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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-23 · 222 added, 219 removed, 898 unchanged (33% of the section changed)

You should consider carefully the risks and uncertainties described below, together with all of the other information in this annual report on Form 10-K.

You should carefully consider the risks and uncertainties described below, together with all of the other information in this annual report on Form 10-K.

We operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties.

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Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this annual report on Form 10-K.

Our business has been and may continue to be adversely affected by COVID-19.

In December 2019, a respiratory disease caused by a novel strain of coronavirus, known as COVID-19, was reported to have surfaced in Wuhan, China.

This coronavirus has since spread to other parts of the world, including the United States and Europe, and efforts to contain the spread of this coronavirus have intensified, resulting in travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak as a “pandemic.” We have followed the guidelines from the U.S.

Center for Disease Control (CDC) and have implemented recommended safety protocols from the CDC and the State of New York.

Since March 2020, the spread of COVID-19 has caused us to modify our business practices (including curtailing employee travel and mandatory work-from-home policies where necessary), and we may need to take further actions as required by government authorities or that we determine are in the best interests of our employees, customers, partners and suppliers.

The COVID-19 pandemic has caused a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could impact our operating results.

During 2020, our business and operations, in particular our clinical development programs, were impacted by the coronavirus pandemic.

The extent to which our business and operations could be impacted throughout 2021 will depend on future developments, which are highly uncertain and cannot be predicted, including the duration of the outbreak, the availability and efficacy of vaccines, new information which may emerge concerning the severity of COVID-19, the emergence of new mutations of COVID-19, and the actions to contain COVID-19 or treat its impact, among others.

Given such continued uncertainty, we cannot estimate the impact of the COVID-19 pandemic on the Company's financial results or operations.

In particular, the continued spread of COVID-19 globally have adversely impacted and could continue to adversely impact our clinical trial operations, including the REGAL study, and could have an adverse impact on our business and financial results.

For example, our clinical trials may suffer from slower than anticipated patient recruitment or enrollment and we may be forced to temporarily delay or pause ongoing trials.

Further, if the spread of COVID-19 continues, the operations of manufacturers of our clinical supply of GPS could be significantly delayed as well and we risk a delay, default and/or nonperformance under our existing agreements.

While we believe that we currently have sufficient supply of our product candidates to continue our ongoing clinical trials, such delays, defaults or non-performance could materially adversely affect our revenues, financial condition, profitability, and cash flows.

Risks Relating to Our Financial Position and Capital Needs

Risks Related to Our Financial Position and Capital Needs

We have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future.

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Our expenses will further increase as we:

• conduct additional clinical trials of our lead product, GPS, including the Phase 3 clinical trial evaluating GPS for AML and the Phase 1/2 basket study in combination with pembrolizumab;

• conduct additional clinical trials of our lead product, GPS, including the Phase 3 clinical trial evaluating GPS for AML;

• hire additional personnel, including clinical, manufacturing, quality control, quality assurance and other scientific personnel, sales and marketing personnel and general and administrative personnel;

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• seek marketing approval for any product candidates that successfully complete clinical trials;

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• add operational, financial and management information systems and personnel.

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We currently have no source of revenues from product sales.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce our operations.

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We will need additional financing to fund our operations and complete the development and, if approved, the commercialization of our product candidates.

If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

We expect our existing cash as of December 31, 2020 and the proceeds received in the first quarter of 2021 from the exercise of certain warrants to acquire share of common stock purchase will enable us to fund our operating expenses for at least the next 12 months.

We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of GPS, in particular the Phase 3 study of GPS in AML and the Phase 1/2 basket study of GPS in combination with pembrolizumab.

We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of GPS, in particular the Phase 3 study of GPS in AML.

Our existing cash will not be sufficient to complete such development activities and obtain regulatory approval for GPS and, if we receive regulatory approval for GPS, commence commercialization activities, and we will need to raise significant additional capital to help us do so.

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We have no committed source of additional capital.

Moreover, the global coronavirus pandemic has caused uncertainty and volatility in the capital markets which could impact our ability to raise capital.

Moreover, global events, such as the coronavirus pandemic and geopolitical unrest, have caused and will likely continue to cause uncertainty and volatility in the capital markets which could impact our ability to raise capital.

If adequate funds are not available to us on a timely basis, we may not be able to continue as a going concern or we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.

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Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.

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If we raise additional funds through collaborations, strategic alliances, or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, products or product candidates or grant licenses on terms that may not be favorable to us.

Our cash and cash equivalents balance as of December 31, 2021 will fund our operations for less than one year.

As of December 31, 2021, we had a cash and cash equivalents balance of approximately $21.4 million.

We expect our existing cash and cash equivalents balance as of December 31, 2021, will be insufficient to fund current planned operations for at least the next twelve months from the date of issuance of our consolidated financial statements for the year ended December 31, 2021, and that we will need to raise additional capital in order to continue our operations as currently planned.

In the event that we are unable to obtain additional financing, we may be unable to continue as a going concern.

There is no guarantee that we will be able to secure additional financing.

Changes in our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our development activities, any near-term or future expansion plans, increased expenses, potential acquisitions or other events may further affect our ability to continue as a going concern.

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on our assessment.

Similarly, the report of our independent registered public accounting firm on our consolidated financial statements as of and for the year ended December 31, 2021 includes an Emphasis of Matter paragraph indicating that there is substantial doubt about our ability to continue as a going concern.

Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

If we cannot continue as a viable entity, our securityholders may lose some or all of their investment in us.

Risks Related to the Development and Regulatory Approval of Our Product Candidates

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• receipt of regulatory approvals from applicable authorities;

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• obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

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• developing a manufacturing process used in connection with GPS that will yield a satisfactory product that is safe, effective, scalable and profitable;

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• establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance;

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Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh their costs.

We may find it difficult to enroll patients in our clinical trials due to the impact of COVID-19 and given the limited number of patients who have the diseases for which our product candidates are being studied which could delay or prevent the start of clinical trials for our product candidates.

The impact of Covid-19, as well as the limited number of patients who have the diseases for which our product candidates are being studied, has made it more difficult to enroll patients in our clinical trials, which could delay or prevent the start of clinical trials for our product candidates.

Identifying and qualifying patients to participate in clinical trials of our current and future product candidates is essential to our success.

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Many factors may affect our ability to identify, enroll and maintain qualified patients, including the following:

• disruptions caused by the global coronavirus pandemic;

• disruptions caused by the global COVID-19 pandemic;

• shortages of personnel at our clinical sites;

• travel restrictions, lockdowns, and social distancing requirements as a result of COVID-19 which can adversely affect clinical site monitoring;

• eligibility criteria of our ongoing and planned clinical trials with specific characteristics appropriate for inclusion in our clinical trials;

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• issues with contract research organizations, or CROs, and/or with other vendors that handle our clinical trials.

For example, we have observed that, at certain times and in certain instances, clinical site initiations and patient enrollment may have been delayed due to prioritization of hospital resources towards the COVID-19 pandemic.

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Clinicians and patients may not have been able to comply with clinical trial protocols if quarantines impeded patient movement or interrupted operations at sites.

Certain newly initiated sites have taken longer than expected to be fully operational.

Additionally, several European Union countries in which we plan to initiate clinical sites, including Germany, France, and Italy, continue to impose restrictions in response to the continued surge in coronavirus cases throughout the European Union.

Additionally, several countries in which we currently have or plan to have clinical sites continue to impose restrictions in response to the continued surge in coronavirus cases.

We believe that these factors have had and could continue to have an impact on the projected timelines for enrollment of patients in the REGAL study.

Moreover, the indication being studied in our Phase 3 clinical trial for GPS, i.e., patients with AML who have achieved Crem2, is an orphan indication.

Moreover, only CRem2 patients who meet specific inclusion criteria will be eligible to participate in the study.

Moreover, the indication being studied in our Phase 3 clinical trial for GPS, i.e., patients with AML who have achieved CR2, is an orphan indication.

In addition, only those CR2 patients who meet specific inclusion criteria are eligible to participate in the study.

Primary entry restrictions include demonstrating adequate hematologic recovery, not being candidates for bone marrow transplants and not being eligible for treatments targeted at certain mutations common in significant proportions of AML patients.

The estimated prevalence of AML is 12,000 to 20,000 cases in the United States (across all ages) with only a subset of this group having achieved CRem2 and only a further subset of this group satisfying the enrollment criteria for our AML Phase 3 clinical trial.

The estimated prevalence of newly diagnosed AML patients is approximately 20,000 cases in the United States annually (across all ages) with only a subset of this group having achieved CR2 and only a further subset of the CR2 subset satisfying the enrollment criteria for our AML Phase 3 clinical trial.

We may not be able to initiate or continue to support clinical trials of our product candidates for one or more indications, or any future product candidates if we are unable to locate and enroll a sufficient number of eligible participants in these trials as required by the FDA or other regulatory authorities.

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Even if we believe that we have adequate data to support an application for regulatory approval to market any of our current or future product candidates, the FDA or other regulatory authorities may not agree and may require that we conduct additional clinical trials.

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Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

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For a further discussion of the safety risks in our trials, see the risk factor herein entitled "Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval."

Clinical trials also require the review and oversight of an institutional review board, or IRB.

Clinical trials also require the review and oversight of an IRB.

An inability or delay in obtaining IRB approval could prevent or delay the initiation and completion of clinical trials, and the FDA may decide not to consider any data or information derived from a clinical investigation not subject to initial and continuing IRB review and approval.

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• inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication;

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• failure of our third-party clinical trial managers, CROs, clinical trial sites, contracted laboratories or other third-party vendors to satisfy their contractual duties, meet expected deadlines or return trustworthy data;

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Risks associated with operating in foreign countries could materially adversely affect our product development.

We may conduct future studies in countries outside of the United States.

We are conducting future studies in countries outside of the United States.

Consequently, we may be subject to risks related to operating in foreign countries.

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more stringent privacy requirements for data to be supplied to our operations in the United States, e.g.

, General Data Protection Regulation in the European Union;

, GDPR the in the European Union;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

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foreign taxes, including withholding of payroll taxes;

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• differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls;

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• business interruptions resulting from geopolitical actions, including war and terrorism.

Global, market and economic conditions may negatively impact our business, financial condition and share price.

We face several risks associated with international business and are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing armed military conflict between Russia and Ukraine.

Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

The U.S., United Kingdom and EU governments, among others, have instituted various sanctions and export-control measures in response to the invasion, including comprehensive financial sanctions, targeted at Russia or designated individuals and entities with business interests and/or government connections to Russia or those involved in Russian military activities.

Governments have also enhanced export controls and trade sanctions targeting Russia’s imports of goods.

The United States and other countries could impose wider sanctions and take other actions should the conflict further escalate.

It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations and our ability to raise capital.

Although we do not currently have any clinical study sites in Russia or Ukraine, economic, political and social conditions resulting from Russia’s invasion of Ukraine could materially disrupt our clinical trials, increase our costs and may disrupt planned clinical development activities.

For example, we are currently in the process of activating clinical sites for our REGAL study in Poland, a country that borders Ukraine and is being impacted by an influx of Ukrainian refugees resulting from Russia’s invasion of Ukraine.

Furthermore, we rely on suppliers in the EU.

To the extent the conflict between Ukraine and Russia adversely impacts the ability of our suppliers to distribute the supplies we need for our clinical trials, or such distribution cannot be done on a timely basis, the timing for completing our clinical trials may be adversely impacted.

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Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval.

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• we may be required to conduct post-marketing studies;

• we may be required to change the way the product is administered;

• we may be required to change or the healthcare setting in which the way the product is administered;

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

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Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved.

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Our product development program may not uncover all possible adverse events that patients who take our product candidates may experience.

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Such rare and severe side effects may only be uncovered with a significantly larger number of patients exposed to our product candidates.

If such safety problems occur or are identified after our product candidates reaches the market, the FDA may require that we amend the labeling of the product or recall the product, or may even withdraw approval for the product.

Our future success is dependent on the regulatory approval of our product candidates.

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Before obtaining regulatory approvals for the commercial sale of any product candidate for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and clinical trials, generally including well-controlled Phase 3 trials, that the product candidate is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate.

The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.

In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

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• the insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of a BLA, NDA or other submission or to obtain regulatory approval;

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• the insufficiency of a single Phase 3 clinical trial of GPS in AML for regulatory approval in that indication;

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We have received Orphan Drug Product designations from the FDA for GPS in AML, MPM and MM as well as Orphan Medicinal Product designations from the EMA for GPS in AML, MPM and MM.

Although we have received Orphan Drug Product designation for GPS, there is no guarantee that any of these indications for GPS will be successfully approved by the FDA, that GPS will be commercially successful in the marketplace, or that another product will not be approved for the same indication ahead of our product candidate.

Although we have received Orphan Drug Product designation for GPS, there is no guarantee that any of these indications for GPS will be successfully approved by the FDA or the EMA, that GPS will be commercially successful in the marketplace, or that another product will not be approved for the same indication ahead of our product candidate.

Even if we obtain Orphan Drug Product exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same condition.

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The FDA has given us Fast Track designation for GPS in AML, MPM and MM and for NPS for the adjuvant treatment of patients with early stage breast cancer with low to intermediate HER2 expression following standard of care upfront therapy (surgery plus chemotherapy +/- radiotherapy).

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However, Fast Track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe.

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Even if our current and future product candidates receive regulatory approval, they may still face future development and regulatory difficulties.

Even if we obtain regulatory approval for a product candidate, that approval would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information.

Any regulatory approvals we receive for any of our product candidates may be subject to limitations on the approved indicated uses for which the product candidate may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials.

Any such regulatory approvals would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance by us and/or our contract manufacturing organizations, or CMOs, and CROs for any post-approval clinical trials that we may conduct.

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If the FDA or comparable foreign regulatory authorities become aware of new safety information after approval of any of our product candidates, they may require labeling changes or establishment of a risk evaluation and mitigation strategy, impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP, cGCP, and other regulations.

Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance.

If our original marketing approval for a product candidate was obtained through an accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm the clinical benefit for our products.

An unsuccessful post-marketing clinical trial or failure to complete such a trial could result in the withdrawal of marketing approval.

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In addition, manufacturers and manufacturers’ facilities are required to continuously comply with FDA and comparable foreign regulatory authority requirements, including ensuring quality control and manufacturing procedures conform to cGMP, regulations and corresponding foreign regulatory manufacturing requirements.

Accordingly, 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 BLA submission to the FDA or any other type of domestic or foreign marketing authorization application.

We or our third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States.

If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and commercialize our product candidates could suffer significant interruptions.

If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may:

• issue warning letters or untitled letters;

If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may take the following actions, any of which could significantly and adversely affect supplies of our products:

• issue Form 483 notices of observations, warning letters or untitled letters;

• mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

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• seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.

Any government investigation of alleged violations of law would require us to expend significant time and resources in response and could generate adverse publicity.

The occurrence of any event or penalty described above may inhibit our ability to successfully commercialize our products and generate revenues.

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Any actual or alleged failure to comply with labeling and promotion requirements may have a negative impact on our business.

Even if we obtain regulatory approval for a product, we will remain subject to ongoing regulatory requirements.

Even if our product candidates are approved, we will be subject to ongoing regulatory requirements with respect to manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing clinical trials and submission of safety, efficacy and other post-approval information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

Manufacturers and manufacturers’ facilities are required to continuously comply with FDA and comparable foreign regulatory authority requirements, including ensuring quality control and manufacturing procedures conform to cGMP, regulations and corresponding foreign regulatory manufacturing requirements.

We will be required to report adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities.

Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance.

An unsuccessful post-marketing clinical trial or failure to complete such a trial could result in the withdrawal of marketing approval.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or it disagrees with the promotion, marketing or labeling of a product, the regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.

If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

• issue warning letters;

• impose civil or criminal penalties;

• suspend or withdraw regulatory approval;

• suspend any of our ongoing clinical trials;

• refuse to approve pending applications or supplements to approved applications submitted by us;

• impose restrictions on our operations, including closing our contract manufacturers' facilities;

• require a product recall.

Any government investigation of alleged violations of law would require us to expend significant time and resources in response and could generate adverse publicity.

Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to develop and commercialize our products and the value of our business and our operating results would be adversely affected.

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Risks Related to Our Manufacturing

We have limited to no manufacturing, sales, marketing or distribution capability and must rely upon third parties for such.

We have limited to no manufacturing or distribution capability and must rely upon third parties for such.

We currently have agreements with various third-party manufacturing facilities for production of our product candidates for research and development and testing purposes.

We depend on these manufacturers to meet our deadlines, quality standards and specifications.

Reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves.

We do not control the manufacturing processes of the CMOs we contract with and are dependent on those third parties for the production of our product candidates in accordance with relevant applicable regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

Our reliance on third parties for the manufacture of our active pharmaceutical ingredient and drug product and, in the future, any approved products, creates a dependency that could severely disrupt our research and development, our clinical testing, and ultimately our sales and marketing efforts if the source of such supply proves to be unreliable or unavailable.

If the contracted manufacturing source is unreliable or unavailable, we may not be able to manufacture clinical drug supplies of our product candidates, and our preclinical and clinical testing programs may not be able to move forward and our entire business plan could fail.

Our third-party manufacturers are subject to inspection and approval by regulatory authorities before we can commence the manufacture and sale of any of our product candidates, and thereafter are subject to ongoing inspection from time to time.

Our third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States.

In complying with the manufacturing regulations of the FDA and other comparable foreign regulatory authorities, we and our third-party suppliers must spend significant time, money and effort in the areas of design and development, testing, production, record-keeping and quality control to assure that the products meet applicable specifications and other regulatory requirements.

If either we or our CMOs fail to comply with these requirements, our ability to develop and commercialize our product candidates could suffer significant interruptions, and we may be subject to regulatory enforcement action, including the seizure of products and shutting down of production.

Both the active pharmaceutical ingredient and drug product for our product candidates are currently single sourced.

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If we are able to commercialize our products in the future, there is no assurance that our manufacturers will be able to meet commercialized scale production requirements in a timely manner or in accordance with applicable standards or cGMP.

Once the nature and scope of additional indications and their commensurate drug product demands are established, we will seek secondary suppliers of both the active pharmaceutical ingredient and drug product for our product candidates, but we cannot assure that such secondary suppliers will be found on terms acceptable to us, or at all.

We are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidates.

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Moreover, current clinical supplies may not be adequate for future clinical studies.

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Additionally, the process of manufacturing our product candidates is complex, highly regulated and subject to several risks, including but not limited to:

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• product loss or manufacturing failure due to failure of temperature controls in production, storage or transit;

• product loss, which may not be covered by insurance, due to global conflict and unrest, including related inoperability of shipping lanes;

• reduced production yields, product defects, and other supply disruptions due to deviations, even minor, from normal manufacturing and distribution processes;

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Any temporary interruptions or discontinuation of the availability of Montanide could have a material adverse effect on our clinical trials for GPS and any commercialization of the asset.

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If any of our CMOs’ clinical manufacturing facilities are damaged or destroyed or production at such facilities is otherwise interrupted, our business and prospects would be negatively affected.

If our CMOs’ manufacturing facilities or the equipment in them is damaged or destroyed, we may not be able to quickly or inexpensively replace our manufacturing capacity or replace it at all.

If our CMOs’ manufacturing facilities or the equipment in them is damaged or destroyed, we may not be able, quickly or inexpensively, to replace our manufacturing capacity or replace it at all.

In the event of a temporary or protracted loss of this facility or equipment, we might not be able to transfer manufacturing to another CMO.

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Although we currently maintain insurance coverage against damage to our property and to cover business interruption and research and development restoration expenses, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer.

In addition, our clinical trials insurance coverage has exclusions for global conflict and unrest or the type currently ongoing in Ukraine.

We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facility or processes.

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We have relied upon and plan to continue to rely upon third-party CROs, vendors and contractors to monitor and manage data for our ongoing preclinical and clinical programs.

We currently rely on and plan to continue to rely on a CRO for our Phase 3 trial for GPS in AML and well as all of our ongoing and contemplated clinical studies, with services to be rendered by such CROs and vendors ranging from, in the case of assorted Phase 2 trials, specific and need-tailored ( e.g.

, data management and biostatistics) only to, in the case of our immune combination (PD1 blocker) Phase 2 trials and our Phase 3 trial for GPS in AML, all-encompassing.

, data management and biostatistics) only to, in the case of our Phase 3 trial for GPS in AML, all-encompassing.

We rely on these parties for the execution of our preclinical studies and clinical trials, including the proper and timely conduct of our clinical trials, and we control only some aspects of their activities.

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Failure to comply also would violate federal requirements in the United States and could result in other penalties, which would delay the regulatory approval process and result in adverse publicity.

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Our CROs, third-party vendors and contractors are not our employees, and except for remedies available to us under our agreements with such CROs, third-party vendors and contractors, we cannot control whether or not they devote sufficient time and resources, including experienced staff, to our ongoing clinical, nonclinical and preclinical programs.

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If we fail to meet our obligations under our license agreements, we may lose the ability to develop our product candidates, which would adversely affect our business.

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We have in-licensed a significant portion of our intellectual property from MSK.

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The risks described elsewhere pertaining to our patents and other intellectual property rights also apply to the intellectual property rights that we license, and any failure by us or our licensors to obtain, maintain and enforce these rights could have a material adverse effect on our business.

We may not be able to identify any suitable acquiror, licensing or collaboration partner for NPS, or if we are able to find such a suitable acquiror or partner, to enter into a transaction with such acquiror or partner on favorable terms, which will impair our ability to derive value from the NPS asset.

To date, we have not been able to identify any suitable acquiror, licensing or collaboration partner for NPS to enter into a transaction with such acquiror or partner on favorable terms, and we may not be able to find such a suitable acquiror or partner in the future, which will impair our ability to derive value from the NPS asset.

We have determined that we will not engage in further development of NPS.

As a result of such determination, the primary path available to derive value from the NPS asset is to find a suitable acquiror, licensing or collaboration partner for the asset.

We currently have no agreements or commitments to engage in any specific transactions, and our exploration of various strategic alternatives may not result in any specific action or transaction.

To the extent that this effort results in a transaction, our business objectives may change depending upon the nature of the transaction.

We currently have no agreements or commitments to engage in any specific transactions, and our exploration of various strategic alternatives has not resulted in any specific action or transaction.

There can be no assurance that we will enter into any transaction as a result of this effort or that a transaction will be able to be consummated upon favorable terms, including up-front, milestone, royalty and/or license payments as a result of numerous factors, many of which are outside of our control.

Furthermore, if we enter into a transaction relating to NPS, we cannot predict the impact that such transaction might have on our stock price.

Furthermore, if we enter into a transaction relating to NPS, our business objectives may change depending upon the nature of the transaction.

We cannot predict the impact that such transaction might have on our stock price.

We also cannot predict the impact on our stock price if we fail to enter into such a transaction.

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We cannot be certain that, following a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transaction.

Any delays in entering into new strategic alliances agreements related to our product candidates could also delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market.

Any delays in entering into new strategic alliances or license agreements related to our product candidates could also delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market.

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Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental, health and safety laws and regulations, which can be expensive and restrict how we do business.

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If we are unable to obtain or maintain these agreements, we may not be able to clinically develop, formulate, manufacture, obtain regulatory approvals for or commercialize our product candidates.

We cannot necessarily control the amount or timing of resources that our contract partners, including 3D Medicines, will devote to our research and development programs, product candidates or potential product candidates, and we cannot guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion.

We may not be able to readily terminate any such agreements with contract partners even if such contract partners do not fulfill their obligations to us.

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Any assertion by third parties that our activities or product candidates infringe upon the intellectual property rights of third parties may adversely affect our ability to secure strategic partners or licensees for our technology or product candidates or our ability to secure or maintain manufacturers for our compounds.

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Risks Related to Our Intellectual Property

We may not be able to obtain and enforce patent rights or other intellectual property rights that cover our product candidates and that are of sufficient breadth to prevent third parties from competing against us.

Our success with respect to our product candidates will depend in part on our ability to obtain and maintain patent protection in the United States and abroad, to preserve our trade secrets, and to prevent third parties from infringing upon our proprietary rights.

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Moreover, in some circumstances, we do not have the right to control the preparation, filing or prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties or covering technology that a collaboration or commercialization partner may develop.

In some circumstances, our licensors have the right to enforce the licensed patents without our involvement or consent, or to decide not to enforce or to allow us to enforce the licensed patents.

In some circumstances, our licensors have the right to prosecute and/or enforce the licensed patents without our involvement or consent, or to decide not to enforce or to allow us to enforce the licensed patents.

Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

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Our pending and future patent applications, and any collaboration or commercialization partner’s pending and future patent applications, may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products.

During prosecution of any patent application, the issuance of any patents based on the application may depend upon our or their ability to generate additional preclinical or clinical data that support the patentability of our proposed claims.

During prosecution of any patent application, the issuance of any patents based on the application may depend upon our or our partners’ ability to generate additional preclinical or clinical data that support the patentability of our proposed claims.

We or any collaboration or commercialization partner may not be able to generate sufficient additional data on a timely basis, or at all.

Moreover, changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our or a collaboration or commercialization partner’s patents or narrow the scope of our or their patent protection.

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Changes in either the patent laws or in the interpretations of patent laws in the United States or abroad may diminish the value of our intellectual property.

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Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business.

However, the Leahy-Smith Act, in particular the first-to-file provision and our implementation, could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement of or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

However, the Leahy-Smith Act, in particular the first-to-file provision and our implementation thereof, could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents.

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Litigation or other proceedings to enforce or defend intellectual property rights is very complex, expensive, and may divert our management’s attention from our core business and may result in unfavorable results that could adversely affect our ability to prevent third parties from competing with us.

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If another party has reason to assert a substantial new question of patentability against any of our claims in our own and in-licensed patents, the third party can request that the patent claims be reexamined, which may result in a loss of scope of some claims or a loss of the entire patent.

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As the medical device, biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that others may assert our commercial product and/or product candidates infringe their patent rights.

If a third-party’s patents were found to cover our commercial product and product candidates, proprietary technologies or our uses, we or our collaborators could be enjoined by a court and required to pay damages and could be unable to continue to commercialize our products or use our proprietary technologies unless we or it obtained a license to the patent.

A license may not be available to us or our collaborators on acceptable terms, if at all.

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Therefore, the FDA may approve a biosimilar despite unresolved patent issues between the reference product sponsor and the biosimilar applicant.

Our composition of matter patents for certain of our product candidates have expired or will expire prior to any product marketing approval.

We intend to seek data exclusivity and market exclusivity for GPS, which, like NPS, is expected to be regulated by the FDA as a biological product, provided under the PHSA, and similar laws in other countries.

We believe that these product candidates will qualify for four years of data exclusivity and 12 years of market exclusivity under the BPCIA.

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Some of our composition of matter patents for certain of our product candidates have expired or will expire prior to any product marketing approval.

We intend to seek data exclusivity and market exclusivity for GPS, which we expect to be regulated by the FDA as a biological product, provided under the PHSA, and similar laws in other countries.

We believe that GPS and NPS will qualify for four years of data exclusivity and 12 years of market exclusivity under the BPCIA.

The law is complex and continues to be interpreted and implemented by the FDA.

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The regulatory, or non-patent, exclusivity available to drugs or biologics in some countries is less than that provided by the United States.

On January 29, 2020, the United States signed the United States-Mexico-Canada Agreement (USMCA), which is to replace the North American Free Trade Agreement (NAFTA) of 1994.

The current version does not include a minimum 10-year market exclusivity period for biologics that was part of earlier versions of the Agreement.

The 10-year period in the USMCA would have increased Canada’s 8-year period of exclusivity and Mexico’s 5-year period of exclusivity.

For instance, Canada currently provides for an eight-year period of exclusivity for new biological products, and Mexico provides for a five-year period of exclusivity.

Furthermore, in some countries outside of the United States, peptide vaccines, such as GPS and NPS, are regulated as chemical drugs rather than as biologics and may or may not be eligible for non-patent exclusivity.

If competitors are able to obtain marketing approval for biosimilars referencing our therapeutic candidates, if approved, our future products may become subject to competition from such biosimilars, whether or not they are designated as interchangeable, with the attendant competitive pressure and potential adverse consequences.

Such competitive products may be able to immediately compete with us in each indication for which our therapeutic candidates may have received approval.

If we are sued for infringing the intellectual property rights of third parties, such litigation could be costly and time-consuming and could prevent or delay our development and commercialization efforts.

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issued patents and pending patent applications owned by third parties exist in the fields in which we are developing and may develop our current and future product candidates.

As the biotechnology and pharmaceutical industries expand and more patents are issued, and as our product pipeline grows, the risk increases that our product candidates may be subject to claims of infringement of third parties’ patent rights as it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use.

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methods of use.

The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform or predictable.

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These infringing products may compete with our product candidates in jurisdictions where we or our licensors have no issued patents or where we do not have exclusive rights under the relevant patent(s), or our patent claims and other intellectual property rights may not be effective or sufficient to prevent them from so competing.

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Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

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 and our licensors to stop the infringement of our and our licensors’ patents or marketing of competing products in violation of our and our licensors’ proprietary rights generally.

Certain governments outside the United States have indicated that compulsory licenses to patents may be sought to further their domestic policies or on the basis of national emergencies.

Proceedings to enforce our and our licensors’ patent rights in foreign jurisdictions could result in substantial costs and divert our attention from other aspects of our business, could put our and our licensors’ patents at risk of being invalidated or interpreted narrowly, could put our and our licensors’ patent applications at risk of not issuing, and could provoke third parties to assert claims against us or our licensors.

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An unfavorable outcome in any such proceeding could require us or our licensors to cease using the related technology and commercializing the affected product candidate, or to attempt to license rights to it from the prevailing party.

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Our business could be harmed if the prevailing party does not offer us or our licensors a license on commercially reasonable terms if any license is offered at all.

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Even if we are successful in defending against any such claims, any such litigation would likely be protracted, expensive, a distraction to our management team, not viewed favorably by investors and other third parties, and may potentially result in an unfavorable outcome.

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If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be materially adversely affected, and our business could be harmed.

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government funding, the provisions of the Bayh-Dole Act may similarly apply.

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Risks Related to Commercialization of Our Current and Future Product Candidates

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• the cost of treatment in relation to alternative treatments;

• the availability of coverage and adequate reimbursement from third-party payors and government authorities;

• the availability of coverage, formulary status and adequate reimbursement from third-party payors and government authorities;

• relative convenience and ease of administration;

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If any of our current and future product candidates are approved but fail to achieve market acceptance among physicians, patients, healthcare payors or cancer treatment centers, we will not be able to generate significant revenues, which would compromise our ability to become profitable.

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Even if we are able to commercialize our current or future product candidates, the products may not receive coverage and adequate reimbursement from third-party payors in the United States and in other countries in which we seek to commercialize our products, which could harm our business.

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Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, ability to raise capital needed to commercialize products and overall financial condition.

Recently enacted and future legislation, including potentially unfavorable pricing regulations, may increase the difficulty and cost for us to obtain regulatory approval of and commercialize our current or future product candidates and affect the prices we may obtain.

The regulations that govern, among other things, regulatory approvals, coverage, pricing and reimbursement for new drug products vary widely from country to country.

In the United States 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 regulatory approval of our current or future product candidates, restrict or regulate post-approval activities and affect our ability to successfully sell any product candidates for which we obtain regulatory approval.

In the United States, the European Union, United Kingdom and other potentially significant markets for our current and future product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which has resulted in lower average selling prices.

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

For example, on May 8, 2019, CMS issued a final rule that would have required direct-to-consumer television advertisements of prescription drugs and biological products to include the Wholesale Acquisition Cost, or list price, of the product;

however, the U.S.

District Court for the District of Columbia invalidated the final rule, preventing it from taking effect.

The District Court’s ruling was upheld by the U.S.

Court of Appeals for the DC Circuit.

In addition, under the Trump Administration’s Safe Importation Plan, at the end of December 2019, the FDA issued a notice of proposed rulemaking to establish a system whereby state governmental entities could lawfully import and distribute prescription drugs sourced from Canada, although the impact of such future programs is uncertain.

Congress has indicated that it will continue to seek additional new legislative and/or administrative measures to control drug costs.

At the state level, legislatures are increasingly 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.

We expect that additional state and federal healthcare reform 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.

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

Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.

In both the United States and certain international jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably.

In particular, in 2010, the ACA was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars;

addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program;

extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations;

subjected manufacturers to new annual fees and taxes for certain branded prescription drugs;

and provided incentives to programs that increase the federal government’s comparative effectiveness research.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts to repeal or repeal and replace certain aspects of the ACA.

On December 14, 2018, a U.S.

District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as a part of the Tax Act, the remaining provisions of the ACA are invalid as well.

In December 2019, the Fifth Circuit Court of Appeals upheld the lower court’s finding that the individual mandate in the law is unconstitutional.

However, the Fifth Circuit also reversed and remanded the case to the district court to determine if other reforms enacted as part of the ACA, but not specifically related to the individual mandate or health insurance, including the BPCIA, could be severed from the rest of the ACA so as not to be declared invalid.

On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case and allocated one hour for oral arguments, which occurred on November 10, 2020.

A decision from the Supreme Court is expected to be issued in spring 2021.

It is unclear how this litigation and other efforts to repeal and replace the ACA will affect the implementation of that law.

Until there is more certainty concerning the future of the ACA, it will be difficult to predict its full impact and influence on our business.

Further changes to and under the ACA remain possible, although the new administration under President Joseph Biden has signaled that it plans to build on the ACA and expand the number of people who are eligible for subsidies under it.

President Biden indicated that he may use executive orders to undo changes to the ACA made by the former administration and would advocate for legislation to build on the ACA.

It is unknown what form any such changes or any law proposed to replace the ACA would take, and how or whether it may affect our business in the future.

We expect that changes to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in 2013, and will remain in effect through 2027 unless additional Congressional action is taken.

The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at containing or lowering the cost of healthcare, including facilitation of generic entry and biosimilars.

The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could prevent or delay marketing approval of our current product candidates and any future product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell a product for which we obtain marketing approval.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example, changes to our manufacturing arrangements, additions or modifications to product labeling, the recall or discontinuation of our products, or additional record-keeping or reporting requirements.

If any such changes were to be imposed, they could adversely affect the operation of our business.

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In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.

For example, the ACA substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the U.S.

pharmaceutical industry.

The ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs and biologics that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs and biologics, and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% (increased from 50% pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs and biologics to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs or biologics to be covered under Medicare Part D.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, re-examining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact the ACA or our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, resulted in reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through June 30, 2022 (a 1% sequester will apply from April 1, 2022 through June 30, 2022) due to the COVID-19 pandemic, unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

As another example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive healthcare provisions and amendments to existing laws, including a requirement that all manufacturers of drugs and biological products covered under Medicare Part B report the product’s average sales price, or ASP, to Department of Health and Human Services (HHS) beginning on January 1, 2022, subject to enforcement via civil money penalties.

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Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.

Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

Although a number of these and other measures may require additional authorization to become effective, Congress and the current U.S.

administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.

Moreover, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and health care insurance industries.

Among other things, the executive order directs the FDA to work towards implementing a system for importing drugs from Canada (following on a Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020).

The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry.

The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

Accordingly, there remains a large amount of uncertainty regarding the federal government’s approach to making pharmaceutical treatment costs more affordable for patients.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

or example, California requires pharmaceutical manufacturers to notify certain purchasers, including health insurers and government health plans at least 60 days before any scheduled increase in the wholesale acquisition cost (WAC), of their product if the increase exceeds 16%, and further requires pharmaceutical manufacturers to explain whether a change or improvement in the product necessitates such an increase.

Similarly, Vermont requires pharmaceutical manufacturers to disclose price information on certain prescription drugs, and to provide notification to the state if introducing a new drug with a WAC in excess of the Medicare Part D specialty drug threshold.

In December 2020, the U.S.

Supreme Court also held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers, or PBMs, and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects.

In addition, regional healthcare authorities 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.

This could reduce the ultimate demand for our product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.

We expect that the ACA, the recent laws described above, and 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.

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

We cannot predict the initiatives that may be adopted in the future.

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• our ability to enjoy or maintain market exclusivity;

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• the level of taxes that we are required to pay;

• the availability of capital.

We expect that the ACA, 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, lower reimbursement and new payment methodologies.

This could lower the price that we receive for any approved product.

Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profitability or commercialize our product candidates, if approved.

Price controls may be imposed in foreign markets, which may adversely affect our future profitability.

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• federal civil and criminal false claims laws, including the federal False Claims Act that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, which imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information;

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identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information;

• the federal physician sunshine requirements under the ACA which requires certain manufacturers of drugs, devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations;

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and certain state and local laws which require the registration of pharmaceutical sales representatives;

• state and foreign laws govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

• state and foreign laws govern the privacy and security of health information in specified circumstances, including the GDPR, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.

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Many healthcare laws and regulations are rapidly changing and legislative bodies and regulatory agencies are regularly considering amendments and supplements to existing laws and regulations, and as a result interpretations of rules and confirmation of our compliance with such rules can be ambiguous.

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Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

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We have been involved in multiple legal and governmental proceedings, including securities class action litigation, and may in the future be involved in proceedings, relating to the commercial activities of our predecessor that could divert management’s attention and adversely affect our financial condition and our business.

Our predecessor, Galena, was involved in multiple legal and governmental proceedings, including stockholder class actions, both state and federal, some of which are ongoing.

In the past, our predecessor, Galena, was involved in multiple legal and governmental proceedings, including stockholder class actions, both state and federal, none of which are ongoing.

These legal and governmental actions, or the Galena Legacy Matters, included allegations relating to federal securities law violations, claims under the False Claims Act and Anti-Kickback Statute, claims regarding breaches of contract, and other stockholder allegations, including claims of breaches of fiduciary duty by our former directors, and fentanyl related litigation.

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Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the continuing company’s business.

In December 2015, Galena announced that it had received a subpoena from the U.S.

Attorney’s Office for the District of New Jersey, or the USAO NJ, requesting the production of a broad range of documents pertaining to marketing and promotional practices related to Abstral, a fentanyl or synthetic opioid product, that was sold to Sentynl Therapeutics Inc., or Sentynl, in November 2015.

In January 2016, Galena announced that the USAO NJ and the DOJ were conducting a criminal and civil investigation of Galena, which came to involve criminal investigations with respect to possibly one or more then-current and/or former employees.

On September 8, 2017, the DOJ announced a civil settlement agreement with Galena regarding certain of the marketing and promotional practices at issue in the USAO NJ and DOJ’s investigation.

The settlement involved a civil resolution agreement and a civil payment of approximately $7.551 million, plus interest accrued since the date of reaching an agreement in principle in return for a release of federal government claims against Galena in connection with the covered conduct in investigation.

The civil payment was fully paid on or about December 29, 2017.

The settlement did not include releases of criminal claims by the USAO NJ and DOJ or claims by state agencies or administrative claims HHS but each of these government authorities indicated that they had no present intention to pursue claims in connection with the investigation.

A qui tam action had been filed against Galena and others as described in the settlement agreement with DOJ and USAO NJ.

As set forth in that settlement agreement, for a release of all claims against Galena and its former officers and directors and dismissal with prejudice of the qui tam lawsuit, the relator received a portion of the $7.551 million payment to the federal government.

As a result of the payment of the settlement amount, the federal government and the relator filed a stipulation of dismissal with prejudice as to their claims against Galena in the qui tam lawsuit.

In a separate settlement agreement, Galena paid $0.3 million in cash to the relator’s counsel for the statutorily mandated attorney’s fees.

A federal investigation led by the U.S.

Attorney’s Office for the Southern District of Alabama, or the SDAL, of two of the high-prescribing physicians for Abstral resulted in the criminal prosecution of the two physicians for alleged violations of the federal False Claims Act and other federal statutes.

On April 28, 2016, a second superseding indictment was filed in the criminal case, which added additional information about the defendant physicians and provided information regarding the facts and circumstances involving a rebate agreement between us and the defendant physicians’ pharmacy as well as their ownership of our common stock.

The criminal trial, which began on January 4, 2017, concluded with a jury verdict on February 23, 2017 finding these physicians guilty on 19 of 20 counts.

In May 2017, one physician was sentenced to 20 years in prison, and the other physician was sentenced to 21 years in prison.

At the end of the SDAL case, SDAL dismissed count 18 of the indictment charging that the physicians conspired, through the C&R Pharmacy, to receive illegal kickbacks in exchange for prescribing Abstral.

To our knowledge, we were not a target or subject of that investigation.

We received a subpoena from the U.S.

Attorney’s Office for the Southern District of New York, or USAO SDNY, in February 2018, seeking documents related to specific prescribing physicians for Abstral (fentanyl) sublingual tablets, who have been subsequently indicted, to which we responded.

To our knowledge, we are not a target or subject of that investigation and have had no further interaction with the USAO SDNY with regard to the matter after responding to the subpoena.

There continues to be significant litigation and governmental activity generally in the fentanyl and opioid area, and this activity is expected to continue and may increase in the future.

We cannot assure you we will not become subject to additional significant legal or governmental proceedings relating to Galena’s former Abstral business in the future.

Moreover, in addition to these ongoing and prior matters, we may be exposed to claims, or other legal or governmental actions in the future relating to violations of the False Claims Act, Anti-Kickback Statute, the ACA, or any other applicable state or federal statutes or regulations, and thereby be subject to penalties, such as civil and criminal penalties, damages, fines, or an administrative action of exclusion from government health care reimbursement programs.

We cannot assure you we will not become subject to additional legal or governmental proceedings relating to Galena’s former Abstral business in the future.

Moreover, we may be exposed to claims, or other legal or governmental actions in the future relating to violations of the False Claims Act, Anti-Kickback Statute, the ACA, or any other applicable state or federal statutes or regulations, and thereby be subject to penalties, such as civil and criminal penalties, damages, fines, or an administrative action of exclusion from government health care reimbursement programs.

Since DOJ published a memorandum in 2016 formally instructing prosecutors to focus on individual accountability when dealing with corporate misconduct, individual prosecutions have increased.

As a result, former individual executives or other former employees of Galena could be subjected to prosecution relating to Galena’s former Abstral business in the future.

In February 2017, Galena, and certain of its then officers and directors, were named in a purported consolidated putative class action lawsuit that generally alleges that Galena and certain of its then officers and directors violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by failing to disclose, among other things, that certain of Galena’s promotional practices were allegedly improper and that these alleged failures rendered Galena’s statements about its business misleading.

This action is currently pending in the U.S.

District Court for the District of New Jersey.

We deny any and all allegations of wrongdoing and are vigorously defending against this lawsuits.

We are, however, unable to predict the outcome of this matter at this time.

This lawsuit could adversely impact our reputation and divert management attention and resources away from other priorities.

Three related derivative lawsuits were filed with respect to which we have reached a settlement in principle subject to final documentation and court approval.

As a result of a cease and desist order issued by the SEC on April 10, 2017 and our related settlement with the SEC, or the SEC Settlement, we are currently an “ineligible issuer” as the term is defined under Rule 405 promulgated under the Securities Act.

This could make it more difficult for us to raise necessary financing in the future.

If we fail to comply with the terms of the SEC Settlement in the future, it could have significant additional adverse consequences to us.

These Galena Legacy Matters have required and continue to require our management and board of directors to devote a significant amount of time and resources to defending such claims and addressing such allegations, rather than focusing on executing on our business plans and operations.

We may, in the future, become subject to additional legal and governmental actions that will also require us to expend time and resources.

The settlement of the Galena Legacy Matters has resulted in substantial payments, some of which have not been fully covered by our insurance policies.

We may continue to incur substantial unreimbursed legal fees and other expenses in connection with the Galena Legacy Matters.

These ongoing and other future legal and governmental proceedings may not qualify for coverage under, or may exceed the limit of, our applicable directors and officers liability insurance policies and could have a material adverse effect on our financial condition, liquidity, and results of operations.

An unfavorable outcome in any of these matters could damage our business and reputation or result in additional claims or proceedings against us.

Moreover, in addition to these ongoing and prior matters, we may be exposed to other legal or governmental actions in the future, which could result in the payment of additional amounts and have a material adverse effect on our financial condition and results of operations.

We can make no assurances as to the time or resources that will need to be devoted to the Galena Legacy Matters, or any new or future matters or their outcome, or the impact, if any, that these matters or any resulting legal or governmental proceedings may have on our business or financial condition but any further action in respect of any such matter by a governmental agency could have a material adverse effect on our results of operation and our business and prospects.

See “ Business-Legal Proceedings ” for more information regarding our legal and governmental proceedings.

Future legal and governmental proceedings may not qualify for coverage under, or may exceed the limit of, our applicable directors and officers liability insurance policies and could have a material adverse effect on our financial condition, liquidity, and results of operations.

An unfavorable outcome in any future litigation matters could damage our business and reputation.

We can make no assurances as to the time or resources that would need to be devoted to any new or future litigation matters or their outcome, or the impact, if any, that these matters may have on our business or financial condition.

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Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

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Risks Related to our Business Operations

Our business has been and may continue to be adversely affected by COVID-19.

The ongoing global COVID-19 pandemic, including the surges of cases from the Delta and Omicron variants, continues to disrupt our business operations and those of our contractors, CROs, suppliers, clinical sites, CMOs, and other partners.

The COVID-19 pandemic could affect the health and availability of our workforce and that of the third-parties we rely on, such as our CROs, clinical sites, CMOs, and other contractors as well as the governmental agencies, such as the FDA and health authorities in other countries which could delay or otherwise adversely impact the ability of such parties to fulfill their obligations.

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In particular, our clinical trial operations, including the REGAL study, have been directly and indirectly adversely impacted globally, and could continue to be directly and indirectly adversely impacted, by the COVID-19 pandemic.

Restrictions on travel and/or transport of clinical materials as well as the diversion of hospital and clinical site staff and resources to COVID-19 infected patients has, and could continue, to disrupt clinical trial operations, including causing delays, potentially resulting in a slowdown in enrollment and/or deviations from or disruptions in key clinical trial activities, such as clinical site monitoring.

Further, if the spread of COVID-19 continues, the operations of our CMOs for our clinical supply of GPS could be significantly delayed as well and we risk a delay, default and/or nonperformance under our existing agreements.

The COVID-19 pandemic and mitigation measures also may have an adverse impact on global economic conditions, which could adversely impact our business, financial condition or results of operations.

Additionally, the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty.

A continuation or worsening of the levels of market disruption or volatility seen in the recent past due to the COVID-19 pandemic could have an adverse impact on our ability to access capital and on the market price of our common stock.

It is currently not possible to predict how long the COVID-19 pandemic will last, including whether there will be additional surges from new variants, or the time that it will take for economic activity to return to pre-pandemic levels.

The extent to which COVID-19 impacts our business and operations, and our employees, suppliers, CROs and other partners will depend on future developments that are highly uncertain and cannot be predicted, including the duration of the outbreak, the continued availability and efficacy of vaccines, new information which may emerge concerning the severity of COVID-19, the emergence of new variants of COVID-19, and the actions to contain COVID-19 or treat its impact, among others.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

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Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

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We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

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If these or other therapies are successful in their development, it could negatively impact our ability to enroll our clinical trials and could negatively impact the commercial potential of GPS.

Principal competitors for our AML indication include both companies with currently approved products in AML, such as AbbVie/Genentech (the holders of rights to VENCLEXTA), Agios Pharmaceuticals, Inc./Servier (the holder of U.S.

rights to TIBSOVO), Novartis AG (the holder of rights to RYDAPT), Astellas Pharmaceuticals (the holder of rights to XOSPATA), BMS (the holder of rights to VIDAZA and IDHIFA), Otsuka Pharmaceutical Co., Ltd.

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Principal competitors for our AML indication include both companies with currently approved products in AML, such as AbbVie/Genentech (the holders of rights to VENCLEXTA), Servier (the holder of U.S.

rights to TIBSOVO), Novartis AG (the holder of rights to RYDAPT), Astellas Pharmaceuticals (the holder of rights to XOSPATA), BMS (the holder of rights to ONUREG/VIDAZA and IDHIFA), Otsuka Pharmaceutical Co., Ltd.

(the holder of rights to DACOGEN), among others, as well as those with front-line chemotherapy drugs and maintenance therapies such as Jazz Pharmaceuticals, Inc.

(the holder of rights to VYXEOS), BMS (the holder of rights to ONUREG),as well as Pfizer Inc.

(the holder of rights to VYXEOS), as well as Pfizer Inc.

(the holder of rights to MYLOTARG and DAURISMO), among others, as well as companies with drugs currently in development in AML, such Daiichi Sankyo (the holder of rights to quizartinib/licensed in Japan under the trade name VANFLYTA), Karyopharm Therapeutics, Inc.

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(the holder of rights to cusatuzumab, or ARGX-110/JNJ-4550), Gilead Sciences, Inc.

(the holder of rights to magrolimab, or Hu5F9 G4), Actinium Pharmaceuticals, Inc.

(the holder of rights to [131]-iodine-apamistamab, or Iomab-B), and Rafael Pharmaceuticals, Inc.

(the holder of rights to devimistat), among others.

(the holder of rights to magrolimab, or Hu5F9 G4), and Actinium Pharmaceuticals, Inc.

(the holder of rights to [131]-iodine-apamistamab, or Iomab-B), among others.

Companies currently engaged in the clinical development of AML therapies with an immunological/immuno-modulatory mechanism of action include Pfizer Inc./EMD Serono (the holders of rights to BAVENCIO), BMS (the holder of rights to YERVOY), MacroGenics, Inc./Les Laboratoires Servier, SA (the holders of rights to flotetuzumab, or MGD006), Celyad Oncology SA (the holder of rights to CYAD-01), Fortress Biotech, Inc.

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These appreciable advantages could render our product candidates obsolete or noncompetitive before we can recover the expenses of development and commercialization.

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We enter into various contracts in the normal course of our business in which we may be required to indemnify the other party to the contract under certain specific scenarios.

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The size and complexity of our information technology and information security systems, and those of our third-party vendors with whom we contract (and the large amounts of confidential information that is present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from malicious attacks by third parties.

Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage and market manipulation) and expertise.

Such attacks are of ever-increasing levels of sophistication and are made by groups, including nation states and organized crime, and individuals with a wide range of motives (including, but not limited to, industrial espionage and market manipulation) and expertise.

These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data.

While we have invested significantly in the protection of data and information technology, there can be no assurance that we detect any such disruption or security breach or that our efforts will prevent service interruptions or security breaches.

While we have invested significantly in the protection of data and information technology, there can be no assurance that we will be able to detect any such disruption or security breach in a timely manner or at all or that our efforts will prevent service interruptions or security breaches.

Our internal computer systems, and those of MSK, our CROs, our CMOs, and other business vendors on which we rely, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, fire, terrorism, war and telecommunication and electrical failures.

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To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development of our current and future product candidates could be delayed and our business could be otherwise adversely affected.

We will likely need to grow the size of our organization in the future, and we may experience difficulties in managing this growth.

As of December 31, 2020, we had seven full-time employees.

In addition, we do not maintain separate cyber liability insurance.

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We will need to grow the size of our organization in the future, and we may experience difficulties in managing this growth.

As of December 31, 2021, we had 11 full-time employees.

We will need to grow the size of our organization in order to support our continued development and potential commercialization of our product candidates.

As our development and commercialization plans and strategies continue to develop, our need for additional managerial, operational, manufacturing, sales, marketing, financial and other resources may increase.

As our development and commercialization plans and strategies continue to develop, our need for additional managerial, operational, manufacturing, regulatory, sales, marketing, financial and other resources may increase.

Our management, personnel and systems currently in place may not be adequate to support this future growth.

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These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers.

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Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel.

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We have not obtained, do not own, nor are we the beneficiary of, key-person life insurance.

Governance changes, becoming subject to enhanced regulatory requirements and increased responsibilities associated with becoming a public company may influence our management personnel and our employees to terminate their employment with us.

To enhance our ability to retain our executive management personnel, we have entered into retention agreements with certain executive officers and may find it beneficial to enter into additional retention agreements with other key personnel in the future, potentially increasing payroll and operating expenses.

Our future growth and success depend on our ability to recruit, retain, manage and motivate our employees.

The loss of any member of our senior management team or the inability to hire or retain experienced management personnel could compromise our ability to execute our business plan and harm our operating results.

Because of the specialized scientific and managerial nature of our business, we rely heavily on our ability to attract and retain qualified scientific, technical and managerial personnel.

The competition for qualified personnel in the pharmaceutical field is intense and as a result, we may be unable to continue to attract and retain qualified personnel necessary for the development of our business.

If we and our third-party manufacturers 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.

We and our third-party manufacturers are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes.

Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials.

Our operations also produce hazardous waste products.

We generally contract with third parties for the disposal of these materials and wastes.

We cannot eliminate the risk of contamination or injury from these materials.

In the event of contamination or injury resulting from us or our third-party manufacturers’ use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.

We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover the costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials with a policy limit that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, this insurance may not provide adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

These current or future laws and regulations may impair our research, development or production efforts.

Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions, which could adversely affect our business, financial condition, results of operations and prospects.

We employ our executive officers, other than Dr.

Stergiou, on an at-will basis and their employment can be terminated by them or us at any time, for any reason and without notice.

The loss of any member of our senior management team or the inability to hire or retain experienced senior management personnel could compromise our ability to execute our business plan and harm our operating results.

In order to retain valuable employees at our company, in addition to salary and discretionary bonus payments, we provide stock options and restricted stock units (RSUs) that vest over time.

The value to our employees of stock options and RSUs could be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract offers from other companies.

Our future growth and success depends not only on our ability to retain, manage and motivate our employees but also on our ability to recruit new employees which is key to our growth.

We might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified talent among biotechnology, pharmaceutical and other businesses.

We could have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employment recruitment and retention efforts.

Many pharmaceutical and biotechnology companies with whom we compete for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than we do.

The Tax Cuts and Jobs Act could adversely affect our business and financial condition.

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In addition, it is uncertain if and to what extent various states will conform to the TCJA, the FFCR Act, the CARES Act, or the CAA.

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Our ability to use net operating losses to offset future taxable income may be subject to limitations.

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The Merger constituted an ownership change and as such, our ability to use our NOL carryforwards is materially limited, which may harm our future operating results by effectively increasing our future tax obligations.

Risks Relating to Ownership of Our Common Stock

Risks Related to Ownership of Our Common Stock

We will likely need to secure additional capital which may cause dilution to you and our existing stockholders, provide subsequent investors with rights and preference that are senior to yours, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.

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• announcements of dilutive financing;

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• announcements of additional potential reverse stock split;

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• government regulation of drug pricing;

• general changes in the economy, the financial markets or the pharmaceutical or biotechnology industries.

• general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors, including deteriorating market conditions due to investor concerns regarding inflation and hostilities between Russia and Ukraine.

Factors beyond our control may also have an impact on the market price of shares of our common stock.

For example, to the extent that other companies within our industry experience declines in their stock prices, the market price of shares of our common stock may decline as well.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Inadequate funding for the FDA, the SEC and other domestic and foreign government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA or foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

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In the case of outstanding securities that have exercise or conversion prices that are below the market price of our common stock from time to time, our stockholders would experience dilution upon the exercise or conversion of these securities.

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Certain of our securityholders have registration rights and they can require us, subject to certain limitations, to register their securities for resale and to maintain such registration.

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We have settled in the past and may in the future settle legal claims through the issuance of freely tradable shares of our common stock.

In June 2018, we issued 4,574 unrestricted shares of our common stock (or $1,250,000 based on the volume-weighted average closing price for the 20 trading days immediately preceding June 21, 2018, the day before the transfer of the settlement stock to the settlement fund) to settle the case entitled Patel vs.

Galena Biopharma, Inc.

We may issue additional shares of common stock as settlement payments in the future.

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Section 203 could operate to delay or prevent a change of control of us.

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If our common stock becomes subject to the penny stock rules, it may be more difficult to sell our common stock.

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Delisting from the Nasdaq Capital Market could also result in other negative consequences, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities.

As previously reported, on May 31, 2019, we received a letter from Nasdaq indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we did not meet the minimum bid price of $1.00 per share required for continued listing on the Nasdaq Capital Market pursuant to the Minimum Bid Price Rule.

In connection therewith, we effected a 1-for-50 reverse stock split of our common stock on November 7, 2019, and on November 25, 2019, we were informed by Nasdaq that we regained compliance with the Minimum Bid Price Rule.

Notwithstanding the reverse stock split and our compliance with The Nasdaq Capital market requirements, we cannot be sure that our share price will comply with the requirements for continued listing of our common stock on The Nasdaq Capital Market in the future, or that we will comply with the other continued listing requirements.

If our shares of common stock lose their status on Nasdaq, we believe that they would likely be eligible to be quoted on the inter-dealer electronic quotation and trading system operated by Pink OTC Markets Inc., commonly referred to as the Pink Sheets and now known as the OTCQB market.

Our shares of common stock may also be quoted on the Over-the-Counter Bulletin Board, an electronic quotation service maintained by the Financial Industry Regulatory Authority.

These markets are generally not considered to be as efficient as, and not as broad as, Nasdaq.

Selling our shares on these markets could be more difficult because smaller quantities of shares would likely be bought and sold, and transactions could be delayed.

In addition, in the event our shares are delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity of our common stock.

These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock.

In the past, we received a letter from Nasdaq indicating that we did not meet the minimum bid price of $1.00 per share required for continued listing on the Nasdaq Capital Market pursuant to the Minimum Bid Price Rule.

Although we have regained compliance with the Minimum Bid Price Rule after implementing reverse stock splits, there can be no assurance that we will be able to meet the minimum closing bid price rule or other listing requirements in the future.

We have never declared or paid cash dividends on our common stock and we do not anticipate paying cash dividends on our common stock in the foreseeable future.

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As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of potential gain for the foreseeable future.

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UNRESOLVED STAFF COMMENTS

We lease our headquarters in New York, New York.

The lease covers approximately 5,143 square feet of office space and expires in December 2024.

The lease covers approximately 8,455 square feet of office space, which includes additional space beginning on February 22, 2022, and expires in December 2024.

We believe that our facility is adequate for our current needs.

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

What changed 10-K

Item 1A. Risk Factors