What changed in this filing

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Item 1. Legal Proceedings

2022-08-03 compared with 2022-05-09 · 72 added, 80 removed, 910 unchanged (14% of the section changed)

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The impact of the COVID-19 pandemic and related risks could have a material adverse impact on our research and development programs and financial condition.

The impact of the war resulting from the Russian invasion of Ukraine and related risks could have a material adverse impact on our development programs and our business prospects.

We are an early-stage immuno-oncology company with a limited operating history.

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Changes in healthcare law and implementing regulations, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict, and may have a significant adverse effect on our business and results of operations.

Risks Related to the Impact of COVID-19 and the Russia-Ukraine War

Risks Related to the Impact of COVID-19

The impact of the COVID-19 pandemic and related risks could have a material adverse impact on our research and development programs and financial condition.

The degree to which COVID-19 impacts our business operations, research and development programs and financial condition remains highly uncertain and will depend on future developments, including the ultimate duration and/or severity of the pandemic, the impact of any resurgences and new variants that emerge, actions by government authorities to contain the spread of the virus, the availability, adoption and effectiveness of vaccines and boosters, and when and to what extent normal economic and operating conditions can resume.

COVID-19 infections continue to fluctuate in the U.S.

and in many countries worldwide as local surges and new waves of infection continue to be reported as a result of new variants.

The degree to which COVID-19 impacts our business operations, research and development programs and financial condition remains highly uncertain and dependent on future developments, including the ultimate duration and/or severity of the pandemic, the impact of any resurgences and new variants that emerge, actions by government authorities to contain the spread of the virus, the availability, adoption and effectiveness of vaccines and boosters, and when and to what extent normal economic and operating conditions can resume.

We conduct our clinical trials in the U.S.

impact our ability to initiate, supply, enroll, conduct or complete our ongoing or planned clinical trials.

For example, in the first half of 2020, the pandemic led to a decline in screening, diagnosis and treatment for cancer patients.

and internationally in geographic regions that are impacted by COVID-19 to varying degrees, and disruptions caused by the COVID-19 pandemic, including the reinstitution of shelter-in-place measures, will continue to impact our ability to initiate, supply, enroll, conduct or complete our ongoing or planned clinical trials.

For example, in the first half of 2020, the pandemic led to a decline in screening, diagnosis and

treatment for cancer patients.

While cancer screening rates have rebounded, resurgences due to new variants may cause patients to delay screening and treatment for fear of exposure to COVID-19, thereby adversely impacting the enrollment of patients in clinical trials targeting early-stage cancers and retention of patients overall in our trials.

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We are unable to predict the ultimate impact of this pandemic on our programs.

Due to the availability of vaccines and our mandatory vaccine policy, our laboratory operations are operating at or near normal levels and we began returning office-based employees to our offices on a hybrid schedule.

Due to the availability of vaccines and our mandatory vaccine policy, our laboratory operations are operating at or near normal levels and we re-opened our offices to office-based employees.

The safety, health and well-being of our employees remains a primary concern.

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The impact of the COVID-19 pandemic, including governmental and other actions to combat it such as the imposition of shelter-in-place and other public health orders, may exacerbate the effects of the risks described below.

The impact of the war resulting from the Russian invasion of Ukraine and related risks could have a material adverse impact on our development programs and our business prospects.

While we did not have any clinical studies enrolling in Russia, Ukraine or Belarus, we conduct our clinical trials on a global basis and had planned to include those countries in our ongoing and future clinical trials.

We have suspended site activations in those countries until we believe it is safe to resume such activities and we can ensure uninterrupted supply of investigational products to patients who are ultimately enrolled in our studies in those countries.

We did not have other business activities ongoing or contemplated in the sanctioned countries and Ukrainian territories.

However, we do file patent applications in Russia and the Eurasian patent office, which is headquartered in Moscow.

Sanctions may make it difficult or impossible to file and maintain patents in these countries.

Additionally, Russia has begun taking actions against “unfriendly”

countries, including the U.S., which may adversely affect the scope of and/or our ability to enforce our intellectual property rights.

The degree to which the Russia-Ukraine war will impact our development programs will depend on future developments, including the ultimate duration of the war, whether the war spreads to additional countries, the severity of the harm on infrastructure and hospital services in the impacted countries and adverse actions taken by the sanctioned countries against the U.S.

and other unfriendly countries.

The impact of the Russia-Ukraine war may also exacerbate the effects of the risks described below.

Risks Related to our Limited Operating History, Financial Position and Capital Requirements

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In 2021, we recognized our first annual net income since commencing operations as a result of option payments totaling $725 million due to us from Gilead following its exercise of options to three of our programs.

For the three months ended March 31, 2022 and the year ended December 31, 2021 we had net losses of $68.0 million and net income of $52.8 million, respectively.

As of March 31, 2022, we had an accumulated deficit of $343.3 million.

For the six months ended June 30, 2022 and the year ended December 31, 2021 we had net losses of $134.6 million and net income of $52.8 million, respectively.

As of June 30, 2022, we had an accumulated deficit of $410.0 million.

We expect that it will be several years, if ever, before we have an investigational product ready for commercialization.

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In addition, if we obtain marketing approval for any of our investigational products, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution.

As of March 31, 2022, we had $1,342.4 million of cash, cash equivalents and investments.

As of June 30, 2022, we had $1,271.1 million of cash, cash equivalents and investments.

While we believe that our cash position will be sufficient to fund our anticipated level of operations into 2026, our future capital requirements will depend on many factors, including:

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For example, the FDA recently published guidance on "Project Optimus", an initiative to reform dose selection in oncology drug development.

If the FDA does not believe we have sufficiently demonstrated that the selected doses for our investigational products maximize not only the efficacy of the investigational product, but the safety and tolerability as

well, our ability to initiate new studies may be delayed.

Even if we conducted the additional studies or generated the additional information requested, the FDA could disagree that we have satisfied their requirements, all of which will cause significant delays and expense to our programs.

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Based upon negative or inconclusive results, we may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies.

In addition, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may further delay, limit or prevent marketing

In particular, results from uncontrolled trials, meaning trials in which there is no control group such as a placebo group, are inherently difficult to interpret.

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Even if we are able to obtain marketing approvals for any of our investigational products, those approvals may be for indications that are not as broad as desired or may contain other limitations that would adversely affect our ability to generate revenue from sales of those products.

Moreover, if we are not able to differentiate our product against other approved products within the same class of drugs, or if any of the other circumstances described above occur, our business would be materially harmed and our ability to generate revenue from that class of drugs would be severely impaired.

Moreover, if we are not able to differentiate our product against other approved products within the same class of drugs, or if

any of the other circumstances described above occur, our business would be materially harmed and our ability to generate revenue from that class of drugs would be severely impaired.

Enrollment and retention of subjects in clinical trials is expensive and time consuming, can be made more difficult or rendered impossible by competing treatments, clinical trials of competing investigational products, and public health epidemics, each of which could result in significant delays and additional costs in our product development activities, or in the failure of such activities.

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Material adverse changes in the final data could significantly harm our business prospects.

Serious adverse events, undesirable side effects or other unexpected properties of our investigational products may be identified during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our investigational products or limitations on the use of our investigational products or, if

discovered following marketing approval, revocation of marketing authorizations or subsequent limitations on the use of our investigational products.

To date, we have only tested our clinical-stage investigational products in a relatively small number of oncology subjects.

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However, these combinations have not been tested before and may fail to demonstrate synergistic activity against immunological targets, may fail to achieve superior outcomes relative to the use of single agents or other combination therapies, may exacerbate adverse events associated with one of the investigational products when used as monotherapy, or may fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.

In addition, our early clinical

trials may test more than one investigational product in uncontrolled studies, and it may be difficult to interpret the results of those uncontrolled trials or evaluate the contribution of each investigational agent in such combination.

In addition, our early clinical trials may test more than one investigational product in uncontrolled studies, and it may be difficult to interpret the results of those uncontrolled trials or evaluate the contribution of each investigational agent in such combination.

We expect that our anti-PD-1 antibody, zimberelimab, will form the backbone of many of our intra-portfolio combinations.

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Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as a medical device and may require separate regulatory authorization prior to commercialization.

Certain clinical trials that we are conducting, such as our Phase 2 ARC-7 trial and our Phase 3 ARC-10 trial, each being conducted in patients with PD-L1≥50% non-small cell lung cancer, include the use of a diagnostic test to help identify eligible patients.

Certain clinical trials that we are conducting, such as our Phase 2 ARC-7 trial and our Phase 3 ARC-10 trial, which are each being conducted in patients with PD-L1≥50% non-small cell lung cancer, include the use of a diagnostic test to help identify eligible patients.

Our future trials may also use a diagnostic test to help identify eligible patients.

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The design or execution of a clinical trial can determine whether its results will support marketing approval, and flaws in the design or execution of a clinical trial may not become apparent until the clinical trial is well advanced.

In some instances, there can be significant variability in safety or efficacy results between different trials with the same investigational product due to numerous

factors, including differences in trial protocols, size and type of the patient populations, variable adherence to the dosing regimen or other protocol requirements and the rate of dropout among clinical trial participants.

In some instances, there can be significant variability in safety or efficacy results between different trials with the same investigational product due to numerous factors, including differences in trial protocols, size and type of the patient populations, variable adherence to the dosing regimen or other protocol requirements and the rate of dropout among clinical trial participants.

The FDA or comparable foreign regulatory authorities may disagree with our trial designs and our interpretation of data from preclinical studies or clinical trials.

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The FDA’s Oncology Center of Excellence has recently announced several initiatives to disrupt long-standing practices, including Project Optimus and Project FrontRunner.

These initiatives may impose additional requirements on our overall product development programs, resulting in longer development timelines and increased cost.

These initiatives, as well as any new initiatives announced by the FDA and other regulatory authorities, may impose additional requirements on our overall product development programs, resulting in longer development timelines and increased cost.

Any of these regulatory authorities may also approve an investigational product for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials.

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For example, ARC-10, our Phase 3 trial evaluating zimberelimab monotherapy and zimberelimab plus domvanalimab combination therapy versus chemotherapy, does not include any clinical sites in the United States.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA.

Although the FDA may accept data from clinical trials

conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA.

For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles.

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We produce in our laboratory relatively small quantities of compounds for evaluation in our research programs.

We rely, and expect to continue to rely, on third parties for the manufacture of our investigational products for

preclinical and clinical testing, as well as for commercial manufacture if any of our investigational products are approved.

We rely, and expect to continue to rely, on third parties for the manufacture of our investigational products for preclinical and clinical testing, as well as for commercial manufacture if any of our investigational products are approved.

We currently have limited manufacturing arrangements and expect that each of our investigational products will only be covered by single source suppliers for the foreseeable future.

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We closely monitor the inventory for each of our investigational products in order to prevent or minimize the impact of potential disruptions, and have not yet experienced any disruptions in our ability to manufacture our investigational products as a result of the COVID-19 health crisis.

However, the pandemic has prevented the U.S.

Commerce Department from conducting an inspection of WuXi Biologics in connection with purchases of hardware that are subject to U.S.

However, the pandemic prevented the U.S.

Commerce Department from conducting inspections of WuXi Biologics in connection with purchases of hardware that are subject to U.S.

export controls.

As a result, WuXi Biologics has been placed on the U.S.'s "Unverified List".

As a result, WuXi Biologics was placed on the U.S.'s "Unverified List".

Commerce Department, in coordination with China’s Ministry of Commerce, recently completed site inspections for one of the two WuXi Biologics facilities placed on the Unverified List.

At this time, we do not anticipate any impact to our manufacturing plans with WuXi Biologics.

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Components of a finished therapeutic product approved for commercial sale or used in clinical trials must be manufactured in accordance with cGMP requirements.

These regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.

regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.

Poor control of production processes can lead to the introduction of contaminants, or to inadvertent changes in the properties or stability of our investigational products that may not be detectable in final product testing.

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We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information.

These agreements typically limit the rights of the

third parties to use or disclose our confidential information, including our trade secrets.

These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets.

Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.

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Obtaining reimbursement for our products may be particularly difficult because of the higher prices often associated with branded therapeutics and therapeutics administered under the supervision of a physician.

Additionally, our collaborators, will be required to obtain coverage and reimbursement for any related companion diagnostics tests they develop separate and apart from the coverage and reimbursement we seek for our product candidates, once approved.

Additionally, our collaborators will be required to obtain coverage and reimbursement for any related

companion diagnostics tests they develop separate and apart from the coverage and reimbursement we seek for our product candidates, once approved.

Reimbursement may also impact the demand for, and the price of, any product for which we obtain marketing approval.

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We believe that any of our current and future investigational products approved as a biological product under a BLA should qualify for the twelve-year period of exclusivity.

However, there is a risk that this exclusivity could be shortened due to Congressional action

or otherwise, or that the FDA will not consider our investigational products to be reference products for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated.

However, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider our investigational products to be reference products for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.

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If we breach our obligations under these agreements, we may be required to pay damages, lose our rights to these investigational products or both, which would adversely affect our business and prospects.

We rely, in part, on license and other strategic agreements, which subject us to various obligations, including diligence obligations with respect to development and commercialization activities, reporting and notification obligations, payment obligations for achievement of certain milestones and royalties on product sales, negative covenants and other material obligations.

achievement of certain milestones and royalties on product sales, negative covenants and other material obligations.

We may need to devote substantial time and attention to ensuring that we successfully integrate these transactions into our existing operations and are compliant with our obligations under these agreements, which may divert management’s time and attention away from our research and development programs or other day-to-day activities.

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We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction or such other benefits that led us to enter into the arrangement.

For example, under the Gilead Collaboration Agreement, for each additional clinical program that Gilead exercises its option to, it will pay an option fee of $150 million per

program, and for each research program that Gilead exercises its option to at the IND-enabling stage, it will pay an option fee of $60 million per program.

For example, under the Gilead Collaboration Agreement, for each additional clinical program that Gilead exercises its option to, it will pay an option fee of $150 million per program, and for each research program that Gilead exercises its option to at the IND-enabling stage, it will pay an option fee of $60 million per program.

Furthermore, we and Gilead will equally share global co-development costs for the joint development program, as well as profits and losses for the United States, subject to opt-out rights applicable to certain programs, and expense caps on our spending and true-up adjustments.

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If we elect to fund and undertake development or commercialization activities on our own, we will need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all.

If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our investigational products or bring them to market and generate product sales revenue, which would harm our business prospects, financial condition and results of operations.

investigational products or bring them to market and generate product sales revenue, which would harm our business prospects, financial condition and results of operations.

We may wish to acquire rights to future assets through in-licensing or may attempt to form collaborations in the future with respect to our investigational products, but may not be able to do so, which may cause us to alter or delay our development and commercialization plans.

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Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both.

In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the

invention at issue.

There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention.

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If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of shares of our common stock.

Moreover, we cannot assure you that we will have sufficient financial or other resources to defend or pursue such litigation, which typically last for years before they are concluded.

Moreover, we cannot assure you that we will have sufficient financial or other resources to defend or pursue such litigation, which typically last for

years before they are concluded.

Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations.

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In addition, certain developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.

In those countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents.

Further, we file patent applications in Russia and the Eurasian patent office, which is headquartered in Moscow.

Sanctions against Russia may make it difficult to file and maintain patents in these countries, and Russia has begun taking actions against "unfriendly" countries, including the U.S., which may adversely affect the scope of and/or our ability to enforce our intellectual property rights.

In any of these countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents.

This could limit our potential revenue opportunities.

Accordingly, our efforts to enforce

our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our investigational products.

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These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents.

These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.

include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.

After March 2013, under the America Invents Act, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.

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We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor.

The failure to name the proper inventors on a patent application can result in the

patents issuing thereon being unenforceable.

The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.

Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our investigational products or as a result of questions regarding co-ownership of potential joint inventions.

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Our industry also has experienced a high rate of turnover in recent years, which has worsened during the COVID-19 pandemic.

While we have expanded a number of our in-office roles to permit remote work arrangements, allowing us to seek talent from outside the San Francisco Bay Area, we still may not be able to attract or retain qualified personnel in the future due to the intense competition for a

limited number of qualified personnel among biopharmaceutical companies.

Many of the other biopharmaceutical companies against which we compete have greater financial and other resources, different risk profiles and a longer history in the industry than we do.

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To our knowledge, there are no approved anti-TIGIT antibodies and the most advanced agents are in Phase 3 development.

With respect to our dual adenosine receptor antagonist, etrumadenant, we are aware that Incyte and Merck KGaA have initiated clinical development of dual adenosine receptor antagonists and we are aware of clinical-stage selective adenosine A 2a R antagonists being developed by other companies, including AstraZeneca, Corvus, CStone, Exscientia, Incyte, iTeos, Novartis and Tarus, and clinical-stage selective adenosine A 2b R antagonists being developed by Palobiofarma, Tarus and Teon.

With respect to our dual adenosine receptor antagonist, etrumadenant, we are aware that Incyte and Merck KGaA have initiated clinical development of dual adenosine receptor antagonists and we are aware of clinical-stage selective adenosine A 2a R antagonists being developed by other companies, including AstraZeneca, Corvus, CStone, Exscientia, Incyte, iTeos, Novartis and Portage (acquired from Tarus), and clinical-stage selective adenosine A 2b R antagonists being developed by Palobiofarma, Portage (acquired from Tarus) and Teon.

For our small-molecule CD73 inhibitor, quemliclustat, we are aware of several pharmaceutical companies developing antibodies against this target, including Akeso, AstraZeneca, Bristol-Myers Squibb, Corvus, Incyte, Innate, Innovent, Jacobio, Novartis, Shanghai Henlius Biotech, Symphogen/Servier and Tracon/I-Mab, all of whom have advanced their CD73 antibodies into clinical development.

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Consequently, the results of our clinical trials for investigational products in that class will likely need to show a risk benefit profile that is competitive with or more favorable than those products and investigational products in order to obtain marketing approval or, if approved, a product label that is favorable for commercialization.

If the risk benefit profile is not competitive with those products or investigational products, or if the approval of other agents for an indication or patient population significantly alters the standard of care with which we tested our investigational products, we may have developed a product that is not commercially viable, that we are

not able to sell profitably or that is unable to achieve favorable pricing or reimbursement.

In such circumstances, our future product revenue and financial condition would be materially and adversely affected.

Many of our competitors, such as large pharmaceutical and biotechnology companies like AstraZeneca, Bristol-Myers Squibb, Merck, Novartis and Roche/Genentech, have longer operating histories and significantly greater financial resources and expertise in research and development, manufacturing, preclinical studies, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more

resources being concentrated among a smaller number of our competitors.

Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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There can be no assurance that we and our third-party CROs and other third parties upon which we rely will be successful in detecting, preventing or fully recovering systems or data from all breakdowns, service interruptions, attacks or breaches of systems that could adversely affect our business and operations and/or result in the loss or disclosure of critical or sensitive data or other assets, which could result in financial, legal, business or reputational harm to us.

Ransomware attacks have risen dramatically and we may be forced to pay to unlock our data and information, re-access our systems and resume our ability to conduct business operations.

Ransomware attacks have risen dramatically and we may be forced to pay to unlock our data and information, re-access our systems and resume our ability to

conduct business operations.

The loss of clinical trial data for our investigational products could significantly increase our costs to recover or reproduce the data and result in delays in our development programs, impair our ability to obtain marketing approval and reduce the commercial opportunity for our investigational products.

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Cyber insurance may become increasingly difficult to maintain and we may not be able to maintain coverage at a reasonable cost or in an amount adequate to compensate for any loss or satisfy any liability that may arise.

Unfavorable global economic and trade conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets and global trade.

The current global economic conditions are highly volatile due to the COVID-19 pandemic and government restrictions on movement, which may lead to disruptions in the capital and credit markets and reduce our ability to raise additional capital when needed on acceptable terms, if at all.

Furthermore, we conduct, and we expect to continue to conduct, portions of our clinical trials outside the United States, and unfavorable economic conditions resulting in the weakening of the U.S.

dollar would make those clinical trials more costly to operate.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.

Adverse trade relations may further impact our operations and/or financial condition by limiting or preventing the activities of third parties that we engage or increasing the cost of our operations.

Unfavorable global economic, political and trade conditions could adversely affect our business, financial condition or results of operations and may exacerbate the effects of the risks described herein.

Current global economic conditions are highly volatile due to the COVID-19 pandemic and geopolitical instability arising from the ongoing military conflict between Russia and Ukraine and the imposition of sanctions against Russia by the U.S.

and EU, which has contributed to rising inflation that has increased our operating expenses and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all.

While we do not have any clinical studies ongoing in Russia, Ukraine or Belarus, we do file patent applications in Russia and the Eurasian patent office, which is headquartered in Moscow.

Sanctions may make it difficult to file and maintain patents in these countries, and Russia has begun taking actions against “unfriendly”

countries, including the U.S., which may adversely affect the scope of and/or our ability to enforce our intellectual property rights.

Emerging international trade relations may also adversely impact our operations and/or financial condition by limiting or preventing the activities of third parties that we engage or increasing the cost of our operations.

For example, we have an exclusive relationship with WuXi Biologics, located in China, for the manufacture of our investigational biologics, including zimberelimab, domvanalimab and AB308, and for biologics CMC development.

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In addition, if tariffs were to be imposed on the investigational products they manufacture for us, such tariffs would have an adverse impact on our operating results and financial condition.

Furthermore, the current inflationary environment related to increased aggregate demand and supply chain constraints have increased our operating expenses and may continue to affect our operating expenses.

Economic conditions may also strain our suppliers, possibly resulting in supply disruptions that impact our ongoing clinical trials and other operations.

A significant worsening of global economic conditions could materially increase these risks we face.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

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based research and development expenditures over five and fifteen years, respectively, pursuant to IRC Section 174.

Although Congress is considering legislation that would defer

the amortization requirement to later years, we have no assurance that the provision will be repealed or otherwise modified.

Although Congress is considering legislation that would defer the amortization requirement to later years, we have no assurance that the provision will be repealed or otherwise modified.

If the requirement is not modified, it may materially reduce our cash flows beginning in 2023.

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In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of investigational products, restrict or regulate post-approval activities, and affect the ability to profitably sell investigational products for which marketing approval is obtained.

Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in

healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

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ability to influence corporate matters, including the ability to influence the outcome of director elections and other matters requiring stockholder approval.

Based upon shares outstanding as of March 31, 2022, our executive officers, directors and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially owned approximately 48.0% of our common stock.

Based upon shares outstanding as of June 30, 2022, our executive officers, directors and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially owned approximately 53.1% of our common stock.

In particular, Gilead owns approximately 19.2% of our outstanding common stock, and we have appointed its two designees to our board of directors pursuant to the terms of our investor rights agreement.

As a result, these stockholders, acting together, will have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.

As a result, these stockholders, acting together, will have significant influence

over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.

Corporate actions might be taken even if other stockholders oppose them.

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In addition, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

These choice of forum 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 and may discourage these types of lawsuits.

These choice of forum 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 and may discourage these types of lawsuits.

While the Delaware courts have determined that these types of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.

In such instance, we would expect to vigorously assert the validity and enforceability of these provisions,

which may require significant additional costs associated with resolving such action in other jurisdictions, and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

In such instance, we would expect to vigorously assert the validity and enforceability of these provisions, which may require significant additional costs associated with resolving such action in other jurisdictions, and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

General Risk Factors

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

What changed 10-Q

Item 1. Legal Proceedings