What changed in this filing

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Item 1A. Risk Factors

2020-08-05 compared with 2020-05-06 · 170 added, 130 removed, 596 unchanged (33% of the section changed)

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Risks Related to Our Business and Financial Condition

We will need to raise substantial additional funds through public or private equity transactions and/or complete one or more strategic transactions, to continue development of Gencaro or any of our other product candidates.

We expect the clinical development of AB201 will require substantially more capital to complete, and we cannot guarantee when or if we will be able to secure such additional financing.

We plan to initiate a Phase 2 clinical trial for AB201 .

However, we do not know the definitive design of the clinical development plan for AB201, including the number of trials or patients that may be required to obtain regulatory approval, potential comparator drugs to be tested against AB201 or other factors impacting clinical trial design.

We believe our current capital will allow us to begin pre-trial preparations, such as clinical study drug, site selection, and contract research organization, or CRO, selection and to initiate patient enrollment.

We expect to need to raise significant additional capital to complete the clinical development plan.

As a result, we may need to secure additional financing in order to complete development of AB201 .

If we are not able to obtain financing in the future or on acceptable terms, we may not be able to complete the clinical development of AB201.

As a result, our ability to complete development of AB201 in our clinical development plan is largely contingent on our ability to secure substantial additional financing in the future.

If we encounter difficulties enrolling patients in our planned clinical trial of AB201, any potential enrollment milestones or potential regulatory approvals could be delayed or otherwise adversely affected.

We may encounter difficulty enrolling a sufficient number of patients in the trial, due to circumstances which are outside our control, including improvements in the COVID-19 pandemic resulting from the development of vaccines and therapies that limit the availability of study participants.

As a result, we may need to delay or terminate our trial, which would have a negative impact on our business.

Delays in enrolling patients in the planned clinical trial of AB201 would also adversely affect our ability to meet projected enrollment milestones or timelines for completing the study and obtaining regulatory approval.

Development of other COVID-19 targeted therapies may mean there are no patients who need AB201 as a therapy.

AB201 may not yield results that will enable us to further develop it as a therapy and obtain regulatory approvals necessary to be used as a drug.

We will receive regulatory approval for our product candidates only if we can demonstrate, in carefully designed and conducted clinical trials, that the product candidate is safe and effective.

We do not know whether the planned or any future clinical trials for AB201 will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result in marketable products.

Because AB201 is designed to treat the disease caused by viruses, we believe its efficacy is not linked to a specific viral genetic code and may not be diminished by genetic drift or the development of new strains of the SARS-CoV-2 virus.

However, AB201 has never been tested for safety or efficacy in any pre-clinical COVID-19 models or any patients diagnosed with COVID-19.

It may not be effective for any COVID-19 associated diseases.

The results from preclinical testing and early clinical trials may not be predictive of results from our planned studies of AB201.

We may suffer significant setbacks in advanced clinical trials, even after seeing promising results in earlier studies.

Based on results at any stage of clinical trials, we may decide to repeat or redesign a trial or discontinue development of one or more of our product candidates, including AB201.

If we fail to adequately demonstrate the safety and efficacy of our AB201 product candidate, we will not be able to obtain the required regulatory approvals to commercialize it and our business, results of operations and financial condition would be materially adversely affected.

In addition, administering AB201 to humans may produce undesirable side effects.

These side effects could interrupt, delay or halt clinical trials of AB201 and could result in the FDA or other regulatory authorities denying approval of AB201 for any or all targeted indications.

We may not achieve our projected development goals in the time frames we announce a nd expect.

We set goals for, and make public statements regarding, the timing of certain accomplishments, such as the planned submission of an IND application for AB201 as a potential treatment for COVID-19 with the FDA, initiation of our planned clinical trial of AB201, the duration of the planned AB201 clinical trial, the steps for commencing and continuing our clinical trials, the disclosure of trial results, the obtainment of regulatory approval and the sale of drug products, which we sometimes refer to as milestones.

These milestones may not be achieved, and the actual timing of these events can vary dramatically due to a number of factors such as FDA’s rejection of our IND application, delays or failures in our clinical trials, disagreements with any collaborative partners, the uncertainties inherent in the regulatory approval process and manufacturing scale-up, delays in achieving manufacturing or marketing arrangements sufficient to commercialize our products or our inability to obtain sufficient financing in a timely manner.

There can be no assurance that we will make regulatory submissions or receive regulatory approvals as planned.

If we fail to achieve one or more of these milestones as planned, our business will be materially adversely affected.

We expect the PRECISION-AF clinical trial will require substantially more capital to complete, and we cannot guarantee when or if we will be able to secure such additional financing.

We have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic.

We initially estimated that enrollment in PRECISION-AF would start in 2021;

however, any initiation of the trial will depend on receiving additional funding and an abatement of the COVID-19 pandemic among other factors, this estimate is subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic and the availability of patients for non-COVID-19 related trials.

As a result, we will need to secure additional financing in order to initiate enrollment of our Phase 3 PRECISION-AF clinical trial.

Even if we can begin enrolling patients, we expect to have to raise significant additional capital to continue enrollment.

If we are not able to obtain financing in the future or on acceptable terms, we may have to terminate the clinical trial early, which could adversely affect our business.

We will need to raise substantial additional funds through public or private equity or debt transactions and/or complete one or more strategic transactions, to continue development of AB201, Gencaro or any of our other product candidates.

If we are unable to raise such financing or complete such a transaction, we may not be able to continue operations.

In light of the expected development timeline to potentially obtain FDA approval for Gencaro, if at all, the substantial additional costs associated with the development of Gencaro and our other product candidates, including the costs associated with clinical trials related thereto, and the substantial cost of commercializing Gencaro, if it is approved, we will need to raise substantial additional funding through public or private equity or debt transactions or a strategic combination or partnership.

If we are delayed in obtaining funding or are unable to complete a strategic transaction, we may discontinue our development activities on Gencaro and our other product candidates or discontinue our operations.

Even if we are able to fund continued development and Gencaro or any of our other product candidates is approved, we expect that we will need to complete a strategic transaction or raise substantial additional funding through public or private equity or debt securities to successfully commercialize Gencaro or any other product candidate.

We believe our cash and cash equivalents balance as of March 31, 2020 will be sufficient to fund our operations, at our projected cost structure, after giving effect to potential cost reductions, through the end of the third quarter of 2020.

In light of the expected development timeline to potentially obtain FDA approval for AB201 or Gencaro, if at all, the substantial additional costs associated with the development of our product candidates, including the costs associated with clinical trials related thereto, and the substantial cost of commercializing AB201 or Gencaro, if approved, we will need to raise substantial additional funding through public or private equity or debt transactions or a strategic combination or partnership.

If we are delayed in obtaining funding or are unable to complete a strategic transaction, we may discontinue our development activities on AB201, Gencaro and our other product candidates or discontinue our operations.

Even if we are able to fund continued development and AB201, Gencaro or any of our other product candidates is approved, we expect that we will need to complete a strategic transaction or raise substantial additional funding through public or private equity or debt securities to successfully commercialize AB201, Gencaro or any other product candidate.

We believe our cash and cash equivalents balance as of June 30, 2020, together with $24.1 million of net proceeds raised from July 1, 2020 through July 31, 2020 from sales of our common stock, will be sufficient to fund our operations at our current cost structure plus projected costs for the AB201 clinical development program, through the end of the fourth quarter of 2021 .

In 2017, we entered into a sales agreement with an agent to sell, from time to time, our common stock pursuant to which we have sold an aggregate of 3,302,159 shares of our common stock, for aggregate gross proceeds of approximately $32.3 million.

Net proceeds received in this offering were approximately $30.8 million, after deducting initial expenses for executing the “at the market offering” and commissions paid to the placement agent.

On July 22, 2020, we entered into a new sales agreement, with an agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of July 31, 2020, we had sold an aggregate of 1,423,413 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $10.1 million.

Net proceeds received in this offering were approximately $9.7 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

Sales of our common stock dilute the ownership interest of our stockholders and may cause the price per share of our common stock to decrease.

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This outbreak is causing major disruptions to businesses and markets worldwide as the virus spreads.

The economic uncertainty surrounding the COVID-19 pandemic may dramatically reduce our ability to secure equity or debt financing necessary to support our operations.

The economic uncertainty surrounding the CO VID-19 pandemic may dramatically reduce our ability to secure equity or debt financing necessary to support our operations.

We are unable to currently estimate the financial effect of the pandemic.

If the pandemic continues to be a severe worldwide crisis, economic conditions may cause capital not to be available to us, or not be available on acceptable terms, regardless of our business efforts.

We have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic and prioritizing th e development of AB201 .

We estimate that enrollment in PRECISION-AF will start in 2021, subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic , the availability of patients for non-COVID-19 related trials and obtaining addition al financing .

Our liquidity, and our ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following:

the costs and timing for potential additional clinical trials in order to gain possible regulatory approval for Gencaro and our other product candidates;

the costs and timing for potential additional clinical trials in order to gain possible regulatory approval for AB201, Gencaro and our other product candidates;

the market price of our stock and the availability and cost of additional equity capital from existing and potential new investors;

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Should strategic alternatives or additional capital not be available to us, or not be available on acceptable terms, we may be unable to realize value from our assets and discharge our liabilities in the normal course of business which may, among other alternatives, cause us to further delay, substantially reduce or discontinue operational activities to conserve our cash resources.

Our management, as of March 31, 2020 and December 31, 2019, and our independent registered public accounting firm, in their report on our financial statements as of and for the fiscal year ended December 31, 2019, have concluded that due to our need for additional capital, and the uncertainties surrounding our ability to raise such funding, substantial doubt exists as to our ability to continue as a going concern.

Our financial statements for the three months ended March 31, 2020 and our audited financial statements for the fiscal year ended December 31, 2019 were prepared assuming that we will continue as a going concern.

Our management and our independent registered public accounting firm, in their report on our financial statements as of and for the fiscal year ended December 31, 2019, have concluded that due to our need for additional capital, and the uncertainties surrounding our ability to raise such funding, substantial doubt exists as to our ability to continue as a going concern.

Our audited financial statements for the fiscal year ended December 31, 2019 were prepared assuming that we will continue as a going concern.

The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our inability to continue as a going concern.

As of March 31, 2020, our management concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt exists as to our ability to continue as a going concern for a period from one year after our quarterly financial statements have been issued.

As of December 31, 2019, our management and our independent registered public accounting firm concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt existed as to our ability to continue as a going concern for a period from one year after our annual financial statements had been issued.

However, we believe our cash and cash equivalents balance as of June 30, 2020, together with the net proceeds of $24.1 million raised from July 1, 2020 through July 31, 2020 from sales of our common stock, will be sufficient to fund our operations at our current cost structure plus projected costs for the AB201 clinical development program, through the end of the fourth quarter of 2021 .

We cannot be certain that we will be able to make any other sale of our common stock in any future offering to cover our future capital needs, or at all.

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We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate.

We may be forced to reduce our operating expenses and raise additional funds to meet our working capital needs, principally through the additional sales of our securities or debt financings.

We may be forced to reduce our ope rating expenses and raise additional funds to meet our working capital needs, principally through the additional sales of our securities or debt financings.

However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to us.

If we are unable to raise sufficient additional capital or complete a strategic transaction, we may be unable to continue to fund our operations, develop Gencaro or our other product candidates, or realize value from our assets and discharge our liabilities in the normal course of business.

If we cannot raise sufficient funds, we may have to liquidate our assets, and might realize significantly less than the values at which they are carried on our financial statements, and stockholders may lose all or part of their investment in our common stock.

If we are not able to successfully develop, obtain FDA approval for, and provide for the commercialization of Gencaro in a timely manner, we may not be able to continue our business operations.

If we are unable to raise sufficient additional capital or complete a strategic transaction, we may be unable to continue to fund our operations, develop AB201, Gencaro or o ur other product candidates, or realize value from our assets and discharge our liabilities in the normal course of business.

If we are not able to successfully develop, obtain FDA approval for, and provide for the commercialization of AB201 or Gencaro in a timely manner, we may not be able to continue our business operations.

We currently have no products that have received regulatory approval for commercial sale.

The process to develop, obtain regulatory approval for and commercialize potential product candidates is long, complex and costly.

For instance, we began screening patients for our Phase 2B GENETIC-AF clinical trial in April 2014 and enrolled our first patient in June 2014.

Enrollment was completed in August 2017 having randomized 267 HF patients with AF.

The Phase 2B clinical trial completed the patient treatment phase in December 2017 and we reported top-line data in February 2018 .

We received guidance from the FDA following an End-of-Phase 2 meeting regarding the Phase 3 program for Gencaro as a potential genetically-targeted treatment for AF patients with HF with the beta‑1 389 arginine homozygous genotype.

While, in consultation with the FDA, we developed key elements of the Phase 3 clinical trial needed to support a potential NDA, details of which were confirmed via the FDA SPA process, there is no guarantee that any Phase 3 clinical trial for Gencaro will not be subject to similar enrollment periods as GENETIC‑AF .

Any future development of Gencaro, including initiating the Phase 3 clinical trial, is dependent on obtaining additional financing, even if we enter into a strategic collaboration.

Failure to demonstrate that a product candidate, including Gencaro, is safe and effective, or significant delays in demonstrating such safety and efficacy, would adversely affect our business.

Failure to obtain marketing approval of Gencaro from appropriate regulatory authorities, or significant delays in obtaining such approval, would also adversely affect our business and could, among other things, preclude us from completing a strategic transaction or obtaining additional financing necessary to continue as a going concern.

Furthermore, we do not yet have a complete development plan for AB201 that has been harmonized with FDA guidance, including details with respect to the number of trials, patients or trial design.

Failure to demonstrate that a product candidate, including AB201 or Gencaro, is safe and effective, or significant delays in demonstrating such safety and efficacy, would adversely affect our business.

Failure to obtain marketing approval of AB201 or Gencaro from appropriate regulatory authorities, or significant delays in obtaining such approval, would also adversely affect our business and could, among other things, preclude us from completing a strategic transaction or obtaining additional financing necessary to continue as a going concern.

Even if approved for sale, a product candidate must be successfully commercialized to generate value.

We do not currently have the capital resources or management expertise to commercialize Gencaro or any of our other product candidates and, as a result, will need to complete a strategic transaction, or, alternatively, raise substantial additional funds to enable commercialization of Gencaro or any of our other product candidates, if approved.

Failure to successfully provide for the commercialization of Gencaro or any other product candidate, if approved, would damage our business.

We do not currently have the capital resources or management expertise to commercialize AB201, Gencaro or any of our other product candidates and, as a result, will need to complete a strategic transaction, or, alternatively, raise substantial additional funds to enable commercialization of AB201, Gencaro or any of our other product candidates, if approved.

Failure to successfully provide for the commercialization of AB201, Gencaro or any other product candidate, if approved, would damage our business.

We have received an SPA agreement from the FDA relating to our planned Phase 3 program for Gencaro.

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Moreover, if the FDA revokes or alters its agreement under our SPA, or interprets the data collected from the clinical trial differently than we do, the FDA may not deem the data sufficient to support an application for regulatory approval, which could materially adversely affect our business, financial condition and results of operations.

If we are not able to maintain the requirements for listing on the Nasdaq Capital Market, we could be delisted, which could have a material adverse effect on our ability to raise additional funds as well as the price and liquidity of our co mmon stock .

Our common stock is currently listed on the Nasdaq Capital Market.

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In future periods, if we do not meet the minimum stockholders’ equity, minimum closing bid price requirements, or any other listing requirements, we would be subject to delisting from the Nasdaq Capital Market.

As of May 5, 2020, the closing price of our common stock was $3.79 per share, and the total market value of our listed securities was approximately $6.0 million.

As of March 31, 2020, we had stockholders’ equity of $6.3 million.

As of August 4, 2020, the closing price of our common stock was $6.78 per share, and the total market value of our listed securities was approximately $41.0 million.

As of June 30, 2020, we had stockholders’ equity of $10.3 million.

Our business could be adversely affected by the effects of health epidemics, including the ongoing COVID-19 global pandemic, in regions where we or third parties on which we rely may have clinical trial sites or other business operations.

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There is a risk that other countries or regions may be less effective at containing COVID-19, or it may be more difficult to contain if the outbreak reaches a larger population or broader geography, in which case the risks described herein could be elevated significantly.

In particular, our anticipated clinical trials, including PRECISION-AF, may be affected by the COVID-19 outbreak.

Site initiation, patient enrollment, distribution of drug product candidates, study monitoring, and data collection may be delayed due to changes in hospital policies, local regulations, and/or prioritization of hospital resources toward the COVID-19 outbreak.

If COVID-19 continues to spread, some patients and clinical investigators may not be able to comply with clinical trial protocols.

For example, quarantines may impede patient movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be required to delay patient enrollment or unable to obtain patient data as a result.

In addition, third party manufacturing of our drug product candidates and suppliers of the materials used in the production of our drug product candidates may be impacted by restrictions resulting from the COVID-19 outbreak which may disrupt our supply chain or limit our ability to manufacture drug product candidates for our clinical trials.

The ultimate impact of the COV ID-19 outbreak or a similar future health epidemic is highly uncertain and subject to change.

The ultimate impact of the COVID-19 outbreak or a similar future health epidemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole.

Howev er, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

If we encounter difficulties enrolling patients in any future clinical trials, our future trials could be delayed or otherwise adversely affected.

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Delays in enrolling patients in any future clinical trials would also adversely affect our ability to generate any product, milestone and royalty revenues under collaboration agreements, if any, and could impose significant additional costs on us or on any future collaborators.

We do not yet know the details of the clinical development program for AB201, including the number of patients that will be needed.

Development beyond our control may impact our ability to enroll patients in an AB201 clinical trial, such as the development of vaccines for the SARS-CoV-2 virus or the development of other therapies for COVID-19 disease.

The GENETIC-AF clinical trial required that we identify and enroll a large number of patients with the condition under investigation and the trial enrolled only those patients having a specific genotype, and certain patients who have or are willing to have a Medtronic device implanted for monitoring and recording AFB data.

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We anticipate that any future Phase 3 clinical trial of Gencaro, including PRECISION-AF, may have similar enrollment criteria, and we cannot guarantee that we will not have similar enrollment issues in any future clinical trials.

We may also encounter difficulty enrolling a sufficient number of patients in any future clinical trial, including PRECISION-AF, due to circumstances which are outside our control, including as a result of the ongoing COVID-19 pandemic.

We may also encounter difficulty enrolling a sufficient number of patients in any future clinical trial, due to circumstances which are outside our control, including as a result of the ongoing COVID-19 pandemic.

See “Our business could be adversely affected by the effects of health epidemics, including the ongoing COVID-19 global pandemic, in regions where we or third parties on which we rely have clinical trial sites or other business operations.

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We will receive regulatory approval for our product candidates only if we can demonstrate in carefully designed and conducted clinical trials that the product candidate is safe and effective.

We do not know whether any current or future clinical trials for Gencaro or any other product candidate will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result in marketable products.

We do not know whether any current or future clinical trials for AB201, Gencaro or any other product candidate will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result in marketable products.

AB201 has not been tested in any pre-clinical COVID-19 models or any patients diagnosed with COVID-19.

It may not be safe or effective for any COVID-19 patients.

For example, GENETIC-AF was designed as an adaptive trial.

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Administering our product candidates to humans may produce undesirable side effects.

These side effects could interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory au thorities denying approval of our product candidates for any or all targeted indications.

If clinical trials for a product candidate are unsuccessful, we will be unable to commercialize the product candidate.

These side effects could interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory authorities denying approval of our product candidates for any or all targeted indications.

If clinical trials for a product candidate are unsuccessful, we will be unabl e to commercialize the product candidate.

If one or more of our clinical trials are delayed, we will be unable to meet our anticipated development timelines.

Either circumstance could cause the market price of our common stock to decline .

We will rely on contract research organizations to conduct substantial portions of our clinical trials, including any future clinical trial of Gencaro, and as a result, we will be unable to directly control the timing, conduct and expense of all aspects of our clinical trials.

We will rely on contract research organizations to conduct substantial portions of our clinical trials, including any future clinical trial of AB201 or Gencaro, and as a result, we will be unable to directly control the timing, conduct and expense of all aspects of our clinical trials.

We do not currently have sufficient staff with the requisite experience to conduct our clinical trials and therefore will rely on third parties to conduct certain aspects of any future clinical trials.

We previously contracted with a CRO to conduct components of our GENETIC-AF clinical trial and anticipate contracting with a CRO to conduct components of any future clinical trial for Gencaro or any future clinical trials for our other product candidates.

We previously contracted with a CRO to conduct components of our GENETIC-AF clinical trial and anticipate contracting with a CRO to conduct components of any future clinical trial for Gencaro and components of the planned clinical study of AB201 or any future clinical trials for our other product candidates.

As a result, we will have less control over many details and steps of any clinical trial, the timing and completion of any clinical trial, the required reporting of adverse events and the management of data developed through any clinical trial than would be the case if we were relying entirely upon our own staff.

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These milestones may not be achieved, and the actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our clinical trials, disagreements with any collaborative partners, the uncertainties inherent in the regulatory approval process and manufacturing scale-up, delays in achieving manufacturing or marketing arrangements sufficient to commercialize our products or an inability to finance in a timely manner.

For instance, we previously planned to initiate PRECISION-AF in the first quarter of 2020, subject to securing additional financing.

We now plan to initiate enrollment of PRECISION-AF in the fourth quarter of 2020 due to our continued financing needs.

For instance, we previously planned to initiate PRECISION-AF in the first quarter of 2020 but have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic.

We estimate that enrollment in PRECISION-AF will start in 2021, subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic, the availability of patients for non-COVID-19 related trials and obtaining additional financing.

We cannot guarantee if we will be able to secure such financing in order to initiate PRECISION-AF in a timely fashion.

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If those collaborations are not successful, we may not be able to complete the development of these product candidates.

We intend to collaborate with one or more clinical trial networks in our development program for AB201.

As a result, we will lack direct control over certain aspects of the development program and the amount and timing of resources that these collaborators devote to the project.

We had a collaboration agreement with Medtronic that supported our GENETIC-AF clinical trial.

If our arrangement with Medtronic, as amended, is continued as part of our future development of Gencaro, we will have limited control over the amount and timing of resources that they dedicate to the development of Gencaro.

This is also likely to be true in any future collaboration with third parties and we may seek additional third party collaborators for the development of Gencaro or other product candidates.

This is also likely to be true in any future collaboration with third parties and we may seek additional third party collaborators for the development of AB201, Gencaro or any other product candidates.

Our ability to benefit from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements .

Collaborations involving our product candidat es pose the following risks to us :

Collaborations involving our product candidates po se the following risks to us:

collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

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If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.

An y future clinical trial for Gencaro will require the use of a third-party diagnostic services provider to administer a genetic test needed to identify the patient receptor genotypes of clinical trial participants, and as a result, we will be unable to dire ctly control the timing, conduct and expense of the genetic test .

Any future clinical trial for Gencaro will require the use of a third-party diagnostic services provider to administer a genetic test needed to identify the patient receptor genotypes of clinical trial participants, and as a result, we will be unable to di rectly control the timing, conduct and expense of the genetic test.

We anticipate that any future clinical trial of Gencaro, if any, will require a companion diagnostic test that identifies the patient’s receptor genotype.

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If regulatory clearance or approval is delayed, or if one or more third-party diagnostic services providers are unable to obtain FDA approval of the genetic test at all or in parallel with the approval of Gencaro, or are unable to commercialize the test successfully and in a manner that effectively supports the commercial efforts for Gencaro, or if the information concerning the differential response to Gencaro resulting from certain genetic variation is not included in the approval label for Gencaro, the commercial launch of Gencaro may be significantly and adversely affected.

Regulator y approval is required for the genetic test to be used in our Gencaro clinical trials and to support the commercialization of the test, if approved.

Delays or failures in obtaining such regulatory approval, including any required validation analyses may pr event a third-party diagnostics provider from commercializing such genetic test and will adversely affect our business, operating results and prospects .

Regulatory approval is required for the genetic test to be used in our Gencaro clinical trials and to support the co mmercialization of the test, if approved.

Delays or failures in obtaining such regulatory approval, including any required validation analyses may prevent a third-party diagnostics provider from commercializing such genetic test and will adversely affect o ur business, operating results and prospects.

Before a genetic test can be used commercially, including in conjunction with Gencaro, if it is approved for marketing, the third-party diagnostics provider must obtain FDA Premarket Approval, or PMA, for such test.

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Our failure to raise substantial additional funding or enter into a strategic transaction may materially and adversely affect our business.

Unless we are able to raise substantial additional funding for the development of Gencaro through other means, we will need to complete a strategic transaction to continue the development of Gencaro through its next phase of clinical development, the regulatory submission process, the commercialization phase, and to continue our other operations.

Unless we are able to raise substantial additional funding for the development of AB201 or Gencaro through other means, we will need to complete a strategic transaction to continue the development of AB201 or Gencaro through its next phase of clinical development, the regulatory submission process, the commercialization phase, and to continue our other operations.

The strategic transactions that we may consider include a potential combination or partnership.

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Under Nasdaq rules, an offering of more than 20% of our total shares outstanding at a price per share less than (i) the closing price of our common stock on the Nasdaq Capital Market immediately preceding the signing of the binding agreement, or (ii) the average closing price of our common stock on the Nasdaq Capital Market for the five trading days immediately preceding the signing of the binding agreement requires stockholder approval unless the offering qualifies as a “public offering” for purposes of the Nasdaq rules.

As of March 31, 2020, we had approximately 1.6 million shares of common stock outstanding, 20% of which is approximately 319,000 shares.

SEC rules impose restrictions on our ability to raise funds through the registered offering of our securities pursuant to a “shelf” registration statement on Form S-3.

Under SEC rules, we are prohibited from selling securities under such a registration statement if the aggregate market value of the securities sold thereunder in any twelve-month period exceeds one-third of the market value of our outstanding common stock held by non-affiliates.

In the twelve-months prior to May 5, 2020, we sold an aggregate of 495,257 shares of our common stock pursuant to the terms of such sales agreement, as amended, for aggregate gross proceeds of approximately $4.2 million.

Due to these sales, we may be limited in our ability to sell securities registered on Form S-3 over the next 12 months, which may substantially limit our ability to effect future financings.

In addition, we are currently subject to certain contractual rights of investors arising from our public and private equity financing transactions that limit the nature and price of future public and private financing transactions that we may effect.

As of June 30, 2020, we had approximately 2.3 million shares of common stock outstanding, 20% of which is approximately 454,000 shares.

SEC rules impose restrictions on certain companies’ ability to raise funds through the registered offering of securities pursuant to a “shelf” registration statement on Form S-3.

Although we are not currently subject to such restrictions, under SEC rules, if our market capitalization is below $75 million at the time of our next annual report on Form 10-K, we would be prohibited from selling securities under such a registration statement if the aggregate market value of the securities sold thereunder in any twelve-month period exceeds one-third of the market value of our outstanding common stock held by non-affiliates.

Unless we are able to generate sufficient product revenue, we will continue to incur losses from operations and will not achieve or maintain profitability.

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As a result, we expect to continue to incur significant operating losses for the foreseeable future.

Even if we ultimately receive regulatory approval for Gencaro or our other product candidates, sales of such products may not generate sufficient revenue for it to achieve or maintain profitability.

Even if we ultimately receive regulatory approval for AB201, Gencaro or our other product candidates, sales of such products may not generate sufficient revenue for it to achieve or maintain profitability.

Because of the numerous risks and uncertainties associated with developing therapeutic drugs, we may experience larger than expected future losses and may never reach profitability.

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We are not permitted to market a potential drug in the United States until we receive approval of an NDA from the FDA for such drug.

We have not received an NDA approval from the FDA for Gencaro or any of our other product candidates.

We have not received an NDA approval from the FDA for AB201, Gencaro or any of our other product candidates.

There can be no guarantees with respect to our product candidates that clinical studies will adequately support an NDA, that the products will receive necessary regulatory approvals, or that they will prove to be commercially successful.

To receive regulatory approval for the commercial sale of any product candidates, we must demonstrate safety and efficacy in humans to the satisfaction of regulatory authorities through preclinical studies and adequate and well-controlled clinical trials of the product candidates.

This process is expensive and can take many years, and failure can occur at any stage of the tes ting.

This process is expensive and can take many years, and failure can occur at any stage of the testing.

Our failure to adequately demonstrate the safety and efficacy of our product candidates will prevent regulatory approval and commercialization of such products.

In 2008, we submitted and the FDA accepted our NDA filing for Gencaro for the treatment o f chronic HF.

We do not yet have guidance from FDA on a development program for AB201, so we do not yet know what FDA will require in terms of a clinical development plan, including trial design and number of patients and trials needed for the successful development of AB201.

In 2008, we submitted and the FDA accepted our NDA filing for Gencaro for the treatment of chronic HF.

In 2009, the FDA issued a Complete Response Letter, or CRL, in which the FDA stated that it could not approve the Gencaro NDA in its current form and specified actions required for approval of the NDA, including conducting an additional Phase 3 clinical trial of Gencaro in patients with HF.

We completed a Phase 2B clinical study of Gencaro in HFrEF patients to assess its efficacy in reducing or preventing AF.

We enrolled 267 HFrEF patients with AF in the Phase 2B clinical trial.

We reported to p-line Phase 2B data in February 2018.

We completed a Phase 2B clinical study of Gencaro in HF patients to assess its efficacy in reducing or preventing AF.

We enrolled 267 HF patients with AF in the Phase 2B clinical trial.

We reported top-line Phase 2B data in February 2018.

In the third quarter of 2018, we submitted a SPA to the FDA for a Phase 3 clinical trial.

In 2019, the FDA approved our SPA request for a Phase 3 clinical trial of Gencaro.

Even though the FDA approved our SPA, this p roduct candidate will require years of additional clinical development.

Even if we conduct additional studies in accordance with our SPA agreement or further FDA guidance and submit or file a new or amended NDA, the FDA may ultimately decide that the NDA d oes not satisfy the criteria for approval .

Even though the FDA approved our SPA, this product candidate will require years of additional clinical development.

In the event that we or our collaborators conduct preclinical studies that do not comply with Good Laboratory Practices, or GLP, or incorrectly design or carry out human clinical trials in accordance with Good Clinical Practices, or GCP, or those clinical trials fail to demonstrate clinical significance, it is unlikely that we will be able to obtain FDA approval for product development candidates.

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Finally, an approval could be conditioned on our commitment to conduct further clinical trials, which we may not have the resources to conduct or which may negatively impact our financial situation.

The manufacture and tableting of Gencaro is done by third party suppliers, who must also meet cGMP requirements and pass a pre-approval inspe ction of their facilities before we can obtain marketing approval .

The manufacture of AB201 and Gencaro and the tableting of Gencaro is done by third party suppliers, who must also meet cGMP requirements and pass a pre-approval inspection of their facilities before we can obtain marketing approval.

All of our product candidates are prone to the risks of failure inherent in drug development.

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Furthermore, our third-party manufacturers and the manufacturing facilities that they use to make our product candidates are regulated by the FDA.

Quality control and manufacturing procedures must continue to conform to cGMP after approval.

Drug manufacturers and their subcontractors are required to register their facilities and products manufactured annually with the FDA and certain state agencies and are subject to pe riodic unannounced inspections by the FDA, state and/or other foreign authorities.

Any subsequent discovery of problems with a product, or a manufacturing or laboratory facility used by us or our collaborators, may result in restrictions on the product, or on the manufacturing or laboratory facility, including a withdrawal of the drug from the market or suspension of manufacturing.

Any changes to an approved product, including the way it is manufactured or promoted, often require FDA approval before the pro duct, as modified, can be marketed.

We and our third-party manufacturers will also be subject to ongoing FDA requirements for submission of safety and other post-market information.

Quality control and manufacturing procedures must continue to conform to c GMP after approval.

Drug manufacturers and their subcontractors are required to register their facilities and products manufactured annually with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA, state and/o r other foreign authorities.

Any subsequent discovery of problems with a product, or a manufacturing or laboratory facility used by us or our collaborators, may result in restrictions on the product, or on the manufacturing or laboratory facility, includin g a withdrawal of the drug from the market or suspension of manufacturing.

Any changes to an approved product, including the way it is manufactured or promoted, often require FDA approval before the product, as modified, can be marketed.

We and our third-p arty manufacturers will also be subject to ongoing FDA requirements for submission of safety and other post-market information.

The marketing and advertising of our drug products by our collaborators or us will be regulated by the FDA, certain state agencies or foreign regulatory authorities.

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impose civil or criminal penalties.

Reliance on third parties to commercialize Gencaro or our other product candidates could negatively impact our business.

Reliance on third parties to commercialize AB201, Gencaro or our other product candidates could negatively impact our business.

If we are required to establish a direct sales force in the United States and are unable to do so, our business may be harmed.

Commercialization of Gencaro or any other product candidate, if approved, particularly the establishment of a sales organization, will require substantial additional capital resources.

We currently intend to pursue a strategic partnership alternative for the commercialization of Gencaro, if it is approved, and we have suspended our efforts to build internal sales, marketing and distribution capabilities.

If we elect to rely on third parties to sell Gencaro and any other products, then we may receive less revenue than if we sold such products directly.

Commercialization of AB201, Gencaro or any other product candidate, if approved, particularly the establishment of a sales organization, will require substantial additional capital resources.

We currently intend to pursue a strategic partnership alternative for the commercialization of AB201 or Gencaro, if it is approved, and we have suspended our efforts to build internal sales, marketing and distribution capabilities.

If we elect to rely on third parties to sell AB201, Gencaro and any other products, then we may receive less revenue than if we sold such products directly.

In addition, we may have little or no control over the sales efforts of those third parties.

If we are unable to complete a strategic transaction, we would be unable to commercialize Gencaro or any other product candidate without substantial additional capital.

Even if such capital were secured, we would be required to build internal sales, marketing and distribution capabilities to market Gencaro in the United States.

If we are unable to complete a strategic transaction, we would be unable to commercialize AB201, Gencaro or any other product candidate without substantial additional capital.

Even if such capital were secured, we would be required to build internal sales, marketing and distribution capabilities to market AB201 or Gencaro in the United States.

None of our current employees have experience in establishing and managing a sales force.

In the event we are unable to sell Gencaro and other selected product candidates, either directly or through third parties via a strategic transaction, the commercialization of Gencaro, if it is approved, may be delayed indefinitely.

In the event we are unable to sell AB201, Gencaro and other selected product candidates, either directly or through third parties via a strategic transaction, the commercialization of AB201 or Gencaro, if approved, may be delayed indefinitely.

We are dependent on our key personnel.

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We do not intend to develop facilities for the manufacture of product candidates for clinical trials or commercial purposes in the foreseeable future.

We have contracted with Groupe Novasep to manufacture the API for Gencaro.

For drug product, we previously contracted with Patheon, Inc.

to manufacture the Gencaro tablets.

In addition, we contracted with a separate service provider for packaging and distribution of our clinical trial materials.

We may also need to contract with similar manufacturers for similar services in connection with any Phase 3 clinical trial of Gencaro.

We have contracted with several third-party manufacturing organizations for production and analytical testing of our product candidates.

These contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to successfully produce, store and distribute our products.

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If our contract manufacturers fail to comply with applicable governmental regulations, such as quality control, quality assurance and the maintenance of records and documentation, we may not be able to continue production of the API or finished product.

If the safety of any API or product supplied is compromised due to failure to adhere to applicable laws or for other reasons, this may jeopardize our regulatory approval for Gencaro and other product candidates, and we may be held liable for any injuries sustained as a result.

If the safety of any API or product supplied is compromised due to failure to adhere to applicable laws or for other reasons, this may jeopardize our regulatory approval for AB201, Gencaro and other product candidates, and we may be held liable for any injuries sustained as a result.

Upon the occurrence of one of the aforementioned events, the ability to switch manufacturers may be difficult for a number of reasons, including:

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To date we have not generated any product revenue and have historically funded our operations through investment capital.

Our future growth depends on our ability to emerge from the clinical development stage and successfully commercialize or provide for the commercialization of Gencaro and our other product candidates which in turn, will depend, among other things, on our ability to:

conduct additional clinical trials and develop and obtain regulatory approval for Gencaro or other product candidates;

successfully partner a companion genetic test with the commercial launch of Gencaro;

enter into a strategic transaction enabling the continued development and commercialization of Gencaro, or alternatively, raise significant additional capital to enable these activities;

pursue additional indications for Gencaro and develop other product candidates, including other cardiovascular therapies;

obtain commercial quantities of Gencaro or other product candidates at acceptable cost levels.

Any one of these factors or other factors discussed in this report could affect our ability to successfully commercialize Gencaro and other product candidates, which could impact our ability to earn sufficient revenues to transition from a clinical development stage company and continue our business.

If approved by the FDA, Gencaro will be entering a competitive marketplace and may not succeed .

Our future growth depends on our ability to emerge from the clinical development stage and successfully commercialize or provide for the commercialization of AB201, Gencaro and our other product candidates which in turn, will depend, among other things, on our ability to:

conduct additional clinical trials and develop and obtain regulatory approval for AB201, Gencaro or other product candidates;

successfully partner a companion genetic test with the commercial launch of AB201 or Gencaro;

enter into a strategic transaction enabling the continued development and commercialization of AB201 or Gencaro, or alternatively, raise significant additional capital to enable these activities;

pursue additional indications for AB201 or Gencaro and develop other product candidates, including other cardiovascular therapies;

obtain commercial quantities of AB201, Gencaro or other product candidates at acceptable cost levels.

Any one of these factors or other factors discussed in this prospectus supplement could affect our ability to successfully commercialize Gencaro and other product candidates, which could impact our ability to earn sufficient revenues to transition from a clinical development stage company and continue our business.

If approved by the FDA, AB201 or Gencaro will be entering a competitive marketplace and may not succeed.

We do not yet know what the commercial opportunity will be, if any, for AB201 if it is approved for treating COVID-19 disease.

We do not know how and to whom AB201 would be marketed and what the commercial arrangements would be for its sales and reimbursement.

While we anticipate that AB201, if approved, could potentially be used in combination with antiviral drugs and other therapies, there are other vaccines and therapies under development .

Gencaro is a new type of beta-blocker and vasodilator being developed for AF.

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Future sales of our products may suffer if they are not accepted in the marketplace by physicians, patients and the medical community.

Gencaro or our other product candidates may not gain market acceptance among physicians, patients and the medical community.

The degree of market acceptance of Gencaro or our other product candidates will depend on a number of factors, such as its effectiveness and tolerability, as compared with competitive drugs.

For instance, the top-line results of our Phase 2B GENETIC-AF clinical trial indicated that Gencaro demonstrated a similar treatment benefit compared to the active comparator, metoprolol succinate (TOPROL‑XL).

If our future clinical trials in Gencaro do not show that Gencaro has a clear therapeutic benefit as compared to other drugs in the beta-blocker class currently on the market, then prescribers may be unlikely to prescribe Gencaro to patients, even if approved.

Also, prevalence and severity of side-effects could negatively affect market acceptance of Gencaro or our other product candidates.

Failure to achieve market acceptance of Gencaro would significantly harm our business.

If we are unable to obtain acceptable prices or adequate reimbursement from third-party payors for Gencaro, or any other product candidates that we may seek to commercialize, then our revenues and prospects for profitability will suffer.

Our or any strategic partner’s ability to commercialize Gencaro, or any other product candidates that we may seek to commercialize, is highly dependent on the extent to which coverage and reimbursement for these product candidates will be available from:

AB201, Gencaro or our other product candidates may not gain market acceptance among physicians, patients and the medical community.

The degree of market acceptance of AB201, Gencaro or our other product candidates will depend on a number of factors, such as its effectiveness and tolerability, as compared with competitive drugs.

For instance, if AB201 is approved, by that time there may be superior alternatives in terms of vaccines and/or therapeutics that may significantly impact the relative medical benefits offered by AB201.

If our future clinical trials for AB201 do not show that AB201 has a clear therapeutic benefit as compared to other therapies or vaccines that are approved in the interim, then there may be a limited or no commercial market for AB201.

Also, prevalence and severity of side-effects could negatively affect market acceptance of AB201.

Failure to achieve market acceptance of AB201 or Gencaro would significantly harm our business.

If we are unable to obtain acceptable prices or adequate reimbursement from third-party payors for AB201, Gencaro, or any other product candidates that we may seek to commercialize, then our revenues and prospects for profitability will suffer.

Our or any strategic partner’s ability to commercialize AB201, Gencaro, or any other product candidates that we may seek to commercialize, is highly dependent on the extent to which coverage and reimbursement for these product candidates will be available from:

governmental payors, such as Medicare and Medicaid;

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For example, in some countries other than the United States, pricing of prescription drugs is subject to government control and we expect to see continued efforts to reduce healthcare costs in international markets.

Some states are also considering legislation that would control the prices of drugs, and state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid.

Managed care organizations continue to seek price discounts and, in some cases, to impose restrictions on the coverage of particular drugs.

Some states are also considering legislation that would control the prices of drugs, a nd state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid.

Managed care organizations contin ue to seek price discounts and, in some cases, to impose restrictions on the coverage of particular drugs.

Government efforts to reduce Medicaid expenses may lead to increased use of managed care organizations by Medicaid programs.

This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for drugs.

It is likely that federal and state legislatures and health agencies will continue to focus on additional health care reform in the future although we are unable to predict what additional legislation or regulation, if any, relating to the health care industry or third-party coverage and reimbursement may be enacted in the future or what effect such legislation or regulation would have on our business.

We or any strategic partner’s ability to commercialize Gencaro, or any other product candidates that we may seek to commercialize, is highly dependent on the extent to which coverage and reimbursement for these product candidates will be available from government payors, such as Medicare and Medicaid, private health insurers, including managed care organizations, and other third-party payors, and any change in reimbursement levels could materially and adversely affect our business.

This may result in manag ed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for drugs.

It is likely that federal and state legislatures and health agencies will continue to focu s on additional health care reform in the future although we are unable to predict what additional legislation or regulation, if any, relating to the health care industry or third-party coverage and reimbursement may be enacted in the future or what effect such legislation or regulation would have on our business.

We or any strategic partner’s ability to commercialize AB201, Gencaro, or any other product candidates that we may seek to commercialize, is highly dependent on the extent to which coverage and re imbursement for these product candidates will be available from government payors, such as Medicare and Medicaid, private health insurers, including managed care organizations, and other third-party payors, and any change in reimbursement levels could mate rially and adversely affect our business.

Further, the pendency or approval of future proposals or reforms could result in a decrease in our stock price or limit our ability to raise capital or to obtain strategic partnerships or licenses .

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In 2019, our research and development activities were dedicated to Gencaro and non-clinical development activities with AB171.

We expect our research and development activities for 2020, subject to obtaining additional financing, will be focused on regulatory activities related to Gencaro, initiating the PRECISION‑AF clinical trial and non-clinical development activities with AB171.

We expect our research and development activities for 2020, subject to obtaining additional financing, will be focused on regulatory activities related to AB201, initiating the planned clinical trial of AB201.

If we are not able to substantially expand our research and development efforts, or identify, or license or acquire other products or product candidates or complete future acquisitions, then we will likely be unable expand our pipeline of product candidates.

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Future acquisitions could also result in the incurrence of debt, contingent liabilities or the amortization of expenses related to other intangible assets, any of which could adversely affect our operating results.

We would be subject to applicable regulatory approval requirements of the foreign countries in which we market our products, which are costly and may prevent or delay us from marketing our products in those countries.

We would be subject to applicable regulatory ap proval requirements of the foreign countries in which we market our products, which are costly and may prevent or delay us from marketing our products in those countries.

In addition to regulatory requirements in the United States, we would be subject to the regulatory approval requirements in each foreign country where we market our products.

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If our internal control over financial reporting is not considered effective, we may experience a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock.

Changes in tax laws or regulations that are applied adversely to us or our customers may have a material advers e effect on our business, cash flow, financial condition or results of operations.

Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings.

Any new taxes could adversely affect our domestic and international business operations, and our business and financial performance.

Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us.

Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or app lied adversely to us.

For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, significantly revised the Internal Revenue Code of 1986, as amended, or the Code.

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In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income.

We have not determined whether we have experienced an ownership change in the past, and we experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes.

For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

We have not determined whether we have

experienc ed an ownership change in the past, and we experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

There is also a risk that due to regulatory changes, such as suspens ions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes.

For these reasons, we may not be able to utilize a material portion o f the NOLs reflected on our balance sheet, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition .

Security breaches, cyber-attacks, or other disruptions or incidents could expose us to liability and affect our business and reputation.

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Many similar privacy laws have been proposed at the federal level and in other states.

Foreign data protection laws, including, without limitation, the European Union Directive 95/46/EC, or the Directive, and the European Union’s General Data Protection Regulation, or the GDPR, that became effective in May 2018, and member state data protection legislation, may also apply to health-related and other personal information obtained outside of the United States.

protection legislation, may also apply to health-related and other personal information obtained outside of the United States.

These laws impose strict obligations on the ability to process health-related and other personal information of data subjects in the European Union and the United Kingdom, including in relation to use, collection, analysis, and transfer (including cross-border transfer) of such personal information .

These laws include several requirements relating to the consent of the individuals to whom the personal data relates, limitations on data processing, establishing a legal basis for processing, notification of data processing obligations or security incidents to appropriate data protection authorities or data subjects, the security and confidentiality of the personal data and various rights that data subjects may exercise.

These laws include several requirements relating to the consent of the individuals to whom the personal data relates, limitations on data processing, establishing a legal basis for processing, notification of data processing obligations or security incid ents to appropriate data protection authorities or data subjects, the security and confidentiality of the personal data and various rights that data subjects may exercise.

The Directive and the GDPR prohibit, without an appropriate legal basis, the transfer of personal data to countries outside of the European Economic Area, or EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection.

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Risks Related to Intellectual Property and Other Legal Matters

If product liability lawsuits are successfully brought against us, then we will incur substantial liabilities and may be required to limit commercialization of Gencaro or other product candidates.

If product liability lawsuits are successfully brought against us, then we will incur substantial liabilities and may be required to limit commercialization of AB201, Gencaro or other product candidates.

We face product liability exposure related to the testing of our product candidates in human clinical trials, and may face exposure to claims by an even greater number of persons once we begin marketing and distributing our products commercially.

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We may not be able to obtain commercially reasonable product liability insurance for any product candidate.

Defending against claims relating to improper handling, storage or disposal of hazardous chemicals, radioactive or biological materials could be time consuming and expensive.

Defending against claims relating to improper handling, storage or disposal of hazardous chemicals, radioactive or biolo gical materials could be time consuming and expensive.

Our research and development of product candidates may involve the controlled use of hazardous materials, including chemicals, radioactive and biological materials.

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If such parties were to breach the terms of such licenses or such licenses were otherwise to terminate, our and our partners’ rights to use such technology and develop and commercialize their products such as the genetic test may terminate and our business would be materially harmed.

Third parties may own or control patents or patent applica tions that we may be required to license to commercialize our product candidates or that could result in litigation that would be costly and time consuming.

Our or any strategic partner’s ability to commercialize Gencaro and other product candidates depends upon our ability to develop, manufacture, market and sell these drugs without infringing the proprietary rights of third parties.

Third parties may own or control patents or patent applications that we may be required to license to commercialize our product candidates or that could result in litigation that would be costly and time consuming.

Our or any strategic partner’s ability to commercialize AB201, Gencaro and other product candidates depends upon our ability to develop, manufacture, market and sell these drugs without infringing the proprietary rights of third parties.

A number of pharmaceutical and biotechnology companies, universities and research institutions have or may be granted patents that cover technologies similar to the technologies owned by or licensed to us.

We may choose to seek, or be required to seek, licenses under third party patents, which would likely require the payment of license fees or royalties or both.

We may also be unaware of existing patents that may be infringed by Gencaro, the genetic testing we intend to use in connection with Gencaro or our other product candidates.

Because patent applications can take many years to issue, there may be other currently pending applications that may later result in issued patents that are infringed by Gencaro or our other product candidates.

We may also be unaware of existing patents that may be infringed by AB201 or Gencaro, the genetic testing we intend to use in connection with Gencaro or our other product candidates.

Because patent applications can take many years to issue, there may be other currently pending applications that may later result in issued patents that are infringed by AB201, Gencaro or our other product candidates.

Moreover, a license may not be available to us on commercially reasonable terms, or at all.

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An adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties or require us to cease using such technology.

If AB201 is approved, we expect to have market protection in the U.S.

for 12 years from approval, under FDA law and regulations governing biologics license applications.

However, another competitor could a compound with similar biological properties to AB201 that may not be barred by our exclusivity.

We have also filed a provisional patent application for AB201 and its use for COVID-19 disease, but there is no assurance that this provisional application will ultimately result in an issued patent.

Regardless of merit, the listing of patents in the FDA Orange Book for Gencaro may be challenged as being improperly listed.

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We require our employees, consultants, business partners and members of our scientific advisory board to execute confidentiality agreements upon the commencement of employment, consulting or business relationships with us.

These agreements provide that all confidential information developed or made known during the course of the relationship with us be kept confidential and not dis closed to third parties except in specific circumstances.

In the case of employees, the agreements provide that all inventions resulting from work performed for us, utilizing the property or relating to our business and conceived or completed by the indivi dual during employment shall be our exclusive property to the extent permitted by applicable law.

These agreements provide that all confidential information developed or made known during the course of the relationship with us be kept confidential and not disclosed to third parties except in specific circumstances.

In the case of employees, the agreements provide that all inventions resulting from work performed for us, utilizing the property or relating to our business and conceived or completed by the individual during employment shall be our exclusive property to the extent permitted by applicable law.

Third parties may breach these and other agreements with us regarding our intellectual property and we may not have adequate remedies for the breach.

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Any issued patent may not be sufficient to prevent others from competing with us.

Further, we have trade secrets relating to Gencaro, and such trade secrets may become known or independently discovered.

Further, we have trade secrets relating to AB201 and Gencaro, and such trade secrets may become known or independently discovered.

Our issued patents and those that may issue in the future, or those licensed to us, may be challenged, opposed, invalidated or circumvented, which could allow competitors to market similar products or limit the patent protection term of our product candidates.

All of these factors may affect our competitive position.

If the manufacture, use or sale of our products infringe on the intellectual property rights of others, we could face costly litigation, which could cause us to pay substantial damages or licensing fees and limit our ability to sell some or all of our products.

If the manufacture, use or sale of our products infringe on the intellectual property rights of others, we could face costly litigation, which could cause us to pay su bstantial damages or licensing fees and limit our ability to sell some or all of our products.

Extensive litigation regarding patents and other intellectual property rights has been common in the biopharmaceutical industry.

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Some of the factors that may cause the market price of our common stock to fluctuate include:

the regulatory status of Gencaro and the genetic test, and whether and when they are approved for sale, if at all, and the labeling or other conditions of use imposed by the FDA;

our ability to secure additional funding or complete a strategic transaction or to complete development of and commercialize Gencaro;

progress of any future clinical trials for Gencaro or our other product candidate, including enrollment and any data that may become available;

the regulatory status of AB201, Gencaro and the genetic test, and whether and when they are approved for sale, if at all, and the labeling or other conditions of use imposed by the FDA;

our ability to secure additional funding or complete a strategic transaction or to complete development of and commercialize AB201 or Gencaro;

progress of any future clinical trials for AB201, Gencaro or our other product candidate, including enrollment and any data that may become available;

the results of our future clinical trials and any future NDAs of our current and future product candidates;

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Sales in the public market of substantial amounts of our common stock could depress prevailing market prices of our common stock.

As of March 31, 2020, approximately 1.6 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.

As of June 30, 2020, approximately 2.3 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.

The sale of these additional shares, or the perception that such sales may occur, could depress the market price of our common stock.

As of March 31, 2020, approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.

As of June 30, 2020, approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.

Once a warrant is exercised, if the shares of our common stock issued upon the exercise of any such warrant are not available for sale in the open market without further registration under the Securities Act, then the holder can arrange for the resale of shares either by invoking any applicable registration rights, causing the shares to be registered under the Securities Act and thus freely transferable, or by relying on an exemption to the Securities Act.

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If these registration rights, or similar registration rights that may apply to securities we may issue in the future, are exercised, it could result in additional sales of our common stock in the market, which may have an adverse effect on our stock price.

As of March 31, 2020, there were approximately 31,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2020 and thereafter.

As of June 30, 2020, there were approximately 31,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2020 and thereafter.

If and when these options are exercised, such shares will be available for sale in the open market without further registration under the Securities Act.

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The exercise of those options, and the prompt resale of shares of our common stock received, may also result in downward pressure on the price of our common stock.

In the absence of a significant strategic transaction, we will need to raise significant additional capital to finance the research, development and commercialization of Gencaro and our other product candidate.

In the absence of a significant strategic transaction, we will need to raise significant additional capital to finance the research, development and commercialization of AB201, Gencaro and our other product candidate.

If future securities offerings occur, they would dilute our current stockholders’ equity interests and could reduce the market price of our common stock.

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Investors seeking cash dividends should not invest in our common stock.

We have implemented anti-takeover provisions that could discourage, prev ent or delay a takeover, even if the acquisition would be beneficial to our stockholders.

We have implemented anti-takeover provisions that could discourage, prevent or delay a takeover, even if the acquisition would be beneficial to our stockholders.

Provisions of our certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders.

31 unchanged sentences

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