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• We may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution to our stockholders and impose restrictions or limitations on our business.
−Removed: • Sales of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to drop significantly.
+Added: • Sale of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to drop significantly.
• We are early in our drug development efforts of our current drug candidates and all of our drug candidates are in clinical trials or preclinical development.
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• We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of our current and any future drug candidates.
−Removed: • We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.
+Added: • We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.
• We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.
−Removed: • We may be subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.
+Added: • We are subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.
• We have previously identified material weaknesses in our internal control over financial reporting.
−Removed: In the future, if we are unable to identify or remediate material weaknesses, or if we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
−Removed: condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
−Removed: • If we fail to satisfy all applicable requirements of Nasdaq and it determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease.
+Added: In the future, if we are unable to identify or remediate material weaknesses, or if we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
Risks Related to Our Financial Position and Need for Additional Capital
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As of December 31, 2025, our cash, cash equivalents and marketable securities were $90.4 million and we had an accumulated deficit of $321.7 million.
−Removed: We believe that our existing cash, cash equivalents and marketable securities will fund our current operating plans through at least 12 months from the filing of this Annual Report on Form 10-K.
−Removed: However, our operating plans may change because of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
+Added: We believe that our cash, cash equivalents and marketable securities will be sufficient to fund our operating and capital expenditure requirements through at least 12 months from the issuance of the financial statements contained in this Annual Report on Form 10-K.
+Added: However, our operating plans may change because of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party
+Added: funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, our product candidates and advance our other programs.
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Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if at all.
−Removed: Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
Adequate additional financing may not be available to us on acceptable terms, or at all.
−Removed: In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, inflation expectations, and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from public health crises and geopolitical tensions.
−Removed: While long-term economic impacts associated with public health crises and geopolitical tensions are difficult to assess or predict, there may be significant disruptions to the global financial markets and general global economic slowdown due to macroeconomic factors.
+Added: There have been and may continue to be significant disruptions to the global financial markets and general global economic slowdown due to macroeconomic and geopolitical factors.
If disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our financial condition and our ability to pursue our business strategy.
If we are unable to raise additional capital when needed, we will be required to delay, limit, reduce or terminate our drug development or future commercialization efforts, or grant rights to develop and market drug candidates that we would otherwise develop and market ourselves.
−Removed: If we are unable to obtain adequate financing when needed, we will be required to implement additional cost reduction measures, such as further reducing operating expenses, or otherwise be required to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts, or terminate our operations.
−Removed: For example, OV888 (GV101) has completed a Phase 1 double-blind multiple-ascending dose trial.
−Removed: However, we have paused development of this program as we evaluate the results of clinical trials completed by others in CCM.
−Removed: Additionally, in June 2024, we announced a reduction of our workforce to prioritize our programs and extend our cash runway.
−Removed: We may not achieve the expected benefits of these cost reduction measures and other cost reduction plans on the anticipated timeline, or at all, which could otherwise accelerate our liquidity needs and could force us to further curtail or suspend our operations.
−Removed: For additional details, see elsewhere in these Risk Factors, including “ Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance .”
+Added: If we are unable to obtain adequate financing when needed, we will be required to implement cost reduction measures, such as reducing operating expenses, or otherwise be required to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts, or terminate our operations.
+Added: For additional details, see elsewhere in these Risk Factors, including “ Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy (including tariffs), natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance .”
We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.
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We may encounter unforeseen expenses, difficulties, complications and delays and may not be successful in such a transition.
−Removed: Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance.
+Added: Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy (including tariffs), natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, fluctuations in inflation and interest rates, and uncertainty about economic stability.
For example, during 2022 and 2023, the Federal Reserve raised interest rates multiple times in response to concerns about inflation.
−Removed: Higher interest rates, coupled with reduced government spending and volatility in financial
−Removed: markets may increase economic uncertainty and affect consumer spending.
+Added: Higher interest rates, coupled with reduced government spending, tariffs, and volatility in financial markets may increase economic uncertainty and affect consumer spending.
Trade policies and geopolitical disputes and conflicts can result in tariffs, sanctions and other measures that restrict international trade, and may adversely affect our costs of doing business, particularly if these measures occur in regions where our suppliers source components or raw materials.
−Removed: Similarly, tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel have created volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.
+Added: Similarly, geopolitical tensions and wars have created volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.
Increased inflation may result in increased operating costs (including labor costs) and may affect our operating budgets.
−Removed: In addition, the U.S.
−Removed: Federal Reserve has raised interest rates in response to concerns about inflation.
−Removed: Additionally, trade policies and geopolitical disputes and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures occur in regions where drug products are manufactured or raw materials are sourced.
−Removed: With the new administration in the U.S., additional and higher tariffs and sanctions may be imposed on goods imported from other countries which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.
+Added: Trade disputes, tariffs, restrictions and other political tensions between the U.S.
+Added: and other countries may also exacerbate unfavorable macroeconomic conditions, including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also limit our access to capital, or otherwise negatively impact our business and operations.
+Added: government has enacted, and continues to enact, a series of new tariffs, including a tariff on all imports and additional “reciprocal” tariffs targeting imports from specified countries.
+Added: Additionally, current or future tariffs may result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components.
+Added: In addition, such tariffs may increase our supply chain complexity and could also potentially disrupt our existing supply chain.
+Added: Trade policies, geopolitical disputes and other trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines.
+Added: With the current administration in the U.S., additional and higher tariffs and sanctions may be imposed on goods imported from other countries which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.
Further, such actions by the U.S.
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Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely.
−Removed: If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
+Added: If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or
+Added: equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs.
−Removed: Our ability to raise capital may be limited by applicable laws and regulations.
−Removed: Using a shelf registration statement on Form S-3 to raise additional capital generally takes less time and is less expensive than other means, such as conducting an offering under a Form S-1 registration statement.
−Removed: However, our ability to raise capital using a shelf registration statement may be limited by, among other things, SEC rules and regulations.
−Removed: Under SEC rules and regulations, if our public float (the market value of our common stock held by non-affiliates) is less than $75.0 million, then the aggregate market value of securities sold by us or on our behalf under our Form S-3 in any 12-month period is limited to an aggregate of one-third of our public float.
−Removed: As our public float is currently less than $75.0 million, we are currently subject to this limitation.
−Removed: If our ability to utilize a Form S-3 registration statement for a primary offering of our securities continues to be limited to one-third of our public float, we may need to conduct such an offering pursuant to an exemption from registration under the Securities Act or under a Form S-1 registration statement, which would increase the cost of raising additional capital relative to utilizing a Form S-3 registration statement.
+Added: The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects.
+Added: While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects.
+Added: In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this Annual Report on Form 10-K.
We may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution to our stockholders and impose restrictions or limitations on our business.
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Sales of a substantial number of shares of our common stock in the public market could occur at any time.
−Removed: These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the
−Removed: market price of our common stock.
+Added: These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
Some of the holders of our securities have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
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Failure to obtain regulatory approval in the United States or other jurisdictions would prevent us from commercializing and marketing our current and future drug candidates.
−Removed: Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future drug candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
+Added: Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future drug candidates, any approval might contain significant limitations related to use restrictions for specified age groups,
+Added: warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
If we are unable to obtain regulatory approval, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of that drug candidate or any other drug candidate that we may in-license, develop or acquire in the future.
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All of our current drug candidates are in early clinical or preclinical development and their risk of failure is high.
−Removed: We must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that each of our drug candidates are safe and effective for its intended indications before we are prepared to submit an NDA or BLA for regulatory approval.
−Removed: We cannot predict with any certainty if or when we might submit an NDA or BLA for any of our product candidates or whether any such application will be approved by the FDA.
+Added: We must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that each of our drug candidates are safe and effective for its intended indications before we are prepared to submit an NDA for regulatory approval.
+Added: We cannot predict with any certainty if or when we might submit an NDA for any of our product candidates or whether any such application will be approved by the FDA.
Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous review and regulatory requirements by numerous government authorities in the United States and in other countries where we intend to test and market our product candidates.
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• delays in reaching a consensus with regulatory authorities on trial design;
−Removed: • delays in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites;
+Added: • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites;
• delays in opening investigational sites;
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• changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;
−Removed: • business interruptions resulting from global geopolitical tensions, including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, and any other war or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
−Removed: Further, clinical endpoints for certain diseases we are targeting, including brain conditions with significant unmet need, have not been established, and accordingly, we may have to develop new modalities or modify existing endpoints to measure efficacy, which may increase the time it takes for us to commence or complete clinical trials.
+Added: • business interruptions resulting from global geopolitical tensions and wars, or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
+Added: Further, clinical endpoints for certain diseases we are targeting, including brain disorders with significant unmet need, have not been established, and accordingly, we may have to develop new modalities or modify existing endpoints to measure efficacy, which may increase the time it takes for us to commence or complete clinical trials.
In addition, we believe investigators in this area may be inexperienced in conducting trials in this area due to the current lack of drugs to treat these disorders, which may result in increased time and expense to train investigators and open clinical sites.
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• be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;
−Removed: • have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy;
+Added: • have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy (“REMS”);
• be subject to the addition of labeling statements, such as warnings or contraindications;
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We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all.
−Removed: Further, we, the FDA, IRB or similar foreign regulatory agency may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s GCP regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our IND applications or the conduct of these trials.
+Added: Further, we, the FDA or an IRB may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (“cGCP”) regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our IND applications or the conduct of these trials.
Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials.
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If we are not successful in discovering, developing and commercializing additional drug candidates, our ability to expand our business and achieve our strategic objectives would be impaired.
−Removed: A key element of our current strategy is to discover, develop and potentially commercialize a portfolio of drug candidates to treat brain conditions with significant unmet need.
+Added: A key element of our current strategy is to discover, develop and potentially commercialize a portfolio of drug candidates to treat certain brain disorders with significant unmet need.
However, our business development activities and research activities may present attractive opportunities outside of our current areas of focus and we may choose to pursue drug candidates in other areas of interest including other disorders that we believe would be in the best interest of the Company and our stockholders.
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Identifying new drug candidates requires substantial technical, financial and human resources, whether or not any drug candidates are ultimately identified.
−Removed: Even if we identify drug candidates that initially show promise, we may fail to in-
−Removed: license or acquire these assets and may also fail to successfully develop and commercialize such drug candidates for many reasons, including the following:
+Added: Even if we identify drug candidates that initially show promise, we may fail to in-license or acquire these assets and may also fail to successfully develop and commercialize such drug candidates for many reasons, including the following:
• the research methodology used may not be successful in identifying potential drug candidates;
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Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control.
−Removed: We focus our research and drug development on treatments for brain conditions with significant unmet need.
−Removed: This specifically includes medicines to treat symptoms of excess neural excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions.
+Added: We focus our research and drug development on treatments for certain brain disorders with significant unmet need.
+Added: This specifically includes medicines to treat symptoms of excess neuronal excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions.
We are developing medicines for rare and broader conditions.
−Removed: Identifying and qualifying patients to participate in our clinical trials is critical to our success.
+Added: Identifying and qualifying patients to participate in our clinical trials is critical
+Added: to our success.
The number of patients suffering from the disorders that we are targeting is small and has not been established with precision.
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Regulatory authorities may draw different conclusions or require additional testing to confirm these determinations, if they occur.
−Removed: In addition, it is possible that illnesses, injuries, discomforts or other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials will be reported by
−Removed: subjects as we test our drug candidates in larger, longer and more extensive clinical programs, or, as use of these drug candidates becomes more widespread if they receive regulatory approval.
+Added: In addition, it is possible that illnesses, injuries, discomforts or other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials will be reported by subjects as we test our drug candidates in larger, longer and more extensive clinical programs, or, as use of these drug candidates becomes more widespread if they receive regulatory approval.
Many times, side effects are only detectable after investigational drugs are tested in large-scale, Phase 3 trials or, in some cases, after they are made available to patients on a commercial scale after approval.
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If the market opportunities for our drug candidates are smaller than we believe they are, even assuming approval of a drug candidate, our business may suffer.
−Removed: Because the patient populations in the market for our drug candidates may be small and difficult to assess, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.
−Removed: We focus our research and drug development on treatments for brain conditions with significant unmet need.
−Removed: This specifically includes medicines to treat symptoms of excess neural excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions.
−Removed: We are developing medicines for rare and broader conditions.
+Added: Because the patient populations in the market for our drug candidates may be
+Added: small and difficult to assess, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.
+Added: We focus our research and drug development on treatments for certain brain disorders with significant unmet need.
+Added: This specifically includes medicines to treat symptoms of excess neuronal excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions.
+Added: We are developing medicines for both rare and broader conditions.
As a result of the disorders that we are targeting for drug development, our eligible patient population and pricing estimates may differ significantly from the actual market addressable by our drug candidates.
Our projections of both the number of people who have these disorders, as well as the subset of people with these disorders who have the potential to benefit from treatment with our drug candidates, are based on our beliefs and estimates.
−Removed: These estimates have been derived from a variety of sources, including the scientific literature, patient foundations, or market research, and may prove to be incorrect.
+Added: These estimates have been derived from a variety of sources, including scientific literature, patient foundations, or market research, and may prove to be incorrect.
Further, new studies may change the estimated incidence or prevalence of these disorders.
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There are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development of drug candidates for the treatment of the indications that we are pursuing.
−Removed: Potential competitors also include academic institutions, government agencies and other public and
−Removed: private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.
+Added: Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.
More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience.
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• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
−Removed: • business interruptions resulting from geopolitical tensions including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, and any other war or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
+Added: • business interruptions resulting from geopolitical tensions and wars, or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
We have no prior experience in these areas.
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We may explore additional strategic collaborations that may never materialize or may fail.
−Removed: Our business strategy is based on acquiring or in-licensing compounds directed at certain epilepsies, seizure-related disorders, and rare neurological disorders.
+Added: Our business strategy is based on acquiring or in-licensing compounds directed at certain epilepsies, seizure-related disorders, and other brain neurological disorders.
As a result, we intend to periodically explore a variety of possible additional strategic collaborations in an effort to gain access to additional drug candidates or resources.
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We may not be able to negotiate strategic collaborations on acceptable terms, or at all.
−Removed: We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and
−Removed: uncertainties associated with establishing them, and we cannot predict the success of any collaborations that we enter into.
+Added: We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and uncertainties associated with establishing them, and we cannot predict the success of any collaborations that we enter into.
We may enter into strategic collaborations that we subsequently no longer wish to pursue.
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Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may subject us to various federal and state fraud and abuse laws and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and the law commonly referred to as the Physician Payments Sunshine Act and regulations.
−Removed: These laws will impact, among other things, our clinical research, proposed sales, marketing and educational programs.
+Added: These laws will impact, among other things, our clinical research,
+Added: proposed sales, marketing and educational programs.
In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.
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This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other.
−Removed: The Patient Protection and Affordable Care Act, as amended by the PPACA, amended the intent requirement of the federal Anti-Kickback Statute.
+Added: The Patient Protection and Affordable Care Act, as amended (“PPACA”), amended the intent requirement of the federal Anti-Kickback Statute.
A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation;
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• HIPAA, which created additional federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private);
−Removed: • HIPAA, as amended by HITECH, and their implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of
−Removed: individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform certain services on behalf of a covered entity that involves the use or disclosure of individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information;
+Added: • HIPAA, as amended by HITECH, and their implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform certain services on behalf of a covered entity that involves the use or disclosure of individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information;
• Physician Payments Sunshine Act, which is part of the PPACA, requires that certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, information related to:
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healthcare industry and elsewhere is cost containment.
+Added: For example, HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis.
+Added: In addition, HHS has been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years and single-source biologics that have been on the market for at least eleven (11) years covered under Medicare as part of the Medicare Drug Price Negotiation Program.
+Added: Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program.
+Added: Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.
+Added: If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current and any future product candidates that we develop, which could have an adverse effect on our operating results and our overall financial condition.
Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
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There have been amendments to and executive, judicial, congressional and executive branch challenges to certain aspects of the PPACA.
−Removed: For example, on August 16, 2022, IRA was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025.
−Removed: The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and by creating a new manufacturer discount program.
−Removed: It is possible that the PPACA will be subject to judicial or congressional challenges in the future.
−Removed: It is unclear how any such challenges and the healthcare reform measures of the current administration will impact the PPACA and our business.
−Removed: Other legislative changes have been proposed and adopted since the PPACA was enacted.
−Removed: These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013, and due to subsequent legislative amendments to the statute, will remain in effect until 2032 unless additional congressional action is taken.
−Removed: Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), which ended the use of the statutory formula and established a quality payment program, also referred to as the Quality Payment Program.
−Removed: This program provides clinicians with two ways to participate, including through the Advanced Alternative Payment Models (“APMs”) and the Merit-based Incentive Payment System (“MIPS”).
−Removed: Under both APMs and MIPS, performance data collected each performance year will affect Medicare payments in later years, including potentially reducing payments.
−Removed: Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which have resulted in several presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
−Removed: At the federal level, the IRA, among other things, (i) directs the U.S.
−Removed: Department of Health and Human Services “HHS” to negotiate the price of certain high-expenditure, single-source drugs
−Removed: that have been on the market for at least seven years and biologics for at least 11 years covered under Medicare (the “Medicare Drug Price Negotiation Program”), and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
−Removed: These provisions began to take effect progressively starting in fiscal year 2023.
−Removed: On August 15, 2024, HHS announced the agreed-upon price of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
−Removed: On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025.
−Removed: Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.
−Removed: Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
−Removed: On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
−Removed: While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
−Removed: At the state level, legislatures have increasingly passed and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: These and other healthcare reform measures may be adopted in the future, particularly in light of the recent U.S.
−Removed: presidential and congressional elections, and may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug.
−Removed: The current presidential administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.
+Added: For example, on July 4, 2025, OBBBA, was signed into law, which narrowed access to PPACA marketplace exchange enrollment and declined to extend the PPACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.
+Added: The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.
+Added: Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired PPACA subsidies.
+Added: In the United States, we expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
+Added: The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies.
These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.
−Removed: These actions may include, for example, directives to reduce agency workforce, rescinding a previous executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending and eliminating the previous executive order that directed HHS to establishing an artificial intelligence task force and developing a strategic plan, and directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans.
−Removed: Additionally, in its June 2024 decision in Loper Bright Enterprises v.
−Removed: Raimondo, the U.S.
−Removed: Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.
−Removed: The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA.
−Removed: Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
−Removed: Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs.
+Added: For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct to consumer platform, U.S.
+Added: patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues.
+Added: Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs;
+Added: (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products;
+Added: (3) imposing tariffs on imported pharmaceutical products;
+Added: and (4) as part of the MAHA Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.
+Added: Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on PBM payment methodologies, among other things.
+Added: These actions and policies may significantly reduce U.S.
+Added: drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.
+Added: In June 2024, in Loper Bright Enterprises v.
+Added: Raimondo, the United States Supreme Court greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations.
+Added: Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.
+Added: At the state level, legislatures have increasingly passed and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
+Added: We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or judicial action in the United States or any other applicable jurisdiction.
+Added: If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, we may not achieve or sustain profitability.
We may not be able to obtain or maintain orphan drug designations or exclusivity for our drug candidates, which could limit the potential profitability of our drug candidates.
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Additionally, after an orphan drug is approved, the FDA could subsequently approve another application for the same drug for the same indication if the FDA concludes that the later drug is shown to be safer, more effective or makes a major contribution to patient care.
−Removed: Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later
−Removed: determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
+Added: Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
The failure to obtain an orphan drug designation for any drug candidates we may develop, the inability to maintain that designation for the duration of the applicable period, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of the applicable drug candidate to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.
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Any regulatory approvals that we receive for our current or future drug candidates may also be subject to a REMS, limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 trials, and surveillance to monitor the quality, safety and efficacy of the drug.
−Removed: In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA, BLA or foreign marketing application.
+Added: In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA or foreign marketing application.
If we, or a regulatory authority, discover previously unknown problems with a drug, such as adverse events of unanticipated severity or frequency, or problems with the facility where the drug is manufactured or if a regulatory authority disagrees with the promotion, marketing or labeling of that drug, a regulatory authority may impose restrictions relative to that drug, the manufacturing facility or us, including requesting a recall or requiring withdrawal of the drug from the market or suspension of manufacturing.
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We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
−Removed: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may
−Removed: not achieve or sustain profitability, which would harm our business, financial condition, results of operations and prospects.
+Added: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would harm our business, financial condition, results of operations and prospects.
+Added: Disruptions at the FDA and other government agencies caused by layoffs, funding shortages or global health concerns could negatively impact our business.
+Added: The ability of the FDA to review proposed clinical trials or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
+Added: Average review times at the agency have fluctuated in recent years as a result.
+Added: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, including executive and congressional priorities, the impacts of which are inherently fluid and unpredictable.
+Added: Disruptions at the FDA and other agencies may slow the time necessary for new product candidates to be reviewed and/or approved, which would adversely affect our business.
+Added: For example, over the last several years, including in October 2025, the U.S.
+Added: government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
+Added: If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: In addition, the current administration has implemented substantial reductions in force at various government agencies including the FDA, and has implemented layoffs at the FDA, which could significantly reduce the FDA’s capacity to perform its functions in a manner consistent with its past practices and could delay reviews and negatively impact our business.
Risks Related to Our Intellectual Property
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The patent applications that we own or in-license may fail to result in issued patents with claims that cover our current or any future drug candidates in the United States or in other foreign countries.
−Removed: There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application.
+Added: no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application.
Even if patents do successfully issue and even if such patents cover our current or any future drug candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable.
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Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.
−Removed: Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
−Removed: On December 16, 2011, the Leahy-Smith America Invents Act (“Leahy-Smith Act”) was signed into law.
+Added: Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
+Added: In December 2011, the Leahy-Smith America Invents Act (“Leahy-Smith Act”) was signed into law.
The Leahy-Smith Act includes a number of significant changes to United States patent law.
These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation.
−Removed: The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013.
+Added: The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in March 2013.
Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business.
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Without patent protection for our current or future drug candidates, we may be open to competition from generic versions of such drugs.
−Removed: Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
+Added: Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such
+Added: candidates are commercialized.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.
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A finding of infringement could prevent us from manufacturing and commercializing our current or any future drug candidates or force us to cease some or all of our business operations, which could materially harm our business.
−Removed: Claims that we have misappropriated the confidential information or trade
−Removed: secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.
+Added: Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.
See the section herein titled “Item 3.
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Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own drugs and, further, may export otherwise infringing drugs to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States.
−Removed: These drugs may compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
+Added: These drugs may
+Added: compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
Reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
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Further, we also will rely on third-party manufacturers to supply us with sufficient quantities of our drug candidates to be used, if approved, for commercialization.
−Removed: Any significant delay in the supply of a drug candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could
−Removed: considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates.
+Added: Any significant delay in the supply of a drug candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates.
Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured drug candidates ourselves, including:
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Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production.
−Removed: We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.
+Added: We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.
We do not currently have the ability to independently conduct any preclinical studies or clinical trials.
−Removed: We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance.
−Removed: We intend to rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies.
−Removed: We expect to control only certain aspects of our CROs’ activities.
−Removed: Nevertheless, we will be responsible for ensuring that each of our preclinical studies or clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
−Removed: We and our CROs will be required to comply with GLPs and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Council for Harmonization guidelines for any of our drug candidates that are in preclinical and clinical development.
−Removed: The regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites.
−Removed: Although we will rely on CROs to conduct GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
−Removed: If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
+Added: We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance.
+Added: We rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies.
+Added: We are able to control only certain aspects of our CROs’ activities.
+Added: Nevertheless, we are responsible for ensuring that each of our preclinical studies or clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
+Added: We and our CROs are required to comply with GLPs and cGCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Council for Harmonization guidelines for any of our drug candidates that are in preclinical and clinical development.
+Added: The regulatory authorities enforce cGCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites.
+Added: Although we rely on CROs to conduct cGCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
+Added: If we or our CROs fail to comply with cGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.
−Removed: While we will have agreements governing their activities, our CROs will not be our employees, and we will not control whether or not they devote sufficient time and resources to our future clinical and preclinical programs.
+Added: While we have agreements governing their activities, our CROs are not our employees, and we do not control whether or not they devote sufficient time and resources to our future clinical and preclinical programs.
These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our business.
−Removed: We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret
−Removed: protection and allow our potential competitors to access and exploit our proprietary technology.
+Added: We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any drug candidate that we develop.
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As a result, delays occur, which can negatively impact our ability to meet our desired clinical development timelines.
−Removed: Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition and prospects.
+Added: Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not
+Added: encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition and prospects.
Risks Related to Our Business Operations, Employee Matters and Managing Growth
−Removed: We are highly dependent on the services of our senior management team, including our Chairman and Chief Executive Officer, Dr.
−Removed: Jeremy Levin, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed.
−Removed: We are highly dependent on our senior management team, including our Chairman and Chief Executive Officer, Dr.
+Added: We are highly dependent on the services of our senior management team, including our President and Chief Executive Officer, Margaret “ Meg ” Alexander, and our Executive Chairman, Dr.
+Added: Levin, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed.
+Added: We are highly dependent on our senior management team, including our President and Chief Executive Officer, Margaret “Meg” Alexander, and our Executive Chairman, Dr.
The employment agreements we have with these officers do not prevent such persons from terminating their employment with us at any time.
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Future growth would impose significant additional responsibilities on management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors.
−Removed: Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day operations and devote a substantial amount of time to managing these growth activities, which could be a particular challenge as a result of the workforce reduction completed in June 2024.
+Added: Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day operations and devote a substantial amount of time to managing these growth activities.
We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees.
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Some of these opportunities may be more appealing to high-quality candidates and consultants than what we have to offer.
−Removed: If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop our products and product candidates will be harmed, which could negatively impact our financial condition, results of operations and cash flows.
+Added: unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop our products and product candidates will be harmed, which could negatively impact our financial condition, results of operations and cash flows.
Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
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Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations.
−Removed: If our information technology systems or data, or those of the third parties upon with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical
−Removed: trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences.
+Added: If our information technology systems or data, or those of the third parties upon with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences.
We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business.
−Removed: In the ordinary course of our business, we collect, store, process and transmit large amounts of sensitive data, and, as a result, we and the third parties with whom we work face a variety of continuously evolving threats that have caused and could cause future security incidents.
+Added: In the ordinary course of our business, we receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) large amounts of sensitive data, and, as a result, we and the third parties with whom we work face a variety of continuously evolving threats that have caused and could cause future security incidents.
+Added: Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities are increasing in their frequency, levels of persistence, sophistication and intensity, and are also being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others.
+Added: Such attacks could include the deployment of harmful malware (including as a result of advanced persistent threat intrusions), ransomware attacks, denial-of-service attacks, credential stuffing and/or harvesting, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information systems and sensitive data.
+Added: In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds.
+Added: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
In addition, many of those third parties in turn subcontract or outsource some of their responsibilities to other third parties.
−Removed: While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive data stored on those systems, make such systems vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
+Added: While all information technology operations are inherently vulnerable to inadvertent or intentional security
+Added: breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive data stored on those systems, make such systems vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
We have also outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, certain third parties with whom we work have access to our computer networks and/or our sensitive data.
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In addition, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
−Removed: Increasing global tensions, including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, among others, are likely to increase the frequency of cybersecurity attacks.
+Added: Increasing geopolitical tensions are likely to increase the frequency of cybersecurity attacks.
In addition, hybrid work has increased risks to our information technology systems and data as our employees utilize network connections, computer and devices outside our premises or network, including working at home, while in transit and in public locations.
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Non-remediated vulnerabilities could be exploited and result in a security incident.
−Removed: Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities are increasing in their frequency, levels of persistence, sophistication and intensity, and are also being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others.
−Removed: Such attacks could include the deployment of harmful malware (including as a result of advanced persistent threat intrusions), ransomware attacks, denial-of-service attacks, credential stuffing and/or harvesting, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence, telecommunications failures, earthquakes, fires, floods and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information systems and sensitive data.
−Removed: In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds.
−Removed: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss,
−Removed: misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, which could result in financial, legal, regulatory, business and reputational harm to us.
+Added: Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, which could result in financial, legal, regulatory, business and reputational harm to us.
In addition, information technology system disruptions, whether from attacks on our technology environment or from computer viruses, natural disasters, terrorism, war and telecommunication and electrical failures, could result in a material disruption of our development programs and our business operations.
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Our efforts to do so may not be successful.
+Added: Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses and disruptions of our business.
For example, we utilize a phishing reporting feature that allows our IT function to analyze and assess whether suspicious emails are phishing attempts.
−Removed: This system is reliant on artificial intelligence and employee awareness and diligence, both of which may be exploited or not always successful.
+Added: This system is reliant on AI and employee awareness and diligence, both of which may be exploited or not always successful.
Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain and remediate a security incident could result in outages, data losses, and disruptions of our business.
Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.
+Added: For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.
We have in the past and will in the future expend significant resources or modify our business activities to try to protect against current and constantly evolving security incidents.
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In addition to experiencing a security incident, third parties may gather, collect or infer sensitive information about us from public sources, data brokers or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
−Removed: Additionally, sensitive company information could be leaked, disclosed or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative artificial intelligence technologies.
−Removed: We and the third parties with whom we work are subject to stringent and evolving privacy and security laws, regulations, contractual obligations, industry standards, policies, and other obligations, and our failure or perceived
−Removed: failure to comply with such obligations could result in regulatory investigations or actions, litigation (including class actions), fines and penalties, disruptions of our business operations, loss of revenue or profits, reputational damage and other adverse business consequences.
−Removed: In the ordinary course of business, we and the third parties with whom we work collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, clinical trial data and financial information (collectively, sensitive data).
+Added: Additionally, sensitive company information could be leaked, disclosed or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.
+Added: We and the third parties with whom we work are subject to stringent and evolving privacy and security laws, regulations, contractual obligations, industry standards, policies, and other obligations, and our failure or perceived failure to comply with such obligations could result in regulatory investigations or actions, litigation (including class actions), fines and penalties, disruptions of our business operations, loss of revenue or profits, reputational damage and other adverse business consequences.
+Added: In the ordinary course of business, we and the third parties with whom we work process personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, clinical trial data and financial information (collectively, sensitive data).
Our data processing activities subject us to laws and regulations covering data privacy and the protection of personal information and other sensitive data.
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Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
−Removed: Our employees and personnel use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy
+Added: Additionally, the U.S.
+Added: Department of Justice issued a rule entitled the Preventing Access to U.S.
+Added: Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered individuals (i.e., individuals and entities who are designated as such by the U.S.
+Added: Attorney General or considered “foreign persons” and are majority owned by, organized under the laws of, a primary resident, or a contract of, a covered person or country of concern, as applicable) that may impact certain business activities such as vendor engagements, employment of certain individuals, and investor agreements.
+Added: Violations of the rule could lead to significant civil and criminal fines and penalties.
+Added: The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular challenges for companies like ours and may impact our ability to transfer data in connection with certain transactions or agreements.
+Added: Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.
Governments have passed and are likely to pass additional laws regulating generative AI.
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We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
−Removed: Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
−Removed: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
+Added: Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
+Added: If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar);
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Our NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S.
−Removed: Our federal NOLs generated in tax years beginning on or before December 31, 2017 are permitted to be carried forward for only 20 years under applicable U.S.
−Removed: Under the Tax Cuts and Jobs Act, or the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the utilization of such federal NOLs is limited.
+Added: Under applicable U.S.
+Added: tax law, federal NOLs generated in tax years beginning on or before December 31, 2017 are permitted to be carried forward for only 20 years, and federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the utilization of such federal NOLs is limited.
In addition, under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” its ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.
A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points (by value) over their lowest ownership percentage over a rolling three-year period.
−Removed: We may have experienced ownership changes in the past and may experience ownership changes in the future as a result of shifts in our stock ownership (some of which are outside our control).
+Added: On August 10, 2015 and February 22, 2019, we experienced ownership changes, and we may have experienced other ownership changes in the past and may experience ownership changes in the future as a result of shifts in our stock ownership (some of which are outside our control).
+Added: In October 2025 and March 2026, we completed financings but did not conduct a formal Section 382 study.
As a result, if we earn net taxable income, our ability to use our pre-change NOLs and certain other tax attributes to offset such taxable income may be subject to limitations.
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federal or state income tax provision, based on pre-tax losses of $17.4 million and $26.4 million, respectively.
−Removed: As of December 31, 2024, we had available approximately $177.3 million of unused NOL carryforwards for U.S.
+Added: As of December 31, 2025, we had approximately $214.9 million of unused NOL carryforwards for U.S.
federal income tax purposes, $202.7 million of unused NOL carryforwards for New York and other state income tax purposes, and $163.8 million of unused NOL carryforwards for New York City income tax purposes, that may be applied against future taxable income.
Our NOL carryforwards are significantly limited such that even if we achieve profitability in future periods, we may not be able to utilize most of the NOL carryforwards, which could have a material adverse effect on cash flow and results of operations.
+Added: 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.
+Added: New tax laws, statutes, rules, regulations, or ordinances could be enacted at any time.
+Added: For example, the Tax Cuts and Jobs Act, the Coronavirus Aid, Relief, and Economic Security Act, the IRA, and OBBBA made many significant changes to U.S.
+Added: tax laws, including the imposition by the IRA of, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases.
+Added: Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted differently, changed, repealed, or modified at any time.
+Added: Any such enactment, interpretation, change, repeal, or modification could adversely affect us, possibly with retroactive effect.
+Added: In particular, changes in corporate tax rates, the realization of net deferred tax assets, the taxation of foreign earnings, and the deductibility of expenses could have a material impact on the value of our deferred tax assets, resulting in significant one-time charges, and increase our future tax expenses.
Risks Related to Being a Public Company
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We are currently a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended.
−Removed: We will be a smaller reporting company and may take advantage of the scaled-back disclosures available to smaller reporting companies for so long as (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of
−Removed: our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.
+Added: We will be a smaller reporting company and may take advantage of the scaled-back disclosures available to smaller
+Added: reporting companies for so long as (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.
As a smaller reporting company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
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If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
−Removed: During the three and nine month periods ended September 30, 2024, we identified material weaknesses in our internal control over financial reporting, which were subsequently remediated as of December 31, 2024.
+Added: During the three month period ended September 30, 2024, we identified material weaknesses in our internal control over financial reporting, which were subsequently remediated as of December 31, 2024.
In the future, if we are unable to identify or remediate material weaknesses, or if we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
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Section 404 also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
−Removed: As of the last business day of our most recently completed second fiscal quarter, we determined that we qualify as a smaller reporting company and as a non-accelerated filer for the year ended December 31, 2024.
−Removed: We are therefore not required to include an attestation report as of December 31, 2024.
−Removed: During the year ended December 31, 2024, we were subject to a criminal scheme via a business email compromise at one of our development collaborators which led to a fraudulent transfer of $1.8 million to a third-party impersonating one of our development collaborators.
+Added: We will not be required to have our auditors formally attest to the effectiveness of our internal control over financial reporting unless we cease to qualify as a non-accelerated filer.
+Added: During the three month period ended September 30, 2024, we were the victim of a criminal scheme involving a business email compromise at one of our development collaborators which led to a fraudulent transfer of $1.8 million to a third-party impersonating one of our development collaborators.
The funds were subsequently fully recovered.
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Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
−Removed: Immediately following the incident, we initiated a reassessment of our processes and controls related to fund transfers and vendor-related information updates and implemented an action plan that remediated this matter, as concluded in Part I, Item 9a of this Annual Report on Form 10-K for the year ended December 31, 2024.
+Added: Immediately following the incident, we initiated a reassessment of our processes and controls related to fund transfers and vendor-related information updates and developed an action plan that remediated this matter.
Our compliance with Section 404 in future periods may require that we incur substantial expense and expend significant management efforts.
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Risks Related to the Ownership of Our Common Stock and Other General Matters
−Removed: If we fail to satisfy all applicable requirements of Nasdaq and it determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease.
−Removed: To maintain the listing of our common stock on Nasdaq, we are required to meet certain listing requirements, including, a minimum closing bid price of $1.00 per share.
−Removed: On February 10, 2025, we received notice from Nasdaq that we are no longer in compliance with Nasdaq’s Listing Rule 5450(a)(1) because the closing bid price of our common stock had fallen below $1.00 per share for 31 consecutive days.
−Removed: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have an initial period of 180 calendar days, or until August 11, 2025 (the “Compliance Date”), to regain compliance with the minimum bid price requirement.
−Removed: To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of 10 consecutive business days before the Compliance Date.
−Removed: If our common stock does not achieve compliance by the Compliance Date, we may be eligible for an additional 180-day period to regain compliance if we apply to transfer the listing of its common stock to the Nasdaq Capital Market.
−Removed: To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
−Removed: There can be no assurance that we will maintain compliance with the requirements for listing our common stock on Nasdaq.
−Removed: If we are unable to satisfy the Nasdaq criteria for continued listing, our common stock would be subject to delisting.
−Removed: A delisting of our common stock could negatively impact us by, among other things, (i) reducing the liquidity and market price of our common stock;
−Removed: (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing;
−Removed: (iii) decreasing the amount of news and analyst coverage of us;
−Removed: (iv) limiting our ability to issue additional securities or obtain additional financing in the future;
−Removed: (v) limiting our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing us from accessing the public capital markets;
−Removed: and (vi) impairing our ability to provide equity incentives to our employees.
−Removed: In addition, delisting from Nasdaq may negatively impact our reputation and, consequently, our business.
−Removed: The market price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for our common stock .
+Added: The market price of our common stock has been and will likely remain volatile and fluctuate substantially, which could result in substantial losses for holders of our common stock .
The market price of our common stock has been and likely will remain volatile.
−Removed: For example, during the twelve months ended December 31, 2024, the closing price of our common stock on The Nasdaq Global Select Market ranged from $0.70 per share to $4.04 per share.
−Removed: During this time period, we experienced a stock price drop following our announcement of Takeda’s release of topline Phase 3 study results for soticlestat, noting that soticlestat narrowly missed its primary endpoint and showed clinically meaningful and significant effects in multiple key secondary efficacy endpoints with respect to Dravet syndrome and missed its primary endpoint with respect to Lennox-Gastaut syndrome.
+Added: For example, during the year ended December 31, 2025, the closing price of our common stock on the Nasdaq Global Select Market and Nasdaq Capital Markets ranged from $0.26 per share to $1.84 per share.
+Added: In June 2024, we experienced a stock price drop following our announcement of Takeda’s release of topline Phase 3 study results for soticlestat, noting that soticlestat narrowly missed its primary endpoint and showed clinically meaningful and significant effects in multiple key secondary efficacy endpoints with respect to Dravet syndrome and missed its primary endpoint with respect to Lennox-Gastaut syndrome.
In addition, the stock market in general and the market for biopharmaceutical or pharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies, which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects.
Broad market and industry factors, including potentially worsening economic conditions and other adverse effects or developments relating to new or ongoing public health crises or other inflationary factors, may negatively affect the market price of our common stock, regardless of our actual operating performance.
−Removed: As a result of this volatility, you may lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid for the shares.
+Added: As a result of this volatility, stockholders may lose all or part of their investment in our common stock since they may be unable to sell their shares at or above the price paid for the shares.
The market price for our common stock may be influenced by many factors, including:
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Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources.
−Removed: There is no public market for our Series A convertible preferred stock .
−Removed: There is no established public trading market for our Series A convertible preferred stock, and we do not expect a market to develop.
−Removed: In addition, we do not intend to apply for listing of the Series A convertible preferred stock on any national securities exchange or other nationally recognized trading system.
−Removed: Without an active market, the liquidity of the Series A convertible preferred stock will be limited.
−Removed: Stockholders will be diluted by any conversions of outstanding Series A convertible preferred stock and exercises of outstanding options.
−Removed: As of December 31, 2024, we had outstanding options to purchase an aggregate of 15,341,356 shares of our common stock at a weighted average exercise price of $3.49 per share and 1,250,000 shares of common stock issuable upon conversion of outstanding Series A convertible preferred stock for no additional consideration.
−Removed: Such Series A convertible preferred stock is convertible any time at the option of the holder thereof subject to the beneficial ownership limitations described in Note 7 to the consolidated financial statements contained in this Annual Report on Form 10-K.
−Removed: The exercise of such options and conversion of the Series A convertible preferred stock for shares of our common stock will result in further dilution of our stockholders’ investment and could negatively affect the market price of our common stock.
−Removed: In addition, stockholders may experience further dilution if we issue common stock, or securities convertible into common stock, in the future.
−Removed: As a result of this dilution, stockholders may receive significantly less than the full purchase price paid for the shares in the event of liquidation.
Concentration of ownership of our common stock among our executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.
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If additional analysts cease to cover our stock or fail to regularly publish reports, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.
−Removed: Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be stockholders ’ sole source of gain.
−Removed: We have never declared or paid cash dividends on our capital stock.
+Added: Because we do not anticipate paying any dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be stockholders ’ sole source of gain.
+Added: We have never declared or paid dividends on our capital stock.
We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business.
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As a result, capital appreciation, if any, of our common stock will be stockholders’ sole source of gain for the foreseeable future.
−Removed: Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
−Removed: Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which they might otherwise receive a premium for their shares.
+Added: Provisions in our organizational documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
+Added: Provisions in our amended and restated certificate of incorporation (“Certificate of Incorporation”) and our amended and restated bylaws (“Bylaws”) may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which they might otherwise receive a premium for their shares.
These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.
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Among other things, these provisions:
−Removed: • establish a classified board of directors such that not all members of the board are elected at one time;
+Added: • establish a classified board of directors such that not all members of the board of directors are elected at one time;
• allow the authorized number of our directors to be changed only by resolution of our board of directors;
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• authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors;
−Removed: • require the approval of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
−Removed: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in
−Removed: which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
+Added: • require the approval of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our Certificate of Incorporation or Bylaws.
+Added: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Additionally, the Takeda standstill provisions and transfer restrictions in the RLT Agreement may delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
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Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
−Removed: Some provisions of our charter documents and the DGCL may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would benefit our stockholders and may prevent attempts by our stockholders to replace or remove our current management.
−Removed: Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
+Added: Some provisions of our organizational documents and the DGCL may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would benefit our stockholders and may prevent attempts by our stockholders to replace or remove our current management.
+Added: Provisions in 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 or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
These provisions include:
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Under the DGCL, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction.
−Removed: Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
+Added: Any provision of our Certificate of Incorporation or Bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
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.