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Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
−Removed: We are early in our development efforts and all of our product candidates and research programs other than JANX007 are in the preclinical development or discovery stage.
−Removed: We have no history of conducting clinical trials to test our product candidates in humans.
+Added: We are early in our development efforts and all of our product candidates and research programs other than JANX007 and JANX008 are in the preclinical development or discovery stage.
+Added: We have a very limited history of conducting clinical trials to test our product candidates in humans.
Preclinical and clinical development is a lengthy, expensive and uncertain process.
The results of preclinical studies and early clinical trials are not always predictive of future results.
−Removed: JANX007 and any other product candidate that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.
+Added: JANX007, JANX008 and any other product candidate that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.
Our product candidates are based on novel technologies, which make it difficult to predict the timing, results and cost of product candidate development and likelihood of obtaining regulatory approval.
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Our operations to date have been limited to organizing and staffing our company, business planning, business development, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and preclinical studies for our lead programs, establishing and enhancing our intellectual property portfolio and providing general and administrative support for these operations.
−Removed: All of our product candidates are in preclinical development, and none have been approved for commercial sale.
+Added: All of our product candidates and research programs other than JANX007 and JANX008 are in preclinical development, and none have been approved for commercial sale.
We have never generated any revenue from product sales and have incurred net losses each year since we commenced operations.
−Removed: For the nine months ended September 30, 2022 and 2021, our net losses were $47.0 million and $19.3 million, respectively.
+Added: For the three months ended March 31, 2023 and 2022, our net losses were $17.5 million and $13.4 million, respectively.
We expect that it will be several years, if ever, before we have a product candidate ready for regulatory approval and commercialization.
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In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution.
−Removed: As of September 30, 2022, we had $338.8 million in cash and cash equivalents and short-term investments.
+Added: As of March 31, 2023, we had $316.9 million in cash and cash equivalents and short-term investments.
Based upon our current operating plan, we estimate that our existing cash and cash equivalents and short-term investments, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months.
2 unchanged sentences
Our future capital requirements will depend on many factors, including:
−Removed: the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates, and in particular the clinical trial for JANX007 and the IND-enabling studies and planned future clinical trials for JANX008, TROP2-TRACTr and TRACIr costimulatory bispecific;
+Added: the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates, and in particular the clinical trials for JANX007 and JANX008 and the IND-enabling studies and planned future clinical trials for TROP2-TRACTr and TRACIr costimulatory bispecific;
the number and characteristics of clinical programs that we pursue;
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our costs associated with expanding our facilities or building out our laboratory space;
−Removed: the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from the COVID-19 pandemic or otherwise;
+Added: the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions, including the COVID-19 pandemic, the military conflict in Ukraine and Russia, and bank failures;
the costs of operating as a public company.
2 unchanged sentences
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.
−Removed: The impact of the COVID-19 pandemic on capital markets may affect the availability, amount and type of financing available to us in the future.
−Removed: On August 9, 2022, we entered into an Open Market Sale Agreement SM (Sale Agreement), with Jefferies LLC (Jefferies), to sell shares of our common stock, from time to time, through an “at the market offering”
−Removed: program having an aggregate offering price of up to $100.0 million through which Jefferies would act as sales agent.
−Removed: There can be no assurance that we will meet the requirements to be able to sell shares of our common stock pursuant to the Sale Agreement, of if we meet the requirements that we will be able to raise sufficient funds on favorable terms.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
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If Merck decides not to pursue the collaboration, we will not receive the benefit of the milestone and royalty payments that we would otherwise potentially receive pursuant to our collaboration with Merck and accordingly may need to raise capital from other sources.
−Removed: If we are unable to raise additional funds when needed, we
−Removed: may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
−Removed: Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic or otherwise.
−Removed: Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses and cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
+Added: If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
+Added: Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide.
+Added: Because of the numerous risks and uncertainties associated with product
+Added: development, we cannot predict the timing or amount of increased expenses and cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates
−Removed: We are early in our development efforts and all of our product candidates and research programs other than JANX007 are in the preclinical development or discovery stage.
−Removed: We have no history of conducting clinical trials to test our product candidates in humans.*
+Added: We are early in our development efforts and all of our product candidates and research programs other than JANX007 and JANX008 are in the preclinical development or discovery stage.
+Added: We have a very limited of conducting clinical trials to test our product candidates in humans.
We are early in our development efforts and most of our operations to date have been limited to developing our platform technologies and conducting drug discovery and preclinical studies.
−Removed: Other than JANX007 our platform technologies and product candidates remain in the preclinical or discovery stage and our product candidates are based on novel technologies.
+Added: Other than JANX007 and JANX008, our platform technologies and product candidates remain in the preclinical or discovery stage and our product candidates are based on novel technologies.
As a result, we have limited infrastructure, experience conducting clinical trials as a company and regulatory interactions, and cannot be certain that our clinical trials will be completed on time, if at all, that our planned development programs would be acceptable to the FDA, the EMA or other comparable foreign regulatory authorities, or that, if approval is obtained, such product candidates could be successfully commercialized.
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demonstrating a risk-benefit profile acceptable to regulatory authorities;
−Removed: receipt of marketing approvals from applicable regulatory authorities, including biologics license applications (BLAs), from the FDA and maintaining such approvals;
+Added: receipt of marketing approvals from applicable regulatory authorities, including biologics license applications (BLAs), from the FDA and equivalent approvals from comparable foreign regulatory authorities and maintaining such approvals;
making arrangements with third-party manufacturers, or establishing manufacturing capabilities for clinical supply and, if and when approved, for commercial supply;
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In the future, we may also become dependent on other product candidates that we may develop or acquire;
−Removed: however, given our early stage of development, it may be several years, if at all, before we have demonstrated the safety and efficacy of a treatment sufficient to warrant approval for
−Removed: commercialization.
+Added: however, given our early stage of development, it may be several years, if at all, before we have demonstrated the safety and efficacy of a treatment sufficient to warrant approval for commercialization.
If we are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize our product candidates, we may not be able to generate sufficient revenue to continue our business.
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The results of preclinical studies and early clinical trials are not always predictive of future results.
−Removed: JANX007 and any other product candidate that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.*
+Added: JANX007, JANX008 and any other product candidate that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.
Preclinical and clinical development is expensive and can take many years to complete, and their outcome is inherently uncertain.
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The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
−Removed: Even if we eventually complete clinical testing and receive approval of a BLA or foreign marketing application for our product candidates, the FDA, the European Commission or the comparable foreign regulatory authorities may grant approval contingent on the
−Removed: performance of costly additional clinical trials, including post-market clinical trials.
−Removed: The FDA, the European Commission or the comparable foreign regulatory authorities also may approve a product candidate for a more limited indication or patient population than we originally request, and the FDA, the European Commission or comparable foreign regulatory authorities may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate.
+Added: Even if we eventually complete clinical testing and receive approval of a BLA or foreign marketing application for our product candidates, the FDA, the European Commission or the comparable foreign regulatory authorities may grant approval contingent on the performance of costly additional clinical trials, including post-market clinical trials.
+Added: The FDA, the European Commission or the comparable foreign regulatory authorities also may approve a product candidate for a more limited indication or patient population than we originally request, and the FDA, the European Commission or comparable foreign regulatory authorities may not approve the
+Added: labeling that we believe is necessary or desirable for the successful commercialization of a product candidate.
Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would adversely impact our business and prospects.
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Serious adverse events, undesirable side effects or other unexpected properties of our product candidates may be identified during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on the use of our product candidates thereby limiting the commercial potential of such product candidate.
−Removed: As we continue developing our product candidates and initiate any future clinical trials of our product candidates, serious adverse events (SAEs), undesirable side effects, relapse of disease or unexpected characteristics may emerge causing us to abandon these product candidates or limit their development to more narrow uses or subpopulations in which the SAEs or undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective or in which efficacy is more pronounced or durable.
+Added: As we continue developing and conducting clinical trials of our product candidates, serious adverse events (SAEs), undesirable side effects, relapse of disease or unexpected characteristics may emerge causing us to abandon these product candidates or limit their development to more narrow uses or subpopulations in which the SAEs or undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective or in which efficacy is more pronounced or durable.
Should we observe any SAEs in our ongoing or planned clinical trials or identify other undesirable side effects or other unexpected findings depending on their severity, our trials could be delayed or even stopped and our development programs may be halted entirely, such as imposition of a clinical hold by the FDA or comparable actions of foreign regulatory authorities and institutional review boards and ethics committees.
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Sometimes, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications.
−Removed: If serious adverse or unexpected side effects are identified during development or after approval and are determined to be attributed to our product candidate, we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS) to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.
+Added: If serious adverse or unexpected side effects are identified during development or after approval and are determined to be attributed to our product candidate, we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS) or equivalent foreign procedure to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.
Product-related side effects could also result in potential product liability claims.
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Neither we nor any current or future collaborator is permitted to market any of our product candidates in the United States until we receive regulatory approval of a BLA from the FDA.
+Added: Equivalent limitations are imposed by comparable foreign regulatory authorities within their territories.
Obtaining regulatory approval of a BLA, or in an equivalent foreign process, can be a lengthy, expensive and uncertain process.
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Even if we believe the nonclinical or clinical data for our product candidates are positive, such data may not be sufficient to support approval by the FDA, the European Commission or other comparable foreign regulatory authorities.
−Removed: Administering product candidates to humans may produce undesirable side effects, which could interrupt, delay or halt clinical trials and result in the FDA, the European Commission or other
−Removed: comparable foreign regulatory authorities denying approval of a product candidate for any or all indications.
−Removed: The FDA, the EMA or other comparable foreign regulatory authorities, may also require us to conduct additional studies or trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program such as the number of subjects in our future clinical trials from the United States or abroad.
+Added: Administering product candidates to humans may produce undesirable side effects, which could interrupt, delay or halt clinical trials and result in the FDA, the European Commission or other comparable foreign regulatory authorities denying approval of a product candidate for any or all indications.
+Added: The FDA, the EMA or other comparable foreign regulatory authorities, may also require us to conduct additional studies or trials for our product candidates
+Added: either prior to or post-approval, or may object to elements of our clinical development program such as the number of subjects in our clinical trials from the United States or abroad.
The FDA, the European Commission or other comparable foreign regulatory authorities can delay, limit or deny approval of our product candidates or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:
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These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current cGMP regulations, as well as GCPs for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.
−Removed: In addition, any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing,
−Removed: including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.
−Removed: The FDA may also require a REMS and the European Commission, or comparable foreign regulatory authorities may require equivalent actions as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
+Added: In addition, any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.
+Added: The FDA may also require a REMS and the European Commission, or comparable foreign regulatory authorities may require equivalent actions as a
+Added: condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
Such regulatory requirements may differ from country to country depending on where we have received regulatory approval.
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The ability of the FDA, EMA, European Commission, and other foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.
−Removed: Average review times at the FDA have
−Removed: fluctuated in recent years as a result.
+Added: Average review times at the FDA have fluctuated in recent years as a result.
In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
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If a prolonged government shutdown 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.
−Removed: Separately, the FDA and regulatory authorities outside the United States have and may adopt restrictions or other policy measures in response to the global COVID-19 pandemic that divert resources and delay their attention from any submissions we may make.
+Added: Separately, the FDA and regulatory authorities outside the United States have and may adopt restrictions or other policy measures in response to the global COVID-19 pandemic or other public health crises that divert resources and delay their attention from any submissions we may make.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other foreign regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
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We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves.
−Removed: As a result, we are and expect to remain dependent on third parties to conduct our preclinical studies, clinical trials and any future clinical trials of our product candidates.
+Added: As a result, we are and expect to remain dependent on third parties to conduct our preclinical studies, ongoing clinical trials and any future clinical trials of our product candidates.
The timing of the initiation and completion of these studies and trials will therefore be partially controlled by such third parties and may result in delays to our development programs.
Nevertheless, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal requirements, and scientific standards, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.
−Removed: We and our CROs are required to comply with GLP and GCP requirements, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the European Economic Area, or EEA, countries, and comparable foreign regulatory authorities for all of
−Removed: our product candidates in clinical development.
+Added: We and our CROs are required to comply with GLP and GCP requirements, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the European Economic Area, or EEA, countries, and comparable foreign regulatory authorities for all of our product candidates in clinical development.
Regulatory authorities enforce these GLP and GCP requirements through periodic inspections of preclinical study sites, trial sponsors, clinical trial investigators and clinical trial sites.
−Removed: If we or any of our CROs or clinical trial sites fail to comply with applicable GLP or GCP requirements, the data generated in our preclinical studies and clinical trials may be deemed unreliable, and the FDA, the EMA or comparable foreign regulatory authorities may require us to perform additional preclinical or clinical trials before approving our marketing authorization applications.
+Added: If we or any of our CROs or clinical trial sites fail to comply with applicable GLP or GCP requirements, the data generated in our preclinical studies and clinical
+Added: trials may be deemed unreliable, and the FDA, the EMA or comparable foreign regulatory authorities may require us to perform additional preclinical or clinical trials before approving our marketing authorization applications.
In addition, our clinical trials must be conducted with product produced under cGMP regulations.
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There is no guarantee that any such CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development activities or perform as contractually required.
−Removed: These risks are heightened as a result of the efforts of government agencies and the CROs themselves to limit the spread of COVID-19, including quarantines and shelter-in-place orders.
If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated.
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We rely on third parties for the manufacture of our product candidates for clinical testing and we will continue to rely on such third parties for commercial manufacture if any of our product candidates are approved.
−Removed: We currently have limited manufacturing arrangements and expect that each of our product candidates will only be covered by single source suppliers for the foreseeable future.
+Added: We currently have limited manufacturing arrangements and expect that the BDS for each of our product candidates will only be covered by single source suppliers for the foreseeable future.
This reliance increases the risk that we will not have sufficient quantities of our product candidates or products, if approved, or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
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We do not control the manufacturing activities of, and are completely dependent on, our contract manufacturers for compliance with cGMP regulations.
−Removed: In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, including due to the impact of the COVID-19 pandemic, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third-party, which we may not be able to do on commercially reasonable terms, if at all.
−Removed: In particular, any replacement of our manufacturers could require significant effort and
−Removed: expertise because there may be a limited number of qualified replacements.
+Added: In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third-party, which we may not be able to do on commercially reasonable terms, if at all.
+Added: In particular, any replacement of our manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements.
In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty transferring such skills or technology to another third-party and a feasible alternative may not exist.
In addition, certain of our product candidates and our own proprietary methods have never been produced or implemented outside of our company, and we may therefore experience delays to our development programs if and when we attempt to establish new third-party manufacturing arrangements for these product candidates or methods.
−Removed: These factors would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third-party manufacture our product candidates.
+Added: These factors would
+Added: increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third-party manufacture our product candidates.
If we are required to or voluntarily change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines and that the product produced is equivalent to that produced in a prior facility.
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If any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.
−Removed: Manufacturing our product candidates is complex and requires the use of innovative technologies to handle living cells.
+Added: Manufacturing our product candidates is complex and requires the use of technologies directed to handle living cells.
Manufacturing these products requires facilities specifically designed for and validated for this purpose and sophisticated quality assurance and quality control procedures are necessary.
−Removed: Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result in lot failures, product recalls or spoilage.
+Added: Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result in lot failures, product recalls or expiry.
When changes are made to the manufacturing process, we may be required to provide preclinical and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.
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If our manufacturers are unable to produce sufficient quantities for clinical trials or for commercialization, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
−Removed: Due to the early nature of our product candidates, the drug product may not be stable over time causing changes to be made to the manufacturing or storage process which may result in delays or stopping the development of the product candidate.
+Added: Due to the early nature of our product candidates, the drug product may not be stable over time causing changes to be made to the manufacturing, formulation or storage process, which may result in delays or stopping the development of the product candidate.
Changes in methods of product candidate manufacturing may result in additional costs or delays.
−Removed: As product candidates progress through preclinical to late-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to
−Removed: optimize yield, manufacturing batch size, change drug product dosage form, minimize costs and achieve consistent quality and results.
+Added: As product candidates progress through preclinical to late-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize yield, manufacturing batch size, change drug product dosage form, minimize costs and achieve consistent quality and results.
Such changes carry the risk that they will not achieve these intended objectives.
Any of these changes could cause our product candidates to perform differently and affect the results of clinical trials or other future clinical trials conducted with the altered materials.
−Removed: This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates and generate revenue.
+Added: This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more
+Added: clinical trials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates and generate revenue.
Any approved products may fail to achieve the degree of market acceptance by physicians, patients, hospitals, cancer treatment centers, healthcare payors and others in the medical community necessary for commercial success.
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Outside of the United States, many countries require approval of the sale price of a product before it can be marketed, and the pricing review period only begins after marketing or product licensing approval is granted.
−Removed: To obtain reimbursement or pricing approval in some of these countries, including in some EU Member States, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
+Added: To obtain reimbursement or pricing approval in some of these countries, including in some EEA countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
In the EU, this Health Technology Assessment (HTA) process is currently governed by the national laws of the individual EU Member States.
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Our product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated.
−Removed: The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the Affordable Care Act) signed into law on March 23, 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA) which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable
−Removed: with an FDA-licensed reference biological product.
+Added: The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the Affordable Care Act) signed into law on March 23, 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA) which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.
In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed.
−Removed: During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
+Added: During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and
+Added: well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
Equivalent laws and procedures apply in foreign countries.
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These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets.
−Removed: Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
+Added: Despite the contractual provisions employed
+Added: when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s independent discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.
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Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming.
−Removed: Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
+Added: requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays.
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We have entered into a research collaboration and exclusive license agreement with Merck and in the future may seek and form strategic alliances, create joint ventures or additional collaborations, or enter into acquisitions or licensing arrangements with third parties that we believe will complement or augment our existing technologies and product candidates.
−Removed: These transactions can entail numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of our management’s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations
−Removed: and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business.
−Removed: As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, or if there are materially adverse impacts on our or the counterparty’s operations resulting from COVID-19, which could delay our timelines or otherwise adversely affect our business.
+Added: These transactions can entail numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of our management’s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business.
+Added: As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business.
We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction or such other benefits that led us to enter into the arrangement.
25 unchanged sentences
Such misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.
−Removed: It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits
−Removed: stemming from a failure to comply with these laws or regulations.
+Added: It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
If any such actions are instituted against us those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid or comparable foreign healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations.
28 unchanged sentences
The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business.
−Removed: We conduct substantially all of our operations remotely and at our facilities in La Jolla, California.
+Added: We conduct substantially all of our operations remotely and at our facilities in San Diego, California.
This region is headquarters to many other biopharmaceutical companies and many academic and research institutions.
1 unchanged sentence
To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options that vest over time.
−Removed: The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.
−Removed: There also may be shortages of skilled labor due to the COVID-19 pandemic, macroeconomic conditions, or other factors that may make it more difficult for us to attract and retain qualified personnel and lead to increased labor costs.
+Added: The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other
+Added: There also may be shortages of skilled labor due to the COVID-19 pandemic and other public health crises, macroeconomic conditions, or other factors that may make it more difficult for us to attract and retain qualified personnel and lead to increased labor costs.
Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice.
4 unchanged sentences
We expect to expand our development, regulatory and operational capabilities and, as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.*
−Removed: As of September 30, 2022, we had 56 employees.
+Added: As of March 31, 2023, we had 62 employees.
As we advance our research and development programs, we will be required to further increase the number of our employees and the scope of our operations, particularly in the areas of research and clinical development, medical affairs, general and administrative matters relating to being a public company, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution.
15 unchanged sentences
Other products that are similar to our product candidates have already been approved and other products in the same class are further along in development.
−Removed: As more product candidates within a particular class of biopharmaceutical products proceed through clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory
−Removed: authorities may increase or change.
+Added: As more product candidates within a particular class of biopharmaceutical products proceed through clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory authorities may increase or change.
Consequently, the results of our clinical trials for product candidates in those classes will likely need to show a risk benefit profile that is competitive with or more favorable than those products and product candidates in order to obtain marketing approval or, if approved, a product label that is favorable for commercialization.
14 unchanged sentences
federal net operating losses (NOLs) incurred in taxable years beginning after December 31, 2017, can be carried forward indefinitely to offset future taxable income, but the deductibility of such U.S.
−Removed: federal NOLs in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.
+Added: federal NOLs is limited to 80% of taxable income.
As of December 31, 2022, we had $50.0 million of U.S.
16 unchanged sentences
The COVID-19 pandemic and other epidemic diseases could adversely impact our business, including our ongoing and planned clinical trials, supply chain and business development activities.*
−Removed: In March 2020, the World Health Organization characterized COVID-19 as a pandemic.
−Removed: As a result of measures imposed by the governments in affected regions, many commercial activities, businesses and schools experienced suspensions as part of quarantines
−Removed: and other measures intended to contain this pandemic.
−Removed: As COVID-19 continues to persist around the globe, or if new epidemic diseases arise in the future, we may experience disruptions that could severely impact our business and clinical trials, including:
+Added: COVID-19 has caused, and a resurgence of COVID-19 or another health epidemic or pandemic may cause, significant disruptions that could severely impact our business and clinical trials, including:
interruption or delays in our operations, which may impact our ability to conduct and produce preclinical results required for submission of an IND in the United States or equivalent marketing authorization applications in foreign jurisdictions;
10 unchanged sentences
These and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial condition.
−Removed: The spread of COVID-19 and actions taken to reduce its spread may also materially affect us economically.
−Removed: While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.
−Removed: COVID-19 and actions taken to reduce its spread continue to evolve.
−Removed: The extent to which COVID-19 may impede the development of our product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
−Removed: To the extent the COVID-19 pandemic or other epidemic diseases adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors”
+Added: A resurgence of COVID-19 or another health epidemic or pandemic may also materially affect us economically.
+Added: While the potential economic impact brought by, and the duration of, a resurgence of COVID-19 or other health crises may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.
+Added: The extent to which a resurgence of COVID-19 or other health crises may impede the development of our product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted with confidence and may also have the effect of heightening many of the other risks described in this “Risk Factors”
Risks Related to Government Regulation
7 unchanged sentences
Healthcare providers and others play a primary role in the recommendation and prescription of any products for which we obtain marketing approval.
−Removed: These laws may impact, among other things, our current business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers
−Removed: and other parties through which we may market, sell and distribute our products for which we obtain marketing approval.
+Added: These laws may impact, among other things, our current business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we may market, sell and distribute our products for which we obtain marketing approval.
In addition, we may be subject to additional healthcare, statutory and regulatory requirements and enforcement by foreign regulatory authorities in jurisdictions in which we conduct our business.
2 unchanged sentences
federal and state healthcare programs such as Medicare and Medicaid.
−Removed: A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: A person or entity
+Added: does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
federal false claims laws, including the False Claims Act, which can be enforced through whistleblower actions, and civil monetary penalties laws, which, among other things, impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the U.S.
20 unchanged sentences
Further, defending against any such actions can be costly and time-consuming, and may require significant financial and personnel resources.
−Removed: Therefore, even if we are successful in defending against any such actions that may be brought against us,
−Removed: our business may be impaired.
+Added: Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.
If any of the physicians or other providers or entities with whom we expect to do business is found to not be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
13 unchanged sentences
The IRA also eliminates the “donut hole”
−Removed: under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost through a newly established manufacturer discount program.
+Added: under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.
It is also unclear how any additional healthcare reform measures of the Biden administration will impact the Affordable Care Act or our business.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
−Removed: For example, in August 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year until 2031, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless Congress takes additional action.
+Added: For example, in August 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year until 2031.
Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.
9 unchanged sentences
These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
+Added: HHS has and will continue to issue and update guidance as these programs are implemented.
It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.
−Removed: Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.
+Added: Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.
+Added: It is unclear whether the models will be utilized in any health reform measures in the future.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control costs pharmaceutical and biological products.
1 unchanged sentence
In the European Union, many EU Member States periodically review their reimbursement procedures for medicinal products, which could have an adverse impact on reimbursement status.
−Removed: We expect that legislators, policymakers and healthcare insurance funds in the EU Member States will continue to propose and implement cost-containing measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually generic, products as an alternative to branded products, and/or
−Removed: branded products available through parallel import to keep healthcare costs down.
+Added: We expect that legislators, policymakers and healthcare insurance funds in the EU Member States will continue to propose and implement cost-containing measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually generic, products as an alternative to branded products, and/or branded products available through parallel import to keep healthcare costs down.
Moreover, in order to obtain reimbursement for our products in some European countries, including some EU Member States, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies.
1 unchanged sentence
The HTA process, which is currently governed by national laws in each EU Member State, is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
−Removed: The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States.
+Added: of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States.
The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States.
2 unchanged sentences
Legislators, policymakers and healthcare insurance funds in the European Union may continue to propose and implement cost-containing measures to keep healthcare costs down.
−Removed: particularly due to the financial strain that the COVID-19 pandemic has placed on national healthcare systems of the EU Member States.
These measures could include limitations on the prices we are be able to charge for product candidates that we may successfully develop and for which we may obtain regulatory approval or the level of reimbursement available for these products from governmental authorities or third-party payors.
5 unchanged sentences
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.
−Removed: Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business, which could reduce the price of our common shares.
12 unchanged sentences
Among the areas of absence of mutual recognition are batch testing and batch release.
−Removed: The UK has unilaterally agreed to accept European Union batch testing and batch release for a period of at least 2 years until January 1, 2023.
−Removed: The UK’s acceptance of batch testing conducted in EEA countries will be reviewed before 31 December 2022.
−Removed: A two-year notice period will be given in case any changes are made to existing arrangements.
+Added: The UK has unilaterally agreed to accept European Union batch testing and batch release.
However, the European Union continues to apply European Union laws that require batch testing and batch release to take place in the European Union territory.
3 unchanged sentences
For example, the scope of a marketing authorization for a medicinal product granted by the European Commission or by the competent authorities of EU Member States will no longer encompass Great Britain (England, Scotland and Wales).
−Removed: In these circumstances, a separate marketing authorization granted by the UK competent authorities will be required to place medicinal products on the market
−Removed: in Great Britain.
+Added: In these circumstances, a separate marketing authorization granted by the UK competent authorities will be required to place medicinal products on the market in Great Britain.
Northern Ireland will, however, continue to be covered by the marketing authorizations granted by the European Commission.
Since a significant proportion of the regulatory framework in the UK applicable to medicinal products is derived from European Union Directives and Regulations, Brexit, following the Transition Period, could materially impact the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the UK or the European Union, now that UK legislation has the potential to diverge from European Union legislation.
+Added: It is currently unclear to what extent the UK will seek to align its regulations with the EU in the future.
+Added: The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation).
+Added: However, the Retained EU Law
+Added: (Revocation and Reform) Bill published in late 2022 which is intended to remove all EU-derived legislation from the UK statute book by the end of 2023, may result in a divergence of approach between the EU and the UK.
+Added: On January 17, 2022, the UK Medicines and Healthcare products Regulatory Agency, or MHRA, launched an eight-week consultation on reframing the UK legislation for clinical trials.
+Added: The consultation closed on March 14, 2022, and aims to streamline clinical trials approvals, enable innovation, enhance clinical trials transparency, enable greater risk proportionality, and promote patient and public involvement in clinical trials.
+Added: The outcome of the consultation will be closely watched and will determine whether the UK chooses to align with the regulation or diverge from it to maintain regulatory flexibility.
+Added: A decision by the UK not to closely align its regulations with the new approach that will be adopted in the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries and/or make it harder to seek a marketing authorization in the EU for our product candidates on the basis of clinical trials conducted in the UK.
+Added: 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.
All of these changes could increase our costs and otherwise adversely affect our business.
4 unchanged sentences
These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the UK.
−Removed: Our actual or perceived failure to comply with current or future federal, state and foreign laws and regulations and industry standards relating to privacy and security could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.*
−Removed: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, processing) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.
+Added: We are subject to stringent and evolving U.S.
+Added: and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security.
+Added: Our actual or perceived failure to comply with current or future federal, state and foreign laws and regulations and industry standards relating to privacy and security could lead to regulatory investigations or actions (which could include civil or criminal fines and penalties), private litigation, adverse publicity, disruptions of our business operations and other adverse business consequences.
+Added: In the ordinary course of business, we Process personal information and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.
Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
−Removed: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including health information privacy laws, data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
+Added: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including health information privacy laws, data breach notification laws, personal information privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
For example, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under the HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations.
HIPAA imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information.
−Removed: In addition, the California Consumer Privacy Act (CCPA) imposes obligations on covered businesses.
−Removed: These obligations include, but are not limited to, providing specific disclosures in privacy notices and affording California residents certain rights with respect to their personal data.
+Added: In addition, the California Consumer Privacy Act (CCPA) applies to personal information of consumers, business representatives, and employees, and requires businesses to provide specific disclosures in privacy notices and affording California residents certain rights with respect to their personal information.
The CCPA provides for civil penalties for violations (up to $7,500 per violation) and allows private litigants affected by certain data breaches to recover significant statutory damages.
−Removed: Although the CCPA exempts some data processed in the context of clinical trials, the CCPA may increase compliance costs and potential liability with respect to other personal data we may maintain about California residents.
−Removed: In addition, the California Privacy Rights Act of 2020 (CPRA), which becomes operative January 1, 2023, will expand the CCPA’s requirements, including applying to personal information of business representatives and employees.
−Removed: The CPRA establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which could result in increased privacy and information security enforcement.
−Removed: Other states have enacted data privacy laws.
+Added: Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and potential liability with respect to other personal information we maintain about California residents.
+Added: In addition, the California Privacy Rights Act of 2020 (CPRA) expands the CCPA’s requirements, including by adding a new right for individuals to correct their personal information and establishing a new California Privacy Protection Agency to implement and enforce the CPRA, which could result in increased enforcement.
+Added: Other states have also enacted data privacy laws.
For example, Virginia, Colorado, Utah and Connecticut, have also passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
−Removed: These developments may further complicate compliance efforts, and may increase legal risk and compliance costs for us and the third parties upon whom we rely.
−Removed: Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
−Removed: Our inability or failure to do so could result in adverse consequences.
+Added: While these states, like the CCPA, exempt some data processed in the context of clinical trials, these laws further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
+Added: Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal information.
+Added: Our inability or failure to do so could result in material adverse consequences, including interrupting our clinical trial activities.
In many jurisdictions, enforcement actions and consequences for noncompliance are rising.
−Removed: In the United States, these include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies and state attorneys general and legislatures and consumer protection agencies.
−Removed: In addition, privacy advocates and industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or contractually apply to us.
−Removed: If we fail to follow these security standards, even if no customer information is compromised, we may incur significant fines or experience a significant increase in costs.
+Added: the United States, these include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies, state attorneys general, legislatures and consumer protection agencies.
Outside the United States, an increasing number of laws, regulations, and industry standards may govern to data privacy and security.
−Removed: For example, the European Union’s General Data Protection Regulation (EU GDPR) and the United Kingdom’s GDPR (UK
−Removed: GDPR), impose strict requirements for processing personal data and violators of these laws face significant penalties.
−Removed: For example, under the EU GDPR and UK GDPR, government regulators may impose temporary or definitive bans on data processing, as well as fines of up to 20 million euros or 4% of annual global revenue, whichever is greater.
+Added: For example, the European Union’s General Data Protection Regulation (EU GDPR) and the United Kingdom’s GDPR (UK GDPR), impose strict requirements for processing personal data and violators of these laws face significant penalties.
+Added: For example, under the EU GDPR and UK GDPR, government regulators may impose temporary or definitive bans on data processing, as well as fines of up to 20 million euros (£17.5 million for the UK GDPR) or 4% of annual global revenue, whichever is greater.
Further, the EU GDPR provides for private litigation related to the processing of personal information, which can be brought by classes of data subjects or consumer protection organizations authorized by law to represent the interests of such classes.
Similarly, consumer associations may bring proceedings to defend collective interests of data subjects under the EU GDPR, independently of the absence of a mandate to that effect.
−Removed: Certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws, which could make it more difficult to transfer information across jurisdictions (such as transferring or receiving personal data that originates in the EU, in the United Kingdom or in other foreign jurisdictions).
−Removed: Existing mechanisms that facilitate cross-border personal data transfers may change or be invalidated.
−Removed: For example, absent appropriate safeguards or other circumstances, the EU GDPR and the UK GDPR generally restrict the transfer of personal data to countries outside of the European Economic Area (EEA) and the United Kingdom respectively, that the European Commission or the United Kingdom Government (as applicable) do not consider to provide an adequate level of data privacy and security, such as the United States.
−Removed: The European Commission released a set of “Standard Contractual Clauses”
−Removed: (SCCs), that are designed to be a valid mechanism to facilitate personal data transfers out of the EEA to these jurisdictions.
−Removed: Currently, these SCCs are a valid mechanism to transfer personal data outside of the EEA.
−Removed: The United Kingdom has also adopted the international data transfer agreement (IDTA), the international data transfer addendum to the European Commission’s SCCs (Addendum) and a document setting out transitional provisions, which came into force on March 21, 2022.
−Removed: The IDTA and Addendum replaced the SCCs as a transfer tool to comply with Article 46 of the UK GDPR when making restricted transfers from the United Kingdom.
−Removed: Additionally, the SCCs the IDTA or the Addendum impose additional compliance burdens, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data.
−Removed: The SCCs, the IDTA or the Addendum may increase the legal risks and liabilities associated with cross-border data transfers, and result in material increased compliance and operational costs.
−Removed: In addition, Switzerland similarly restrict personal data transfers outside of those jurisdictions to countries, such as the United States, that do not provide an adequate level of personal data protection, and certain countries outside the EEA and the United Kingdom (e.g., China) have also passed or are considering laws requiring local data residency or otherwise impeding the transfer of personal data across borders, any of which could increase the cost and complexity of doing business.
−Removed: If there is no lawful manner for cross-border personal data transfers, or if the requirements for a legally-compliant transfer are too onerous, we may face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions as significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against processing or transferring personal data from the EEA and the United Kingdom or other foreign jurisdictions necessary to operate our business.
−Removed: The inability to import personal data to the United States could significantly and negatively impact our business operations, including by limiting our ability to conduct clinical trial activities in the EEA and elsewhere or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expense.
+Added: We are bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
+Added: For example, certain privacy laws, such as the GDPR and the CCPA, require us to impose specific contractual restrictions on our service providers.
+Added: Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose such information.
+Added: We also publish privacy policies, marketing materials and other statements regarding data privacy and security.
+Added: If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
+Added: In addition, privacy advocates and industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or contractually apply to us.
+Added: If we fail to follow these security standards, even if no customer information is compromised, we may incur significant fines or experience a significant increase in costs.
Our obligations related to data privacy and security are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the effective future legal framework.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
−Removed: Preparing for and complying with these obligations requires significant resources and may necessitate changes to our information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
+Added: Preparing for and complying with these obligations requires significant resources, which may necessitate changes to our information technologies, systems, and practices and to those of any third parties that process personal information on our behalf.
Although we endeavor to comply with all applicable data privacy and security obligations, we may at times fail (or be perceived to have failed) to do so.
Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
−Removed: If we or our partners fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, or if we experience a data breach involving personal data, we could face significant consequences, including but not limited to government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
+Added: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
litigation (including private lawsuits and class-action claims);
additional reporting requirements and/or oversight;
−Removed: bans on processing personal data;
−Removed: orders to destroy or not use personal data;
+Added: bans on processing personal information;
+Added: orders to destroy or not use personal information;
and imprisonment of company officials.
Any associated claims, inquiries, or investigations or other government actions could lead to unfavorable outcomes that have a material impact on our business including through imposition of significant penalties or fines, monetary judgments or settlements including criminal and civil liability for us and our officers and directors, increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, or other remedies that harm our business, including orders that we modify or cease existing business practices.
−Removed: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to, interruptions or stoppages in our business operations (including, as relevant, clinical trials), inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources
−Removed: to defend any claim or inquiry, adverse publicity, or revisioning or restructuring of our operations.
+Added: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to, interruptions or stoppages in our business operations (including, as relevant, clinical trials), inability to process personal information or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or inquiry, adverse publicity, or revisioning or restructuring of our operations.
+Added: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to, interruptions or stoppages in our business operations (including, as relevant, clinical trials), inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or inquiry, adverse publicity, or revisioning or restructuring of our operations.
Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose such information.
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Our pending and future patent applications may not result in patents being issued or that issued patents will afford sufficient protection of our product candidates or their intended uses against competitors, nor can there be any assurance that the patents issued will not be infringed, designed around, invalidated by third parties, or effectively prevent others from commercializing competitive technologies, products or product candidates.
−Removed: Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications or maintain and/or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner, including delays as a result of the COVID-19 pandemic impacting our operations.
+Added: Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications or maintain and/or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner.
It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection.
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If such an event were to occur, it could have a material adverse effect on our business.
−Removed: In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees that have citizenship or nationality in, are registered in, or have predominately primary place of business or profit-making activities in the United States and other countries that
−Removed: Russia has deemed unfriendly without consent or compensation.
+Added: In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees that have citizenship or nationality in, are registered in, or have predominately primary place of business or profit-making activities in the United States and other countries that Russia has deemed unfriendly without consent or compensation.
Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia.
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For example, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates or their intended uses, and as a result the impact of such third-party intellectual property rights upon the patentability of our own patents and patent applications, as well as the impact of such third-party intellectual property upon our freedom to operate, is highly uncertain.
−Removed: 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: Patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions.
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There may be prior art of which we are not aware that may affect the patentability of our patent claims or, if issued, affect the validity or enforceability of a patent claim.
−Removed: Even if the patents do issue based on our patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
+Added: Even if the patents do issue based on our patent applications, third parties
+Added: may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
Furthermore, even if they are unchallenged, patents in our portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.
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For example, we have licensed a cell line to manufacture these products under an agreement with WuXi Biologics.
−Removed: If we fail to comply with the obligations under our license agreements, including as a result of COVID-19 impacting our operations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and our licensors may have the right to terminate the license.
+Added: If we fail to comply with the obligations under our license agreements or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and our licensors may have the right to terminate the license.
If our license agreements are terminated, we may experience significant delays, difficulties, and costs in developing new cell lines and identifying an alternative source to manufacture components of our candidate products covered by our agreements and those being tested or approved in combination with such products.
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In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
−Removed: Moreover, some of our owned patent applications or future patents may be co-owned with third parties.
+Added: Moreover, some of our owned patent applications and patents may be co-owned with third parties.
If we are unable to obtain an exclusive license to any such third-party co-owners’
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In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the market price of our common stock.
−Removed: Such litigation or proceedings could substantially increase our operating losses and reduce the
−Removed: resources available for development activities or any future sales, marketing or distribution activities.
+Added: Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.
We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
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We are currently aware of a third-party European patent that may cover our products.
−Removed: However, we do not plan to launch any product in Europe before the expiration of such patent.
+Added: However, we do not plan to launch any product in the European Union before the expiration of such patent.
Third parties may assert infringement claims against us based on existing or future intellectual property rights.
Proving invalidity may be difficult.
−Removed: For example, in the United States, proving invalidity in court requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.
+Added: For example, in the United States, proving invalidity in court requires a showing of clear and convincing evidence to overcome the
+Added: presumption of validity enjoyed by issued patents.
If we are found to infringe a third-party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing candidate product or product.
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fees if we are found to have willfully infringed a patent.
−Removed: A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, and could divert the time and attention of our technical personnel and management,
−Removed: cause development delays, and/or require us to develop non-infringing technology, which may not be possible on a cost-effective basis, any of which could materially harm our business.
+Added: A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, and could divert the time and attention of our technical personnel and management, cause development delays, and/or require us to develop non-infringing technology, which may not be possible on a cost-effective basis, any of which could materially harm our business.
In the event of a successful claim of infringement against us, we may have to pay substantial monetary damages, including treble damages and attorneys’
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To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.
−Removed: Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.
+Added: Our pending patent applications cannot be enforced against third parties
+Added: practicing the technology claimed in such applications unless and until a patent issues from such applications.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both.
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While we may litigate to defend ourselves against these claims, even if we are successful, litigation could result in substantial costs and could be a distraction to management.
−Removed: If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to our product candidates, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers.
+Added: If our defenses to these claims fail, in addition to requiring us to pay monetary
+Added: damages, a court could prohibit us from using technologies or features that are essential to our product candidates, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers.
Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.
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We may need to share our proprietary information, including trade secrets, with future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
−Removed: Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third-party, we would have no right to prevent them from using that technology or
−Removed: information to compete with us.
+Added: Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third-party, we would have no right to prevent them from using that technology or information to compete with us.
If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would be harmed.
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If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
−Removed: Such an outcome could have a material adverse effect on our business.
+Added: Such an outcome
+Added: could have a material adverse effect on our business.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
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The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names.
−Removed: If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, it may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
+Added: If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, it
+Added: may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
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The market price for our common stock may be influenced by numerous factors, many of which are beyond our control, including:
−Removed: adverse results or delays in preclinical studies or future clinical trials;
+Added: adverse results or delays in preclinical studies or clinical trials;
results from our future clinical trials with our future product candidates or of our competitors;
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political uncertainty and/or instability in the United States;
−Removed: the ongoing and future impact of the COVID-19 pandemic;
+Added: the future impact of a resurgence of the COVID-19 pandemic or other health epidemic or pandemic;
any other factors discussed in this Quarterly Report.
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The price of our common stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, or if there is a large number of shares of our common stock available for sale and the market perceives that sales will occur.
−Removed: As of September 30, 2022, we had 41,663,029 outstanding shares of common stock.
+Added: As of March 31, 2023, we had 41,833,315 outstanding shares of common stock.
Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
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Pursuant to our 2021 Equity Incentive Plan (2021 Plan), we are authorized to grant stock options and other equity-based awards to our employees, directors and consultants.
−Removed: The number of shares of our common stock reserved for issuance under our 2021 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to the lesser of (i) 5% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase;
+Added: The number of shares of our common stock reserved for issuance under our 2021 Plan automatically increases on January 1 of each calendar year, through January 1, 2031, in an amount equal to the lesser of (i) 5% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase;
or (ii) a lesser number of shares determined by our board of directors prior to the applicable January 1st.
−Removed: In addition, pursuant to our 2021 Employee Stock Purchase Plan, the number of shares of our common stock reserved for issuance automatically increases on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase, and (ii) 932,000 shares;
+Added: In addition, pursuant to our 2021 Employee Stock Purchase Plan, the number of shares of our common stock reserved for issuance automatically increases on January 1 of each calendar year, through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase, and (ii) 932,000 shares;
provided that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii).
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(v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware;
−Removed: and (vi) any action asserting a claim
−Removed: against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
+Added: and (vi) any action asserting a claim against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
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To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation and our amended and restated bylaws provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, including any complaint against the underwriters of any offering giving rise to such claim.
−Removed: While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
+Added: While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the
+Added: exclusive forum provisions.
In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation and our amended and restated bylaws.
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We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.
−Removed: Company responsibilities required by the Sarbanes-Oxley Act include, among other things, that we maintain
−Removed: corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures.
+Added: Company responsibilities required by the Sarbanes-Oxley Act include, among other things, that we maintain corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
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We are not currently required to make a formal assessment of the effectiveness of our internal control over financial reporting under the SEC rules that implement Section 404 of the Sarbanes-Oxley Act.
−Removed: As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second Annual Report on Form 10-K.
+Added: We are also required to provide an annual management report on the effectiveness of our disclosure controls and procedures over financial reporting.
If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, investors could lose confidence in our reported financial information and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
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Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us.
−Removed: For example, the Biden administration and Congress have proposed various U.S.
−Removed: federal tax law changes, which if enacted could have a material impact on our business, cash flow, financial condition or results of operations.
+Added: For example, the Tax Act, the Coronavirus Aid, Relief, and Economic Security Act and the Inflation Reduction Act enacted many significant changes to the U.S.
+Added: Effective January 1, 2022, the Tax Act eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States.
+Added: Although there have been legislative proposals to repeal or defer the capitalization requirement to later years, there can be no assurance that the provision will be repealed or otherwise modified.
+Added: Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation
+Added: may affect us, and certain aspects of such legislation could be repealed or modified in future legislation.
In addition, it is uncertain if and to what extent various states will conform to federal tax laws.
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Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.*
−Removed: As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
+Added: As a result of disruptions and changes in the macro environment, including those resulting from the COVID-19 pandemic and actions taken to slow its spread, bank failures, and geo-political actions such as the United States and foreign government actions related to Russia’s invasion of Ukraine, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
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If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
−Removed: Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans.
+Added: Failure to secure any necessary financing in a timely manner and on favorable terms or failure to access to our liquidity within the U.S.
+Added: banking system could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans.
In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.
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We are increasingly dependent upon information technology systems, infrastructure and data to operate our business.
−Removed: In the ordinary course of business, we may process confidential and sensitive information, including personal data (such as health-related data), intellectual property, and trade secrets (collectively, sensitive information).
+Added: In the ordinary course of business, we Process proprietary, confidential, and sensitive information, including personal information (such as health-related data), intellectual property, and trade secrets (collectively, sensitive information).
It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such sensitive information.
−Removed: We also have outsourced elements of our operations to third parties in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.
−Removed: Our ability to monitor these third parties’
−Removed: information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: We may share or receive sensitive information with or from third parties.
−Removed: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
−Removed: While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
−Removed: Cyber-attacks, malicious internet-based activity, online and offline fraud, and similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
+Added: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,”
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During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
−Removed: We and the third parties upon which we rely may be subject to a variety of evolving threats, including, but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result
−Removed: of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
+Added: We and the third parties upon which we rely are subject to a variety of evolving threats, including, but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
Severe ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’
−Removed: supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems or the third-party information technology systems that support us and our services.
−Removed: Additionally, the COVID-19 pandemic and our remote workforce poses increased risks to our information technology systems and data, as more of our employees work from home, while in transit and in public locations, utilizing network connections, computers and devices outside our premises or network.
+Added: Additionally, the COVID-19 pandemic and our remote workforce poses increased risks to our information technology systems and data, as more of our employees work from home, while in transit and in public locations, utilizing network connections, computers and devices outside our
+Added: premises or network.
Future or past business transactions (such as acquisitions or integrations) could also expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’
systems and technologies.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption.
−Removed: A security incident or other interruption could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information.
+Added: Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: We rely on third-party service providers and technologies to operate critical business systems and have outsourced elements of our operations to third parties in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.
+Added: Our ability to monitor these third parties’
+Added: information security practices is limited, and these third parties may not have adequate information security measures in place.
+Added: We may share or receive sensitive information with or from third parties.
+Added: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
+Added: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’
+Added: infrastructure in our supply chain or our third-party partners’
+Added: supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems or the third-party information technology systems that support us and our services.
+Added: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to conduct our business operations.
For example, a security incident could result in a material disruption of our programs and the development of our product candidates could be delayed.
−Removed: In addition, the loss of pre-clinical study data or future clinical trial data for our product candidates could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data.
+Added: In addition, the loss of preclinical study data or clinical trial data for our product candidates could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
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While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
−Removed: We may be unable in the future to detect vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.
−Removed: Despite our efforts to identify and remediate vulnerabilities, if any, in our information technology systems, our efforts may not be successful.
+Added: We take steps to detect and remediate vulnerabilities, but we may not be able in the future to detect and remediate all vulnerabilities in our information technology systems because such threats and techniques change frequently and are often sophisticated in nature Therefore, such vulnerabilities may not be detected until after a security incident has occurred.
Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
−Removed: Applicable data privacy and security obligations may require us to notify relevant stakeholders, including individuals and data protection authorities, of security incidents.
+Added: Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents, including individuals and data protection authorities.
Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.
−Removed: If we (or a third-party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences.
−Removed: These consequences may include:
−Removed: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
+Added: If we (or a third-party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
additional reporting requirements and/or oversight;
−Removed: restrictions on processing sensitive information (including personal data);
+Added: restrictions on processing sensitive information (including personal information);
litigation (including class claims);
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If these earthquakes, fires, other natural disasters, terrorism and similar unforeseen events beyond our control prevented us from using all or a significant portion of our headquarters or research facility, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
−Removed: We do not have a disaster recovery or
−Removed: business continuity plan in place and may incur substantial expenses as a result of the absence or limited nature of our internal or third-party service provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.
+Added: We do not have a disaster recovery or business continuity plan in place and may incur substantial expenses as a result of the absence or limited nature of our internal or third-party service provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of
+Added: earthquake insurance, could have a material adverse effect on our business.
Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events.
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Further, the legal systems of certain countries particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals or biologics, 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.
−Removed: Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims
+Added: 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.
We may not prevail in any such lawsuits that we initiate and the damages and other remedies awarded, if any, may not be commercially meaningful.
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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.