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The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this Form 10-K and those we may make from time to time.
−Removed: You should carefully consider the risks described below, in addition to the other information contained in this Form 10-K, before making an investment decision.
+Added: You should carefully consider the risks described below, in addition to the other information contained in this Form 10-K, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before making an investment decision.
Our business, financial condition or results of operations could be harmed by any of these risks.
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Additional risks not presently known to us, or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.
+Added: Some of the statements in the following risk factors constitute forward-looking statements.
+Added: Please see the section titled “Special Note Regarding Forward-Looking Statements.”
Risks Related to Our Finances and Capital Requirements
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We have a limited operating history.
−Removed: We have focused primarily on in-licensing and developing our product candidates, with the goal of supporting regulatory approval for these product candidates.
−Removed: We have incurred losses since our inception in March 2015 and have an accumulated deficit of $329.4 million as of December 31, 2022.
+Added: We have focused primarily on organizing, acquiring, developing and securing our proprietary technology and identifying and obtaining preclinical data or clinical data for various product candidates, with the goal of supporting regulatory approval for these product candidates.
+Added: We have incurred losses since our inception in March 2015.
+Added: Our net losses were $51.6 million and $77.5 million for the years ended December 31, 2023 and 2022, respectively, and we had an accumulated deficit of $381.0 million as of December 31, 2023.
We expect to continue to incur significant operating losses for the foreseeable future.
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Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
−Removed: Our failure to become and remain profitable would depress the value of the Company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or even continue our operations.
−Removed: A decline in the value of the Company could also cause you to lose all or part of your investment.
+Added: Our failure to become and remain profitable would depress the value of our Company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or even continue our operations.
+Added: A decline in the value of our Company could also cause you to lose all or part of your investment in our Securities.
There is substantial doubt regarding our ability to continue as a going concern.
−Removed: We will need to raise additional funding, which may not be available on acceptable terms to the Company, or at all.
−Removed: Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
+Added: We will need to raise additional funding, (which may not be available on acceptable terms to us, or at all) and/or delay, limit or terminate our product development efforts or other operations.
We are currently advancing our programs in hematologic cancers, solid tumors and rare genetic diseases through clinical development.
−Removed: Developing and commercializing CAR T and gene therapy products is expensive, and we do not expect to generate meaningful product revenues in the foreseeable future until we obtain marketing approval for products in the United States and following any potential commercial launch.
+Added: Developing and commercializing CAR T and gene therapy products is expensive, and we do not expect to generate meaningful product
+Added: revenues in the foreseeable future until we obtain marketing approval for products in the United States and following any potential commercial launch.
As of December 31, 2023, our cash and cash equivalents were $6.2 million.
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The sale of additional equity or convertible securities would dilute all of our stockholders.
−Removed: Our current and the potential for additional indebtedness would result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
+Added: Potential indebtedness, if incurred, would result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
−Removed: If we are unable to obtain funding on a timely basis, we may be required to further revise our business plan and strategy, which may result in us (i) significantly curtailing, delaying or discontinuing one or more of our research or development programs or the commercialization of any product candidates, (ii) selling certain of our assets (which could include our manufacturing facility) and/or (iii) may result in our being unable to expand our operations or otherwise capitalize on our business opportunities.
+Added: In addition, in order to address our current funding constraints, we may be required to further revise our business plan and strategy, which may result in us (i) further curtailing, delaying or discontinuing one or more of our research or development programs or the commercialization of any product candidates, (ii) selling certain of our assets and/or (iii) may result in our being unable to expand our operations or otherwise capitalize on our business opportunities.
+Added: Such actions may become necessary whether or not we are able to raise additional capital.
As a result, our business, financial condition, and results of operations could be materially affected.
−Removed: We are exposed to interest rate risk under our Term Loan with Runway, which could cause our debt service obligations to increase
−Removed: significantly.
−Removed: We are exposed to market risk from changes in interest rates.
−Removed: Our Term Loan with Runway bears a variable interest rate equal to the (i) 8.75% and (ii) the greater of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 0.50%.
−Removed: The Federal Reserve has recently raised, and may in the future further raise, interest rates to combat the effects of recent high inflation.
−Removed: An increase in interest rates by the Federal Reserve has and could in the future cause the prime rate to increase, which has and could in the future increase our debt service obligations.
−Removed: Significant increases in such obligations could have a negative impact on our financial position or operating results, including cash available for servicing our indebtedness, or result in increased borrowing costs in the future.
Our short operating history makes it difficult to evaluate our business and prospects.
−Removed: We have only been conducting operations since our incorporation in March 2015.
−Removed: Our operations to date have been limited to preclinical operations and the in-licensing of our product candidates.
+Added: We have been conducting operations only since our incorporation in March 2015.
+Added: Our operations to date have been limited.
We have not yet demonstrated an ability to successfully complete clinical trials, obtain regulatory approvals, manufacture a clinical scale or commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
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Accordingly, you should not rely upon the results of any past quarterly period as an indication of future operating performance.
−Removed: Our loan agreement requires us to meet certain funding conditions and operating conditions which place restrictions on our operating and financial flexibility.
−Removed: Our Term Loan with Runway, which we entered into in March 2022, contains a variety of affirmative and negative covenants, including required financial reporting, limitations on certain dispositions of assets, limitations on the incurrence of additional debt, limitations on the ability to pay cash dividends and other requirements.
−Removed: The Term Loan also subjects us to financial covenants in respect of minimum liquidity, pursuant to which we must maintain an unrestricted cash balance in an amount equal to or greater than the trailing five months of our operating cash flow.
−Removed: This covenant imposes significant operational constraints on us, and it will be difficult for us to continue to comply with the covenant absent remedial measures to reduce costs and/or raise additional capital.
−Removed: The Term Loan contains customary events of default, which include among others, non-payment of principal, violation of covenants, inaccuracy of representations and warranties, insolvency events, materials judgments, and certain regulatory-related events.
−Removed: These restrictions may adversely affect our ability to operate our business, finance our operations, engage in business activities or fully pursue our business strategies.
−Removed: To secure our performance of our obligations under this Term Loan, we granted a security interest in substantially all of our assets, other than certain intellectual property assets and certain other excluded collateral, to Runway.
−Removed: Our failure to comply with the covenants in the Term Loan, the occurrence of a material impairment in our prospect of repayment or in the perfection or priority of Runway’s lien on our assets, as determined by Runway, or the occurrence of certain other specified events could result in an event of default that, if not cured or waived, could result in the acceleration of all or a substantial portion of our debt, potential foreclosure on our assets and other adverse results.
−Removed: In the event of an acceleration of amounts due under the Term Loan as a result of an event of default, we may not have enough available cash or be able to raise additional funds through equity or debt financing to repay such indebtedness.
−Removed: Additionally, we are bound by certain negative covenants setting forth actions that are not permitted to be taken during the term of the Term Loan without consent of Runway, including, without limitation, incurring certain additional indebtedness, making certain asset dispositions, entering into certain mergers, acquisitions or other business combination transactions or incurring any non-permitted lien or other encumbrance on our assets.
−Removed: The foregoing prohibitions and constraints on our operations could result in our inability to:
−Removed: (i) acquire promising intellectual property or other assets on desired timelines or terms;
−Removed: (ii) reduce costs by disposing of assets or business segments no longer deemed advantageous to retain;
−Removed: (iii) stimulate further corporate growth or development through the assumption of additional debt;
−Removed: or (iv) enter into other arrangements that necessitate the imposition of a lien on corporate assets.
We will require substantial additional funding which may not be available to us on acceptable terms, or at all.
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We will need to significantly increase our spending to advance the preclinical and clinical development of our product candidates and launch and commercialize any product candidates for which we may receive regulatory approval, including building our own commercial organizations to address certain markets.
−Removed: We will require additional capital for the further development and, if approved, commercialization of our product candidates, as well as to fund our other operating expenses and capital expenditures.
−Removed: As of December 31, 2022, we had $76.7 million in cash and restricted cash.
+Added: We will require substantial additional capital for the further development and, if approved, commercialization of our product candidates, as well as to fund our other operating expenses and capital expenditures.
+Added: As of December 31, 2023, we had $7.0 million in cash and restricted cash and have not generated positive cash flows from operations.
We cannot provide any assurance that we will be able to raise funds to complete the development of our product candidates.
Additionally, if we are unable to secure additional funding, it is likely that we will need to delay or terminate the development of certain product candidates;
−Removed: any such delay or
−Removed: termination, or the announcement of any such delay or termination, may impact our potential growth and have a material adverse effect on the value of our debt and equity securities.
−Removed: We cannot be certain that additional funding will be available on acceptable terms, or at all.
+Added: any such delay or termination, or the announcement of any such delay or termination, may impact our potential growth and have a material adverse effect on the value of our Securities.
+Added: In order to carry out our business plan and implement our strategy, we will need to obtain substantial additional financing and may choose to raise additional funds through strategic collaborations, licensing arrangements, public or private equity or debt financing, bank lines of credit, asset sales, government grants, or other arrangements.
+Added: We cannot be certain that additional funding will be available on acceptable
+Added: terms, or at all.
Additional funding may be more difficult to obtain, or may be more expensive, as a result of recent increases in inflation and interest rates in the U.S.
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Our future funding requirements will depend on many factors, including, but not limited to:
−Removed: ● the timing, design and conduct of, and results from, preclinical studies and clinical trials for our product candidates;
+Added: ● the scope, timing, design and conduct of, and results from, preclinical studies and clinical trials for our product candidates;
● the potential for delays in our efforts to seek regulatory approval for our product candidates, and any costs associated with such delays;
● the costs of establishing a commercial organization to sell, market and distribute our product candidates;
−Removed: ● the rate of progress and costs of our efforts to prepare for the submission of an NDA or BLA for any product candidates that we may in-license or acquire in the future, and the potential that we may need to conduct additional clinical trials to support applications for regulatory approval;
+Added: ● the rate of progress and costs of our efforts to prepare for the submission of a New Drug Application (“NDA”) or Biologics License Application (“BLA”) for any product candidates that we may in-license or acquire in the future, and the potential that we may need to conduct additional clinical trials to support applications for regulatory approval;
● the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights associated with our product candidates, including any such costs we may be required to expend if our licensors are unwilling or unable to do so;
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● the success of the commercialization of one or more of our product candidates, if approved;
−Removed: Future capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products and technologies, although we currently have no commitments or agreements relating to any of these types of transactions.
−Removed: In order to carry out our business plan and implement our strategy, we anticipate that we will need to obtain additional financing from time to time and may choose to raise additional funds through strategic collaborations, licensing arrangements, public or private equity or debt financing, bank lines of credit, asset sales, government grants, or other arrangements.
−Removed: We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all.
−Removed: Furthermore, any additional equity or equity-related financing may be dilutive to our stockholders, and debt or equity financing, if available, may subject us to restrictive covenants and significant interest costs.
−Removed: If we obtain funding through a strategic collaboration or licensing arrangement, we may be required to relinquish our rights to certain of our product candidates or marketing territories.
−Removed: Our inability to raise capital when needed would harm our business, financial condition and results of operations, and could cause our stock value to decline or require that we wind down our operations altogether.
+Added: ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
+Added: ● macroeconomic factors such as inflationary pressures, rising interest rates, liquidity constraints, failures and instability in U.S.
+Added: and international financial banking systems, supply disruptions due to political unrest, conflict and war or other factors, and pandemics.
Under current SEC regulations, if at the time we file our Annual Report on Form 10-K our public float is less than $75 million, and for so long as our public float remains less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to an aggregate of one-third of our public float, which is referred to as the “baby shelf rules.” SEC regulations permit us to use the highest closing sales price of our common stock (or the average of the last bid and last ask prices of our common stock) on any day within 60 days of sales under the registration statement to calculate our public float.
−Removed: As of the date of this Annual Report on Form 10-K, our public float was less than $75 million.
−Removed: As a result, for sales following the date of this Annual Report on Form 10-K, and until we again have a public float with a value in exceeds of $75 million, if ever, we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.
+Added: As of the date of this Form 10-K, our public float was less than $75 million.
+Added: As a result, for sales following the date of this Form 10-K, and until we again have a public float with a value in exceeds of $75 million, if ever, we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.
If our public float decreases, the amount of securities we may sell under our Form S-3 shelf registration statements will also decrease.
+Added: Our inability to raise capital when needed would harm our business, financial condition and results of operations, and could cause our stock value to decline or require that we wind down our operations altogether.
Raising additional capital, including through lending arrangements, may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.
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We will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
−Removed: As a public company, we incur significant legal, accounting and other expenses under the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, and the rules of the Nasdaq Stock Exchange.
+Added: As a public company, we incur significant legal, accounting and other expenses under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as rules subsequently implemented by the SEC, and the rules of the Nasdaq Stock Exchange.
These rules impose various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and appropriate corporate governance practices.
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For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
−Removed: As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
+Added: As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board, our Board committees or as executive officers.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures.
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If a material weakness is identified, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources, costly litigation or a loss of public confidence in our internal controls, which could have an adverse effect on the market price of our stock.
−Removed: Compliance with the Sarbanes-Oxley Act will require substantial financial and management resources and may increase the time and costs of completing an acquisition.
−Removed: A business that we identify as a potential acquisition target may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls.
−Removed: The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
−Removed: Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations.
−Removed: Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our securities.
+Added: We are a "smaller reporting company," and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
+Added: We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.
+Added: Smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors.
+Added: We have elected to take advantage of certain of the reduced reporting obligations available to us.
+Added: We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.
+Added: If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be reduced or more volatile.
Our ability to use our pre-change NOLs and other pre-change tax attributes to offset post-change taxable income or taxes may be subject to limitation.
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● developing our technology platform;
−Removed: ● identifying, developing, formulating, manufacturing and commercializing product candidates;
+Added: ● identifying, developing, formulating, manufacturing and, if approved, commercializing product candidates;
● entering into successful licensing and other arrangements with product development partners;
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● maintaining patent protection and regulatory exclusivity for our product candidates;
−Removed: Our operations have been limited to organizing the Company, acquiring, developing and securing our proprietary technology and identifying and obtaining preclinical data or clinical data for various product candidates.
−Removed: These operations provide a limited basis for you to assess our ability to continue to develop our technology, identify product candidates, develop and commercialize any product candidates we are able to identify and enter into successful collaborative arrangements with other companies, as well as for you to assess the advisability of investing in our securities.
+Added: ● raising additional required capital on acceptable terms.
+Added: Our operations have historically been limited to organizing, acquiring, developing and securing our proprietary technology and identifying and obtaining preclinical data or clinical data for various product candidates.
+Added: These operations provide a limited basis to assess our ability to continue to develop our technology, identify product candidates, develop and commercialize any product candidates we are able to identify and enter into successful collaborative arrangements with other companies, as well as for you to assess the advisability of investing in our securities.
Each of these requirements will require substantial time, effort and financial resources.
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or any other jurisdiction before we receive regulatory approval from the FDA or comparable foreign regulatory authority, respectively, and we may never receive such regulatory approval for any of our product candidates.
−Removed: Our future growth depends in part on our ability to identify and acquire or in-license products, and if we do not successfully identify and acquire or in-license related product candidates or integrate them into our operations , we may have limited growth opportunities .
−Removed: An important part of our business strategy is to continue to develop a pipeline of product candidates by acquiring or in-licensing products, businesses or technologies that we believe are a strategic fit with our focus on ex vivo lentiviral gene therapy for rare genetic diseases and on novel combinations of CAR T cells with immuno-oncology antibodies, other biologics, and small molecule kinase inhibitors.
−Removed: Future in-licenses or acquisitions, however, may entail numerous operational and financial risks, including, but not necessarily limited to:
−Removed: ● exposure to unknown liabilities;
−Removed: ● disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies;
−Removed: ● difficulty or inability to secure financing to fund development activities for such acquired or in-licensed technologies in the current economic environment;
−Removed: ● incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions;
−Removed: ● higher than expected acquisition and integration costs;
−Removed: ● increased amortization expenses;
−Removed: ● difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;
−Removed: ● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;
−Removed: ● inability to retain key employees of any acquired businesses.
−Removed: We have limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our current infrastructure.
−Removed: In particular, we may compete with larger pharmaceutical companies and other competitors in our efforts to establish new collaborations and in-licensing opportunities.
−Removed: These competitors may have access to greater financial resources than us and may have greater expertise in identifying and evaluating new opportunities.
−Removed: Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts.
Our approach to the development of our product candidates is unproven, and we do not know whether we will be able to develop any products of commercial value .
−Removed: Our products candidates are emerging technologies and, consequently, it is conceivable that such technologies may ultimately fail to develop into commercially viable therapies to treat human patients with cancer or other diseases.
+Added: Our product candidates are emerging technologies and, consequently, it is conceivable that such technologies may ultimately fail to develop into commercially viable therapies to treat human patients with cancer or other diseases.
One of the reasons for the lack of commercial viability could be our inability to obtain regulatory approval for such technologies.
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We have concentrated much of our research and development efforts on CAR T technology, and our future success is highly dependent on the successful development of T cell immunotherapies in general and our CAR T technology and product candidates in particular.
−Removed: Because CAR T is a new approach to cancer immunotherapy and cancer treatment generally, developing and commercializing our product candidates subjects us to a number of challenges, including, but not necessarily limited to:
+Added: Because CAR T is a relatively new approach to cancer immunotherapy and cancer treatment generally, developing and commercializing our product candidates subjects us to a number of challenges, including, but not necessarily limited to:
● obtaining regulatory approval from the FDA and other regulatory authorities that may have very limited experience with the commercial development of genetically modified T cell therapies for cancer;
● developing and deploying consistent and reliable processes for engineering a patient’s T cells ex vivo and infusing the engineered T cells back into the patient;
−Removed: ● conditioning patients with chemotherapy in conjunction with delivering each of our products, which may increase the risk of adverse side effects of our products;
−Removed: ● educating medical personnel regarding the potential side effect profile of each of our products;
−Removed: ● developing processes for the safe administration of these products, including long-term follow-up for all patients who receive our product candidates;
+Added: ● conditioning patients with chemotherapy in conjunction with delivering each of our products, which may increase the risk of adverse side effects of our product candidates;
+Added: ● educating medical personnel regarding the potential side effect profile of each of our product candidates;
+Added: ● developing processes for the safe administration of these product candidates, including long-term follow-up for all patients who receive our product candidates;
● sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process our product candidates;
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If we do not accurately and/or effectively evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
−Removed: We are a "smaller reporting company,"
−Removed: and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
−Removed: We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.
−Removed: Smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information or risk factors.
−Removed: We have elected to take advantage of certain of the reduced reporting obligations available to us.
−Removed: We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.
−Removed: If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be reduced or more volatile.
Risks Inherent in Drug Development and Commercialization
Delays in the commencement or conduct of our clinical trials could result in increased costs and delay our ability to pursue regulatory approval.
+Added: Clinical trials are expensive and can take many years to complete, and the outcome is inherently uncertain.
+Added: We cannot guarantee that any clinical trials will be conducted as planned or will be completed on schedule, if at all.
+Added: A failure of one or more clinical trials can occur at any stage and our future clinical trials may not be successful.
The commencement or conduct of clinical trials can be delayed for a variety of reasons, including, but not necessarily limited to, delays in:
−Removed: ● obtaining regulatory approval to commence a clinical trial;
+Added: ● commencing a clinical trial as a result of regulatory authority action;
● identifying, recruiting and training suitable clinical investigators;
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In addition, many of the factors that cause, or lead to, a delay in the commencement of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate.
−Removed: Suspensions or delays in the completion of clinical testing could result in increased costs and delay or prevent our ability to complete development of that product or generate product revenues.
+Added: Suspensions or delays in the completion of clinical testing could result in increased costs and delay or prevent our ability to complete development of that product candidate or generate product revenues, if approved.
Once a clinical trial has begun, patient recruitment and enrollment may be slower than we anticipate due to the nature of the clinical trial plan, the proximity of patients to clinical sites, the eligibility criteria for participation in the study or other factors.
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Pharmaceutical development has inherent risks.
−Removed: We will be required to demonstrate through well-controlled clinical trials that product candidates are effective with a favorable benefit-risk profile for use in their target indications before seeking regulatory approvals for their
−Removed: commercial sale.
+Added: We will be required to demonstrate through well-controlled clinical trials that product candidates are effective with a favorable benefit-risk profile for use in their target indications before seeking regulatory approvals for their commercial sale.
Success in early clinical trials does not mean that later clinical trials will be successful, as product candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressed through initial clinical testing.
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The regulatory authority may also require the label to contain warnings, contraindications, or precautions that limit the commercialization of the product.
−Removed: In addition, the DEA (or foreign equivalent) may classify one or more of our product candidates in scheduling under the Controlled Substances Act (or its foreign equivalent) that could impede such product’s commercial viability.
Any of these scenarios could impact the commercial prospects for one or more of our current or future product candidates.
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With respect to foreign markets, approval procedures vary among countries and, in addition to the aforementioned risks, can involve additional product testing, administrative review periods and agreements with pricing authorities.
−Removed: In addition, rapid drug and biological development during the COVID-19 pandemic has raised questions about the safety and efficacy of certain marketed pharmaceuticals and may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new pharmaceuticals based on
−Removed: safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals.
+Added: In addition, rapid drug and biological development during the COVID-19 pandemic has raised questions about the safety and efficacy of certain marketed pharmaceuticals and may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new pharmaceuticals based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals.
Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us from commercializing our product candidates.
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In addition, our failure to follow FDA laws, regulations and guidelines relating to promotion and advertising may cause the FDA to suspend or withdraw an approved product from the market, request a recall or institute fines or penalties, or could result in disgorgement of money, operating restrictions, corrective advertising, injunctions or criminal prosecution, any of which could harm our business.
−Removed: If any of our product candidates are approved and we or our contract manufacturer(s) fail to produce the product, or components of the product, in the volumes that we require on a timely basis, or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the commercialization of our product candidates or be unable to meet market demand, and may lose potential revenues.
+Added: If any of our product candidates are approved and we or our contract manufacturer(s) fail to produce the product, or components of the product, in the volumes that we require on a timely basis, or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the commercialization of our product candidates, if approved, or be unable to meet market demand, and may lose potential revenues.
The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls, and the use of specialized processing equipment.
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Any manufacturing defect or error discovered after products have been produced and distributed could result in even more significant consequences, including costly recalls, re-stocking costs, damage to our reputation and potential for product liability claims.
−Removed: If the contract manufacturers upon whom we may rely to manufacture one or more of our product candidates, and any future product candidate we may in-license, fails to deliver the required commercial quantities on a timely basis at commercially reasonable prices, we would likely be unable to meet demand for our products and we would lose potential revenues.
+Added: If the contract manufacturers upon whom we may rely to manufacture one or more of our product candidates, and any future product candidate we may in-license, fails to deliver the required commercial quantities on a timely basis at commercially reasonable prices, we would likely be unable to meet demand for our approved product and we would lose potential revenues.
If serious adverse or unacceptable side effects are identified during the development of one or more of our product candidates or any future product candidate, we may need to abandon or limit the development of some of our product candidates.
If one or more of our product candidates or any future product candidate are associated with undesirable side effects or adverse events in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
−Removed: In our industry, many compounds that initially showed promise in early stage testing have later
−Removed: been found to cause serious adverse events that prevented further development of the compound.
+Added: In our industry, many compounds that initially showed promise in early stage testing have later been found to cause serious adverse events that prevented further development of the compound.
In the event that our clinical trials reveal a high or unacceptable severity and prevalence of adverse events, our trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development or deny approval of one or more of our product candidates or any future product candidate for any or all targeted indications.
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● regulatory authorities may suspend or withdraw their approval of the product, and/or require it to be removed from the market;
−Removed: ● we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product;
+Added: ● we may be required to recall a product, be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product;
● our reputation may suffer.
−Removed: Any of these events could prevent us from achieving or maintaining market acceptance of any of our product candidates or any future product candidate or could substantially increase our commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues, or any revenues, from its sale.
+Added: Any of these events could prevent us from achieving or maintaining market acceptance of any of our product candidates or any future product candidate or could substantially increase our commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues, or any revenues, from their sale.
Even if one or more of our product candidates receives regulatory approval, it and any other products we may market will remain subject to substantial regulatory scrutiny.
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The FDA and other applicable regulatory authorities closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling.
−Removed: The FDA and other applicable regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use and if we do not market our products for only their approved indications, we may be subject to enforcement action for off-label marketing.
−Removed: Violations of the FDCA relating to the promotion of prescription drugs may lead to investigations, civil claims, and/or criminal charges alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.
+Added: The FDA and other applicable regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use and if we do not market any approved product for only their approved indications, we may be subject to enforcement action for off-label marketing.
+Added: Violations of the Federal Food, Drug and Cosmetics Act (“FDCA”) relating to the promotion of prescription
+Added: drugs may lead to investigations, civil claims, and/or criminal charges alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:
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● requirements to conduct post-marketing studies or clinical trials;
−Removed: ● warning letters, untitled letters, import alerts, and/or inspection observations;
+Added: ● warning letters, untitled letters, Form 483s, import alerts, and/or inspection observations;
● withdrawal of the products from the market;
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These events have resulted in the withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and the establishment of risk management programs.
−Removed: The Food and Drug Administration Amendments Act of 2007, or FDAAA, grants significant expanded authority to the FDA, much of which is aimed at improving the safety of drug products before and after approval.
+Added: The Food and Drug Administration Amendments Act of 2007, (“FDAAA”), grants significant expanded authority to the FDA, much of which is aimed at improving the safety of drug products before and after approval.
In particular, the new law authorizes the FDA to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety information and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.
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If the FDA requires us to conduct additional preclinical studies or clinical trials prior to approving any of our product candidates, our ability to obtain approval of this product candidate will be delayed.
−Removed: If the FDA requires us
−Removed: to provide additional clinical or preclinical data following the approval of any of our product candidates, the indications for which this product candidate is approved may be limited or there may be specific warnings or limitations on dosing, and our efforts to commercialize our product candidates may be otherwise adversely impacted.
+Added: If the FDA requires us to provide additional clinical or preclinical data following the approval of any of our product candidates, the indications for which this product candidate is approved may be limited or there may be specific warnings or limitations on dosing, and our efforts to commercialize our product candidates may be otherwise adversely impacted.
If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
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Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether.
−Removed: Enrollment delays in our clinical trials may result in increased development costs for our product candidates or future product candidates, which would cause the value of the Company to decline and limit our ability to obtain additional financing.
+Added: Enrollment delays in our clinical trials may result in increased development costs for our product candidates or future product candidates, which would cause the value of our Company to decline and limit our ability to obtain additional financing.
If our competitors develop treatments for any of our product candidates’ target indications and those competitor products are approved more quickly, marketed more successfully or demonstrated to be more effective, the commercial opportunity for our product candidate will be reduced or eliminated.
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If we are unable to demonstrate to physicians and payers that the key differentiating features of our product candidates translate to overall clinical benefit or lower cost of care, we may not be able to compete with generic alternatives.
−Removed: If any of our product candidates are successfully developed but do not achieve broad market acceptance among physicians, patients, healthcare payors and the medical community, the revenues that any such product candidates generate from sales will be limited.
+Added: If any of our product candidates are successfully developed but, if approved, do not achieve broad market acceptance among physicians, patients, healthcare payors and the medical community, the revenues that any such product candidates generate from sales will be limited.
Even if our product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors and the medical community.
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● the efficacy and safety as demonstrated in clinical trials;
−Removed: ● the timing of market introduction of such product candidate as well as competitive products;
+Added: ● the timing of market introduction of such approved product as well as competitive products;
● the clinical indications for which the product is approved;
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Market acceptance and sales of our product candidates in both domestic and international markets will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for any of our product candidates and may be affected by existing and future health care reform measures.
−Removed: Government and other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for new drugs and, as a result, they may not cover or provide adequate payment for our product candidates.
−Removed: These payors may conclude that our product candidates are less safe, less effective or less cost-effective than existing or future introduced products, and third-party payors may not approve our product candidates for coverage and reimbursement or may cease providing coverage and reimbursement for these product candidates.
+Added: Government and other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for new drugs and, as a result, they may not cover or provide adequate payment for our product candidates, if approved.
+Added: These payors may conclude that our product candidates are less safe, less effective or less cost-effective than existing or future introduced products, and third-party payors may not approve our product candidates, if approved, for coverage and reimbursement or may cease providing coverage and reimbursement for these product candidates.
Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data for the use of our products.
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To obtain reimbursement or pricing approval in some countries, we may be required to conduct additional clinical trials that compare the cost-effectiveness of our product candidates to other available therapies.
−Removed: If reimbursement of our product candidates is unavailable or limited in scope or amount in a particular country, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability of our products in such a country.
+Added: If reimbursement of our product candidates, if approved, is unavailable or limited in scope or amount in a particular country, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability of our products in such a country.
If we are unable to establish sales, marketing and distribution capabilities or to enter into agreements with third parties to market and sell our product candidates, we may be unsuccessful in commercializing our product candidates, if they are approved.
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This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
−Removed: Factors that may inhibit our efforts to commercialize our products on our own include, but are not necessarily limited to:
+Added: Factors that may inhibit our efforts to commercialize our product candidates, if approved, on our own include, but are not necessarily limited to:
● our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
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● unforeseen costs and expenses associated with creating our own sales and marketing organization.
−Removed: We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate we may license or acquire and may have to limit their commercialization.
+Added: We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate we may license or acquire and, if approved, may have to limit their commercialization.
The use of one or more of our product candidates and any future product candidate we may license or acquire in clinical trials and the sale of any products for which we obtain marketing approval expose us to the risk of product liability claims.
−Removed: For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale.
+Added: For example, we may be sued if any product candidate we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, and, if approved, during marketing or sale.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties.
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● reduced resources of our management to pursue our business strategy;
−Removed: ● the inability to commercialize our product candidate or future product candidates.
+Added: ● the inability to commercialize our product candidate or future product candidates, if approved.
We will obtain limited product liability insurance coverage for any and all of our upcoming clinical trials.
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CAR T or other technologies we pursue may only be effective in combating specific types of cancer but not others.
−Removed: Even if one or more of our products proves to be an effective treatment against a given type of cancer, the number of patients suffering from such cancer may be small, in which case potential sales from a therapy designed to combat such cancer would be limited.
+Added: Even if one or more of our product candidates, if approved, proves to be an effective treatment against a given type of cancer, the number of patients suffering from such cancer may be small, in which case potential sales from a therapy designed to combat such cancer would be limited.
Our gene therapy product candidates are based on a novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval .
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We may also experience delays in developing a sustainable, reproducible and commercial-scale manufacturing process or transferring that process to commercial partners, which may prevent us from completing our clinical studies or commercializing our products on a timely or profitable basis, if at all.
−Removed: In addition, the clinical study requirements of the FDA, the European Medicines Agency, or EMA, and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products.
+Added: In addition, the clinical study requirements of the FDA, the European Medicines Agency (“EMA”), and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products.
The regulatory approval process for novel product candidates such as ours can be more expensive and take longer than for other, better known or more extensively studied pharmaceutical or other product candidates.
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Moreover, serious adverse events or developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other regulatory bodies to initiate a clinical hold on our clinical trials or otherwise change the requirements for approval of any of our product candidates.
−Removed: These regulatory review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of these treatment candidates or lead to significant post-approval studies, limitations or restrictions.
+Added: These regulatory review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and, if approved, commercialization of these treatment candidates or lead to significant post-approval studies, limitations or restrictions.
As we advance our product candidates, we will be required to consult with these regulatory and advisory groups and comply with applicable requirements and guidelines.
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Our reliance on these third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities.
−Removed: For example, we remain responsible for ensuring that each of our preclinical studies and clinical trials are conducted in accordance with the general investigational plan and protocols for the trial and for ensuring that our preclinical studies are conducted in accordance with good laboratory practices (“GLPs”) as appropriate.
+Added: For example, we remain responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the general investigational plan and protocols for the trial and for ensuring that our preclinical studies are conducted in accordance with good laboratory practices (“GLPs”) as appropriate.
Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices (“GCPs”) for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
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Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
−Removed: We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.
+Added: We also are required to register certain clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.
Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
The third parties with whom we have contracted to help perform our preclinical studies and/or clinical trials may also have relationships with other entities, some of which may be our competitors.
−Removed: If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our preclinical studies or clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
+Added: If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our preclinical studies or clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates, if approved.
If any of our relationships with these third-party CROs or site management organizations terminates, we may not be able to enter into arrangements with alternative CROs or site management organizations or to do so on commercially reasonable terms.
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As a result, delays could occur, which could compromise our ability to meet our desired development timelines.
−Removed: Though we carefully manage our relationships with our CROs or site management organizations, there can be no assurance that we will not encounter similar challenges or delays in the future.
−Removed: Forces beyond our control, including the impacts of COVID-19, could disrupt the ability of our third-party CROs, site management organizations, clinical data management organizations, medical institutions, and clinical investigators to conduct our preclinical studies and our clinical trials for our product candidates and for any future product candidate.
−Removed: As of the date of this Annual Report on Form 10-K, the Company has experienced a moderate impact on its long-term development timeline and its liquidity due to the worldwide spread of the COVID-19 virus.
We are currently reliant on COH, Fred Hutch, St.
−Removed: Jude, UAB, Mayo Clinic, and LUMC for a substantial portion of our research and development efforts and the early clinical testing of our product candidates.
+Added: Jude, the NIH, UAB, Mayo Clinic, and LUMC for a substantial portion of our research and development efforts and the early clinical testing of our product candidates.
A substantial portion of our research and development has been and will continue to be conducted by COH, Fred Hutch, St.
−Removed: Jude, UAB, LUMC and Mayo Clinic pursuant to a sponsored research agreement and/or clinical trial agreements with each of those parties.
+Added: Jude, UAB, Mayo Clinic and LUMC pursuant to a sponsored research agreement and/or clinical trial agreements with each of those parties.
As a result, our future success is heavily dependent on the results of research and development efforts of Dr.
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Markert and his team at UAB, of Dr.
−Removed: Staal and his team at LUMC, and of Dr.
−Removed: Pease and his team at Mayo Clinic.
+Added: Pease and his team at Mayo Clinic, and of Dr.
+Added: Staal and his team at LUMC.
We have limited control over the nature or timing of their research and limited visibility into their day-to-day activities, and as a result can provide little assurance that their efforts will be successful.
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We rely on our third-party manufacturers to produce or purchase from third-party suppliers the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials.
−Removed: Forces beyond our control, including the effects of the COVID-19 pandemic, could disrupt the global supply chain and impact our or our third-party manufacturers’ ability to obtain raw materials or other products necessary to manufacture our product candidates.
−Removed: There are a limited number of suppliers for raw materials and equipment that we use (or that are used on our behalf) to manufacture our drugs, and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials, and if approved, ultimately for commercial sale.
+Added: Forces beyond our control, including the continuing effects of the COVID-19 pandemic, could disrupt the global supply chain and impact our or our third-party manufacturers’ ability to obtain raw materials or other products necessary to manufacture our product candidates.
+Added: There are a limited number of suppliers for raw materials and equipment that we use (or that are used on our behalf) to manufacture our product candidates, and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials, and if approved, ultimately for commercial sale.
We do not have any control over the process or timing of the acquisition of these raw materials or equipment by our third-party manufacturers.
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We may incur added costs and delays in identifying and qualifying any replacement manufacturers.
−Removed: The DEA restricts the importation of a controlled substance finished drug product when the same substance is commercially available in the United States, which could reduce the number of potential alternative manufacturers for one or more of our product candidates.
Future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that may receive marketing approval on a timely and competitive basis.
1 unchanged sentence
Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.
−Removed: We rely on third parties to conduct all aspects of our lentiviral vector production and these third parties may not perform satisfactorily.
−Removed: We do not independently conduct our lentiviral vector production and we currently rely, and expect to continue to rely, on third parties with respect to the manufacture of these items.
−Removed: Our reliance on these third parties for manufacturing lentiviral vector reduces our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations and study protocols.
−Removed: For products that we develop and commercialize, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies is conducted in accordance with the study plan and protocols, and that our lentiviral vectors are manufactured in accordance with GMP as applied in the relevant jurisdictions.
−Removed: If these third parties do not successfully carry out their contractual duties, meet expected deadlines, conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, or manufacture our lentiviral vectors in accordance with GMP, we will not be able to complete, or may be delayed in completing, the preclinical and clinical studies and manufacturing process validation activities required to support future IND, market authorization application and BLA submissions and approval of our product candidates, or to support commercialization of our products, if approved.
+Added: We rely on third parties to conduct all aspects of our LV vector production and these third parties may not perform satisfactorily.
+Added: We do not independently conduct our LV vector production and we currently rely, and expect to continue to rely, on third parties with respect to the manufacture of these items.
+Added: Our reliance on these third parties for manufacturing LV vector reduces our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations and study protocols.
+Added: For products that we develop and commercialize, if approved, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies is conducted in accordance with the study plan and protocols, and that our LV vectors are manufactured in accordance with GMP as applied in the relevant jurisdictions.
+Added: If these third parties do not successfully carry out their contractual duties, meet expected deadlines, conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, or manufacture our LV vectors in accordance with GMP, we will not be able to complete, or may be delayed in completing, the preclinical and clinical studies and manufacturing process validation activities required to support future IND, market authorization application and BLA submissions and approval of our product candidates, or to support commercialization of our products, if approved.
Many of our agreements with these third parties contain termination provisions that allow these third parties to terminate their relationships with us at any time.
1 unchanged sentence
We may be forced to enter into an agreement with a different manufacturer, which we may not be able to do on reasonable terms, if at all.
−Removed: In some cases, the technical skills required to manufacture lentiviral vector for our drug product candidates may be unique or proprietary to the original manufacturer, and we may have difficulty or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.
−Removed: Any of these events could lead to clinical study delays or failure to obtain marketing approval or impact our ability to successfully commercialize our product or any future products.
+Added: In some cases, the technical skills required to manufacture LV vector for our drug product candidates may be unique or proprietary to the original manufacturer, and we may have difficulty or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.
+Added: Any of these events could lead to clinical study delays or failure to obtain marketing approval or impact our ability to successfully commercialize our product candidates or any future product candidates, if approved.
Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.
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A third party may hold intellectual property, including patent rights that are important or necessary to the development and commercialization of our products.
−Removed: It may be necessary for us to use the patented or proprietary technology of third parties, who may or may not be interested in granting such a license, to commercialize our products, in which case we would be required to obtain a license from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially.
+Added: It may be necessary for us to use the patented or proprietary technology of third parties, who may or may not be interested
+Added: in granting such a license, to commercialize our products, in which case we would be required to obtain a license from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially.
Collaborative relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.
2 unchanged sentences
Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position.
−Removed: In addition, there has been a significant number of recent business combinations
−Removed: among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.
+Added: In addition, there has been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.
Even if we successfully establish new collaborations, these relationships may never result in the successful development or commercialization of product candidates or the generation of sales revenue.
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We are subject to new legislation, regulatory proposals and managed care initiatives that may increase our costs of compliance and adversely affect our ability to market our products, obtain collaborators and raise capital.
−Removed: Legislative and regulatory changes to the healthcare systems of the United States and certain foreign countries could impact our ability to sell our products profitably.
−Removed: Several federal agencies including FDA, CMS and HHS, in addition to state and local governments regulate drug product development and marketing.
−Removed: In particular, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) changed the way Medicare covers and pays for pharmaceutical products by revising the payment methodology for many products reimbursed by Medicare, resulting in lower rates of reimbursement for many types of drugs, and added a prescription drug benefit to the Medicare program that involves commercial plans negotiating drug prices for their members.
−Removed: In addition, this law provided authority for limiting the number of drugs that will be covered in any therapeutic class.
−Removed: Cost reduction initiatives and other provisions of this law and future laws could decrease the coverage and price that we will receive for any approved products.
−Removed: While the MMA only applies to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates.
−Removed: Therefore, any limitations in reimbursement that results from the MMA may result in reductions in payments from private payors.
−Removed: Since 2003, there have been several other legislative and regulatory changes to the coverage and reimbursement landscape for pharmaceuticals.
−Removed: In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the “Affordable Care Act” or “ACA,” was enacted in 2010 and made significant changes to the United States’ healthcare system.
−Removed: The ACA and any revisions or replacements of that Act, any substitute legislation, and other changes in the law or regulatory framework could have a material adverse effect on our business.
−Removed: Among the provisions of the ACA of importance to our potential product candidates are:
−Removed: ● an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biological products, apportioned among these entities according to their market share in certain government healthcare programs;
−Removed: ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;
−Removed: ● expansion of healthcare fraud and abuse laws, including the federal False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for non-compliance;
−Removed: ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
−Removed: ● extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
−Removed: ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 138% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
−Removed: ● expansion of the entities eligible to enroll in the 340B Drug Pricing Program to include certain critical access hospitals, freestanding cancer hospitals, rural referral centers, and sole community hospitals, but exempting certain drugs from the ceiling price requirements for these covered entities;
−Removed: ● the new requirements under the federal Open Payments program and its implementing regulations;
−Removed: ● a new requirement to annually report drug samples that manufacturers and distributors provide to physicians;
−Removed: ● a new regulatory pathway for the approval of biosimilar biological products, all of which will impact existing government healthcare programs and will result in the development of new programs;
−Removed: ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
−Removed: The Supreme Court upheld the ACA in the main challenge to the constitutionality of the law in 2012.
−Removed: Specifically, the Supreme Court held that the individual mandate and corresponding penalty was constitutional because it would be considered a tax by the federal government.
−Removed: The Supreme Court also upheld federal subsidies for purchasers of insurance through federally facilitated exchanges in a decision released in June 2015.
−Removed: At the end of 2017, Congress passed the Tax Cuts and Jobs Act, which repealed the penalty for individuals who fail to maintain minimum essential health coverage as required by the ACA.
−Removed: The Bipartisan Budget Act of 2018, the “BBA,” which set government spending levels for Fiscal Years 2018 and 2019, revised certain provisions of the ACA.
−Removed: Specifically, beginning in 2019, the BBA increased manufacturer point-of-sale discounts off negotiated prices of applicable brand drugs in the Medicare Part D coverage gap from 50% to 70%, ultimately increasing the liability for brand drug manufacturers.
−Removed: Further, this mandatory manufacturer discount applied to biosimilars beginning in 2019.
−Removed: In the United States there is significant interest in containing healthcare costs and increasing scrutiny of pharmaceutical pricing practices.
−Removed: Congress has continually explored legislation intended to address the cost of prescription drugs.
−Removed: Notably, the major committees of jurisdiction in the Senate (Finance Committee, Health, Education, Labor and Pensions Committee, and Judiciary Committee), regularly evaluate and hold hearings on legislation intended to address various elements of the prescription drug supply chain and prescription drug pricing.
−Removed: Proposals include a significant overhaul of the Medicare Part D benefit design, efforts to cap the increase in drug prices, create drug price transparency, and efforts to allow the Secretary of the Department of Health and Human Services to negotiate drug prices with prescription drug manufacturers.
−Removed: While we cannot predict what proposals may ultimately become law, the elements under consideration could significantly change the landscape in which the pharmaceutical market operates.
−Removed: The former Trump administration took several regulatory steps and proposed numerous prescription drug cost control measures.
−Removed: Similarly, the Biden administration has identified promoting competition and lowering drug prices as a priority.
−Removed: State legislatures are similarly active in proposing and passing legislation and regulations aimed at controlling pharmaceutical and biological prices and drug cost transparency.
−Removed: There likely will continue to be legislative and regulatory proposals at the federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare products and services, including prescription drugs.
−Removed: We cannot predict the initiatives that may be adopted in the future.
−Removed: The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and prescription drugs may adversely affect:
−Removed: ● the demand for any products for which we may obtain regulatory approval;
−Removed: ● our ability to set a price that we believe is fair for our products;
−Removed: ● our ability to generate revenues and achieve or maintain profitability;
−Removed: ● the level of taxes that we are required to pay;
−Removed: ● the availability of capital.
−Removed: We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug.
+Added: In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system that could prevent or delay marketing approval of our product candidate, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
+Added: The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “PPACA” or collectively, the “ACA”), substantially regulates the way healthcare is financed by both governmental and private insurers in the United States.
+Added: Among other things, the ACA increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%;
+Added: required collection of rebates for drugs paid by Medicaid managed care organizations;
+Added: imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs;
+Added: implemented a new methodology under which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected;
+Added: expanded the eligibility criteria for Medicaid programs;
+Added: created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
+Added: and established a Center for Medicare and Medicaid Innovation (“CMMI”) at the CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
+Added: Since its enactment, there have been executive, judicial, and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
+Added: Drug pricing continues to be a subject of debate at the executive and legislative levels of U.S.
+Added: The American Rescue Plan Act of 2021 signed into law by President Biden on March 14, 2021 includes a provision that will eliminated the statutory cap on rebates drug manufacturers pay to Medicaid beginning in January 2024.
+Added: With the elimination of the rebate cap, manufacturers may be required to compensate states in an amount greater than what the state Medicaid programs pay for the drug.
+Added: Additionally, the Inflation Reduction Act of 2022 contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
+Added: Department of Health and Human Services that would require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on Part D drugs.
+Added: Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the Inflation Reduction Act of 2022.
+Added: The Inflation Reduction Act of 2022 could have the effect of reducing the prices we can charge and reimbursement we receive for our product candidates, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.
+Added: The effect of Inflation Reduction Act of 2022 on our business and the pharmaceutical industry in general is not yet known.
+Added: At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
+Added: We expect that additional federal, state, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
+Added: These and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any current or future product candidates.
Any reduction in reimbursement from Medicare or other government healthcare programs may result in a similar reduction in payments from private payors.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.
−Removed: Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
−Removed: We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations,
−Removed: guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be.
−Removed: In addition, increased scrutiny by the U.S.
−Removed: Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates, if approved.
+Added: Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for drugs.
+Added: We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance, or interpretations will be changed, or what the impact of such changes on the marketing approvals of any current or future product candidates, if any, may be.
+Added: In addition, increased Congressional scrutiny of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business or the business of our partners.
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Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business or the business of our partners.
−Removed: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
−Removed: government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough nonessential FDA employees and stop routine activities.
+Added: government has shut down several times in the past, and certain regulatory agencies, such as the FDA, have had to furlough nonessential FDA employees and stop routine activities.
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.
If the timing of FDA’s review and approval of new products is delayed, the timing of our or our partners’ development process may be delayed, which could result in delayed milestone revenues and materially harm our operations or business.
−Removed: The COVID-19 pandemic has caused considerable disruptions at the FDA, namely with respect to diverting the FDA’s attention and resources to facilitate vaccine development and ensure rapid review and emergency use authorization of vaccines intended to prevent COVID-19.
−Removed: Continued focus on COVID-19 countermeasures, and the reorganization and rededication for critical resources, both at the FDA and within similar governmental authorities across the world, may impact the ability of new products and services from being developed or commercialized in a timely manner.
Our current and future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
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The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to:
−Removed: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid;
−Removed: ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
−Removed: the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
−Removed: ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare
−Removed: clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
−Removed: ● the federal Open Payments program, which requires manufacturers of certain approved drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS, information related to “payments or other transfers of value” made to physicians, which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians and their immediate family members.
−Removed: Data collection began on August 1, 2013, with requirements for manufacturers to submit reports to CMS by June 30, 2014, and 90 days after the end each subsequent calendar year.
−Removed: Disclosure of such information was made by CMS on a publicly available website beginning in September 2014 and is annually updated;
−Removed: ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;
−Removed: state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers;
−Removed: state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
−Removed: and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
+Added: ● The federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either (1) the referral of an individual to a person for furnishing any item or service for which payment is available under a federal health care program,
+Added: or (2) the purchase, lease, order or recommendation thereof of any good, facility, service or item for which payment is available under a federal health care program;
+Added: The False Claims Act and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment from the federal government or making or using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;
+Added: The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program, obtaining money or property of the health care benefit program through false representations or knowingly and willingly falsifying, concealing or covering up a material fact, making false statements or using or making any false or fraudulent document in connection with the delivery of, or payment for, health care benefits or services;
+Added: HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;
+Added: The provision under the Affordable Care Act (“ACA”) commonly referred to as the Sunshine Act, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies to track and annually report to CMS payments and other transfers of value provided to physicians and teaching hospitals and certain ownership and investment interests held by physicians or their immediate family members in applicable manufacturers and group purchasing organizations;
+Added: applicable manufacturers are also required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives;
+Added: The Foreign Corrupt Practices Act (“FCPA”) generally prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S.
+Added: government official in order to influence official action, or otherwise obtain or retain business.
+Added: The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls.
+Added: Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities;
+Added: therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA;
+Added: State law equivalents of each of the above federal laws, such as the Anti-Kickback Statute and False Claims Act, and state laws concerning security and privacy of health care information, which may differ in substance and application from state-to-state thereby complicating compliance efforts.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.
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We cannot eliminate the risk of contamination or injury from these materials.
−Removed: Although we believe that the safety procedures for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.
+Added: Although we believe that the safety procedures for handling and disposing of these materials comply with the standards prescribed by these
+Added: laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.
In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.
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In addition, U.S.
−Removed: patent laws may change, which could prevent or limit us from filing patent applications or patent claims to protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents.
+Added: patent laws may change, which could prevent or limit us from filing patent applications or patent claims to
+Added: protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents.
We and our licensors also rely on trade secrets and proprietary know-how to protect product candidates.
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We depend on our licensors to protect the proprietary rights covering our product candidates and we have limited, if any, control over the amount or timing of resources that they devote on our behalf, or the priority they place on, maintaining patent rights and prosecuting patent applications to our advantage.
−Removed: Moreover, we have limited, if any, control over the strategies and arguments employed in the maintenance of
−Removed: patent rights and the prosecution of patent applications to our advantage.
+Added: Moreover, we have limited, if any, control over the strategies and arguments employed in the maintenance of patent rights and the prosecution of patent applications to our advantage.
Our licensors might become involved in disputes with one of their other licensees, and we or a portion of our licensed patent rights might become embroiled in such disputes.
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or provoke those parties to petition the USPTO to institute inter partes review against the asserted patents, which may lead to a finding that all or some of the claims of the patent are invalid.
−Removed: In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable,
−Removed: in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question or as a matter of public policy.
+Added: In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question or as a matter of public policy.
An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, rendered unenforceable, or interpreted narrowly.
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The interests of Fortress may not always coincide with the interests of other stockholders, and Fortress may take actions that advance its own interests and are contrary to the desires of our other stockholders.
−Removed: Moreover, this concentration of voting power may delay, prevent or deter a change in control of us even when such a change may be in the best interests of all stockholders, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of Mustang or our assets, and might affect the prevailing market price of our common stock.
+Added: Moreover, this concentration of voting power may delay, prevent or deter a change in control of us even when such a change may be in the best interests of all stockholders, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our Company or our assets, and might affect the prevailing market price of our common stock.
Fortress has the right to receive a significant grant of shares of our common stock annually which will result in the dilution of your holdings of common stock upon each grant, which could reduce their value.
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Fortress currently owns all outstanding shares of Class A Preferred Stock.
−Removed: These share issuances to Fortress and any other holder of Class A Preferred Stock will dilute your holdings in our common stock and, if the value of Mustang has not grown proportionately over the prior year, would result in a reduction in the value of your shares.
+Added: These share issuances to Fortress and any other holder of Class A Preferred Stock will dilute your holdings in our common stock and, if the value of our Company has not grown proportionately over the prior year, would result in a reduction in the value of your shares.
The Founders Agreement has a term of 15 years and renews automatically for subsequent one-year periods unless terminated by Fortress or upon a Change in Control (as defined in the Founders Agreement).
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We will have to be diligent to ensure that any such situation is resolved by independent parties.
−Removed: In particular, under the Management Services Agreement, Fortress and its affiliates are free to pursue opportunities which could potentially be of interest to Mustang, and they are not required to notify Mustang prior to pursuing such opportunities.
−Removed: Any such conflict of interest or pursuit by Fortress of a corporate opportunity independent of Mustang could expose us to claims by our investors and creditors and could harm our results of operations.
+Added: In particular, under the Management Services Agreement, Fortress and its affiliates are free to pursue opportunities which could potentially be of interest to us, and they are not required to notify us prior to pursuing such opportunities.
+Added: Any conflict of interest or pursuit by Fortress of such a corporate opportunity could expose us to claims by our investors and/or creditors and could harm our results of operations.
General Risks
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In the ordinary course of business, we collect, store, and transmit confidential information, including, but not limited to, information related to our intellectual property and proprietary business information, personal information, and other confidential information.
−Removed: It is critical that we maintain such confidential information in a manner that preserves its confidentiality and integrity.
+Added: It is critical that we maintain such
+Added: confidential information in a manner that preserves its confidentiality and integrity.
Furthermore, we have outsourced elements of our operations to third party vendors, who each have access to our confidential information, which increases our disclosure risk.
−Removed: We are in the process of implementing our internal security and business continuity measures and developing our information technology infrastructure.
−Removed: Our internal computer systems and those of current and future third parties on which we rely may fail and are vulnerable to damage from computer viruses and unauthorized access.
+Added: Despite the implementation of our internal security and business continuity measures and our information technology infrastructure, our internal computer systems and those of current and future third parties on which we rely may fail and are vulnerable to damage from computer viruses and unauthorized access.
Our information technology and other internal infrastructure systems, including corporate firewalls, servers, data center facilities, lab equipment, and connection to the internet, face the risk of breakdown or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), each of which could compromise our system infrastructure or lead to the loss, destruction, alteration, disclosure, or dissemination of, or damage or unauthorized access to, our data or data that is processed or maintained on our behalf, or other assets.
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Furthermore, if the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.
−Removed: Major public health issues, and specifically the pandemic caused by the spread of COVID-19, could have an adverse impact on our financial condition and results of operations and other aspects of our business.
−Removed: In December 2019, a novel strain of coronavirus, COVID-19 , was first detected in Wuhan, China, and has since spread around the world.
−Removed: On March 11, 2020, the World Health Organization declared that the rapidly spreading COVID-19 outbreak had evolved into a pandemic.
−Removed: In response to the pandemic, many governments around the world are implementing a variety of measures to reduce the spread of COVID-19 , including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, shelter-in-place orders and required closures of non-essential businesses.
−Removed: The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption of financial markets.
−Removed: Although COVID-19 has not had a material adverse effect on our business to date, no assurance can be given that it will not in the future if the situation persists or worsens.
−Removed: The extent to which the coronavirus impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the coronavirus and the actions to contain the coronavirus or treat its impact, among others.
−Removed: Should the coronavirus continue to spread, our business operations could be delayed or interrupted.
−Removed: For instance, our preclinical research and clinical trials have been affected in the past by the pandemic, and they may be affected again in the future should the pandemic return
−Removed: to previous levels of severity.
−Removed: Similarly, the FDA has identified COVID-19 as an important contributor to delays in response to sponsors and in scheduling of requested meetings, and it is not clear at the present time that such delays have subsided.
−Removed: Site initiation, participant recruitment and enrollment, participant dosing, distribution of clinical trial materials, study monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward pandemic efforts, or other reasons related to the pandemic.
−Removed: If the coronavirus continues to spread, some participants and clinical investigators may not be able to comply with clinical trial protocols.
−Removed: For example, quarantines or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be unable to conduct our clinical trials.
−Removed: Infections and deaths related to the pandemic may disrupt the United States’ and other countries’ healthcare and healthcare regulatory systems.
−Removed: Such disruptions could divert healthcare resources away from, or materially delay FDA or other regulatory review and/or approval with respect to, our clinical trials.
−Removed: It is unknown how long these disruptions could continue, were they to occur.
−Removed: Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates.
−Removed: We currently rely on third parties, such as contract laboratories, CROs, medical institutions and clinical investigators to conduct these studies and clinical trials.
−Removed: If these third parties themselves are adversely impacted by restrictions resulting from the coronavirus outbreak, we will likely experience delays and/or realize additional costs.
−Removed: We also rely on third parties for the manufacture of our product candidates for preclinical and clinical testing.
−Removed: Disruptions to the global supply chain have impacted our and our third-party manufacturers’ ability to obtain raw materials or other products necessary to manufacture and distribute our product candidates.
−Removed: As a result, our efforts to develop our products have been delayed, and recurrence of such disruptions could delay or disrupt our ability to obtain regulatory approvals for, and to commercialize, our product candidates.
−Removed: Finally, we have incurred considerable expense to warehouse sufficient supplies in anticipation of future unexpected supply chain disruptions, and we may need to increase these expenses as we increase our cell processing.
−Removed: The potential economic impact brought by and the duration of the pandemic may be difficult to assess or predict, however it has already caused, and is likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital either at all or on favorable terms.
−Removed: In addition, a recession, depression or other sustained adverse market event resulting from the spread of the coronavirus could materially and adversely affect our business and the value of our common stock.
−Removed: The ultimate impact of the current pandemic, or any other health epidemic, is highly uncertain and will depend on future developments that cannot be predicted with confidence, such as the duration of the outbreak, the severity of COVID-19, and the effectiveness of actions to contain and treat for COVID-19.
−Removed: Although, as of the date of this Annual Report on Form 10-K, we do not expect any material impact on our long-term activity, we do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole, which could have a material adverse effect on our business, financial condition and results of operations and cash flows.
−Removed: The Company has experienced some delays in clinical trial accrual and in the availability and delivery of certain consumables and raw materials used in its laboratory and manufacturing operations due to the impact of COVID-19 on the global supply chain.
−Removed: The ability of the Company’s employees and consultants to work may be significantly impacted by the coronavirus.
−Removed: The Company’s employees and consultants are being affected by the COVID-19 pandemic.
−Removed: The Company may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the coronavirus.
−Removed: COVID-19 may also compromise the ability of independent contractors who perform consulting services for us to deliver services or deliverables in a satisfactory or timely manner.
−Removed: Further, our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which continues to require an investment of time and resources, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic.
−Removed: If these conditions worsen, or last for an extended period of time, the Company’s ability to manage its business may be impaired, and operational risks, cybersecurity risks and other risks facing the Company even prior to the pandemic may be elevated.
−Removed: Our growth is subject to economic and political conditions.
−Removed: Our business is affected by global and local economic and political conditions as well as the state of the financial markets, inflation, recession, financial liquidity, currency volatility, growth, and policy initiatives.
+Added: Our business could be adversely affected by the effects of health pandemics or epidemics, which could cause significant disruptions in our operations.
+Added: Health pandemics or epidemics, such as the COVID-19 pandemic, have in the past and could again in the future result in quarantines, stay-at-home orders, remote work policies or other similar events that may disrupt businesses, delay our research and development programs and timelines, negatively impact productivity and increase risks associated with cybersecurity, the future magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations.
+Added: More specifically, these types of events may negatively impact personnel at third-party manufacturing facilities or the availability or cost of materials, which could disrupt our supply chain.
+Added: In addition, impact on the operations of the FDA or other regulatory authorities could negatively affect our planned approval processes.
+Added: Finally, economic conditions and business activity may be negatively impacted and may not recover as quickly as anticipated.
+Added: The effects of epidemics and pandemic are highly uncertain and subject to change.
+Added: If we are not able to respond to and manage the impact of such events effectively, our business, operating results, financial condition and cash flows could be adversely affected.
+Added: Our growth is subject to economic and geopolitical conditions.
+Added: Our business is affected by global and local economic and geopolitical conditions as well as the state of the financial markets, inflation, recession, financial liquidity, currency volatility, growth, and policy initiatives.
There can be no assurance that global economic conditions and financial markets will not worsen and that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital, such as the adverse effects resulting from a prolonged shutdown in government operations both in the United States and internationally.
−Removed: Political changes, including war or other conflicts, some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location.
+Added: Geopolitical changes, including war or other conflicts (including the conflicts between Russia and Ukraine and Israel and Hamas), some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location.
We may not be able to manage our business effectively if we are unable to attract and retain key personnel.
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Any system failure, accident or security breach that causes interruptions in our operations could result in a material disruption of our drug development programs.
−Removed: For example, the loss of clinical trial data from completed clinical trials for one or more of our product conducts could result in delays in our regulatory approval efforts and significantly increase our costs to recover or
−Removed: reproduce the data.
+Added: For example, the loss of clinical trial data from completed clinical trials for one or more of our product conducts could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data and applications, or inappropriate/unauthorized disclosure of confidential or proprietary information (including trade secrets), we could incur liability and our business and financial condition could be harmed.
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The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:
−Removed: ● announcements concerning the progress of our efforts to obtain regulatory approval for and commercialize our product candidates or any future product candidate, including any requests we receive from the FDA for additional studies or data that result in delays in obtaining regulatory approval or launching these product candidates, if approved;
+Added: ● announcements concerning the progress of our efforts to obtain regulatory approval for and, if approved, commercialize our product candidates or any future product candidate, including any requests we receive from the FDA for additional studies or data that result in delays in obtaining regulatory approval or launching these product candidates, if approved;
● market conditions in the pharmaceutical and biotechnology sectors or the economy as a whole;
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● discussion of us or our stock price by the financial and scientific press and in online investor communities.
−Removed: We have received notice from the Nasdaq Stock Market of non-compliance with its minimum bid price rules.
−Removed: On May 24, 2022, we received written notification (the “Notice Letter”) from the Nasdaq Stock Market (“Nasdaq”) indicating that we were not in compliance with Nasdaq Listing Rule 5450(a)(1), as the closing bid price for our Common Stock was below the $1.00 per share requirement for the previous 30 consecutive business days.
−Removed: The Notice Letter stated that we had 180 calendar days, or until November 21, 2022 (the “Initial Compliance Period”), to regain compliance with the minimum bid price requirement.
−Removed: On November 22, 2022, we were granted an additional 180 calendar days, or until May 24, 2023 (“Extended Compliance Period”), to regain compliance with the minimum bid price requirement.
−Removed: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we can regain compliance if the closing bid price of our Common Stock is at least $1.00 for a minimum of 10 consecutive business days.
−Removed: Although we have taken steps toward effecting a reverse stock split in order to regain compliance with the minimum bid price requirement, and we expect to complete the reverse stock split and regain compliance within the extended compliance period, there can be no assurance that such transaction will be completed, or if completed, will be successful in regaining compliance with the minimum bid price requirement.
−Removed: In the event that we do not regain compliance with Listing Rule 5450(a)(1) prior to the expiration of the Extended Compliance Period, we will receive written notification that our securities are subject to delisting.
−Removed: At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.
−Removed: A delisting of our Common Stock would have an adverse effect on the market liquidity of our Common Stock and, as a result, the market price for our Common Stock could become more volatile.
−Removed: Further, a delisting could also make it more difficult for us to raise additional capital.
We may become involved in securities class action litigation that could divert management’s attention and harm our business.
5 unchanged sentences
Litigation often is expensive and diverts management’s attention and resources, which could adversely affect our business.
−Removed: Unresolved Staff Comments
+Added: Risks Relating to Sale of Our Manufacturing Facility
+Added: As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments,” on May 18, 2023, we entered into an Asset Purchase Agreement, as amended on June 29, 2023, and July 28, 2023, and certain related agreements with uBriGene relating to the sale of our manufacturing facility and related assets (the “Transaction”).
+Added: The following discussion of risks relating to the Transaction uses certain capitalized terms that are defined in Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments, and the following discussion of risks should be read together with such discussion of the Transaction.
+Added: We may be unable to complete the Transaction as anticipated if the Committee on Foreign Investment in the United States (“CFIUS”) determines to implement mitigating measures, including the potential divestment of some or all of the Transferred Assets by uBriGene;
+Added: any such mitigating measures may limit our ability to realize the anticipated cost savings of the sale of the Facility and may have a material adverse effect on our financial condition.
+Added: Pursuant to the Amended Asset Purchase Agreement, we and uBriGene agreed to cause our respective affiliates to use their reasonable best efforts to obtain clearance for the Transaction from CFIUS, although obtaining such clearance was not a condition to closing the Transaction.
+Added: In accordance with the Amended Asset Purchase Agreement, together with uBriGene, we submitted a joint notice to CFIUS on August 10, 2023.
+Added: Following an initial 45-day review period and subsequent 45-day investigation period, on November 13, 2023, CFIUS requested that we and uBriGene withdraw and re-file our joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the Transaction.
+Added: Upon CFIUS’s request, we and uBriGene submitted a request to withdraw and re-file our
+Added: joint voluntary notice to CFIUS, and on November 13, 2023, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on November 14, 2023.
+Added: CFIUS’s 45-day review ended on December 28, 2023.
+Added: Since CFIUS had not concluded its review by December 28, 2023, the proceeding transitioned to a subsequent 45-day investigation period, which ended on February 12, 2024.
+Added: Following the 45-day review period and subsequent 45-day investigation period described above, on February 12, 2024, we and uBriGene requested permission to withdraw and re-file their joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the Transaction.
+Added: Upon our and uBriGene’s request to withdraw and re-file their joint voluntary notice to CFIUS, on February 12, 2024, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on February 13, 2024.
+Added: The new 45-day review period will conclude no later than March 28, 2024.
+Added: If CFIUS does not conclude its review by March 28, 2024, the proceeding will transition to a second 45-day phase as CFIUS further investigates the Transaction.
+Added: At the completion of its review and, if applicable, investigation, if CFIUS determines there are no unresolved national security concerns, it will apprise the parties of its determination and conclude all action on the matter.
+Added: Alternatively, CFIUS may identify and impose mitigation measures.
+Added: Depending on the nature and severity of perceived national security risks identified during its investigation, CFIUS may, among other mitigation measures, require suspension of the Transaction, require uBriGene to divest some or all of the Transferred Assets, forfeit contracts CFIUS deems to be sensitive, or require appointment of special compliance personnel or a proxy board consisting of U.S.
+Added: If CFIUS determines to require mitigating measures with respect to the Transaction, then uBriGene must comply with such measures although the Closing Date has already occurred.
+Added: If CFIUS requires uBriGene to divest the Transferred Assets, uBriGene is not required to sell the Transferred Assets back to us and could instead elect to sell the Transferred Assets to a third-party purchaser.
+Added: If uBriGene sells the Transferred Assets to a third-party purchaser, the manufacturing and production of our lead product candidate may be disrupted.
+Added: Under the terms of the MSA, uBriGene will manufacture our lead product candidate, including MB-106, upon the completion of the sale of the Facility.
+Added: Pursuant to the Sub-Contracting CDMO Agreement, we will perform the manufacturing services to be performed by uBriGene under the MSA until the sale of the Facility is completed in exchange for an amount equal to our operating costs associated with our CDMO Manufacturing Services.
+Added: If uBriGene sells the Transferred Assets to a third-party purchaser, there can be no assurance that such third-party purchaser will continue to contract with us for our CDMO Manufacturing Services.
+Added: Any third-party purchaser of the Transferred Assets may not be willing to contract with us to provide Company CDMO Manufacturing Services.
+Added: In addition, a third-party purchaser may not be able to comply with cGMP or similar regulatory requirements related to the production of our lead product candidates or otherwise may not be able to provide manufacturing services on quality and timeliness standards that are acceptable to us.
+Added: In either such case, the manufacturing of our lead product candidate may need to be transferred to an unknown CDMO and may be at risk of delays, disruptions or quality issues, any of which could significantly and adversely affect supplies of our lead product candidate and our ability to conduct clinical trials and receive regulatory approval.
+Added: If CFIUS requires uBriGene to divest the Transferred Assets and uBriGene sells the Transferred Assets back to us, we will incur significant costs associated with the repurchase and continued operation of the Facility.
+Added: In addition to the payment of the repurchase price of the Facility, we will cease to be reimbursed by uBriGene for our CDMO Manufacturing Services and, as a result, will experience substantially increased expenses in connection with operating the Facility and manufacturing our lead product candidate, which could materially adversely affect our results of operations, financial condition, prospects and ability to operate as a going concern.
+Added: Certain key personnel may depart the Company upon the completion of the sale of the facility, which may adversely affect our ability to realize the anticipated benefits of the transaction;
+Added: unfortunately, key personnel may also depart the Company in the event that we are unable to complete the facility transfer.
+Added: Our ability to receive the Contingent Amount from uBriGene is subject to receipt of the Landlord’s consent to the Proposed Lease Transfer and our ability to raise additional capital;
+Added: if we do not receive such consent from the Landlord and/or are unable to raise the requisite amount of capital, we will not receive the full purchase price for the Transaction which may have a material adverse effect on our financial condition.
+Added: Pursuant to the Asset Purchase Agreement, in addition to the base purchase price paid to us upon closing of the Transaction, uBriGene will also pay a Contingent Amount to us as consideration of the Transaction once we (i) complete an issuance of equity securities in an amount equal to or greater than $10,000,000 (the “Contingent Capital Raise”) and (ii) obtains the consent of the Landlord to the Proposed Lease Transfer.
+Added: As of December 31, 2023, we had completed issuances of equity securities for proceeds totaling approximately $4.6 million following the Closing Date.
+Added: If we are unable to close the full amount of the Contingent Capital Raise and/or do not receive the Landlord’s
+Added: consent to the Proposed Lease Transfer within two years from the Closing Date, uBriGene will no longer be obligated to pay the Contingent Amount to us.
+Added: If we do not receive the Contingent Amount our business, prospects, financial condition, results of operation and ability to operate as a going concern will be materially and adversely affected, and we may be required to implement further cost reduction strategies.
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.