What changed in this filing

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Item 1A. Risk Factors

2020-11-12 compared with 2020-08-14 · 71 added, 17 removed, 126 unchanged (41% of the section changed)

Risk Factors.

Summary of Risk Factors

We may be unable for many reasons, including those that are beyond our control, to implement our business strategy successfully.

The occurrence of any single risk or any combination of risks could materially and adversely affect our business, financial condition, results of operations, cash flows and the trading price of our common stock.

Some of these risks are:

We are a clinical stage biopharmaceutical company with a limited operating history.

We have no drug candidates approved for commercial sale, we have never generated any revenue from sales, and we may never be profitable.

We have concentrated our research and development and clinical efforts on the treatment of Alzheimer’s and other degenerative diseases, a field that has seen very limited success in drug development.

Our drug candidates are based on new therapeutic approaches and novel technology, which also makes it difficult to predict the time and cost of drug candidate development and the regulatory approval process and exposes us to unforeseen risks.

If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities outside the United States or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

We will require substantial additional funding to finance our operations, complete the development and commercialization of atuzaginstat (COR388) and evaluate future drug candidates.

If we are unable to raise this funding when needed, we may be required to significantly curtain, delay, reduce or eliminate one or more of our drug development programs or other operations.

We are substantially dependent on the success of atuzaginstat, which will require significant additional clinical testing before we can seek regulatory approval and potentially launch commercial sales, receive regulatory approval or be successfully commercialized, even if approved.

If we are not successful in commercializing atuzaginstat, or are significantly delayed in doing so, our business will be materially harmed.

We may not be successful in our efforts to create a pipeline of drug candidates or to develop commercially successful drugs.

If we fail to successfully identify, acquire, develop and commercialize additional drug candidates, our commercial opportunity may be limited.

Adverse side effects or properties, clinical holds imposed by the FDA, or other safety risks associated with atuzaginstat or any future drug candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials, abandon further development, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

We rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing.

We cannot be certain that atuzaginstat or any of our future drug candidates will receive regulatory approval, and without regulatory approval we will not be able to market our drug candidates.

If we or any of our third-party manufacturers encounter difficulties in production of our current or any future drug candidate, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our drug candidates for clinical trials or for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.

If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any drug candidates we may develop, we may not be successful in commercializing those drug candidates if and when they are approved.

The COVID-19 pandemic, as well as other public health crises, catastrophic events or other events outside of our control, may adversely affect our capabilities or the capabilities of third parties on which we depend.

We are currently conducting and in the future may conduct clinical trials for our drug candidates outside the United States, and the U.S.

Food and Drug Administration (FDA), European Medicines Agency and applicable foreign regulatory authorities may not accept data from such trials.

If we are unable to obtain and maintain sufficient intellectual property protection for our drug candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize drug candidates similar or identical to ours, and our ability to successfully commercialize our drug candidates may be adversely affected.

Updated Risk Factors

Except as discussed below, there have been no material changes to the risk factors previously disclosed by us in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 16, 2020.

20 unchanged sentences

the costs of acquiring, licensing or investing in businesses, drug candidates and technologies;

our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in conne ction with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

our need and ability to retain management and hire scientific and clinical personnel;

the effect of competing drugs and drug candidates and oth er market developments;

the effect of competing drugs and drug candidates and other market developments;

our need to implement additional internal systems and infrastructure, including financial and reporting systems;

21 unchanged sentences

the supply or quality of our drug candidates or other materials necessary to conduct clinical trials of our drug candidates may be insufficient or inadequate;

our drug candidates may have undesirable side effects or other unexpected characteristics, causing us or our investi gators, regulatory authorities or institutional review boards to suspend or terminate the trials;

our drug candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulatory authorities or institutional review boards to suspend or terminate the trials;

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

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If the patients involved with our clinical trials contract COVID-19, we may have more adverse events and deaths in our clinical trials as a result.

The occurrence of any of these events could delay or impede our ability to release clinical results, delay or impact our clinical trials, including the integrity and completeness of subject data and clinical study endpoints, and could adversely impact our product candidate testing, development and timelines.

The Company has taken and continues to take proactive measures to maintain the integrity of its ongoing clinical trial.

For example, to potentially mitigate some of the risks of the COVID-19 pandemic and based on interest and the ability to maintain milestone timelines, we enrolled approximately 70 additional subjects in the GAIN trial.

However, these measures may not be successful, and the occurrence of any of these events could delay or impede our ability to release clinical results, delay or impact our clinical trials, including the integrity and completeness of subject data and clinical study endpoints, and could adversely impact our product candidate testing, development and timelines.

We may be exposed to a variety of international risks that could materially adversely affect our business.

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business interruptions resulting from geo-political actions, including war and terrorism, public health crises, such as pandemics and epidemics, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires.

Natural disasters, public health crises, political crises, and other catastrophic events o r other events outside of our control may be detrimental to our capabilities or the capabilities of third parties on which we depend.

Natural disasters, public health crises, political crises, and other catastrophic events or other events outside of our control may be detrimental to our capabilities or the capabilities of third parties on which we depend.

Our headquarters are located in California near major geologic faults that have experienced earthquakes in the past.

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In addition, if any of our suppliers or third-party service providers, such as our manufacturing partners or CROs, are affected by natural disasters, such as earthquakes, tsunamis, power shortages or outages, floods or monsoons, public health crises, such as pandemics and epidemics, political crises, such as terrorism, war, political instability or other conflict, cyberattacks, or other events outside of our control, our business and operating results could suffer.

Disasters, public health crises and

political crises occurring at third-party facilities also could negatively impact our clinical development and regulatory approval timelines, our reputation and the perception of our company.

For example, as a resu lt of the COVID-19 pandemic, we and our third-party service providers have limited our operations or implemented limitations, including work-from-home policies.

Disasters, public health crises and political crises occurring at third-party facilities also could negatively impact our clinical development and regulatory approval timelines, our reputation and the perception of our company.

For example, as a result of the COVID-19 pandemic, we and our third-party service providers have limited our operations or implemented limitations, including work-from-home policies.

Our and our third-party service providers increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business.

The increase in working remotely could increase cybersecurity risk, create data accessibility concerns, and make us and our third-party service providers more s usceptible to communication disruptions, any of which could adversely impact our or their business operations or delay necessary interactions with local and federal regulators, manufacturing sites, clinical trial sites, and other third parties.

The increase in working remotely could increase cybersecurity risk, create data accessibility concerns, and make us and our third-party service providers more susceptible to communication disruptions, any of which could adversely impact our or their business operations or delay necessary interactions with local and federal regulators, manufacturing sites, clinical trial sites, and other third parties.

In addition, as a result of shelter-in-place orders or other mandated travel restrictions, our on-site staff conducting research and development activities may not be able to access our laboratories, and these core activities may be significantly limited or curtailed, possibly for an extended period of time.

Further, due to travel restrictions and “shelter in place” orders, we may experience limitations on the ability to recruit and hire key personnel due to the inability to meet with candidates and reduced ability to engage with the medical and investor communities due to the cancelation of conferences scheduled throughout the year.

We also may experience operational challenges caused by sickness of our employees or their families, the desire of employees to avoid con tact with large groups of people, and an increased reliance on working from home or mass transit disruptions.

Furthermore, new quarantines for COVID-19 or other viruses could impact personnel at contract manufacturing facilities in China, Europe or elsewhe re to deliver key materials or the availability or cost of starting materials.

We also may experience operational challenges caused by sickness of our employees or their families, the desire of employees to avoid contact with large groups of people, and an increased reliance on working from home or mass transit disruptions.

Furthermore, new quarantines for COVID-19 or other viruses could impact personnel at contract manufacturing facilities in China, Europe or elsewhere to deliver key materials or the availability or cost of starting materials.

Any disruption of our ability to manufacture atuzaginstat or the ability of our contract manufacturing vendors in China, Europe or elsewhere to deliver key materials on a timely basis could have a material adverse effect on the initiation of new trials, the duration of open label extension studies and overall product development.

In addition, we may experience delays or disruptions in non-clinical experiments and supplies for suc h experiments, including animals required for such experiments.

These and other factors arising from the COVID-19 pandemic could worsen in countries that are already afflicted with COVID-19, could continue to spread to additional countries, or could return to countries where the pandemic has been partially contained, each of which could further adversely impact our ability to conduct clinical trials and our business generally, and could have a material adverse impact on our operations and financial conditio n and results.

In addition, we may experience delays or disruptions in non-clinical experiments and supplies for such experiments, including animals required for such experiments.

Changes in funding for the FDA and other government agencies or other disruptions at these agencies could prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.

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Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could affect the development and study of atuzaginstat.

The market price of our common stock is likely to be volatile and could fluctuate or decline, resulting in a substantial loss of your investment.

The market price of our common stock is likely to be volati le and could fluctuate or decline, resulting in a substantial loss of your investment.

The market price of our common stock has been and may continue to be volatile and could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

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We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.

However, these provisions may limit a stockholder’s ability to bring a claim in a jud icial forum that it finds favorable for disputes with us or our directors, officers, or other employees.

While the Delaware Supreme Court recently determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to br ing such a claim arising under the Securities Act against us, our directors, officers, or other employees in a venue other than in the federal district courts of the United States of America.

In such instance, we would expect to vigorously assert the valid ity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation, and this may require significant additional costs associated with resolving such action in other jurisdictions.

However, these provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees.

While the Delaware Supreme Court recently determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us, our directors, officers, or other employees in a venue other than in the federal district courts of the United States of America.

In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation, and this may require significant additional costs associated with resolving such action in other jurisdictions.

Adverse side effects or properties or other safety risks associated with atuzaginstat (COR388) or any future drug candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials, abandon further development, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

There may be side effects and adverse events associated with the use of atuzaginstat or any future drug candidates.

Atuzaginstat was well-tolerated with no concerning safety signals in our Phase 1a and Phase 1b clinical trials.

While some subjects experienced minor changes in electrocardiograms, or ECGs, in particular transient increases in the QRS duration and PR interval, these changes were not clinically significant, which means they did not result in the need to consider changes to the treatment of the patient.

Similar measurements were seen at higher doses in animal studies.

There were no discernable trends in the QTcF interval in human or animal studies.

Relative to placebo, there were no patterns in laboratory abnormalities or changes in ECGs, vital signs or the results of physical examinations observed during these trials that would be deemed practically relevant to the treatment of the patient with atuzaginstat.

Results from our preclinical testing and early clinical trials do not ensure that later clinical trials will provide adequate data to demonstrate the safety of atuzaginstat.

Results of our Phase 2/3 GAIN trial, and future clinical trials, could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics as the clinical trials progress to longer exposures at varying dose levels and a larger number of patients.

Side effects could include treatment-related adverse events not seen in our Phase 1a and Phase 1b clinical trials of atuzaginstat.

Undesirable side effects caused by, or unexpected or unacceptable characteristics associated with, atuzaginstat or any future drug candidates could result in the delay, suspension or termination of clinical trials by us, the FDA or other regulatory authorities for a number of reasons.

We may also elect to limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial expectations for such drug candidate if approved.

If we elect or are required to further delay, suspend or terminate any clinical trial of any drug candidates that we develop, the commercial prospects of such drug candidates will be harmed and our ability to generate drug revenues from any such drug candidates will be delayed or eliminated.

As we test the safety of atuzaginstat in our Phase 2/3 GA IN trial or other trials, or as the use of atuzaginstat becomes more widespread if it receives regulatory approval, we may identify additional adverse events that were not identified or not considered significant in our earlier trials.

If such side effects become later known in development or upon approval, if any, such findings may harm our business, financial condition, results of operations and prospects significantly.

If we or others later identify undesirable side effects, a number of potentially signi ficant negative consequences could result, including:

regulatory authorities may withdraw, suspend or limit approval of atuzaginstat or any future drug candidates;

we may be required to recall a drug or change the way such drug is administered to patients;

regulatory authorities may require additional warnings or statements in the labeling, such as a boxed warning or a contraindication or issue safety alerts, press releases or other communications containing warnings or other safety information about the drug candidate, for example, field alerts to physicians and pharmacies;

regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a risk evaluation and mitigation strategy, or REMS, to ensure that the benefits of the drug outweigh its risks;

we may be required to change the way a drug is distributed or administered, conduct additional clinical trials or change the labeling of a drug, or be required to conduct additional post-marketing studies or surveillance;

we could be sued and held liable for harm caused to patients;

sales of the drug may decrease significantly or atuzaginstat or any future drug could become less competitive;

our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of atuzaginstat or any future drug candidates, if approved, and could significantly harm our business, financial condition, results of operations and prospects.

Clinical holds imposed by the FDA could prevent us from administering atuzaginstat (COR388) at higher doses than currently utilized or planned.

Preclinical data for atuzaginstat showed toxicity at very high exposure levels in mice and, as a result, the FDA placed atuzaginstat on partial clinical hold to enforce an exposure cap on atuzaginstat dosages in humans at approximately 2.4 times the currently planned top dose in our Phase 2/3 GAIN trial.

Although the FDA has permitted the continuation of clinical trials at the planned doses of atuzaginstat, if we determine that we need to increase the dosage of atuzaginstat in humans, the partial hold, or any future clinical holds placed by the FDA may have a negative impact on our ability to carry out our clinical studies, which could delay or prevent the commercialization of atuzaginstat and may harm our business and financial condition.

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