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Item 1A. Risk Factors

2020-11-09 compared with 2020-08-10 · 491 added, 542 removed, 477 unchanged (68% of the section changed)

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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.

Risks Related to our Business and Intellectual Property

Risks Associated with Our Business

Our business is subject to numerous risks that you should be aware of before making an investment decision.

These risks are described more fully in this “Risk Factors” section and include, among others:

● We are a development stage company with a history of operating losses, and we expect losses to continue for the indefinite future.

These factors raise substantial doubt regarding our ability to continue as a going concern.

● Our business and operations are likely to be adversely affected by the evolving and ongoing COVID-19 global pandemic.

● All of our product candidates are in clinical development.

If we are unable to successfully develop, receive regulatory approval for and commercialize our product candidates, or successfully develop any other product candidates, or experience significant delays in doing so, our business will be harmed.

● The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates.

● The results of earlier preclinical and clinical trials may not be predictive of future clinical trial results.

● Our preclinical studies and clinical trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could prevent or delay regulatory approval and commercialization, increase our costs or necessitate the abandonment or limitation of the development of some of our product candidates.

● We may not be successful in establishing our own manufacturing infrastructure for supply of our requirements of product candidates for use in clinical trials and for commercial sale.

Until our new manufacturing facility is operational, we will be dependent on third-party vendors to design, build, maintain and support our manufacturing and cell processing facilities.

● Our strategic relationship with BCM is dependent, in part, upon our ongoing relationship with key medical and scientific personnel and advisors.

● Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, healthcare payors and the medical community.

● The biotechnology and immunotherapy industries are characterized by rapid technological developments and a high degree of competition.

We may be unable to compete with more substantial enterprises.

● If we are unable to protect our proprietary rights, we may not be able to compete effectively or operate profitably.

● We are subject to extensive regulation, which can be costly, time consuming and can subject us to unanticipated delays.

Even if we receive regulatory approval of our product candidates, we will be subject to ongoing quality and regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.

● The price of our stock may be volatile.

Risks Related to our Financial Position and Capital Needs

We are a development stage company with a history of operating losses, and we expect losses to continue for the indefinite future.

These factors raise substantial doubt regarding our ability to continue as a going concern.

We are a clinical-stage immunotherapy company with a history of losses, and we may always operate at a loss.

We expect that we will continue to operate at a loss throughout our development stage, and as a result, we may exhaust our financial resources and be unable to complete the development of our product candidates.

We anticipate that our ongoing operational costs will increase significantly, and our deficit will continue to grow, as we continue conducting our clinical development program.

We have no approved products or product candidates pending approval.

As a result, we have not derived any revenue from the sales of products and have not yet demonstrated ability to obtain regulatory approval, formulate and manufacture commercial-scale products, or conduct sales and marketing activities necessary for successful product commercialization.

We have no sources of significant revenue to provide incoming cash flows to sustain our future operations.

Our ability to pursue our planned business activities depends upon our successful efforts to raise additional financing, which may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

We have sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future due to the substantial investment in research and development.

As of September 30, 2020, we had an accumulated deficit of $347.7 million since inception.

We expect that our cash and cash equivalents as of September 30, 2020 will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2021.

We expect to spend substantial additional sums on the continued administration and research and development of licensed and proprietary product candidates and technologies with no certainty that our approach and associated technologies will become commercially viable or profitable as a result of these expenditures.

If we fail to raise a significant amount of capital, we may need to significantly curtail operations, allocate limited financial resources among our product candidates, or cease operations in the near future.

If any of our product candidates fail in clinical trials or do not gain regulatory approval, we may never generate revenue.

Even if we generate revenue in the future, we may not be able to become profitable or sustain profitability in subsequent periods.

These and other factors raise substantial doubt regarding our ability to continue as a going concern, which may create negative reactions to the price of our common stock.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment.

Further, the perception that we may be unable to continue as a going concern may impede our ability to pursue strategic opportunities or operate our business due to concerns regarding our ability to discharge our contractual obligations.

In addition, if there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, or at all.

Risks Related to the Development of our Product Candidates

Our business and operations are likely to be adversely affected by the evolving and ongoing COVID-19 global pandemic.

Our business and operations are likely to be adversely affected by the effects of the recent and evolving COVID-19 virus, which was declared by the World Health Organization as a global pandemic.

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Such orders may also impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain and could affect our ability to conduct ongoing and planned clinical trials and preparatory activities.

In addition, we expect that we will be delayed in initiating our Phase 2 trial of MT-401 (zelenoleucel) for post-transplant AML per previously communicated timelines due to delays in our ability to enroll the first three patients in the safety lead-in portion of the trial because of the COVID-19 pandemic and delays in receiving the new reagent for MT-401 and the final data and certificate of analysis required by the FDA to satisfy the requirements for lifting the partial hold.

In addition, we expect that we will continue to be delayed in initiating our Phase 2 trial of MT-401 (zelenoleucel) for post-transplant AML per previously communicated timelines.

Although we have begun enrolling patients in the safety lead-in portion of the trial, we previously experienced temporary delays in enrollment due to the COVID-19 pandemic.

Further, we continue to be delayed in receiving the and the final data and certificate of analysis required by the U.S.

Food and Drug Administration, or the FDA, to satisfy the requirements for lifting the partial hold, although the vendor has supplied the new reagent for MT-401.

Our ongoing clinical trials may be also affected by the COVID-19 pandemic.

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In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.

We are a development stage company with a history of operating losses, and we expect losses to continue for the indefinite future.

These factors raise substantial doubt regarding our ability to continue as a going concern.

We are a clinical-stage immunotherapy company with a history of losses, and we may always operate at a loss.

We anticipate that our ongoing operational costs will increase significantly as we continue conducting our clinical development program.

Our deficit will continue to grow during our drug development period.

We have no sources of significant revenue to provide incoming cash flows to sustain our future operations.

As outlined above, our ability to pursue our planned business activities depends upon our successful efforts to raise additional financing.

Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

As of June 30, 2020, we had an accumulated deficit of $ 340.4 million since inception.

We expect that our cash and cash equivalents as of June 30, 2020 will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2021.

If any of our product candidates fail in clinical trials or do not gain regulatory approval, we may never generate revenue.

Even if we generate revenue in the future, we may not be able to become profitable or sustain profitability in subsequent periods.

These and other factors raise substantial doubt regarding our ability to continue as a going concern, which may create negative reactions to the price of our common stock.

Our future success is highly dependent upon our key personnel, and our ability to attract, retain, and motivate additional qualified personnel.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific, and medical personnel.

We are highly dependent on our management, scientific, and medical personnel and consultants, including Peter Hoang, our President and Chief Executive Officer, Juan Vera, M.D., our Chief Development and Scientific Officer, and Mythili Koneru, M.D., Ph.D.

our Chief Medical Officer as well as others.

The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm to our business.

We have a priority to quickly train additional qualified scientific and medical personnel to ensure the ability to maintain business continuity.

Any delays in training such personnel could delay the development, manufacture, and clinical trials of our product candidates.

Our ability to attract and retain highly skilled personnel is critical to our operations and expansion.

We face competition for these types of personnel from other biotechnology companies and more established organizations, many of which have significantly larger operations and greater financial, technical, human and other resources than us.

We may not be successful in attracting and retaining qualified personnel on a timely basis, on competitive terms, or at all.

If we are not successful in attracting and retaining these personnel, or integrating them into our operations, our business, prospects, financial condition and results of operations will be materially adversely affected.

In such circumstances, we may be unable to conduct certain research and development programs, unable to adequately manage our clinical trials and development of our product candidates, and unable to adequately address our management needs.

Our strategic relationship with Baylor College of Medicine, or BCM, is dependent, in part, upon our relationship with key medical and scientific personnel and advisors.

Our MultiTAA-specific T cell therapy has been developed through our collaboration with the Center for Cell and Gene Therapy at BCM, founded by Malcolm K.

Brenner, M.D., Ph.D., a recognized pioneer in immuno-oncology.

In addition to Dr.

Brenner, our founders include Juan Vera, M.D., Ann Leen, Ph.D., Helen Heslop, M.D., DSc (Hon) and Cliona Rooney, Ph.D., who all have significant experience in this field and are all affiliated with the Center for Cell and Gene Therapy at BCM.

Vera is our Chief Development Officer.

In addition, Dr.

Heslop and Dr.

Rooney have joined our Scientific Advisory Board.

Our strategic relationship with BCM is dependent, in part, on our relationship with these key employees and advisors, and in particular Dr.

Vera discontinues his employment with us, our relationship with BCM may deteriorate, and our business could be harmed.

We, and certain of our key medical and scientific personnel, will need additional agreements in place with BCM to expand our development, manufacture, and clinical trial efforts.

Although we have an exclusive license agreement with BCM under which we received a worldwide, exclusive license to BCM’s rights in and to three patent families to develop and commercialize the MultiTAA-specific T cell product candidates, we will need to enter into additional agreements with BCM with respect to (i) a strategic alliance to advance pre-clinical research, early stage clinical trials, and Phase 2 clinical trials with respect to our product candidates, as well as continued access to our clinical data, and (ii) product manufacturing and support, including personnel and space at the institution for the foreseeable future.

Any delays in entering into new strategic agreements with BCM related to our product candidates could delay the development, manufacture, and clinical trials of our product candidates.

The multiple roles of certain of Dr.

Vera, our Chief Development and Scientific Officer, and John Wilson, our director, could limit their time and availability to us, and create, or appear to create, conflicts of interest.

Vera is a co-founder and member of Allovir Inc., or Allovir.

Allovir has technology which is being developed under a license agreement with BCM by the same research group at BCM.

Allovir is a clinical-stage biopharmaceutical company that is investigating and developing virus-specific T cell therapy technology for the prevention and/or treatment of viral infections.

Accordingly, Dr.

Vera may have other commitments that would, at times, limit his availability to us.

Other research being conducted by Dr.

Vera may, at times, receive higher priority than research on our programs, which may, in turn, delay the development or commercialization of our product candidates.

In addition, John Wilson is a co-founder, member and director of Allovir and is a director of our company.

Both of these individuals have certain fiduciary or other obligations to us and certain fiduciary or other obligations to Allovir and, in the case of Dr.

Such multiple obligations may in the future result in a conflict of interest with respect to presenting other potential business opportunities to us or to Allovir.

A conflict of interest also may arise concerning the timing and scope of the parties’ planned and ongoing clinical trials, investigational new drug application filings and the parties’ opportunities for marketing their respective product candidates, as well as our intellectual property rights with those of Allovir.

In addition, they may be faced with decisions that could have different implications for us than for Allovir.

Consequently, there is no assurance that these members of our board and management will always act in our best interests in all situations should a conflict arise.

We have not yet sold any products or received regulatory approval to sell any product candidates.

We have no approved products or product candidates pending approval.

Without revenue, we can only finance our operations through debt and equity financings.

Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier pre-clinical and clinical trials may not be predictive of future clinical trial results.

Clinical testing is expensive and generally takes many years to complete, and the outcome is inherently uncertain.

Failure can occur at any time during the clinical trial process.

The results of preclinical testing and early clinical trials of our product candidates may not be predictive of the results of larger, later-stage controlled clinical trials.

Product candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks in subsequent clinical trials.

Our clinical trials to date have been conducted on a small number of patients in a single academic clinical site for a limited number of indications.

We will have to conduct larger, well-controlled trials in our proposed indications at multiple sites to verify the results obtained to date and to support any regulatory submissions for further clinical development of our product candidates.

Our assumptions related to our product candidates, such as with respect to lack of toxicity and manufacturing cost estimates, are based on early limited clinical trials and current manufacturing processes at BCM and may prove to be incorrect.

All of our product candidates are in clinical development.

We are early in our development efforts and all of our product candidates are still in clinical development.

Each of our programs and product candidates will require additional preclinical and/or clinical development, regulatory approval, obtaining manufacturing supply, capacity and expertise, building a commercial organization or successfully outsourcing commercialization, substantial investment and significant marketing efforts before we generate any revenue from product sales.

We do not have any products that are approved for commercial sale, and we may never be able to develop or commercialize marketable products.

Our ability to generate revenue from our product candidates, which we do not expect will occur for several years, if ever, will depend heavily on the successful development, regulatory approval and eventual commercialization of our product candidates.

The success of our MultiTAA product candidates or any other product candidates that we develop or otherwise may acquire will depend on several factors, including:

● timely and successful completion of preclinical studies, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable, and clinical trials;

● effective investigational new drug applications, or INDs, from the FDA or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for our product candidates;

● sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;

● successful enrollment and completion of clinical trials, including under the FDA’s current Good Clinical Practices, or GCPs, and current Good Laboratory Practices;

● successful development of, or making arrangements with third-party manufacturers for, our commercial manufacturing processes for any of our product candidates that receive regulatory approval;

● receipt of timely marketing approvals from applicable regulatory authorities;

● launching commercial sales of products, if approved, whether alone or in collaboration with others;

● acceptance of the benefits and use of our products, including method of administration, if approved, by patients, the medical community and third-party payors, for their approved indications;

● the prevalence and severity of adverse events experienced our product candidates;

● the availability, perceived advantages, cost, safety and efficacy of alternative therapies for any product candidate, and any indications for such product candidate, that we develop;

● our ability to produce any product candidates we develop on a commercial scale;

● obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our product candidates and otherwise protecting our rights in our intellectual property portfolio;

● maintaining compliance with regulatory requirements, including the FDA’s current Good Manufacturing Practices, or cGMPs, and complying effectively with other procedures;

● obtaining and maintaining third-party coverage and adequate reimbursement and patients’ willingness to pay out-of-pocket in the absence of such coverage and adequate reimbursement;

● maintaining a continued acceptable safety, tolerability and efficacy profile of the products following approval.

If we are not successful with respect to one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize the product candidates we develop, which would materially harm our business.

If we do not receive marketing approvals for any product candidate we develop, we may not be able to continue our operations.

Because we have limited financial and management resources, we must focus on development programs and product candidates that we identify for specific indications.

As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications for these product candidates that later prove to have greater commercial potential.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future development programs and product candidates for specific indications may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates.

Any immunotherapies that we may develop are not likely to be commercially available for at least five years.

Any delay in obtaining FDA and/or other necessary regulatory approvals in the United States and in countries outside the United States for any investigational new drug and failure to receive such approvals would have an adverse effect on the investigational new drug’s potential commercial success and on our business, prospects, financial condition and results of operations.

The time required to obtain approval by the FDA and non-U.S.

regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.

We have not previously submitted a biologics license application, or BLA, to the FDA, or similar approval filings to comparable foreign authorities.

A BLA must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety and effectiveness for each desired indication.

The BLA must also include significant information regarding the chemistry, manufacturing and controls for the product.

We expect the novel nature of our product candidates to create further challenges in obtaining regulatory approval.

For example, the FDA has limited experience with commercial development of cell therapies for cancer.

Accordingly, the regulatory approval pathway for our product candidates may be uncertain, complex, expensive and lengthy, and approval may not be obtained, and the FDA or non-U.S.

regulatory authorities may disagree with the design or implementation of our clinical trials or study endpoints.

We may also experience delays in completing planned clinical trials for a variety of reasons, including delays related to:

● the availability of financial resources to commence and complete the planned trials;

● reaching agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● obtaining approval by an independent institutional review board, or IRB, at each clinical trial site;

● recruiting suitable patients to participate in a trial;

● having patients complete a trial or return for post-treatment follow-up;

● clinical trial sites deviating from trial protocol or dropping out of a trial;

● adding new clinical trial sites;

● manufacturing sufficient quantities of qualified materials under cGMPs and applying them on a subject by subject basis for use in clinical trials.

Further, the performance of our CROs may also be interrupted by the ongoing COVID-19 pandemic, including due to travel or quarantine policies, heightened exposure of CRO staff who are healthcare providers to COVID-19 or prioritization of resources toward the pandemic.

We could also encounter delays if physicians face unresolved ethical issues associated with enrolling patients in clinical trials of our product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles.

Further, a clinical trial may be suspended or terminated by us, the IRB for the institutions in which such trials are being conducted, the Data and Safety Monitoring Board or Committee for such trial, or by the FDA or other regulatory authorities due to a number of factors.

Those factors could include failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

If we experience termination of, or delays in the completion of, any clinical trial of our product candidates, the commercial prospects for our product candidates will be harmed, and our ability to generate product revenue will be delayed.

In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenue.

Preclinical studies and clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome.

Further, we may encounter substantial delays in completing the development of our product candidates.

All of our product candidates are in clinical development and their risk of failure is high.

The clinical trials and manufacturing of our product candidates are, and the manufacturing and marketing of our products, if approved, will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where we intend to test and market our product candidates.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication.

In particular, because our product candidates are subject to regulation as biological products, we will need to demonstrate that they are safe, pure and potent for use in their target indications.

Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

Because our product candidates are based on new technologies and manufactured on a patient-by-patient basis for our MultiTAA-specific T cell product candidates we expect that they will require extensive research and development and have substantial manufacturing costs.

In addition, the initial estimates of the clinical cost of development may prove to be inadequate, particularly if clinical trial timing or outcome is different than predicted or regulatory agencies require further testing before approval.

For example, we anticipate that the COVID-19 pandemic will delay our planned timelines for our Phase 2 trial of MT-401 for the treatment of post-transplant AML, which may impact our cost estimates for this trial.

Several companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles despite promising results in earlier, smaller clinical trials.

Moreover, clinical data are often susceptible to varying interpretations and analyses.

We do not know whether any Phase 2, Phase 3, or other clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety with respect to the proposed indication for use sufficient to receive regulatory approval or market our product candidates.

The biotechnology and immunotherapy industries are characterized by rapid technological developments and a high degree of competition.

We may be unable to compete with more substantial enterprises.

The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree of competition.

As a result, our actual or proposed immunotherapies could become obsolete before we recoup any portion of our related research and development and commercialization expenses.

Competition in the biopharmaceutical industry is based significantly on scientific and technological factors.

These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain governmental approval for testing, manufacturing and marketing.

We compete with specialized biopharmaceutical firms in the United States, Europe and elsewhere, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations.

Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including cancer.

Many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies.

These companies, as well as academic institutions, governmental agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants.

Our ability to compete successfully with other companies in the pharmaceutical field will also depend to a considerable degree on the continuing availability of capital to us.

We are aware of certain investigational new drugs under development or approved products by competitors that are used for the prevention, diagnosis, or treatment of certain diseases we have targeted for drug development.

Various companies are developing biopharmaceutical products that have the potential to directly compete with our immunotherapies even though their approach may be different.

The competition comes from both biotechnology firms and from major pharmaceutical companies.

Many of these companies have substantially greater financial, marketing, and human resources than us.

We also experience competition in the development of our immunotherapies from universities, other research institutions and others in acquiring technology from such universities and institutions.

In addition, certain of our immunotherapies may be subject to competition from investigational new drugs and/or products developed using other technologies, some of which have completed numerous clinical trials.

We are subject to numerous risks inherent in conducting clinical trials.

In addition, costs to treat patients with relapsed/refractory cancer and to treat potential side effects that may result from our product candidates can be significant.

Some clinical trial sites may not bill, or obtain coverage from, Medicare, Medicaid, or other third-party payors for some or all of these costs for patients enrolled in our clinical trials, and we may be required by those trial sites to pay such costs.

Accordingly, our clinical trial costs may be significantly higher per patient than those of more conventional therapeutic technologies or drug products.

In addition, our proposed personalized product candidates involve several complex manufacturing and processing steps, the costs of which will be borne by us.

Depending on the number of patients we ultimately enroll in our trials, and the number of trials we may need to conduct, our overall clinical trial costs may be higher than for more conventional treatments.

Further, delays and interruptions to ongoing trials related to the COVID-19 pandemic may also increase the duration and costs of such trials.

We outsource some of the management of our clinical trials to third parties.

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If these clinical investigators, medical institutions or other third parties do not carry out their contractual duties or obligations or fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols or for other reasons, our clinical trials may be extended, delayed or terminated, and we may be unable to obtain regulatory approval for, or successfully commercialize, agents.

We cannot be certain that we will successfully recruit enough patients to complete our clinical trials nor that we will reach our primary endpoints.

We cannot be certain that we will successfully recruit enough patients to complete our clinical trials

nor that we will reach our primary endpoints.

Delays in recruitment, lack of clinical benefit or unacceptable side effects would delay our clinical trials.

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In February 2020, the FDA lifted the clinical hold, permitting us to initiate a Phase 2 clinical trial with a safety lead-in portion but placed a partial clinical hold on the trial for the use of MT-401 manufactured using one of the reagents supplied by our alternative supplier.

Our alternate supplier has notified us that they will be delayed in providing the new reagent for MT-401, along with the final data and certificate of analysis required by the FDA to satisfy the requirements for lifting the partial hold, which will delay our ability to initiate the trial per previously communicated timelines.

Our alternate supplier has provided the new reagent for MT-401, but continues to be delayed in providing the final data and certificate of analysis required by the FDA to satisfy the requirements for lifting the partial hold, which will delay our ability to initiate the trial per previously communicated timelines.

The FDA may not agree that our response addresses all of their concerns and the partial clinical hold may remain in place and further delay the initiation of the trial.

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The lengthy approval process, as well as the unpredictability of future clinical trial results, may result in us failing to obtain regulatory approval for our product candidates, which would materially harm our business, results of operations and prospects.

The successful development of immunotherapies is highly uncertain.

Successful development of biopharmaceuticals is highly uncertain and depends on numerous factors, many of which are beyond our control.

Immunotherapies that appear promising in the early phases of development may fail to reach the market for several reasons including:

● clinical study results that may show the immunotherapy to be less effective than expected (e.g., the study failed to meet its primary endpoint) or to have unacceptable side effects;

● failure to receive the necessary regulatory approvals or a delay in receiving such approvals.

Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis, or BLA preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data, or unexpected safety or manufacturing issues;

● manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make the immunotherapy uneconomical;

● the proprietary rights of others and their competing products and technologies that may prevent the immunotherapy from being commercialized.

Success in preclinical and early clinical studies does not ensure that large-scale clinical trials will be successful.

Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals.

The length of time necessary to complete clinical studies and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one immunotherapy to the next and may be difficult to predict.

Even if we are successful in getting market approval, commercial success of any of our product candidates will also depend in large part on the availability of coverage and adequate reimbursement from third-party payors, including government payors such as the Medicare and Medicaid programs and managed care organizations, which may be affected by existing and future health care reform measures designed to reduce the cost of health care.

Third-party payors could require us to conduct additional studies, including post-marketing studies related to the cost effectiveness of a product, to qualify for reimbursement, which could be costly and divert our resources.

If government and other health care payors were not to provide adequate coverage and reimbursement levels for any of our products if approved, market acceptance and commercial success would be reduced.

In addition, if one of our products is approved for marketing, we will be subject to significant regulatory obligations regarding the submission of safety and other post-marketing information and reports and registration, and will need to continue to comply (or ensure that our third-party providers comply) with current Good Manufacturing Practices, or cGMPs, and current Good Clinical Practices or cGCPs for any clinical trials that we conduct post-approval.

In addition, there is always the risk that we or a regulatory authority might identify previously unknown problems with a product post-approval, such as adverse events of unanticipated severity or frequency.

Compliance with these requirements is costly, and any failure to comply or other issues with our product candidates’ post-market approval could have a material adverse effect on our business, financial condition and results of operations.

It may take longer and cost more to complete our clinical trials than we project, or we may not be able to complete them at all.

For budgeting and planning purposes, we have projected the dates for the commencement, continuation, and completion of our various clinical trials.

However, a number of factors, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, and competition for such eligible patents from other clinical trials, may cause significant delays.

We may not commence or complete clinical trials involving any of our product candidates as projected or may not conduct them successfully.

We expect that we will be delayed in initiating our planned Phase 2 trial of MT-401 for post-transplant AML due to the COVID-19 pandemic.

The results of earlier preclinical and clinical trials may not be predictive of future clinical trial results.

Failure can occur at any time during the clinical trial process.

The results of preclinical testing and early clinical trials of our product candidates may not be predictive of the results of larger, later-stage controlled clinical trials.

Product candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks in subsequent clinical trials.

Our clinical trials to date have been conducted on a small number of patients in a single academic clinical site for a limited number of indications.

Moreover, clinical data are often susceptible to varying interpretations and analyses.

If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our products may be delayed.

From time to time, we may estimate the timing of the accomplishment of various scientific, clinical, regulatory, manufacturing and other product development goals, which we sometimes refer to as milestones.

These milestones may include the commencement or completion of preclinical studies and clinical trials and the submission of regulatory filings, including IND submissions.

From time to time, we may publicly announce the expected timing of some of these milestones.

All of these milestones are, and will be, based on a variety of assumptions.

The actual timing of these milestones can vary significantly compared to our estimates, in some cases for reasons beyond our control, including with respect to challenges related to enrollment, manufacturing and our reliance on third parties to conduct, supervise or monitor some or all aspects of our clinical trials.

We may experience numerous unforeseen events during, or as a result of, any future clinical trials that we conduct that could delay or prevent our ability to receive marketing approval or commercialize our product candidates.

For example, we expect that we will be delayed in initiating our planned Phase 2 trial of MT-401 for post-transplant AML due to the COVID-19 pandemic.

As previously announced, the FDA placed a partial clinical hold for the use of MT-401 manufactured using one of the reagents supplied by our alternative supplier.

We cannot guarantee when, or if, we will be successful in these efforts.

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Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing clinical trial and planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

We rely on medical institutions, academic institutions, and clinical research organizations to conduct, supervise, or monitor some or all aspects of clinical trials involving our product candidates.

We may have less control over the timing and other aspects of these clinical trials than if we conducted them entirely on our own.

If we fail to commence or complete, or experiences delays in, any of our planned clinical trials, we may experience delays in our clinical development and/or commercialization plans.

In particular, while BCM will continue to support our trials with production of MultiTAA-specific T cells under contract, we anticipate that we will have to rely on internal facilities yet to be developed for the commercial manufacture of our multi-antigen specific T cell therapy product candidates for clinical trials and eventual licensure.

If they fail to complete, or experience delays in, manufacturing our multi-antigen specific T cell therapy product candidates, our planned clinical trials with respect to such product candidates will be delayed, and we may experience delays in our clinical development and/or commercialization plans

Clinical trials are expensive, time-consuming, and difficult to design and implement, and our clinical trial costs may be higher than for more conventional therapeutic technologies or drug products.

Clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

In addition, costs to treat patients with relapsed/refractory cancer and to treat potential side effects that may result from our product candidates can be significant.

Accordingly, our clinical trial costs may be significantly higher per patient than those of more conventional therapeutic technologies or drug products.

In addition, our proposed personalized product candidates involve several complex manufacturing and processing steps, the costs of which will be borne by us.

Further, delays and interruptions to ongoing trials related to the COVID-19 pandemic may also increase the duration and costs of such trials.

Our clinical trials may fail to demonstrate adequately the safety and efficacy of our product candidates, which would prevent or delay regulatory approval and commercialization.

The clinical trials of our product candidates are, and the manufacturing and marketing of any approved products will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where we intend to test and market our product candidates.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex, and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication.

In particular, because our product candidates are subject to regulation as biological drug products, we will need to demonstrate that they are safe, pure and potent for use in their target indications.

Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

The risk/benefit profile required for product licensure will vary depending on these factors and may include not only the ability to show tumor shrinkage, but also adequate duration of response, a delay in the progression of the disease, and/or an improvement in survival.

For example, response rates from the use of our product candidates may not be sufficient to obtain regulatory approval unless we can also show an adequate duration of response.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

Failure can occur at any time during the clinical trial process.

The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.

The results of studies in one set of patients or line of treatment may not be predictive of those obtained in another.

In addition, we expect that there may be greater variability in results for products processed and administered on a patient-by-patient basis, as anticipated for our MultiTAA-specific T cell product candidates, than for “off-the-shelf” products, like many other drugs.

There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials.

Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials.

A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.

Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

In addition, even if such trials are successfully completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval.

To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities.

Results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

If unacceptable toxicities arise in the development of our product candidates, we or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications.

Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims.

Our preclinical studies and clinical trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could prevent or delay regulatory approval and commercialization, increase our costs or necessitate the abandonment or limitation of the development of some of our product candidates.

Before obtaining regulatory approvals for the commercial sale of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates are safe, pure and effective for use in each target indication, and failures can occur at any stage of testing.

Preclinical studies and clinical trials often fail to demonstrate safety or efficacy of the product candidate studied for the target indication.

In addition to side effects caused by the product candidate, the administration process or related procedures also can cause adverse side effects.

If any such adverse events occur, our clinical trials could be suspended or terminated.

If we cannot demonstrate that any adverse events were not caused by the drug or administration process or related procedures, the FDA, EMA or foreign regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications.

Even if we are able to demonstrate that all future serious adverse events are not product-related, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the trial.

Moreover, if we elect, or are required, to not initiate, delay, suspend or terminate any future clinical trial of any of our product candidates, the commercial prospects of such product candidates may be harmed and our ability to generate product revenues from any of these product candidates may be delayed or eliminated.

In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, as toxicities resulting from personalized cell therapy, as with our MultiTAA-specific T cell therapy products, are not normally encountered in the general patient population and by medical personnel.

Any of these occurrences may harm our business, financial condition and prospects significantly.

We will be unable to seek regulatory approval of or commercialize our products if our trials are not successful.

Our research and development programs are at an early stage.

We must demonstrate our products’ safety and efficacy in humans through extensive clinical testing.

We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of our products, including but not limited to the following:

● safety and efficacy results in various human clinical trials reported in scientific and medical literature may not be indicative of results we obtain in our clinical trials;

● after reviewing trial results, we or our collaborators may abandon product candidates that we might previously have believed to be promising;

● we, our collaborators or regulators, may suspend or terminate clinical trials if the participating subjects or patients are being exposed to unacceptable health risks;

● the effects our potential product candidates have may not be the desired effects or may include undesirable side effects or other characteristics that preclude regulatory approval or limit their commercial use if approved.

Further, we expect that the COVID-19 pandemic will delay our ability to initiate our planned Phase 2 trial of MT-401 for post-transplant AML and may impact our other clinical programs due to delays and difficulties in clinical site initiation and patient enrollment and potential diversion of healthcare resources and other interruptions in clinical trial activities.

Clinical testing is very expensive, can take many years, and the outcome is uncertain.

For example, it can take as much as 12 months or more before we learn the results from any clinical trial using our MultiTAA-specific T cell therapy.

The data collected from our clinical trials may not be sufficient to support approval by the FDA of our MultiTAA-specific T cell therapy-based product candidates for the treatment of hematological malignancies.

The clinical trials for our product candidates under development may not be completed on schedule and the FDA may not ultimately approve any of our product candidates for commercial sale.

If we fail to adequately demonstrate the safety and efficacy of any product candidate under development, we may not receive regulatory approval for those product candidates, which would prevent us from generating revenues or achieving profitability.

We may not be able to expand our manufacturing processes to other third-party manufacturing facilities or successfully create our own manufacturing infrastructure for supply of our requirements of product candidates for use in clinical trials and for commercial sale.

Any of these occurrences may harm our ability to develop other product candidates, and may harm our business, financial condition and prospects significantly.

If our product candidates are associated with side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.

The FDA or an IRB may also require that we suspend, discontinue, or limit our clinical trials based on safety information, or that we conduct additional animal or human studies regarding the safety and efficacy of our product candidates which we have not planned or anticipated.

Such findings could further result in regulatory authorities failing to provide marketing authorization for our product candidates or limiting the scope of the approved indication, if approved.

Many product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of the product candidate.

Additionally, if one or more of our product candidates receives marketing approval, and we or others identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

● regulatory authorities may withdraw approvals of such product;

● regulatory authorities may require additional warnings on the labels;

● we may be required to create a medication guide outlining the risks of such side effects for distribution to patients or other requirements subject to a REMS;

● we could be sued and held liable for harm caused to patients;

● we may not be able to achieve or maintain third-party payor coverage and adequate reimbursement;

● our reputation and physician or patient acceptance of our products may suffer.

There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or foreign regulatory agency in a timely manner or at all.

Moreover, any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.

We may not obtain or maintain the benefits associated with orphan drug designation, including market exclusivity.

Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations as orphan drugs.

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic.

Generally, a product that has orphan drug designation and subsequently receives the first FDA approval for the disease for which it has such designation is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

The FDA has granted orphan drug designation for MT-401 for the treatment of AML after receiving an allogenic stem cell transplant.

We may seek orphan drug designation for other indications or product candidates.

Even if we were to obtain orphan drug designation for a product candidate, we may not obtain orphan exclusivity and that exclusivity may not effectively protect the drug from the competition of different drugs for the same condition, which could be approved during the exclusivity period.

Additionally, after an orphan drug is approved, the FDA could subsequently approve another application for the same drug for the same indication if the FDA concludes that the later drug is shown to be safer, more effective or makes a major contribution to patient care.

Orphan drug exclusive marketing rights in the United States also may be lost if the FDA or European Medicines Agency, or the EMA, later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

The failure to obtain an orphan drug designation for any product candidates we may

develop, the inability to maintain that designation for the duration of the applicable period, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of the applicable product candidate to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

Risks Related to Manufacturing

We may not be successful in establishing our own manufacturing infrastructure for supply of our requirements of product candidates for use in clinical trials and for commercial sale.

Until our new manufacturing facility is operational, we will be dependent on third-party vendors to design, build, maintain and support our manufacturing and cell processing facilities.

We currently do not operate our own facility that may be used as our clinical-scale manufacturing and processing facility.

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Further, the cGMP manufacturing facility is most likely too small to conduct the pivotal clinical studies being planned by us, so we will need to develop our own cGMP manufacturing capacity that will be adequate for such clinical trials with respect to our MultiTAA-specific T cell therapy-based product candidates.

We have begun to develop additional cGMP manufacturing capacity of our own that would be capable of supporting our manufacturing needs with respect to our clinical trials, particularly with respect to pivotal studies.

Third-party manufacturers may not be able to meet our needs concerning timing, quantity, or quality.

If we are unable to contract for a sufficient supply of needed materials on acceptable terms, or if we should encounter delays or difficulties in our relationships with manufacturers, our clinical trials may be delayed, thereby delaying the submission of product candidates for regulatory approval or the market introduction and subsequent sales of any approved products.

Any such delay may lower our revenues and potential profitability.

If any third party breaches or terminates its agreement with us or fails to conduct its activities in a timely manner, the commercialization of our product candidates could be slowed down or blocked completely.

It is possible that third parties relied upon by us will change their strategic focus, pursue alternative technologies, or develop alternative product candidates, either on their own or in collaboration with others, as a means for developing treatments for the diseases targeted by our collaborative programs, or for other reasons.

The effectiveness of these third parties in marketing their own products may also affect our revenues and earnings.

We intend to continue to enter into additional third-party agreements in the future.

However, we may not be able to negotiate any additional agreements successfully.

Even if established, these relationships may not be scientifically or commercially successful.

We have begun to develop our own cGMP manufacturing capacity that would be capable of supporting our manufacturing needs with respect to our clinical trials, particularly with respect to pivotal studies.

We expect that the development of our own manufacturing facility will provide us with enhanced control of material supply for both clinical trials and the commercial market, enable the more rapid implementation of process changes, and allow for better long-term margins.

We intend to begin a process technology transfer to develop in-house manufacturing capabilities in 2021.

In order to transfer our MultiTAA-specific T cell manufacturing from or expand our manufacturing capabilities beyond BCM pursuant to our development plans, we will need access to the standard operating procedures and the specific batch production records that are used to manufacture the product candidates.

If BCM does not support the transfer of our manufacturing processes or impedes our ability to transfer the manufacturing processes of its product candidates to us, our planned clinical trials and additional necessary manufacturing capabilities will be delayed, which will adversely affect our ability to conduct and further develop our business as currently planned.

Establishment of our own manufacturing facility is subject to many risks.

We do not have extensive experience in developing a manufacturing facility and may never be successful in developing our own manufacturing facility or capability.

For example, the establishment of a cell-therapy manufacturing facility is a complex endeavor requiring knowledgeable individuals.

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There are a small number of individuals with experience in cell therapy, and the competition for these individuals is high.

However, we do not have extensive experience in developing a manufacturing facility and may never be successful in developing our own manufacturing facility or capability.

We may establish multiple manufacturing facilities as we expand our commercial footprint to multiple geographies, which may lead to regulatory delays or prove costly.

Even if we are successful, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, natural disasters, power failures, transportation difficulties and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our clinical development and/or commercialization plans.

Even if we are successful, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, natural disasters, power failures,

transportation difficulties and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our clinical development and/or commercialization plans.

In addition, the manufacturing process for any product candidates that we may develop is subject to the FDA and foreign regulatory authority approval process, and we will need to contract with manufacturers who can meet all applicable FDA and foreign regulatory authority requirements on an ongoing basis.

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Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our clinical development and/or commercialization plans.

Until our new manufacturing facility is operational, we will be dependent on third-party vendors to design, build, maintain and support our manufacturing and cell processing facilities.

Until our new manufacturing facility is operational, we will rely very heavily on BCM and other third-party manufacturers to perform the manufacturing of our product candidates for our clinical trials.

We license our technology from others.

We intend to rely on our contract manufacturers to produce large quantities of materials needed for clinical trials and potential product commercialization.

Third-party manufacturers may not be able to meet our needs concerning timing, quantity, or quality.

Any such delay may lower our revenues and potential profitability.

The effectiveness of these third parties in marketing their own products may also affect our revenues and earnings.

We intend to continue to enter into additional third-party agreements in the future.

However, we may not be able to negotiate any additional agreements successfully.

Even if established, these relationships may not be scientifically or commercially successful.

Our manufacturing process is reliant upon the specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all.

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For example, the manufacture of our MultiTAA-specific T cell therapy-based product candidates involves complex processes, including drawing blood from patients/donors, manufacturing the clinical product, and ultimately infusing the product into a patient.

As a result of the complexities, the cost to manufacture biologics is generally higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce.

As a result of the complexities, the cost to manufacture biologics is generally higher than traditional small molecule chemical

compounds, and the manufacturing process is less reliable and is more difficult to reproduce.

Our manufacturing processes will be susceptible to product loss or failure due to any of the following:

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No assurance can be given that we will be able to develop such manufacturing process, or that our partners will thereafter be able to establish and operate such a production facility.

The deviations in our proposed new MultiTAA-based product candidates from existing products may require us to perform additional testing, which will increase the cost, and extend the time for obtaining approval.

Our MultiTAA-specific T cell therapy platform is based on the adoptive T cell therapy technology that we licensed from BCM and that is presently available as a physician-sponsored investigational therapy at BCM for the treatment of lymphoma, AML/MDS, multiple myeloma and select solid tumors in the United States.

The current method of treatment is labor intensive and expensive.

We are performing process optimization that we anticipate will enable more efficient manufacturing of our product candidates.

We may have difficulty demonstrating that the product candidates produced from our new processes are identical to the existing products.

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Cellular products are not considered to be well characterized products because there are hundreds of markers present on T cells, and even small changes in manufacturing processes could alter the cell subtypes.

It is unclear at this time which of those markers are critical for success of T cells to combat cancer, so our ability to predict the outcomes with newer manufacturing processes is limited.

It is unclear at this time which of those markers are critical for success of T cells to combat cancer, so our ability to predict

the outcomes with newer manufacturing processes is limited.

The changes that we may make to the existing manufacturing process may require additional testing, which may increase costs and timelines associated with these developments.

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These combination therapies will require additional testing, and clinical trials will require additional FDA regulatory approval and will increase our future cost of development.

We may not be able to develop product candidates successfully or on a timely basis.

Our immunotherapy product candidates are at various stages of research and development.

Further development and extensive testing will be required to determine their technical feasibility and commercial viability.

We will need to complete significant additional clinical trials demonstrating that our product candidates are safe and effective to the satisfaction of the FDA and other non-U.S.

regulatory authorities.

The drug approval process is time-consuming, which involves substantial expenditures of resources, and depends upon a numerous factors, including the severity of the disease indication in question, the availability of alternative treatments, and the risks and benefits demonstrated in the clinical trials.

Our success depends on our ability to achieve scientific and technological advances and to translate such advances into licensable, FDA-approvable, commercially competitive products on a timely basis.

Failure can occur at any stage of the process.

If such programs are not successful, we may be unable to develop revenue-producing products.

As we enter a more extensive clinical program for our product candidates, the data generated in these studies may not be as compelling as the earlier results.

Immunotherapies that we may develop are not likely to be commercially available for at least five years.

The time required to obtain approval by the FDA and non-U.S.

For example, the FDA or non-U.S.

regulatory authorities may disagree with the design or implementation of our clinical trials or study endpoints;

or we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks.

In addition, the FDA or non-U.S.

regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials or the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere.

The FDA or non-U.S.

regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

and the approval policies or regulations of the FDA or non-U.S.

regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

The proposed development schedules for our immunotherapy product candidates may be affected by a variety of other factors, including technological difficulties, clinical trial failures, regulatory hurdles, competitive products, intellectual property challenges and/or changes in governmental regulation, many of which will not be within our control.

Any delay in the development, approval, introduction or marketing of our product candidates could result either in such product candidates being marketed at a time when their cost and performance characteristics would not be competitive in the marketplace or in the shortening of their commercial lives.

In light of the long-term nature of our projects, the unproven technology involved and the other factors described elsewhere in this section, we might not be able to successfully complete the development or marketing of any new product candidates, and as a result, our business, prospects, financial condition and results of operations could be materially and adversely affected.

We may be required to reduce our staff, discontinue certain research or development programs of our future products and cease to operate.

Risks Related to our Reliance on Third Parties, Including BCM

Our strategic relationship with BCM is dependent, in part, upon our ongoing relationship with key medical and scientific personnel and advisors.

Our MultiTAA-specific T cell therapy has been developed through our collaboration with the Center for Cell and Gene Therapy at BCM, founded by Malcolm K.

Brenner, M.D., Ph.D., a recognized pioneer in immuno-oncology.

Our strategic relationship with BCM is dependent, in part, on our relationship with certain key employees and advisors, some of whom serve on our Scientific Advisory board, and in particular Dr.

Vera, our founder and Chief Development Officer.

Vera discontinues his employment with us, our relationship with BCM may deteriorate, and our business could be harmed.

We may also be dependent on BCM facilities and personnel to conduct research and development and manufacturing activities in the future.

Although we have an exclusive license agreement with BCM under which we received a worldwide, exclusive license to BCM’s rights in and to three patent families to develop and commercialize the MultiTAA-specific T cell product candidates, we will need to enter into additional agreements with BCM with respect to (i) a strategic alliance to advance preclinical research, early stage clinical trials, and Phase 2 clinical trials with respect to our product candidates, as well as continued access to our clinical data, and (ii) product manufacturing and support, including personnel and space at the institution for the foreseeable future.

Any delays in entering into new strategic agreements with BCM related to our product candidates could delay the development, manufacture, and clinical trials of our product candidates.

An important element of our intellectual property portfolio is to license additional rights and technologies from BCM.

Our inability to license the rights and technologies that we have identified, or newly developed MultiTAA-specific T cell technology that we may in the future identify, could have a material adverse impact on our ability to complete the development of our product candidates or to develop additional product candidates.

No assurance can be given that we will be successful in licensing any additional rights or technologies from BCM and others.

Failure to obtain additional rights and licenses may detrimentally affect our planned development of additional product candidates and could increase the cost, and extend the timelines associated with our development of such other product candidates.

We may not be able to establish or maintain the third-party relationships, including strategic collaborations, that are necessary to develop, commercialize and/or market some or all of our product candidates.

We expect to depend on collaborators, partners, licensees, clinical research organizations and other third parties to support our discovery efforts, to formulate product candidates, to manufacture our product candidates, and to conduct clinical trials for some or all of our product candidates.

We cannot guarantee that we will be able to successfully negotiate agreements for or maintain relationships with collaborators, partners, licensees, clinical investigators, vendors and other third parties on favorable terms, if at all.

Our ability to successfully negotiate such agreements will depend on, among other things, potential partners’ evaluation of the superiority of our technology over competing technologies and the quality of the preclinical and clinical data that it has generated, and the perceived risks specific to developing our product candidates.

If we are unable to obtain or maintain these agreements, we may not be able to clinically develop, formulate, manufacture, obtain regulatory approvals for or commercialize our product candidates.

Management of any third-party relationships will require significant time and effort from our management team, coordination of our research and development programs with the research and development priorities of our collaborators and effective allocation of our resources to multiple projects.

If we continue to enter into research and development collaborations at the early phases of drug development, our success will in part depend on the performance of our corporate collaborators.

We will not directly control the amount or timing of resources devoted by our corporate collaborators to activities related to our immunotherapies.

Our corporate collaborators may not commit sufficient resources to their research and development programs or the commercialization, marketing or distribution of their immunotherapies.

If any corporate collaborator fails to commit sufficient resources, our preclinical or clinical development programs related to this collaboration could be delayed or terminated.

Also, our collaborators may pursue existing or other development-stage products or alternative

technologies in preference to those being developed in collaboration with us.

Finally, if we fail to make required milestones or royalty payments to our collaborators or to observe other obligations in our agreements with them, our collaborators may have the right to terminate those agreements.

Our strategy includes eventual substantial reliance upon strategic collaborations for marketing and commercialization of our product candidates, and we may rely even more on strategic collaborations for research, development, marketing and commercialization of our other immunotherapies.

If we are unsuccessful in securing such strategic collaborations, we may be unable to commercialize any approved products as we have not yet licensed, marketed or sold any of our immunotherapies or entered into successful collaborations for these services in order to ultimately commercialize our immunotherapies.

Establishing strategic collaborations is difficult and time-consuming.

Our discussions with potential collaborators may not lead to the establishment of collaborations on favorable terms, if at all.

Potential collaborators may reject collaborations based upon their assessment of our financial, clinical, regulatory or intellectual property position.

If we successfully establish new collaborations, these relationships may never result in the successful development or commercialization of our immunotherapies or the generation of sales revenue.

To the extent that we enter into co- promotion or other collaborative arrangements, our product revenues are likely to be lower than if we directly marketed and sold any products that we may develop.

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.

Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to:

comply with the laws of the FDA and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, comply with manufacturing standards we have established, comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws, or report financial information or data accurately or to disclose unauthorized activities to us.

If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.

These laws may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs.

In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally.

Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

Efforts to ensure that our business arrangements comply with applicable healthcare laws may involve substantial costs.

It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or in asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to develop our business.

In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

Risks Related to the Commercialization of our Product Candidates

Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, healthcare payors and the medical community.

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● effectiveness of any sales and marketing efforts.

Moreover, if our product candidates are approved but fail to achieve market acceptance among physicians, patients, healthcare payors and the medical community, we may not be able to generate significant revenues, which would compromise our ability to become profitable.

We may not be able to establish or maintain the third-party relationships that are necessary to develop or potentially commercialize some or all of our product candidates.

If we are unable to obtain or maintain these agreements, we may not be able to clinically develop, formulate, manufacture, obtain regulatory approvals for or commercialize our product candidates.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or with the USPTO.

If we, our licensing partners, or any potential future collaborator initiates legal proceedings against a third party to enforce a patent directed to one of our product candidates, the defendant could counterclaim that the patent is invalid and/or unenforceable in whole or in part.

In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.

Grounds for a validity challenge include an alleged failure to meet any of several statutory requirements, including lack of novelty, non-obviousness or enablement.

Grounds for an unenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.

Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.

Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).

Such proceedings could result in revocation or amendment to our patents in such a way that they are no longer directed to our product candidates.

The outcome following legal assertions of invalidity and unenforceability is unpredictable, and prior art could render our patents or those of our licensors invalid or could prevent a patent from issuing from one or more of our pending patent applications.

There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found.

There is also no assurance that there is not prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim in our patents and patent applications, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim.

Furthermore, even if our patents are unchallenged, they may not adequately protect our intellectual property, provide exclusivity for our product candidates, prevent others from designing around our claims or provide us with a competitive advantage.

If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.

In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Such a loss of patent protection could have a material adverse impact on our business development.

If our product candidates are approved but fail to achieve market acceptance among physicians, patients, healthcare payors and the medical community, we may not be able to generate significant revenues, which would compromise our ability to become profitable.

The market for any products that we successfully develop will also depend on the cost of the product.

We do not yet have sufficient information to reliably estimate what it will cost to commercially manufacture our current product candidates, and the actual cost to manufacture these products could materially and adversely affect the commercial viability of these products.

Our goal is to reduce the cost of manufacturing our therapies.

However, unless we are able to reduce those costs to an acceptable amount, we may never be able to develop a commercially viable product.

If we do not successfully develop and commercialize products based upon our approach or find suitable and economical sources for materials used in the production of our products, we will not become profitable.

Third-party payors could require us to conduct additional studies, including post- marketing studies related to the cost effectiveness of a product, to qualify for reimbursement, which could be costly and divert our resources.

Our MultiTAA-specific T cell therapy may be provided to patients in combination with other agents provided by third parties.

The cost of such combination therapy may increase the overall cost of MultiTAA-specific T cell therapy and may result in issues regarding the allocation of reimbursements between our therapy and the other agents, all of which may adversely affect our ability to obtain reimbursement coverage for the combination therapy from third-party medical insurers.

Our future success is highly dependent upon our key personnel, and our ability to attract, retain, and motivate additional qualified personnel.

We will also be required to establish sales and marketing capabilities or enter into agreements with third parties to market and sell any approved products.

We are highly dependent on our management, scientific, and medical personnel and consultants, including Peter Hoang, our President and Chief Executive Officer, Juan Vera, M.D., our Chief

Development and Scientific Officer, and Mythili Koneru, M.D., Ph.D.

our Chief Medical Officer as well as others.

We have a priority to quickly train additional qualified scientific and medical personnel to ensure the ability to maintain business continuity.

Any delays in training such personnel could delay the development, manufacture, and clinical trials of our product candidates.

Our ability to attract and retain highly skilled personnel is critical to our operations and expansion.

We may not be successful in attracting and retaining qualified personnel on a timely basis, on competitive terms, or at all.

We do not currently have an organization for the sale, marketing and distribution of any approved products and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so.

In order to market any products approved by the FDA or comparable foreign regulatory authorities, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services.

If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able to generate product revenue and may not become profitable.

We will be competing with many companies that currently have extensive and well-funded sales and marketing operations.

Without an internal commercial organization or the support of a third party to perform sales and marketing functions, we may be unable to compete successfully against these more established companies.