Legal Proceedings.
−Removed: Two putative class action lawsuits were filed against us and certain of our current and former executive officers in the United States District Court for the Eastern District of New York, one captioned Richard S.
+Added: Two putative class action lawsuits were filed against us and certain of our current and former officers in the United States District Court for the Eastern District of New York, one captioned Richard S.
Spero Therapeutics, Inc., Ankit Mahadevia, and Satyavrat Shukla, Case No.
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The Amended Complaint generally alleges that we and certain of our current and former officers violated Sections 10(b) and/or 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements concerning the New Drug Application (“NDA”) for tebipenem HBr in an effort to lead investors to believe that the drug would receive approval from the FDA.
−Removed: Plaintiffs seek unspecified damages, interest, attorneys’ fees, and other costs.
+Added: Plaintiffs seek unspecified damages, interest,
+Added: attorneys’ fees, and other costs.
We filed a fully-briefed Motion to Dismiss on June 21, 2023.
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Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Quarterly Report on Form 10-Q, including the section of this Quarterly Report on Form 10-Q titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and in other documents that we file with the SEC, in evaluating our company and our business.
−Removed: Investing in our securities involves a high degree of risk.
If any of the events described in the following risk factors and the risks described elsewhere in this Quarterly Report on Form 10-Q actually occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected, and the trading price of our securities could decline.
−Removed: Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Quarterly Report on Form 10-Q.
+Added: Our actual results could differ materially from those contained in the forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time.
+Added: The risks and uncertainties described below are not the only ones we face.
+Added: Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.
Risks Related to Product Development and Commercialization
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Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.
−Removed: The clinical development of any of our product candidates is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a trial or across a broad population of patients, the occurrence of severe adverse events, failure to comply with protocols or applicable regulatory requirements, and determination by the FDA or any comparable foreign regulatory authority that a drug product is not approvable.
+Added: The clinical development of any of our product candidates is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a trial or across a broad population of patients, the occurrence of severe adverse events, failure to comply with protocols or applicable regulatory requirements, and determination by the FDA or any
+Added: comparable foreign regulatory authority that a drug product is not approvable.
A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in clinical trials, even after promising results in earlier nonclinical studies or clinical trials.
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We could also encounter delays if a clinical trial is suspended or terminated by us, by the institutional review boards (“IRBs”) responsible for overseeing such trials, by the Data Safety Monitoring Board (“DSMB”) if any, for such trial or by the FDA or other regulatory authorities.
−Removed: Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or changes in governmental regulations or administrative actions.
+Added: Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to
+Added: conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or changes in governmental regulations or administrative actions.
If we are required to conduct additional clinical trials or other testing of any of our product candidates beyond the trials and testing that we contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, if the results of these trials or tests are unfavorable or are only modestly favorable or if there are safety concerns associated with any of our product candidates, we may:
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The action plan must describe appropriate diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.
−Removed: In the future, we will be required to submit a diversity action plan to the FDA by the time we submit a Phase 3 trial, or pivotal study, protocol to the agency for review, unless we are able to obtain a waiver for some or all of the requirements for a diversity action plan.
−Removed: It is unknown at this time how the diversity action plan may affect the planning and timing of any future Phase 3 trial for our product candidates or what specific information FDA will expect in such plans.
−Removed: However, initiation of such trials may be delayed if the FDA objects to our proposed diversity action plans for any future Phase 3 trial for our product candidates, and we may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan.
+Added: In the future, we will be required to submit a diversity action plan to the FDA by the time we submit a Phase 3 clinical trial, or pivotal study, protocol to the agency for review, unless we are able to obtain a waiver for some or all of the requirements for a diversity action plan.
+Added: It is unknown at this time how the diversity action plan may affect the planning and timing of any future Phase 3 clinical trial for our product candidates or what specific information FDA will expect in such plans.
+Added: However, initiation of such trials may be delayed if the FDA objects to our proposed diversity action plans for any future Phase 3 clinical trial for our product candidates, and we may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan.
Analyses of preliminary or interim data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
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This may make it difficult for tebipenem HBr to compete with these products.
−Removed: There are also a number of oral product candidates in clinical development by third parties that are intended to treat cUTIs.
−Removed: One such product candidate is ceftibuten/clavulanate ("C-Scape") from Cipla Therapeutics, Inc.
−Removed: If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.
−Removed: There are several IV-administered products marketed for the treatment of infections resistant to first-line therapy for Gram-negative infections, including ceftazidime-avibactam ("Avycaz") from Allergan plc and Pfizer Inc., ceftolozane-tazobactam ("Zerbaxa") from Merck & Co., imipenem/cilastatin and relebactam ("Recarbrio") from Merck & Co., plazomicin ("Zemdri") from Cipla Therapeutics, Inc., cefiderocol ("Fetroja") from Shionogi & Co.
−Removed: Ltd., eravacycline ("Xerava") from Innoviva, Inc.
−Removed: and meropenem-vaborbactam ("Vabomere") from Melinta Therapeutics, Inc.
+Added: There are several IV-administered products marketed for the treatment of infections resistant to first-line therapy for Gram-negative infections, including Avycaz (ceftazidime-avibactam) from Allergan plc and Pfizer Inc., Zerbaxa (ceftolozane-tazobactam) from Merck & Co., imipenem/cilastatin and Recarbrio (relebactam) from Merck & Co., Zemdri (plazomicin) from Cipla Therapeutics, Inc., Fetroja (cefiderocol) from Shionogi & Co.
+Added: Ltd., Xerava (eravacycline) from Innoviva, Inc.
+Added: and Vabomere (meropenem-vaborbactam) from Melinta Therapeutics, Inc., and Exblifep (cefepime/enmetazobactam) from Allecra Therapeutics.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.
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The healthcare industry is focused on cost containment, both in the United States and elsewhere.
−Removed: Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably.
+Added: Government authorities and third-party payors have attempted to control
+Added: costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably.
Increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged.
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While we have not, to our knowledge, experienced any significant system failure, accident or material cybersecurity incident to date, if such an event were to occur and cause interruptions in our operations or the operations of those third parties with which we contract, it could result in a material disruption of our programs and our business operations, as well as our financial condition.
−Removed: For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could
−Removed: result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
+Added: For example, the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
Such a loss could also expose us to regulatory enforcement, civil liability and reputational damage.
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Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well.
−Removed: For example, the European Parliament and the Council of the European Union adopted a comprehensive general data privacy framework called the General Data Protection Regulation ("GDPR"), which took effect in May 2018 and governs the collection and use of personal data in the European Union, including by companies outside of the European Union.
+Added: For example, the European Parliament and the Council of the European Union adopted a comprehensive general
+Added: data privacy framework called the General Data Protection Regulation ("GDPR"), which took effect in May 2018 and governs the collection and use of personal data in the European Union, including by companies outside of the European Union.
The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of the personal data.
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That could require us to incur significant expenses, which could significantly affect our business.
−Removed: Failure to comply with data protection laws may expose us to risk of enforcement actions taken by
−Removed: data protection authorities or other regulatory agencies, private rights of action in some jurisdictions, and potential significant penalties if we are found to be non-compliant.
+Added: Failure to comply with data protection laws may expose us to risk of enforcement actions taken by data protection authorities or other regulatory agencies, private rights of action in some jurisdictions, and potential significant penalties if we are found to be non-compliant.
Furthermore, the number of government investigations related to data security incidents and privacy violations continue to increase and government investigations typically require significant resources and generate negative publicity, which could harm our business and reputation.
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We have not generated any revenue from the sale of our products and have incurred losses in each year since our inception in 2013 through 2022.
−Removed: Our net loss was $12.7 million during the three months ended March 31, 2024.
+Added: Our net loss was $17.9 million and $30.5 million during the three and six months ended June 30, 2024.
All of our product candidates are in development, none have been approved for sale and we may never have a product candidate approved for commercialization.
In accordance with ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we are required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern from the issuance date of our financial statements.
−Removed: We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report.
−Removed: Based on our cash and cash equivalents as of March 31, 2024, we believe that our cash runway will be sufficient to fund us into late 2025.
+Added: We believe that our existing cash and cash equivalents, together with expected collections from our collaboration receivables – related party, will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report.
+Added: Based on our cash and cash equivalents as of June 30, 2024, we believe that our cash runway will be sufficient to fund us into late 2025.
Beyond this point we will need additional funding, which primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or partnerships, additional grant funding and/or reducing cash expenditures.
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Our failure to raise capital as and when needed would have a negative effect on our financial condition and our ability to pursue our business strategy.
−Removed: We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report.
−Removed: Based on our cash and cash equivalents as of March 31, 2024, we believe that our cash runway will be sufficient to fund us into late 2025.
+Added: We believe that our existing cash and cash equivalents, together with expected collections from our collaboration receivables – related party, will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report.
+Added: Based on our cash and cash equivalents as of June 30, 2024, we believe that our cash runway will be sufficient to fund us into late 2025.
Our cash forecasts are based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
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We have a limited operating history and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability.
−Removed: We were established in 2013 and began operations in 2014.
−Removed: Our operations to date have been limited to financing and staffing our company, developing our technology and our product candidates.
+Added: Our operations to date have been limited to financing and staffing our company, and performing research and development activities to advance our product candidates.
+Added: Each of our product candidates is either in clinical or preclinical development.
We have not yet demonstrated an ability to successfully obtain marketing approval, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.
−Removed: We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.
−Removed: We have begun to transition from a company with a development focus to a company capable of supporting commercial activities.
−Removed: We may not be successful in such a transition.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control.
Accordingly, stockholders should not rely upon the results of any quarterly or annual periods as indications of future operating performance.
−Removed: We and certain of our current and former executive officers have been named as defendants in two initiated lawsuits, which were ordered consolidated, and two derivative lawsuits, that could result in substantial costs and divert management’s attention.
+Added: We and certain of our current and former officers have been named as defendants in two initiated putative class action lawsuits, which were ordered consolidated, and two derivative lawsuits, that could result in substantial costs and divert management’s attention.
We, and certain of our current and former executive officers, were named as defendants in two purported class action lawsuits that generally allege that we and certain of our current and former officers violated Sections 10(b) and/or 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements concerning the NDA for tebipenem HBr in an effort to lead investors to believe that the drug would receive approval from the FDA.
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The collaborator may also consider alternative product candidates or technologies for similar indications that may be available for collaboration and whether such a collaboration could be more attractive than the one with us for our product candidate.
−Removed: also be restricted under future license agreements from entering into agreements on certain terms with potential collaborators.
+Added: We may also be restricted under future license agreements from entering into agreements on certain terms with potential collaborators.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.
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If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates.
−Removed: If that occurs, we may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
+Added: If that occurs, we may not be able
+Added: to, or may be delayed in our efforts to, successfully commercialize our product candidates.
In such an event, our financial results and the commercial prospects for our product candidates could be harmed, our costs could increase and our ability to generate revenue could be delayed, impaired or foreclosed.
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In addition, our manufacturers are subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements.
−Removed: Failure by any of our
−Removed: manufacturers to comply with applicable cGMPs or other regulatory requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions, interruptions in supply and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates and have a material adverse effect on our business, financial condition and results of operations.
+Added: Failure by any of our manufacturers to comply with applicable cGMPs or other regulatory requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions, interruptions in supply and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates and have a material adverse effect on our business, financial condition and results of operations.
Our current and anticipated future dependence upon others for the manufacture of our product candidates and potential product candidates may adversely affect our future profit margins and our ability to commercialize any products for which we receive marketing approval on a timely and competitive basis.
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We have registered our trademarks for our name and logo in the United States and other countries and have a number of pending trademark applications in the United States and other countries.
−Removed: As of December 31, 2023, we have two registered United States trademarks, 23 registered foreign trademarks, and no pending foreign trademark applications.
+Added: As of June 30, 2024, we have two registered United States trademarks, 23 registered foreign trademarks, and no pending foreign trademark applications.
If our registered trademarks are invalidated, we may be unable to exclusively use our name or logo in certain jurisdictions or may need to change our name or logo in certain jurisdictions, which could affect our business.
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• production shortages resulting from any events affecting a product candidate and/or finished drug product supply or manufacturing capabilities abroad;
−Removed: • business interruptions resulting from geo-political actions, including war and terrorism, health epidemics or natural disasters, including earthquakes, hurricanes, typhoons, floods and fires;
+Added: • business interruptions resulting from geo-political conflicts, including war and terrorism, health epidemics or natural disasters, including earthquakes, hurricanes, typhoons, floods and fires;
• failure to comply with Office of Foreign Asset Control rules and regulations and the Foreign Corrupt Practices Act.
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This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
−Removed: We have in the past failed to satisfy certain continued listing requirements of the Nasdaq Global Select Market and could fail to satisfy those requirements again in the future, which could negatively affect the market price of our common stock, our liquidity and our ability to raise capital.
−Removed: Our potential failure to meet the continued listing requirements of Nasdaq Global Select Market in the future could result in a delisting of our common stock.
−Removed: Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq GS”), which imposes, among other requirements, a minimum $1.00 per share bid price requirement for continued inclusion on the Nasdaq GS pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”).
+Added: An active trading market for our common stock may never develop or be sustained.
+Added: Although our common stock is listed on the Nasdaq Global Select Market (“Nasdaq GS”), an active trading market for our shares may never develop or be sustained.
+Added: As a result, it may be difficult for our stockholders to sell their shares without depressing the market price for the shares, or at all.
+Added: If in the future we fail to satisfy the requirements of the Nasdaq GS it could result in a delisting of our common stock and could negatively affect the market price of our common stock, our liquidity and our ability to raise capital.
+Added: Our common stock is listed on the Nasdaq GS, which imposes, among other requirements, a minimum $1.00 per share bid price requirement for continued inclusion on the Nasdaq GS pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”).
The closing bid price for our common stock must remain at or above $1.00 per share to comply with the Bid Price Requirement for continued listing.
−Removed: There can be no assurance that we will be able to keep the closing bid price above $1.00 per share.
−Removed: If we fail to satisfy the continued listing requirements of Nasdaq GS, including the Bid Price Requirement, the Nasdaq Stock Market, LLC (“Nasdaq”) may provide us with another deficiency letter regarding the continued listing requirement.
−Removed: If we are unable to regain compliance with the Nasdaq Listing Rules in the future, Nasdaq may take steps to delist our common stock.
−Removed: Such a delisting from the Nasdaq GS could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity.
−Removed: If our common stock is delisted by the Nasdaq GS, our common stock may be eligible to trade on the Nasdaq Capital Market or an over-the-counter quotation system, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market value of our common stock.
−Removed: We cannot assure you that our common stock, if delisted from the Nasdaq GS, will be listed on another national securities exchange or quoted on an over-the counter quotation system.
+Added: In August 2022, we received a deficiency letter from the Listing Qualifications Department, or the Nasdaq Staff, informing us that we were not in compliance with the continued listing requirements of the Nasdaq Global Select Market because the bid price for our common stock had closed below $1.00 per share for 30 consecutive business days.
+Added: In October 2022, we received written notification from the Nasdaq Staff informing us that we had regained compliance with the minimum bid price requirement as a result of our common stock maintaining a closing bid price of $1.00 per share or greater for at least 10 consecutive business days.
+Added: However, there can be no assurance that we will be able to keep the closing bid price above $1.00 per share.
+Added: Any potential delisting of our common stock could have a material adverse effect on the market for, and liquidity and price of, our common stock and would adversely affect our ability to raise capital on terms acceptable to us, or at all.
+Added: Delisting from Nasdaq GS could also have other negative results, including, without limitation, the potential loss of confidence by investors, customers and employees and fewer business development opportunities.
+Added: Such a delisting from the Nasdaq GS would also make trading our common stock more difficult for stockholders to sell their shares in the public market.
We intend to actively monitor the closing bid price of our common stock and may, if appropriate, consider implementing available options to maintain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.
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In addition, if one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
−Removed: We can issue and have issued shares of preferred stock, which may adversely affect the rights of holders of our common stock.
−Removed: Our Amended and Restated Certificate of Incorporation, as amended, authorizes us to issue up to 10,000,000 shares of preferred stock with designations, rights and preferences determined from time-to-time by our board of directors.
−Removed: Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights superior to those of holders of our common stock.
−Removed: For example, an issuance of shares of preferred stock could:
−Removed: • adversely affect the voting power of the holders of our common stock;
−Removed: • make it more difficult for a third party to gain control of us;
−Removed: • discourage bids for our common stock at a premium;
−Removed: • limit or eliminate any payments that the holders of our common stock could expect to receive upon our liquidation;
−Removed: • otherwise adversely affect the market price or our common stock.
−Removed: As of March 31, 2024, all of our previously issued Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, and Series D Convertible Preferred stock has been converted into shares of our common stock.
−Removed: If any future holders of our shares of preferred stock convert their shares into common stock, existing holders of our common stock will experience dilution.
+Added: Unstable global economic and political conditions, including economic uncertainty tied to interest rates and heightened inflation, credit and financial market instability, and uncertainty related to ongoing geopolitical conflicts, could adversely affect our business, financial condition, stock price and ability to raise capital.
+Added: Unstable global economic and political conditions, including economic uncertainty tied to interest rates and heightened inflation, credit and financial market instability, and uncertainty related to ongoing geopolitical conflicts, could adversely affect our business, financial condition, stock price and ability to raise capital.
+Added: The global economy, in particular the financial markets, have
+Added: recently experienced significant disruption and volatility, including without limitation, as a result of heightened inflation, capital market volatility, interest rate and currency rate fluctuations, volatility in commodity prices, decline in consumer confidence and economic growth, supply chain disruptions, banking disruptions, and uncertainty resulting from geopolitical events, including trade wars, civil and political unrest, wars and other armed conflicts.
+Added: In addition, market volatility, high levels of inflation and high interest rates may increase our cost of financing or restrict our access to potential sources of future capital.
+Added: Furthermore, our stock price may further decline due in part to the volatility of the stock market and any general economic downturn.
+Added: If the disruption and volatility persist or heighten, it may impact our ability to raise sufficient additional capital on agreeable terms, if at all.
+Added: If we are unable to raise sufficient additional capital, our business, financial condition, stock price and results of operations could be adversely affected, and we will need to implement cost reduction strategies, which could include delaying, reducing or altogether terminating both internal and external costs related to our operations and research and development programs.
+Added: In addition, political developments impacting government spending and international trade, including changes in trade agreements, trade disputes, tariffs and investment restrictions, such as the ongoing trade dispute between the United States and China, may negatively impact markets and cause weaker macroeconomic conditions.
+Added: These global economic and political factors could also strain certain of our suppliers and manufacturers, possibly resulting in supply disruptions or increased raw material or manufacturing costs, or adversely impacting their ability to manufacture clinical trial materials for our product candidates.
+Added: Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic and geopolitical climate and financial market conditions could adversely impact our business.
We have broad discretion in the use of our cash reserves and may not use them effectively.
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To maintain compliance with Section 404, we are required to document and evaluate our internal control over financial reporting, which is both costly and challenging.
−Removed: We will need to continue to dedicate internal resources, continue to engage outside consultants and follow a detailed work plan to continue to assess and document the adequacy of internal control over financial reporting, continue to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.
+Added: We will need to continue to dedicate internal resources, continue to engage outside consultants and follow a detailed work plan to continue to assess and document the adequacy of internal control over financial reporting, continue to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous
+Added: reporting and improvement process for internal control over financial reporting.
If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
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Our outstanding shares of common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act, or to the extent that such shares have already been registered under the Securities Act and are held by non-affiliates of ours.
−Removed: Moreover, holders of a substantial number of shares of our common stock have
−Removed: rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
+Added: Moreover, holders of a substantial number of shares of our common stock have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
We also have registered all shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.