What changed in this filing

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Item 1A. Risk Factors

2024-02-29 compared with 2023-02-23 · 139 added, 99 removed, 423 unchanged (36% of the section changed)

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We have no products approved for commercial sale and may never achieve or maintain profitability.

• Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

• We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved.

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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 technologies or product candidates.

• Public health crises such as pandemics or other events could materially and adversely affect our business operations, workforce, product development activities, research and development activities, preclinical and clinical trials, and financial condition.

• Our compounds, including those from our ARC and GADLEN platforms, are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

• Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

• Our compounds, including those from our ARC platform, are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

We may not be successful in our efforts to use and expand our technology platforms to develop and commercialize our compounds and product candidates, or may experience significant delays in doing so.

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• We rely on third parties to supply raw materials and to manufacture our product candidates.

The manufacture of our product candidates is complex and our third-party manufacturers may encounter difficulties in production, which could

delay or entirely halt their ability to supply our product candidates for clinical trials or, if approved, for commercial sale.

• Our success depends upon our ability to obtain and maintain patents and other intellectual property rights to protect our technology, including product candidates from our ARC and GADLEN platforms, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.

The manufacture of our product candidates is complex and our third-party manufacturers may encounter difficulties in production, which could delay or entirely halt their ability to supply our product candidates for clinical trials or, if approved, for commercial sale.

• Our success depends upon our ability to obtain and maintain patents and other intellectual property rights to protect our technology, including product candidates from our ARC platform, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.

Risks Related to Our Business

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We may never succeed in these activities and, even if we do, we may never generate revenue that is sufficient to achieve profitability.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Since our inception in 2016, we have devoted a significant portion of our resources to developing our product candidates, our other research and development efforts, building our intellectual property portfolio, raising capital, and providing general and administrative support for these operations.

We have not yet demonstrated our ability to successfully complete product development activities, complete clinical trials (including Phase 3 or other pivotal clinical trials), obtain regulatory approvals, 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.

Additionally, we expect our financial condition and operating results to continue to fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control.

Consequently, any predictions you or we may make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved.

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

Based on our current business plans, we estimate that our existing cash and cash equivalents and investments will enable us to fund our operating expenses into the second half of 2024.

Based on our current business plans, we estimate that our existing cash and cash equivalents and investments will enable us to fund our operating expenses into 2026.

We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect, requiring us to seek additional funds sooner than planned through public or private equity or debt financings or other sources, such as strategic collaborations.

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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 technologies or product candidates.

If we raise additional capital through the sale of equity, including through our “at-the-market” offerings, or the ATM Facility, or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights as holders of our common stock.

If we raise additional capital through the sale of equity, including through our “at-the-market” offerings (the “ATM Facility”), or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights as holders of our common stock.

In addition, the possibility of such issuance may cause the market price of our common stock to decline.

Debt financing, if available, may result in increased fixed payment obligations and involve agreements that include covenants limiting or restricting our ability to take certain actions, which could materially and adversely impact our ability to conduct our business.

Our compounds, including those from our ARC and GADLEN platforms, are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

We may not be successful in our

efforts to use and expand our technology platforms to develop and commercialize our current and future product candidates, or may experience significant delays in doing so.

A key element of our strategy is to use and expand our proprietary technologies, including our ARC and GADLEN platforms, to build a pipeline of product candidates and progress these compounds and product candidates through preclinical and clinical development.

Our compounds, including those from our ARC platform, are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

We may not be successful in our efforts to use and expand our technology platforms to develop and commercialize our current and future product candidates, or may experience significant delays in doing so.

A key element of our strategy is to use and expand our proprietary technologies, including our ARC platform, to build a pipeline of product candidates and progress these compounds and product candidates through preclinical and clinical development.

Although our research and development efforts to date have resulted in a pipeline of product candidates and potential product candidates directed at various cancers and other indications, we have not received regulatory approval for any of our product candidates.

The scientific research that forms the basis of our efforts to develop product candidates with our proprietary technologies, including those from our ARC and GADLEN platforms, is still ongoing.

The scientific research that forms the basis of our efforts to develop product candidates with our proprietary technologies, including those from our ARC platform, is still ongoing.

Further, the scientific evidence to support the feasibility of developing therapeutic treatments based on our platforms is both preliminary and limited.

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We cannot be certain that our approach will lead to the development of approvable or marketable products, alone or in combination with other therapies.

To our knowledge, our dual-sided fusion protein product candidates have not previously been tested in humans and may have properties that negatively impact safety or efficacy, such as greater immunogenicity when compared to existing therapeutics.

our knowledge, our dual-sided fusion protein product candidates have not previously been tested in humans and may have properties that negatively impact safety or efficacy, such as greater immunogenicity when compared to existing therapeutics.

Moreover, our product candidates may have unexpected biological interactions when administered in vivo .

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Although we have employment agreements with certain of our key employees, including our Chief Executive Officer, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.

We expect to experience continued growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, clinical operations, business development, manufacturing, regulatory affairs, quality assurance, human resources, legal, accounting and finance, and, ultimately, sales and marketing.

We expect to experience periods of growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, clinical operations, business development, manufacturing, regulatory affairs, quality assurance, human resources, legal, accounting and finance, and, ultimately, sales and marketing.

The competition for qualified personnel in the biotechnology and pharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly skilled scientific, technical, and managerial employees.

If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement our business strategy, which could have a material adverse effect on our business.

To manage our anticipated future growth, we must continue to implement and improve our managerial, operational, and financial systems, and expand our facilities.

Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations systems and facilities.

If our recruitment and retention efforts are unsuccessful, when needed, in the future, it may be difficult for us to implement our business strategy, which could have a material adverse effect on our business.

To manage any future growth, we must continue to implement and improve our managerial, operational, and financial systems, and expand our facilities.

Due to our limited financial resources and the limited experience of our management team in managing a growing company, we may not be able to effectively manage the expansion of our operations systems and facilities.

These activities may lead to significant costs and may divert our management and other resources.

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In such event, we may be required to limit our growth and expansion efforts and our business and financial results may suffer.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Additionally, we expect our financial condition and operating results to continue to fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control.

Consequently, any predictions you or we may make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

Risks Related to the Development and Clinical Testing of Our Product Candidates

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Interim, topline, or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim, topline, or preliminary data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.

The interim, topline, or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.

From time to time, we have publicly disclosed, and we may publicly disclose again in the future, interim, topline, or preliminary data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.

The interim, topline, or preliminary results that we have reported or may report in the future may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.

For example, safety, pharmacokinetic, and pharmacodynamic data are different than, and may not be predictive of, clinical efficacy endpoints.

In addition, at times we have access to additional data, in part because our trials are open-label, beyond what has been publicly disclosed.

As a result, interim, topline, or preliminary data should be viewed with caution until the final data are available.

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

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their compounds and product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates.

In addition, the results of our preclinical animal studies, including our

non-human primate studies, may not be predictive of the results of outcomes in subsequent clinical trials on human subjects.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their

compounds and product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates.

In addition, the results of our preclinical animal studies, including our non-human primate studies, may not be predictive of the results of outcomes in subsequent clinical trials on human subjects.

Product candidates in clinical trials may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through preclinical studies.

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Therefore, it is possible that positive results observed in open-label trials will not be replicated in later placebo-controlled trials.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such clinical trials are being conducted, by the Data Safety Monitoring Board, if any, for such clinical trial, or by the FDA or other regulatory authorities.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the independent institutional review boards of the institutions in which such clinical trials are being conducted, by the Data Safety Monitoring Board, if any, for such clinical trial, or by the FDA or other regulatory authorities.

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 trial 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 the product candidates, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial.

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Successful and timely completion of clinical trials will require that we initiate our clinical trial sites in a timely manner and enroll a sufficient number of patient candidates.

Trials have been and may continue to be subject to delays for a variety of reasons, including as a result of delays to clinical trial site start up and initiation, patient enrollment taking longer than anticipated, fewer than expected patients who meet enrollment eligibility criteria, patient withdrawal, or adverse events.

Our clinical trials compete with other clinical trials that are in the same therapeutic areas as our product candidates and/or that seek to enroll the same specific patient populations as our clinical trials, which reduces the number and types of patients available to us.

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Moreover, enrolling patients in clinical trials for cancer therapies is challenging, as cancer patients will first receive the applicable standard of care.

Many patients who respond positively to the standard of care therapy, such as PD-1 checkpoint inhibitors, (and thus do not enroll in clinical trials) are believed to have tumor types that may have responded well to our product candidates.

This may limit the number of eligible patients able to

enroll in our clinical trials and could extend development timelines or increase costs for these programs.

Many patients who respond positively to the

standard of care therapy (and thus do not enroll in clinical trials) are believed to have tumor types that may have responded well to our product candidates.

This may limit the number of eligible patients able to enroll in our clinical trials and could extend development timelines or increase costs for these programs.

Patients who fail to respond positively to the standard of care treatment will be eligible for clinical trials of unapproved drug candidates.

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Either of these prior treatment regimens may render our therapies less effective in clinical trials.

We have sought and may continue to seek to mitigate these effects in the future through modification of enrollment eligibility criteria, including patients with tumor types that are not typically responsive to anti-PD-1 antibodies, or pursuing combination regimens early in clinical development to enable access to anti-PD-1 naïve patients.

We have sought and may continue to seek to mitigate these effects in the future through modification of enrollment eligibility criteria.

Additionally, patients who have failed approved therapies will typically have more advanced cancer and a poorer long-term prognosis.

If we are unable to initiate or adequately enroll our clinical trial sites in the United States, Canada, and Europe, our clinical trials may be delayed.

If we are unable to initiate or adequately enroll our clinical trial sites in the United States, the United Kingdom of Great Britain, Canada, and Europe, our clinical trials may be delayed.

Receiving approval for and establishing clinical trial sites in other countries may be more challenging or lengthy than in the United States.

For example, we have not yet received the requisite approval to initiate our Phase 1 clinical trials for SL-172154 in Spain and we may not receive such approval, which has impacted, and may continue to impact in the future, our ability to enroll patients and the expected timeline for such trials.

As a result of any of the aforementioned factors, we may in the future decide to use clinical trial sites in other parts of the world.

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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 therapies, which could result in reduced demand for our product candidates or additional pricing pressures.

Most recently, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, or the IRA, which, among other provisions, included several measures intended to lower the cost of prescription drugs and enact related healthcare reforms.

In August 2022, President Biden signed into law the IRA, which, among other provisions, included several measures intended to lower the cost of prescription drugs and enact related healthcare reforms.

We cannot be sure whether additional legislation or rulemaking related to the IRA will be issued or enacted, or what impact, if any, such changes will have on the profitability of any of our drug candidates, if approved for commercial use, in the future.

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The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting (including the submission of safety and other post-marketing information and reports), and other possible activities relating to our product candidates are subject to extensive regulation.

Obtaining approval of a BLA can be a lengthy, expensive, and uncertain process, and as a company we have no experience with

the preparation of a BLA submission or any other application for marketing approval.

Obtaining approval of a BLA can be a lengthy, expensive, and uncertain process, and as a company we have no experience with the preparation of a BLA submission or any other application for marketing approval.

This lengthy approval process may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects.

See “Business—Government Regulation—BLA Submission and Review.”

In addition, the FDA or comparable foreign authorities may change the requirements for clinical development and approval, which may alter our clinical development plans and increase our costs.

For example, the FDA published guidance in January 2023 on “Project Optimus,” an initiative to improve dose selection in oncology drug development with the goal of optimizing the design of early dose-finding trials.

If the FDA does not believe we have sufficiently demonstrated that the selected doses for our product candidates maximize not only the efficacy of such candidate, but the safety and tolerability as well, our ability to progress our clinical trials and ultimately commercialize a product candidate may be delayed and our costs may be increased.

Any regulatory approvals that we may receive for our programs will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the program, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.

For example, the FDA may require a risk evaluation and mitigation strategy in order to approve our programs, which could entail requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

In addition, if the FDA or comparable foreign regulatory authorities approve our programs, our programs and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, distribution, import and export will be subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable foreign regulatory authorities.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as on-going compliance with current cGMPs and GCPs for any clinical trials that we conduct following approval.

We may seek designations under FDA programs designed to facilitate and potentially expedite product candidate development, such as Fast Track or Breakthrough Therapy Designation.

If we decide to pursue a Fast Track or Breakthrough Therapy Designation by the FDA, it may not lead to a faster development or regulatory review or approval process.

We may seek a Fast Track or Breakthrough Therapy Designation for a product candidate.

The FDA has broad discretion whether or not to grant these designations, so even if we believe a particular product candidate is eligible for one or both of these designations, we cannot assure you that the FDA would decide to grant it.

Even if we do receive Fast Track or Breakthrough Therapy Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw Fast Track or Breakthrough Therapy Designation if it believes that the designation is no longer supported by data from our clinical development program.

See the section titled “Business—Government Regulation—Expedited Development and Review Programs” for a more detailed description of the process for seeking Fast Track and/or Breakthrough Therapy Designation.

Disruptions at the FDA and other government agencies could negatively affect the review of our regulatory submissions, which could negatively impact our business.

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Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs.

If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal, and administrative penalties, as well as damages, fines, exclusion from government-funded healthcare programs, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.

If our operations are found to be in violation of any of these laws

or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal, and administrative penalties, as well as damages, fines, exclusion from government-funded healthcare programs, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.

Further, defending against any such actions can be costly, time-consuming, may require significant personnel resources, and may impair our business even if we are successful in defending against such claims.

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

Our employees, independent contractors, principal investigators, contract research organizations, or CROs, consultants, commercial partners, suppliers, and vendors acting for us or on our behalf may engage in misconduct or other improper activities, including noncompliance with applicable laws and regulations.

Our employees, independent contractors, principal investigators, contract research organizations (“CROs”), consultants, commercial partners, suppliers, and vendors acting for us or on our behalf may engage in misconduct or other improper activities, including noncompliance with applicable laws and regulations.

We have adopted a code of conduct, but it is not always possible to identify and deter such misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We 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 may involve the use of hazardous and flammable materials, including chemicals and biological and radioactive 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 commercialization efforts.

Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Risks Related to Commercialization of Our Product Candidates

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We may subsequently seek approval as a second- and first-line therapy.

There is no guarantee that our product candidates, even if initially approved,

would be subsequently approved as a second or first line therapy.

There is no guarantee that our product candidates, even if initially approved, would be subsequently approved as a second or first line therapy.

Because the potentially addressable patient target population for our product candidates may be limited to patients who are ineligible for or have failed prior treatments, even if we obtain significant market share for our product candidates, we may never achieve profitability.

We may pursue the development of our product candidates in combination with other approved therapeutics.

We currently are pursuing the development of our product candidates in combination with other approved therapeutics.

If the FDA revokes approval of any such therapeutic, or if safety, efficacy, manufacturing, or supply issues arise with any therapeutic that we use in combination with one of our product candidates in the future, we may be unable to further develop and/or market our product candidate or we may experience significant regulatory delays or supply shortages, and our business could be materially and adversely affected.

We may pursue the development of our product candidates in combination with other approved therapeutics, and we may commence clinical trials of our product candidates in combination with other approved therapeutics in the future.

If we were to commence a combination trial, we will not have developed or obtained regulatory approval for, nor will we manufacture or sell, any of these approved therapeutics.

In addition, the combinations will likely not have been previously tested and may, among other things, fail to demonstrate synergistic activity, fail to achieve superior outcomes relative to the use of single agents or other combination therapies, exacerbate adverse events associated with one of our product candidates when used as monotherapy, or fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.

If the FDA revokes its approval of any combination therapeutic, we would not be able to continue clinical development of or market any product candidate in combination with such revoked therapeutic.

If safety or efficacy issues were to arise with therapeutics that we seek to combine with, we could experience significant regulatory delays, and the FDA could require us to redesign or terminate the applicable clinical trials.

We currently are pursuing the development of our product candidates in combination with other approved therapeutics, and we have commenced clinical trials of our product candidates in combination with other approved therapeutics in the future.

We have not developed or obtained regulatory approval for, nor will we manufacture or sell, any of these approved therapeutics.

In addition, the combinations have not have been previously tested and may, among other things, fail to demonstrate synergistic activity, fail to achieve superior outcomes relative to the use of single agents or other combination therapies, exacerbate AEs associated with one of our product candidates when used as monotherapy, or fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.

If the FDA revokes its approval of any combination therapeutic, we will not be able to continue clinical development of or market any product candidate in combination with such revoked therapeutic.

If safety or efficacy issues arise with therapeutics that we seek to combine with, we could experience significant regulatory delays, and the FDA could require us to redesign or terminate the applicable clinical trials.

In addition, we may need, for supply, data referencing, or other purposes, to collaborate or otherwise engage with the companies who market these approved therapeutics.

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The process of manufacturing our product candidates is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls that are in compliance with current Good Manufacturing Practices, or cGMP.

We do not currently own or operate any cGMP manufacturing facilities, nor do we have any in-house cGMP manufacturing capabilities.

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There can also be no assurance that our manufacturers will continue to meet regulatory requirements for cGMP manufacturing.

As is common in our industry, we have experienced enrollment delays in our clinical trials as a result of

delays in receipt of BDS.

We have experienced enrollment delays in our clinical trials as a result of delays in receipt of BDS.

We have limited control over the process or timing of the acquisition or manufacture of materials by our manufacturers, and cannot ensure that they will deliver to us the BDS we order on time, or at all.

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Any changes to our manufacturing processes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of our ongoing clinical trials or future clinical trials.

In some circumstances, changes in the manufacturing process may require us to perform ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.

In some circumstances, changes in the manufacturing process may

require us to perform ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.

We are preparing to scale up to a Phase 3 and commercial manufacturing process, including transferring our manufacturing process to contract development and manufacturing organizations (“CDMOs”), including those that may not yet have completed a cGMP campaign with our product.

There is no guarantee that the CDMOs that have produced our clinical trial material to date will be suitable for Phase 3 or commercial manufacturing.

Our product candidate has not yet been manufactured on a commercial scale, and there are risks associated with the scaling up of the manufacturing process including, CDMO selection, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, lot consistency, supply chain disruptions and timely availability of raw materials.

Even if we obtain regulatory approval for SL-172154, there is no assurance that the manufacturer or manufacturers we have arranged will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product or to meet potential future demand.

In addition, the FDA and other regulatory authorities require that our product candidates be manufactured according to cGMPs and similar foreign standards relating to methods, facilities, and controls used in the manufacturing, processing, packing, storage, and distribution of the product, which are intended to ensure that biological products are safe and that they consistently meet applicable requirements and specifications.

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We rely on these parties for execution of certain preclinical studies and clinical trials, and control only certain aspects of their activities.

As a result, we will have less direct control over the conduct, timing, and completion of these preclinical studies, nonclinical studies, and clinical trials and

the management of data developed through these preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff.

If we or any of these third parties fail to comply with applicable good laboratory practice, or GLP, or good clinical practice, or GCP, regulations, such data may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical or nonclinical studies, or clinical trials before approving our marketing applications.

As a result, we will have less direct control over the conduct, timing, and completion of these preclinical studies, nonclinical studies, and clinical trials and the management of data developed through these preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff.

If we or any of these third parties fail to comply with applicable good laboratory practice, or good clinical practice regulations, such data may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical or nonclinical studies, or clinical trials before approving our marketing applications.

Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

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There is a limited number of third-party service providers that specialize in or have the expertise required to achieve our business objectives.

If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties or to do so in a timely manner or on commercially reasonable terms.

If any of our

relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties or to do so in a timely manner or on commercially reasonable terms.

If the third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines;

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We may not realize the benefits of any existing or future collaborative or licensing arrangement, and if we fail to enter into new strategic relationships our business, financial condition, commercialization prospects, and results of operations may be materially and adversely affected.

We have entered into, and may decide in the future to enter into, collaborations with pharmaceutical or biopharmaceutical companies for the development and potential commercialization of certain of our product candidates.

We have entered into, and may decide in the future to enter into, collaborations with pharmaceutical or biopharmaceutical companies, including our collaboration with Ono, for the development and potential commercialization of certain of our product candidates.

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

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If our strategic collaborations do not result in the successful development and commercialization of product candidates or if one of our collaborators fails to act under the collaboration agreement or terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration.

For example, if Ono decides not to exercise its option to obtain an exclusive, sublicensable license to research, develop, manufacture and commercialize products resulting from the Development Compounds under the Ono Agreement, we would not receive any of the potential licensing fees or clinical, regulatory and commercial milestone payments thereunder.

In addition, if a collaboration is terminated, it may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

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Risks Related to Intellectual Property and Information Technology

Our success depends upon our ability to obtain and maintain patents and other intellectual property rights to protect our technology, including product candidates from our ARC and GADLEN platforms, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.

Our success depends upon our ability to obtain and maintain patents and other intellectual property rights to protect our technology, including product candidates from our ARC and platform, methods used to manufacture those product candidates, formulations thereof, and the methods for treating patients using those product candidates.

The prosecution, enforcement, defense, and maintenance of intellectual property rights is often challenging, costly, and uncertain.

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the unpredictability of what patent claim scope will ultimately be issued to protect our products and how the law will change or develop as to scope, length, and enforcement of patent protection;

the competitive and crowded immune-

oncology space;

the competitive and crowded immune-oncology space;

complicated and unforgiving procedural, documentary, and fee requirements of the U.S.

Patent & Trademark Office, or USPTO, and foreign patent offices;

PTO, and foreign patent offices;

lack of perfect visibility into what our competitors are doing and the patent claim scope they are obtaining;

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We cannot be sure that we will not encounter freedom-to-operate challenges in the development and commercialization of our product candidates.

We cannot be sure our trademarks and trade names are sufficient to build name recognition in our markets of interest.

We cannot be sure our

trademarks and trade names are sufficient to build name recognition in our markets of interest.

We cannot be sure our measures to protect our trade secrets will be sufficient.

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Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates.

could result in either an injunction prohibiting our manufacture, future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

We cannot provide any assurances that third-party patents do not exist that might be enforced against our current technology, including our platform technologies, product candidates and their respective methods of use, manufacture, and formulations thereof, and could result in either an injunction prohibiting our manufacture, future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

We rely, in part, on in-licensed patents and other intellectual property rights to develop and commercialize our product candidates.

We may need to obtain additional licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.

Our competitive position may suffer if patents issued to third parties or other third-party intellectual property rights cover our methods or product candidates or elements thereof, our manufacture or uses relevant to our development plans, our product candidates or other attributes of our product candidates, or our compounds, including those from our ARC or GADLEN platforms.

In such cases, we may not be in a position to develop or commercialize product candidates unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned, which can be expensive and time-consuming, or we may have to enter into a license agreement with the intellectual property right holder, which may not be available on commercially reasonable terms, if at all.

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Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.

In addition, while we cannot determine currently the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant.

In addition, while we cannot determine currently the amount of the royalty obligations

we would be required to pay on sales of future products, if any, the amounts may be significant.

The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any.

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Changes in either the patent laws or interpretation of the patent laws in the United States or in foreign jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

In the United States, there have been numerous changes to the patent laws and proposed changes to the rules of the USPTO that may have a significant impact on our ability to protect our technology and enforce our intellectual property rights.

For example, the America Invents Act, enacted in 2011, involved significant changes in patent legislation.

The Supreme Court has ruled on several patent cases in recent years, some of which cases either narrow the scope of patent protection available in certain circumstances or weaken the rights of patent owners in certain situations.

The patent laws of the U.S.

and foreign jurisdictions, as well as the rules of the U.S.

PTO and foreign patent offices, change from time to time.

Further changes to the patent laws and/or rules of the U.S.

PTO and foreign patent offices may have a significant impact on our ability to protect our technology and enforce our intellectual property rights.

The Supreme Court and other federal courts also regularly rule on patent cases, including those involving the life sciences.

Those decisions can change the interpretation of patent laws;

for example, narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

These changes to patent laws and subsequent court decisions related to patent rights have created uncertainty with respect to the value of patents once obtained.

Depending on decisions by Congress, the federal courts and the USPTO, and similar legislative and regulatory bodies in other countries in which we may pursue patent protection, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Depending on decisions by Congress, the federal courts and the U.S.

PTO, and similar legislative and regulatory bodies in other countries in which we may pursue patent protection, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

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We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.

Some of our competitors may be able to sustain the costs of such litigation or

proceedings more effectively than we can because of their greater financial resources.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Infringement or related suits against us by others could result in damages awards against us or injunction or other equitable relief precluding continued commercialization of our products.

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Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.

Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process.

Periodic maintenance and annuity fees on any issued patent are due to be paid to the U.S.

PTO and foreign patent agencies in several stages over the lifetime of the patent.

PTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent

application process and in order to maintain the patent once issued.

While an inadvertent lapse can, in many cases, be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

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See Part I, Item 1.

“Business—Government Regulation—Data Privacy and Security.” Further, a cybersecurity incident may disrupt our business or damage our reputation, which could have a material adverse effect on our business, prospects, operating results, share price, stockholder value, and financial condition.

“Business—Government Regulation—Data Privacy and Security” and Part I, item 1C.

“Cybersecurity.” Further, a cybersecurity incident may disrupt our business or damage our reputation, which could have a material adverse effect on our business, prospects, operating results, share price, stockholder value, and financial condition.

We could also incur substantial remediation costs, including the costs of investigating the incident, repairing or replacing damaged systems, restoring normal business operations, implementing increased cybersecurity protections, and paying increased insurance premiums.

In addition, because we collect, store and transmit confidential information in digital form, we, and third parties who we work with, are or may become subject to numerous domestic and foreign laws, regulations, and standards relating to privacy, data protection, and data security, the scope of which is changing, subject to differing applications and interpretations, and may be inconsistent among countries, or conflict with other rules.

We are or may become subject to the terms of contractual obligations related to privacy, data protection, and data security.

Our obligations may also change or expand as our business grows.

The actual or perceived failure by us or third parties related to us to comply with such laws, regulations and obligations could increase our compliance and operational costs, expose us to regulatory scrutiny, actions, fines and penalties, result in reputational harm, lead to a loss of customers, result in litigation and liability, and otherwise cause a material adverse effect on our business, financial condition, and results of operations.

See the section titled “Business—Government Regulation—Data Privacy and Security” for a more detailed description of the laws that may affect our ability to operate.

Risks Related to Ownership of Our Common Stock

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The market price of our common stock may be highly volatile and may fluctuate significantly as a result of a variety of factors, some of which are related in complex ways and many of which are beyond our control, including the factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.

In addition, the stock market in general, and The Nasdaq Stock Market, or Nasdaq, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

In addition, the stock market in general, and The Nasdaq Stock Market, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.

Securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities.

We are the subject of putative securities class action cases against the Company and certain of our officers and directors, alleging that defendants made false or misleading statements.

This type of litigation, and others like it, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.

We have in the past been subject to securities class action litigation following periods of volatility in the market price of our securities.

While this litigation was settled, if any similar litigation was instituted in the future, it could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.

See the discussion of Legal Proceedings in Part I, Item 3 of this Form 10-K.

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As of February 1, 2024, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned a significant percentage of our outstanding common stock.

Therefore, these stockholders have the

ability to influence us through this ownership position and may be able to determine all matters requiring stockholder approval.

Therefore, these stockholders have the ability to influence us through this ownership position and may be able to determine all matters requiring stockholder approval.

For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction.

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These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Because we do not anticipate paying any dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance the growth and development, operation and expansion of our business and do not anticipate declaring or paying any dividends for the foreseeable future.

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

General Risk Factors

Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such as the crisis in Ukraine, or other macroeconomic conditions, which could have a material and adverse effect on our results of operations and financial condition.

Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, such as pandemics, political crises, geopolitical events, or other macroeconomic conditions, which could have a material and adverse effect on our results of operations and financial condition.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, higher interest rates, and uncertainty about economic stability.

For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets.

The Federal Reserve has raised interest rates multiple times in response to concerns about inflation and it may raise them again.

Higher interest rates, coupled with reduced government spending and volatility in financial markets, may increase economic uncertainty and affect consumer spending.

Similarly, the ongoing military conflict between Russia and Ukraine has created extreme volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain.

For example, higher interest rates, coupled with reduced government spending and volatility in financial markets, may increase economic uncertainty and affect consumer spending, and ongoing military conflicts throughout the world have created extreme volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain.

Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely.

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Any one or a combination of these events could have a material and adverse effect on our results of operations and financial condition.

Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations.

Our cash held in non-interest-bearing and interest-bearing accounts exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations.

For example, the FDIC took control of Silicon Valley Bank on March 10, 2023.

The Federal Reserve subsequently announced that account holders would be made whole.

However, the FDIC may not make all account holders whole in the event of future bank failures.

In addition, even if account holders are ultimately made whole with respect to a future bank failure, account holders’ access to their accounts and assets held in their accounts may be substantially delayed.

Any material loss that we may experience in the future or inability for a material time period to access our cash and cash equivalents could have an adverse effect on our ability to pay our operational expenses or make other payments, which could adversely affect our business.

If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline.

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In addition, the price of our common stock could decline if one or more analysts downgrade our stock or issue other unfavorable commentary or research.

The requirements of being a public company may strain our resources, result in more litigation, and divert management’s attention.

The requirements of being a public company may strain our resources, result in litigation, and divert management’s attention.

As a public company, we are subject to certain reporting requirements, listing requirements, and other applicable securities rules and regulations.

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As a result, management’s attention may be diverted from other business concerns, which could materially and adversely affect our business and operating results.

In addition, a change in our filer status could trigger a requirement to begin complying with Section 404(b) of the Sarbanes-Oxley Act of 2002, and our independent registered public accounting firm would have to evaluate and report on the effectiveness of internal control over financial reporting, increasing our costs.

We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

By disclosing information in this and in future filings required of a public company, our business and financial condition will become more visible, which has resulted in, and may in the future result in, threatened or actual litigation, including by

competitors and other third parties.

If those claims are successful, our business could be seriously harmed.

Even if the claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could divert our management’s resources and seriously harm our business.

See the discussion of Legal Proceedings in Part I, Item 3 of this Form 10-K.

Class-action litigation filed against us could harm our business, and insurance coverage may not be sufficient to cover all related costs and damages.

Litigation filed against us could harm our business, and insurance coverage may not be sufficient to cover all related costs and damages.

We face the threat of legal claims and regulatory matters involving various aspects of our business.

Given the volatility of the trading price of our common stock, and the increase in shareholder litigation generally, we face a risk of lawsuits alleging violations of the securities laws.

Given the volatility of the trading price of our common stock, and the prevalence of shareholder litigation generally, we face a risk of lawsuits alleging violations of the securities laws.

Litigation is inherently uncertain, and adverse rulings may occur, including awards of monetary damages, that may have a material adverse impact on our business.

These lawsuits may also divert management’s attention and resources, and may require us to incur substantial costs, some of which will not be covered by insurance.

See the discussion of Legal Proceedings in Part I, Item 3 of this Form 10-K.

We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims.

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We are required to report upon the effectiveness of our internal control over financial reporting.

To comply with the requirements of being a reporting company under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we have implemented and will continue to implement additional financial and management controls, reporting systems, and procedures and we have hired and will continue to hire additional accounting and finance staff.

To comply with the requirements of being a reporting company under the Exchange Act, we have implemented and will continue to implement additional financial and management controls, reporting systems, and procedures and we have hired and will continue to hire additional accounting and finance staff.

We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.

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We are subject to the periodic reporting requirements of the Exchange Act.

We have designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.

specified in the rules and forms of the SEC.

We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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Our amended and restated certificate of incorporation and our amended and restated bylaws each contain provisions that could depress the market price of our common stock by acting to discourage, delay, or prevent a change in control of the Company or changes in our management that the stockholders of the Company may deem advantageous.

stockholder (as defined in the statute) for a period of three years after the date of the transaction in which the person first becomes an interested stockholder, unless the business combination is approved in advance by a majority of the independent directors or by the holders of at least two-thirds of the outstanding disinterested shares.

As a Delaware corporation, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in a business combination specified in the statute with an interested stockholder (as defined in the statute) for a period of three years after the date of the transaction in which the person first becomes an interested stockholder, unless the business combination is approved in advance by a majority of the independent directors or by the holders of at least two-thirds of the outstanding disinterested shares.

The application of Section 203 of the Delaware General Corporation Law could also have the effect of delaying or preventing a change of control of the Company.

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As of December 31, 2023, we had U.S.

federal and state net operating loss, or NOL, carryforwards of $118.4 million and $0.2 million, respectively, which may be available to offset future taxable income.

federal and state net operating loss (“NOL”), carryforwards of $149.5 million, which may be available to offset future taxable income.

As of December 31, 2023, we also had gross federal tax credits of $16.9 million, which may be used to offset future tax liabilities.

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Use of our NOL carryforwards and tax credit carryforwards depends on many factors, including having current or future taxable income, which cannot be assured.

Unresolved Staff Comments

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