future product candidates, may be incorrect or unreliable, or may have a negative impact on us if the results of such studies are imputed to our product candidates or proposed indications, even if such imputation is improper.
Additionally, we may use third-party data to analyze, reach conclusions or make predictions or decisions with respect to our product candidates that may be incomplete, inaccurate or otherwise unreliable.
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Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy.
+Added: If conflicts arise between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to implement our strategies.
+Added: If conflicts arise between our corporate or academic collaborators or strategic partners and us, the other party may act in a manner adverse to us and could limit our ability to implement our strategies.
+Added: Some of our existing academic collaborators and strategic partners are conducting multiple product development efforts.
+Added: Such current or future collaborators or strategic partners could become our competitors in the future and could develop competing products, preclude us from entering into collaborations with their competitors, fail to obtain timely regulatory approvals, terminate their agreements with us prematurely or fail to devote sufficient resources to the development and commercialization of our product candidates.
+Added: Competing product candidates, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of our collaborator’s or partner’s support for our product candidates.
+Added: For example, in 2019, Sorrento Therapeutics, Inc.
+Added: with which we jointly established a new entity called Immunotherapy NANTibody, LLC as a stand-alone biotechnology company, commenced litigation against us and certain of our officers and directors, alleging that we improperly caused NANTibody to acquire IgDraSol, Inc.
+Added: and in 2020, Sorrento sent letters purporting to terminate an exclusive license agreement with us and an exclusive license agreement with NANTibody.
+Added: Additionally, in 2020, we received a Request for Arbitration before the International Chamber of Commerce, International Court of Arbitration, served by Shenzhen Beike Biotechnology Co.
+Added: asserting breach of contract under our subsidiary Altor’s license agreement with them.
+Added: For more information regarding these disputes, see Note 7 , Commitments and Contingencies—Litigation, of the “Notes to Condensed Consolidated Financial Statements” that appears in Part I, Item 1.
+Added: “Financial Statements” of this Quarterly Report on Form 10-Q.
+Added: Any of these developments could harm our product development efforts.
Our use of joint ventures, strategic partnerships and alliances may expose us to risks associated with jointly owned investments.
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For example, we are in the initial stages of establishing a joint venture relationship with Amyris, and there can be no guarantee that it will be successful.
−Removed: If conflicts arise between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to implement our strategies.
−Removed: If conflicts arise between our corporate or academic collaborators or strategic partners and us, the other party may act in a manner adverse to us and could limit our ability to implement our strategies.
−Removed: Some of our existing academic collaborators and strategic partners are conducting multiple product development efforts.
−Removed: Such current or future collaborators or strategic partners could become our competitors in the future and could develop competing products, preclude us from entering into collaborations with their competitors, fail to obtain timely regulatory approvals, terminate their agreements with us prematurely or fail to devote sufficient resources to the development and commercialization of our product candidates.
−Removed: Competing product candidates, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of our collaborator’s or partner’s support for our product candidates.
−Removed: For example, in 2019, Sorrento Therapeutics, Inc.
−Removed: with which we jointly established a new entity called Immunotherapy NANTibody, LLC as a stand-alone biotechnology company, commenced litigation against us and certain of our officers and directors, alleging that we improperly caused NANTibody to acquire IgDraSol, Inc.
−Removed: and in 2020, Sorrento sent letters purporting to terminate an exclusive license agreement with us and an exclusive license agreement with NANTibody.
−Removed: Additionally, in 2020, we received a Request for Arbitration before the International Chamber of Commerce, International Court of Arbitration, served by Shenzhen Beike Biotechnology Co.
−Removed: asserting breach of contract under our subsidiary Altor’s license agreement with them.
−Removed: For more information regarding these disputes, see Note 7 , Commitments and Contingencies—Litigation, of the “Notes to Condensed Consolidated Financial Statements” that appears in Part I, Item 1.
−Removed: “Financial Statements” of this Quarterly Report on Form 10-Q.
−Removed: Any of these developments could harm our product development efforts.
We will be heavily dependent on our senior management, particularly Dr.
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Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice.
−Removed: We do not have employment agreements with our key employees and all of our employees are hired on an “at-will” basis, which means that any of our employees could leave our employment at any time, with or without notice.
−Removed: We do not maintain “key man” insurance policies on the lives of these individuals or the lives of any of our other employees.
+Added: We do not have employment agreements with our NEOs and do not maintain “key man” insurance policies on the lives of these individuals or the lives of any of our other employees.
We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.
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Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction.
−Removed: We are involved in this type of litigation in connection with our recent Merger, and we may become involved in this type of litigation in the future.
+Added: We were involved in this type of litigation in connection with our recent Merger, and we may become involved in this type of litigation in the future.
Litigation often is expensive and diverts management’s attention and resources, which could adversely affect our business and the company.
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Satisfaction of these and other regulatory requirements is costly, lengthy, time-consuming, uncertain and subject to unanticipated delays and can vary substantially based upon the type, complexity and novelty of the products involved.
−Removed: We have not previously submitted a BLA or NDA or similar marketing or drug approval application to the FDA or comparable foreign authorities, for any product candidate, and we may never receive such regulatory approval for any of our product candidates or regulatory approval that will allow us to successfully commercialize our product candidates.
+Added: I n May 2022, we announced the submission of a BLA to the FDA for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease.
+Added: In July 2022, we announced the FDA has accepted our BLA for review and set a PDUFA target action date of May 23, 2023.
+Added: It is unclear when the FDA will approve our BLA, if at all.
+Added: If the FDA requires additional data, finds that the CMC information in the BLA is deficient, disagrees with our interpretation or analysis of clinical data, identifies any deficiency in our clinical data, or finds deficiencies in our pre-approval inspection, we may fail to obtain approval of the BLA for our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, or approval may be delayed.
+Added: We have not submitted any other marketing or drug approval applications to the FDA or comparable foreign authorities, for any other product candidate, and we may never receive such regulatory approval for any of our product candidates or regulatory approval that will allow us to successfully commercialize our product candidates.
In addition, regulatory agencies may lack experience with our technologies and products, which may lengthen the regulatory review process, increase our development costs and delay or prevent their commercialization.
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If we fail to comply with the regulatory requirements in international markets and/or fail to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.
+Added: Even if we receive regulatory approval for our product candidate, N-803 in combination with BCG for the treatment of patients with NMIBC with CIS with or without Ta or T1 disease, or any other product candidates, they will be subject to ongoing regulatory requirements, which may result in significant additional expenses.
+Added: Additionally, our product candidates, if approved, could be subject to labeling and other restrictions, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates .
+Added: Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed, or to conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor safety and efficacy.
+Added: In addition, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for any approved product will be subject to extensive and ongoing regulatory requirements.
+Added: These requirements include submissions of safety and other post-marketing information and reports, including reporting of certain adverse events as well as continued compliance with cGMP for the drug products, and GCP for any clinical trials that we conduct post-approval.
+Added: Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, or failure to comply with regulatory requirements, may result in, among other things:
+Added: • holds on clinical trials;
+Added: • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
+Added: • imposition of a REMS, which may include distribution or use restrictions;
+Added: • requirements to conduct additional post-market clinical trials to assess the safety of the product;
+Added: • revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings;
+Added: • manufacturing delays and supply disruptions where regulatory inspections identify observations of noncompliance requiring remediation;
+Added: • fines, warning or untitled letters;
+Added: • refusal by the FDA to approve pending applications or supplements to approved applications submitted by us, or withdrawal of product approvals;
+Added: • product seizure or detention, or refusal to permit the import or export of product candidates;
+Added: • injunctions or the imposition of civil or criminal penalties.
+Added: The FDA’s policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.
+Added: We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the U.S.
+Added: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or are not able to maintain regulatory compliance, we may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.
+Added: If we are unable to establish sales, marketing and distribution capabilities, we may not be successful commercializing our product candidates if and when they are approved.
+Added: We are in the process of implementing our sales and marketing personnel hiring plan and building out key commercialization infrastructure.
+Added: To achieve commercial success for any product for which we have obtained marketing approval, we will need to establish a sales and marketing team.
+Added: We expect to build a focused sales and marketing infrastructure to market our product candidate, N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, and potentially other product candidates in the U.S., if and when they are approved.
+Added: There are risks involved with establishing our own sales, marketing and distribution capabilities and entering into arrangements with third parties to perform these services.
+Added: For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch.
+Added: If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, including failure to receive marketing approval from the FDA, we would have prematurely or unnecessarily incurred these commercialization expenses.
+Added: We may also inaccurately estimate the number of representatives needed to build our sales force, which may result in unnecessary expense or the inability to scale as quickly as needed.
+Added: This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
+Added: Factors that may inhibit our efforts to commercialize our product candidates, if approved, on our own include:
+Added: • our inability to recruit, train and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel;
+Added: • the inability of sales personnel to obtain access to physicians or increase market acceptable of our approved product;
+Added: • the inability of reimbursement professionals to negotiate arrangements for coverage or adequate reimbursement by payors for our approved products;
+Added: • the inability to price our product candidates at a sufficient price point to ensure an adequate and attractive level of profitability;
+Added: • restricted or closed distribution channels that make it difficult to distribute our product candidates to segments of the patient population;
+Added: • unforeseen costs and expenses associated with creating an independent commercialization organization.
+Added: If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.
+Added: Problems related to large-scale commercial manufacturing could cause delays in product launches, an increase in costs or shortages of product candidates.
+Added: Manufacturing finished drug products, especially in large quantities, is complex.
+Added: If our product candidates receive regulatory approval, they will require several manufacturing steps and may involve complex techniques to assure quality and sufficient quantity, especially as the manufacturing scale increases.
+Added: Our product candidates will need to be made consistently and in compliance with a clearly defined manufacturing process pursuant to FDA regulations.
+Added: Accordingly, it will be essential to be able to validate and control the manufacturing process to assure that it is reproducible.
+Added: Slight deviations anywhere in the manufacturing process, including obtaining materials, filling, labeling, packaging, storage, shipping, quality control and testing, may result in lot failures, delay in the release of lots, product recalls or spoilage.
+Added: Success rates can vary dramatically at different stages of the manufacturing process, which can lower yields and increase costs.
+Added: We may experience deviations in the manufacturing process that may take significant time and resources to resolve and, if unresolved, may affect manufacturing output and cause us to fail to satisfy contractual commitments, lead to delays in our clinical trials or result in litigation or regulatory action.
+Added: Such actions would hinder our ability to meet contractual obligations and could cause material adverse consequences for our business.
If we fail to comply with U.S.
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Any regulatory approvals that we receive for our product candidates will require surveillance to monitor the safety and efficacy of the product candidate.
−Removed: The FDA and similar agencies have significant pre- and post-market authority, including requirements related to product design, development, testing, laboratory and clinical trials and preclinical studies approval, manufacturing processes and quality (including suppliers), labeling, packaging, distribution, AE and deviation reporting, storage, shipping, pre-market clearance or approval, advertising, marketing, promotion, sale, import, export, product change, recalls, submissions of safety and effectiveness, post-market surveillance and reporting of deaths or serious injuries and certain malfunctions, and other post-marketing information and reports such as deviation reports, registration, product listing, annual user fees, and recordkeeping for our product candidates.
+Added: The FDA and similar agencies have significant pre- and post-market authority, including requirements related to product design, development, testing, laboratory and clinical trials and preclinical studies approval, manufacturing processes and quality (including suppliers), labeling, packaging, distribution, adverse event and deviation reporting, storage, shipping, pre-market clearance or approval, advertising, marketing, promotion, sale, import, export, product change, recalls, submissions of safety and effectiveness, post-market surveillance and reporting of deaths or serious injuries and certain malfunctions, and other post-marketing information and reports such as deviation reports, registration, product listing, annual user fees, and recordkeeping for our product candidates.
The FDA may also require a REMS to approve our product candidates, which may impose further requirements or restrictions on the distribution or use of an approved drug or therapeutic biologic.
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complying with cGMP under Quality Systems Regulations;
−Removed: filing reports with the FDA of and keeping records relative to certain types of AEs associated with devices under the medical device reporting regulation;
+Added: filing reports with the FDA of and keeping records relative to certain types of adverse events associated with devices under the medical device reporting regulation;
assuring that device labeling complies with device labeling requirements;
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If the FDA or comparable foreign regulatory authorities become aware of new safety information or previously unknown problems after approval of any of our product candidates, including:
−Removed: (i) AEs of unanticipated severity or frequency, (ii) that the product is less effective than previously thought, (iii) problems with our third-party manufacturers or manufacturing processes, or (iv) failure to comply with regulatory requirements, or if we violate regulatory requirements at any stage, whether before or after marketing approval is obtained, we may face a number of regulatory consequences, including fines, warnings or untitled letters, holds on clinical trials, delay of approval or refusal by the FDA to approve pending applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures, administrative detention of products, refusal to permit the import or export of products, operating restrictions or partial suspension or total shutdown of production, injunctions, consent decrees, civil penalties and criminal prosecution, among other consequences.
+Added: (i) adverse events of unanticipated severity or frequency, (ii) that the product is less effective than previously thought, (iii) problems with our third-party manufacturers or manufacturing processes, or (iv) failure to comply with regulatory requirements, or if we violate regulatory requirements at any stage, whether before or after marketing approval is obtained, we may face a number of regulatory consequences, including fines, warnings or untitled letters, holds on clinical trials, delay of approval or refusal by the FDA to approve pending applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures, administrative detention of products, refusal to permit the import or export of products, operating restrictions or partial suspension or total shutdown of production, injunctions, consent decrees, civil penalties and criminal prosecution, among other consequences.
Additionally, we may face unanticipated expenditures to address or defend such actions and customer notifications for repair, replacement or refunds.
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Since its enactment, various portions of the ACA have been subject to judicial and constitutional challenges.
−Removed: In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA.
+Added: In June 2021, the U.S.
+Added: Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA.
Accordingly, the ACA remains in effect in its current form.
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with respect to drug pricing practices, including Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
−Removed: At the federal level, in 2020, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives, some of which resulted in lawsuits against the U.S Department of Health and Human Services challenging various aspects of the rules.
+Added: At the federal level, in 2020, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives, some of which resulted in lawsuits against the U.S.
+Added: Department of Health and Human Services challenging various aspects of the rules.
The impact of these lawsuits as well as legislative, executive, and administrative actions of the Biden administration on us and the pharmaceutical industry as a whole remains unclear.
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Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs.
+Added: Our relationships with health care professionals, institutional providers, principal investigators, consultants, potential customers and third-party payors are, and will continue to be, subject, directly and indirectly, to federal and state health care fraud and abuse, false claims, marketing expenditure tracking and disclosure, government price reporting, and privacy and data security laws.
+Added: If we are unable to comply, or have not fully complied, with such laws, we could face significant penalties and liabilities.
+Added: Our business operations and activities may be directly or indirectly subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act.
+Added: If we obtain FDA approval for any of our product candidates and begin commercializing those product candidates in the U.S., our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.
+Added: Our current and future arrangements with healthcare professionals, clinical investigators, CROs, third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval.
+Added: In addition, we may be subject to laws of the federal government and state governments in which we conduct our business relating to privacy and data security with respect to patient information.
+Added: The laws that may affect our ability to operate include, but are not limited to:
+Added: federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for a healthcare item or service, or the purchasing or ordering of an item or service, for which payment may be made under a federal healthcare program such as Medicare or Medicaid;
+Added: federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented, claims for payment by government funded programs such as Medicare or Medicaid that are false or fraudulent, and which may apply to us by virtue of statements and representations made to customers or third parties;
+Added: federal Health Insurance Portability and Accountability Act (HIPAA), which created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud healthcare programs;
+Added: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), which imposes requirements on certain types of people and entities relating to the privacy, security, and transmission of individually identifiable PHI, and requires notification to affected individuals and regulatory authorities of certain breaches of security of PHI;
+Added: • the federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, to report annually to the Centers for Medicare & Medicaid Services (CMS) information related to payments and other transfers of value to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare providers (such as physician assistants and nurse practitioners) and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members, which is published in a searchable form on an annual basis;
+Added: • state laws comparable to each of the above federal laws, such as, for example, anti-kickback and false claims laws that may be broader in scope and also apply to commercial insurers and other non-federal payors, requirements for mandatory corporate regulatory compliance programs, and laws relating to patient data privacy and security.
+Added: Other 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;
+Added: require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
+Added: and state and foreign laws 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.
+Added: We expect to incur increased costs of compliance with such laws and regulations as they continue to evolve.
+Added: If we or our contractors are unable to comply, or have not fully complied, with such laws, we could face penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal and state health care programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations.
+Added: Any of these could adversely affect our business, financial condition, and results of operations.
Risks Related to Intellectual Property
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There is no guarantee that any of our pending patent applications will result in issued or granted patents, any of our issued or granted patents will not later be found to be invalid or unenforceable, or any issued or granted patents will include claims sufficiently broad to cover our product candidates and technology, or to provide meaningful protection from our competitors.
−Removed: Our owned or in-licensed pending and future patent applications may not result in patents being issued that protect our Anktiva, saRNA, hAd5 and yeast technologies, cell-based therapies, aldoxorubicin or other product candidates and technologies or that effectively prevent others from commercializing competitive technologies and product candidates.
+Added: Our owned or in-licensed pending and future patent applications may not result in patents being issued that protect our N-803, saRNA, hAd5 and yeast technologies, cell-based therapies, aldoxorubicin or other product candidates and technologies or that effectively prevent others from commercializing competitive technologies and product candidates.
Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.
1 unchanged sentence
Any patents that we own or in-license may be challenged, narrowed, circumvented, or invalidated by third parties.
−Removed: Consequently, we do not know whether our Anktiva, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates and technologies will be protectable or remain protected by valid and enforceable patents.
+Added: Consequently, we do not know whether our N-803, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates and technologies will be protectable or remain protected by valid and enforceable patents.
Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and growth prospects.
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We may also be required to participate in post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge our or our licensor’s priority of invention or other features of patentability with respect to our owned or in-licensed patents and patent applications.
−Removed: Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our Anktiva, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates and technologies.
−Removed: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our owned or in-licensed patent rights, allow third parties to commercialize our Anktiva, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates or technologies and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
+Added: Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our N-803, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates and technologies.
+Added: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our owned or in-licensed patent rights, allow third parties to commercialize our N-803, saRNA, hAd5 and yeast technologies, cell-based therapies or other product candidates or technologies and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
If we or our collaborators are unsuccessful in any such proceeding or other priority or inventorship dispute, we may be required to cease using the technology or to obtain and maintain license rights from prevailing third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes.
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The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
−Removed: Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and patent applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent.
−Removed: The USPTO and various foreign governmental patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process.
−Removed: In certain circumstances, we rely on our licensors to pay these fees and take the necessary actions to comply with these requirements.
−Removed: While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
−Removed: Noncompliance events that could result in abandonment or lapse of a patent or patent application include, 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.
−Removed: In such an event, our competitors might be able to enter the market with similar or identical products or technology, which would have a material adverse impact on our business, financial condition, results of operations and prospects.
Changes in U.S.
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While we do not believe that any of the patents owned or licensed by us will be found invalid based on the foregoing, we cannot predict how future decisions by Congress, the federal courts or the USPTO may impact the value of our patents.
+Added: Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
+Added: Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and patent applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent.
+Added: The USPTO and various foreign governmental patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process.
+Added: In certain circumstances, we rely on our licensors to pay these fees and take the necessary actions to comply with these requirements.
+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.
+Added: 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.
+Added: In such an event, our competitors might be able to enter the market with similar or identical products or technology, which would have a material adverse impact on our business, financial condition, results of operations and prospects.
Our rights to develop and commercialize our product candidates and technologies are subject, in part, to the terms and conditions of licenses granted to us by others.
102 unchanged sentences
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
−Removed: In addition to seeking patents for Anktiva, saRNA, hAd5 and yeast technologies, cell therapies, and other product candidates and technologies, we also rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology, and other proprietary information and to maintain our competitive position.
+Added: In addition to seeking patents for N-803, saRNA, hAd5 and yeast technologies, cell therapies, and other product candidates and technologies, we also rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology, and other proprietary information and to maintain our competitive position.
Trade secrets and know-how can be difficult to protect.
29 unchanged sentences
Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
−Removed: Risks Related to Our Common Stock
+Added: Risks Related to Our Common Stock and CVRs
Soon-Shiong, our Executive Chairman, Global Chief Scientific and Medical Officer and our principal stockholder, has significant interests in other companies which may conflict with our interests.
20 unchanged sentences
Soon-Shiong, through his direct and indirect ownership of the company’s common stock, has voting control of the company.
−Removed: As of March 31, 2022, Dr.
+Added: As of June 30, 2022, Dr.
Soon-Shiong and his affiliates beneficially own approximately 78.7% of the company’s common stock outstanding.
4 unchanged sentences
Soon-Shiong and his related party have irrevocably agreed to receive shares of the company’s common stock in satisfaction of their CVRs.
−Removed: During the year ended March 31, 2022, we executed a $300.0 million promissory note with an entity affiliated with Dr.
+Added: During the year ended June 30, 2022, we executed a $300.0 million promissory note with an entity affiliated with Dr.
Soon-Shiong that is due and payable on December 17, 2022.
1 unchanged sentence
In addition, entities affiliated with Dr.
−Removed: Soon-Shiong hold promissory notes representing $309.4 million in indebtedness, including interest thereon, of the company as of March 31, 2022.
−Removed: Soon-Shiong has 926,064 stock options outstanding as of March 31, 2022, of which 900,000 are exercisable.
+Added: Soon-Shiong hold promissory notes representing $312.5 million in indebtedness, including interest thereon, of the company as of June 30, 2022.
+Added: Soon-Shiong has 926,064 stock options outstanding as of June 30, 2022, of which 900,000 are exercisable.
Soon-Shiong is in a position to control the outcome of corporate actions that require, or may be accomplished by, stockholder approval, including amending the bylaws of the company, the election or removal of directors and transactions involving a change of control.
35 unchanged sentences
• general economic slowdowns;
+Added: • government-imposed lockdowns, supply chain disruptions, and adverse economic effects from the ongoing COVID-19 pandemic, in the U.S.
+Added: • geopolitical tensions and war, including the war in Ukraine;
• coordinated actions by independent third-party actors to affect the price of certain stocks, coordinated via the Internet and otherwise;
6 unchanged sentences
In addition, our Executive Chairman and Global Chief Scientific and Medical Officer, Dr.
−Removed: Soon-Shiong, and his affiliates currently beneficially own approximately 78.7% of our outstanding shares of common stock as of March 31, 2022.
+Added: Soon-Shiong, and his affiliates currently beneficially own approximately 78.7% of our outstanding shares of common stock as of June 30, 2022.
Sales of stock by Dr.
45 unchanged sentences
If one or more of these analysts’ cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
+Added: The holders of our CVRs payable and contingent upon us obtaining FDA approval of our BLA by December 31, 2022 may not receive any further consideration.
+Added: In connection with the 2017 acquisition of Altor, we issued, in part, CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million contingent upon successful approval of the BLA, or foreign equivalent, for N-803 by December 31, 2022.
+Added: We have submitted the BLA, and in July 2022, we announced the FDA has accepted our BLA for review and set a PDUFA target action date of May 23, 2023.
+Added: It is unclear when the FDA will approve our BLA, if at all.
+Added: If the FDA does not approve our BLA by December 31, 2022, prior to its established PDUFA target action date, the $304.0 million will not be payable and the holders of these CVRs will not receive any cash or shares of our common stock on account of the CVRs.
We are not subject to the provisions of Section 203 of the Delaware General Corporation Law (DGCL), which could negatively affect your investment.
3 unchanged sentences
An “interested stockholder” is a person who, together with affiliates and associates, owns (or, in certain cases, within three years prior, did own) 15% or more of the corporation’s voting stock.
−Removed: Our decision not to be subject to Section 203 will allow, for example, our Executive Chairman and Global Chief Scientific and Medical Officer (who, with members of his immediate family and entities affiliated with him, currently beneficially own, in the aggregate, approximately 78.7% of our common stock as of March 31, 2022) to transfer shares in excess of 15% of our voting stock to a third-party free of the restrictions imposed by Section 203.
+Added: Our decision not to be subject to Section 203 will allow, for example, our Executive Chairman and Global Chief Scientific and Medical Officer (who, with members of his immediate family and entities affiliated with him, currently beneficially own, in the aggregate, approximately 78.7% of our common stock as of June 30, 2022) to transfer shares in excess of 15% of our voting stock to a third-party free of the restrictions imposed by Section 203.
This may make us more vulnerable to takeovers that are completed without the approval of our Board of Directors and/or without giving us the ability to prohibit or delay such takeovers as effectively.
19 unchanged sentences
To the extent that a claim for indemnification is brought by any of our directors or officers, it would reduce the amount of funds available for use in our business.
−Removed: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
−Removed: (a) Recent Sales of Unregistered Securities
−Removed: (b) Issuer Purchases of Equity Securities
−Removed: DEFAULTS UPON SENIOR SECURITIES.
−Removed: MINE SAFETY DISCLOSURES.
−Removed: Not applicable.
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.