−Removed: We face many risks and uncertainties, as more fully described in this section under the heading “Risk Factors.” Some of these risks and uncertainties are summarized below.
−Removed: The summary below does not contain all of the information that may be important to you, and you should read this summary together with the more detailed discussion of these risks and uncertainties contained in “Risk Factors.”
−Removed: • Failure to complete, or delays in completing, the potential Mergers with OnKure could materially and adversely affect Reneo’s results of operations, business, financial results and/or common stock price.
−Removed: • Reneo stockholders and OnKure stockholders may not realize a benefit from the Mergers commensurate with the ownership dilution they will experience in connection with the Mergers.
−Removed: • If the Mergers are not completed, the price of our common stock may decrease significantly.
−Removed: • If we and OnKure complete the Mergers, NewCo may need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to NewCo’s stockholders or restrict NewCo’s operations.
−Removed: • We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur net losses for the foreseeable future.
−Removed: • If we fail to achieve the expected financial and operational benefits of our recent cash preservation activities, our business and financial results may be harmed.
−Removed: • If we fail to satisfy applicable listing standards, our common stock may be delisted from the Nasdaq Global Market.
−Removed: • Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
−Removed: An investment in shares of our common stock involves a high degree of risk.
−Removed: You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before deciding whether to purchase, hold or sell shares of our common stock.
−Removed: The occurrence of any of the risks described below could harm our business, financial condition, results of operations, growth prospects, and/or stock price or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time.
−Removed: You should consider all of the risk factors described when evaluating our business.
−Removed: We have marked with an asterisk (*) those risk factors that reflect changes from the similarly titled risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023.
−Removed: Risks Related to the Pending Merger Transaction with OnKure
−Removed: Failure to complete, or delays in completing, the potential Mergers with OnKure could materially and adversely affect our results of operations, business, financial results and/or common stock price.*
−Removed: On May 10, 2024, we entered into the Merger Agreement with OnKure, pursuant to which, if all of the conditions to closing are satisfied or waived, in the First Merger, Merger Sub I, our direct, wholly owned subsidiary will merge with and into OnKure, with OnKure surviving as a direct, wholly owned subsidiary of NewCo, and as promptly as practicable following the First Merger, in the Second Merger, OnKure will merge with and into Merger Sub II, a direct, wholly owned subsidiary of NewCo, with Merger Sub II surviving.
−Removed: Completion of the Mergers are subject to certain closing conditions, a number of which are not within our control.
−Removed: Any failure to satisfy these required conditions to closing may prevent, delay or otherwise materially adversely affect the completion of the Mergers.
−Removed: We cannot predict with certainty whether or when any of the required closing conditions will be satisfied or if another uncertainty may arise and cannot assure you that we will be able to successfully consummate the Mergers as currently contemplated under the Merger Agreement or at all.
−Removed: Our efforts to complete the Mergers could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operation and our business.
−Removed: Uncertainty as to whether the Mergers will be completed may affect our ability to retain and motivate existing employees.
−Removed: Employee retention may be particularly challenging while the transaction is pending because employees may experience uncertainty about their roles following the Mergers.
−Removed: Uncertainty as to whether the Mergers will be completed could adversely affect our business and our relationship with collaborators, suppliers, vendors, regulators and other business partners.
−Removed: For example, vendors, collaborators and other counterparties may defer their decisions to work with us or seek to change their existing business relationships with us.
−Removed: Changes to, or termination of, existing business relationships could adversely affect our results of operations and financial condition, as well as the market price of our common stock.
−Removed: The adverse effects of the pendency of the transaction could be exacerbated by any delays in completion of the Mergers or termination of the Merger Agreement.
−Removed: The exchange ratios set forth in the Merger Agreement (Exchange Ratios) will not change or otherwise be adjusted based on the market price of our common stock as the Exchange Ratios depend on our net cash at the closing and not the market price of our common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.*
−Removed: At the First Effective Time, outstanding shares of OnKure capital stock will be converted into rights to receive shares of NewCo common stock.
−Removed: After applying estimated Exchange Ratios and giving effect to the Concurrent PIPE Investments, immediately after the Mergers, on a pro forma basis and based upon the number of shares of NewCo common stock expected to be issued in the Mergers, assuming a subscription amount of (i) $65.0 million pre-Mergers OnKure stockholders are expected to own approximately 54.8% of NewCo on a fully-diluted basis, pre-Mergers Reneo stockholders are expected to own approximately 24.2% of NewCo on a fully-diluted basis, and the PIPE Investors are expected to own approximately 21.0% of NewCo on a fully-diluted basis, and (ii) $85.0 million, pre-Mergers OnKure stockholders are expected to own approximately 51.5% of NewCo on a fully-diluted basis,
−Removed: pre-Mergers Reneo stockholders are expected to own approximately 22.7% of NewCo on a fully-diluted basis, and the PIPE Investors are expected to own approximately 25.8% of NewCo on a fully-diluted basis (in each case, using the treasury stock method and based on assumptions described in the Merger Agreement).
−Removed: The Exchange Ratios, and related pro forma ownership, will be adjusted (i) to account for the effect of the proposed Reverse Stock Split and (ii) to the extent that our net cash as of the close of business on the business day immediately preceding the closing date of the Mergers is less than $59.0 million or greater than $61.0 million (resulting in pre-Mergers Reneo stockholders owning less or more of NewCo, respectively).
−Removed: In the event our net cash is below $59.0 million, the Exchange Ratios will be adjusted such that the number of shares of NewCo common stock issued to the OnKure stockholders will be increased and Reneo stockholders will own a smaller percentage of NewCo following the Mergers.
−Removed: Any changes in the market price of our common stock before the completion of the Mergers will not affect the Exchange Ratios or the number of shares that OnKure stockholders will be entitled to receive pursuant to the Merger Agreement.
−Removed: Therefore, if before the completion of the Mergers, the market price of our common stock increases from the market price on the date of the Merger Agreement, OnKure stockholders could then receive merger consideration with substantially higher value for their shares of OnKure capital stock than the parties had negotiated when they established the Exchange Ratios.
−Removed: The Merger Agreement does not include a price-based termination right.
−Removed: Failure to complete the Mergers may result in us paying a termination fee to OnKure, and could harm the price of our common stock and our future business and operations.*
−Removed: If the Mergers are not completed, we are subject to the following risks:
−Removed: • if the Merger Agreement is terminated under specified circumstances, we could be required to pay OnKure a termination fee of $3.0 million;
−Removed: • the price of our common stock may decrease and could fluctuate significantly;
−Removed: • we will incur substantial costs related to the Mergers, such as financial advisor, legal and accounting fees, a majority of which must be paid even if the Mergers are not completed.
−Removed: If the Merger Agreement is terminated and the OnKure board of directors determines to seek another business combination, there can be no assurance that we will be able to find another third party with whom to transact a business combination that would yield comparable or greater benefits.
−Removed: If the conditions to the Mergers are not satisfied or waived, the Mergers may not occur.*
−Removed: Even if the Mergers are approved by the OnKure stockholders and our stockholders, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the Mergers.
−Removed: We and OnKure cannot assure you that all of the conditions to the consummation of the Mergers will be satisfied or waived.
−Removed: If the conditions are not satisfied or waived, the Mergers may not occur or the closing may be delayed.
−Removed: The Mergers may be completed even though a material adverse effect may result from the public announcement of the Mergers, industry-wide changes or other causes.*
−Removed: In general, neither we nor OnKure are obligated to complete the Mergers if there is a material adverse effect affecting the other party between May 10, 2024 (the date of the Merger Agreement) and the completion of the Mergers.
−Removed: However, certain types of events are excluded from the concept of a “material adverse effect.” Such exclusions include but are not limited to changes in general economic or political conditions, industry-wide changes, changes resulting from the public announcement of the merger, natural disasters, pandemics, public health events, other force majeure events, acts or threat of terrorism or war and changes in U.S.
−Removed: generally accepted accounting principles.
−Removed: Therefore, if any of these events were to occur and adversely affect us or OnKure, the other party would still be required to consummate the Mergers notwithstanding such events.
−Removed: If any such adverse effects occur and we or OnKure consummates the Mergers, the price of the NewCo Class A common stock
−Removed: This, in turn, may reduce the value of the Mergers to the Reneo stockholders, the OnKure stockholders, or both.
−Removed: If we and OnKure complete the Mergers, NewCo may need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to NewCo’s stockholders or restrict NewCo’s operations.*
−Removed: On May 10, 2024, as part of the Concurrent PIPE Investments, we entered into the Subscription Agreement with certain investors pursuant to which the investors agreed to purchase, in the aggregate, $65.0 million in shares of NewCo Class A common stock, which amount may be increased to $85.0 million, concurrently with the closing of the Mergers.
−Removed: The closing of the Concurrent PIPE Investments is conditioned upon the satisfaction or waiver of the conditions to the completion of the Mergers, as well as certain other conditions.
−Removed: The NewCo Class A common stock issued in the Concurrent PIPE Investments will result in dilution to all securityholders of NewCo (i.e., both Reneo stockholders and OnKure stockholders).
−Removed: Even if the Concurrent PIPE Investments close as expected, NewCo may need to raise additional capital in the future.
−Removed: Additional financing may not be available to NewCo when it is needed or may not be available on favorable terms.
−Removed: To the extent that NewCo raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of NewCo, including Reneo stockholders and former OnKure stockholders.
−Removed: It is also possible that the terms of any new equity securities may have preferences over NewCo common stock.
−Removed: Any debt financing into which NewCo enters may involve covenants that restrict its operations.
−Removed: These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of NewCo’s assets, as well as prohibitions on its ability to grant liens, pay dividends, redeem its stock or make investments.
−Removed: In addition, if NewCo raises additional funds through licensing arrangements, the terms of such arrangements may not be favorable to NewCo.
−Removed: Some Reneo and OnKure directors and executive officers may have interests in the Mergers that are different from yours and that may influence them to support or approve the Mergers without regard to your interests.*
−Removed: Directors and executive officers of Reneo and OnKure may have interests in the Mergers that are generally different from, or in addition to, the interests of other Reneo stockholders and OnKure stockholders, respectively.
−Removed: These interests with respect to our directors and executive officers may include, among others, accelerated vesting of stock options and restricted stock units (RSUs), retention bonus payments, extension of exercisability periods of previously issued stock options, severance payments if employment is terminated in a qualifying termination in connection with the First Merger, and rights to continued indemnification, expense advancement and insurance coverage.
−Removed: In addition, certain of our executive officers have entered into consulting agreements with NewCo for the provision of services to NewCo following the First Effective Time pursuant to which such executive officers will receive fees for such services.
−Removed: It is expected that two members of our Board of Directors will continue as directors of NewCo after the First Effective Time, and, following the completion of the Mergers, may therefore be eligible to be compensated as non-employee directors of NewCo.
−Removed: These interests in the Mergers with respect to OnKure’s directors and executive officers may include, among others, that certain of OnKure’s directors and executive officers hold OnKure stock options and OnKure RSUs that, after the First Effective Time, will be converted into and become NewCo stock options and NewCo RSUs, respectively;
−Removed: that certain OnKure stock options held by OnKure’s directors and executive officers will accelerate vesting at the First Effective Time;
−Removed: that OnKure’s executive officers are expected to continue as executive officers of NewCo after the First Effective Time and are expected to enter into new employment agreements to reflect their status as executive officers of a publicly-traded company and to provide for certain increases to annual base salary and annual target bonus opportunity, and certain change-in-control and severance benefits;
−Removed: and that all of Reneo’s and OnKure’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement.
−Removed: In addition, one of OnKure’s directors is affiliated with an investment fund that holds an interest in OnKure.
−Removed: Further, the members of the OnKure board of directors will continue as directors of NewCo after the First Effective Time, and, following the completion of the Mergers, will be eligible to be compensated as non-employee directors
−Removed: of NewCo pursuant to a non-employee director compensation policy that is expected to be adopted in connection with the closing and take effect at the First Effective Time.
−Removed: The Reneo and OnKure directors were aware of and considered these interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement, approve the Mergers, and recommend the approval of the Proposed Transactions to Reneo stockholders and recommend the approval of the Merger Agreement to the OnKure stockholders.
−Removed: These interests, among other factors, may have influenced the directors and executive officers of Reneo and OnKure to support or approve the Mergers.
−Removed: Reneo stockholders and OnKure stockholders may not realize a benefit from the Mergers commensurate with the ownership dilution they will experience in connection with the Mergers.*
−Removed: If NewCo and all of its subsidiaries, including its wholly owned subsidiaries following the consummation of the Proposed Transactions (the Combined Company) is unable to realize the full strategic and financial benefits currently anticipated from the Mergers, Reneo stockholders and OnKure stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or will have only received part of the commensurate benefit resulting from the extent to which the Combined Company is able to realize the strategic and financial benefits currently anticipated from the Mergers.
−Removed: If the Mergers are not completed, the price of our common stock may decrease significantly.*
−Removed: The market price of our common stock is subject to significant fluctuations.
−Removed: Market prices for securities of pharmaceutical companies have historically been particularly volatile.
−Removed: In addition, the market price of our common stock will likely be volatile based on whether stockholders and other investors believe that we can complete the Mergers or otherwise raise additional capital to support our operations if the Mergers are not completed and another strategic transaction cannot be identified, negotiated and completed in a timely manner, if at all.
−Removed: The volatility of the market price of our common stock may be exacerbated by low trading volume.
−Removed: Additional factors that may cause the market price of our common stock to fluctuate include:
−Removed: • the entry into, or termination of, our key agreements;
−Removed: • announcements by our commercial partners or competitors of new commercial products, our clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;
−Removed: • the loss of our key employees;
−Removed: • future sales of our common stock;
−Removed: • general and industry-specific economic conditions that may affect our research and development expenditures;
−Removed: • our failure to meet industry analyst expectations;
−Removed: • period-to-period fluctuations in financial results.
−Removed: Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies.
−Removed: These broad market fluctuations may also adversely affect the trading price of our common stock.
−Removed: In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.
−Removed: Reneo stockholders and OnKure stockholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, NewCo following the completion of the Mergers as compared to their current ownership and voting interests in the respective companies.*
−Removed: After the completion of the Mergers, the current stockholders of Reneo and OnKure will generally own a smaller percentage of NewCo than their ownership of their respective companies prior to the Mergers.
−Removed: Immediately after the Mergers and after giving effect to the Concurrent PIPE Investments, assuming a subscription
−Removed: amount of (i) $65.0 million, pre-Mergers OnKure stockholders as of immediately prior to the Mergers are expected to own approximately 54.8% of NewCo on a fully-diluted basis, pre-Mergers Reneo stockholders are expected to own approximately 24.2% of NewCo on a fully-diluted basis and the PIPE Investors are expected to own approximately 21.0% of NewCo on a fully-diluted basis, and (ii) $85.0 million, pre-Mergers OnKure stockholders are expected to own approximately 51.5% of NewCo on a fully-diluted basis, pre-Mergers Reneo stockholders are expected to own approximately 22.7% of NewCo on a fully-diluted basis, and the PIPE Investors are expected to own approximately 25.8% of NewCo on a fully-diluted basis (in each case, using the treasury stock method and based on assumptions described in the Merger Agreement).
−Removed: During the pendency of the Mergers, neither we nor OnKure will be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect their respective business prospects.*
−Removed: Covenants in the Merger Agreement impede the ability of us and OnKure to make acquisitions during the pendency of the Mergers, subject to specified exceptions.
−Removed: As a result, if the Mergers are not completed, the parties may be at a disadvantage with respect to their competitors during that period.
−Removed: In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, seeking, initiating or knowingly encouraging, inducing or facilitating the communication, making, submission or announcement of any acquisition proposal or acquisition inquiry or taking any action that could reasonably be expected to lead to certain transactions involving a third party, including a merger, sale of assets or other business combination, subject to specified exceptions.
−Removed: Even if such a transaction would be favorable to such party’s stockholders, such party would be unable to pursue it.
−Removed: Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the Proposed Transactions.*
−Removed: The terms of the Merger Agreement prohibit each of us and OnKure from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals except in limited circumstances as described in the Merger Agreement.
−Removed: In addition, if we terminate the Merger Agreement under specified circumstances, we will be required to pay OnKure a termination fee of $3.0 million.
−Removed: This termination fee may discourage third parties from submitting competing proposals to us or our stockholders and may cause our Board of Directors or the OnKure board of directors to be less inclined to recommend a competing proposal.
−Removed: Because the lack of a public market for OnKure common stock makes it difficult to evaluate the fair market value of its capital stock, the value of the NewCo common stock to be issued to OnKure stockholders may be more or less than the fair market value of OnKure common stock and OnKure preferred stock.*
−Removed: The OnKure capital stock is privately held and is not traded on any public market.
−Removed: The lack of a public market makes it difficult to determine the fair market value of OnKure capital stock.
−Removed: Because the percentage of NewCo equity to be issued to OnKure stockholders was determined based on negotiations between the parties, it is possible that the value of the NewCo common stock to be issued to OnKure stockholders will be more or less than the fair market value of OnKure capital stock.
−Removed: Lawsuits may be filed against us, OnKure, or any of the members of the respective boards of directors arising out of the Mergers, which may delay or prevent the Mergers.*
−Removed: Putative stockholder complaints, including stockholder class action complaints, and other complaints may be filed against us, our Board of Directors, OnKure, the OnKure board of directors and others in connection with the Proposed Transactions.
−Removed: The outcome of litigation is uncertain, and we or OnKure may not be successful in defending against any such future claims.
−Removed: Lawsuits that may be filed against us, our Board of Directors, OnKure, or the OnKure board of directors could delay or prevent the Mergers, divert the attention of our and OnKure’s management and employees from their day-to-day business and otherwise adversely affect us and OnKure financially.
−Removed: We are substantially dependent on our remaining employees to facilitate the completion of the Mergers.*
−Removed: As of August 31, 2024, we had only eight full-time employees.
−Removed: Our ability to successfully complete the Mergers depends in large part on our ability to retain certain remaining personnel.
−Removed: Despite our efforts to retain these employees, one or more employees may terminate their employment with us on short notice.
−Removed: The loss of the services of certain employees could potentially harm our ability to consummate the Mergers and run our day-to-day business operations, as well as fulfill our reporting obligations as a public company.
−Removed: The Reverse Stock Split may not increase the our common stock (and, accordingly, the NewCo Class A common stock) price over the long-term.*
−Removed: Our Board of Directors believes that the Reverse Stock Split may be desirable for a number of reasons.
−Removed: Our common stock is currently listed on Nasdaq and, following the completion of the Mergers, the NewCo Class A common stock is expected to be listed on the Nasdaq Global Market.
−Removed: According to the applicable Nasdaq rules, in order for our common stock or NewCo Class A common stock to continue to be listed on the Nasdaq Global Market, we and NewCo, as applicable, must satisfy certain requirements established by Nasdaq.
−Removed: Our Board of Directors expects that the Reverse Stock Split of our common stock will increase the market price of our common stock (and, accordingly, the NewCo Class A common stock) so that we and NewCo will be able to maintain compliance with the relevant Nasdaq listing requirements for the foreseeable future, although we cannot assure holders of our common stock or NewCo Class A common stock that it will be able to do so.
−Removed: Our Board of Directors also believes a higher stock price may help generate investor interest in NewCo, help NewCo attract and retain employees, increase trading volume in the NewCo Class A common stock, and facilitate future financings by NewCo.
−Removed: While it is expected that the reduction in the number of outstanding shares of our common stock will proportionally increase the market price of our common stock (and, accordingly, NewCo Class A common stock), there can be no assurance that the Reverse Stock Split will increase the market price of our common stock (and, accordingly, NewCo Class A common stock) by a multiple of the Reverse Stock Split ratio determined by OnKure and subject to our approval (which approval may not be unreasonably withheld, conditioned or delayed), or result in any permanent or sustained increase in the market price of our common stock or NewCo Class A common stock, which is dependent upon many factors, including NewCo’s business and financial performance, general market conditions and prospects for future success.
−Removed: Thus, while the stock price of our common stock might meet the listing requirements for Nasdaq initially after the Reverse Stock Split, it cannot be assured that it will continue to do so.
−Removed: The Reverse Stock Split may decrease the liquidity of our common stock (and, accordingly, NewCo Class A common stock).*
−Removed: Although our Board of Directors believes that the anticipated increase in the market price of our common stock (and, accordingly, NewCo Class A common stock) resulting from the proposed Reverse Stock Split could encourage interest in our common stock (and, accordingly, NewCo Class A common stock) and possibly promote greater liquidity for our and NewCo’s stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the Reverse Stock Split.
−Removed: The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for our common stock (and, accordingly, NewCo Class A common stock).
−Removed: The Reverse Stock Split may lead to a decrease in our (and, accordingly, NewCo’s) overall market capitalization.*
−Removed: Should the market price of our common stock (and, accordingly, NewCo Class A common stock) decline after the Reverse Stock Split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the Reverse Stock Split.
−Removed: A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in our (and, accordingly, NewCo’s) overall market capitalization.
−Removed: If the per-share market price does not increase in proportion to the Reverse Stock Split ratio, then our value (and, accordingly, NewCo), as measured by its stock capitalization, will be reduced.
−Removed: In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels,
−Removed: and accordingly, it cannot be assured that the total market value of our common stock (and, accordingly, NewCo Class A common stock) will remain the same after the Reverse Stock Split is effected, or that the Reverse Stock Split will not have an adverse effect on our common stock (and, accordingly, NewCo Class A common stock) due to the reduced number of shares outstanding after the Reverse Stock Split.
−Removed: The Reverse Stock Split may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell.*
−Removed: The Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of our common stock (and, accordingly, NewCo Class A common stock) on a post-split basis.
−Removed: These odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.
−Removed: OnKure will determine the ratio of the Reverse Stock Split in its discretion, subject to the approval of our Board of Directors, and may consider a variety of factors in making its determination.*
−Removed: One of the purposes of the Reverse Stock Split is to increase the per-share market price of our common stock (and, accordingly, NewCo Class A common stock).
−Removed: In addition, the OnKure board of directors and our Board of Directors believe a higher stock price may help generate investor interest in the Combined Company.
−Removed: Therefore, our Board of Directors may consider additional factors in determining to approve a Reverse Stock Split ratio in an attempt to achieve a higher price per share.
−Removed: Such additional factors may include the historical trading price and trading volume of our common stock;
−Removed: the then prevailing trading price and trading volume of our common stock, and the anticipated impact of the Reverse Stock Split on the trading market for our common stock (and, accordingly, NewCo Class A common stock);
−Removed: the anticipated impact of the Reverse Stock Split on the Combined Company’s ability to raise additional financing;
−Removed: and prevailing general market and economic conditions.
−Removed: Risks Related to Our Business and Industry
−Removed: We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur net losses for the foreseeable future.*
−Removed: We are a pharmaceutical company founded in 2014.
−Removed: Prior to the recent suspension of our development activities for mavodelpar announced on December 14, 2023, our operations focused primarily on raising capital, establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of, and manufacturing development for, our only product candidate, mavodelpar.
−Removed: As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful commercialization.
−Removed: Further, we have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical area.
−Removed: Consequently, any predictions about our future performance may not be as accurate as they would be if we had a history of successfully developing and commercializing pharmaceutical products.
−Removed: Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effectiveness in the targeted indication or an acceptable safety profile, gain regulatory approval and become commercially viable.
−Removed: We have no products approved for commercial sale and have not generated any revenue to date, and we continue to incur expenses related to our ongoing operations.
−Removed: As a result, we are not profitable and have incurred significant net losses since our inception.
−Removed: We may never generate any revenue.
−Removed: For the six months ended June 30, 2024 and 2023, we reported a net loss of $13.8 million and $34.6 million, respectively.
−Removed: As of June 30, 2024, we had an accumulated deficit of $232.3 million.
−Removed: We expect to continue to incur significant losses for the foreseeable future.
−Removed: We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business,
−Removed: including in connection with the proposed Mergers with OnKure.
−Removed: Our prior net losses and expected future net losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
−Removed: Because of the numerous risks and uncertainties associated with our business, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability.
−Removed: If we fail to achieve the expected financial and operational benefits of our recent cash preservation activities, our business and financial results may be harmed.
−Removed: Following the suspension of development activities of our only product candidate, mavodelpar, we implemented a reduction in workforce in December 2023 and February 2024, which resulted in approximately $4.1 million in severance and continuation of benefit expenses.
−Removed: The estimates of the costs we expect to incur, and the successful implementation of the restructuring activities pursuant to the cash preservation activities, are subject to a number of assumptions, risks and uncertainties, and actual results may differ from the above-described estimates.
−Removed: We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the cash preservation activities.
−Removed: Restructuring activities may also result in a loss of continuity, accumulated knowledge and inefficiency during transitional periods and thereafter.
−Removed: In addition, restructurings can require a significant amount of time and focus from management and other employees, which may divert attention from our core business activities.
−Removed: As a result of the negative data from our STRIDE clinical study and the reductions in our workforce that we implemented in December 2023 and February 2024, we may not be successful in retaining key employees.
−Removed: If we are unable to retain our remaining staff, our ability to consummate any strategic alternative, including the proposed Mergers with OnKure, will be seriously jeopardized.*
−Removed: We implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining.
−Removed: Our cash preservation activities may yield unintended consequences, such as attrition beyond our reductions in workforce and reduced employee morale which may cause our remaining employees to seek alternate employment.
−Removed: Competition among biotechnology companies for qualified employees is intense.
−Removed: Following the suspension of development activities for mavodelpar, our ability to retain our key employees is critical to our ability to effectively manage our resources to consummate a potential strategic transaction, including the proposed Mergers with OnKure.
−Removed: In addition, as a result of the workforce reductions, we face an increased risk of employment litigation.
−Removed: Our employees, independent contractors, principal investigators, CROs, consultants, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
−Removed: We are exposed to the risk that employees, independent contractors, principal investigators, CROs, consultants, and vendors may engage in fraudulent or other illegal activity.
−Removed: Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates:
−Removed: (i) the rules of the FDA and other similar foreign regulatory bodies, including those rules that require the reporting of true, complete, and accurate information to the FDA and other similar foreign regulatory bodies;
−Removed: (ii) manufacturing standards;
−Removed: (iii) healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws or (iv) laws that require the true, complete, and accurate reporting of our financial information or data.
−Removed: These laws may impact, among other things, our current activities with principal investigators and research subjects, as well as proposed and future sales, marketing, and education programs.
−Removed: 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.
−Removed: 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.
−Removed: Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
−Removed: If we obtain regulatory approval for a product candidate and begin commercializing such product in the United States, the EU and other countries or jurisdictions, our potential exposure under the laws of such countries and jurisdictions will increase significantly, and our costs associated with compliance with such laws are also likely to increase.
−Removed: If any such actions are instituted against us, and we are not successful in defending ourselves or 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 and equivalent foreign healthcare programs, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.
−Removed: Our relationships with customers, healthcare providers, and third-party payors may be subject, directly or indirectly, to federal, state and comparable foreign healthcare fraud and abuse laws, false claims laws, and other healthcare laws and regulations.
−Removed: If we or our employees, independent contractors, consultants, commercial partners, or vendors violate these laws, we could face substantial penalties.
−Removed: Our relationships with customers, healthcare providers, and third-party payors may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and other healthcare laws and regulations.
−Removed: These laws may impact, among other things, any future clinical research programs, as well as our proposed and future sales, marketing, and education programs.
−Removed: In particular, the promotion, sales and marketing of healthcare items and services is subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing, and other abusive practices.
−Removed: These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive, and other business arrangements.
−Removed: healthcare laws and regulations that may affect our ability to operate include, but are not limited to:
−Removed: • the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully, offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, the purchasing, leasing, ordering or arranging for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
−Removed: The term “remuneration” has been broadly interpreted to include anything of value.
−Removed: Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.
−Removed: Practices that may be alleged to be intended to induce prescribing, purchases or recommendations, include any payments of more than fair market value, and may be subject to scrutiny if they do not qualify for an exception or safe harbor.
−Removed: In addition, a person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation;
−Removed: • federal civil and criminal false claims laws, including the federal civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal government programs that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, including federal healthcare programs.
−Removed: In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act and the civil monetary penalties statute;
−Removed: • the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which created new federal civil and criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under
−Removed: the custody or control of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by any trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services.
−Removed: Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
−Removed: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, which impose requirements on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well as their covered subcontractors;
−Removed: • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and purse practitioners), and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.
−Removed: We may also be subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope.
−Removed: For example, we may be subject to the following:
−Removed: anti-kickback and false claims laws and regulations that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor;
−Removed: laws and regulations that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;
−Removed: laws and regulations that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing;
−Removed: and laws and regulations requiring the registration of pharmaceutical sales and medical representatives.
−Removed: Additionally, we may be subject to consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
−Removed: Because of the breadth of these laws and regulations and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities, or our arrangements with physicians, could be subject to challenge under one or more of such laws and regulations.
−Removed: It is not always possible to identify and deter employee misconduct or business noncompliance, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
−Removed: Efforts to ensure that our business arrangements will comply with applicable healthcare laws and regulations may involve substantial costs.
−Removed: 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.
−Removed: If we or our employees, independent contractors, consultants, commercial partners and vendors violate these laws and regulations, we may be subject to investigations, enforcement actions and/or significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and regulations, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
−Removed: In addition, any approval and commercialization of any product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws and regulations mentioned above, among other foreign laws and regulations.
−Removed: We (and the third parties with whom we work) are subject to stringent and evolving U.S.
−Removed: and foreign laws, regulations, and rules, industry standards, contractual obligations, policies and other obligations related to data privacy and security.
−Removed: Our actual or perceived failure to comply with such obligations (or such failure by the third parties with whom we work) could lead to regulatory investigations or actions;
−Removed: litigation (including class claims) and mass arbitration demands;
−Removed: fines and penalties;
−Removed: disruptions of our business operations;
−Removed: reputational harm;
−Removed: loss of revenue or profits;
−Removed: and other adverse business consequences.*
−Removed: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data (collectively, sensitive data).
−Removed: Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations, relating to data privacy and security.
−Removed: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, state and federal health information privacy laws, personal data privacy laws, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
−Removed: In addition, we may obtain health data from third parties (including research institutions from which we obtain clinical trial data) that is subject to privacy and security requirements under HIPAA, as amended by HITECH, and their respective implementing regulations.
−Removed: Depending on the facts and circumstances, we could be subject to civil, criminal, and administrative penalties if we knowingly obtain, use, or disclose individually identifiable protected health information in a manner that is not authorized or permitted by HIPAA.
−Removed: In the past few years, numerous U.S.
−Removed: states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
−Removed: As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
−Removed: The exercise of these rights may impact our business and ability to provide our products and services.
−Removed: Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.
−Removed: These state laws allow for statutory fines for noncompliance.
−Removed: For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, the CCPA), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
−Removed: The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
−Removed: Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
−Removed: While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
−Removed: Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.
−Removed: For example, the European Union’s General Data Protection Regulation (EU GDPR), the United Kingdom’s GDPR (UK GDPR), Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), Australia’s Privacy Act, and New Zealand’s Privacy Act, impose strict requirements for processing personal data.
−Removed: For example, under the EU GDPR and UK GDPR, companies may face temporary or definitive bans on data processing and other corrective actions, fines of up to 20 million euros or 17.5 million pounds, respectively, or 4% of annual global revenue, in each case, whichever is greater, or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
−Removed: In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.
−Removed: Europe and other jurisdictions have enacted laws requiring data to be localized or
−Removed: limiting the transfer of personal data to other countries.
−Removed: In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws they generally believe are inadequate.
−Removed: Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the European Commission’s Standard Contractual Clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
−Removed: Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework and/or extension thereto), these mechanisms are subject to potential legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
−Removed: If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
−Removed: These challenges and risks concerning cross-border transfers of personal data out of the EEA and UK to recipients in other jurisdictions, notably recipients in the United States, may be of particular significance to us and our operations as the majority of the trials we conduct take place in locations outside the United States, with a large number occurring in the EEA or UK.
−Removed: Furthermore, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
−Removed: Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
−Removed: In addition to data privacy and security laws, we are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
−Removed: Our employees and personnel may use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy or legal obligations (such as copyright infringement).
−Removed: Governments have passed and are likely to pass additional laws regulating generative AI.
−Removed: Any use of this technology could result in additional compliance costs, regulatory investigations and actions, and consumer lawsuits.
−Removed: If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages.
−Removed: We publish privacy policies, marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
−Removed: If these policies, marketing materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
−Removed: Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.
−Removed: Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
−Removed: Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties with whom we work.
−Removed: We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
−Removed: Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
−Removed: If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences.
−Removed: These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
−Removed: litigation (including class-action claims) and mass arbitration demands;
−Removed: additional reporting requirements and/or oversight;
−Removed: bans or restrictions on processing personal data;
−Removed: and orders to destroy or not use personal data.
−Removed: In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
−Removed: Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
−Removed: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:
−Removed: loss of customers;
−Removed: interruptions or stoppages in our business operations (including future clinical trials);
−Removed: inability to process sensitive data or to operate in certain jurisdictions;
−Removed: limited ability to develop or commercialize our products;
−Removed: expenditure of time and resources to defend any claim or inquiry;
−Removed: adverse publicity;
−Removed: or revision or restructuring of our operations.
−Removed: If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any product candidates.
−Removed: Although we are not currently pursuing further clinical development of our only product candidate, mavodelpar, we face an inherent risk of product liability as a result of the clinical testing of mavodelpar we have conducted and any future clinical testing of mavodelpar and any other product candidates we may conduct.
−Removed: We will face an even greater risk if we commercialize any products.
−Removed: For example, we may be sued if mavodelpar or any future product candidates causes or is perceived to cause injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing, or sale.
−Removed: Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties.
−Removed: Claims could also be asserted under state consumer protection acts.
−Removed: If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of any product candidates.
−Removed: Even successful defense would require significant financial and management resources.
−Removed: Regardless of the merits or eventual outcome, liability claims may result in:
−Removed: • decreased demand for any product candidates;
−Removed: • injury to our reputation;
−Removed: • withdrawal of clinical trial participants;
−Removed: • initiation of investigations by regulatory authorities;
−Removed: • costs to defend the related litigation;
−Removed: • a diversion of management’s time and our resources;
−Removed: • substantial monetary awards to trial participants or patients;
−Removed: • product recalls, withdrawals or labeling, marketing, or promotional restrictions;
−Removed: • loss of revenue;
−Removed: • exhaustion of any available insurance and our capital resources;
−Removed: • the inability to commercialize any product candidates;
−Removed: • a decline in our share price.
−Removed: Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we may develop.
−Removed: We currently carry an aggregate of up to $7.0 million of product liability insurance covering our clinical trials.
−Removed: Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.
−Removed: If we determine that it is prudent to increase our product liability coverage due to the commercial launch of any approved product, we may be unable to obtain such increased coverage on acceptable terms, or at all.
−Removed: Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage.
−Removed: We will have to pay any amounts awarded by a court or negotiated
−Removed: in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
−Removed: Our ability to utilize our net operating loss (NOL) carryforwards and certain other tax attributes may be limited.*
−Removed: We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability.
−Removed: To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire (if at all).
−Removed: See Note 11, Income Taxes of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for further discussion.
−Removed: Under federal tax legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the Tax Act), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but, in the case of tax years beginning after 2020, may only be used to offset 80% of our taxable income annually.
−Removed: Our NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (IRS) and state tax authorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a rolling three-year period in excess of 50 percentage points (by value), as defined under Section 382 of the Internal Revenue Code of 1986, as amended.
−Removed: Our ability to utilize our NOL carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes.
−Removed: Similar rules may apply under state tax laws.
−Removed: Such limitations could result in the expiration of our carryforwards before they can be utilized and, if we are profitable, our future cash flows could be adversely affected due to our increased taxable income or tax liability.
−Removed: We may have experienced ownership changes in the past and may experience ownership changes as a result of the proposed Mergers with OnKure, future offerings and/or subsequent changes in our stock ownership (some of which are outside our control).
−Removed: In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited.
−Removed: For example, California recently enacted legislation that, with certain exceptions, suspends the ability to use California net operating losses to offset California income and limits the ability to use California business tax credits to offset California taxes, for taxable years beginning on or after January 1, 2024, and before January 1, 2027.
−Removed: Such state tax law provisions could accelerate or permanently increase state taxes owed.
−Removed: Changes in tax laws or regulations that are applied adversely to us or our customers may have a material and adverse effect on our business, cash flow, financial condition or results of operations.
−Removed: The Tax Act enacted many significant changes to the U.S.
−Removed: Future guidance from the IRS and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation.
−Removed: For example, the CARES Act modified certain provisions of the Tax Act.
−Removed: Changes in corporate tax rates, the realization of net deferred tax assets relating to our U.S.
−Removed: operations, the taxation of foreign earnings and the deductibility of expenses under the Tax Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years and could increase our future U.S.
−Removed: For example, the recently enacted IRA includes provisions that will impact the U.S.
−Removed: federal income taxation of corporations, including imposing a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock.
−Removed: The foregoing items, as well as any other future changes in tax laws, could have a material adverse effect on our business, cash flow, financial condition or results of operations.
−Removed: In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, the IRA, or any newly enacted federal tax legislation.
−Removed: Tax authorities may disagree with our positions and conclusions regarding certain tax positions, resulting in unanticipated costs, taxes or non-realization of expected benefits.
−Removed: A tax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities.
−Removed: For example, the IRS or another tax authority could challenge our allocation of income by tax jurisdiction
−Removed: and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property development.
−Removed: Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable nexus, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.
−Removed: A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, in which case, we expect that we might contest such assessment.
−Removed: Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the assessment, the implications could increase our anticipated effective tax rate, where applicable.
−Removed: Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions could adversely affect our current financial condition and projected business operations.
−Removed: Events involving limitations to liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
−Removed: For example, on March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver.
−Removed: Subsequently, the FDIC announced that all deposits with SVB would be fully insured.
−Removed: Similarly, on March 12, 2023, Signature Bank Corp.
−Removed: and Silvergate Capital Corp.
−Removed: were each swept into receivership and on May 1, 2023, First Republic Bank was swept into receivership.
−Removed: We have moved any cash or other deposits previously held at SVB US (a division of First Citizens Bank) and SVB UK (a division of HSBC) to other financial institutions.
−Removed: We did not have any material impact on our financial condition or operations as a result of SVB’s circumstances.
−Removed: Additionally, the failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances or with which we do business, could adversely impact our liquidity and financial performance.
−Removed: There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S.
−Removed: or any applicable foreign government in the future or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a future failure or liquidity crisis.
−Removed: In addition, if any of our partners or parties with whom we conduct business are unable to access funds due to the status of their financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.
−Removed: Investor concerns regarding the U.S.
−Removed: or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
−Removed: Our inability to acquire financing on acceptable terms or at all may materially harm our business, financial condition, results of operations and prospects.
+Added: You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including the unaudited condensed consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other public filings in evaluating our business.
+Added: The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects.
+Added: In such an event, the market price of our common stock could decline.
+Added: Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and the market price of our common stock .
+Added: Summary of Risk Factors
+Added: We face many risks and uncertainties, as more fully described in this section.
+Added: Some of these risks and uncertainties are summarized below.
+Added: The summary below does not contain all of the information that may be important to you, and you should read this summary together with the more detailed discussion of these risks and uncertainties contained below.
+Added: • We are early in our development efforts and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and future viability.
+Added: • We have incurred significant net losses in each period since inception, and expect to continue to incur significant net losses for the foreseeable future.
+Added: • We have never generated revenue from product sales and may never achieve or maintain profitability.
+Added: • We will need substantial additional funding before we can complete the development of our product candidates.
+Added: If we are unable to obtain such additional capital on favorable terms, on a timely basis or at all, we would be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business
+Added: • We are substantially dependent on OKI-219.
+Added: If we are unable to advance OKI-219 through clinical development, obtain regulatory approval and ultimately commercialize such product candidate, or experience significant delays in doing so, our business will be materially harmed.
+Added: • We have limited resources and are currently focusing our efforts on OKI-219 for development in particular indications and advancing our other discovery research programs.
+Added: As a result, we may fail to capitalize on programs, product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
+Added: • If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
+Added: • The regulatory approval processes of the FDA, EMA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
+Added: If we are ultimately unable to obtain regulatory approval of our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.
+Added: • If we experience delays or difficulties in the enrollment or retention of subjects in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
+Added: • The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities.
+Added: • If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates on acceptable terms, we may be unable to successfully commercialize our product candidates that obtain regulatory approval.
+Added: • If we are unable to obtain and maintain sufficient intellectual property protection for our technology and products and product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and, if approved, commercialize our product candidates may be adversely affected.
+Added: • We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct, supervise and monitor certain aspects of our clinical trials and preclinical studies.
+Added: If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements and meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed.
+Added: • Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees.
+Added: • The market price of our Class A Common Stock is expected to be volatile.
+Added: • We expect to incur losses for the foreseeable future and might never achieve profitability.
+Added: • Our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and provisions under Delaware law could make an acquisition of our company more difficult and may prevent attempts by our stockholders to replace or remove our management.
+Added: • As a result of the Merger, we are subject to the SEC requirements applicable to reporting shell company business combinations.
+Added: As a result, we are subject to more stringent reporting requirements, offering limitations and resale restrictions.
+Added: • An active trading market for our Class A Common Stock may not develop, and the holders of our Class A Common Stock may not be able to resell their shares of our Class A Common Stock for a profit, if at all.
+Added: • We could be subject to securities class action litigation, which is expensive and could divert management attention.
+Added: • Our executive officers, directors and principal stockholders have the ability to control or significantly influence all matters submitted to our stockholders for approval.
+Added: Risks Related to Our Operating History, Financial Position and Need for Additional Capital
+Added: We are early in our development efforts and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and future viability.
+Added: We are a clinical-stage biopharmaceutical company, have no products approved for commercial sale and have never generated any revenue.
+Added: Our operations to date have been limited to organizing the company, raising capital and developing our product candidates.
+Added: We have not yet demonstrated our ability to obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
+Added: As a result, it may be difficult for investors to accurately predict our likelihood of success and viability.
+Added: In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields.
+Added: We also expect that, as we advance our product candidates, we will need to transition from a company with a research and development focus to a company capable of supporting commercial activities.
+Added: We have not yet demonstrated an ability to successfully overcome such risks and difficulties, or to make such a transition.
+Added: If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer.
+Added: We have incurred significant net losses in each period since inception, and we expect to continue to incur significant net losses for the foreseeable future.
+Added: We have incurred significant net losses in each reporting period since inception, have not generated any revenue from the sale of products, and have funded our operations primarily from the sale and issuance of equity securities and convertible debt.
+Added: Legacy OnKure’s net losses were $35.3 million and $29.5 million for the years ended December 31, 2023 and 2022, respectively.
+Added: We have no products approved for sale.
+Added: As a result, we expect that it will be many years, if ever, before we have a commercialized product and generate revenue from product sales.
+Added: Even if we succeed in receiving marketing approval for and commercializing one or more of our product candidates, we expect that we will continue to incur substantial research and development and other expenses to discover, develop and market additional product candidates.
+Added: We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
+Added: The net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.
+Added: The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue, if any.
+Added: Our prior losses and expected future losses have had and will continue to have an adverse effect on our working capital, our ability to fund the development of our product candidates, our ability to achieve and maintain profitability and the performance of our stock.
+Added: We have never generated revenue from product sales and may never achieve or maintain profitability.
+Added: We have never generated any revenue from commercial product sales.
+Added: To become and remain profitable, we must develop and eventually commercialize product candidates with significant market potential, which will require us to be successful in a range of challenging activities.
+Added: These activities can include completing preclinical studies and clinical trials of our product candidates, obtaining marketing approval for these product candidates, manufacturing, marketing and selling those products that are approved and satisfying any post-marketing requirements.
+Added: We do not anticipate generating any revenue from product sales for many years.
+Added: Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives, including:
+Added: • successful and timely completion of clinical development of OKI-219 and preclinical and clinical development of other pipeline programs and any other future programs;
+Added: • establishing and maintaining relationships with CROs and clinical sites for the clinical development of OKI-219 and any other future programs;
+Added: • timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development;
+Added: • developing an efficient and scalable manufacturing process for our product candidates, including obtaining finished products that are appropriately packaged for sale;
+Added: • establishing and maintaining commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and meet the market demand for our product candidates, if approved;
+Added: • successful commercial launch following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators a continued acceptable safety profile following any marketing approval of our product candidates;
+Added: • commercial acceptance of our product candidates by patients, the medical community and third-party payors;
+Added: • satisfying any required post-marketing approval commitments to applicable regulatory authorities;
+Added: • identifying, assessing and developing new product candidates;
+Added: • obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;
+Added: • defending against third-party interference or infringement claims, if any;
+Added: • entering into, on favorable terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;
+Added: • obtaining and maintaining coverage and adequate reimbursement by third-party payors for our product candidates;
+Added: • addressing any competing therapies and technological and market developments;
+Added: • attracting, hiring and retaining qualified personnel.
+Added: We may never be successful in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability.
+Added: If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
+Added: Our failure to become and remain profitable would decrease our value and could impair our ability to maintain or further our research and development efforts, raise additional necessary capital, grow our business and continue our operations.
+Added: Any changes in the manufacturing process, suppliers, or facilities will require further comparability analysis and approval by the U.S.
+Added: Food and Drug Administration (the FDA) before implementation, which could delay our
+Added: clinical trials and product candidate development, and could require additional clinical trials, including bridging studies, to demonstrate consistent and continued safety and efficacy.
+Added: We have not previously submitted a New Drug Application (NDA) to the FDA or similar approval filings to a comparable foreign regulatory authority for any product candidate.
+Added: An NDA or other relevant regulatory filing must include extensive nonclinical and clinical data and supporting information to establish that the product candidate is safe and effective for each desired indication.
+Added: The NDA or other relevant regulatory filing must also include significant information regarding the chemistry, manufacturing and controls for the product candidate.
+Added: We cannot be certain that our current or future product candidates will be successful in clinical trials or receive regulatory approval.
+Added: If we do not receive regulatory approvals for current or future product candidates, we may not be able to continue our operations.
+Added: Even if we successfully obtain regulatory approval to market a product candidate, our revenue will depend, in part, upon the size of the markets in the territories for which we receive regulatory approval and have commercial rights, the availability of competitive therapies and whether there are sufficient levels of reimbursement and adoption by physicians.
+Added: We will need substantial additional funding before we can complete the development of our product candidates.
+Added: If we are unable to obtain such additional capital on favorable terms, on a timely basis or at all, we would be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business.
+Added: Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive.
+Added: We have not generated any revenues from the commercial sale of products and will not be able to generate any product revenues until, and only if, we receive approval to sell our product candidates from the FDA or other regulatory authorities.
+Added: Our cash, cash equivalents and short term investments are expected to fund operations into the fourth quarter of 2026.
+Added: However, as we have not generated any revenue from commercial sales to date and do not expect to generate any revenue for several years, if ever, we will need to raise substantial additional capital in order to fund our general corporate activities and to fund our research and development, including our currently planned clinical trials and plans for new clinical trials and product development.
+Added: We may seek to raise additional funds through various potential sources, such as equity and debt financings, or through strategic collaborations and license agreements.
+Added: We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available, that such additional financing will be sufficient to meet our needs.
+Added: Moreover, to the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution and new investors could gain rights, preferences and privileges senior to the holders of common stock.
+Added: Debt financing, if available, may involve restrictive covenants.
+Added: To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or product candidates, or grant licenses on terms that may not be favorable.
+Added: Given our capital constraints, we will need to prioritize spending on our clinical and preclinical programs.
+Added: If we are unable to raise sufficient funds to support our current and planned operations, we may elect to discontinue certain of our ongoing activities or programs.
+Added: Our inability to raise additional funds could also prevent us from taking advantage of opportunities to pursue promising new or existing programs in the future.
+Added: Our forecasts regarding the sufficiency of our financial resources to support our current and planned operations are forward-looking statements and involve significant risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section.
+Added: These estimates are based on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than currently expected.
+Added: Risks Related to Our Development and Commercialization of Our Product Candidates
+Added: We are substantially dependent on OKI-219.
+Added: If we are unable to advance OKI-219 through clinical development, obtain regulatory approval and ultimately commercialize such product candidate, or experience significant delays in doing so, our business will be materially harmed.
+Added: We are currently evaluating OKI-219 in a Phase 1 clinical trial.
+Added: We will be required to demonstrate thorough, adequate and well-controlled clinical trials that OKI-219 is safe and effective, with a favorable benefit risk profile, for use in its target indication before we can seek regulatory approvals for its commercial sale.
+Added: Our initial clinical trials will begin with relatively small cohorts before expanding in size in subsequent cohorts.
+Added: If safety issues arise in an early cohort, we may be delayed or prevented from subsequently expanding into larger trial cohorts.
+Added: Our ability to generate product revenue, which we do not expect will occur for many years, if ever, will depend heavily on the successful clinical development and eventual commercialization of OKI-219.
+Added: We are not permitted to market or promote any product candidate before we receive marketing approval from the FDA, European Medicines Agency (EMA) or any comparable foreign regulatory authorities, and we may never receive such marketing approvals.
+Added: We have limited resources and are currently focusing our efforts on OKI-219 for development in particular indications and advancing our other discovery research programs.
+Added: As a result, we may fail to capitalize on programs, product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
+Added: We are currently focusing our resources and efforts on OKI-219 and advancing our other research programs.
+Added: Because we have limited financial and managerial resources, we must focus on a limited number of research programs and product candidates and on specific indications.
+Added: As a result, we may forgo or delay pursuit of opportunities for other indications or with other product candidates that may have greater commercial potential.
+Added: Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
+Added: Our spending on current and future research and development activities for OKI-219 and our other research programs may not yield any commercially viable products.
+Added: If we do not accurately evaluate the commercial potential or target markets for OKI-219 and our other research programs, or the product candidates we are currently developing in these programs, we may relinquish valuable rights to our product candidates or programs through collaboration, licensing or other strategic arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate or program.
+Added: If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
+Added: Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct preclinical studies in animals and extensive clinical trials in humans to demonstrate the safety and efficacy of the product candidates.
+Added: Clinical testing is expensive and difficult to design and implement, can take many years to complete and has uncertain outcomes.
+Added: The outcome of preclinical studies and early clinical trials may not predict the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
+Added: A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier trials.
+Added: We do not know whether the clinical trials we may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market any of our product candidates in any jurisdiction.
+Added: Our product candidates may fail to demonstrate efficacy in humans, and particularly across tumor types.
+Added: A product candidate may fail for safety or efficacy reasons at any stage of the testing process.
+Added: A major risk we face is the possibility that none of our product candidates under development will successfully gain market approval from the FDA, EMA or other comparable foreign regulatory authorities, resulting in our being unable to derive any commercial revenue from them after investing significant amounts of capital in their development.
+Added: If the results of our ongoing or future preclinical studies and future clinical trials are inconclusive with respect to the safety and efficacy of our product candidates, if our trials do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with our product candidates, we may be prevented or delayed in obtaining marketing approval for such product candidates.
+Added: In some instances, there can be significant variability in safety or efficacy results between different preclinical studies and clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants.
+Added: Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or adverse events.
+Added: In such an event, our trials could be suspended or terminated and the FDA, EMA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.
+Added: Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.
+Added: Any of these occurrences may harm our business, financial condition and prospects significantly.
+Added: Further, our product candidates could cause undesirable side effects in clinical trials related to on-target toxicity.
+Added: If on-target toxicity is observed, or if our product candidates have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow indications or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
+Added: Many compounds that initially showed promise in early stage testing for treating cancer have later been found to cause side effects that prevented further development of the compound.
+Added: The regulatory approval processes of the FDA, EMA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
+Added: If we are ultimately unable to obtain regulatory approval of our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.
+Added: Our product candidates are and will continue to be subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of drugs.
+Added: Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must be successfully completed in the United States and in many foreign jurisdictions before a new drug can be approved for marketing.
+Added: Obtaining approval by the FDA, EMA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved.
+Added: 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, which may cause delays in the approval or the decision not to approve an application.
+Added: For example, FDA’s Oncology Center of Excellence initiated Project Optimus to reform the dose optimization and dose selection paradigm in oncology drug development and Project FrontRunner to help develop and implement strategies to support approvals in early clinical setting, among other goals.
+Added: How the FDA plans to implement these goals and their impact on specific clinical programs and the industry are unclear.
+Added: Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other data.
+Added: Even if we eventually complete clinical testing and receive approval for our product candidates, the FDA, EMA and other comparable foreign regulatory authorities may approve our product candidates for a more limited indication or a narrower patient population than originally requested or may impose other prescribing limitations or warnings that limit the product candidate’s commercial potential.
+Added: We have not submitted for, or obtained, regulatory approval for any product candidate, and it is possible that none of our product candidates will ever obtain regulatory approval.
+Added: Further, development of our product candidates and/or regulatory approval may be delayed for reasons beyond our control.
+Added: Applications for our product candidates could fail to receive regulatory approval for many reasons, including the following:
+Added: • the FDA, EMA or other comparable foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials;
+Added: • the FDA, EMA or other comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, are only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
+Added: • the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;
+Added: • the FDA, EMA or other comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
+Added: • we may be unable to demonstrate to the FDA, EMA or other comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
+Added: • the FDA, EMA or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
+Added: • the FDA, EMA or other comparable regulatory authorities may fail to approve companion diagnostic tests required for our product candidates;
+Added: • the approval policies or regulations of the FDA, EMA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
+Added: In addition, even if clinical 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.
+Added: For example, although we have sought and received feedback from the FDA on the designs of our clinical trials and intend to continue to do so, the FDA may ultimately disagree that our trials support approval for OKI-219.
+Added: Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction.
+Added: 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 conduct additional trials in support of potential approval of our product candidates.
+Added: Even if we secure regulatory approval for any of our product candidates, the terms of such approval may limit the scope and use of the product candidate, which may also limit its commercial potential.
+Added: If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
+Added: • incur unplanned costs;
+Added: • be delayed in obtaining marketing approval for our product candidates or not obtain marketing
+Added: approval at all;
+Added: • obtain marketing approval in some countries and not in others;
+Added: • obtain marketing approval for indications or patient populations that are not as broad as intended or
+Added: • obtain marketing approval with labeling that includes significant use or distribution restrictions or
+Added: safety warnings, including boxed warnings;
+Added: • be subject to additional post-marketing testing requirements;
+Added: • be subject to changes in the way the product is administered;
+Added: • have regulatory authorities withdraw or suspend their approval of the product.
+Added: We cannot be certain that our planned clinical trials or any other future clinical trials will be successful.
+Added: Additionally, any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
+Added: Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction.
+Added: For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion and pricing of the product candidate in those countries.
+Added: However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
+Added: Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional nonclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.
+Added: In many jurisdictions outside the United States, the pricing of a prescription drug candidate is subject to regulatory approval before it can be approved for sale in that jurisdiction.
+Added: In some cases, the price that we intend to charge for our products is also subject to approval.
+Added: We may also submit marketing applications in other countries.
+Added: Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions.
+Added: Obtaining foreign regulatory approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries.
+Added: If we or any future collaborator fails to comply with the regulatory requirements in international markets or fails to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our potential product candidates will be harmed.
+Added: If we experience delays or difficulties in the enrollment or retention of subjects in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
+Added: Trials may be subject to delays as a result of patient withdrawal or patient enrollment taking longer than anticipated.
+Added: We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of subjects to participate to such trials’ conclusion as required by the FDA, EMA or other comparable foreign regulatory authorities.
+Added: Patient enrollment is a significant factor in the timing of clinical trials.
+Added: While our Phase 1 dose-escalation and expansion cohort trial, OKI-219-101, known as PIKture-01, has begun enrollment, future difficulties we experience relating to enrollment in our clinical trials, or complications in the PIKture-01 trial or future clinical trials, could delay regulatory approval for OKI-219 or our future product candidates.
+Added: Patient enrollment may be affected if our competitors have ongoing clinical trials for product candidates that are under development for the same indications as our product candidates, and subjects who would otherwise be eligible for our clinical trials instead enroll in clinical trials of our competitors’ product candidates.
+Added: Patient enrollment for any of our future clinical trials may be affected by other factors, including:
+Added: • size and nature of the patient population, and process for identifying patients;
+Added: • severity and difficulty of diagnosing the condition under investigation;
+Added: • availability and efficacy of approved drugs and other competing therapeutic candidates for the condition under investigation;
+Added: • the eligibility and exclusion criteria for the trial in question as defined in the protocol;
+Added: • our ability to recruit clinical trial investigators with the appropriate competencies and experience;
+Added: • the design of the clinical trial;
+Added: • perceived risks and benefits of the product candidate under study;
+Added: • participants’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating;
+Added: • efforts to facilitate timely enrollment in clinical trials;
+Added: • participant referral practices of doctors;
+Added: • the ability to monitor participants adequately during and after treatment;
+Added: • proximity and availability of clinical trial sites for prospective trial subjects;
+Added: • continued enrollment of prospective subjects by clinical trial sites;
+Added: • the risk that subjects enrolled in clinical trials will drop out of the trials before completion.
+Added: Our inability to enroll a sufficient number of subjects for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
+Added: Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain marketing approval for the sale of our product candidates.
+Added: Furthermore, we expect to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and we will have limited influence over their performance.
+Added: Even if we are able to enroll a sufficient number of subjects for our clinical trials, we may have difficulty maintaining enrollment of such subjects in our clinical trials.
+Added: Our product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.
+Added: If our product candidates are associated with undesirable side effects or have unexpected characteristics in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, we may need to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
+Added: 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.
+Added: Any of these occurrences may prevent us from achieving or maintaining market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly.
+Added: Patients in our ongoing and planned clinical trials may suffer significant adverse events or other side effects not observed in our preclinical studies or previous clinical trials.
+Added: Patients treated with our product candidates may also be undergoing surgical, radiation and chemotherapy treatments, which can cause side effects or adverse events that are unrelated to our product candidate but may still impact the success of our clinical trials.
+Added: The inclusion of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the gravity of such patients’ illnesses.
+Added: For example, it is expected that some of the patients enrolled in our clinical trials will die or experience major clinical events either during the course of our clinical trials or after participating in such trials.
+Added: If significant adverse events or other side effects are observed in any of our current or future clinical trials, we may have difficulty recruiting patients to the clinical trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts of that product candidate altogether.
+Added: We, the FDA, and other comparable regulatory authorities or an institutional review board (IRB) may suspend clinical trials of a product candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to unacceptable health risks or adverse side effects.
+Added: Some potential therapeutics developed in the biotechnology industry that initially showed therapeutic promise in early-stage trials have later been found to cause side effects that prevented their further development.
+Added: Even if the side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance due to its tolerability versus other therapies.
+Added: Any of these developments could materially harm our business, financial condition and prospects.
+Added: Further, if any of our product candidates obtains marketing approval, toxicities associated with such product candidates previously not seen during clinical testing may also develop after such approval and lead to a requirement to conduct additional clinical safety trials, additional contraindications, warnings and precautions being added to the drug label, significant restrictions on the use of the product or the withdrawal of the product from the market.
+Added: We cannot predict whether our product candidates will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval based on preclinical studies or early-stage clinical trials.
+Added: The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities.
+Added: We will be required to demonstrate with substantial evidence through well-controlled clinical trials that our product candidates are safe and effective for use in a diverse population before we can seek marketing approvals for their commercial sale.
+Added: Success in preclinical studies and early-stage clinical trials does not mean that future clinical trials will be successful.
+Added: For example, we previously decided to cease developing another product candidate, known as OKI-179, despite promising early data.
+Added: Product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and other comparable foreign regulatory authorities despite having progressed through preclinical studies and early-stage clinical trials.
+Added: Regulatory authorities may also limit the scope of later-stage trials until we have demonstrated satisfactory safety, which could delay regulatory approval, limit the size of the patient population to which we may market our product candidates, or prevent regulatory approval.
+Added: In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dose and dosing regimen and other trial protocols and the rate of dropout among clinical trial participants.
+Added: Patients treated with our product candidates may also be undergoing surgical, radiation and chemotherapy treatments and may be using other approved products or investigational new drugs, which can cause side effects or adverse events that are unrelated to our product candidates.
+Added: As a result, assessments of efficacy can vary widely for a particular patient, and from patient to patient and site to site within a clinical trial.
+Added: This subjectivity can increase the uncertainty of, and adversely impact, our clinical trial outcomes.
+Added: We may also experience issues in conducting our clinical trials that would delay or prevent us from satisfying the applicable requirements of the FDA and other regulatory authorities, including:
+Added: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials for any future product candidates;
+Added: • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for advanced clinical trials;
+Added: • delays in reaching agreement with the FDA or other regulatory authorities as to the design or implementation of our clinical trials;
+Added: • obtaining regulatory authorization to commence a clinical trial;
+Added: • delays in reaching, or fail to reach, agreement on acceptable terms with clinical trial sites or prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites;
+Added: • obtaining approval at each trial site;
+Added: • recruiting suitable patients to participate in a clinical trial;
+Added: • having patients complete a clinical trial or return for post-treatment follow-up;
+Added: • inspections of clinical trial sites or operations by applicable regulatory authorities, or the imposition of a clinical hold;
+Added: • clinical sites, CROs or other third parties deviating from trial protocol or dropping out of a trial;
+Added: • failure to perform in accordance with applicable regulatory requirements, including the FDA’s current Good Clinical Practices (GCP) requirements, or applicable regulatory requirements in other countries;
+Added: • addressing patient safety concerns that arise during the course of a trial, including occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;
+Added: • adding a sufficient number of clinical trial sites;
+Added: • manufacturing sufficient quantities of product candidate for use in clinical trials;
+Added: • suspensions or terminations by IRBs of the institutions at which such trials are being conducted, or by the FDA or other regulatory authorities due to a number of factors, including those described above.
+Added: We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such trials, including:
+Added: • changes in regulatory requirements or guidance, or receive feedback from regulatory authorities that requires us to modify the design of our clinical trials;
+Added: • clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs;
+Added: • the number of patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;
+Added: • third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
+Added: • we or our investigators might have to suspend or terminate clinical trials for various reasons, including non-compliance with regulatory requirements, a finding that a product candidate has undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks;
+Added: • the cost of clinical trials may be greater than we anticipate and we may not have funds to cover the costs;
+Added: • the supply or quality of product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate;
+Added: • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate;
+Added: • any future collaborators that conduct clinical trials may face any of the above issues and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.
+Added: We do not know whether any clinical trials we may conduct will demonstrate efficacy and safety sufficient to obtain approval to market any of our product candidates.
+Added: Interim, initial, “top-line” and preliminary data from clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
+Added: From time to time, we may publicly disclose interim, preliminary or top-line data from our preclinical studies and clinical trials.
+Added: Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their condition.
+Added: Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.
+Added: As a result, interim, preliminary and top-line data should be viewed with caution until the final data are available.
+Added: We also make assumptions, estimations, and calculations, and draws conclusions, as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
+Added: As a result, the top-line or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
+Added: Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program or the approvability or commercialization of the particular product candidate, and could have a material adverse effect on the success of our business.
+Added: In addition, the information we choose to disclose publicly regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
+Added: If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our product candidates may be harmed, which could harm our business, results of operations, prospects or financial condition.
+Added: Further, disclosure of interim, top-line or preliminary data by us or by our competitors could result in volatility in the price of our Class A Common Stock.
+Added: Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
+Added: As product candidates progress through preclinical and clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield and manufacturing batch size, minimize costs and achieve consistent quality and results.
+Added: Such changes carry the risk that they will not achieve these intended objectives.
+Added: Any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials.
+Added: This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of product candidates and jeopardize our ability to commercialize our product candidates, if approved, and generate revenue.
+Added: We may develop programs in combination with other therapies, which exposes us to additional risks.
+Added: We intend to develop OKI-219, and may develop any other product candidate we develop, in combination with one or more currently approved cancer therapies or therapies in development.
+Added: Patients may not be able to tolerate our product candidates in combination with other therapies, or dosing of our product candidates in combination with other therapies may have unexpected consequences.
+Added: Even if any of our product candidates were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to risks that the FDA or other comparable foreign regulatory authorities could revoke
+Added: approval of the therapy used in combination with our product candidates, or safety, efficacy, manufacturing or supply issues could arise with these existing therapies.
+Added: In addition, it is possible that existing therapies with which our product candidates may be approved for use could themselves fall out of favor or be relegated to later lines of treatment.
+Added: This could result in the need to identify other combination therapies for our product candidates or our products being removed from the market or being less successful commercially.
+Added: If the FDA or other comparable foreign regulatory authorities do not approve or revoke their approval of these other therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues arise with the therapies we choose to evaluate in combination with our product candidates, we may be unable to obtain approval of or successfully market any or all of the product candidates we develop.
+Added: Additionally, if the third-party providers of therapies or therapies in development used in combination with our product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our product candidates, or if the cost of combination therapies is prohibitive, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
+Added: We face substantial competition which may result in others discovering, developing or commercializing products before or more successfully than we do.
+Added: The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.
+Added: We face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions.
+Added: Product candidates that we successfully develop and commercialize may compete with existing therapies, and new therapies that may become available in the future.
+Added: Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presence in the market and expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do.
+Added: These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
+Added: Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
+Added: Additional mergers and acquisitions may result in even more resources being concentrated in our competitors.
+Added: As a result of these factors, our competitors may succeed in obtaining approval from the FDA, EMA or other comparable foreign regulatory authorities or in discovering, developing and commercializing product candidates in our field before we do.
+Added: There are multiple PI3Kα-pathway targeted agents either approved or under clinical development that will potentially compete with OKI-219 and our PI3Kα-targeted portfolio.
+Added: These include the marketed medicines alpelisib (Piqray, a PI3Kα-selective inhibitor marketed by Novartis) and capivasertib (Truquap, an AKT1 inhibitor marketed by Astra Zeneca), both of which are approved for the treatment of PI3Kα-mutated breast cancer patients in combination with the selective estrogen receptor degrader (SERD) fulvestrant.
+Added: We are also aware of several novel PI3K-targeted therapies that are in clinical development.
+Added: This includes both multiple non-mutation-selective PI3K inhibitors (inavolisib, developed by Roche Holdings AG;
+Added: gedatolisib (Celcuity Inc.);
+Added: MEN1611 (menarini) and TOS-358 (Totus Medicines)) and inhibitors designed to have greater selectivity for mutated PI3Kα, including RLY-2608 (Relay Therapeutics), STX-473 (Scorpion Therapeutics) and LOXO-783 (Loxo Oncology).
+Added: Multiple other companies have disclosed or published research efforts in PI3K inhibitors that are at an early stage, but could potentially advance to the clinical trial stage.
+Added: Finally, there are numerous other investigational therapies, spanning many modalities that are being evaluated preclinically and in clinical trials for breast cancer.
+Added: Our commercial potential could be reduced or eliminated if our competitors develop and commercialize products that are safer or more effective, have fewer or less severe side effects or are more convenient or lessexpensive than products that we may develop.
+Added: Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we can, which could make our development more complicated or result in our competitors establishing a strong market position before we are able to enter the market.
+Added: Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.
+Added: If we are unable to compete effectively, our opportunity to generate revenue from the sale of our product candidates, if approved, could be adversely affected.
+Added: Even if OKI-219 or any other product candidate receives marketing approval, they may fail to achieve market acceptance among physicians, patients, third-party payors and others in the medical community.
+Added: If OKI-219 or any other product candidate that we develop receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
+Added: The degree of market acceptance of OKI-219 or any other product candidate that we develop, if approved for commercial sale, will depend on a number of factors, including:
+Added: • the efficacy and potential advantages of our product candidates compared to alternative treatments, including the existing standard of care;
+Added: • our ability to offer products for sale at competitive prices;
+Added: • the clinical indications for which the product is approved;
+Added: • restrictions on the use of product candidates in the labeling approved by regulatory authorities, such as boxed warnings or contraindications in labeling, or a Risk Evaluation Mitigation Strategy (REMS), if any, which may not be required of alternative treatments and competitor products;
+Added: • the cost of treatment in relation to alternative treatments;
+Added: • the convenience and ease of administration compared to alternative treatments;
+Added: • the willingness of the target patient population to try new therapies and of doctors to prescribe these therapies;
+Added: • the strength of our marketing and distribution support;
+Added: • the timing of market introduction of competitive products;
+Added: • the availability of an approved product candidate for use as a combination therapy;
+Added: • the potential for our competitors to limit our access to the market through anti-competitive contracts or other arrangements;
+Added: • unfavorable publicity relating to our product candidates;
+Added: • the prevalence and severity of any side effects;
+Added: • any restrictions on the use of our products together with other medications.
+Added: If any of our product candidates are approved but do not achieve an adequate level of market acceptance, we may not generate or derive sufficient revenue from that product candidate and our financial results could be negatively impacted.
+Added: If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates on acceptable terms, we may be unable to successfully commercialize our product candidates that obtain regulatory approval.
+Added: If OKI-219 or another product candidate is approved, we must build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for each of the territories in which we intend to sell and market our product candidates.
+Added: We may not be successful in accomplishing these required tasks.
+Added: Establishing and building out an internal sales and marketing team with technical expertise and supporting distribution capabilities to commercialize our product candidates will be expensive and time-consuming and will require significant attention of our executive officers to manage.
+Added: Any failure or delay in the development of our
+Added: internal sales, marketing and distribution capabilities could adversely impact the commercialization of any of our product candidates that we obtain approval to market, if we do not have arrangements in place with third parties to provide such services on our behalf.
+Added: Alternatively, if we choose to collaborate, either globally or on a territory-by-territory basis, with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems, we will be required to negotiate and enter into arrangements with such third parties relating to the proposed collaboration.
+Added: If we are unable to enter into such arrangements when needed, on acceptable terms, or at all, we may not be able to successfully commercialize any of our product candidates that receive regulatory approval, or any such commercialization may experience delays or limitations.
+Added: If we are unable to successfully commercialize our approved product candidates, either on our own or through collaborations with one or more third parties, our future product revenue will suffer, and we may incur significant additional losses.
+Added: If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products, if approved.
+Added: Our business exposes us to significant product liability risks inherent in the development, testing, manufacturing and marketing of therapeutic treatments.
+Added: Product liability claims could delay or prevent completion of our development programs.
+Added: If our product candidates are approved for marketing, such claims could still result in an FDA, EMA or other regulatory authority investigation of the safety and effectiveness of such products, our manufacturing processes and facilities or our marketing programs.
+Added: These investigations could potentially lead to a recall of our products or more serious enforcement actions, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals.
+Added: Regardless of the merits or eventual outcome, liability claims may also result in injury to our reputation, withdrawal of clinical trial participants, costs to defend the related litigation, a diversion of management’s time and our resources, initiation of investigations by regulators, substantial monetary awards to patients or other claimants, the inability to commercialize our product candidates and decreased demand for our product candidates, if approved for commercial sale.
+Added: We currently have product liability insurance that we believe is appropriate for our stage of development and may need to obtain higher levels prior to marketing any of our product candidates, if approved.
+Added: Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business and cause the price of our Class A Common Stock to decline.
+Added: Furthermore, clinical trial and product liability insurance is becoming increasingly expensive.
+Added: As a result, we may be unable to maintain or obtain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses, including those caused by product liability claims.
+Added: Any product candidates we develop may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations.
+Added: The availability and extent of coverage and adequate reimbursement by third-party payors, including government health administration authorities, private health coverage insurers, managed care organizations and other third-party payors is essential for most patients to be able to afford expensive treatments.
+Added: Sales of any of our product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of such product candidates will be covered and reimbursed by third-party payors.
+Added: If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates.
+Added: Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize an adequate return on investment.
+Added: Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.
+Added: If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize any product candidate for which we obtain marketing approval.
+Added: There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
+Added: In the United States, for example, principal decisions about reimbursement for new products are typically made by the Centers for Medicare & Medicaid Services (CMS), an agency within the U.S.
+Added: Department of
+Added: Health and Human Services (HHS).
+Added: CMS decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree.
+Added: However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate.
+Added: As a result, the coverage determination process is often time-consuming and costly.
+Added: This process will require us to provide scientific and clinical support for the use of our products to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
+Added: Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.
+Added: Further, such payors are increasingly challenging the price, examining the medical necessity and reviewing the cost effectiveness of medical product candidates.
+Added: There may be especially significant delays in obtaining coverage and reimbursement for newly approved drugs.
+Added: Third-party payors may limit coverage to specific product candidates on an approved list, known as a formulary, which might not include all FDA-approved drugs for a particular indication.
+Added: We may need to conduct expensive pharmaco-economic studies to demonstrate the medical necessity and cost effectiveness of our products.
+Added: Nonetheless, our product candidates may not be considered cost effective.
+Added: We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be.
+Added: Outside the United States, the commercialization of therapeutics is generally subject to extensive governmental price controls and other market regulations, and we believe that the increasing emphasis on cost containment initiatives in Europe, Canada and other countries has and will continue to put pressure on the pricing and usage of therapeutics such as our product candidates.
+Added: In many countries, particularly the countries of the European Union, medical product prices are subject to varying price control mechanisms as part of national health systems.
+Added: In these countries, pricing negotiations with governmental authorities can take considerable time after a product receives marketing approval.
+Added: To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost effectiveness of a product candidate to other available therapies.
+Added: In general, product prices under such systems are substantially lower than in the United States.
+Added: Other countries allow companies to fix their own prices for products but monitor and control company profits.
+Added: Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates.
+Added: Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.
+Added: If we are unable to establish or sustain coverage and adequate reimbursement for any product candidates from third-party payors, the adoption of those products and sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell those product candidates, if approved.
+Added: Coverage policies and third-party payor reimbursement rates may change at any time.
+Added: Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
+Added: A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.
+Added: We are developing regulatory strategies for our product candidates outside the United States and, accordingly, we expect that we or our partners would seek regulatory approval of our product candidates outside of the United States.
+Added: As such, we expect that we will be subject to additional risks related to operating in foreign countries if we or such partners obtain the necessary approvals, including:
+Added: • differing regulatory requirements and drug pricing regimes in foreign countries;
+Added: • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;
+Added: • economic weakness, including inflation, or political instability in particular foreign economies and markets;
+Added: • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
+Added: • foreign taxes, including withholding of payroll taxes;
+Added: • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;
+Added: • difficulties staffing and managing foreign operations;
+Added: • workforce uncertainty in countries where labor unrest is more common than in the United States;
+Added: • potential liability under the U.S.
+Added: Foreign Corrupt Practices Act or comparable foreign regulations;
+Added: • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;
+Added: • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
+Added: • business interruptions resulting from geopolitical actions, including war and terrorism.
+Added: These and other risks associated with our international operations or those of any applicable international partners may materially adversely affect our ability to attain or maintain profitable operations.
+Added: In particular, there is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, including sanctions, treaties, tariffs, taxes, regulatory requirements, and other limitations on cross-border operations.
+Added: government has made and continues to make significant additional changes in U.S.
+Added: trade policy and may continue to take future actions that could negatively impact U.S.
+Added: For example, legislation has been introduced in Congress to limit certain interactions with certain Chinese biotechnology companies.
+Added: We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what interactions, including products or services, may be subject to such actions, or what actions may be taken by the other countries in retaliation.
+Added: If our interactions with parties affected by any such actions are limited or no longer possible, our business, liquidity, financial condition, or results of operations could be materially and adversely affected.
Risks Related to Our Intellectual Property
−Removed: If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
−Removed: We may enter into license agreements under which we are granted intellectual property rights that are important to our business and product candidates.
−Removed: If we fail to comply with our obligations under such license agreements, such license agreements may be terminated.
−Removed: The agreements under which we may license intellectual property or technology from third parties may be complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
−Removed: The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other
−Removed: obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
−Removed: Moreover, if disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
−Removed: In spite of our best efforts, our current and future licensor(s) might conclude that we materially breached our license agreements and might therefore terminate the license agreements, thereby removing our ability to develop and commercialize products and technology covered by these license agreements.
−Removed: If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, products identical to ours.
−Removed: This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
−Removed: Disputes may arise between us and our licensors regarding intellectual property rights subject to a license agreement, including:
−Removed: • the scope of rights granted under the license agreement and other interpretation-related issues;
−Removed: • whether and the extent to which our technology and processes infringe on intellectual property rights of the licensor that are not subject to the license agreement;
−Removed: • our right to sublicense intellectual property rights to third parties under collaborative development relationships;
−Removed: • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of any product candidates, and what activities satisfy those diligence obligations;
−Removed: • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
−Removed: We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own, which are described herein.
−Removed: If we or our licensor(s) fail to adequately protect this intellectual property, our ability to develop, manufacture or commercialize products could suffer.
−Removed: If disputes over intellectual property rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, our business, results of operations, financial condition, and prospects may be adversely affected.
−Removed: We may enter into additional licenses in the future and if we fail to comply with obligations under those agreements, we could suffer adverse consequences.
+Added: If we are unable to obtain and maintain sufficient intellectual property protection for our technology and products and product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and, if approved, commercialize our product candidates may be adversely affected.
+Added: We rely upon a combination of patents, trademarks, trade secret protection and confidentiality agreements to protect the intellectual property related to our development programs and product candidates.
+Added: Our success depends in part on our ability to obtain and maintain patent protection in the United States and other countries with respect to OKI-219 and any future product candidates.
+Added: We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our development programs, product candidates and novel discoveries that are important to our business.
+Added: The patent prosecution process is expensive and time consuming, and we may not be able to file, prosecute, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner.
+Added: The patents and patent applications that we own may fail to result in issued patents with claims that protect OKI-219 or any future product candidate in the United States or in other foreign countries.
+Added: There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which
+Added: can prevent a patent from issuing from a pending patent application, or be used to invalidate a patent.
+Added: Even if patents do successfully issue and even if such patents cover OKI-219 or any future product candidate, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable.
+Added: Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop.
+Added: Further, the scope and coverage of such patents may be so narrow that a third party could successfully design around our patents without materially impacting the therapeutic effectiveness of the resulting drug product.
+Added: Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.
+Added: The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future collaborators will be successful in protecting our product candidates by obtaining and defending patents.
+Added: These risks and uncertainties include the following:
+Added: • the United States Patent and Trademark Office (the USPTO) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;
+Added: • the USPTO requires us to disclose all material references to the patent examiner during prosecution of our patent applications, and failure to do so could result in a third party successfully challenging our ability to enforce a patent against an infringer;
+Added: • patent applications may not result in any patents being issued;
+Added: • patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
+Added: • our competitors, many of whom have substantially greater resources than we do and many of which have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or block our ability to make, use and sell our product candidates;
+Added: • there may be significant pressure on the U.S.
+Added: government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments of diseases or conditions that prove successful, as a matter of public policy regarding worldwide health concerns;
+Added: • countries other than the United States may have patent laws that are less favorable to patentees, allowing foreign competitors a better opportunity to create, develop and market competing products.
+Added: The patent prosecution process is also expensive and time consuming, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications or maintain or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner or in all jurisdictions where protection may be commercially advantageous.
+Added: We may not be able to obtain or maintain patent applications and patents due to the subject matter claimed in such patent applications and patents in the public domain.
+Added: It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
+Added: Moreover, if we choose to license certain patent rights in the future from third parties, we may not have the right to control the preparation, filing and prosecution of such patent applications, or to maintain the patents, directed to technology that we license from those third parties.
+Added: We may also require the cooperation of our future licensor, if any, to enforce the licensed patent rights, and such cooperation may not be provided.
+Added: Therefore, any licensed patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
+Added: We cannot be certain that patent prosecution and maintenance activities by any of our future licensors have been or will be conducted in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications.
+Added: If they fail to do so, this could cause us to lose rights in any applicable intellectual property that we in-license, and as a result our ability to develop and commercialize
+Added: products or product candidates may be adversely affected, and we may be unable to prevent competitors from making, using and selling competing products.
+Added: If the patent applications we hold or may in-license in the future with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for OKI-219 or any future product candidate, it could dissuade other companies from collaborating with us to develop product candidates, and threaten our ability to commercialize OKI-219 or future product candidates.
+Added: Any such outcome could have a materially adverse effect on our business.
+Added: The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been and will continue to be the subject of litigation and new legislation, resulting in court decisions, including U.S.
+Added: Supreme Court decisions, which have increased uncertainties as to the ability to enforce patent rights in the future.
+Added: In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
+Added: For example, many countries restrict the patentability of methods of treatment of the human body.
+Added: Publications in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
+Added: Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our own patents or pending patent applications, or that we were the first to file for patent protection of such inventions.
+Added: As a result of these and other factors, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.
+Added: Our pending and future patent applications may not result in patents being issued that protect our technology or products, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products.
+Added: Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.
+Added: For example, the America Invents Act created new administrative post-grant proceedings, including post-grant review, inter partes review and derivation proceedings that allow third parties to challenge the validity of issued patents.
+Added: This applies to all of our U.S.
+Added: patents, even those issued before March 16, 2013.
+Added: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S.
+Added: federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
+Added: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
+Added: Depending on decisions by the U.S.
+Added: Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
+Added: Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.
+Added: The costs of defending patents or enforcing proprietary rights in post-issuance administrative proceedings and litigation can be substantial and the outcome can be uncertain.
+Added: An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize their technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
+Added: 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.
+Added: The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents and patent applications may be challenged in the courts or patent offices in the United States and abroad.
+Added: Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts.
+Added: An adverse decision in any such challenge may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and
+Added: Generally, issued patents are granted a term of 20 years from the earliest claimed non-provisional filing date.
+Added: In certain instances, patent term can be adjusted to recapture a portion of delay incurred by the USPTO in examining the patent application (patent term adjustment).
+Added: The scope of patent protection may also be limited.
+Added: Without patent protection for our current or future product candidates, we may be open to competition from generic versions of such products.
+Added: Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
+Added: As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
+Added: Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
+Added: Patent rights are of limited duration.
+Added: In the United States, if all maintenance fees are paid timely, the natural expiration of a patent is generally 20 years after its first effective filing date.
+Added: Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized.
+Added: Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic products.
+Added: As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours.
+Added: Upon issuance in the United States, the term of a patent can be increased by patent term adjustment, which is based on certain delays caused by the USPTO, but this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution.
+Added: The term of a U.S.
+Added: patent may also be shortened if the patent is terminally disclaimed over an earlier-filed patent.
+Added: Depending upon the timing, duration and specifics of FDA marketing approval of OKI-219 and future product candidates, one or more of our U.S.
+Added: patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.
+Added: The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the normal expiration of the patent as compensation for patent term lost during drug development and the FDA regulatory review process, which is limited to the approved indication (or any additional indications approved during the period of extension).
+Added: This extension is based on the first approved use of a product and is limited to only one patent that covers the approved product, the approved use of the product or a method of manufacturing the product.
+Added: Such patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval.
+Added: However, the applicable authorities, including the FDA and the USPTO in the United States and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
+Added: We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
+Added: Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
+Added: If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case.
+Added: Laws governing analogous patent term extension (PTE) in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family.
+Added: Additionally, we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, apply prior to expiration of relevant patents or otherwise satisfy applicable requirements.
+Added: If we are unable to obtain PTE or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our products will be shortened and our competitors may obtain approval of competing products following our patent expiration and may take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to launch their product earlier than might otherwise be the case, and our revenue could be reduced, possibly materially.
+Added: Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.
+Added: Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and patent applications will be due to the USPTO and other foreign patent agencies in several stages over the lifetime of our patents and patent applications.
+Added: The USPTO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
+Added: While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
+Added: Noncompliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
+Added: If we or any of our licensors fails to maintain the patents and patent applications covering OKI-219 or any future product candidate, our competitors may be able to enter the market, which would have an adverse effect on our business.
+Added: We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.
+Added: As the biopharmaceutical industry expands and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
+Added: There can be no assurance that our operations do not, or will not in the future, infringe, misappropriate or otherwise violate existing or future third-party patents or other intellectual property rights.
+Added: Identification of third-party patent rights that may be relevant to our operations is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims.
+Added: We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our current and future product candidates in any jurisdiction.
+Added: Numerous U.S.
+Added: and foreign patents and pending patent applications exist in our market that are owned by third parties.
+Added: Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained, or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
+Added: We do not always conduct independent reviews of pending patent applications and patents issued to third parties.
+Added: Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date.
+Added: applications that will not be filed outside the United States can remain confidential until patents issue.
+Added: In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived.
+Added: Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or the use of our product candidates.
+Added: As such, there may be applications of others now pending or recently revived patents of which we are unaware.
+Added: These patent applications may later result in issued patents, or the revival of previously abandoned patents, that may be infringed by the manufacture, use or sale of our product candidates or will prevent, limit or otherwise interfere with our ability to make, use or sell our product candidates.
+Added: The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.
+Added: Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our products.
+Added: For example, we may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly
+Added: predict whether a third party’s pending application will issue with claims of relevant scope.
+Added: Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.
+Added: We may become involved in third-party claims of intellectual property infringement, which may delay or prevent the development and commercialization of OKI-219 and any future product candidate.
+Added: Our commercial success depends in part on us avoiding infringement and other violations of the patents and proprietary rights of third parties.
+Added: There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter partes review and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions.
+Added: We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights and who allege that our product candidates, uses and/or other proprietary technologies infringe their intellectual property rights.
+Added: Numerous U.S.- and foreign-issued patents and pending patent applications owned by third parties exist in the fields in which we and our collaborators are developing product candidates.
+Added: As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties.
+Added: Third parties may assert that we are infringing their patents or employing their proprietary technology without authorization.
+Added: Also, there may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our current and future product candidates.
+Added: Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our current or future product candidates may infringe.
+Added: In addition, third parties may obtain patent rights in the future and claim that use of our technologies infringes upon their rights.
+Added: If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process, methods of treating certain diseases or conditions that we are pursuing with our product candidates, our formulations including combination therapies, or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtain a license under the applicable patents, or until such patents expire.
+Added: Such a license may not be available on commercially reasonable terms or at all.
+Added: In addition, we may be subject to claims that we are infringing other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
+Added: Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our current and future product candidates.
+Added: Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
+Added: In the event of a successful infringement or other intellectual property claim against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our affected products, which may be impossible or require substantial time and monetary expenditure.
+Added: We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.
+Added: Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time.
+Added: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.
+Added: In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly.
+Added: We cannot provide any assurances that third-party patents do not
+Added: exist which might be enforced against our product candidates, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties.
+Added: During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation.
+Added: If securities analysts or investors regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished.
+Added: Accordingly, the price of our Class A Common Stock may decline.
+Added: Such announcements could also harm our reputation or the market for our future products, which could have a material adverse effect on our business.
+Added: We may become involved in lawsuits to protect or enforce our patents or other intellectual property rights, or the patents or other intellectual property rights of any licensors, which could be expensive, time-consuming, and unsuccessful.
+Added: Competitors may infringe or otherwise violate our patents or other intellectual property rights, or those of our licensors.
+Added: To counter infringement or unauthorized use or misappropriations, we or any future licensors may be required to file legal claims, which can be expensive and time-consuming.
+Added: In addition, in an infringement proceeding, a court may decide that one or more of our patents or any of our current or future licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our or our licensors’ patents do not cover the technology in question.
+Added: An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
+Added: The initiation of a claim against a third party may also cause the third party to bring counter claims against us, such as claims asserting that our patents are invalid or unenforceable.
+Added: In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
+Added: Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement, insufficient written description or failure to claim patent-eligible subject matter.
+Added: Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution.
+Added: Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation.
+Added: The outcome following legal assertions of invalidity and unenforceability is unpredictable.
+Added: In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours or a future licensor is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.
+Added: There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our or any future licensors’ patent claims do not cover the invention, or decide that the other party’s use of our or any future licensors’ patented technology falls under the safe harbor to patent infringement under 35 U.S.C.
+Added: An adverse outcome in a litigation or proceeding involving our or any future licensors’ patents could limit our ability to assert our own or any future licensors’ patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.
+Added: Any of these occurrences could adversely affect our competitive position and our business, financial condition, results of operations and prospects.
+Added: Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.
+Added: In this case, we could ultimately be forced to cease use of such trademarks.
+Added: We cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution.
+Added: For any patents and patent applications that we license from third parties, we may have limited or no right to participate in the defense of such licensed patents against challenge by a third party.
+Added: If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our current or future product candidates.
+Added: Such a loss of patent protection could harm our business.
+Added: We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.
+Added: Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms.
+Added: Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees.
+Added: Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
+Added: There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
+Added: If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our Class A Common Stock.
+Added: Moreover, we cannot assure you that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded.
+Added: Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.
+Added: Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.
+Added: Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing our patents, any patents that may be issued as a result of our future patent applications, or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in our best interest or that of our stockholders.
+Added: In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution.
+Added: Changes in U.S.
+Added: patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
+Added: As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.
+Added: Obtaining, defending, maintaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time-consuming and inherently uncertain.
+Added: Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents, and may diminish our ability to protect our inventions, obtain, maintain, enforce and protect our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our future owned and licensed patents.
+Added: The United States has enacted and implemented wide-ranging patent reform legislation.
+Added: Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.
+Added: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
+Added: Depending on actions by Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.
+Added: Similarly, changes in patent law and regulations in other jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.
+Added: For example, the complexity and uncertainty of European patent laws have also increased in recent years.
+Added: In Europe, a new unitary patent system took effect June 1, 2023, which will significantly impact European patents, including those granted before the introduction of such a system.
+Added: Under the unitary patent system, European applications have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court (the UPC).
+Added: As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any
+Added: Patents granted before the implementation of the UPC have the option of opting out of the jurisdiction of the UPC over the first seven years of the court’s existence and remaining as national patents in the UPC countries.
+Added: Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries that are signatories to the UPC.
+Added: We cannot predict with certainty the long-term effects of any potential changes.
+Added: We may not be able to protect our intellectual property rights throughout the world, which could impair our business.
+Added: Patents are of national or regional effect, and filing, prosecuting and defending patents covering OKI-219 and any future product candidate throughout the world would be prohibitively expensive.
+Added: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions in which we do pursue patent protection.
+Added: Consequently, we may not be able to prevent third parties from practicing our or any future licensors’ inventions in all countries outside the United States, even in jurisdictions where we or any future licensors do pursue patent protection, or from selling or importing products made using our or any future licensors’ inventions in and into the United States or other jurisdictions.
+Added: Competitors may use our or any future licensors’ technologies in jurisdictions where we have not obtained patent protection to develop our own products and, further, may export otherwise infringing products to territories where we may have or obtain patent protection, but where patent enforcement is not as strong as in the United States.
+Added: These unauthorized competitors’ products may compete with our products in such jurisdictions and take away our market share where we do not have any issued or licensed patents, and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
+Added: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products.
+Added: This could make it difficult for us to stop the infringement of our patents or the marketing of competing products in violation of our intellectual property and proprietary rights generally.
+Added: In addition, certain jurisdictions do not protect to the same extent or at all inventions that constitute new methods of treatment.
+Added: Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
+Added: In addition, many countries limit the enforceability of patents against government agencies or government contractors.
+Added: In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
+Added: If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
+Added: Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws within the United States.
+Added: We may need to share our trade secrets and proprietary know-how with current or future partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors and those affiliated with or controlled by state actors.
+Added: As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.
+Added: In addition, some courts inside and outside of the United States may be less willing or unwilling to protect trade secrets.
+Added: If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs.
+Added: Even if we are successful, such lawsuits would consume our time and other resources.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
−Removed: We rely on trade secrets, including unpatented know-how, technology and other proprietary information, to protect our proprietary technologies and maintain our competitive position, especially where we do not believe patent protection is appropriate or obtainable.
−Removed: However, trade secrets are difficult to protect.
−Removed: We rely in part on confidentiality agreements with our employees, outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties, to protect our trade secrets and other proprietary information.
−Removed: In addition to contractual measures, we try to protect the confidential nature of our trade secrets and other proprietary information using commonly accepted physical and technological security measures.
−Removed: Despite these efforts, we cannot provide any assurances that all such agreements have been duly executed, and these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
−Removed: In addition, others may independently discover our trade secrets and proprietary information.
−Removed: For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including
−Removed: information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
−Removed: Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
−Removed: In addition, such commonly accepted physical and technological security measures may not provide adequate protection for our proprietary information, for example, in the case of misappropriation of a trade secret by an employee, consultant, advisor, or other third party with authorized access.
−Removed: Our security measures may not prevent an employee, outside scientific collaborator, CRO, third-party manufacturer, consultant, advisor, potential partner, and other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
−Removed: Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.
−Removed: Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary.
−Removed: Even though we use commonly accepted security measures, the criteria for protection of trade secrets can vary among different jurisdictions.
−Removed: Further, we may need to share our proprietary information, including trade secrets, with our current and future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
−Removed: Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.
−Removed: In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.
−Removed: Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us.
−Removed: If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced, and our competitive position would be harmed.
−Removed: Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
−Removed: Elements of our product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, and other proprietary information that is not covered by patents, and thus for these aspects we may consider trade secrets, including unpatented know-how, and other proprietary information to be our primary intellectual property.
−Removed: Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
−Removed: Trade secrets, including unpatented know-how, and other proprietary information, can be difficult to trace, protect and enforce.
−Removed: We require our employees to enter into written employment agreements containing provisions of confidentiality and obligations to assign to us any inventions generated in the course of their employment.
−Removed: We further seek to protect our potential trade secrets, proprietary know-how and information in part, by entering into non-disclosure and confidentiality agreements with parties who are given access to them, such as outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, and other third parties.
−Removed: With our consultants, advisors, contractors and outside scientific collaborators, these agreements typically include invention assignment obligations.
−Removed: Although we have taken steps to protect our trade secrets and unpatented know-how, we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets and unpatented know-how, and we may not be able to obtain adequate remedies for such breaches.
−Removed: Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.
−Removed: Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.
−Removed: Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or academic to industry scientific positions.
−Removed: Though our agreements with third parties typically restrict the ability of our employees, outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties, to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights.
−Removed: If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.
−Removed: Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trade secrets with them.
−Removed: Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
−Removed: If any of these events occurs or if any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position would be harmed and we would have no right to prevent them from using that technology or information to compete with us.
−Removed: If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.
−Removed: We may be subject to claims that we or our employees, outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.
−Removed: We have entered into and may enter in the future into non-disclosure and confidentiality agreements to protect the proprietary positions of third parties, such as outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties.
−Removed: We may become subject to litigation where a third party asserts that we or our employees inadvertently or otherwise breached the agreements and used or disclosed trade secrets or other information proprietary to the third parties.
−Removed: We may also be subject to claims that we have wrongfully hired an employee from a competitor.
−Removed: Defense of such matters, regardless of their merit, could involve substantial litigation expense and be a substantial diversion of employee resources from our business.
−Removed: We cannot predict whether we would prevail in any such actions.
−Removed: Moreover, intellectual property litigation, regardless of its outcome, may cause negative publicity and could prohibit us from marketing or otherwise commercializing our product candidates and technology.
−Removed: Failure to defend against any such claim could subject us to significant liability for monetary damages or prevent or delay our developmental and commercialization efforts, which could adversely affect our business.
−Removed: Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employees.
−Removed: Parties making claims against us may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources.
−Removed: In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, operating results, financial condition and prospects.
−Removed: Risks Related to Ownership of Our Common Stock
−Removed: If we fail to satisfy applicable listing standards, our common stock may be delisted from the Nasdaq Global Market.
−Removed: Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from The Nasdaq Global Market or if we are unable to transfer our listing to another stock market.
−Removed: The continued listing requirements of The Nasdaq Global Market include minimums for market value of listed securities, closing prices and stockholders’ equity.
−Removed: Currently, our stock trades above these
−Removed: minimum requirements, but we cannot assure that our stock will continue to meet these minimum requirements.
−Removed: If our common stock is delisted by Nasdaq, it could lead to a number of negative implications, including an adverse effect on the price of our common stock, increased volatility in our common stock, reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.
−Removed: In addition, delisting of our common stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, could result in a loss of current or future coverage by certain sell-side analysts and might deter certain institutions and persons from investing in our securities at all.
−Removed: Delisting could also cause a loss of confidence of our customers, collaborators, vendors, suppliers and employees, which could harm our business and future prospects.
−Removed: If our common stock is delisted by Nasdaq, the price of our common stock may decline, and although our common stock may be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common stock or obtain accurate quotations as to the market value of our common stock.
−Removed: Further, if we are delisted, we would incur additional costs under state blue sky laws in connection with any sales of our securities.
−Removed: These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.
−Removed: The market price of our common stock has been volatile and may continue to be volatile in the future.
−Removed: This volatility may cause our stock price and the value of your investment to decline.*
−Removed: The market prices for securities of pharmaceutical companies, including ours, have been highly volatile and may continue to be so in the future.
−Removed: The market price of our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations, including as a result of the factors discussed in this “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q.
−Removed: For example, the market price of our common stock declined significantly as a result of the announcement we made on December 14, 2023, regarding the topline results from our pivotal STRIDE study and a decision to suspend all mavodelpar development activities.
−Removed: In addition, the stock market in general, and pharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
−Removed: Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
−Removed: We could be subject to securities class action litigation.*
−Removed: In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities or certain significant business transactions, such as the sale of a company or announcement of merger.
−Removed: This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years.
−Removed: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
−Removed: Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.*
−Removed: Our executive officers and directors, combined with our stockholders who own more than 5% of our outstanding capital stock, beneficially own shares representing a significant percentage of our common stock.
−Removed: Therefore, these stockholders will have the ability to influence us through this ownership position.
−Removed: These stockholders may be able to determine all matters requiring stockholder approval.
−Removed: For example, these stockholders may be able to significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction, including the proposed merger transaction with OnKure.
−Removed: This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.
−Removed: Our business could face adverse consequences as a result of the actions of activist stockholders.*
−Removed: We have been and may in the future be subject to unsolicited attempts to gain control of our company, proxy contests, and other forms of stockholder activism.
−Removed: For example, we have received unsolicited proposals from stockholders to acquire all outstanding shares of our common stock.
−Removed: Our Board of Directors will carefully review and evaluate each proposal in consultation with our independent financial and legal advisors.
−Removed: Our business could be adversely affected because responding to an unsolicited offer, proxy contest or other actions by activist stockholders can be costly and time-consuming, disruptive to our operations and divert the attention of management and our employees from the execution of our potential strategic alternatives, including the proposed Mergers with OnKure.
−Removed: In addition, actual or perceived uncertainties as to our future direction caused by activist activities may cause or appear to cause instability, potentially making it more difficult to retain qualified personnel and collaborators or leading to the loss of collaboration opportunities, and if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans.
−Removed: Activist stockholder activities may also cause significant fluctuations in our stock price based on temporary or speculative market perceptions, or other factors that do not necessarily reflect the fundamental underlying value of our business.
−Removed: Finally, we might experience a significant increase in legal fees and administrative and associated costs incurred in connection with responding to an unsolicited offer, proxy contest or related action.
−Removed: These actions could also negatively affect the price of our common stock.
−Removed: We are an emerging growth company and a smaller reporting company, and the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.*
−Removed: We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).
−Removed: For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various public company reporting requirements, including being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this Quarterly Report on Form 10-Q, not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
−Removed: We may take advantage of these exemptions until December 31, 2026 or until we are no longer an emerging growth company, whichever is earlier.
−Removed: We will cease to be an emerging growth company prior to the end of such five-year period if certain earlier events occur, including if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period.
−Removed: Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
−Removed: We are also a “smaller reporting company” as defined in the Exchange Act.
−Removed: We may continue to be a smaller reporting company even after we are no longer an emerging growth company, which would allow us to take advantage of many of the same exemptions available to emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation.
−Removed: We will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
−Removed: Investors may find our common stock less attractive because we may rely on these exemptions.
−Removed: If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
+Added: In addition to the protection afforded by patents, we may seek to rely on trade secret protection to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other
+Added: elements of our product discovery and development processes that involve proprietary know-how, information or technology that is not covered by our patents.
+Added: We may not be able to meaningfully protect our trade secrets.
+Added: Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed to our competitors or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
+Added: Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws within the United States.
+Added: As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.
+Added: If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.
+Added: Because we expect to rely on third parties to manufacture OKI-219 and any future product candidates, and we expect to collaborate with third parties on the continuing development of OKI-219 and any future product candidates, we must, at times, share trade secrets with them.
+Added: We also expect to conduct R&D programs that may require us to share trade secrets under the terms of our partnerships or agreements with CROs.
+Added: We seek to protect our proprietary technology in part by entering into agreements containing confidentiality and use restrictions and obligations, including material transfer agreements, consulting agreements, manufacturing and supply agreements, confidentiality agreements or other similar agreements with our advisors, employees, contractors, contract manufacturing organizations (or CMOs), CROs, other service providers and consultants prior to disclosing proprietary information.
+Added: These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets.
+Added: Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are intentionally or inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
+Added: Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect on our business and results of operations.
+Added: In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors CMOs, CROs, other service providers and consultants to publish data potentially relating to our trade secrets, although such agreements may contain certain limited publication rights.
+Added: Despite our efforts to protect our trade secrets, our competitors may discover such trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators.
+Added: A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.
+Added: Monitoring unauthorized disclosure and detection of unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate.
+Added: If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, it would be expensive and time consuming, and the outcome would be unpredictable.
+Added: In addition, courts outside the United States are sometimes less willing to protect trade secrets.
+Added: If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs.
+Added: These lawsuits may consume our time and other resources even if we are successful.
+Added: For example, significant elements of our products, including confidential aspects of sample preparation, methods of manufacturing, and related processes and software, are based on unpatented trade secrets.
+Added: Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.
+Added: We may become subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties or claims asserting ownership of what we regard as our own intellectual property.
+Added: We employ individuals who were previously employed at other biotechnology or pharmaceutical companies, or at research institutions, including our competitors or potential competitors.
+Added: Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that these individuals have or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of such individual’s current or former employer.
+Added: Further, although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with our employees, collaborators, and other third parties with whom we do business include provisions requiring such parties to assign rights in inventions to us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.
+Added: Litigation may be necessary to defend against these claims.
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights.
+Added: An inability to incorporate such technologies or features would harm our business and may prevent us from successfully commercializing our technologies or product candidates.
+Added: In addition, we may lose personnel as a result of such claims, and any such litigation, or the threat thereof, may adversely affect our ability to hire employees or contract with independent contractors.
+Added: A loss of key personnel or their work product could hamper or prevent our ability to commercialize our technologies or product candidates, which could adversely affect our business, financial condition, results of operations and prospects.
+Added: Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
+Added: In addition, we may also be subject to claims that former employers, consultants or other third parties have an ownership interest in our patents or patent applications as an inventor or co-inventor.
+Added: The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.
+Added: Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our product candidates or as a result of questions regarding co-ownership of potential joint inventions.
+Added: Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership.
+Added: Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property.
+Added: There is no guarantee of success in defending these claims, and if we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
+Added: Such challenges may also result in our inability to develop, manufacture or commercialize our technologies and product candidates without infringing third-party patent rights.
+Added: 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 technologies and product candidates.
+Added: Even if we are successful, litigation could result in substantial costs and be a distraction to our management and other employees.
+Added: Any of the foregoing could adversely affect our business, financial condition, results of operations and prospects.
+Added: If our future trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest, and our business may be adversely affected.
+Added: We intend to use registered or unregistered trademarks or trade names to brand and market ourselves and our products.
+Added: Our trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks.
+Added: During trademark registration proceedings, we may receive rejections of our applications by the USPTO or foreign agencies.
+Added: Although we are given an opportunity to respond to such rejections, we may be unable to overcome them.
+Added: In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.
+Added: Opposition or cancellation proceedings may be filed against our trademarks, which may not survive such proceedings.
+Added: We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.
+Added: At times, competitors may adopt trade names or trademarks similar to those of ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.
+Added: In addition, there could be potential trade name or trademark infringement
+Added: claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.
+Added: Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected.
+Added: We may license our trademarks and trade names to third parties, such as distributors.
+Added: Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.
+Added: Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.
+Added: In addition, any proprietary name we propose to use with our current or future product candidates in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.
+Added: The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names.
+Added: If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
+Added: Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
+Added: Our intellectual property rights do not necessarily address all potential threats to our competitive advantage.
+Added: The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business or permit us to maintain our competitive advantage.
+Added: The following examples are illustrative:
+Added: • others may be able to make formulations or compositions that are the same as or similar to our current or future product candidates, but that are not covered by the pending patent applications or patents that we own or any pending patent applications or patents that we may in-license in the future;
+Added: • others may be able to make products that are similar to our current or future product candidates, but that are not covered by the patents that we own or exclusively license and have the right to enforce;
+Added: • we, or our future licensors or collaborators, may not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in-license in the future;
+Added: • we, or our future licensors, may not have been the first to file patent applications covering certain of our or those licensors’ inventions;
+Added: • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned intellectual property rights or any patent applications that we may license in the future;
+Added: • it is possible that our pending patent applications or those that we may own or license in the future will not lead to issued patents;
+Added: • issued patents that we either own or that we may license in the future may be revoked, modified or held valid or unenforceable, as a result of legal challenges by our competitors;
+Added: • issued patents that we either own or may license in the future may not provide us with any competitive advantages;
+Added: • others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis;
+Added: • our competitors may conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
+Added: • we may not develop additional proprietary technologies that are patentable;
+Added: • we cannot predict the scope of protection of any patent issuing based on our or any future licensors’ patent applications, including whether the patent applications that we own or, in the future, in-license, will result in issued patents with claims directed to our product candidates or uses thereof in the United States or in other foreign countries;
+Added: • a court may not hold that our patents are valid, enforceable or infringed;
+Added: • we may need to initiate litigation or administrative proceedings to enforce or defend our patent rights, which will be costly whether we win or lose;
+Added: • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property;
+Added: • we may fail to adequately protect and police our trademarks and trade secrets;
+Added: • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving the subject matter covered by our patent applications.
+Added: Any collaboration or partnership arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products.
+Added: Any future collaborations that we enter into may not be successful.
+Added: The success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators.
+Added: Collaborations are subject to numerous risks, which may include that:
+Added: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations;
+Added: • collaborators may not pursue development and commercialization of our products or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in our strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;
+Added: • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our current and future product candidates;
+Added: • a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;
+Added: • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;
+Added: • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;
+Added: • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;
+Added: • collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates;
+Added: • collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property;
+Added: • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
+Added: If we fail to comply with our obligations under any license, collaboration or other agreement, such agreements may be terminated, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our product candidates.
+Added: We may license or otherwise acquire development or commercialization rights to current and future product candidates or data from third parties.
+Added: If any future licensors fail to prosecute, maintain, enforce and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize future product candidates that may be subject of such licensed rights could be adversely affected.
+Added: In spite of our efforts, any future licensors might conclude that we are in material breach of obligations under our license agreements.
+Added: If we breach any material obligations, or uses the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are covered by the licensed technology or enable a competitor to gain access to the licensed technology.
+Added: If such in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, our competitors will have the freedom to seek regulatory approval of, and to market, products identical to our product candidates, and the licensors to such in-licenses could prevent us from developing or commercializing product candidates that rely upon the patents or other intellectual property rights which were the subject matter of such terminated agreements.
+Added: Any of these events could adversely affect our business, financial condition, results of operations and prospects.
+Added: Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including:
+Added: • the scope of rights granted under the license agreement and other interpretation-related issues;
+Added: • either party’s financial or other obligations under the license agreement;
+Added: • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
+Added: • our right to sublicense patents and other rights under our collaborative development relationships to third parties;
+Added: • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations;
+Added: • our right to transfer or assign the license;
+Added: • the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by any of our licensors and us and our partners;
+Added: • the priority of invention of patented technology.
+Added: If disputes over intellectual property that we license prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates, which would have a material adverse effect on our business.
+Added: In addition, certain of our current or future agreements with third parties may limit or delay our ability to consummate certain transactions, may impact the value of those transactions, or may limit our ability to pursue certain activities
+Added: Further, we or our current or future licensors may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.
+Added: Therefore, we may miss potential opportunities to strengthen our patent position.
+Added: It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, ownership, claim scope or requests for patent term adjustments.
+Added: If our current or future licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.
+Added: If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications, such patents may be invalid or unenforceable, and such applications may never result in valid, enforceable patents.
+Added: Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.
+Added: In addition, even where we have the right to control patent prosecution of patents and patent applications under a license from third parties, we may still be adversely affected or prejudiced by actions or inactions of our predecessors or licensors and their counsel that took place prior to us assuming control over patent prosecution.
+Added: Our acquired technologies and current or future licensed technology may be subject to retained rights.
+Added: Our predecessors or licensors may retain certain rights under their agreements with us, including the right to use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology and to make customary scientific and scholarly disclosures of information relating to the technology.
+Added: It is difficult to monitor whether our predecessors or future licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
+Added: If we are limited in our ability to utilize acquired technologies or current or future licensed technologies, or if we lose our rights to critical acquired or in-licensed technology, we may be unable to successfully develop, out-license, market and sell our products.
+Added: Our business strategy may depend on the successful development of acquired technologies, and current or future licensed technology, into commercial products.
+Added: Therefore, any limitations on our ability to utilize these technologies may impair our ability to develop, out-license or market and sell our product candidates.
+Added: We may not be able to license or acquire new or necessary intellectual property rights or technology from third parties.
+Added: Because our development programs may in the future require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these third-party proprietary rights.
+Added: Further, other parties, including our competitors, may have patents and have filed and are likely filing patent applications potentially relevant to our business.
+Added: In order to avoid infringing these patents, we may find it necessary or prudent to obtain licenses to such patents from such parties.
+Added: The licensing or acquisition of intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary.
+Added: These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities.
+Added: In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
+Added: We also may be unable to license or acquire third party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.
+Added: No assurance can be given that we will be successful in-licensing any additional rights or technologies from third parties.
+Added: Our inability to license the rights and technologies that we have identified, or 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.
+Added: Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.
+Added: Failure to obtain any necessary rights or licenses may detrimentally affect our planned development of our current or future product candidates and
+Added: could increase the cost and extend the timelines associated with the development of such other product candidates, and we may have to abandon development of the relevant program or product candidate.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: We may enter into license agreements in the future with others to advance our existing or future research or allow commercialization of our existing or future product candidates.
+Added: These licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future.
+Added: In that event, we may be required to expend significant time and resources to redesign our product candidates, or the methods for manufacturing them, all of which may not be feasible on a technical or commercial basis.
+Added: If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results of operations and prospects significantly.
+Added: We cannot provide any assurances that third-party patents do not exist which might be enforced against our current manufacturing methods, product candidates or future methods or product candidates, resulting in either an injunction prohibiting their manufacture or future sale or, with respect to their future sale, an obligation on our part to pay royalties or other forms of compensation to third parties, which could be significant.
+Added: Risks Related to Our Regulatory Approval and Other Legal Compliance Matters
+Added: Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory oversight, which may result in significant additional expense, and we may experience unanticipated problems with our product candidates or be subject to penalties if we fail to comply with regulatory requirements.
+Added: Even if we obtain regulatory approval for one or more of our product candidates, such product candidates will be subject to ongoing regulatory requirements applicable to manufacturing, labeling, packaging, storage, advertising, promoting, sampling, record-keeping and submission of safety or other post-market information, among other things.
+Added: Any regulatory approvals that we receive for our product candidates will require surveillance to monitor safety and efficacy.
+Added: The FDA may also require a REMS, limitations on the approved indicated uses for which the product candidate may be marketed or to the conditions of approval, or requirements that we conduct potentially costly post-market testing and surveillance studies, including Phase 4 trials and surveillance to monitor the quality, safety and efficacy of the product candidate.
+Added: An unsuccessful post-marketing study or failure to complete such a study could result in requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools as conditions of approval.
+Added: Any new legislation addressing drug safety issues could result in delays in product development or commercialization or increased compliance costs.
+Added: We must also comply with requirements concerning advertising and promotion for our products.
+Added: Promotional communications with respect to prescription drug products are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label.
+Added: As such, we will not be allowed to promote our products for indications or uses for which they do not have approval, commonly known as off-label promotion.
+Added: The holder of an approved NDA must submit new or supplemental applications and obtain prior approval for certain changes to the approved product, product labeling or manufacturing process.
+Added: A company that is found to have improperly promoted off-label uses of our products may be subject to significant civil, criminal and administrative penalties.
+Added: In addition, drug manufacturers are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with FDA’s current Good Manufacturing Practices (cGMPs) and adherence to commitments made in the NDA or foreign marketing application.
+Added: If we, the FDA or a comparable foreign regulatory authority discovers previously unknown problems with our product candidates, such as adverse events of unanticipated severity or frequency, or problems with the facility where the drug was manufactured, or if a regulatory authority disagrees with the promotion, marketing or labeling of that drug, a regulatory authority may impose restrictions relative to that drug, the manufacturing facility or us, including requesting a recall or requiring withdrawal of the drug from the market or suspension of manufacturing.
+Added: Failure by us to comply with applicable regulatory requirements following approval of any product candidates may result in, among other things:
+Added: • restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls;
+Added: • manufacturing delays and supply disruptions where regulatory inspections identify observations of noncompliance requiring remediation;
+Added: • revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings;
+Added: • imposition of a REMS, which may include distribution or use restrictions;
+Added: • requirements to conduct additional post-marketing clinical trials to demonstrate the safety of the product;
+Added: • suspension or withdrawal of regulatory approvals;
+Added: • issuance of fines, untitled letters, warning letters or holds on clinical trials;
+Added: • refusal by regulatory authorities to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of approvals;
+Added: • product seizure or detention, or refusal to permit the import or export of a product candidates;
+Added: • injunctions or the imposition of civil or criminal penalties.
+Added: The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.
+Added: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.
+Added: We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
+Added: It is difficult to predict how current and future legislation, executive actions and litigation, including the executive orders, will be implemented, and the extent to which they will impact our business and clinical development, and the FDA’s and other agencies’ ability to exercise their regulatory authority, including the FDA’s pre-approval inspections and timely review of any regulatory filings or applications we submit to the FDA.
+Added: To the extent any executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.
+Added: Disruptions at the FDA, the SEC or other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
+Added: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, statutory, regulatory and policy changes, and other events that may otherwise affect the FDA’s ability to perform routine functions.
+Added: Average review times at the agency have fluctuated in recent years as a result.
+Added: In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.
+Added: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed or approved by necessary government agencies, which would adversely affect our business.
+Added: If a prolonged government shutdown or other disruption occurs, or if global health or other concerns prevent the FDA or other
+Added: regulatory authorities from conducting their regular inspections, reviews or other regulatory activities in a timely manner, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: Further, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
+Added: Separately, in response to the COVID-19 pandemic, the FDA announced its intention to postpone most inspections of foreign and domestic manufacturing facilities at various points.
+Added: Even though the FDA has since resumed standard inspection operations of domestic facilities, if a prolonged government shutdown occurs, either for global health related reasons or other reasons, preventing the FDA or other regulatory authorities from conducting business as usual or conducting inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material effect on our business.
+Added: We may face difficulties from changes to current regulations and future legislation.
+Added: Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.
+Added: The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could prevent or delay marketing approval of our product candidates or any future product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell a product for which we obtain marketing approval.
+Added: Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example:
+Added: • changes to our manufacturing arrangements;
+Added: • additions or modifications to product labeling;
+Added: • the recall or discontinuation of our products;
+Added: • additional record-keeping requirements.
+Added: Any such changes imposed on us could adversely affect the operation of our business.
+Added: In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.
+Added: For example, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (as amended, the ACA), was passed, which substantially changed the way healthcare is financed by both governmental and private insurers and significantly impacted the U.S.
+Added: pharmaceutical industry.
+Added: The ACA contained provisions that may reduce the profitability of drug products through, among other things, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.
+Added: There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.
+Added: In August 2022, Congress passed the Inflation Reduction Act of 2022 (the IRA), which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including among other changes allowing the federal government to negotiate a maximum fair price for certain high-priced single-source Medicare drugs, imposing penalties and excise taxes for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries.
+Added: HHS has issued and will continue to issue and update guidance as these programs are implemented.
+Added: On August 29, 2023, CMS announced the list of the first ten drugs that will be subject to price negotiations.
+Added: However, various industry stakeholders, including pharmaceutical companies, the U.S.
+Added: Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional.
+Added: The impact of these judicial challenges, as well as future legislative, executive and administrative actions and any future healthcare measures and agency rules
+Added: implemented by the government on us and the pharmaceutical industry as a whole, is difficult or impossible to predict.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates if approved.
+Added: In addition, President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.
+Added: In February 2023, HHS also issued a proposal in response to an October 2022 executive order from President Biden that includes a proposed prescription drug pricing model that will test whether targeted Medicare payment adjustments will sufficiently incentivize manufacturers to complete confirmatory trials for drugs approved through the FDA’s accelerated approval pathway.
+Added: Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center, which will be evaluated on their ability to lower the cost of drugs, promote accessibility and improve quality of care.
+Added: It is unclear whether the models will be utilized in any health reform measures in the future.
+Added: Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs.
+Added: At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control prescription drug pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage bulk purchasing and importation from other countries.
+Added: A number of states are considering or have recently enacted drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products.
+Added: We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
+Added: Our revenue prospects could be affected by changes in healthcare spending and policy in the United States and abroad.
+Added: We operate in a highly regulated industry, and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could negatively impact our business, operations and financial condition.
+Added: There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
+Added: We cannot predict what initiatives may be adopted in the future.
+Added: The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare or impose price controls may adversely affect:
+Added: • the demand for our product candidates, if we obtain regulatory approval;
+Added: • our ability to set a competitive price that we believe is fair for our products;
+Added: • our ability to generate revenue and achieve or maintain profitability;
+Added: • the level of taxes that we are required to pay;
+Added: • the availability of capital
+Added: The implementation of cost containment measures or other healthcare reforms may lower the pricing of competitor products or procedures, which in turn may constrain the pricing of our product candidates, if approved, and prevent us from being able to generate revenue, attain profitability or commercialize our product candidates.
+Added: Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for biotechnology products.
+Added: We cannot be sure to what extent these legislative and regulatory proposals will be implemented by the federal and state governments, whether additional legislative
+Added: changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes on the marketing approvals of our product candidates, if any, may be.
+Added: In addition, increased scrutiny by Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
+Added: We may be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws and health information privacy and security laws, which could expose us to, among other things, criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
+Added: Our current and future arrangements with healthcare professionals, clinical investigators, CROs and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we plan to market, sell and distribute products for which we obtain marketing approval.
+Added: Laws that may affect our ability to operate include, but are not limited to:
+Added: • the federal Anti-Kickback Statute (the AKS), which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.
+Added: A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
+Added: There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection.
+Added: Violations are subject to civil and criminal fines and penalties, plus up to three times the remuneration involved, imprisonment and exclusion from government healthcare programs;
+Added: • federal civil and criminal false claims laws, including the False Claims Act (FCA), which can be enforced through civil “qui tam” or “whistleblower” actions, and civil monetary penalty laws, which impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting or causing to be presented claims for payment or approval from Medicare, Medicaid or other federal health care programs that are false or fraudulent;
+Added: knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government;
+Added: or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation.
+Added: Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
+Added: In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA.
+Added: The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery.
+Added: When an entity is determined to have violated the federal civil FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;
+Added: • the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
+Added: Similar to the AKS, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;
+Added: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their respective business associates and their subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization.
+Added: HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
+Added: • the federal Physician Payments Sunshine Act, created under the ACA and its implementing regulations, which requires manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members;
+Added: • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
+Added: • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws that may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;
+Added: state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources;
+Added: state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities;
+Added: state and local laws requiring the registration of pharmaceutical sales representatives;
+Added: and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
+Added: Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities, including our advisory board arrangements with physicians and any sales and marketing activities after a product candidate has been approved for marketing in the United States, could be subject to legal challenge and enforcement actions.
+Added: If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement, imprisonment, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: Our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, suppliers and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
+Added: We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, suppliers and vendors may engage in misconduct or other improper activities.
+Added: Misconduct by these parties could include failures to comply with FDA regulations, provide accurate information to the FDA, comply with federal and state health care fraud and abuse laws and regulations, accurately report financial information or data or disclose unauthorized activities to us.
+Added: In particular, sales, marketing and business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.
+Added: These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
+Added: Misconduct by these parties could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.
+Added: It is not always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
+Added: If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations.
+Added: If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
+Added: We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes.
+Added: Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials.
+Added: Our operations also produce hazardous waste products.
+Added: We generally contract with third parties for the disposal of these materials and wastes.
+Added: We cannot eliminate the risk of contamination or injury from these materials.
+Added: In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.
+Added: We also could incur significant costs associated with civil or criminal fines and penalties.
+Added: Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.
+Added: We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, or hazardous materials.
+Added: In addition, we may incur substantial costs to comply with current or future environmental, health and safety laws and regulations.
+Added: These current or future laws and regulations may impair our research, development or commercialization efforts.
+Added: Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
+Added: We are subject to certain U.S.
+Added: and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations and can face serious consequences for violations.
+Added: Among other matters, U.S.
+Added: and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
+Added: Violations of such trade laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
+Added: We have direct or indirect interactions with
+Added: officials and employees of government agencies or government-affiliated hospitals, universities and other organizations.
+Added: We also expect our non-U.S.
+Added: activities to increase in time.
+Added: We plan to engage third parties for clinical trials or to obtain necessary permits, licenses, patent registrations and other regulatory approvals, and we may be held liable for the corrupt or other illegal activities of our personnel, agents or partners even if we do not explicitly authorize or have prior knowledge of such activities.
+Added: Risks Related to Our Reliance on Third Parties
+Added: We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct, supervise and monitor certain aspects of our clinical trials and preclinical studies.
+Added: If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements and meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed.
+Added: We have relied upon, and plan to continue to rely upon, third parties, including independent clinical investigators and third-party CROs, to conduct certain aspects of our preclinical studies and clinical trials and to monitor and manage data for our ongoing clinical programs.
+Added: We rely on these parties for execution of our trials and generally do not control their activities.
+Added: Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable clinical investigation plan and protocol as well as legal, regulatory and scientific standards, and our reliance on these third parties does not relieve us of our regulatory responsibilities.
+Added: We and our third-party contractors and CROs are required to comply with GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities, for all of our products candidates in clinical development.
+Added: Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.
+Added: If we or any of these third parties or CROs fails to comply with applicable GCPs, the clinical data may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
+Added: We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP regulations.
+Added: In addition, our clinical trials must be conducted with product produced under cGMP regulations.
+Added: Failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
+Added: Moreover, our business may be adversely affected if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
+Added: Further, these investigators and CROs are not our employees, and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials.
+Added: These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance on our behalf.
+Added: If independent investigators or CROs fail to devote sufficient resources to the development of our product candidates, or if CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
+Added: As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed or precluded entirely.
+Added: In many cases, our CROs have the right to terminate their agreements with us in the event of an uncured material breach.
+Added: In addition, some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.
+Added: If any of our relationships with these third parties terminates, we may not be able to timely enter into arrangements with alternative third parties or to do so on commercially reasonable terms, if at all.
+Added: Switching or adding CROs involves substantial cost and requires management time and focus.
+Added: In addition, there is a natural transition period when a
+Added: new CRO commences work.
+Added: As a result, delays occur, which can materially impact our ability to meet desired clinical development timelines.
+Added: Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
+Added: We contract with third parties for the manufacture of our product candidates for preclinical studies and clinical trials, and expects to continue to do so for additional clinical trials and ultimately for commercialization.
+Added: This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
+Added: We do not currently have the infrastructure or internal capability to manufacture supplies of our product candidates for use in development and commercialization and do not intend to develop such infrastructure and capabilities.
+Added: We rely, and expect to continue to rely, on third party manufacturers for the production of our product candidates for preclinical studies and clinical trials under the guidance of members of our organization.
+Added: Furthermore, we rely on single-source suppliers for our drug substance manufacturing (PharmaBlock Sciences (Nanjing), Inc.) and for our drug product manufacturing (STA Pharmaceutical Hong Kong Limited).
+Added: We have entered into a master services agreement with each of these service providers;
+Added: however, under the terms of the master services agreements, the service provider is not obligated to enter into any particular statement of work and there is no pre-determined pricing for the manufacturing services.
+Added: If we were to experience an unexpected loss of supply of any of our product candidates or any of our future product candidates for any reason, whether as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations of, or be required to restart or repeat, any pending or ongoing preclinical studies and clinical trials.
+Added: We expect to continue to rely on third-party manufacturers for the commercial supply of any of our product candidates for which we obtain marketing approval.
+Added: We may be unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms.
+Added: Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
+Added: • the failure of the third party to manufacture our product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of their agreements with us;
+Added: • the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms;
+Added: • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us;
+Added: • the breach by the third-party contractors of their agreements with us;
+Added: • the failure of third-party contractors to comply with applicable regulatory requirements;
+Added: • the failure of third parties to manufacture product candidates according to our specifications;
+Added: • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;
+Added: • clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales;
+Added: • the misappropriation of our proprietary information, including our trade secrets and know-how.
+Added: We do not have complete control over all aspects of the manufacturing process of, and are dependent upon, our contract manufacturing partners for compliance with cGMP regulations for manufacturing both active drug
+Added: substances and finished drug products.
+Added: Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States.
+Added: If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA, EMA or others, we will not be able to secure and/or maintain marketing approval for our manufacturing facilities.
+Added: In addition, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
+Added: If the FDA, EMA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain marketing approval for or market our product candidates, if approved.
+Added: Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates or drugs and harm our business and results of operations.
+Added: Our current and anticipated future dependence upon others for the manufacture of our product candidates or drugs may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.
+Added: The manufacture of drugs is complex, and our third-party manufacturers may encounter difficulties in production.
+Added: If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.
+Added: Manufacturing drugs, especially in large quantities, is complex and may require the use of innovative technologies.
+Added: Each lot of an approved drug product must undergo thorough testing for identity, strength, quality, purity, potency and stability.
+Added: Manufacturing drugs requires facilities specifically designed for and validated for this purpose, and sophisticated quality assurance and quality control procedures are necessary.
+Added: Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage, shipping, quality control and testing, may result in lot failures, product recalls or spoilage.
+Added: When changes are made to the manufacturing process, we may be required to provide preclinical and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.
+Added: If microbial, viral or other contaminations are discovered at the facilities of our manufacturers, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely harm our business.
+Added: If our manufacturers are unable to produce sufficient quantities for clinical trials or for commercialization as a result of these challenges, or otherwise, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
+Added: Risks Related to Our Business Operations
+Added: Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees .
+Added: To succeed, we must recruit, retain, manage and motivate qualified executives, and we face significant competition for experienced personnel.
+Added: We are highly dependent on the principal members of our management and need to add executives with operational and commercialization experience as we plan for commercialization of our product candidates and operations as a public company.
+Added: Failure to attract and retain qualified personnel, particularly at the management level, could adversely affect our ability to execute our business plan and harm our operating results.
+Added: In particular, the loss of one or more of our executive officers could be detrimental to us if we cannot recruit suitable replacements in a timely manner.
+Added: The competition for qualified personnel in the biotechnology field is intense and, as a result, we may be unable to continue to attract and retain qualified personnel necessary for the future success of our business.
+Added: We could in the future have difficulty attracting experienced personnel and may be required to expend significant financial resources in employee recruitment and retention efforts.
+Added: Many of the other biotechnology companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do.
+Added: They also may provide more diverse opportunities and better prospects for career advancement.
+Added: Some of these characteristics may be more appealing to high-quality candidates than what we have to offer.
+Added: If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can discover, develop and commercialize our product candidates will be limited, and the potential for successfully growing our business will be harmed.
+Added: If we engage in acquisitions, in-licensing or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.
+Added: We may engage in various acquisitions and strategic partnerships in the future, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses.
+Added: Any acquisition or strategic partnership may entail numerous risks, including:
+Added: • increased operating expenses and cash requirements;
+Added: • the assumption of indebtedness or contingent liabilities;
+Added: • the issuance of equity securities resulting in dilution to our stockholders;
+Added: • assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel;
+Added: • the diversion of management’s attention from our existing product candidates and initiatives in pursuing such an acquisition or strategic partnership;
+Added: • loss of key personnel;
+Added: • uncertainties in our ability to maintain key business relationships;
+Added: • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and our existing products or product candidates;
+Added: • our inability to generate revenue from acquired intellectual property, technology or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.
+Added: In addition, if we undertake such a transaction, we may incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.
+Added: Our business and operations would suffer in the event of system failures.
+Added: Our computer systems, as well as those of our contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters (including hurricanes), terrorism, war and telecommunication and electrical failures.
+Added: If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product candidate development programs.
+Added: For example, the loss of preclinical study or clinical trial data from completed, ongoing or planned trials could result in delays in regulatory approval efforts and significantly increase costs to recover or reproduce the data.
+Added: To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.
+Added: The secure processing, maintenance and transmission of this information is critical to our operations.
+Added: Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or internal bad actors, or breached due to employee error, a technical vulnerability, malfeasance or other disruptions.
+Added: Although, to our knowledge, we have not experienced any such material security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly
+Added: disclosed, lost or stolen.
+Added: Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information and significant regulatory penalties, and such an event could disrupt our operations, damage our reputation and cause a loss of confidence in us and our ability to conduct clinical trials, which could adversely affect our reputation and delay clinical development of our product candidates.
+Added: Risks Related to Ownership of Our Class A Common Stock
+Added: The market price of our Class A Common Stock is expected to be volatile.
+Added: The market price of our Class A Common Stock could be subject to significant fluctuations.
+Added: Some of the factors that may cause the market price of our Class A Common Stock to fluctuate include:
+Added: • price and volume fluctuations in the overall stock market from time to time;
+Added: • the timing and results of clinical trials for our current product candidates and any future product candidates that we may develop;
+Added: • commencement or termination of collaborations for our product development and research programs;
+Added: • failure to achieve development, regulatory or commercialization milestones under our collaborations;
+Added: • failure or discontinuation of any of our product development and research programs;
+Added: • results of preclinical studies, clinical trials or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors;
+Added: • the level of expenses related to any of our research programs, clinical development programs or product candidates;
+Added: • the results of our efforts to develop additional product candidates;
+Added: • regulatory actions with respect to our or our competitors’ product candidates or products;
+Added: • developments or disputes concerning patent applications, issued patents or other proprietary rights;
+Added: • announced or completed acquisitions of businesses, products or intellectual property by us or our competitors;
+Added: • actual or anticipated changes in the financial projections or development timelines we may provide to the public or our failure to meet those projections or timelines;
+Added: • market conditions in the biotechnology and pharmaceutical sectors;
+Added: • changes in the structure of healthcare payment systems;
+Added: • sales of our Class A Common Stock by us or our stockholders, or expectations that such sales may occur, and the expiration of lock-up agreements;
+Added: • the recruitment or departure of key personnel;
+Added: • the public’s reaction to our press releases, other public announcements and our filings with the SEC;
+Added: • rumors and market speculation involving us or other companies in our industry;
+Added: • fluctuations in the trading volume of our Class A Common Stock or the size of our public float;
+Added: • actual or anticipated changes or fluctuations in our results of operations;
+Added: • actual or anticipated developments in our business, our competitors’ businesses or changes in the market valuations of similar companies and the competitive landscape generally;
+Added: • changes in the market valuations of similar companies;
+Added: • failure of securities analysts to maintain coverage of our Class A Common Stock, changes in actual or future expectations of investors or securities analysts or our failure to meet these estimates or the expectations of investors;
+Added: • litigation involving us, our industry or both;
+Added: • governmental or regulatory actions or audits;
+Added: • regulatory or legal developments in the United States and other countries;
+Added: • general economic conditions and trends;
+Added: • announcement or expectation of additional financing efforts;
+Added: • sales of securities by us or our securityholders in the future;
+Added: • if we do not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts;
+Added: • changes in accounting standards, policies, guidelines, interpretations or principles.
+Added: Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies.
+Added: These broad market fluctuations may also adversely affect the trading price of our Class A Common Stock.
+Added: In addition, a recession, depression or other sustained adverse market event could materially and adversely affect our business and the value of our Class A Common Stock.
+Added: Furthermore, market volatility may lead to increased shareholder activism if we experience a market valuation that activists believe is not reflective of our intrinsic value.
+Added: Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results, financial condition and cash flows.
+Added: We may be unable to successfully integrate the businesses of Reneo and Legacy OnKure and realize the anticipated benefits of the Merger.
+Added: The Merger involved the combination of two companies that previously operated as independent companies.
+Added: Following the Merger, we must devote significant management attention and resources to integrating the business practices and operations of the separate companies.
+Added: We may fail to realize some or all of the anticipated benefits of the Merger if the integration process takes longer than expected or is more costly than expected.
+Added: Potential difficulties in the integration process include the following:
+Added: • the inability to successfully combine the businesses of Reneo and OnKure in a manner that permits us to achieve the anticipated benefits from the Merger in the time frame currently anticipated or at all;
+Added: • creation of uniform standards, controls, procedures, policies and information systems;
+Added: • potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger.
+Added: Many of the other biotechnology companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do.
+Added: These competitors also may provide higher compensation, more diverse opportunities and better prospects for career advancement.
+Added: Some of these characteristics may be more appealing to high-quality candidates than what we have to offer.
+Added: If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can discover, develop and commercialize our product candidates will be limited and the potential for successfully growing our business will be harmed.
+Added: If we fail to attract and retain management and other key personnel, we may be unable to continue to successfully develop or commercialize our product candidates or otherwise implement our business plan.
+Added: Our ability to compete in the highly competitive pharmaceuticals industry depends on our ability to attract and retain highly qualified managerial, scientific, medical, legal, sales and marketing and other personnel.
+Added: We will be highly dependent on our management and scientific personnel.
+Added: The loss of the services of any of these individuals could impede, delay or prevent the successful development of our product pipeline, completion of our planned clinical trials, commercialization of our product candidates or in-licensing or acquisition of new assets and could impact negatively our ability to implement successfully our business plan.
+Added: If we lose the services of any of these individuals, we might not be able to find suitable replacements on a timely basis or at all, and our business could be harmed as a result.
+Added: We might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses.
+Added: We will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.
+Added: We will incur significant legal, accounting and other expenses as a public company that Legacy OnKure did not incur as a private company, including costs associated with public company reporting obligations under the Exchange Act.
+Added: Our management team consists of the executive officers of Legacy OnKure prior to the Merger, some of whom have not previously managed and operated a public company.
+Added: These executive officers and other personnel will need to devote substantial time to gaining expertise related to public company reporting requirements and compliance with applicable laws and regulations to ensure that we comply with all of these requirements.
+Added: Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all.
+Added: These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
+Added: We will continue to be an emerging growth company and a smaller reporting company, and it cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our Class A Common Stock less attractive to investors.
+Added: For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
+Added: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Reneo’s initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which requires, among other things, that the market value of our Class A Common Stock that is held by non-affiliates to exceed $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.
+Added: Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act (if we are also a non-accelerated filer at that time) and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
+Added: It cannot be predicted if investors will find our Class A Common Stock less attractive because we may rely on these exemptions.
+Added: If some investors find
+Added: our Class A Common Stock less attractive as a result, there may be a less active trading market for our Class A Common Stock and the price of our Class A Common Stock may be more volatile.
+Added: Under the Jumpstart Our Business Startups Act (JOBS Act), emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.
+Added: It is expected that we will continue to elect to use this extended transition period under the JOBS Act.
+Added: As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult.
+Added: As a result, changes in rules of GAAP or their interpretation, the adoption of new guidance, or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.
+Added: Additionally, once we are no longer an emerging growth company or a smaller reporting company or otherwise no longer qualify for these exemptions, we will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal, accounting and other expenses to do so.
+Added: If we are not able to comply with the requirements in a timely manner or at all, our financial condition or the market price of our Class A Common Stock may be harmed.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
−Removed: We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of The Nasdaq Stock Market LLC (Nasdaq).
−Removed: The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
−Removed: Each fiscal year, we are required to provide a report by our management on, among other things, our internal control over financial reporting as discussed in our Annual Report on Form 10-K filing for that year.
−Removed: The reporting on our assessment of the effectiveness of our internal control over financial reporting needs to include disclosure of any material weaknesses identified in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has audited the effectiveness of our internal control over financial reporting.
−Removed: While we qualify as an emerging growth company under SEC rules for fiscal year 2024 and therefore are not required to obtain such an audit for fiscal year 2024, in the event that we qualify as a large accelerated filer or accelerated filer under SEC rules in future years, our independent registered public accounting firm will be required to audit the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act (Section 404(b)).
−Removed: Any mandatory or voluntary compliance with Section 404(b) will result in increased costs, expenses, and management resources.
−Removed: However, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.
−Removed: We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our consolidated financial statements.
+Added: We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.
+Added: The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
+Added: We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.
+Added: As a private company, Legacy OnKure was not required to test its internal controls within a specified period.
+Added: This will require that we incur substantial professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts.
+Added: We may experience difficulty in meeting these reporting requirements in a timely manner.
+Added: In addition to the matters described above in the context of Legacy OnKure being a private company, we may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements.
Our internal control over financial reporting will not prevent or detect all errors and all fraud.
1 unchanged sentence
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
−Removed: We cannot assure you that the measures we have taken to date, and actions we may take in the future, will prevent or avoid potential future material weaknesses.
−Removed: Moreover, our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
−Removed: Further, material weaknesses in our disclosure controls and procedures and internal control over financial reporting may be discovered in the future.
−Removed: Any failure to develop or maintain effective internal control over financial reporting or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, which could cause the price of our common stock to decline.
−Removed: In addition, if we are not able to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
−Removed: Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.*
−Removed: Sales of a substantial number of shares of our common stock in the public market could occur at any time.
−Removed: These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
−Removed: As of June 30, 2024, there were 33,420,808 shares of our common stock outstanding.
−Removed: In addition, shares of common stock that are either subject to outstanding options, restricted stock units or performance-based restricted stock units or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, and Rule 144 and Rule 701 under the Securities Act of 1933, as amended (the Securities Act).
−Removed: If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
−Removed: Further, the holders of 16,242,841 shares of our common stock are entitled to rights with respect to the registration of their shares under the Securities Act.
−Removed: Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act.
−Removed: Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.
−Removed: We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.*
−Removed: We have never declared or paid any cash dividend on our common stock.
−Removed: We currently anticipate that we will retain future earnings for the operation of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
−Removed: In addition, future debt instruments may materially restrict our ability to pay dividends on our common stock.
−Removed: Any return to stockholders would therefore be limited to the appreciation, if any, of their stock.
−Removed: Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent a change of control of our company or changes in our Board of Directors that our stockholders might consider favorable.
−Removed: Some of these provisions include:
−Removed: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time;
−Removed: • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders;
−Removed: • a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president, or by a majority of the total number of authorized directors;
−Removed: • advance notice requirements for stockholder proposals and nominations for election to our Board of Directors;
−Removed: • a requirement that no member of our Board of Directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors;
−Removed: • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation;
−Removed: • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
−Removed: In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.
−Removed: These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for stockholders or potential acquirors to obtain control of our Board of Directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company.
−Removed: These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.
−Removed: Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
−Removed: (i) any derivative action or proceeding brought on our behalf;
−Removed: (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our stockholders;
−Removed: (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers, or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws;
−Removed: (iv) any action or proceeding to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws;
−Removed: (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware;
−Removed: and (vi) any action asserting a claim against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
−Removed: These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
−Removed: Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
−Removed: Accordingly, both state and federal courts have jurisdiction to entertain such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation and our amended and restated bylaws provide that the federal district courts of the United States of America are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against any defendant named in such complaint.
−Removed: While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
−Removed: In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation and our amended and restated bylaws.
−Removed: This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
−Removed: If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation and our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects.
−Removed: These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
−Removed: If a court were to find either exclusive forum provision contained in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
−Removed: General Risk Factors
−Removed: We are subject to U.S.
−Removed: and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations.
−Removed: Compliance with these legal standards could impair our ability to compete in domestic and international markets.
−Removed: We can face criminal liability and other serious consequences for violations, which can harm our business.
−Removed: We are subject to export control and import laws and regulations, including the U.S.
−Removed: Export Administration Regulations, U.S.
−Removed: Customs regulations, and various economic and trade sanctions regulations administered by the U.S.
−Removed: Treasury Department’s Office of Foreign Assets Controls, and anti-corruption and anti-money laundering laws and regulations, including the FCPA, the U.S.
−Removed: domestic bribery statute contained in 18 U.S.C.
−Removed: § 201, the U.S.
−Removed: Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities.
−Removed: Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, clinical research organizations, contractors and other collaborators and partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.
−Removed: We may engage third parties for clinical trials outside of the United States, to sell our products internationally once we enter a commercialization phase, and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals.
−Removed: We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations.
−Removed: We can be held liable for the corrupt or other illegal activities of our employees, agents, clinical research organizations, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities.
−Removed: Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.
−Removed: Business disruptions could seriously harm our future revenues and financial condition and increase our costs and expenses.*
−Removed: Our operations, and those of our contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.
−Removed: The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
−Removed: Our corporate headquarters is located in California near major earthquake faults and fire zones.
−Removed: The ultimate impact on us, our suppliers and our general infrastructure of being located near major earthquake faults and fire zones and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake, fire or other natural disaster.
−Removed: If our information technology systems, or those of third parties with whom we work, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;
−Removed: fines and penalties;
−Removed: disruptions of our business operations;
−Removed: reputational harm;
−Removed: loss of revenue or profits;
−Removed: loss of customers or sales;
−Removed: and other adverse consequences.*
−Removed: In the ordinary course of our business, we and the third parties with whom we work process sensitive data, and, as a result, we and the third parties with whom we work face a variety of evolving threats that could cause security incidents.
−Removed: Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work.
−Removed: Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors,
−Removed: “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
−Removed: Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
−Removed: During times of war and other major conflicts, we and the third parties with whom we work, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.
−Removed: We are not currently pursuing further clinical development of our only product candidate, mavodelpar.
−Removed: If we resume such development or pursue development of other product candidates, any loss of clinical trial data from completed or ongoing clinical trials could result in delays in, or cancellations of any regulatory approval or clearance efforts and significantly increase our costs to recover or reproduce the data, and subsequently commercialize any of our products.
−Removed: Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy.
−Removed: We and the third-parties with whom we work are subject to a variety of evolving threats including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial of service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
−Removed: In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds.
−Removed: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident.
−Removed: Our efforts to investigate, mitigate, contain, and remediate a security incident may not be successful.
−Removed: Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our business.
−Removed: Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.
−Removed: Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
−Removed: Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
−Removed: Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
−Removed: In addition, our reliance on third-party service providers could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations.
−Removed: We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.
−Removed: We also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business.
−Removed: Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.
−Removed: While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient
−Removed: to cover our damages, or we may be unable to recover such award.
−Removed: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties with whom we work.
−Removed: A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products.
−Removed: We may expend significant resources or modify our business activities (including any future clinical trial activities) to try to protect against security incidents.
−Removed: Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
−Removed: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
−Removed: We take steps to detect, mitigate, and remediate vulnerabilities in our systems (such as our hardware and/or software, including that of third parties with whom we work).
−Removed: We may not, however, detect and remediate all such vulnerabilities including on a timely basis.
−Removed: Further, we, and the third parties with whom we work, may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.
−Removed: Vulnerabilities could be exploited and result in a security incident.
−Removed: Applicable data privacy and security obligations may require us, or we may choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services.
−Removed: Such disclosures and related actions are costly, and the disclosures or the failure to comply with applicable requirements could lead to adverse consequences.
−Removed: If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
−Removed: additional reporting requirements and/or oversight;
−Removed: restrictions on processing sensitive data (including personal data);
−Removed: litigation (including class claims);
−Removed: indemnification obligations;
−Removed: negative publicity;
−Removed: reputational harm;
−Removed: monetary fund diversions;
−Removed: diversion of management attention;
−Removed: interruptions in our operations (including availability of data);
−Removed: financial loss;
−Removed: and other similar harms.
−Removed: Security incidents and attendant consequences may prevent or cause customers to stop using our products or services, deter new customers from using our products or services, the development and commercialization of any product candidates could be delayed, and negatively impact our ability to grow and operate our business.
−Removed: Likewise, we rely on third parties to conduct clinical trials, and similar incidents relating to their information technology systems or data could also have a material adverse effect on our business.
−Removed: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
−Removed: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
−Removed: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
−Removed: Additionally, sensitive data of the Company could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.
+Added: If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements.
+Added: If that were to happen, the market price of our Class A Common Stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
+Added: Our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and provisions under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management.
+Added: Provisions in our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which holders of our Class A Common Stock might otherwise receive a premium price for their shares.
+Added: These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A Common Stock, thereby depressing the market price of our Class A Common Stock.
+Added: In addition, because our board of directors will be responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or
+Added: remove current management by making it more difficult for stockholders to replace members of our board of directors.
+Added: Among other things, these provisions:
+Added: • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our Common Stock;
+Added: • provide for a classified board of directors whose members serve staggered three-year terms;
+Added: • specify that special meetings of our stockholders can be called only by our board of directors;
+Added: • prohibit stockholder action by written consent;
+Added: • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of the stockholders, including proposed nominations of persons for election to our board of directors;
+Added: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
+Added: • provide that our directors may be removed (i) only for cause and (ii) only by the affirmative vote of the holders of 66 2/3% or more of the outstanding shares of capital stock then entitled to vote at an election of directors;
+Added: • expressly authorize our board of directors to make, alter, amend or repeal our Amended and Restated Bylaws;
+Added: • require supermajority votes of the holders of our Class A Common Stock to amend specified provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws.
+Added: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with us.
+Added: Although we believe these provisions collectively will provide for an opportunity to receive higher bids by requiring potential acquirors to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders.
+Added: In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove then-current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of management.
+Added: Our Amended and Restated Bylaws provide that, unless we consent in writing to the selection of an alternative forum, certain designated courts will be the sole and exclusive forum for certain legal actions between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
+Added: Our Amended and Restated Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
+Added: (i) any derivative claim or cause of action brought on our behalf;
+Added: (ii) any claim or cause of action for breach of a fiduciary duty owed by any of our current or former directors, officers or other employees, to us or our stockholders;
+Added: (iii) any claim or cause of action against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws;
+Added: (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws;
+Added: (v) any claim or cause of action as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware;
+Added: and (vi) any claim or cause of action against us or any of our current or former directors, officers or other employees, governed by the internal-affairs doctrine or otherwise related to our internal affairs, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named
+Added: as defendants.
+Added: This provision would not apply to claims or causes of action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
+Added: Unless we consent in writing to the selection of an alternate forum, the United States federal district courts shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: In addition, our Amended and Restated Bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to these exclusive forum provisions.
+Added: The forum selection provisions in our Amended and Restated Bylaws may limit our stockholders’ ability to litigate disputes with us in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders.
+Added: There is uncertainty as to whether a court would enforce such provisions, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
+Added: Furthermore, the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings.
+Added: It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find either exclusive-forum provision in our Amended and Restated Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
+Added: Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over actions brought under the Securities Act or the rules and regulations promulgated thereunder.
+Added: In addition, these forum selection provisions may impose additional litigation costs for stockholders who determine to pursue any such lawsuits against us.
+Added: Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
+Added: Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.
+Added: In addition, as permitted by Section 145 of the DGCL, our Amended and Restated Bylaws and the indemnification agreements that we have entered with our directors and officers provide that:
+Added: • we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;
+Added: • we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;
+Added: • we are not obligated pursuant to our Amended and Restated Bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification;
+Added: • the rights conferred in our Amended and Restated Bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons;
+Added: • we may not retroactively amend the provisions of our Amended and Restated Bylaws to reduce our indemnification obligations to directors, officers, employees and agents.
+Added: We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
+Added: Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably
+Added: believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
+Added: To the extent that a claim for indemnification is brought by any of our directors or officers, it would reduce the amount of funds available for use in our business.
+Added: We do not anticipate that we will pay any cash dividends in the foreseeable future.
+Added: The current expectation is that we will retain our future earnings, if any, to fund the growth of our business as opposed to paying dividends.
+Added: As a result, capital appreciation, if any, of our Class A Common Stock will be your sole source of gain, if any, for the foreseeable future.
+Added: An active trading market for our Class A Common Stock may not develop, and the holders of our Class A Common Stock may not be able to resell their shares of our Class A Common Stock for a profit, if at all.
+Added: Prior to the Merger, there had been no public market for shares of Legacy OnKure capital stock.
+Added: An active trading market for our Class A Common Stock may never develop or be sustained.
+Added: If an active market for our Class A Common Stock does not develop or is not sustained, it may be difficult for our stockholders to sell their shares of our Class A Common Stock at an attractive price or at all.
+Added: We could be subject to securities class action litigation, which is expensive and could divert management attention.
+Added: In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
+Added: This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years.
+Added: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition.
+Added: Reneo’s winddown of its historical operations, the suspension of development activities and the Merger, resulting in the conversion of Legacy OnKure into a public company, make us subject to the SEC requirements applicable to reporting shell company business combinations.
+Added: As a result, we will be subject to more stringent reporting requirements, offering limitations and resale restrictions.
+Added: According to SEC guidance, the requirements applicable to reporting shell company business combinations apply to any company that sells or otherwise disposes of its historical assets or operations in connection with or as part of a plan to combine with a non-shell private company in order to convert the private company into a public one.
+Added: Prior to the Merger, Reneo suspended its development activities and, as such, we are subject to the SEC requirements applicable to reporting shell company business combinations, which are as follows:
+Added: • we were required file a Current Report on Form 8-K to report the Form 10 type information (the Super 8-K) after the closing of the Merger reflecting our status as an entity that is not a shell company;
+Added: • we are not eligible to use a Form S-3 until one year after the filing of the Super 8-K;
+Added: • we must wait at least 60 calendar days after the filing of the Super 8-K to file a Form S-8 for any equity plans or awards;
+Added: • we are an “ineligible issuer” for three years following the closing of the Merger, which will prevent us from (i) incorporating by reference in our Form S-1 filings, (ii) using a free writing prospectus or (iii) taking advantage of the well-known seasoned issuer (also known as a WKSI) status despite our public float;
+Added: • investors who (i) were affiliates of Legacy OnKure at the time the Merger was submitted for the vote or consent of Legacy OnKure stockholders, (ii) received securities in the Merger and (iii) publicly offer
+Added: or sell such securities will be deemed to be engaged in a distribution of such securities, and therefore would be underwriters with respect to resales of those securities;
+Added: • Rule 144(i)(2) limits the ability of holders of restricted securities and any affiliates of the public company to publicly resell Rule 145(c) securities per Rule 145(d), as well as any other of our “restricted” or “control” securities per Rule 144, until one year after the Super 8-K is filed with the SEC.
+Added: The foregoing SEC requirements will increase our time and cost of raising capital, offering stock under equity plans, and complying with securities laws.
+Added: Furthermore, such requirements will add burdensome restrictions on the resale of our Class A Common Stock by our affiliates and any holders of our “restricted” or “control” securities.
+Added: Future sales of shares by existing stockholders could cause our Class A Common Stock price to decline.
+Added: If existing securityholders sell, or indicate an intention to sell, substantial amounts of our Class A Common Stock in the public market after legal restrictions on resale lapse, the trading price of our Class A Common Stock could decline.
+Added: Of the outstanding shares of our Class A Common Stock, approximately 6,796,137 shares will be available for sale in the public market beginning 180 days after the closing of the Merger as a result of the expiration of lock-up agreements between Reneo and Legacy OnKure on the one hand and certain securityholders of Reneo and Legacy OnKure on the other hand.
+Added: All other outstanding shares of our Class A Common Stock, other than “restricted” or “control” securities per Rule 144, are currently freely tradable, without restriction, in the public market.
+Added: In addition, shares of our Class A Common Stock that are subject to outstanding options or warrants will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act.
+Added: If these shares are sold, the trading price of our Class A Common Stock could decline.
+Added: Our executive officers, directors and principal stockholders have the ability to control or significantly influence all matters submitted to our stockholders for approval.
+Added: Our executive officers, directors and principal stockholders, in the aggregate, beneficially own approximately 49.8% of the outstanding shares of our Class A Common Stock.
+Added: As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.
+Added: For example, these stockholders, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.
+Added: This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire.
+Added: If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, the stock price and trading volume of our Class A Common Stock could decline.
+Added: The trading market for our Class A Common Stock will be influenced by the research and reports that equity research analysts publish about us and our business.
+Added: Equity research analysts may elect to not provide research coverage of our Class A Common Stock, and such lack of research coverage may adversely affect the market price of our Class A Common Stock.
+Added: In the event that we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports.
+Added: The price of our Class A Common Stock could decline if one or more equity research analysts downgrades our stock or issues other unfavorable commentary or research.
+Added: If one or more equity research analysts ceases coverage of us or fails to publish reports on it regularly, demand for our Class A Common Stock could decrease, which in turn could cause our stock price or trading volume to decline.
+Added: We may be subject to adverse legislative or regulatory tax changes that could negatively impact our financial condition.
+Added: The rules dealing with U.S.
+Added: federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S.
+Added: Treasury Department.
+Added: Changes to tax laws (which
+Added: changes may have retroactive application) could adversely affect us or our stockholders.
+Added: For example, the United States recently enacted the IRA, which implements, among other changes, a 1% excise tax on certain stock buybacks.
+Added: In addition, beginning in 2022, the Tax Cuts and Jobs Act of 2017 (the Tax Act) eliminated the option to deduct research and development expenditures and required taxpayers to amortize them generally over five or fifteen years.
+Added: However, recently proposed tax legislation, if enacted, would restore the ability to deduct domestic research and development expenditures in the current year through 2025 and would retroactively restore this benefit for 2022 and 2023.
+Added: Any change in tax law will be accounted for in the period of enactment.
+Added: We will assess the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations to determine the potential effect on our business and any assumptions we will make about our future taxable income.
+Added: We cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on our business if they were to be enacted.
+Added: Such changes, among others, may adversely affect our effective tax rate, results of operation and general business condition.
+Added: Our ability to use net operating loss carryforwards and other tax attributes may be limited, including as a result of the Merger.
+Added: As of December 31, 2023 and 2022, Reneo had U.S.
+Added: federal net operating loss carryforwards of $110.9 million and $74.7 million, respectively (which are not subject to expiration other than the net operating loss carryforwards generated prior to 2018 of $1.6 million, which will begin to expire in 2034), and state net operating loss carryforwards of $1.8 million and $1.6 million, respectively (which begin to expire in various amounts in 2034).
+Added: In addition, as of December 31, 2023, Legacy OnKure had approximately $36.7 million of federal and state net operating loss carryforwards.
+Added: Approximately $1.5 million federal net operating loss carryforwards expire through 2037 and approximately $35.2 million have an indefinite life.
+Added: Legacy OnKure’s state net operating loss carryforwards are subject to similar survival periods.
+Added: Under current law, U.S.
+Added: federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards is limited to 80% of taxable income for taxable periods beginning after December 31, 2020.
+Added: It is uncertain if and to what extent various states will conform to federal law.
+Added: In addition, under Sections 382 and 383 of the Code, U.S.
+Added: federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in ownership.
+Added: An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points (by value) over their lowest ownership percentage within a rolling three-year period.
+Added: Legacy OnKure had not conducted a study to determine whether such an ownership change has occurred in the previous years to impair the use of its net operating loss carryforwards.
+Added: Reneo may have experienced such ownership changes in the past, and Reneo is expected to be deemed to have experienced an ownership change in connection with the Merger and the Concurrent PIPE Investments.
+Added: Our ability to utilize these net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including, as discussed above, in connection with the Merger and the Concurrent PIPE Investments or other transactions.
+Added: Similar rules may apply under state tax laws.
+Added: In addition, California has recently proposed a temporary suspension on the use of state net operating loss carryforwards for certain businesses, which may adversely affect us if we earn taxable income in the impacted tax years.
+Added: Other state tax limitations may apply.
+Added: If we earn taxable income, such limitations could result in increased future income tax liability to us, and our future cash flows could be adversely affected.
+Added: Unfavorable global economic conditions could adversely affect our business, financial condition, results of operations or cash flows.
+Added: Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
+Added: A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: A weak or declining economy could also strain our suppliers, possibly
+Added: resulting in supply disruption, or cause our customers to delay making payments for our services.
+Added: Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.