What changed in this filing

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Item 1A. Risk Factors

2022-11-08 compared with 2022-08-04 · 45 added, 37 removed, 575 unchanged (12% of the section changed)

10 unchanged sentences

● Clinical development is a lengthy and expensive process with an uncertain outcome, and failure can occur at any stage of clinical development.

regulatory authorities to, delay or halt or clinical trials, or if such side effects or adverse events are sufficiently severe or prevalent, order us to suspend or cease altogether further development of our product candidates.

● Our product candidates may cause undesirable side effects or have other properties adversely impacting safety that delay or prevent their regulatory approval, restrict their approved labeling, or otherwise limit their commercial opportunity, including being required by an independent data monitoring committee or regulatory authorities to, delay or halt or clinical trials, or if such side effects or adverse events are sufficiently severe or prevalent, order us to suspend or cease altogether further development of our product candidates.

Under “ Risks Related to our Financial Position and Capital Requirements ” we describe risks associated with our financial position and future capital requirements.

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We expect that our financial condition and operating results will fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control, including the success of our programs, decisions by regulatory bodies, actions taken by competitors and other factors identified in these risk factors.

Accordingly, the likelihood of our success must be evaluated in light of many potential challenges and variables associated with a

clinical-stage biopharmaceutical company, many of which are outside of our control, and past results, including operating or financial results, should not be relied on as an indication of future results.

Accordingly, the likelihood of our success must be evaluated in light of many potential challenges and variables associated with a clinical-stage biopharmaceutical company, many of which are outside of our control, and past results, including operating or financial results, should not be relied on as an indication of future results.

We are heavily dependent on the success of our product candidates in clinical development, and if any of these products fail to receive regulatory approval or are not successfully commercialized, our business would be adversely affected.

5 unchanged sentences

We are not permitted to market any product candidate in the United States until after approval of a new drug application (“NDA”) from the FDA, or in any foreign countries until approval by corresponding regulatory authorities.

We will need to conduct larger, more extensive clinical trials in the target patient populations to support a potential application for regulatory approval by the FDA or corresponding regulatory authorities.

Those trials, for rusfertide for PV or subsequent late-stage product candidates, may not demonstrate the safety and efficacy of our product candidates to support a marketing approval in the United States or other jurisdictions.

We will need to conduct larger, more extensive clinical trials in the

target patient populations to support a potential application for regulatory approval by the FDA or corresponding regulatory authorities.

Those trials, for rusfertide for the treatment of PV or subsequent late-stage product candidates, may not demonstrate the safety and efficacy of our product candidates to support a marketing approval in the United States or other jurisdictions.

Our product candidates require additional clinical development, regulatory approval and secure sources of commercial manufacturing supply.

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We may experience delays in ongoing clinical trials, and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all.

Clinical trials can be delayed for a variety of reasons, including if a clinical trial is modified, suspended or terminated by us, by the institutional review boards or ethics committees of the institutions in which such clinical trials are being conducted, by a Data Safety Monitoring Board, for such trial or by the FDA or other regulatory authorities.

For example, to date we have experienced slower than expected patient enrollment in VERIFY, a global Phase 3 clinical trial of rusfertide in PV, resulting from operational challenges, including site staff shortages, which have continued to delay initial recruitment activities.

Clinical trials can be delayed for a variety of reasons, including if a clinical trial is modified, suspended or terminated by us.

For example, we do not intend to dedicate further internal resources to clinical development or contract manufacturing activities for our PN-943 clinical program as part of our ongoing commitment to optimize and focus resources toward our rusfertide program in PV.

Clinical trials can also be delayed by the institutional review boards or ethics committees of the institutions in which such clinical trials are being conducted, by a Data Safety Monitoring Board, for such trial or by the FDA or other regulatory authorities.

Such authorities may impose a modification, suspension or termination due to a number of factors.

2 unchanged sentences

Also, in April 2022, the FDA indicated that it intends to rescind Breakthrough Therapy Designation for rusfertide in PV.

For additional information, see the Risk Factor – “Our product candidates may cause undesirable side effects or have other properties adversely impacting safety that delay or prevent their regulatory approval, restrict their approved labeling, or otherwise limit their commercial opportunity” below.

For additional information, see the Risk Factor –

“Our product candidates may cause undesirable side effects or have other properties adversely impacting safety that delay or prevent their regulatory approval, restrict their approved labeling, or otherwise limit their commercial opportunity” below.

In addition, there are a significant number of global clinical trials in inflammatory bowel disease and in hematologic disorders that are currently ongoing, especially in Phases 2 and 3, making it highly competitive and challenging to recruit subjects.

21 unchanged sentences

Even if our product candidates are approved, side effects or adverse events could result in significant delay in or denial of, regulatory approval, restrictive labeling, or potential product liability claims.

Moreover, since our product candidates PN-943 and PN-235 are in development for indications for which injectable antibody drugs have been approved, clinical trials for those product candidates may need to show a risk/benefit profile that is competitive with those existing products in order to obtain regulatory approval or, if approved, a product label that is favorable for commercialization.

Moreover, for our product candidates that are in development for indications for which injectable antibody drugs have been approved, clinical trials for those product candidates may need to show a risk/benefit profile that is competitive with those existing products in order to obtain regulatory approval or, if approved, a product label that is favorable for commercialization.

For example, on September 16, 2021 the Company’s clinical studies for rusfertide were placed on a full clinical hold by the FDA.

6 unchanged sentences

We have focused our limited resources to pursue particular product candidates and indications, and consequently, we may fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we have focused on research programs and product candidates mainly on the development of rusfertide, PN-943 and the product candidates subject to our Janssen collaboration.

Because we have limited financial and managerial resources, we have historically focused on research programs and product candidates mainly on the development of rusfertide, the product candidates subject to our Janssen collaboration and PN-943.

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

5 unchanged sentences

We have incurred significant operating losses every year since inception and expect to continue to incur operating losses for the foreseeable future.

As of June 30, 2022, we had an accumulated deficit of $471.3 million.

As of September 30, 2022, we had an accumulated deficit of $502.6 million.

We expect to continue to incur significant research, development and other expenses related to our ongoing operations and product development.

9 unchanged sentences

Further, in the event our Restated Agreement with Janssen is terminated, we may not receive any additional fees or milestone payments under that agreement.

Absent the funding support from this agreement, our further development of the collaboration product candidates would require significant additional capital from us, or the establishment of alternative collaborations with third parties, which may not be possible.

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $291.9 million.

Absent the funding support from this agreement, our further development of the collaboration product candidates would require significant

additional capital from us, or the establishment of alternative collaborations with third parties, which may not be possible.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $267.4 million.

Based upon our current operating plan and expected expenditures, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months.

14 unchanged sentences

In addition, prior to any termination of the agreement, Janssen will generally have control over the further clinical development of PN-235 and any other second-generation compounds.

Janssen’s decisions with respect to such

development will affect the timing and availability of potential future payments under the agreement, if any.

Janssen’s decisions with respect to such development will affect the timing and availability of potential future payments under the agreement, if any.

During the fourth quarter of 2021, following a pre-specified interim analysis criteria, a portfolio decision was made by Janssen to stop further development of PTG-200, and further development of PN-232 was also discontinued during the quarter, both in favor of PN-235, a novel peptide with exceptional, low picomolar potency and with superior in vivo stability.

2 unchanged sentences

We are subject to the risk of possible disagreements with Janssen regarding the development of PN-235 or other matters under the Restated Agreement with Janssen, such as the interpretation of the agreement or ownership of proprietary rights.

Also, after the period of collaborative development ends under the agreement, Janssen will have sole decision-making authority for product candidates resulting from the collaboration, which could lead to disputes with Janssen.

Disagreements with Janssen could lead to litigation or arbitration, which would be expensive and would be time-consuming for our management and employees.

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If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms.

If CROs do not successfully carry out

their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.

If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.

As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase substantially and our ability to generate revenue could be delayed significantly.

2 unchanged sentences

We do not currently have, nor do we plan to develop, the infrastructure or capability internally to manufacture our drug supplies and we expect to continue to depend on contract manufacturers for the foreseeable future.

As we proceed with the development and potential commercialization of our product candidates, we will need to increase the scale at which the drug is manufactured which will require the development of new manufacturing processes to potentially reduce the cost of goods.

As we proceed with the development and potential commercialization of our product candidates, we will need to

increase the scale at which the drug is manufactured which will require the development of new manufacturing processes to potentially reduce the cost of goods.

We will rely on our internal process research and development efforts and those of contract manufacturers to develop the good manufacturing processes (“GMPs”) required for cost-effective, large-scale production.

39 unchanged sentences

With respect to our product candidates, we may choose to partner with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems, and in the case of the Restated Agreement with Janssen, we may elect to exercise our Co-Detailing Option (allows us to elect to provide up to 30% of the selling effort in the United States for any IL-23R antagonist compounds approved for commercial sale), which would require us to establish a U.S.

If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

If we are not

successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

11 unchanged sentences

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid

Supreme Court is currently reviewing this case, but it is unclear when a decision will be made.

19 unchanged sentences

We expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for our product candidates or additional pricing pressures.

Most recently, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA”) which, among other provisions, included several measures intended to lower the cost of prescription drugs and related healthcare reforms.

We cannot be sure whether additional legislation or rulemaking related to the IRA will be issued or enacted, or what impact, if any, such changes will have on the profitability of any of our drug candidates, if approved for commercial use, in the future.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of

such changes on the marketing approvals of our product candidates, if any, may be.

We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be.

In addition, increased scrutiny by the U.S.

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Competition may increase further as a result of advances in the commercial applicability of newer technologies and greater availability of capital for investment in these industries.

Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, pharmaceutical products that are easier to develop, more effective or less costly than any product candidates that we are

currently developing or that we may develop.

If approved, our product candidates are expected to face competition from commercially available drugs as well as drugs that are in the development pipelines of our competitors.

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There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.

A future recession or market correction resulting from the spread of COVID-19 or other significant geopolitical events could materially affect our business and the value of our common stock.

Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.

5 unchanged sentences

Our arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products.

Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party

payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business.

Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business.

The laws that may affect our ability to operate include, but are not limited to:

2 unchanged sentences

● the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”);

● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their implementing regulations, which also imposes obligations, including mandatory contractual terms, on HIPAA-covered entities, their business associates as well as their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

on HIPAA-covered entities, their business associates as well as their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

● the federal civil monetary penalties statute;

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We expect to expand the size of our organization, and we may experience difficulties in managing this growth.

As of June 30, 2022, we had 127 full-time equivalent employees, including 101 full-time equivalent employees engaged in research and development.

As of September 30, 2022, we had 122 full-time equivalent employees, including 99 full-time equivalent employees engaged in research and development.

As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, scientific, sales, marketing, research, development, regulatory, manufacturing, financial and other resources.

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We and some of the third-party service providers on which we depend for various support functions are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism, pandemics and similar unforeseen events beyond our control.

Our corporate headquarters, including our laboratory facilities, are located in the

San Francisco Bay Area, which in the past has experienced severe earthquakes and fires.

Our corporate headquarters, including our laboratory facilities, are located in the San Francisco Bay Area, which in the past has experienced severe earthquakes and fires.

We do not carry earthquake insurance.

3 unchanged sentences

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford medications and therapies.

Sales of any of our product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.

organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.

If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates.

24 unchanged sentences

Our granted U.S.

patents covering PN-943 and PTG-200 expire in 2035, and our granted U.S.

patents covering PTG-200 and PN-943 expire in 2035, and our granted U.S.

patent covering rusfertide expires in 2034.

1 unchanged sentence

Patent and Trademark Office (the “PTO”), this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution.

If we encounter delays in our clinical trials or in gaining regulatory approval, the period of time during which we could market any of our product candidates under patent protection, if approved, would be reduced.

If we encounter delays in our clinical trials

or in gaining regulatory approval, the period of time during which we could market any of our product candidates under patent protection, if approved, would be reduced.

We may not be able to protect our intellectual property rights throughout the world.

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Issued patents and patent applications may be challenged in the courts and in the patent office in the United States and abroad.

An adverse determination in any such challenge could prevent the issuance of, reduce the scope of, invalidate or render unenforceable our patent rights, result in the loss of exclusivity, or limit our ability to stop others from using or commercializing our platform technology and products.

from using or commercializing our platform technology and products.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

19 unchanged sentences

There may be applications now pending of which we are unaware that may later result in issued patents that may be infringed by the practice of our peptide therapeutics technology platform or the manufacture, use or sale of our product candidates.

If any third-party patents were to be held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product or formulation itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

or formulation itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

As our industry expands and more patents are issued, the risk increases that our product candidates or technologies may give rise to claims of infringement of the patent rights of others.

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Our stock price has fluctuated in the past and is likely to be volatile in the future.

From January 1, 2021 through June 30, 2022, the reported sale price of our common stock has fluctuated between $6.91 and $50.54 per share.

From January 1, 2021 through September 30, 2022, the reported sale price of our common stock has fluctuated between $6.91 and $50.54 per share.

The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

43 unchanged sentences

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

What changed 10-Q

Item 1A. Risk Factors