1 unchanged sentence
We are a clinical stage biopharmaceutical company focused on developing novel therapies for the treatment of orphan pulmonary and fibrosis indications with no approved or limited effective treatments.
−Removed: We currently have two product candidates in clinical development, LTI-03 and LTI-01, and multiple candidates in preclinical development focused on fibrosis indications.
+Added: We currently have two product candidates in clinical development, LTI-03 and LTI-01, however, due to insufficient funding we have paused development of LTI‑01 for an undetermined period of time and are prioritizing LTI‑03.
Our pipeline includes:
−Removed: • LTI-03, a peptide for which we conducted a Phase 1b dose-ranging, placebo-controlled safety, tolerability, and pharmacodynamic biomarker activity trial in development for the treatment of Idiopathic Pulmonary Fibrosis, or IPF, that has demonstrated the ability in both preclinical studies and clinical trials to protect healthy lung epithelial cells and reduce pro-fibrotic signaling;
+Added: • LTI-03, a peptide, for which we conducted a Phase 1b dose-ranging, placebo-controlled safety, tolerability, and pharmacodynamic biomarker activity trial in development for the treatment of Idiopathic Pulmonary Fibrosis, or IPF, that has demonstrated the ability to protect healthy lung epithelial cells and reduce pro-fibrotic signaling;
• LTI-01, a proenzyme that completed a Phase 2a dose-ranging, placebo-controlled trial and a Phase 1b safety, tolerability and proof of mechanism trial in loculated pleural effusion, or LPE, patients, an indication that has no approved drug treatment;
2 unchanged sentences
In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
+Added: In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 and preclinical programs targeting cystic fibrosis and a peptide program focused on the Cav1 protein for an indefinite period.
Principal Product Candidates
3 unchanged sentences
LTI-03 has been granted Orphan Drug Designation in the U.S.
−Removed: for the treatment of IPF.
+Added: and European Union, or EU, for the treatment of IPF.
The pathogenesis of IPF is characterized by the loss of healthy lung cells known as alveolar epithelial type 2 cells, or AEC2s, proliferation and accumulation of activated myofibroblasts, deposition of extracellular matrix, or ECM, and fibrosis, resulting in labored breathing and loss of lung function.
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Other than lung transplantation, no treatment has shown survival benefit.
−Removed: Two approved drugs, nintedanib (OFEV ® ) and pirfenidone, have been shown to reduce the rate of lung function decline, but unfortunately provide only modest clinical benefit in IPF patients.
−Removed: Neither drug is curative, and significant side effects or intolerance can occur with the use of pirfenidone and nintedanib.
+Added: Three approved drugs, Nerandomilast (Jascayd ® ), nintedanib (OFEV ® ) and pirfenidone, have been shown to reduce the rate of lung function decline, but unfortunately provide only modest clinical benefit in IPF patients.
+Added: No drug is curative, and significant side effects or intolerance can occur with the use of these therapies.
As these approved drugs are focused on fibroblast proliferation, they have not demonstrated an effect on protecting or restoring healthy lung epithelial cells.
37 unchanged sentences
We enrolled a total of 24 patients in the trial.
−Removed: In the trial, these patients had a bronchoscopy at a baseline screening followed by either LTI-03 or
−Removed: placebo twice a day for 14 days.
+Added: In the trial, these patients had a bronchoscopy at a baseline screening followed by either LTI-03 or placebo twice a day for 14 days.
On day 14, shortly after the final dose, patients received a second bronchoscopy and were monitored thereafter for seven days.
22 unchanged sentences
• SPD, an indicator of epithelial cell health that is linked to decline in lung function, decreased by 5% in Cohort 2 at 14 days of treatment.
−Removed: The current standard of care for IPF, nintetanib, reduced SPD by 4% at 12-weeks in a third party trial of nentanib referred to as the INMARK trial.
+Added: The current standard of care for IPF, nintedanib, reduced SPD by 4% at 12-weeks in a third party trial of nintedanib referred to as the INMARK trial.
The biomarker regarding change in SPD in our Phase 1b trial and the data from the INMARK trial of nintedanib compares two clinical trials with different trial designs, patient enrollment criteria and treatment regimens.
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• LTI-03 was generally well-tolerated, and there were no drug-related adverse events that resulted in a discontinuation of the trial.
−Removed: Planned Phase 2 Trial
−Removed: Subject to obtaining additional funding, we plan to initiate a placebo-controlled Phase 2 clinical trial of LTI-03 in the first half of 2025.
−Removed: We plan to evaluate 2.5 mg or 5 mg of LTI-03 administered twice a day in up to 120 patients with IPF with 40 patients in each treatment arm and 40 patients in the placebo arm.
−Removed: We expect that patients will be treated for 24 weeks with four weeks of follow-up.
−Removed: The primary endpoints of the trial will be to evaluate the safety and tolerability of LTI-03 and the efficacy of LTI-03 measured by change from baseline in forced vital capacity, or FVC, in milliliters, change from baseline in percent predicted FVC and change from baseline in lung fibrosis measured by high-resolution computed tomography.
+Added: Phase 2 Clinical Trial
+Added: In May 2025, we initiated screening and recruitment of patients in the RENEW Phase 2 clinical trial of LTI-03.
+Added: The RENEW trial is a Phase 2 multi-center, randomized, double-blind, placebo-controlled study evaluating the safety, tolerability, and efficacy of LTI-03 patients with IPF.
+Added: In addition, the trial is designed to assess the activity of inhaled dry powder LTI-03 across multiple biomarkers and to measure lung function, lung imaging markers of fibrosis, and the potential for healthy tissue regeneration.
+Added: The trial is designed to enroll approximately 120 patients diagnosed with IPF within 5 years of screening, who may be receiving standard of care antifibrotic therapy, across up to 50 sites globally, including sites in the U.S., UK, Germany, Australia and Poland.
+Added: Patients will be randomized into two blinded placebo-controlled cohorts that will run concurrently.
+Added: Patients in the low dose cohort will receive 2.5 mg of either LTI-03 or placebo administered twice daily, or BID, for a total dose of 5 mg/day, while participants in the high dose cohort will receive 5 mg BID for a total dose of 10 mg/day.
+Added: The primary endpoint is the incidence of treatment-emergent adverse events from Day 1 through Week 24.
+Added: The key secondary endpoint is the efficacy of LTI-03 measured through forced vital capacity, percent predicted FVC and high-resolution computer tomography, in collaboration with Qureight Ltd.
+Added: Patients will undergo a 28-day screening period prior to being randomized and entering the 24-week treatment period, with a four-week follow-up.
+Added: In October 2025, we received authorization from the European Medicines Agency, or the EMA, to initiate our Phase 2 RENEW trial of our lead candidate, LTI-03, for the treatment of IPF at sites in Germany and Poland.
+Added: We had previously received regulatory clearance from the UK’s Medicines and Healthcare products Regulatory Agency, or the MHRA.
+Added: In January 2026, we received orphan drug designation from the EMA for LTI-03.
+Added: As of the date of this Annual Report, we activated sites and are enrolling patients in the U.S.
+Added: and are seeking to activate additional sites, enroll patients and initiate the RENEW trial throughout the U.S., UK, Europe and other jurisdictions.
+Added: In March 2026, we dosed our first patient in the RENEW Phase 2 clinical trial of LTI-03.
+Added: We expect to report initial interim topline data on some proportion of patients in the fourth quarter of 2026.
LTI-01 is a single chain urokinase plasminogen activator, or scuPA, for the treatment of LPE.
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LTI-01 has been granted Orphan Drug Designation in the U.S.
−Removed: and European Union, or the EU, for treatment of empyema and Fast Track Designation in the U.S.
+Added: and EU for treatment of empyema and Fast Track Designation in the U.S.
for the investigation of LTI-01 for the treatment of infected, non-draining pleural effusion.
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to evaluate LTI-01 in patients with infected, non-draining pleural effusions.
−Removed: The primary endpoint in the trial was treatment failure, defined as death or referral to surgery by checklist within seven days from
−Removed: commencement of dosing.
+Added: The primary endpoint in the trial was treatment failure, defined as death or referral to surgery by checklist within seven days from commencement of dosing.
Secondary endpoints included length of hospital stay, incidence of bleeding and pain and volume of pleural fluid drainage.
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In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
+Added: In the fourth quarter of 2025, as a result of our current capital limitations, we have suspended development activities for LTI‑01 for an indefinite period and are allocating our limited resources to LTI‑03 development.
Phase 1b Clinical Trial
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Cav1 has been demonstrated to be deficient in multiple fibrotic organs in preclinical models.
−Removed: Independent preclinical research and our preclinical research have demonstrated the potential of a Cav1-related peptide to treat fibrosis in a number of organs, including kidney, heart and skin.
+Added: Independent preclinical research and our preclinical research have demonstrated the potential of a Cav1-related peptide to treat fibrosis in a number of organs, including kidney,
+Added: heart and skin.
This preclinical program is currently in the formulation development stage.
+Added: Similar to the LTI-01, we have suspended any development activities for our preclinical programs until we can raise sufficient financing and are allocating our limited resources to development of LTI‑03.
Manufacturing
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If any of our product candidates are approved by any regulatory agency, we intend to enter into agreements with a third-party contract manufacturer and one or more back-up manufacturers for the commercial production of our product candidates.
−Removed: Development and commercial quantities of any drugs that we develop will need to be manufactured in facilities, and by processes, that comply with the requirements of the U.S.
−Removed: Food and Drug Administration, or FDA, and the regulatory agencies of other jurisdictions in which we are seeking approval.
+Added: Development and commercial quantities of any drugs that we develop will need to be manufactured in facilities, and by processes, that comply with the requirements of the FDA, and the regulatory agencies of other jurisdictions in which we are seeking approval.
The risks associated with our reliance on third-party contract manufacturers are described in Item 1A.
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We are aware of several marketed and investigational products in our leading disease areas, including but not limited to:
−Removed: There are currently two approved branded products for the treatment of IPF;
−Removed: Esbriet (pirfenidone), marketed by Roche Holding AG, and Ofev (nintedanib), marketed by Boehringer Ingelheim GmbH.
−Removed: Companies currently developing product candidates in IPF include AbbVie Inc., Boehringer Ingelheim GmbH, Bristol Myers Squibb Company, Avalyn Pharma, Inc., Roche Holding AG, Vicore Pharma Holding AB, Endeavor BioMedicines and PureTech Health plc.
+Added: There are currently three approved branded products for the treatment of IPF;
+Added: Esbriet (pirfenidone), marketed by Roche Holding AG, and Ofev (nintedanib) and Jascayd (nerandomilast), both marketed by Boehringer Ingelheim GmbH.
+Added: Companies currently developing product candidates in IPF include AbbVie Inc., Boehringer Ingelheim GmbH, Bristol Myers Squibb Company, Avalyn Pharma, Inc., Vicore Pharma Holding AB, Endeavor BioMedicines and PureTech Health plc.
There are currently no approved drug therapies for the treatment of LPE.
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Taiho has the ability to terminate the Taiho Agreement early for safety reasons or if marketing approval in Japan has not occurred within three years of initial filing for approval in Japan.
−Removed: Exclusive Option Agreement with Advancium
−Removed: On October 31, 2024, we entered into an exclusive option agreement with Advancium Health Network, or Advancium, for the sale of ALRN-6924, a clinical-stage oncology agent that we were developing prior to our acquisition of Lung Therapeutics, Inc., or Lung, in October 2023, or the Lung Acquisition.
−Removed: During the option period, Advancium intends to evaluate ALRN-6924 as a potential therapy for retinoblastoma.
−Removed: Under the terms of the option agreement Advancium paid us a non-refundable fee of $0.1 million for the exclusive option to acquire ALRN-6924 and related assets.
−Removed: If Advancium exercises its option, we will receive an exercise payment with potential for additional development, regulatory and commercial milestone payments and sales royalties.
In-License Agreements
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UTHSCT may also terminate the UTHSCT Agreement, but only if we breach the terms of the agreement.
−Removed: We incurred $100,000 in a minimum royalty fee during the years ended December 31, 2024 and 2023, respectively.
+Added: We incurred $0.1 million in a minimum royalty fee during the years ended December 31, 2025 and 2024, respectively.
Agreement with the University of Texas at Austin
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We may terminate the MUSC Agreement for convenience by providing a written notice to MUSC effective 90 days following the receipt of notice, and either party may terminate the agreement for a breach of contract.
−Removed: We incurred $25,000 in a minimum royalty fee during the year ended December 31, 2024.
−Removed: We did not incur any expenses under the MUSC Agreement during the year ended December 31, 2023.
+Added: We incurred $25 thousand in a minimum royalty fee during the years ended December 31, 2025 and 2024.
Agreement with Vivarta Therapeutics LLC
17 unchanged sentences
In some cases, enforcement of these rights may depend on third party licensors.
−Removed: With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that
−Removed: may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.
−Removed: As of March 7, 2025, we own or have licensed forty-nine issued patents and fifty-one pending patent applications worldwide, and one pending international Patent Cooperation Treaty, or PCT, patent application, which are material to the programs described below relating to the Lung business.
−Removed: Forty-five issued patents worldwide and six pending patent applications are owned by the UT System, which have granted us exclusive license rights to the technology.
−Removed: We own one issued patent and eleven pending patent applications worldwide together with the UT System, which have granted us exclusive license rights to the technology.
+Added: With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.
+Added: As of March 24, 2026, we own or have licensed fifty-eight issued patents and fifty-two pending patent applications worldwide, which are material to the programs described below relating to the Lung business.
+Added: Forty-six issued patents worldwide and five pending patent applications are owned by the UT System, which have granted us exclusive license rights to the technology.
+Added: We own five issued patent and ten pending patent applications worldwide together with the UT System, which have granted us exclusive license rights to the technology.
Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business.
4 unchanged sentences
LTI-03 Program
−Removed: As of March 7, 2025, we owned one pending PCT application, nine pending U.S.
−Removed: patent applications, and twenty-six pending applications outside of the U.S.
+Added: As of March 24, 2026, we owned two U.S.
+Added: patents, including U.S.
+Added: 12,280,088 and 12,280,089, three patents granted outside of the U.S., nine pending U.S.
+Added: patent applications, and twenty-eight pending applications outside of the U.S.
related to the LTI-03 program.
1 unchanged sentence
patents, including U.S.
−Removed: 8,697,840, 9,630,990, 10,377,796, 11,161,875, 11,780,879, and 12,173,089, thirty-nine patents granted outside of the U.S., one pending U.S.
−Removed: application, and five pending applications outside of the U.S.
+Added: 8,697,840, 9,630,990, 10,377,796, 11,161,875, 11,780,879, and 12,173,089, forty patents granted outside of the U.S., one pending U.S.
+Added: application, and four pending applications outside of the U.S.
related to the LTI-03 program.
−Removed: The issued LTI-03 related patents are expected to expire in 2030 or 2034, without any available patent term extensions.
+Added: The issued LTI-03 related patents are expected to expire between the years 2030 and 2041, without any available patent term extensions.
Patents that may issue from the pending applications are expected to expire between the years 2034 and 2044, without any available patent term extensions.
+Added: The issued patents we own with the UT system are directed to dry powder formulations of LTI-03 and therapeutic uses thereof.
The in-licensed LTI-03 issued patents from the UT System are directed to methods of treating acute lung injury or pulmonary fibrosis with LTI-03 and methods of treating a condition characterized by fibrosis with LTI-03.
The pending applications in the LTI-03 program are directed to methods for treating diseases or disorders, including fibrosis, methods for increasing viability of lung epithelial cells, and formulations, including dry powder and extended-release formulations, as well as therapeutic uses of LTI-03 for other indications interest and diagnostic methods.
−Removed: As of March 7, 2025, we also own two U.S.
−Removed: patents, one patent granted outside of the U.S., one pending U.S.
+Added: As of March 24, 2026, we also own three U.S.
+Added: patents, four patents granted outside of the U.S., one pending U.S.
application, and nine pending applications outside of the U.S.
1 unchanged sentence
These patents and patents that may issue from these pending applications are expected to expire in 2039.
−Removed: LTI-01 Program
−Removed: We expect LTI-01 to be the first to file Biologics License Application, or BLA, in the U.S., which provides for the potential of 12 years exclusivity.
−Removed: The drug is made using a complex process which would likely be difficult to duplicate.
−Removed: In addition, we have received Orphan Drug Designation for pleural empyema in both the U.S.
−Removed: and the EU, which designation should provide exclusivity of seven and ten years, respectively.
−Removed: We believe that, if the product is approved, these designations may afford us exclusivity and the complex production of LTI-01 will provide for additional barriers to entry for potential competition.
Government Regulation of Drug and Biological Products
Government authorities in the U.S., at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, sales, pricing, reimbursement, post-approval monitoring and reporting, and import and export of drugs and biologics.
−Removed: The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
−Removed: The regulatory requirements applicable to product
−Removed: development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by government agencies in ways that may have a significant impact on our business.
+Added: The processes for obtaining regulatory approvals in the U.S.
+Added: and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
+Added: The regulatory requirements applicable to product development, approval and marketing are subject to change, and regulations and administrative guidance are often revised or reinterpreted by government agencies in ways that may have a significant impact on our business.
In the U.S., the FDA approves and regulates drug products under the Federal Food, Drug, and Cosmetic, or FDCA, and related regulations.
13 unchanged sentences
• satisfactory completion of any FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data submitted in support of the NDA or BLA;
−Removed: • FDA review and approval of the NDA or BLA authorizing marketing of the drug or biological product for particular indications in the United States;
+Added: • the FDA review and approval of the NDA or BLA authorizing marketing of the drug or biological product for particular indications in the United States;
• compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any other potential post-approval studies required by the FDA.
4 unchanged sentences
The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.
−Removed: The results of the preclinical tests, together with
−Removed: manufacturing information and analytical data, are submitted to the FDA as part of an IND application and are typically referred to as IND-enabling studies.
+Added: The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND application and are typically referred to as IND-enabling studies.
An IND is a request for authorization from the FDA to administer an investigational product to humans.
3 unchanged sentences
Imposition of a clinical hold could cause significant delays or difficulties in initiating and/or completing planned clinical trials in a timely manner.
−Removed: Certain long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may initiate or continue after an IND for an investigational product candidate is submitted to the FDA and human clinical trials have been initiated.
+Added: Certain long-term preclinical testing, such
+Added: as animal tests of reproductive adverse events and carcinogenicity, may initiate or continue after an IND for an investigational product candidate is submitted to the FDA and human clinical trials have been initiated.
Human Clinical Trials in Support of an NDA or BLA
16 unchanged sentences
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.
−Removed: Clinical trials are undertaken with an expanded patient population to further evaluate dosage, and to provide substantial evidence of clinical efficacy and safety in an expanded patient population, often
−Removed: at geographically dispersed clinical study sites.
+Added: Clinical trials are undertaken with an expanded patient population to further evaluate dosage, and to provide substantial evidence of clinical efficacy and safety in an expanded patient population, often at geographically dispersed clinical study sites.
These studies are intended to establish the overall risk- benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling.
3 unchanged sentences
These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, or to document a clinical benefit in the case of drugs or biologics approved under the FDA’s accelerated approval regulations and generate additional safety data regarding use of the product in a clinical setting.
−Removed: In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA.
+Added: In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or
Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for the product.
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As of December 19, 2024, the FDA has issued six notices of non-compliance, thereby signaling the government’s willingness to begin enforcing these requirements against non-compliant clinical trial sponsors.
−Removed: While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.
+Added: While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10 thousand for each day the violation continues.
Violations may also result in injunctions and/or criminal prosecution or disqualification from federal grants.
During the development of a new drug or biological product, sponsors have the opportunity to meet with the FDA at certain points, including prior to submission of an IND, at the end of phase 2 and before submission of an NDA or BLA.
−Removed: These meetings can provide an opportunity for the sponsor to share information about the data gathered to date and for FDA to provide advice on the next phase of development.
+Added: These meetings can provide an opportunity for the sponsor to share information about the data gathered to date and for the FDA to provide advice on the next phase of development.
The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice.
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Data may come from company-sponsored clinical trials or from a number of alternative sources, including studies initiated by investigators.
−Removed: To support marketing approval, the FDA must find the data
−Removed: submitted to be sufficient to establish the safety and efficacy of the investigational drug product, and safety, potency and purity for the investigational biologic product, for its proposed indication.
−Removed: The fee required for the submission of an NDA or BLA under the PDUFA, is substantial (for example, for fiscal year 2025 this application fee is approximately $4.3 million), and the sponsor of an approved NDA or BLA is also subject to an annual program fee, which is currently set at $403,889 per eligible prescription program.
+Added: To support marketing approval, the FDA must find the data submitted to be sufficient to establish the safety and efficacy of the investigational drug product, and safety, potency and purity for the investigational biologic product, for its proposed indication.
+Added: The fee required for the submission of an NDA or BLA under the PDUFA, is substantial (for example, for fiscal year 2026 this application fee is approximately $4.7 million), and the sponsor of an approved NDA or BLA is also subject to an annual program fee, which is currently set at $0.4 million per eligible prescription program.
These fees are adjusted annually, but exemptions and waivers may be available under certain circumstances.
1 unchanged sentence
The FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor by that time whether an application is sufficiently complete to permit substantive review.
−Removed: In the event that the FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor.
+Added: In the event that the
+Added: FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor.
The FDA may request additional information rather than accept an NDA or BLA for filing.
10 unchanged sentences
The FDA will not approve the product unless it determines that the manufacturing processes and facilities comply with cGMP regulatory requirements and are adequate to ensure consistent production of the product within required specifications.
−Removed: The FDA also may inspect the sponsor and one or more clinical trial sites to ensure compliance with GCP requirements and the integrity of the clinical data submitted to FDA.
+Added: The FDA also may inspect the sponsor and one or more clinical trial sites to ensure compliance with GCP requirements and the integrity of the clinical data submitted to the FDA.
Under certain circumstances, the principal investigators at a clinical trial site may also serve as scientific advisors or consultants to a sponsor and receive compensation in connection with such services.
6 unchanged sentences
The FDA also may require submission of a REMS, if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug or biological product.
−Removed: If the FDA concludes that a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS and FDA will not approve the NDA or BLA without a REMS.
+Added: If the FDA concludes that a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS and the FDA will not approve the NDA or BLA without a REMS.
Under the Pediatric Research Equity Act of 2003, or PREA, an NDA or a BLA or certain supplements thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless this requirement is waived, deferred or inapplicable.
−Removed: Sponsors must submit a pediatric study plan to FDA outlining the proposed pediatric study or studies they plan to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation.
+Added: Sponsors must submit a pediatric study plan to the FDA outlining the proposed pediatric study or studies they plan to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation.
The FDA must then review the information submitted, consult with the sponsor, and agree upon a final plan.
12 unchanged sentences
Even with the submission of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
−Removed: If a product receives regulatory approval from the FDA, the approval is limited to the conditions of use (e.g., patient population, indication) described in FDA-approved labeling.
+Added: If a product receives regulatory approval from the FDA, the approval is limited to the conditions of use (e.g., patient population, indication) described in the FDA-approved labeling.
Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings, or precautions be included in the product labeling (including specific safety-related label warnings).
1 unchanged sentence
The FDA may prevent or limit further marketing of a product based on the results of post-marketing trials or surveillance programs.
−Removed: After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements, and FDA review and approval.
+Added: After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements, and the FDA review and approval.
Expedited Programs for Serious Conditions
2 unchanged sentences
To be eligible for a Fast Track Designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.
−Removed: Fast Track Designation provides opportunities for more frequent
−Removed: interactions with the FDA review team to expedite development and review of the product.
+Added: Fast Track Designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product.
The FDA also may review sections of the NDA or BLA for a fast track product on a rolling basis before the complete application is submitted if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
2 unchanged sentences
In addition, a new drug or biological product may be eligible for Breakthrough Therapy Designation if it is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
−Removed: Breakthrough Therapy Designation provides all the features of Fast Track Designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and the FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate.
+Added: Breakthrough Therapy Designation provides all the features of Fast
+Added: Track Designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and the FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate.
Breakthrough Therapy Designation may be rescinded by the FDA if the designation is no longer supported.
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In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval.
−Removed: Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for
−Removed: direct comparisons to an available therapy.
+Added: Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons to an available therapy.
Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidance relating to accelerated approval.
1 unchanged sentence
Post Approval Requirements
−Removed: Following approval of a new product, the manufacturer and the approved product are subject to pervasive and continuing regulation by the FDA, governing, among other things, manufacturing and quality-related compliance, monitoring and recordkeeping activities, reporting of adverse experiences with the product and product problems to FDA, product sampling and distribution, manufacturing and promotion and advertising.
+Added: Following approval of a new product, the manufacturer and the approved product are subject to pervasive and continuing regulation by the FDA, governing, among other things, manufacturing and quality-related compliance, monitoring and recordkeeping activities, reporting of adverse experiences with the product and product problems to the FDA, product sampling and distribution, manufacturing and promotion and advertising.
Although physicians may prescribe legally available products for unapproved uses or patient populations, known as off-label uses, manufacturers may not market or promote such uses.
The FDA and other agencies, including state regulatory bodies, actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
−Removed: If there are any modifications to the product, including changes in indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA/BLA or an NDA/BLA supplement, which may require the applicant to develop additional data or conduct additional clinical trials and preclinical studies.
+Added: If there are any modifications to the product, including changes in indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain the FDA approval of a new NDA or a BLA or an NDA or a BLA supplement, which may require the applicant to develop additional data or conduct additional clinical trials and preclinical studies.
The FDA may also place other conditions on approvals including the requirement for a REMS to assure the safe use of the product, which may require substantial commitment of resources post-approval to ensure compliance.
13 unchanged sentences
• fines, warning letters, untitled letters, or other enforcement-related letters or clinical holds on post- approval clinical trials;
−Removed: • refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals;
+Added: • refusal of the FDA to approve pending NDAs or BLAs or supplements to approved NDAs or BLAs, or suspension or revocation of product approvals;
• product seizure or detention, or refusal to permit the import or export of products;
9 unchanged sentences
Moreover, with passage of the Pre-Approval Information Exchange Act (PIE) Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products and product candidates in development to help expedite patient access upon product approval.
−Removed: Previously, such communications were permitted under FDA guidance but the new legislation explicitly provides protection to sponsors who convey certain information about products and product candidates in development to payors, including unapproved uses of approved products.
+Added: Previously, such communications were permitted under the FDA guidance but the new legislation explicitly provides protection to sponsors who convey certain information about products and product candidates in development to payors, including unapproved uses of approved products.
In addition, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.
9 unchanged sentences
Patent Term Restoration
−Removed: Depending upon the timing, duration and specifics of FDA approval for our product candidates, some of our U.S.
+Added: Depending upon the timing, duration and specifics of the FDA approval for our product candidates, some of our U.S.
patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
−Removed: The Hatch-Waxman
−Removed: Amendments permit restoration of the patent term up to five years as compensation for patent term lost during FDA regulatory review process.
−Removed: Patent-term restoration, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date, and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended.
+Added: The Hatch-Waxman Amendments permit restoration of the patent term up to five years as compensation for patent term lost during the FDA regulatory review process.
+Added: Patent-term restoration, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date, and only those claims covering such approved drug
+Added: product, a method for using it or a method for manufacturing it may be extended.
The patent-term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA or a BLA, plus the time during which the applicant failed to exercise due diligence.
28 unchanged sentences
Under the BPCIA, a manufacturer may submit an application for a product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product”.
−Removed: In order for FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency.
+Added: In order for FDA to approve
+Added: a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency.
For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
28 unchanged sentences
LTI-01 has been granted Orphan Drug Designation by the FDA and European Medicines Agency, or EMA, for the treatment of pleural empyema.
−Removed: LTI-03 has been granted Orphan Drug Designation by the FDA for treatment of IPF.
+Added: LTI-03 has been granted Orphan Drug Designation by the FDA and EMA for treatment of IPF.
Pediatric Exclusivity
6 unchanged sentences
In addition to regulations in the U.S., we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products outside of the U.S.
−Removed: Whether or not we obtain FDA approval for a product candidate, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the 27-member EU, before we may commence clinical trials or market products in those countries or areas.
+Added: Whether or not we obtain the FDA approval for a product candidate, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the 27-member EU, before we may commence clinical trials or market products in those countries or areas.
With the exception of the EU or European Economic Area, or EEA, applying the harmonized regulatory rules for medicinal products, the approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly between countries and jurisdictions and can involve additional testing and additional administrative review periods.
−Removed: The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.
+Added: The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain the FDA approval.
Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.
182 unchanged sentences
• the Travel Act of 1961, which has been used as a tool in the health care context to target kickback schemes involving private insurance that would not otherwise be prohibited under the anti-kickback statute, makes it unlawful for a facility to use interstate commerce with the intent, among other things, to distribute proceeds of “unlawful activity” and thereafter do some act to further such distribution (“unlawful activity” includes bribery under the state law in which the activity was committed);
−Removed: • laws and regulations prohibiting bribery and corruption, such as the FCPA, which, among other things, prohibits U.S.
+Added: • laws and regulations prohibiting bribery and corruption, such as the U.S.
+Added: Foreign Corrupt Practices Act or the FCPA, which, among other things, prohibits U.S.
companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations or foreign government-owned or affiliated entities, candidates for foreign public office, and foreign political parties or officials thereof.
3 unchanged sentences
Health Care Reform in the U.S.
−Removed: The containment of health care costs also has become a priority of federal, state and foreign governments and the prices of products have been a focus in this effort.
+Added: The containment of health care costs has also become a priority of federal, state and foreign governments and the prices of products have been a focus in this effort.
Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.
4 unchanged sentences
In March 2010, President Obama signed into law the Affordable Care Act (ACA).
−Removed: In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
−Removed: In August 2011, the Budget Control Act of 2011, among
−Removed: other things, created measures for spending reductions by Congress including aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031.
+Added: In addition, other legislative changes have
+Added: been proposed and adopted since the ACA was enacted.
+Added: In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress including aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031.
The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
26 unchanged sentences
The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.
−Removed: Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026.
+Added: Pursuant to court order, the removal and addition of the aforementioned safe harbors
+Added: were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026.
The Inflation Reduction Act of 2022 (IRA) further delayed implementation of this rule to January 1, 2032.
25 unchanged sentences
This is increasingly true with respect to products approved pursuant to the accelerated approval pathway.
−Removed: State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.
+Added: State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright,
+Added: arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.
For a more detailed discussion of health care reform in the U.S., see “Risk Factors - Ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.”
16 unchanged sentences
maintain rigorous laws governing the privacy and security of personal information.
−Removed: The General Data Protection Regulation, (EU) 2016/679, or GDPR, became effective on May 25, 2018, and deals with the collection, use, storage, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals in the EEA.
+Added: The GDPR became effective on May 25, 2018, and deals with the collection, use, storage, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals in the EEA.
The GDPR imposes a broad range of strict requirements on companies subject to the GDPR, including requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside the EEA, including to the U.S., providing details to those individuals regarding the processing of their personal health and other sensitive data, obtaining consent to certain processing activities from the individuals to whom the personal data relates, keeping personal data secure, having data processing agreements with third parties who process personal data, responding to individuals’ requests to exercise their rights in respect of their personal data, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments, and record- keeping.
1 unchanged sentence
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
−Removed: In addition, the GDPR includes restrictions on cross-border data transfers, and recent court decisions and regulatory guidance have substantially increased the compliance burden and legal uncertainty associated with transferring the personal data of EEA individuals to third countries outside of the EEA whose data protection laws are not believed to be adequate by European standards (although the recent EU-US Data Privacy Framework offers a new route for data transfers from the EU to be made lawfully to the US).
+Added: In addition, the GDPR includes restrictions on cross-border data transfers, and recent court decisions and regulatory guidance have substantially increased the compliance burden and legal uncertainty associated with transferring the personal data of
+Added: EEA individuals to third countries outside of the EEA whose data protection laws are not believed to be adequate by European standards (although the recent EU-US Data Privacy Framework offers a new route for data transfers from the EU to be made lawfully to the US).
Further, the GDPR provides for opening clauses in certain areas, which enable the legislators of member states of the EU to implement additional requirements to the GDPR in national law, whereby national laws may partially deviate from the GDPR and impose different obligations from country to country, so that we do not expect to operate in a uniform legal landscape in the EEA.
8 unchanged sentences
As of December 31, 2025, we had 10 full-time employees, including a total of two employees with M.D.
−Removed: Of these full-time employees, five are engaged in research and development activities and six are engaged in general and administrative activities.
+Added: Of these full-time employees, four are engaged in research and development activities and six are engaged in general and administrative activities.
None of our employees is represented by a labor union or covered by a collective bargaining agreement.
5 unchanged sentences
on February 5, 2007.
−Removed: On October 31, 2023, we acquired Lung pursuant to an Agreement and Plan of Merger, after which time Lung became a wholly owned subsidiary of ours.
+Added: On October 31, 2023, we acquired Lung Therapeutics, Inc., or Lung, pursuant to an Agreement and Plan of Merger, after which time Lung became a wholly owned subsidiary of ours.
On January 10, 2025, we changed our name to Rein Therapeutics, Inc., and changed our trading symbol from “ALRN” to “RNTX”, effective January 13, 2025.
7 unchanged sentences
We make these reports available through the “SEC Filings” section of our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission, or SEC.
−Removed: We also make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons.
+Added: We also make available, free of charge on our website, the reports
+Added: filed with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons.
You can review our electronically filed reports and other information that we file with the SEC on the SEC’s website at http://www.sec.gov.
5 unchanged sentences
We require substantial additional capital to finance our operations.
−Removed: Our cash and cash equivalents are not sufficient to enable us to complete the development and commercialization of LTI-03 and LTI-01.
+Added: Our cash and cash equivalents are not sufficient to enable us to sustain our operations beyond the second quarter of 2026 or complete the development and commercialization of LTI-03.
If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our clinical and research and development programs, future commercialization efforts or other operations.
−Removed: Developing biopharmaceutical products, including conducting clinical trials and preclinical studies, is a very time-consuming, expensive and uncertain process that takes years to complete.
−Removed: Our operations have consumed substantial amounts of cash since inception.
−Removed: We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct our planned clinical trials of LTI-03 and LTI-01 and any future product candidates that we may develop, seek regulatory approvals for our product candidates and to launch and commercialize any products for which we receive regulatory approval.
−Removed: Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations.
−Removed: If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce or eliminate one or more of our research and drug development programs or future commercialization efforts.
−Removed: For example, in June 2024, we decided to temporarily delay clinical development of LTI-01 in an effort to focus our resources on clinical development of LTI-03 and until additional funds are raised.
−Removed: In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
As of December 31, 2025, we had approximately $3.2 million in cash and cash equivalents.
−Removed: Based on our current operating plan, we believe that our existing cash and cash equivalents will enable us to fund our planned operating expense and capital expenditure requirements into August 2025.
−Removed: These funds are not sufficient to enable us to complete our planned Phase 2 clinical trial of LTI-03 and we will need to obtain additional funding prior to initiating the trial.
−Removed: Our future viability is dependent on our ability to raise additional capital to finance our operations.
+Added: Based on our current operating plan, we believe that our existing cash and cash equivalents as of December 31, 2025, together with the $4.3 million of proceeds received by us pursuant to the securities purchase agreements we entered into in January and February 2026, will be sufficient to enable us to fund our planned operating expense and capital expenditure requirements into the second quarter of 2026.
+Added: These funds are not sufficient to enable us to sustain our operations beyond the second quarter of 2026 or complete the Phase 2 RENEW clinical trial of LTI-03.
+Added: Our future viability is dependent on our ability to raise additional capital to finance our operations within the next five months.
Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
−Removed: In addition, our existing cash and cash equivalents will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of our product candidates.
Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.
−Removed: Although management plans to pursue additional funding, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, or at all.
+Added: There is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, or at all.
+Added: If we are unable to obtain sufficient funding on terms acceptable to us, on a timely basis or at all, we may be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:
21 unchanged sentences
Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.
−Removed: Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern.
−Removed: We have incurred significant losses since our inception and have never generated revenue or profit from product sales, and it is possible we will never generate revenue or profit from product sales.
−Removed: As of December 31, 2024, we had approximately $12.9 million in cash and cash equivalent.
−Removed: Based on our current operating plan, we believe that our existing cash and cash equivalents will enable us to fund our planned operating expense and capital expenditure requirements into August 2025.
−Removed: Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
−Removed: In addition, our existing cash and cash equivalents will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of our product candidates.
−Removed: Accordingly, our future viability is dependent on our ability to raise additional capital to finance our operations.
−Removed: There can be no assurance that we will be able to obtain additional funding, including through a combination of public or private additional equity or debt financings, strategic collaborations, licensing arrangements or other sources on acceptable terms, if at all.
−Removed: To the extent that we raise additional capital through future equity
−Removed: offerings, the ownership interest of common stockholders will be diluted, which dilution may be significant.
−Removed: We cannot guarantee that we will be able to obtain any or sufficient additional funding or that such funding, if available, will be obtainable on terms satisfactory to us.
−Removed: In the event that we are unable to obtain any or sufficient additional funding, there can be no assurance that we will be able to continue as a going concern, and we will be forced to delay, reduce or discontinue our product development programs or consider other various strategic alternatives.
−Removed: Moreover, these factors raise substantial doubt about our ability to continue as a going concern.
−Removed: Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing.
−Removed: If existing or potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited.
−Removed: The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to LTI-03, LTI-01 or other product candidates.
11 unchanged sentences
We have no products approved for commercial sale and have not generated any revenue from product sales.
−Removed: Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing clinical trials and research and development of our product candidates.
−Removed: Our approach to the research and development of product candidates is unproven, and we do not know whether we will be able to develop any products of commercial value.
−Removed: In addition, one clinical product candidate, LTI-03, is in early clinical development and a second clinical product candidate, LTI-01, is in mid-stage clinical development.
−Removed: Both programs will require substantial additional development and clinical research time and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales.
+Added: Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing clinical trials and research and development of our main product candidate, LTI-03.
+Added: In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period due to our current capital limitations.
+Added: Our approach to the research and development of our product candidates is unproven, and we do not know whether we will be able to develop any products of commercial value.
+Added: LTI-03 is currently in Phase 2 clinical development.
+Added: It will require substantial additional development and clinical research time and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales.
We have not yet demonstrated the ability to progress any product candidate through clinical trials to regulatory approval.
−Removed: in mid-stage and early clinical development and may be unable to obtain regulatory approval, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
+Added: We are still in mid-stage clinical development and may be unable to obtain regulatory approval, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.
2 unchanged sentences
We have incurred significant net losses since inception and we expect to continue to incur significant net losses for the foreseeable future and do not expect to achieve or maintain profitability;
−Removed: Even if we are able to develop and commercialize our product candidates, we may never generate revenues that are significant or large enough to achieve profitability.
+Added: Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern.
We have incurred significant losses since our inception and have financed our operations principally through equity financings.
5 unchanged sentences
We expect to continue to incur significant losses for the foreseeable future, and we anticipate that our expenses will increase substantially if, and as, we:
−Removed: • advance the development of our clinical product candidates, LTI-03 and LTI-01, and our other product candidates, through clinical development, and, if successful, later-stage clinical trials;
+Added: • advance the development of our lead clinical product candidate, LTI-03, through clinical development, and, if successful, later-stage clinical trials;
• advance our preclinical development programs into clinical development;
4 unchanged sentences
• increase the amount of research and development activities to identify and develop product candidates;
−Removed: • hire additional clinical, chemistry, manufacturing, controls, or CMC, quality control, scientific and management personnel and expand our operational, financial and management systems and personnel, including personnel to support our clinical development and manufacturing efforts and our operations as a public company;
+Added: • hire additional CMC, quality control, scientific and management personnel and expand our operational, financial and management systems and personnel, including personnel to support our clinical development and manufacturing efforts and our operations as a public company;
• establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties;
1 unchanged sentence
• invest in or in-license other technologies or product candidates.
−Removed: To become and remain profitable, we must develop and eventually commercialize products with significant market potential.
−Removed: This will require us to be successful in a range of challenging activities, including completing clinical
−Removed: trials and preclinical studies, obtaining marketing approval for product candidates, manufacturing, marketing and selling products for which we may obtain marketing approval and satisfying any post-marketing requirements.
−Removed: We may never succeed in any or all of these activities and, even if we do, we may never generate revenue that is significant enough to achieve profitability.
−Removed: If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
−Removed: Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations.
+Added: Moreover, these factors raise substantial doubt about our ability to continue as a going concern.
+Added: Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing.
+Added: If existing or potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited.
+Added: The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.
+Added: Global and macroeconomic developments can disrupt our supply chains and adversely affect our financial condition and results of operations.
+Added: We are subject to continuing risks and uncertainties in connection with legislative, regulatory, political, geopolitical and macroeconomic developments beyond our control, including inflationary pressures, trade policies, including tariffs and other trade restrictions or the threat of such actions, military actions and ongoing conflicts in the Middle East, Ukraine and elsewhere, general economic slowdown or a recession, high interest rates, changes in monetary policy or foreign currency exchange rates and changes in, instability in financial institutions.
+Added: Most of these developments and factors are outside of our control and could exist for an extended period of time.
+Added: Portions of our future clinical trials may be conducted outside of the U.S.
+Added: and unfavorable economic conditions resulting in the weakening of the U.S.
+Added: dollar would make those clinical trials more costly to operate.
+Added: Furthermore, a severe or prolonged economic downturn, including due to the impact of tariff and trade policies or conflicts in the Middle East or Ukraine could result in a variety of risks to our business, including a reduced ability to raise additional capital when needed on acceptable terms, if at all.
+Added: A weak or declining economy or international conflicts or trade disputes could also strain our suppliers, some of which are located outside of the U.S., possibly resulting in supply disruption.
+Added: 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.
We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
4 unchanged sentences
We have identified material weaknesses in our internal control over financial reporting as of December 31, 2025 and 2024.
−Removed: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
−Removed: Management identified material weaknesses related to the (i) lack of sufficient accounting and supervisory personnel to maintain appropriate segregation of duties relating to user access of the financial accounting system and who have the appropriate level of technical accounting experience and training, (ii) lack of evidence over reviews of account reconciliations and supporting schedules, and (iii) lack of adequate procedures and controls to ensure that accurate financial statements could have been prepared and reviewed on a timely basis for annual reporting purposes.
−Removed: Refer to Part II, Item 9A for additional information regarding the material weaknesses.
+Added: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial
+Added: reporting such that there is a possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
+Added: We identified the following material weaknesses in internal control over financial reporting:
+Added: (i) lack of sufficient accounting and supervisory personnel who have the appropriate level of technical accounting experience and training, and (ii) lack of adequate procedures and controls to ensure that accurate financial statements could have been prepared and reviewed on a timely basis for annual reporting purposes.
+Added: Refer to Part II, Item 9A.
+Added: “Controls and Procedures” for additional information regarding the material weaknesses.
We have implemented and are continuing to implement procedures to remediate these material weaknesses, however, we cannot assure you that these or other measures will fully remediate the material weaknesses in a timely manner or prevent future material weaknesses from occurring.
1 unchanged sentence
“Controls and Procedures” in this Annual Report on Form 10-K.
−Removed: If we identify material weaknesses in the future, and we are unable to remediate any such material weaknesses, our reputation, financial reporting and condition, and operating results could suffer.
−Removed: Moreover, we could become subject to investigations by regulatory authorities, which could require additional financial and management resources.
−Removed: We are required to disclose changes made in our internal control procedures on a quarterly basis.
−Removed: Our management is required to assess the effectiveness of these controls annually.
−Removed: Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
−Removed: However, for so long as we are neither a “large accelerated filer” nor an “accelerated filer”, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
−Removed: An independent assessment of the effectiveness of our internal control over financial reporting could detect additional material weaknesses that our management’s assessment might not detect.
−Removed: Undetected material weaknesses in our internal control over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation.
−Removed: During the course of our review and testing, we may identify additional material weaknesses and be unable to remediate them before we must provide the required reports.
−Removed: Furthermore, if we identify any material weaknesses, we may not detect errors on a timely basis and our financial statements may be materially misstated.
We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.
We hold a portion of cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts.
−Removed: The balance held in these accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit of $250,000.
+Added: The balance held in these accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit of $0.25 million.
If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds.
6 unchanged sentences
Risks Related to the Discovery, Development and Commercialization of Product Candidates
−Removed: Our business is highly dependent on the success of our product candidates, LTI-03 and LTI-01 and any other product candidates that we advance into clinical development.
+Added: Our business is highly dependent on the success of our lead product candidate, LTI-03.
We currently have no products that are approved for commercial sale and may never be able to develop marketable products.
−Removed: We have two clinical product candidates, LTI-03 and LTI-01, in early- and mid-stage clinical development, respectively.
−Removed: If either of our clinical product candidates encounter safety or efficacy problems, development delays, regulatory issues or other problems, our development plans and business would be significantly harmed.
+Added: We have our lead product candidate, LTI-03, in Phase 2 clinical development.
+Added: If it encounters safety or efficacy problems, development delays, regulatory issues or other problems, our development plans and business would be significantly harmed.
We have completed a Phase 1a safety and tolerability clinical trial of LTI-03 in healthy normal volunteers and conducted a Phase 1b dose ranging, placebo-controlled safety and tolerability trial of LTI-03 in IPF patients.
−Removed: We have completed a Phase 1b safety, tolerability and proof of mechanism trial and a Phase 2a dose-ranging, placebo-controlled trial of LTI-01 in loculated pleural effusion, or LPE, patients.
−Removed: We must successfully complete Phase 3 clinical trials prior to obtaining FDA approval of LTI-03 or LTI-01 for commercial use.
+Added: We must successfully complete Phase 3 clinical trials prior to obtaining the FDA approval of LTI-03 for commercial use.
For each product candidate, we must demonstrate its safety and efficacy in humans, obtain regulatory approval in one or more jurisdictions, obtain manufacturing supply, capacity and expertise, and substantially invest in marketing efforts before we are able to generate any revenue from such product candidate.
−Removed: Before we can generate any revenue from sales of our clinical product candidates, LTI-03 and LTI-01, or any other product candidates, we must perform additional clinical studies and/or preclinical development, and complete regulatory review and approval in one or more jurisdictions.
+Added: Before we can generate any revenue from sales of our clinical product candidate, LTI-03, we must perform additional clinical studies and/or preclinical development, and complete regulatory review and approval in one or
+Added: more jurisdictions.
In addition, if one or more of our product candidates is approved, we must ensure sufficient commercial manufacturing capacity and conduct and finance significant marketing efforts in connection with any commercial launch.
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If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop being delayed for development or regulatory authorization or not receiving approval for commercialization in the applicable jurisdiction.
−Removed: We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of LTI-03, LTI-01 or any other product candidates.
+Added: We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of LTI-03.
We may experience delays in initiating or completing clinical trials.
−Removed: We also may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval or commercialize LTI-03, LTI-01 or any other product candidates, including, but not limited to:
+Added: We also may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval or commercialize LTI-03, including, but not limited to:
• regulators or institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
13 unchanged sentences
In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
+Added: In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period due to our current capital limitations.
If we do not achieve our product development goals in the time frames we announce and expect, the approval and commercialization of our product candidates may be delayed or prevented entirely.
9 unchanged sentences
The product candidate was concluded to be generally well-tolerated across all doses in trial participants.
−Removed: If significant adverse events or other side effects are observed in any of our ongoing or future clinical trials, whether or not related to our product candidates, we may have difficulty recruiting patients to our clinical trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts altogether
−Removed: or may result in safety profile that could delay or prevent regulatory approval or market acceptance of any of our product candidates.
+Added: If significant adverse events or other side effects are observed in any of our ongoing or future clinical trials, whether or not related to our product candidates, we may have difficulty recruiting patients to our clinical trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts altogether or may result in safety profile that could delay or prevent regulatory approval or market acceptance of any of our product candidates.
Clinical development involves a lengthy, complex and expensive process, with an uncertain outcome.
1 unchanged sentence
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
−Removed: In particular, the general approach for FDA approval of a new drug is dispositive data from two well-controlled, Phase 3 clinical trials of the relevant drug in the relevant patient population.
+Added: In particular, the general approach for the FDA approval of a new drug is dispositive data from two well-controlled, Phase 3 clinical trials of the relevant drug in the relevant patient population.
Phase 3 clinical trials typically involve many patients, have significant costs and can take years to complete.
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A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.
−Removed: Most product candidates that commence clinical trials are never approved as new drugs and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of LTI-03 and LTI-01 or any of our other product candidates.
+Added: Most product candidates that commence clinical trials are never approved as new drugs and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of LTI-03.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including, but not limited to:
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Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval.
−Removed: We may also encounter unexpected
−Removed: delays or increased costs due to new government regulations.
+Added: We may also encounter unexpected delays or increased costs due to new government regulations.
Examples of such regulations include future legislation or administrative action, or changes in the FDA policy during the period of product development and the FDA regulatory review.
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Although we have received U.S.
−Removed: Orphan Drug Designation for LTI-03 for IPF and U.S.
−Removed: and European Union, or the EU, Orphan Drug Designation for LTI-01 for pleural empyema, we may be unable to obtain and maintain Orphan Drug Designation for our other product candidates and, even if we obtain such designation, we may not be able to realize the benefits of such designation, including potential marketing exclusivity of our product candidates, if approved.
+Added: and EU Orphan Drug Designation for LTI-03 for IPF and U.S.
+Added: and EU Orphan Drug Designation for LTI-01 for pleural empyema, we may be unable to obtain and maintain Orphan Drug Designation for our other product candidates and, even if we obtain such designation, we may not be able to realize the benefits of such designation, including potential marketing exclusivity of our product candidates, if approved.
Regulatory authorities in some jurisdictions, including the U.S.
and other major markets, may designate drugs intended to treat conditions or diseases affecting relatively small patient populations as orphan drugs.
−Removed: Under the Orphan Drug Act of 1983, the FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the U.S.
+Added: Under the Orphan Drug Act of 1983, the FDA may designate a product candidate as an orphan drug if it is intended to treat a
+Added: rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the U.S.
or a patient population greater than 200,000 in the U.S.
5 unchanged sentences
Although we have received U.S.
−Removed: Orphan Drug Designation for LTI-03 for IPF and U.S.
+Added: and EU Orphan Drug Designation for LTI-03 for IPF and U.S.
and EU Orphan Drug Designation for LTI-01 for pleural empyema, we have not received U.S.
2 unchanged sentences
Generally, if a product candidate with an Orphan Drug Designation in the U.S.
−Removed: receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes FDA from approving another marketing application for a product that constitutes the same drug treating the same indication for that marketing exclusivity period, except in limited circumstances.
+Added: receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for a product that constitutes the same drug treating the same indication for that marketing exclusivity period, except in limited circumstances.
Similar exclusivity rights apply under EU law if a product candidate with Orphan Drug Designation is authorized in the EU.
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In the U.S., orphan drug exclusivity may be revoked if the FDA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition.
−Removed: Under EU law, the protection of an orphan medicinal product does not only apply to medicinal products with the same active substance, but extends to all “similar medicinal products”.
−Removed: This is determined by the molecular structure, the mechanism of action and the approved therapeutic indication.
−Removed: Once an orphan medicinal product has been authorized, the European Commission, the EMA and the national regulatory authorities may not, for a period of ten years from the date of authorization, in respect of such similar medicinal products for the same therapeutic indication:
−Removed: accept another application for authorization, grant a corresponding authorization, or grant an application to extend an existing authorization.
−Removed: Thus, not only market exclusivity is conferred, but also additional protection by prohibiting any application and/or granting of authorization for a similar medicinal product during this 10-year period.
−Removed: Yet, even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate from competition because different drugs can be approved for the same condition or the FDA or the European Commission can approve a similar drug for a different indication.
−Removed: Even after an orphan drug is approved, the FDA may subsequently approve another drug for the same condition if the FDA concludes that the latter drug is not the same drug or is clinically superior in that it is shown to be safer, more effective, or makes a major contribution to patient care.
−Removed: In the EU, another similar product in the same indication may be approved if the holder of the orphan designation is unable to supply sufficient quantities of the product or if the second applicant can establish clinical superiority of its product.
−Removed: On April 26, 2023, the European Commission presented a draft for a comprehensive reform of the pharmaceutical legislation.
−Removed: The so-called “EU pharmaceutical package” provides, among others, for a new regulation to replace Regulation (EC) No.
−Removed: 141/2000 on orphan medicinal products.
−Removed: The draft regulation introduces the possibility of establishing new designation criteria by the EMA and the restriction of designation as an orphan drug to generally seven years.
−Removed: The draft regulation also provides for more flexible rules on the duration of market exclusivity, including:
−Removed: ten years of market exclusivity for orphan drugs in the case of “high unmet medical need”, five years for orphan drugs, approved by a bibliographic marketing authorization and nine years in all other cases with the possibility of extension in the case of market access in all Member States (another year) or development of new therapeutic indications for an already authorized orphan medicinal product (up to two years).
−Removed: Market exclusivity can thus add up to a maximum of thirteen years, whereas today it is still capped at ten years.
−Removed: It should be noted that the market exclusivity right of the
−Removed: orphan medicinal product does not prevent the submission, validation and assessment of an application for marketing authorization of a similar medicinal product, including generics and biosimilars, if the remaining duration of the market exclusivity right is less than two years.
−Removed: The EU pharmaceutical package is still at an early stage of the legislative process.
−Removed: It may still undergo substantial changes and is expected to turn into binding law in several years’ time.
−Removed: In the U.S., the FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies.
−Removed: This may be particularly true in light of a decision from the Court of Appeals for the 11 th Circuit in September 2021 finding that, for the purpose of determining the scope of exclusivity, the term “same disease or condition” means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use”.
−Removed: Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use”.
−Removed: Although there have been legislative proposals to overrule this decision, they have not been enacted into law.
−Removed: On January 23, 2023, the FDA announced that, in matters beyond the scope of that court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved.
−Removed: We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business.
−Removed: Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.
−Removed: Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
−Removed: As product candidates progress through preclinical to later-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield, manufacturing batch size, minimize costs and achieve consistent quality and results.
−Removed: Such changes carry the risk that they will not achieve these intended objectives.
−Removed: Any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials.
−Removed: This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates and generate revenue.
−Removed: In addition, there are risks associated with large scale manufacturing for clinical trials or commercial scale including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, compliance with good manufacturing practices, lot consistency and timely availability of raw materials.
−Removed: Even if we obtain marketing approval for any of our product candidates, there is no assurance that our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential future demand.
−Removed: If our manufacturers are unable to produce sufficient quantities for clinical trials or for commercialization, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
−Removed: Due to our limited resources and access to capital, we must make decisions on the allocation of resources to certain programs and product candidates;
−Removed: these decisions may prove to be wrong and may adversely affect our business.
−Removed: We have limited financial and human resources and intend to initially focus on research programs and product candidates for a limited set of indications.
−Removed: As a result, we may forgo or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential or a greater likelihood of success.
−Removed: This approach may cause us to commit significant resources to prepare for and conduct later-stage trials for one or more product candidates that subsequently fail earlier-stage clinical testing.
−Removed: Therefore, our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities or expend resources on product candidates that are not viable.
−Removed: For instance, in June 2024, we decided to temporarily delay clinical development of LTI-01 in an effort to focus our resources on clinical development of LTI-03 for the treatment of IPF and until additional funds are raised.
−Removed: In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
−Removed: There can be no assurance that we will ever be able to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, which could materially adversely affect our future growth and prospects.
−Removed: We may focus our efforts and resources on potential product candidates or other potential programs that ultimately prove to be unsuccessful.
−Removed: Mergers and acquisitions in the biopharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.
−Removed: Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
−Removed: These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
−Removed: Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, more convenient, or less expensive than any products that we may develop.
−Removed: Furthermore, products currently approved for other indications could be discovered to be effective treatments of IPF and LPE as well, which could give such products significant regulatory and market timing advantages over LTI-03 and LTI-01 or other product candidates that we may identify.
−Removed: Currently, off-label use of fibrinolytics is utilized in many hospitals for the treatment of LPE.
−Removed: Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
−Removed: If competitors obtain patent protection or market exclusivity for their products before any of our products are approved, they could significantly delay the approval, and even review (in some cases), of our marketing application.
−Removed: Additionally, products or technologies developed by our competitors may render our potential product candidates uneconomical or obsolete and we may not be successful in marketing any product candidates we may develop against competitors.
−Removed: The availability of competitive products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize.
−Removed: We may not be successful in our efforts to identify or discover additional product candidates in the future.
−Removed: Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including, but not limited to:
−Removed: • our inability to design or obtain such product candidates with the pharmacological properties that we desire or attractive pharmacokinetics;
−Removed: • potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be medicines that will receive marketing approval and achieve market acceptance.
−Removed: We have Cav1-related peptides in preclinical development for potentially a broad number of fibrosis indications.
−Removed: Many of these fibrosis indications may require a systemically delivered formulation to effectively treat these indications.
−Removed: We have not finalized a systemic formulation of a proprietary Cav1-related peptide and are currently developing potential systemic formulations.
−Removed: In the event we are unable to successfully complete a suitable formulation for therapeutic delivery, we may not be able to develop product candidates to address additional fibrosis indications.
−Removed: Even if we are able to develop a systemic formulation, it is possible that this systemic delivered product candidate will fail to show sufficient efficacy or safety in later stages of testing to proceed with development.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than us.
36 unchanged sentences
Our insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage.
−Removed: We may have to pay any amounts awarded by a court or negotiated in a
−Removed: settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
+Added: We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.
3 unchanged sentences
It is possible that the FDA may refuse to accept for substantive review any new drug applications, or NDAs, or biologics license applications, or BLAs, that we submit for our product candidates or may conclude after review of our data that our application is insufficient to obtain marketing approval of our product candidates.
−Removed: If the FDA does not accept or approve our NDAs or BLAs for our product candidates, it may require that we conduct additional clinical, nonclinical or manufacturing validation studies and submit that data before it will reconsider our applications.
+Added: If the FDA does not accept or approve our NDAs or BLAs for our product candidates, it may require that we conduct additional clinical, nonclinical or manufacturing validation
+Added: studies and submit that data before it reconsiders our applications.
Depending on the extent of these or any other FDA-required studies, approval of any NDA or BLA, or application that we submit may be delayed by several years, or may require us to expend more resources than we have available.
2 unchanged sentences
If any of these outcomes occur, we may be forced to abandon our development efforts for our product candidates, which could significantly harm our business.
−Removed: We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may have to invest significant resources to develop these capabilities.
−Removed: If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.
−Removed: We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product.
−Removed: If any of our product candidates ultimately receives regulatory approval, we expect to establish a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming.
−Removed: We have no prior experience as a company in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
−Removed: Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products.
−Removed: We may also choose to collaborate 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.
−Removed: Notwithstanding our current license and collaboration agreement with Taiho, we may not be able to enter into future collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all, which may result in being unable to successfully commercialize our products.
−Removed: In addition, our product revenues and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves.
−Removed: We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
−Removed: If we are not successful in commercializing our product candidates, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.
Even if a product candidate we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
−Removed: Even if LTI-03, LTI-01 or any other product candidate we develop receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, such as Medicare and Medicaid programs and managed care organizations, and others in the medical community.
−Removed: Our belief that LTI-01 compares well on dosing schedule, surgical referrals and side effect profile compared to off-label IPFT treatment, such as tPA with DNase, to treat LPE patients is based upon limited data from our completed clinical trials.
+Added: Even if LTI-03 receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, such as Medicare and Medicaid programs and managed care organizations, and others in the medical community.
In addition, the availability of coverage by third-party payors may be affected by existing and future health care reform measures designed to reduce the cost of health care.
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or in other countries until we or they receive approval of an NDA or BLA from the FDA or marketing approval from comparable foreign regulatory authorities.
−Removed: LTI-03 and LTI-01 are in early and mid-stages of development and are subject to the risks of failure inherent in drug development.
−Removed: We have not submitted an application for or received marketing approval for LTI-03, LTI-01 or any of our future product candidates in the U.S.
+Added: LTI-03 is in mid-stage of development and is subject to the risks of failure inherent in drug development.
+Added: We have not submitted an application for or received marketing approval for LTI-03 in the U.S.
or in any other jurisdiction.
−Removed: We have limited experience in conducting and managing the clinical trials necessary to obtain marketing approvals, including FDA approval of an NDA or BLA.
+Added: We have limited experience in conducting and managing the clinical trials necessary to obtain marketing approvals, including the FDA approval of an NDA or BLA.
The process of obtaining marketing approvals, both in the U.S.
1 unchanged sentence
It may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
−Removed: Securing marketing approval
−Removed: requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.
+Added: Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.
6 unchanged sentences
In the event that we submit a BLA or NDA on the basis of one clinical trial and confirmatory evidence, the FDA could determine that such information is not sufficient to support approval of the application and the agency could require us to conduct an additional trial in support of the BLA or NDA.
−Removed: Further, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA, or NDA or supplement to an NDA, for certain biological products and drug products, respectively, must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA.
−Removed: A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin.
−Removed: The applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the EMA or to obtain a waiver or deferral from the conduct of these studies by this Committee.
−Removed: For any of our product candidates for which we are seeking regulatory approval in the U.S.
−Removed: or the EU, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.
−Removed: Moreover, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities.
−Removed: The FDA or a comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study.
−Removed: The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
−Removed: This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
−Removed: For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
−Removed: These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.
−Removed: In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for Diversity Action Plans, or DAPs.
−Removed: Unlike most guidance documents issued by the FDA, the DAP guidance, when finalized, will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.
−Removed: Further, in January 2022, the new Clinical Trials Regulation (EU) No 536/2014 became effective in the EU and replaced the prior Clinical Trials Directive 2001/20/EC.
−Removed: This regulation aims at simplifying and streamlining the authorization, conduct and transparency of clinical trials in the EU.
−Removed: Under the coordinated procedure for the approval of clinical trials, the sponsor of a clinical trial to be conducted in more than one EU Member State will only be required to submit a single application for approval.
−Removed: The submission will be made through the Clinical Trials Information
−Removed: System, a clinical trials portal overseen by the EMA and available to clinical trial sponsors, competent authorities of the EU Member States and the public.
−Removed: Our product candidates could fail to receive marketing approval for many reasons, including the following:
−Removed: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
−Removed: • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;
−Removed: • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
−Removed: • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
−Removed: • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
−Removed: • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain marketing approval in the U.S.
−Removed: or elsewhere;
−Removed: • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies due to quality manufacturing concerns;
−Removed: • the FDA or comparable foreign regulatory authorities may fail to approve any companion diagnostics that may be required in connection with approval of our therapeutic product candidates;
−Removed: • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
−Removed: In addition, changes in marketing approval policies during the development period, changes in or the enactment or promulgation of additional statutes, regulations or guidance or changes in regulatory review for each submitted drug application may cause delays in the approval or rejection of an application.
−Removed: Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical studies, clinical trials or other studies and testing.
−Removed: In addition, varying interpretations of the data obtained from preclinical studies and clinical trials could delay, limit or prevent marketing approval of a product candidate.
−Removed: Any marketing approval we, or any collaborators we may have in the future, ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved drug not commercially viable.
−Removed: Finally, we could be adversely affected by several significant administrative law cases decided by the U.S.
−Removed: Supreme Court in 2024.
−Removed: In Loper Bright Enterprises v.
−Removed: Raimondo , for example, the court overruled Chevron U.S.A., Inc.
−Removed: Natural Resources Defense Council, Inc ., which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or ambiguous on a particular topic.
−Removed: Supreme Court stripped federal agencies of this presumptive deference and held that courts must exercise their independent judgment when deciding whether an agency such as the FDA acted within its statutory authority under the Administrative Procedure Act, or the APA.
−Removed: Additionally, in Corner Post, Inc.
−Removed: Board of Governors of the Federal Reserve System , the court held that actions to challenge a federal regulation under the APA can be initiated within six years of the date of injury to the plaintiff, rather than the date the rule is finalized.
−Removed: The decision appears to give prospective plaintiffs a personal statute of limitations to challenge longstanding agency regulations.
−Removed: Another decision, Securities and Exchange Commission v.
−Removed: Jarkesy , overturned regulatory agencies’ ability to impose civil penalties in administrative proceedings.
−Removed: These decisions could introduce additional uncertainty into the regulatory process and may result in additional legal challenges to actions taken by federal regulatory agencies, including the FDA and CMS, that we rely on.
−Removed: In addition to potential changes to regulations as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays and other impacts, any of which could adversely impact our business and operations.
Any delay in obtaining or failure to obtain required approvals could materially adversely affect our ability or that of any collaborators we may have to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our stock price.
23 unchanged sentences
regulatory requirements, our target markets will be reduced and our ability to realize the full market potential of our product candidates will be harmed and our business, financial condition, results of operations and prospects may be adversely affected.
−Removed: Additionally, we could face heightened risks with respect to obtaining marketing authorization in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit.
−Removed: The UK is no longer part of the European Single Market and EU Customs Union.
−Removed: As of January 1, 2025, the Medicines and Healthcare Products Regulatory Agency, or MHRA, is responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland).
−Removed: At the same time, a new international recognition procedure, or IRP, will apply, which intends to facilitate approval of pharmaceutical products in the UK.
−Removed: The IRP is open to applicants that have already received an authorization for the same product from one of the MHRA’s specified Reference Regulators, or RRs.
−Removed: The RRs notably include EMA and regulators in the EU/European Economic Area, or EEA, member states for approvals in the EU centralized procedure and mutual recognition procedure as well as the FDA (for product approvals granted in the U.S.).
−Removed: However, the concrete functioning of the IRP is currently unclear.
−Removed: Any delay in obtaining, or an inability to obtain, any marketing approvals may force us or our collaborators to restrict or delay efforts to seek regulatory approval in the UK for our product candidates, which could significantly and materially harm our business.
−Removed: In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted.
−Removed: For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.
−Removed: The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.
−Removed: The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026.
−Removed: The revisions may however have a significant impact on the pharmaceutical industry and our business in the long term.
−Removed: Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the UK for our product candidates, which could
−Removed: significantly and materially harm our business.
+Added: Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the UK for our product candidates, which could significantly and materially harm our business.
We expect that we will be subject to additional risks in commercializing any of our product candidates that receive marketing approval outside the U.S., including tariffs, trade barriers and regulatory requirements;
13 unchanged sentences
In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.
+Added: In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period.
Even with additional clinical trial testing with a modified primary endpoint, we may never be successful in demonstrating sufficient results to support marketing approval.
11 unchanged sentences
Manufacturers may seek approval of generic versions of reference-listed drugs through submission of ANDAs in the U.S.
−Removed: In support of an ANDA, a
−Removed: generic manufacturer need not conduct clinical trials demonstrating safety and efficacy.
+Added: In support of an ANDA, a generic manufacturer need not conduct clinical trials demonstrating safety and efficacy.
Rather, the applicant generally must show that its drug has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent.
2 unchanged sentences
The FDA may not approve an ANDA for a generic drug until any applicable period of non-patent exclusivity for the reference-listed drug has expired.
−Removed: The Federal Food, Drug, and Cosmetic Act, or FDCA, provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity, or NCE.
+Added: The FDCA, provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity, or NCE.
Specifically, in cases where such exclusivity has been granted, an ANDA may not be filed with the FDA and the FDA may not approve the application until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference-listed drug is either invalid, will not be infringed by the generic drug, or unenforceable, in which case the applicant may submit its application four years following approval of the reference-listed drug.
6 unchanged sentences
and requirements of comparable foreign regulatory authorities.
−Removed: In addition, we will be subject to continued compliance with good manufacturing practices, or cGMP, and good clinical practices, or GCP, requirements for any clinical trials that we conduct post-approval.
+Added: In addition, we will be subject to continued compliance with cGMP and GCP requirements for any clinical trials that we conduct post-approval.
Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations.
−Removed: As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any marketing application, and previous responses to inspection observations.
+Added: As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any marketing application, and previous
+Added: responses to inspection observations.
Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.
2 unchanged sentences
In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, we will have to comply with requirements including submissions of safety and other post-marketing information and reports and registration.
−Removed: The FDA and comparable foreign regulatory agencies may initiate consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
−Removed: Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;
−Removed: imposition of post-market studies or clinical trials to assess new safety risks;
−Removed: or imposition of distribution restrictions or other restrictions under a REMS program.
−Removed: Other potential consequences include, among other things:
−Removed: • rescinding approval of the application, restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls;
−Removed: • fines, warning letters or holds on clinical trials;
−Removed: • refusal by the FDA or a comparable foreign regulatory agency to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
−Removed: • product seizure or detention or refusal to permit the import or export of our product candidates;
−Removed: • injunctions or the imposition of civil or criminal penalties.
−Removed: The regulations relating to the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA, EMA, MHRA and other government agencies.
−Removed: In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a drug product.
−Removed: Physicians may nevertheless prescribe our products off-label to their patients in a manner that is inconsistent with the approved label.
−Removed: We intend to implement compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations.
−Removed: Notwithstanding these programs, the FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our products for unapproved uses.
−Removed: We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses.
−Removed: Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.
−Removed: For example, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.
−Removed: The final guidance calls for such communications to be truthful, non-misleading and scientifically sound and to include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use of the approved product.
−Removed: If a company engages in such communications consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved product.
−Removed: We will need to carefully navigate the FDA’s various regulations, guidance and policies, along with recently enacted legislation, to ensure compliance with restrictions governing promotion of our products.
−Removed: If the FDA or any other governmental agency initiates an enforcement action against us or if we are the subject of a qui tam suit and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations.
−Removed: Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects and reputation.
−Removed: Further, our ability to develop and market new products may be impacted by litigation challenging the FDA’s approval of another company’s drug product.
−Removed: In April 2023, the U.S.
−Removed: District Court for the Northern District of Texas invalidated the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various measures adopted under a REMS.
−Removed: The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious.
−Removed: In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs (anti-abortion doctors and organizations) did not have standing to bring this legal action against the FDA.
−Removed: On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended complaint
−Removed: in the district court in Texas challenging FDA’s actions.
−Removed: On January 16, 2025, the district court agreed to allow these states to file an amended complaint and continue to pursue this challenge.
−Removed: Depending on the outcome of this litigation, our ability to develop new drug product candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted litigation.
−Removed: Even if we are able to commercialize any product candidate, such product ca ndidate may become subject to unfavorable pricing regulations, third-party coverage and reimbursement policies or healthcare reform initiatives, which would harm our business.
−Removed: The regulations that govern marketing approval, pricing, coverage and reimbursement for new drugs vary widely from country to country.
−Removed: Some countries require approval of the sale price of a drug before it can be marketed.
−Removed: In many countries, the pricing review period begins after marketing approval is granted.
−Removed: In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.
−Removed: As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country.
−Removed: Adverse pricing limitations may hinder our ability to recoup our investment in LTI-03 and LTI-01 even if we obtain marketing approval for either product candidate.
−Removed: Our ability to commercialize any products successfully also will depend in part on the extent to which reimbursement and coverage for these products and related treatments will be available from government authorities, private health insurers and other organizations, and if reimbursement and coverage is available, the level of reimbursement and coverage.
−Removed: Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels.
−Removed: A primary trend in the healthcare industry in the U.S.
−Removed: and elsewhere is cost containment.
−Removed: Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
−Removed: Increasingly, the third-party payors who reimburse patients or healthcare providers, such as government and private insurance plans, are requiring that drug companies provide them with predetermined discounts from list prices and are seeking to reduce the prices charged or the amounts reimbursed for medical products.
−Removed: We cannot be sure that reimbursement will be available for any drug that we commercialize and, if reimbursement is available, we cannot be sure as to the level of reimbursement.
−Removed: Reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.
−Removed: If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
−Removed: There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities.
−Removed: Moreover, eligibility for reimbursement does not imply that any drug will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.
−Removed: Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent.
−Removed: Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
−Removed: Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.
−Removed: Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates.
−Removed: Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for new products that we develop and for which we obtain marketing approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
−Removed: Recently enacted and future legislation may increase the difficulty and cost for us and our future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain for any products that are approved in the U.S.
−Removed: or foreign jurisdictions.
−Removed: and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any future collaborators, to profitably sell any product candidates for which we, or they, obtain marketing approval.
−Removed: We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any collaborators, may receive for any approved products.
−Removed: If reimbursement of our products is unavailable or limited in scope, our business could be materially harmed.
−Removed: In the U.S., the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products.
−Removed: The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician-administered drugs.
−Removed: In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class.
−Removed: Cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we, or any future collaborators, may receive for any approved products.
−Removed: While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.
−Removed: Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.
−Removed: In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the ACA.
−Removed: In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.
−Removed: This legislation resulted in aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through 2031 under the CARES Act.
−Removed: These Medicare sequester reductions were suspended through the end of June 2022, with the full 2% cut resuming thereafter.
−Removed: The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: These laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
−Removed: Indeed, under current legislation, the actual reductions in Medicare payments may vary up to 4%.
−Removed: Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.
−Removed: For example, with enactment of the Tax Cuts and Jobs Act of 2017, or TCJA, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate”.
−Removed: The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.
−Removed: On November 10, 2020, the Supreme Court heard oral arguments to a case challenging the ACA.
−Removed: On February 10, 2021, the Biden Administration withdrew the federal government’s support for overturning the ACA.
−Removed: On June 17, 2021, the Supreme Court rejected this challenge to the ACA.
−Removed: During the first Trump Administration, the Congress and administration sought to overturn the ACA and related measures.
−Removed: Shortly after taking office in January 2025, President Trump revoked numerous executive orders issued by President Biden, including at least two executive orders (e.g., EO 14009, Strengthening Medicaid and the Affordable Care Act, and EO 14070, Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage) where were designed to further implement the ACA.
−Removed: We anticipate similar efforts to undermine the ACA, and the accompanying uncertainty, for the foreseeable future with litigation and legislation over the ACA likely to continue, with unpredictable and uncertain results.
−Removed: We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product we might bring to market.
−Removed: Reductions in reimbursement levels may negatively impact the prices we receive or the frequency with which our products are prescribed or administered.
−Removed: Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
−Removed: Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and
−Removed: for which we may obtain marketing approval and may affect our overall financial condition and ability to develop or commercialize product candidates.
−Removed: In the EU, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
−Removed: While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim.
−Removed: Once applicable, it will have a phased implementation depending on the concerned products.
−Removed: The Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.
−Removed: It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
−Removed: Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement.
−Removed: Our relationships with healthcare providers and physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
−Removed: Healthcare providers, physicians and third-party payors in the U.S.
−Removed: and elsewhere play a primary role in the recommendation and prescription of biopharmaceutical products.
−Removed: Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, or FCA, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute biopharmaceutical products.
−Removed: In particular, the research of our product candidates, as well as the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices.
−Removed: These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally.
−Removed: Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
−Removed: The applicable federal, state and foreign healthcare laws and regulations laws that may affect our ability to operate include, but are not limited to:
−Removed: • the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.
−Removed: A person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it.
−Removed: In addition, a claim submitted for payment to any federal health care program that includes items or services that were made as a result of a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.
−Removed: The Anti-Kickback Statute has been interpreted to apply to arrangements between biopharmaceutical manufacturers on the one hand and prescribers, purchasers, group purchasing organizations, and formulary managers, among others, on the other.
−Removed: There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution;
−Removed: • the federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs;
−Removed: knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money or property to the federal government;
−Removed: or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
−Removed: A claim that includes items or
−Removed: services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim under the FCA.
−Removed: Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
−Removed: The FCA also permits a private individual acting as a “whistleblower” to bring qui tam actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;
−Removed: • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
−Removed: Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;
−Removed: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose, among other things, requirements relating to the privacy, security and transmission of individually identifiable health information on certain covered healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their respective “business associates”, those independent contractors or agents of covered entities that perform services for covered entities that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information.
−Removed: HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
−Removed: • the federal Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which require some manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid services, or CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
−Removed: Effective January 1, 2022, these reporting obligations were extended to include transfers of value made in the previous year to certain non-physician providers such as physician assistants and nurse practitioners;
−Removed: • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
−Removed: • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by third-party payors, including private insurers, the Travel Act of 1961, or Travel Act, which has been used as a tool in the health care context to target kickback schemes prohibited under state law involving private insurance that would not otherwise be prohibited under federal law and may be broader in scope than their federal equivalents;
−Removed: state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
−Removed: state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing;
−Removed: state and local laws that require the registration of biopharmaceutical sales representatives;
−Removed: and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
−Removed: The distribution of biopharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of biopharmaceutical products.
−Removed: There are also federal and state consumer deception laws, with which we must comply.
−Removed: The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
−Removed: Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from the business.
−Removed: It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
−Removed: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
−Removed: Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
−Removed: Any action for violation of these laws, even if successfully defended, could cause a biopharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business.
−Removed: Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.
−Removed: The prices of prescription pharmaceuticals in the U.S.
−Removed: and foreign jurisdictions are subject to considerable legislative and executive actions and could impact the prices we obtain for our products, if and when licensed.
−Removed: The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the U.S.
−Removed: There have been several U.S.
−Removed: congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
−Removed: In addition, in October 2020, Department of Health and Human Services, or HHS, and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
−Removed: That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or PhRMA, but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS.
−Removed: Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of drugs from Canada.
−Removed: North Dakota and Virginia have passed legislation establishing working groups to examine the impact of a state importation program.
−Removed: As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had submitted Section 804 Importation Program proposals to the FDA, and on January 5, 2023, the FDA approved Florida’s plan for Canadian drug importation.
−Removed: That state now has authority to import certain drugs from Canada for a period of two years once certain conditions are met.
−Removed: Florida will first need to submit a pre-import request for each drug selected for importation, which must be approved by the FDA.
−Removed: The state will also need to relabel the drugs and perform quality testing of the products to meet FDA standards.
−Removed: Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The final rule would eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager, or PBM, services fees.
−Removed: It was originally set to go into effect on January 1, 202, but with the passage of the Inflation Reduction Act has been delayed by Congress to January 1, 2032.
−Removed: On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law by President Biden.
−Removed: The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage.
−Removed: Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
−Removed: imposes rebates
−Removed: under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);
−Removed: and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
−Removed: The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
−Removed: Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.
−Removed: CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.
−Removed: This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.
−Removed: Nonetheless, since CMS may establish a maximum price for these products in price negotiations, we would have been fully at risk of government action if our products were the subject of Medicare price negotiations.
−Removed: Moreover, given the risk that could be the case, these provisions of the IRA may also have further heightened the risk that we would not have been able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products had been on the market for nine years.
−Removed: The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.
−Removed: On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.
−Removed: The prices of these ten drugs will become effective January 1, 2026.
−Removed: On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations.
−Removed: Thereafter, following the change in administrations, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.
−Removed: The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.
−Removed: Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.
−Removed: In addition to the drug price negotiation program, the IRA established inflation rebate programs under Medicare Part B and Part D.
−Removed: These programs require manufacturers to pay rebates to Medicare if they raise their prices for certain Part B and Part D drugs faster than the rate of inflation.
−Removed: On December 9, 2024, with issuance of its 2025 Physician Fee Schedule final regulation, CMS finalized its rules governing the IRA inflation rebate programs.
−Removed: The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.
−Removed: We expect that current or future litigation involving provisions of the IRA will have unpredictable and uncertain results on the implementation and impact of the IRA on biotechnology industry generally, as well as our business and current or future products.
−Removed: For example, on June 6, 2023, Merck & Co., or Merck, filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.
−Removed: Subsequently, a number of other parties, including the U.S.
−Removed: Chamber of Commerce, Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.
−Removed: There have been various decisions by the courts considering these cases since they were filed.
−Removed: The HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.
−Removed: Certain of these cases are now on appeal, and oral arguments took place on October 30, 2024.
−Removed: We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.
−Removed: At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: In addition, regional healthcare organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
−Removed: These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
−Removed: We expect that additional state and federal healthcare reform
−Removed: measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
−Removed: This may be increasingly true with respect to products approved pursuant to the accelerated approval pathway.
−Removed: State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.
−Removed: In the EU, similar political, economic, and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved.
−Removed: In markets outside of the U.S.
−Removed: and the E.U., reimbursement and healthcare payment systems vary significantly by country and many countries have instituted price ceilings on specific products and therapies.
−Removed: In many countries, including those of the EU, the pricing of prescription pharmaceuticals is subject to governmental control and access.
−Removed: In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
−Removed: To obtain reimbursement or pricing approval in some countries, we or our collaborators may be required to conduct a clinical trial that compares the cost-effectiveness of our product to other available therapies.
−Removed: If reimbursement of our products is unavailable or limited in scope or amount or if pricing is set at unsatisfactory levels, our business could be materially harmed.
−Removed: Governments outside of the U.S.
−Removed: tend to impose strict price controls, which may adversely affect our revenues from the sales of our products, if any.
−Removed: In most foreign countries, including the European Economic Area, or EEA, and the UK, the proposed pricing for certain drugs (in particular, prescription-only drugs) is subject to pricing regulations.
−Removed: In the EU, although Directive 89/105/EEC regulates the framework conditions for the pricing of medicinal products and Regulation (EU) 2021/2282 on health technology assessment (HTA), to become fully applicable in January 2025, provides for a coordinated approach to assessing the benefit of new therapies, the decisions on pricing and cost reimbursement remain in the responsibility of the member states.
−Removed: The requirements governing drug pricing and reimbursement vary widely from country to country.
−Removed: For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
−Removed: In some countries, particularly member states of the EU, the pricing of prescription pharmaceuticals is subject to governmental control and other market regulations which could put pressure on the pricing and usage of our product candidates.
−Removed: In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
−Removed: In addition, market acceptance and sales of our product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for our product candidates and may be affected by existing and future health care reform measures.
−Removed: Moreover, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures.
−Removed: Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained.
−Removed: Reference pricing used by various EU member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.
−Removed: A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.
−Removed: In view of the recurring shortages of medicines, individual member states (especially Germany) have decided to adjust price regulations for particularly rare pediatric medicinal products.
−Removed: In some countries, we, or our future collaborators, may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
−Removed: There can be no assurance that any country that has price controls or reimbursement limitations for biopharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.
−Removed: Historically, products launched in the EU do not follow price structures of the U.S.
−Removed: and generally prices tend to be significantly lower.
−Removed: Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
−Removed: If pricing is set at unsatisfactory levels or if reimbursement of our products is unavailable or limited in scope or amount, our revenues from sales and the potential profitability of any of our product candidates in those countries would be negatively affected.
−Removed: Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
−Removed: If reimbursement of any product candidate
−Removed: approved for marketing is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.
−Removed: EU drug marketing and reimbursement regulations may materially affect our ability to market and receive coverage for our products in the European member states.
−Removed: We intend to seek approval to market our product candidates in both the U.S.
−Removed: and in selected foreign jurisdictions.
−Removed: If we obtain approval in one or more foreign jurisdictions for our product candidates, we will be subject to rules and regulations in those jurisdictions.
−Removed: Much like the federal Anti-Kickback Statute prohibition in the U.S., the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.
−Removed: The provision of benefits or advantages to physicians is governed by the national anti-bribery laws, unfair competition laws and laws on advertising in the healthcare sector of EU Member States, and in respect of the UK (which is no longer a member of the EU), the UK Bribery Act 2010 and laws on advertising and promotion in the pharmaceutical, medical devices and healthcare sectors.
−Removed: Infringement of these laws could result in substantial fines and imprisonment.
−Removed: Payments made to physicians in certain EU Member States must be publicly disclosed.
−Removed: The UK has also recently concluded a public consultation on introducing new statutory requirements for disclosing industry payments in the healthcare sector.
−Removed: Further, certain company associations have adopted so-called transparency codes, according to which payments to certain groups in the healthcare sector must be published or are published voluntarily.
−Removed: Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.
−Removed: These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU Member States, as well in as the UK.
−Removed: Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
We may seek to obtain certain regulatory designations for our product candidates.
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A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
−Removed: FDA fast track designation is possible for drugs intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition.
+Added: The FDA fast track designation is possible for drugs intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition.
In addition, if the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review.
−Removed: Drugs designated as breakthrough therapies by the FDA may also be eligible for priority review if supported by clinical data at the time the NDA is submitted to the FDA.
+Added: Drugs designated as breakthrough therapies by the FDA may also be eligible for priority review if supported by clinical data at the time an NDA is submitted to the FDA.
Such regulatory designations are within the discretion of the FDA, and the FDA may not approve any application that we submit.
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These confirmatory trials may require enrollment of more patients than we currently anticipate and will result in additional costs, which may be greater than the estimated costs we currently anticipate.
−Removed: In addition, the FDA currently requires as a condition for accelerated approval preapproval of promotional materials, which could adversely impact the timing of the commercial launch of the product.
+Added: In addition, the FDA currently requires as a condition for
+Added: accelerated approval preapproval of promotional materials, which could adversely impact the timing of the commercial launch of the product.
There can be no assurance that the FDA will agree with any proposed surrogate endpoints or that we will decide to pursue or submit a BLA or NDA for accelerated approval or any other form of expedited development, review or approval for any of our current or future product candidates.
−Removed: Similarly, there can be no assurance that, after feedback from FDA, we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval, even if we initially decide to do so.
+Added: Similarly, there can be no assurance that, after feedback from the FDA, we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval, even if we initially decide to do so.
Furthermore, if we decide to submit an application for accelerated approval or under another expedited regulatory designation, there can be no assurance that such submission or application will be accepted or that any expedited review or approval will be granted on a timely basis, or at all.
−Removed: The FDA may withdraw approval of a product candidate approved under the accelerated approval pathway if, for example, the trial required to verify the predicted clinical benefit of our product candidate fails to verify such benefit or does not demonstrate sufficient clinical benefit to justify the risks associated with the drug.
−Removed: The FDA may also withdraw approval if other evidence demonstrates that our product candidate is not shown to be safe or effective under the conditions of use, we fail to conduct any required post approval trial of our product candidate with due diligence or we disseminate false or misleading promotional materials relating to our product candidate.
−Removed: A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidates, or withdrawal of a product candidate, would result in a longer time period for commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
−Removed: Further, there can be no assurance that we will satisfy all FDA requirements, including new provisions, that govern accelerated approval.
−Removed: For example, with passage of the FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.
−Removed: Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded and to submit progress reports on its post-approval studies to FDA every six months until the study is completed.
−Removed: Moreover, FDORA established expedited procedures authorizing FDA to withdraw an accelerated approval if certain conditions are met, including where a required confirmatory study fails to verify and describe the predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.
−Removed: The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary”.
−Removed: The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the Commissioner or the Commissioner’s designee and a written appeal, among other things.
−Removed: We will need to fully comply with these and other requirements in connection with the development and approval of any product candidate that qualifies for accelerated approval.
−Removed: More recently, in March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval.
−Removed: The FDA indicated that the accelerated approval pathway is commonly used for approval of oncology drugs due to the serious and life-threatening nature of cancer.
−Removed: Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons to an available therapy.
−Removed: the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.
−Removed: Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidances relating to accelerated approval.
−Removed: These guidances describe FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the agency plans to interpret whether such a study needs to be underway at the time of approval.
−Removed: While these guidances are currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.
−Removed: In the EU, a “conditional” marketing authorization may be granted in cases where all the required safety and efficacy data are not yet available.
−Removed: A conditional marketing authorization is subject to conditions to be fulfilled for generating missing data or ensuring increased safety measures.
−Removed: A conditional marketing authorization is valid for one year and has to be renewed annually until fulfillment of all relevant conditions.
−Removed: Once the applicable pending studies are provided, a conditional marketing authorization can become a “standard” marketing authorization.
−Removed: However, if the conditions are not fulfilled within the timeframe set by the EMA, the marketing authorization will cease to be renewed.
−Removed: Our employees, independent contractors, consultants, commercial partners, collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
−Removed: We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners, collaborators and vendors.
−Removed: Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with the laws and regulations of the FDA, CMS and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA, CMS and other similar foreign regulatory bodies, comply with manufacturing standards we have established, comply with healthcare fraud and abuse laws in the U.S.
−Removed: and similar foreign fraudulent misconduct laws, or report financial information or data accurately or to disclose unauthorized activities to us.
−Removed: If we obtain FDA approval of any of our product candidates and begin commercializing those products in the U.S., our potential exposure under such laws and regulations will increase significantly, and our costs associated with compliance with such laws and regulations will also increase.
−Removed: These laws and regulations may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs.
−Removed: We have adopted a code of business conduct and ethics and maintain a quality management system, but it is not always possible to identify and deter misconduct by our employees, independent contractors, consultants, commercial partners and vendors, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
−Removed: If any actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment, disgorgement, possible exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and the curtailment of our operations.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
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Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.
−Removed: In such an event, we may be held liable for any resulting damages and
−Removed: such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations.
+Added: In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations.
Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.
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These current or future laws and regulations may impair our research, development or production efforts.
−Removed: Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
+Added: Failure to comply with these laws and regulations may also result in substantial fines, penalties or other sanctions.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.
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If we expand our operations outside of the U.S., we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
−Removed: Foreign Corrupt Practices Act, or FCPA, prohibits any U.S.
+Added: The FCPA, prohibits any U.S.
individual or business entity from paying, offering, authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
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In addition, the FCPA presents particular challenges in the biopharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials.
−Removed: Certain payments to hospitals and healthcare providers in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.
+Added: Certain payments to hospitals and healthcare providers in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to the FCPA enforcement actions.
Various laws, regulations and executive orders also restrict the use and dissemination outside of the U.S., or the sharing with certain non-U.S.
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If maintained and if extended to other countries, tariffs and the potential escalation of trade disputes with China and other countries could pose a significant risk to our business and could result in higher operating expenses.
−Removed: The extent and duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and China and/or other countries, the response of such countries, exemptions or exclusions that may be granted, availability
−Removed: and cost of alternative sources of supply of materials we purchase from companies in China or other countries targeted with tariffs.
+Added: The extent and duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and China and/or other countries, the response of such countries, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply of materials we purchase from companies in China or other countries targeted with tariffs.
Trade tensions and conflicts between the U.S.
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In 2024, the U.S.
−Removed: House or Representatives passed the BIOSECURE Act, and the Senate has advanced a substantially similar bill.
+Added: House of Representatives passed the BIOSECURE Act, and the Senate has advanced a substantially similar bill.
Though such legislation was not enacted into law in 2024, Congress could re-introduce similar measures, which legislation, if passed and enacted into law, would have the potential to restrict the ability of U.S.
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In addition to our operations in the U.S., we may seek to conduct clinical trials in the EEA and may become subject to additional European data protection laws, regulations and guidelines.
−Removed: The General Data Protection Regulation, (EU) 2016/679, or GDPR, became effective on May 25, 2018, and deals with the collection, use, storage, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals in the EEA.
+Added: The GDPR, became effective on May 25, 2018, and deals with the collection, use, storage, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals in the EEA.
The GDPR imposes a broad range of strict requirements on companies subject to the GDPR, including requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside the EEA, including to the U.S., providing details to those individuals regarding the processing of their personal health and other sensitive data, obtaining consent to certain processing activities from the individuals to whom the personal data relates, keeping personal data secure, having data processing agreements with third parties who process personal data, responding to individuals’ requests to exercise their rights in respect of their personal data, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments, and record-keeping.
The GDPR provides for substantial penalties to which we could be subject in the event of any non-compliance, including fines of up to 10,000,000 Euros or up to two percent of our total worldwide annual revenues, whichever is greater, for certain comparatively minor offenses, or up to 20,000,000 Euros or up to four percent of our total worldwide annual revenues, whichever is greater, for more serious offenses.
−Removed: The GDPR also
−Removed: confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
+Added: The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
In addition, the GDPR includes restrictions on cross-border data transfers, and recent court decisions and regulatory guidance have substantially increased the compliance burden and legal uncertainty associated with transferring the personal data of EEA individuals to third countries outside of the EEA whose data protection laws are not believed to be adequate by European standards (although the recent EU-US Data Privacy Framework offers a new route for data transfers from the EU to be made lawfully to the U.S.).
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At this point in time, the UK Government has incorporated the GDPR into UK law, known as the “UK GDPR”, but has also published proposals recently to reform UK data protection law which are going through the UK Parliament and likely to become law in 2024.
−Removed: In the context of international data transfers, European Commission has issued adequacy decisions which have the effect of authorizing data transfers from the EEA to the UK The UK Government and the Information Commissioner’s Office have also published proposals recently to indicate how data transfers between the UK and the rest of the world will be regulated now that the UK has left the EU.
+Added: In the context of international data transfers, European Commission has issued adequacy decisions which have the effect of authorizing data transfers from the EEA to the UK.
+Added: The UK Government and the Information Commissioner’s Office have also published proposals recently to indicate how data transfers between the UK and the rest of the world will be regulated now that the UK has left the EU.
For instance, the UK Government proposes recognizing more countries as adequate for data transfers as part of reducing barriers to data flows—this would include countries not yet authorized by the European Commission.
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The GDPR increases our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms and safeguards to ensure compliance with the GDPR, including as implemented by individual countries.
−Removed: Compliance with the GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
+Added: Compliance with the GDPR is
+Added: a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
We face uncertainty as to whether our efforts to comply with our obligations under European data protection laws are sufficient, and personal data transfers from the EEA to the U.S.
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and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
−Removed: Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment,
−Removed: tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
+Added: Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
We have direct or indirect interactions with officials and employees of government agencies or government affiliated hospitals, universities and other organizations.
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There is also uncertainty as to how other measures being implemented by the Trump Administration across the government will our activities and those of the FDA and its operations.
−Removed: For example, the potential loss of FDA personnel could lead to further disruptions and delays in FDA review of our product candidates.
+Added: For example, the potential loss of the FDA personnel could lead to further disruptions and delays in FDA review of our product candidates.
Similarly, efforts by the new administration to substantially reduce research funding by the National Institutes of Health of medical research could have substantial direct or indirect impacts on our research activities.
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Nevertheless, we are responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards and our reliance on third parties does not relieve us of our regulatory responsibilities.
−Removed: We and these third parties are required to comply with GCP or other requirements, which are regulations and guidelines enforced by FDA and comparable foreign regulatory authorities for product candidates in clinical development.
+Added: We and these third parties are required to comply with GCP or other requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development.
Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, clinical investigators and trial sites.
−Removed: If we or any of these third parties fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to suspend or terminate these trials or perform additional clinical trials or preclinical studies before approving our marketing applications.
+Added: If we or any of these third parties fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to suspend or terminate these trials or perform additional clinical trials or preclinical studies
+Added: before approving our marketing applications.
We cannot be certain that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP requirements.
6 unchanged sentences
If any of our relationships with these third-party CROs or others terminate, we may not be able to enter into arrangements with alternative CROs or other third parties or to do so on commercially reasonable terms.
−Removed: adding additional CROs might require prior regulatory approvals or notifications and involves additional cost.
+Added: Switching or adding additional CROs might require prior regulatory approvals or notifications and involves additional cost.
Furthermore, it requires management time and focus.
6 unchanged sentences
There can be no assurance that our preclinical and clinical development product supplies will not be limited, interrupted, or of satisfactory quality or continue to be available at acceptable prices.
−Removed: The manufacturing process for a product candidate is subject to FDA and foreign regulatory authority review.
+Added: The manufacturing process for a product candidate is subject to the FDA and foreign regulatory authority review.
Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMPs.
3 unchanged sentences
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
−Removed: The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.
+Added: The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within
In addition, the new manufacturer must comply with the aforementioned quality-related regulatory requirements.
−Removed: We expect to continue to rely on third-party manufacturers if we receive regulatory approval for LTI-03, LTI-01 or any other product candidate.
+Added: We expect to continue to rely on third-party manufacturers if we receive regulatory approval for LTI-03.
To the extent that we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance.
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In addition, any delay in contracting for fill and finish services, or failure of the contract manufacturer to perform the services as needed, may delay any clinical trials, registration and launches, which could negatively affect our business.
−Removed: The manufacture of our clinical and, if approved, commercial drug supply of LTI-01 involves a highly complex manufacturing process that is subject to a number of risks.
−Removed: The manufacturing process for the development of clinical, and if approved, commercial supply for LTI-01 involves a complex, multi-step process involving mammalian-based cell expression of the proenzyme and harvest, viral inactivation, purification and filtration of LTI-01 drug substance which is then lyophilized into drug product.
−Removed: Manufacturing any biological drug, such as LTI-01, is highly complex and is subject to a number of risks, and failure can occur at any stage in the production process.
−Removed: If our manufacturing partners fail to achieve and maintain high quality controls, processing and manufacturing standards, including avoidance of manufacturing errors, defects or product failures, we could experience recalls or withdrawals of our products, delays in delivery, cost overruns or other problems that would adversely affect our business.
−Removed: If our manufacturing partners are unable to manufacture our products on a timely basis, at acceptable quality and costs, and in sufficient quantities, or if we experience unanticipated technological problems or delays in production, our business would be adversely affected.
We depend on sole-source third-party suppliers for materials that are necessary for the conduct of preclinical studies and manufacture of our product candidates for clinical trials, and the loss of these third-party suppliers and manufacturers or their inability to supply us with sufficient quantities of adequate materials, or to do so at acceptable quality levels and on a timely basis, could harm our business.
1 unchanged sentence
We currently depend on a limited number of vendors for certain materials and equipment used in the manufacture of our product candidates.
−Removed: For example, we are reliant on one manufacturer as the sole drug substance manufacturer of LTI-01.
If this sole supplier is unable to supply to us in the quantities we require, or at all, or otherwise defaults on its supply obligations to us, we may not be able to obtain alternative supplies from other suppliers on acceptable terms, in a timely manner, or at all.
1 unchanged sentence
Our current contracts with certain suppliers may be canceled or not extended by such suppliers and, therefore, do not afford us with protection against a reduction or interruption in supplies.
−Removed: Moreover, in the event any of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages we may suffer.
+Added: Moreover, in the event that any of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages we may suffer.
In addition, we developed the cell line and manufacturing process for drug substance manufacture in collaboration with our sole manufacturer.
−Removed: The loss of this contract development and manufacturing company, or CDMO, or its failure to supply us with material to support our clinical development program on a timely basis could impair our ability to develop our product candidates or otherwise delay the development process, which could adversely affect our business, financial condition and results of operations.
+Added: The loss of this contract development and manufacturing company, or
+Added: CDMO, or its failure to supply us with material to support our clinical development program on a timely basis could impair our ability to develop our product candidates or otherwise delay the development process, which could adversely affect our business, financial condition and results of operations.
Some of our CDMO’s raw material suppliers may not have the capacity to support clinical trials and commercial products manufactured under cGMP or other regulatory requirements by biopharmaceutical firms or may otherwise be ill-equipped to support our needs.
8 unchanged sentences
An inability to continue to source product from any of these suppliers, which could be due to a number of issues, including regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct preclinical and clinical trials, either of which could significantly harm our business.
−Removed: Our existing collaborations and future collaborations are and will be important to our business.
−Removed: If we are unable to enter into new collaborations, or if these collaborations are not successful, our business could be adversely affected.
−Removed: A part of our strategy is to selectively establish partnerships in indications and geographies where we believe partners can add significant commercial and/or development capabilities.
−Removed: Further, we have limited capabilities for product development and do not yet have any capability for commercialization.
−Removed: Accordingly, we have and may in the future enter into collaborations with other companies to provide us with important technologies and funding for our programs and technology.
−Removed: Our existing collaborations and any future collaborations we enter into may pose a number of risks, including the following:
−Removed: • collaborators have significant discretion in determining the efforts and resources that they will apply;
−Removed: • collaborators may not perform their obligations as expected;
−Removed: • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities;
−Removed: • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
−Removed: • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
−Removed: • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
−Removed: • collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product;
−Removed: • collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;
−Removed: • collaborators may not provide us with timely and accurate information regarding development progress and activity under any future license agreement, which could adversely impact our ability to report progress to our investors and otherwise plan development of our product candidates;
−Removed: • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;
−Removed: • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
−Removed: • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
−Removed: • if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us;
−Removed: • collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
−Removed: If our existing collaborations and any future collaborations we enter into do not result in the successful research, development and commercialization of product candidates or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under such collaboration.
−Removed: All of the risks relating to product development, regulatory approval and commercialization also apply to the activities of any therapeutic collaborators.
−Removed: Additionally, if one of our existing or future collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected.
−Removed: We face significant competition in seeking appropriate collaborators for our product candidates, and the negotiation process is time-consuming and complex.
−Removed: In order for us to successfully establish a collaboration for one or more of our product candidates, potential collaborators must view these product candidates as economically valuable in markets they determine to be attractive in light of the terms that we are seeking and other available products for licensing by other companies.
−Removed: Collaborations are complex and time-consuming to negotiate and document.
−Removed: In addition, there have been a significant number of recent business combinations among large biopharmaceutical companies that have resulted in a reduced number of potential future collaborators.
−Removed: Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
−Removed: If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
−Removed: If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all.
−Removed: If we fail to enter into future collaborations or do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates, bring them to market and generate revenue from sales of drugs or continue to develop our technology, and our business may be materially and adversely affected.
−Removed: Even if we are successful in our efforts to establish new strategic collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such strategic collaborations if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing.
−Removed: Any delay in entering into new strategic collaboration agreements related to our product candidates could delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market.
−Removed: We have entered into a collaboration agreement with Taiho for the development of LTI-01 and may in the future seek to enter into collaborations with third parties for the development and commercialization of other product candidates.
−Removed: If we fail to enter into such collaborations, or our collaborations are not successful, we may be unable to continue development of such product candidates, we would not receive any contemplated milestone payments or royalties, and we could fail to capitalize on the market potential of such product candidates.
−Removed: In November 2020, Lung entered into a license and collaboration agreement with Taiho for the development and commercialization of our clinical product candidate, LTI-01.
−Removed: In the first quarter of 2021, Lung received an up-front license payment of $5.0 million for the exclusive license to develop and commercialize LTI-01 in Japan.
−Removed: Pursuant to the Taiho Agreement, we are eligible to receive a milestone payment, transfer supply payments for manufacture of clinical and commercial supplies of LTI-01 and royalties on annual nets sales of LTI-01.
−Removed: If we are unable to successfully advance the development of our product candidates or achieve milestones, including pursuant to the Taiho Agreement, we will not receive any revenue and cash resources from milestone and royalty payments under our collaboration agreements.
−Removed: In addition, to the extent that any of our existing or future collaborators were to terminate a collaboration agreement, we may be forced to independently develop these product candidates, including funding preclinical or clinical trials, assuming marketing and distribution costs and defending intellectual property rights, or, in certain instances, abandon product candidates altogether, any of which could result in a change to our business plan and a material and adverse effect on our business, financial condition, results of operations and prospects.
Risks Related to Our Intellectual Property
13 unchanged sentences
Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our technology, including our product candidates, or prevent others from designing around our claims.
−Removed: If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates.
−Removed: Further, if we
−Removed: encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.
+Added: If the breadth or strength of protection provided by the patent
+Added: applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates.
+Added: Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.
We cannot be certain that we were the first to file any patent application related to our technology, including our product candidates, and, if we were not, we may be precluded from obtaining patent protection for our technology, including our product candidates.
73 unchanged sentences
In addition, these agreements typically restrict the ability of our employees, collaborators, advisors, third-party contractors, and consultants to publish data potentially relating to our know-how.
−Removed: Despite our efforts to protect our know-how, we may not be able to prevent the unauthorized disclosure or use of our technical know-how by the parties to these agreements.
+Added: Despite our efforts to protect our
+Added: know-how, we may not be able to prevent the unauthorized disclosure or use of our technical know-how by the parties to these agreements.
Moreover, we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our confidential information or proprietary technology and processes.
−Removed: unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.
+Added: Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.
If any of the collaborators, scientific advisors, employees, contractors, and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation.
27 unchanged sentences
Litigation or interference proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees.
−Removed: We may not be able to prevent, alone or with our licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the U.S.
+Added: We may not be able to prevent, alone or with our licensors,
+Added: misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the U.S.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
15 unchanged sentences
Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets or disclose our technology.
−Removed: Thus, we may n
+Added: Thus, we may not be able to meaningfully protect our trade secrets.
+Added: It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.
+Added: These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
+Added: In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
+Added: In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties.
+Added: Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.
+Added: Our commercial success depends in part on our ability to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties.
+Added: There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and biopharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, inter partes review, post grant review and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
+Added: We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our product candidates and/or
+Added: proprietary technologies infringe their intellectual property rights.
+Added: Numerous U.S.
+Added: and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates, and further applications in the fields could continue to be filed.
+Added: For example, even if we were the first to file a patent application related to our technology, we cannot be certain that a third-party is or will be filing and prosecuting patent applications related to our technology or related to our field, which could have a material adverse effect on our business.
+Added: As the biotechnology and biopharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.
+Added: There can be no assurance that our business does not, or will not in the future, infringe, misappropriate, or otherwise violate existing or future third-party patents or other intellectual property rights.
+Added: Identification of third-party patent rights that may be relevant to our business is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases, and the difficulty in assessing the meaning of patent claims.
+Added: Moreover, it is not always clear to industry participants, including us, which patents cover various types of drugs, products or their methods of use or manufacture.
+Added: Thus, because of the large number of patents issued and patent applications filed in our fields, there may be a risk that third parties may allege they have patent rights encompassing our product candidates, technologies or methods.
+Added: We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims, or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
+Added: Numerous U.S.
+Added: and foreign patents and pending patent applications exist in our market that are owned by third parties.
+Added: Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, and sell our product candidates.
+Added: We do not always conduct independent reviews of pending patent applications and patents issued to third parties.
+Added: Patent applications in the U.S.
+Added: and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date.
+Added: applications that will not be filed outside the U.S.
+Added: can remain confidential until patents issue.
+Added: In addition, patent applications in the U.S.
+Added: and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived.
+Added: Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, product candidates, or the use of our product candidates.
+Added: As such, there may be applications of others now pending or recently revived patents of which we are unaware.
+Added: These patent applications may later result in issued patents, or the revival of previously abandoned patents, that may be infringed by the manufacture, use, or sale of our technologies or product candidates or will prevent, limit, or otherwise interfere with our ability to make, use, or sell our technologies and product candidates.
+Added: The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent, and the patent’s prosecution history.
+Added: Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect.
+Added: For example, we may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope.
+Added: Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect.
+Added: Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates.
+Added: We cannot provide any assurances that third-party patents and other intellectual property rights do not exist which might be enforced against our product candidates, their respective methods of use, manufacture, and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.
+Added: If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to:
+Added: • infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business;
+Added: • substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third-party’s rights and if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees;
+Added: • a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third-party licenses its product rights to us, which it is not required to do;
+Added: • if a license is available from a third-party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our products and any license that is available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property;
+Added: • redesigning our product candidates or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
+Added: Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.
+Added: In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure.
+Added: We may not be able to protect our intellectual property rights throughout the world.
+Added: Filing, prosecuting and defending patents on our product candidates throughout the world would be prohibitively expensive.
+Added: Competitors may use our technology in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as in the U.S.
+Added: These products may compete with our product candidates in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing.
+Added: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products against third parties in violation of our proprietary rights generally.
+Added: The initiation of proceedings by us to enforce our patent rights or by third parties to challenge the scope or validity of our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.
+Added: Such proceedings could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
+Added: We may not prevail in any lawsuits that we become party to and the damages or other remedies awarded, if any, may not be commercially meaningful.
+Added: 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.
+Added: Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
+Added: Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent.
+Added: The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent application process and following the issuance of a patent.
+Added: While an inadvertent lapse can in many cases be cured by payment of
+Added: a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
+Added: Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
+Added: In certain circumstances, even inadvertent noncompliance events may permanently and irrevocably jeopardize patent rights.
+Added: In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.
+Added: Our collaborators may assert ownership or commercial rights to inventions they develop from research we support or that we develop from our use of samples or other materials, which they provide to us, or otherwise arising from the collaboration.
+Added: We collaborate with several institutions, universities, medical centers, physicians and researchers in scientific matters and expect to continue to enter into additional collaboration agreements.
+Added: In certain cases, we do not have written agreements with these collaborators, or the written agreements we have do not cover intellectual property rights.
+Added: If we cannot successfully negotiate sufficient ownership and commercial rights to any inventions that result from our use of a third-party collaborator’s materials, or if disputes arise with respect to the intellectual property developed with the use of a collaborator’s samples, or data developed in a collaborator’s study, we may be limited in our ability to capitalize on the market potential of these inventions or developments.
+Added: In addition, we may in the future be subject to claims by former employees, collaborators, or other third parties asserting an ownership right in our patents or patent applications.
+Added: An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar technology and therapeutics, without payment to us, or could limit the duration of the patent protection covering our technologies and product candidates.
+Added: Such challenges may also result in our inability to develop, manufacture, or commercialize our technologies and product candidates without infringing third-party patent rights.
+Added: In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop, or commercialize current or future technologies and product candidates.
+Added: Any of the foregoing could adversely affect our business, financial condition, results of operations, and prospects.
+Added: We may be subject to claims challenging the inventorship of our patents and other intellectual property.
+Added: We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents, trade secrets, or other intellectual property as an inventor or co-inventor.
+Added: For example, we may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our product candidates.
+Added: Litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership of our patents, trade secrets or other intellectual property.
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product candidates.
+Added: Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Third parties may assert that we are employing their proprietary technology without authorization, infringing, misappropriating, or otherwise violating their intellectual property rights.
+Added: We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.
+Added: There may be third-party patents of which we are currently unaware with claims to compositions of matter, materials, formulations, methods of manufacture or methods for treatment that encompass the composition, use or manufacture of our product candidates.
+Added: There may be currently pending patent applications of which we are currently unaware which may later result in issued patents that our product candidates or their use or manufacture may infringe.
+Added: In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
+Added: If any third-party patent were held by a court of competent jurisdiction to cover our product candidates,
+Added: intermediates used in the manufacture of our product candidates or our materials generally, aspects of our formulations or methods of use, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.
+Added: In either case, such a license may not be available on commercially reasonable terms or at all.
+Added: If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.
+Added: Even if we obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.
+Added: In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates.
+Added: Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
+Added: In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
+Added: We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.
+Added: Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.
+Added: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.
+Added: In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.
+Added: Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
+Added: As is common in the biotechnology and biopharmaceutical industries, we employ individuals who were previously employed at universities or other biotechnology or biopharmaceutical companies, including our competitors or potential competitors.
+Added: Although no claims against us are currently pending, and although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties.
+Added: Litigation may be necessary to defend against these claims.
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
+Added: Even if we are successful in defending against such claims, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.
+Added: In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
+Added: This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities.
+Added: We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
+Added: Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources.
+Added: Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.
+Added: Any current or future patents, if issued, covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.
+Added: If we or one of our licensors initiate legal proceedings against a third-party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable.
+Added: In patent litigation in the U.S., defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent.
+Added: Third parties may also raise similar claims before administrative bodies in the U.S.
+Added: or abroad, even outside the context of litigation.
+Added: Such mechanisms include re-examination, inter partes review, post grant review and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).
+Added: Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates.
+Added: The outcome following legal assertions of invalidity and unenforceability is unpredictable.
+Added: With respect to the validity
+Added: question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution.
+Added: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
+Added: Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize or license our technology and product candidates.
+Added: Changes in patent law in the U.S.
+Added: and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
+Added: Changes in either the patent laws or interpretation of the patent laws in the U.S.
+Added: could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
+Added: Assuming that other requirements for patentability are met, prior to March 16, 2013, in the U.S., the first to invent the claimed invention was entitled to the patent, while outside the U.S., the first to file a patent application was entitled to the patent.
+Added: On March 16, 2013, under America Invents Act, the U.S.
+Added: transitioned to a first inventor to file system in which, assuming that other requirements for patentability 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.
+Added: A third party that files a patent application in the USPTO on or after March 16, 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party.
+Added: This will require us to be cognizant of the time from invention to filing of a patent application.
+Added: Since patent applications in the U.S.
+Added: and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
+Added: The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation.
+Added: 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.
+Added: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S.
+Added: federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
+Added: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
+Added: Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
+Added: In addition, the patent positions of companies in the development and commercialization of biopharmaceuticals are particularly uncertain.
+Added: Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.
+Added: This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained.
+Added: Depending on future actions by the U.S.
+Added: Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future.
+Added: For example, recent decisions raise questions regarding the award of patent term adjustment, or PTA, for patents where related patents have issued without PTA.
+Added: Thus, it cannot be said with certainty how PTA will or will not be viewed in future and whether patent expiration dates may be impacted.
+Added: Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.
+Added: For example, the complexity and uncertainty of European patent laws have also increased in recent years.
+Added: In Europe, a new unitary patent system took effect on June 1, 2023, which will significantly impact European patents, including those granted before the introduction of such a system.
+Added: Under the unitary patent system, all European patents, including those issued prior to June 1, 2023, now by default automatically fall under the jurisdiction of a new European Unified Patent Court, or the UPC, for litigation involving such patents.
+Added: As the UPC is a new court system,
+Added: there is no precedent for the court, increasing the uncertainty of any litigation.
+Added: Our European patent applications, if issued, could be challenged in the UPC.
+Added: During the first seven years of the UPC’s existence, the UPC legislation allows a patent owner to opt its European patents out of the jurisdiction of the UPC.
+Added: We may decide to opt out our future European patents from the UPC, but doing so may preclude us from realizing the benefits of the UPC.
+Added: Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC.
+Added: The UPC will provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunction.
+Added: It is uncertain how the UPC will impact granted European patents in the biotechnology and pharmaceutical industries.
+Added: We cannot predict how future decisions by the courts, the United States Congress, or the USPTO may impact the value of our patents.
+Added: Any similar adverse change in the patent laws of other jurisdictions could also adversely affect our business, financial condition, and results of operations.
+Added: We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.
+Added: We have limited intellectual property rights outside the U.S.
+Added: Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S.
+Added: can be less extensive than those in the U.S.
+Added: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.
+Added: Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S.
+Added: or other jurisdictions.
+Added: Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the U.S.
+Added: These products may compete with our products in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing.
+Added: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of, and may require a compulsory license to, patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products against third parties in violation of our proprietary rights generally.
+Added: The initiation of proceedings by third parties to challenge the scope or validity of our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.
+Added: Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
+Added: We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.
+Added: 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.
+Added: Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
+Added: Patents have a limited lifespan.
+Added: In the U.S., if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.
+Added: non-provisional filing date.
+Added: Various extensions such as patent term adjustments and/or extensions, may be available, but the life of a patent, and the protection it affords, is limited.
+Added: Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products.
+Added: Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
+Added: As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
+Added: patent licensed from the Board of Regents of the University of Texas System directed to methods of using intrapleural single chain urokinase plasminogen activator, or scuPA, polypeptide for decreasing the severity of
+Added: pleural scarring, expired in 2024 without patent term extension.
+Added: We cannot assure that, we will not face competition from competitive products, now that the patent has expired.
+Added: We plan to rely on the 12 years of data exclusivity provided under the BPCIA, as well as the complexity of the manufacturing process of LTI-01.
+Added: There can be no assurance that BPCIA product protection will be available if LTI-01 is approved, or the Company will be able to maintain the confidentiality of its trade secrets and know-how in its manufacturing process.
+Added: If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed.
+Added: Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates we may develop, one or more of our U.S.
+Added: patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 Hatch-Waxman Amendments, or the Hatch-Waxman Amendments.
+Added: The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process.
+Added: A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.
+Added: However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.
+Added: Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
+Added: If we are unable to obtain patent term extension or the term of any such extension is less than we request, our competitors may take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data, obtain approval of competing products, and launch their products earlier than might otherwise be the case, and our business, financial condition, results of operations, and prospects could be materially harmed.
+Added: If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
+Added: Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
+Added: We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
+Added: Any name we propose to use with our product candidates in the U.S.
+Added: must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.
+Added: Similar requirements exist in Europe.
+Added: The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names.
+Added: If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, it may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
+Added: Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
+Added: We may not be able to protect our rights to our trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.
+Added: If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, and our business may be adversely affected.
+Added: Risks Related to Employee Matters and Managing Growth
+Added: Our internal computer systems, or those of our vendors or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.
+Added: Although we attempt to secure our systems and have a process to identify and mitigate threats, our internal computer systems and those of our current and any future vendors and other contractors or consultants are vulnerable
+Added: to damage from computer viruses, ransomware attacks and other malicious behavior, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
+Added: While we have not experienced any such material system failure, accident, attack or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information, inability to access critical systems and applications, or other similar disruptions.
+Added: For example, the loss of clinical trial data from future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
+Added: To the extent that any disruption, attack or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur costs of notification to individuals, regulators and other third parties, remediation costs, liability to our customers or third parties and/or regulatory fines and penalties, our competitive position could be harmed, and the further development and commercialization of our product candidates could be delayed.
+Added: We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company and our vendors, including personal information of our employees and study subjects, and company and vendor confidential data.
+Added: In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information in order to gain access to our data and/or systems.
+Added: We may experience threats to our data and systems, including malicious codes and viruses, phishing, ransomware and other cyberattack.
+Added: The number and complexity of these threats continue to increase over time.
+Added: If a material breach of, or accidental or intentional loss of data from, our information technology systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged.
+Added: We could be required to expend significant amounts of money and other resources to respond to an incident and repair or replace information systems or networks.
+Added: In addition, we could be subject to regulatory actions and/or claims made by individuals and groups in private litigation involving privacy issues related to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure of data, failure to use reasonable measures to safeguard data, violation of state laws protecting the confidentiality, privacy and integrity of personal information and health-related information, as well as unfair or deceptive practices.
+Added: Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated.
+Added: Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely.
+Added: As we outsource more of our information systems to vendors, engage in more electronic transactions with payors and patients, and rely more on cloud-based information systems, the related security risks will increase, and we will need to expend additional resources to protect our own technology and information systems and manage potential security risks associated with our vendors.
+Added: In addition, there can be no assurance that our internal information technology systems or those of our third-party vendors, or our and our vendors’ efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted or the company being subject to attempted extortion in the event of a cyberattack or ransomware attack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.
+Added: Risks Related to Our Common Stock
+Added: If we fail to maintain compliance with the requirements for continued listing on the Nasdaq Capital Market, our common stock could be delisted from trading, which would adversely affect the liquidity of our common stock.
+Added: Our common stock is currently listed on the Nasdaq Capital Market.
+Added: We are required to meet specified requirements to maintain our listing on the Nasdaq Capital Market, including a minimum bid price of $1.00 per share for our common stock and standards relative to minimum stockholders’ equity, minimum market value of publicly held shares and various additional requirements.
+Added: In the past we have, from time to time, received written notification from the Nasdaq Stock Market informing us that we were not in compliance with certain continued listing requirements of the Nasdaq Capital Market.
+Added: There can be no assurance that we will continue to maintain compliance with the requirements for listing our common stock on the Nasdaq Capital Market.
+Added: Any potential delisting of our common stock from the Nasdaq Capital Market would likely result in decreased liquidity and increased volatility for
+Added: our common stock and would adversely affect our ability to raise additional capital or to enter into strategic transactions.
+Added: Any potential delisting of our common stock from the Nasdaq Capital Market would also make it more difficult for our stockholders to sell our common stock in the public market.
+Added: An active trading market for our common stock may not be sustained.
+Added: Our shares of common stock began trading on The Nasdaq Global Market on June 29, 2017, and transferred to The Nasdaq Capital Market, effective December 30, 2019.
+Added: Given the limited trading history of our common stock, there is a risk that an active trading market for our shares may not be sustained, which could put downward pressure on the market price of our common stock and thereby affect the ability of stockholders to sell their shares.
+Added: An inactive trading market for our common stock may also impair our ability to raise capital to continue to fund our operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.
+Added: If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.
+Added: The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business.
+Added: If few analysts commence, or if analysts discontinue, coverage of us, the trading price of our stock would likely decrease.
+Added: If one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline.
+Added: If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.
+Added: The price of our stock may be volatile, and you could lose all or part of your investment.
+Added: The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.
+Added: These factors include:
+Added: • the timing and results of clinical trials of LTI-03;
+Added: • our ability to raise additional capital as and when needed;
+Added: • any delay in identifying and advancing a clinical candidate for our other development programs;
+Added: • any delay in our regulatory filings for LTI-03 and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information;
+Added: • adverse results or delays in future clinical trials;
+Added: • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;
+Added: • adverse regulatory decisions, including failure to receive regulatory approval of LTI-03;
+Added: • changes in laws or regulations applicable to LTI-03, including but not limited to clinical trial requirements for approvals;
+Added: • adverse developments concerning our manufacturers;
+Added: • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices;
+Added: • our inability to establish collaborations, if needed;
+Added: • our failure to commercialize our product candidates, if approved;
+Added: • additions or departures of key scientific or management personnel;
+Added: • unanticipated serious safety concerns related to the use of LTI-03;
+Added: • introduction of new products or services offered by us or our competitors;
+Added: • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
+Added: • our ability to effectively manage our growth;
+Added: • actual or anticipated variations in our quarterly operating results or those of companies that are perceived to be similar to us;
+Added: • our cash position;
+Added: • our failure to meet, or actual or anticipated changes in, the estimates and projections as to financial results, development timelines or recommendations of the investment community or that we may otherwise provide to the public;
+Added: • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts;
+Added: • changes in the market valuations of similar companies;
+Added: • changes in the structure of the healthcare payment systems;
+Added: • market conditions in the pharmaceutical and biotechnology sectors;
+Added: • overall performance of the equity markets;
+Added: • sales of our common stock by us or our stockholders in the future;
+Added: • trading volume of our common stock;
+Added: • changes in accounting practices;
+Added: • ineffectiveness of our internal controls;
+Added: • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
+Added: • significant lawsuits, including patent or stockholder litigation;
+Added: • general political and economic conditions;
+Added: • the level of expenses related to our product candidates or clinical development programs;
+Added: • investors’ general perception of us and our business;
+Added: • other events or factors, many of which are beyond our control.
+Added: In addition, the stock market in general, and the market for biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
+Added: Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
+Added: We could be subject to securities class action litigation.
+Added: Our stock price has been and will likely continue to be volatile.
+Added: In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities.
+Added: This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years.
+Added: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and our resources, which could harm our business.
+Added: Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.
+Added: Changes in tax law may adversely affect our business or financial condition.
+Added: The TCJA, as amended by the CARES Act, significantly reformed the U.S.
+Added: Internal Revenue Code of 1986, as amended, or the Code.
+Added: The TCJA, among other things, contained significant changes to corporate taxation, including a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% and, the limitation of the deduction for net operating losses to 80% of current year taxable income for net operating losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely).
+Added: In addition, beginning in 2022, the TCJA eliminated the option to deduct research and development expenditures currently and requires corporations to capitalize and amortize them over five years or fifteen years (for expenditures attributable to foreign research).
+Added: In addition to the CARES Act, as part of Congress’ response to the COVID-19 pandemic, economic relief legislation was enacted in 2020 and 2021 containing tax provisions.
+Added: The Inflation Reduction Act, or IRA, was also signed into law in August 2022.
+Added: The IRA introduced new tax provisions, including a 1% excise tax imposed on certain stock repurchases by publicly traded corporations.
+Added: The 1% excise tax generally applies to any acquisition by the publicly traded corporation (or certain of its affiliates) of stock of the publicly traded corporation in exchange for money or other property (other than stock of the corporation itself), subject to a de minimis exception.
+Added: Thus, the excise tax could apply to certain transactions that are not traditional stock repurchases.
+Added: On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted.
+Added: The OBBBA amends U.S.
+Added: tax law including provisions related to domestic research and development expenses and bonus depreciation, among others.
+Added: The provision related to domestic research and development expenses allows for immediate expensing of domestic research and development costs along with accelerated deductions on previously capitalized domestic research and development costs.
+Added: The Company has included impacts for the provisions in effect for tax years beginning after December 31, 2024 in its consolidated financial statements for the year ended December 31, 2025 and notes there was not a material impact.
+Added: Regulatory guidance under the OBBBA, TCJA, the IRA, and such additional legislation is and continues to be forthcoming, and such guidance could ultimately increase or lessen impact of these laws on our business and financial condition.
+Added: In addition, it is uncertain if and to what extent various states will conform to the OBBBA, TCJA, the IRA, and additional tax legislation.
+Added: We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.
+Added: We anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
+Added: Furthermore, future debt or other financing arrangements may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock.
+Added: Any return to stockholders will therefore be limited to the appreciation of their stock.
+Added: A significant portion of our total outstanding shares may be sold into the market at any time, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
+Added: Sales of a substantial number of shares of our common stock in the public market could occur at any time.
+Added: These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
+Added: As of March 24, 2026, we had 28,039,032 shares of common stock outstanding and 12,232 shares of our Series X non-voting convertible preferred stock, or Series X Preferred Stock, outstanding, which were convertible into 12,232,000 shares of common stock, subject to beneficial ownership limitations.
+Added: In connection with our October 2023 private placement, we filed a resale registration statement with the SEC covering the resale of the shares purchased by the purchasers in the private placement and shares issuable upon exercise of the warrants issued in the private placement.
+Added: The shares subject to the resale registration statement no longer constitute restricted securities and may be sold freely in the public markets, subject to lapse on any related contractual restrictions related thereto of any purchaser and subject to volume limitations applicable to affiliates.
+Added: We have also registered all shares of common stock that we may issue under our equity compensation plans, including upon exercise of outstanding options.
+Added: These shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.
+Added: Assuming the conversion of all outstanding Series X Preferred Stock and the exercise of outstanding warrants, there is a concentration of ownership of our outstanding common stock by one group of affiliated stockholders.
+Added: If this group chooses to act together, it could exert substantial influence over our business, and the interests of this group may conflict with those of other stockholders.
+Added: As of March 24, 2026, entities and individuals affiliated with Bios Partners, or collectively, the Bios Entities, beneficially owned 7.11% of our outstanding common stock.
+Added: This ownership percentage does not, due to certain restrictions on conversion and exercisability, take into account the issuance of all shares of our common stock upon conversion of the Series X Preferred Stock or upon exercise of the warrants issued to the Bios Entities in our October 2023 private placement.
+Added: The Certificate of Designation for the Series X Preferred Stock provides that any holder of Series X Preferred Stock will not have a right to convert, subject to certain exceptions, the Series X Preferred Stock for our common stock if, as a result of such conversion, the holder, together with its affiliates and other attribution parties, would hold 19.99% of the total number of shares of our common stock then outstanding, subject to decrease upon written notice by the holder.
+Added: Similarly, under the terms of the warrants a holder shall not have the right to exercise any portion of any warrant, to the extent that after giving effect to such exercise, the holder (together with its affiliates and any other persons acting as a group together with the holder or any of its affiliates), would beneficially own in excess of a percentage elected by the holder up to 19.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise, as such percentage ownership is determined in accordance with the terms of the warrants.
+Added: Assuming the conversion of all outstanding Series X Preferred Stock and the exercise of all outstanding warrants, options and any other rights to acquire our common stock, and without giving effect to the foregoing beneficial ownership limitations on Series X Preferred Stock and the warrants, the Bios Entities would, as of March 24, 2026, own 38.4% of our common stock on a fully diluted basis.
+Added: If any of the Bios Entities acted together, they could be able to exert substantial influence over our business.
+Added: Additionally, the interests of the Bios Entities may be different from or conflict with the interests of our other stockholders.
+Added: This concentration of voting power with the Bios Entities could delay, defer, or prevent a change of control, entrench our management and the Board of Directors, or delay or prevent a merger, consolidation, takeover, or other business combination involving us on terms that other stockholders may desire.
+Added: In addition, conflicts of interest could arise in the future between us, on the one hand, and the Bios Entities on the other hand, concerning potential competitive business activities, business opportunities, the issuance of additional securities and other matters.
+Added: Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
+Added: Provisions in our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for shares of common stock.
+Added: These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.
+Added: In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
+Added: Among other things, these provisions:
+Added: • establish a classified board of directors such that not all members of the board are elected at one time;
+Added: • allow the authorized number of our directors to be changed only by resolution of our board of directors;
+Added: • limit the manner in which stockholders can remove directors from the board;
+Added: • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;
+Added: • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;
+Added: • limit who may call stockholder meetings;
+Added: • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors;
+Added: • require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
+Added: Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
+Added: Our certificate of incorporation designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against the company and our directors, officers and employees.
+Added: Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to our company or our stockholders, any action asserting a claim against us arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or bylaws, or any action asserting a claim against us governed by the internal affairs doctrine.
+Added: We do not expect this choice of forum provision will apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act of 1934, as amended, or any other claim for which federal courts have exclusive jurisdiction.
+Added: This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees.
+Added: Unresolve d Staff Comments
+Added: Cybe rsecurity
+Added: Risk Management and Strategy
+Added: We are a clinical stage biopharmaceutical company with no commercial operations or revenue streams and our sole business activity has been ongoing research into our drug therapies.
+Added: We have certain processes for assessing, identifying and managing cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems, which are built into our overall risk management program.
+Added: Our processes are designed to preserve the confidentiality, integrity, and availability of the information that we collect and store by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
+Added: Such processes include physical, procedural and technical safeguards, and response plans on our systems.
+Added: We engage an external consultant to manage cybersecurity tooling and incident response, as well as general information technology, or IT, systems, which enhance our cybersecurity oversight.
+Added: We consider the internal risk of oversight programs of the third-party consultant before engaging them in order to help protect us from any related
+Added: vulnerabilities.
+Added: As our company grows, we plan to expand our strategy for cybersecurity in alignment with nationally accepted standards.
+Added: Based on an assessment using the previously described cybersecurity risk management program, we do not believe that there are currently any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
+Added: For additional information regarding risks from cybersecurity threats, please refer to Item 1A.
+Added: “Risk Factors” in this Annual Report on Form 10-K.
+Added: Our management and board of directors recognize the critical importance of maintaining the trust and confidence of our business partners and employees, including the importance of managing cybersecurity risks as part of our larger risk management program.
+Added: We seek to address cybersecurity risks through a cross-functional approach.
+Added: One of the key functions of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats.
+Added: Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our audit committee, comprised of members with substantial experience in information technology governance and risk management, oversees our cybersecurity strategy.
+Added: Our board of directors receives periodic updates from management regarding cybersecurity matters, and is notified between such updates regarding significant new cybersecurity threats or incidents.
+Added: Our executive officers are responsible for the day-to-day management of the material risks that we face.
+Added: Our executive officers are led by a third-party consultant, who oversees company-wide cybersecurity strategy, policy , standards and processes and works across relevant departments to assess and help prepare us and our employees to address cybersecurity risks.
+Added: The third-party consultant is advised by their Security Operations Center Manager with a variety of technical certifications, as well as extensive background in IT infrastructure, risk mitigation, and incident response planning.
+Added: In an effort to deter and detect cyber threats, we annually provide all employees, including part-time and temporary employees, with a data protection, cybersecurity and incident response and prevention training and compliance program, which covers a range of timely and relevant topics.
+Added: Past topics have included social engineering, phishing, password protection, confidential data protection, asset use and mobile security.
+Added: The training and compliance program functions to educate employees on the importance of reporting all incidents immediately.
+Added: We also use technology-based tools to mitigate cybersecurity risks and to bolster our employee-based cybersecurity programs.
+Added: On August 16, 2021, Lung entered into an operating lease agreement to rent approximately 6,455 square feet of office space for its corporate headquarters in Austin, Texas, beginning on October 1, 2021.
+Added: The lease expired March 31, 2024, and we did not renew the lease.
+Added: Following expiration of the lease, we are operating virtually, and expect to do so for the foreseeable future.
+Added: Our current address is used solely as a mailing address for the receipt of correspondence.
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.