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Item 1A. Risk Factors

2023-11-07 compared with 2023-08-08 · 89 added, 79 removed, 1406 unchanged (11% of the section changed)

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In addition, we may be unable to continue as a going concern over the long term.

● We may not realize the expected benefits from our recent corporate restructuring, portfolio prioritization, and workforce reduction and we may incur additional costs or other difficulties implementing such initiatives.

● We are substantially dependent on the success of our only product candidate, palazestrant, which is currently in clinical development.

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The degree of market acceptance would depend on a number of factors.

If palazestrant is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate or derive sufficient revenue which could significantly harm our business, financial condition, results of operations and prospects.

If palazestrant is approved

but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate or derive sufficient revenue which could significantly harm our business, financial condition, results of operations and prospects.

● We face significant competition, and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than palazestrant, or product candidates we may develop in the future, our commercial opportunities will be negatively impacted.

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We are a clinical-stage biopharmaceutical company, and we have no products approved for commercial sale, have not generated any revenue from product sales and have incurred losses since inception.

To date, we have devoted substantially all of our resources and efforts to organizing and staffing our company, business planning, executing partnerships, raising capital, discovering, identifying and developing our product candidate, palazestrant (OP-1250), securing related intellectual property rights and conducting nonclinical studies and a

Phase 1/2 clinical study of palazestrant.

We have not yet demonstrated our ability to successfully complete any clinical trials, 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.

activities necessary for successful product commercialization.

As a result, it may be more difficult for you to accurately predict our future success or viability than it could be if we had a longer operating history.

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Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations.

As of June 30, 2023, we had $167.4 million in cash, cash equivalents, and marketable securities.

Based on our current operating plans, we believe that our cash, cash equivalents, and marketable securities as of June 30, 2023 will be sufficient to fund our operating expenses and capital expenditures requirements into the second quarter of 2025.

As of September 30, 2023, we had $276.9 million in cash, cash equivalents, and marketable securities.

In September 2023, we entered into the Loan Agreement with the Bank, providing us with up to $50.0 million of borrowing capacity under the Credit Facility, of which $25.0 million became available upon the closing of the Private Placement, and the remaining $25.0 million may be made available upon approval of the Bank in its discretion.

We believe that our cash, cash equivalents, and marketable securities as of September 30, 2023, as well as the available balance under the Credit Facility, will be sufficient to fund our current operating plan into 2027.

Our estimate as to how long we expect our existing cash, cash equivalents and marketable securities to be able to continue to fund our operating expenses and capital expenditures requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Changing circumstances, some of which may be beyond our control, including a default in one or several of the financial institutions in which we hold, or a negative return on, our cash and cash equivalents, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Moreover, it is particularly difficult to estimate with certainty our future expenses given the dynamic nature of our business and the geopolitical and macroeconomic environment, generally, including economic uncertainty, the COVID-19 pandemic, the ongoing conflict between Ukraine and Russia and related sanctions, and recent bank failures and financial instability.

government shutdown, the ongoing Russia-Ukraine conflict and related sanctions, armed conflict between Israel and groups based in surrounding regions, inflation rates and the responses by central banking authorities to control such inflation, monetary supply shifts and related financial instability.

Advancing the development of palazestrant and any future product candidates we may develop will require a significant amount of capital, and our existing cash, cash equivalents and marketable securities will not be sufficient to fund all of the activities that are necessary to complete the development of palazestrant.

We will be required to obtain additional funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, which may dilute our stockholders or restrict our operating activities.

operating activities.

Adequate additional financing may not be available to us on acceptable terms, or at all.

Market volatility, including as a result of geopolitical and macroeconomic events such as the COVID-19

pandemic and the ongoing conflict between Ukraine and Russia and related sanctions, could adversely increase our need to access capital and likewise, adversely impact our ability to access capital as and when needed.

For example, inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital on acceptable terms, if at all.

Market volatility, including as a result of geopolitical and macroeconomic events discussed above, could adversely increase our need to access capital and likewise, adversely impact our ability to access capital as and when needed.

For example, inflation rates, particularly in the United States, recently increased to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital on acceptable terms, if at all.

In addition, the U.S.

Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation, which, coupled with reduced government spending and volatility in financial markets may have the effect of heightening these risks and further increasing economic uncertainty.

Furthermore, if a prolonged U.S.

government shutdown occurs, it could adversely impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research-stage programs, clinical trials or future commercialization efforts.

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In addition, we may be unable to continue as a going concern over the long term.

We have incurred net losses in each reporting period since our inception, have not generated any revenue from product sales to date and have financed our operations principally through our initial public offering and private financings.

We have incurred net losses of $20.1 million and $32.9 million for the three months ended June 30, 2023 and 2022, respectively.

We had an accumulated deficit of $257.4 million as of June 30, 2023.

We have incurred net losses in each reporting period since our inception, have not generated any revenue from product sales to date and have financed our operations principally through the Private Placement, our initial public offering and private financings.

We have incurred net losses of $21.5 million and $22.7 million for the three months ended September 30, 2023 and 2022, respectively.

We had an accumulated deficit of $278.9 million as of September 30, 2023.

Our losses have resulted principally from expenses incurred in research and development of palazestrant and from management and administrative costs and other expenses that we have incurred while building our business infrastructure.

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In any particular period, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

In addition, our condensed consolidated financial statements for the three months ended June 30, 2023 and 2022 included elsewhere in this Quarterly Report on Form 10-Q have been prepared assuming we will continue as a going concern.

In addition, our condensed consolidated financial statements for the three months ended September 30, 2023 and 2022 included elsewhere in this Quarterly Report on Form 10-Q have been prepared assuming we will continue as a going concern.

However, we have incurred losses and negative cash flows from operations.

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As a result, these conditions raise substantial doubt about our ability to continue as a going concern over the long term.

We may not realize the expected benefits from our recent corporate restructuring, portfolio prioritization, and workforce reduction and we may incur additional costs or other difficulties implementing such initiatives.

In March 2023, we announced a corporate restructuring and portfolio prioritization to focus our resources on the late-stage clinical development of palazestrant for the treatment of ER+/HER2- metastatic breast cancer.

As part of this restructuring, our workforce was reduced by approximately 25%, affecting employees across research, early development, and general and administrative functions.

The restructuring and reduction in force may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond our intended reduction in force, a reduction in morale among our remaining employees, and the risk that we may not achieve the anticipated benefits, all of which may have an adverse effect on our clinical activities and results of operations or financial condition.

We incurred one-time accounting charges of approximately $2.8 million, $2.7 million of which was attributable to cash expenditures.

We may also incur other charges, costs, future cash expenditures or impairments not currently contemplated due to events that may occur as a result of, or in connection with, the restructuring and reduction in workforce.

In addition, we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees, where applicable.

We may also discover that the reduction in force and cost cutting measures will make it difficult for us to pursue new opportunities and initiatives and require us to hire qualified replacement personnel, which may require us to incur additional and unanticipated costs and expenses.

Moreover, there is no assurance we will be successful in our pursuit of any of our new goals.

Our failure to successfully accomplish any of the above activities and goals may have a material adverse impact on our business, financial condition, results of operations, and ability to successfully develop palazestrant.

We have never generated revenue from product sales and may never be profitable.

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Even if we are able to generate revenue from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

The terms of our loan agreement place restrictions on our operating and financial flexibility.

If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

In September 2023, we entered into the Loan Agreement with the Bank.

The Loan Agreement provides for the Credit Facility in an aggregate principal amount of up to $50.0 million, of which $25.0 million was available as of September 30, 2023 and up to $25.0 million of which may be made available upon approval of the Bank in its discretion.

The Credit Facility will mature on August 1, 2027.

Our overall leverage and certain obligations and affirmative and negative covenants contained in the Loan Agreement and related documentation could adversely affect our financial health and business and future operations by limiting our ability to, among other things, satisfy our obligations under the Loan Agreement, refinance our debt on terms acceptable to us or at all, plan for and adjust to changing business, industry and market conditions, use our available cash flow to fund future acquisitions and make dividend payments, and obtain additional financing for working capital, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity.

If we default under the Loan Agreement, the Bank may accelerate all of our repayment obligations and exercise all of its rights and remedies under the Loan Agreement and applicable law, potentially requiring us to renegotiate our agreement on terms less favorable to us.

Further, if we are liquidated, the lenders’ right to repayment would be senior to the rights of the holders of our common stock to receive any proceeds from the liquidation.

The Bank could declare a default upon the occurrence of customary events of default, including events that it interprets as a material adverse change as delineated in the Loan Agreement, payment defaults or breaches of certain affirmative or negative covenants, thereby requiring us to repay the loan immediately.

Any declaration by the lender of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline.

Additionally, if we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.

Risks related to the discovery, development and commercialization of our product candidate

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We cannot assure you that our planned clinical development programs for palazestrant will be completed in a timely manner, or at all, or that we will be able to obtain approval for palazestrant from the FDA, European Commission (based on the positive opinion of the EMA’s Committee for Medicinal Products for Human Use, commonly referred to as EMA approval ) , or any comparable foreign regulatory authority.

If we are unable to complete development of, obtain regulatory approval for and commercialize palazestrant in one or more indications and in a timely manner, our business, financial condition, results of operations and prospects will be significantly harmed.

If we are unable to complete development of, obtain regulatory approval for and commercialize palazestrant in one or more

indications and in a timely manner, our business, financial condition, results of operations and prospects will be significantly harmed.

Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

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

The results of nonclinical studies and early clinical trials of palazestrant and any future product candidates we may develop may not be predictive of the results of subsequent clinical trials.

The results of nonclinical studies and clinical trials of palazestrant and any future product candidates we may develop may not be predictive of the results of subsequent clinical trials.

We have a limited operating history and to date have not demonstrated our ability to complete large-scale clinical trials.

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While we have or will have agreements governing these third parties’ services, we have limited influence over their actual performance.

If these third parties do not make data available to us, or, if applicable, make regulatory submissions in a timely manner, our development programs may be significantly delayed, and we may need to conduct additional studies or collect additional data independently.

If these third parties do not make data available to us, or, if applicable, make regulatory submissions in a timely manner, our development

programs may be significantly delayed, and we may need to conduct additional studies or collect additional data independently.

In either case, our development costs would increase.

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● subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post- treatment follow-up;

● delays in enrollment by subjects, or completion of the trial by subjects, due to the COVID-19 pandemic;

● subjects choosing an alternative treatment for the indication for which we are developing palazestrant, or participating in competing clinical trials;

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● regulatory authorities imposing a clinical hold;

● disruptions at the FDA and other agencies or regulatory authorities, including as a result of legislative actions or a U.S.

government shutdown;

● occurrence of serious adverse events in trials of the same class of agents conducted by other companies;

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Further, conducting clinical trials in foreign countries, as we may do for palazestrant or product candidates we may develop in the future, presents additional risks that may delay completion of our clinical trials.

These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

we may develop in the future will be harmed, and our ability to generate product revenues from palazestrant or any product candidates we may develop in the future will be delayed.

include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

If we experience delays in the completion of, or termination of, any clinical trial of palazestrant or any product candidates we may develop in the future, the commercial prospects of palazestrant or any product candidates we may develop in the future will be harmed, and our ability to generate product revenues from palazestrant or any product candidates we may develop in the future will be delayed.

Moreover, any delays in completing our clinical trials will increase our costs, slow down palazestrant’s or any product candidates we may develop in the future’s development and approval process and jeopardize our ability to commence product sales and generate revenues.

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Because we have limited financial and managerial resources, we must focus our research and development efforts on those product candidates and specific indications that we believe are the most promising.

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

As a result, we may forego or delay pursuit of opportunities with other product candidates or other indications that later

prove to have greater commercial potential.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities, which will significantly harm our business, financial condition, results of operations and prospects.

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Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods.

We may not be able to initiate or continue clinical trials for palazestrant, or any future product candidate we may develop, if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA, EMA or other comparable foreign regulatory authorities.

regulatory authorities.

Additionally, certain clinical trials for future product candidates may be focused on indications with relatively small patient populations, which may further limit enrollment of eligible patients or may result in slower enrollment than we anticipate.

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We intend to develop palazestrant, and may develop other future product candidates, in combination with one or more other approved or unapproved therapies to treat cancer or other diseases.

For example, in December 2021, we initiated a Phase 1b clinical study of palazestrant in a combination trial with a cyclin-dependent kinase 4 and 6 inhibitor, and in the third quarter of 2022 we initiated Phase 1b clinical studies of palazestrant in combination with another CDK4/6 inhibitor and with a PI3K a inhibitor.

risks that the FDA, EMA or comparable foreign regulatory authorities could revoke approval of the therapy used in combination with our product or that safety, efficacy, manufacturing or supply issues could arise with any of those existing therapies.

For example, we have a Phase 1/2 clinical study of palazestrant in a combination trial with a cyclin-dependent kinase 4 and 6 inhibitor,

and additional Phase 1/2 clinical studies of palazestrant in combination with another CDK4/6 inhibitor and with a PI3K a inhibitor.

Even if palazestrant, or any future product candidate we develop, were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA, EMA or comparable foreign regulatory authorities could revoke approval of the therapy used in combination with our product or that safety, efficacy, manufacturing or supply issues could arise with any of those existing therapies.

If the therapies we use in combination with palazestrant, or any future product candidate we may develop, are replaced as the standard of care for the indications we choose for palazestrant or any future product candidate we may develop, the FDA, EMA or comparable foreign regulatory authorities may require us to conduct additional clinical trials.

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If the market opportunities for palazestrant, or any future product candidate we may develop, if and when approved, are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability might be materially and adversely affected.

Periodically, we make estimates regarding the incidence and prevalence of target patient populations for particular diseases based on various third-party sources and internally generated analysis and use such estimates in making decisions regarding our drug development strategy, including acquiring or in-licensing product candidates and determining indications on which to focus in nonclinical or clinical trials.

estimates in making decisions regarding our drug development strategy, including acquiring or in-licensing product candidates and determining indications on which to focus in nonclinical or clinical trials.

The incidence and prevalence for target patient populations of palazestrant are based on estimates and third-party sources.

These estimates may be inaccurate or based on imprecise data.

For example, the total

addressable market opportunity will depend on, among other things, acceptance of our drugs by the medical community and patient access, drug pricing and reimbursement.

For example, the total addressable market opportunity will depend on, among other things, acceptance of our drugs by the medical community and patient access, drug pricing and reimbursement.

The number of patients in the addressable markets may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our drugs, or new patients may become increasingly difficult to identify or gain access to.

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Any product candidate that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

We believe that a significant number of products are currently under development, and may become commercially available in the future, for the

treatment of conditions for which we are attempting to develop palazestrant.

We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we are attempting to develop palazestrant.

Products we may develop in the future are also likely to face competition from other products and therapies, some of which we may not currently be aware.

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Even if palazestrant or other product candidates we may develop in the future achieve marketing approval, they may be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness.

Technological advances or products developed by our competitors may render our technologies or palazestrant or product candidates we may develop in the future obsolete, less

competitive or not economical.

Technological advances or products developed by our competitors may render our technologies or palazestrant or product candidates we may develop in the future obsolete, less competitive or not economical.

If we are unable to compete effectively, our opportunity to generate revenue from the sale of our product we may develop, if approved, would be adversely affected.

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Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.

Reimbursement rates may vary according to the use of the drug and the clinical setting in

which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.

As a result, the coverage determination process is often time-consuming and costly.

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Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products and requiring substitutions of generic products and/or biosimilars.

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.

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.

Further, such payors are increasingly examining the medical necessity and reviewing the cost effectiveness of medical product candidates.

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Recommendations of government agencies or these other groups or organizations may relate to such matters as usage, dosage, route of administration and use of concomitant therapies.

Recommendations or guidelines suggesting the reduced use of palazestrant or any future product candidates we may develop or the use of competitive or alternative products as the standard of care to be followed by patients and healthcare providers could result in decreased use of palazestrant or any future product candidates we may develop.

Recommendations or guidelines suggesting the reduced use of palazestrant or any future product candidates we may develop or the use of

competitive or alternative products as the standard of care to be followed by patients and healthcare providers could result in decreased use of palazestrant or any future product candidates we may develop.

Risks related to regulatory approval and other legal compliance matters

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or foreign regulatory approvals and, as a result, may be unable to commercialize palazestrant or any future product candidate we may develop.

Palazestrant is, and any product candidate we develop in the future will 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.

Rigorous nonclinical 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 marketed.

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Product liability claims could delay or prevent completion of our development programs.

If we succeed in marketing products, such claims could result in an FDA, EMA or other regulatory authority investigation of the safety and effectiveness of our product, our manufacturing processes and facilities or our marketing programs.

If we succeed in marketing products, such claims could result in an FDA, EMA or other regulatory authority investigation of the safety and effectiveness of our product, our manufacturing processes

and facilities or our marketing programs.

The FDA, EMA or other regulatory authority investigations could potentially lead to a recall of our product or more serious enforcement action, limitations on the approved indications for which it may be used or suspension or withdrawal of approvals.

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Furthermore, clinical trial and product liability insurance is becoming increasingly expensive.

As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses

caused by product liability claims that could significantly harm our business, financial condition, results of operations and prospects.

As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could significantly harm our business, financial condition, results of operations and prospects.

Palazestrant and any future product candidates we develop 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 inhibit regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.

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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.

Any of these developments could significantly harm

our business, financial condition, results of operations and prospects.

Any of these developments could significantly harm our business, financial condition, results of operations and prospects.

Further, if palazestrant obtains marketing approval, toxicities associated with palazestrant and 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.

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The FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction.

We may choose to conduct international clinical trials in the future.

We currently plan to conduct international clinical trials and may choose to conduct additional international clinical trials in the future.

The acceptance of study data by the FDA, EMA or other comparable foreign regulatory authority from clinical trials conducted outside of their respective jurisdictions may be subject to certain conditions.

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If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular 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 adverse effect on our business.

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.

We may attempt to secure approval from the FDA, EMA or comparable foreign regulatory authorities through the use of accelerated approval pathways.

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Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

In addition, Congress is considering additional health reform measures.

These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on potential customers for our drugs, if approved, and accordingly, our business.

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In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain high-expenditure single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although the Medicare drug price negotiation program is currently subject to legal challenges.

These provisions will take effect progressively starting in fiscal year 2023.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

In addition, the Biden administration released an additional executive order on October 14, 2022, directing HHS to report on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries.

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Guidance on implementation and compliance practices is often updated or otherwise revised.

The GDPR may increase our responsibility and liability in relation to personal data that we process, and we may be required to put in place additional mechanisms ensuring compliance with the GDPR.

The GDPR will increase our responsibility and liability in relation to personal data that we process, and we have been and may continue to be required to put in place additional mechanisms ensuring compliance with the GDPR.

In addition, we may be unable to receive and/or further transfer onwards personal data that is processed subject to the EU GDPR and/or UK GDPR, or certain other data privacy and security regimes, due to limitations on cross-border data flows and/or actual or de facto data localization requirements.

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and global economies, the U.S.

and global financial markets and adverse geopolitical and macroeconomic developments, including the COVID-19 pandemic, the ongoing conflict between Ukraine and Russia and related sanctions, and recent bank failures and financial instability.

and global market and economic conditions have been, and continue to be, disrupted and volatile due to many factors, including component shortages and related supply chain challenges, geopolitical developments such as the COVID-19 pandemic, the ongoing conflict between Ukraine and Russia and related sanctions, recent bank failures and financial instability, increasing inflation rates and the responses by central banking authorities to control such inflation, among others.

and global financial markets and adverse geopolitical and macroeconomic developments, including the ongoing conflict between Ukraine and Russia and related sanctions, armed conflict between Israel and groups based in surrounding regions, labor shortages, risk of a U.S.

government shutdown, inflation rates and the responses by central banking authorities to control inflation, monetary supply shifts and related financial instability.

General business and economic conditions that could affect our business, financial condition or results of operations include fluctuations in economic growth, debt and equity capital markets, liquidity of the global financial markets, the availability and cost of credit, investor and consumer confidence, and the strength of the economies in which we, our manufacturers and our suppliers operate.

A severe or prolonged global economic downturn could result in a variety of risks to our business.

In addition, the U.S.

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In order to successfully implement our plans and strategies, we will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of June 30, 2023, we had 72 employees, 67 of whom were full-time, including 47 employees engaged in research and development.

In March 2023, we implemented a reduction in force, which reduced our workforce by approximately 25% as part of our corporate restructuring and portfolio prioritization.

However, in order to successfully implement our development and commercialization plans and strategies, we expect to need additional managerial, operational, sales, marketing, financial and other personnel.

As of September 30, 2023, we had 70 employees, 70 of whom were full-time, including 44 employees engaged in research and development.

In order to successfully implement our development and commercialization plans and strategies, we expect to need additional managerial, operational, sales, marketing, financial and other personnel.

Future growth would impose significant added responsibilities on members of management, including:

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Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our suppliers, CMOs, CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health pandemics or epidemics (including, for example, the outbreak of COVID-19), and other natural or man-made disasters or business interruptions, for which we are

predominantly self- insured.

The occurrence of any of these business disruptions could seriously harm our operations, increase our costs and expenses and significantly harm our business, financial condition, results of operations and prospects.

Our operations, and those of our suppliers, CMOs, CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health pandemics or epidemics, and other natural or man-made disasters or business interruptions, for which we are predominantly self- insured.

The occurrence of any

of these business disruptions could seriously harm our operations, increase our costs and expenses and significantly harm our business, financial condition, results of operations and prospects.

Our ability to develop palazestrant or any future product candidates we may develop could be disrupted if our operations or those of our suppliers are affected by man-made or natural disasters or other business interruptions.

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● the failure of the third party to manufacture palazestrant according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over palazestrant or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;

● disruptions resulting from the impact of public health pandemics or epidemics (including, for example, the COVID-19 pandemic);

● disruptions resulting from the impact of public health pandemics or epidemics;

● the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms;

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Furthermore, if the third-party providers of therapies or therapies in development used in combination with palazestrant are unable to produce sufficient quantities for clinical trials or for commercialization of palazestrant, or if the cost of combination therapies are prohibitive, our development and commercialization efforts would be impaired, which would significantly harm our business, financial condition, results of operations and prospects.

For example, for our Phase 1b clinical study of palazestrant in combination with KISQALI® (ribociclib) or PIQRAY® (alpelisib), or the Novartis Study Drugs, in patients with metastatic ER+ breast cancer, we entered into an Amended and Restated Clinical Collaboration and Supply Agreement with Novartis Institutes for BioMedical Research, Inc., or Novartis, or the Novartis Agreement.

For example, for our Phase 1b/2 clinical study of palazestrant in combination with KISQALI® (ribociclib) or

PIQRAY® (alpelisib), or the Novartis Study Drugs, in patients with metastatic ER+ breast cancer, we entered into an Amended and Restated Clinical Collaboration and Supply Agreement with Novartis Institutes for BioMedical Research, Inc., or Novartis, as amended by Amendment No.

1 to Amended and Restated Clinical Collaboration and Supply Agreement between us and Novartis, or, as amended, the Novartis Agreement.

Under the terms of the Novartis Agreement, Novartis is providing KISQALI® (ribociclib) and PIQRAY® (alpelisib) for the clinical trial.

If Novartis is unable to timely manufacture or provide KISQALI® (ribociclib) or PIQRAY® (alpelisib), or if the Novartis Agreement terminates and we are unable to obtain KISQALI® (ribociclib) or PIQRAY® (alpelisib) on the current terms, our Phase 1b/2 clinical study may be delayed and the cost to us to conduct this trial may significantly increase, which would significantly harm our business, financial condition, results of operations and prospects.

For a description of the Novartis Agreement, see the section titled “Business - Clinical Trial Collaboration and Supply Agreement with Novartis” in our Annual Report on Form 10-K.

For a description of the Novartis Agreement, see the section titled “Business - Clinical Trial Collaboration and Supply Agreement with Novartis” in our Annual Report on Form 10-K and our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2023.

Our current and anticipated future dependence upon others for the manufacture of palazestrant or other drugs necessary for the development or commercialization of palazestrant 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.

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The trading price of our common stock has been and may continue to be highly volatile and subject to wide fluctuations in response to various factors, some of which we cannot control.

For example, the closing price of our common stock from January 1, 2022 to August 4, 2023 has ranged from a low of $2.04 to a high of $9.72.

For example, the closing price of our common stock from January 1, 2022 to November 3, 2023 has ranged from a low of $2.04 to a high of $16.59.

The stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

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● sales of our common stock by us, our insiders or our other stockholders;

● general geopolitical, macroeconomic, industry and market conditions, including the COVID-19 pandemic, the ongoing conflict between Ukraine and Russia and related sanctions, and recent bank failures and financial instability.

● general geopolitical, macroeconomic, industry and market conditions, including the ongoing conflict between Ukraine and Russia and related sanctions, armed conflict between Israel and groups based in surrounding regions, labor shortages, risk of a U.S.

government shutdown, inflation rates and the responses by central banking authorities to control such inflation, monetary supply shifts and related financial instability.

In addition, the trading prices for common stock of other biopharmaceutical companies have been highly volatile as a result of factors unrelated to the specific company or its technology, as well as due to the COVID-19 pandemic.

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These sales, or the possibility that these sales may occur, might also make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate.

As of June 30, 2023, we had 41,122,482 shares of common stock outstanding.

As of September 30, 2023, we had 54,601,516 shares of common stock outstanding.

Shares issued upon the exercise of stock options and warrants outstanding under our equity incentive plans or pursuant to future awards granted under those plans will become available for sale in the public market to the extent permitted by the provisions of applicable vesting schedules, and Rules 144 and 701 under the Securities Act.

Moreover, certain holders of shares of our common stock, have rights, subject to certain conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or our other stockholders.

We are obligated to file a registration statement with the Securities and Exchange Commission to register all of the shares issued in the Private Placement for public resale.

Moreover, certain holders of shares of our common stock outstanding at the time of our IPO have rights, subject to certain conditions, to require us to file registration statements for public resale of their shares or to include their shares in registration statements that we may file for ourselves or our other stockholders.

We also register the offer and sale of all shares of common stock that we may issue under our equity compensation plans.

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We have never declared or paid any cash dividends on our equity securities.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate

declaring or paying any cash dividends for the foreseeable future.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.

In addition, the terms of the Loan Agreement

restrict our ability to declare and pay dividends.

Any return to stockholders will therefore be limited to any appreciation in the value of our common stock, which is not certain.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors