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Item 1A. Risk Factors

2024-10-23 compared with 2024-07-24 · 71 added, 62 removed, 987 unchanged (12% of the section changed)

23 unchanged sentences

We are a clinical-stage company.

Since our incorporation in September 2012, our operations have been limited to raising capital, building infrastructure, obtaining the worldwide rights to certain technology from Ligand Pharmaceuticals Incorporated, or Ligand, and planning, preparing and conducting preclinical studies and clinical trials of our drug candidates, including VK2735 subcutaneous, VK2809, VK5211 and VK0612, which are currently in Phase 2 clinical development, VK2735, for which we continue to conduct an oral Phase 1 SAD/MAD clinical trial, and VK0214, currently in a Phase 1b clinical trial, as well as the diacylglycerol acyltransferase-1, or DGAT-1, erythropoietin receptor, or EPOR, and our dual amylin and calcitonin receptor agonist, or DACRA, programs, which are each currently in preclinical development.

Since our incorporation in September 2012, our operations have been limited to raising capital, building infrastructure, obtaining the worldwide rights to certain technology from Ligand Pharmaceuticals Incorporated, or Ligand, and planning, preparing and conducting preclinical studies and clinical trials of our drug candidates, including VK2735 subcutaneous, VK2809, VK5211 and VK0612, which are currently in Phase 2 clinical development, VK2735, for which we continue to conduct an oral Phase 1 SAD/MAD clinical trial, and VK0214, for which we recently completed a Phase 1b clinical trial, as well as the diacylglycerol acyltransferase-1, or DGAT-1, erythropoietin receptor, or EPOR, and our dual amylin and calcitonin receptor agonist, or DACRA, programs, which are each currently in preclinical development.

We have not yet demonstrated an ability to obtain marketing approval for any of our drug candidates or successfully overcome the risks and uncertainties frequently encountered by companies in the biopharmaceutical industry.

We also have not generated any revenue to date, and we continue to incur significant research and development and other expenses.

As of June 30, 2024, we had an accumulated deficit of $427.6 million.

As of September 30, 2024, we had an accumulated deficit of $452.5 million.

For the foreseeable future, we expect to continue to incur losses, which will increase significantly from historical levels as we expand our drug development activities, seek potential partnering opportunities and/or regulatory approvals for our drug candidates and begin to commercialize them if they are approved by the U.S.

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We have spent significant time, money and effort on the licensing and development of our core metabolic and endocrine disease assets, VK2735, VK2809, VK0214, VK5211, VK0612 and our earlier-stage assets, our DGAT-1, EPOR and DACRA programs.

To date, no pivotal clinical trials designed to provide clinically and statistically significant proof of efficacy, or to provide sufficient evidence of safety to justify approval, have been completed with any of our drug candidates.

To date, no pivotal clinical trials designed to provide clinically and statistically significant proof of efficacy, or to provide sufficient

evidence of safety to justify approval, have been completed with any of our drug candidates.

All of our drug candidates will require additional development, including clinical trials as well as further preclinical studies to evaluate their toxicology, carcinogenicity and pharmacokinetics and optimize their formulation, and regulatory clearances before they can be commercialized.

Positive results obtained during early development do not necessarily mean later development will succeed or that regulatory clearances will be obtained.

Our drug development efforts may not lead to commercial drugs, either because our drug candidates fail to be safe and

effective or because we have inadequate financial or other resources to advance our drug candidates through the clinical development and approval processes.

Our drug development efforts may not lead to commercial drugs, either because our drug candidates fail to be safe and effective or because we have inadequate financial or other resources to advance our drug candidates through the clinical development and approval processes.

If any of our drug candidates fail to demonstrate safety or efficacy at any time or during any phase of development, we would experience potentially significant delays in, or be required to abandon, development of the drug candidate.

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In late 2017, we reported positive top-line results from a Phase 2 clinical trial for VK5211.

However, there is no guarantee that the results of our Phase 2 clinical trials for VK2735 or VK2809 will be repeated for our other drug candidates or lead to other positive outcomes.

In October 2024, we reported positive data from our Phase 1b clinical trial of VK0214 in patients with X-ALD.

However, there is no guarantee that the results of our Phase 2 clinical trials for VK2735 or VK2809 or our Phase 1b clinical trial for VK2014 will be repeated for our other drug candidates or lead to other positive outcomes.

As a company, we have conducted only a limited number of clinical trials and preclinical studies for our drug candidates.

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Moreover, to date, our drug candidates have been tested in less than the number of patients that will likely need to be studied to obtain regulatory approval.

The data collected from clinical trials with larger patient populations may not demonstrate sufficient safety and efficacy to support regulatory approval of these drug candidates.

The data collected

from clinical trials with larger patient populations may not demonstrate sufficient safety and efficacy to support regulatory approval of these drug candidates.

We currently do not have strategic collaborations in place for clinical development of any of our current drug candidates.

Therefore, in the future, we or any potential future collaborative partner will be responsible for establishing the targeted endpoints and goals for development of our drug candidates.

These targeted endpoints and goals may be inadequate to demonstrate the safety and efficacy

levels required for regulatory approvals.

These targeted endpoints and goals may be inadequate to demonstrate the safety and efficacy levels required for regulatory approvals.

Even if we believe data collected during the development of our drug candidates are promising, such data may not be sufficient to support marketing approval by the FDA, EMA or comparable foreign authorities.

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Since we will be unable to generate sufficient, if any, cash inflows to fund our operations for the foreseeable future, we may need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.

As of June 30, 2024, we had cash, cash equivalents and investments totaling $942.3 million.

As of September 30, 2024, we had cash, cash equivalents and investments totaling $930.4 million.

There can be no assurance that we will be able to raise sufficient additional capital on acceptable terms or at all.

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Any shares offering and sold in ATM Offering will be issued pursuant to the ATM Prospectus and the At-The-Market Equity Offering Sales Agreement, dated July 28, 2021, as amended on July 26, 2023, among us and the ATM Agents.

As of June 30, 2024, we may sell shares of our common stock for remaining gross proceeds of up to $151.9 million from time to time pursuant to the ATM Prospectus.

As of September 30, 2024, we may sell shares of our common stock for remaining gross proceeds of up to $151.9 million from time to time pursuant to the ATM Prospectus.

On March 4, 2024, we completed an underwritten public offering of our common stock, or the March 2024 Offering, pursuant to the 2023 Shelf Registration Statement.

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As product candidates are developed through preclinical to early to late stage clinical trials towards approval and commercialization, it is customary that various aspects of the development program, such as manufacturing and methods of administration, are altered along the way in an effort to optimize processes and results.

While these types of changes are common and are intended to optimize the product candidates for late stage clinical trials, approval and commercialization, such changes carry the risk that they will not achieve these intended objectives.

While these types of changes are common and

are intended to optimize the product candidates for late stage clinical trials, approval and commercialization, such changes carry the risk that they will not achieve these intended objectives.

Any of these changes could make the results of our planned clinical trials or other future clinical trials we may initiate less predictable and could cause our product candidates to perform differently, including causing toxicities, which could delay completion of our clinical trials, delay approval of our product candidates and/or jeopardize our ability to commence product sales and generate revenues.

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Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.

For example, the COVID-19 pandemic previously negatively impacted our ability to recruit and enroll patients for our clinical trials, as they may be reluctant or unable to visit clinical sites, or may delay seeking treatment for chronic conditions.

For example, the COVID-19 pandemic previously negatively impacted our ability to recruit and enroll patients for our clinical trials, as they may have been reluctant or unable to visit clinical sites, or may have delayed seeking treatment for chronic conditions.

If we fail to enroll and maintain the number of patients for which the clinical trial was designed, the statistical power of that clinical trial may be reduced, which would make it harder to demonstrate that the product candidate being tested in such clinical trial is safe and effective.

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Switching or adding additional CROs, medical institutions, clinical investigators or contract laboratories involves additional cost and requires management’s time and focus.

In addition, there is a natural transition period when a new CRO commences work replacing a previous CRO.

In addition, there is a natural transition period when a new CRO commences work replacing a

previous CRO.

As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

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In addition, our CROs may need to make certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of patients and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA on March 18, 2020 and generally, and may need to make further adjustments in the future.

Many of these adjustments are new and

untested, may not be effective, and may have unforeseen effects on the enrollment, progress and completion of these trials and the findings from these trials.

Many of these adjustments are new and untested, may not be effective, and may have unforeseen effects on the enrollment, progress and completion of these trials and the findings from these trials.

Our drug candidates are subject to extensive regulation under the FDA, EMA or comparable foreign authorities, which can be costly and time consuming, cause unanticipated delays or prevent the receipt of the required approvals to commercialize our drug candidates.

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For example, the FDA has released draft guidance regarding clinical trials for drug candidates treating diabetes that may result in more stringent requirements for the clinical trials and regulatory approval of such drug candidates.

This and any future guidance that may result from recent FDA advisory panel discussions on the topic of diabetes, non-alcoholic steatohepatitis, or NASH, and other metabolic indications, may make it more expensive to develop and commercialize such drug candidates for such indications.

This and any future guidance that may result from recent FDA advisory panel discussions on the topic of diabetes, non-alcoholic steatohepatitis, or MASH/NASH, and other metabolic indications, may make it more expensive to develop and commercialize such drug candidates for such indications.

Such increased expense could make it more difficult to obtain favorable terms in the collaborative arrangements we require to maximize the value of our programs seeking to develop new drug candidates for diabetes.

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If a regulatory agency discovers previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, our collaborators or us, including requiring withdrawal of the product from the market.

Our drug candidates will also be subject to ongoing FDA, EMA or comparable foreign authorities’ requirements for the

labeling, packaging, storage, advertising, promotion, record-keeping and submission of safety and other post-market information on the drug.

Our drug candidates will also be subject to ongoing FDA, EMA or comparable foreign authorities’ requirements for the labeling, packaging, storage, advertising, promotion, record-keeping and submission of safety and other post-market information on the drug.

If our drug candidates fail to comply with applicable regulatory requirements, a regulatory agency may:

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Even if we obtain regulatory approval for any of our drug candidates, our competitors may succeed in obtaining regulatory approvals for their products earlier than we do.

We will also face competition from these third parties in recruiting and retaining qualified scientific and management personnel, in establishing clinical trial sites and patient registration for clinical trials, and in acquiring and in-licensing technologies and products complementary to our programs or advantageous to our business.

We will also face competition from these third parties in recruiting and retaining qualified scientific and management

personnel, in establishing clinical trial sites and patient registration for clinical trials, and in acquiring and in-licensing technologies and products complementary to our programs or advantageous to our business.

The key competitive factors affecting the success of each of our drug candidates, if approved, are likely to be its efficacy, safety, tolerability, frequency and route of administration, convenience and price, the level of branded and generic competition and the availability of coverage and reimbursement from government and other third-party payors.

VK2735, if approved, will compete against therapies that are already approved and marketed for obesity, including Semaglutide (Wegovy®) and liraglutide (Saxenda®) from Novo Nordisk A/S, and tirzepatide (Zepbound) from Eli Lilly and Company.

also aware of several programs targeting obesity that are in the late development stage that will compete against VK2735, if approved, including CagriSema from Novo Nordisk A/S, orforglipron and retatrutide from Eli Lilly and Company, and survodutide (BI 456906) from Boehringer Ingelheim International GmbH.

We are also aware of several programs targeting obesity that are in the late development stage that will compete against VK2735, if approved, including CagriSema from Novo Nordisk A/S, orforglipron and retatrutide from Eli Lilly and Company, and survodutide (BI 456906) from Boehringer Ingelheim International GmbH.

In addition, we are aware of active programs at Altimmune, Inc., Amgen Inc., AstraZeneca, BioAge Labs, Inc., Biophytis SA, D&D Pharmatech, Inc., ERX Pharmaceuticals Inc., F.

Hoffmann-La Roche Ltd, Hanmi Pharmaceutical Co., Ltd., Kallyope Inc., Pfizer Inc., Regeneron Pharmaceuticals Inc., Rivus Pharmaceuticals Inc., Scholar Rock, Inc., Structure Therapeutics Inc., Terns Pharmaceuticals, Inc., Ventyx Biosciences, Inc., and Zealand Pharma A/S.

Hoffmann-La Roche Ltd, Gubra, Hanmi Pharmaceutical Co., Ltd., Kailera Therapeutics Inc., Kallyope Inc., Metsera, Inc., Pfizer Inc., Regeneron Pharmaceuticals Inc., Rivus Pharmaceuticals Inc., Scholar Rock, Inc., Structure Therapeutics Inc., Terns Pharmaceuticals, Inc., Ventyx Biosciences, Inc., and Zealand Pharma A/S.

Resmetirom (Rezdiffra), another agonist of the thyroid hormone receptor beta, or TRß, from Madrigal Pharmaceuticals, Inc., is the only therapy currently approved in the U.S.

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In addition, we are aware of numerous development-stage programs targeting this disease, including arachidyl amido cholanoic acid from Galmed Pharmaceuticals Ltd., belapectin from Galectin Therapeutics Inc., lanifibranor from Inventiva S.A., semaglutide from Novo Nordisk A/S, efruxifermin (AKR-001) from Akero Therapeutics, Inc., firsocostat (GS-0976) and cilofexor (GS-9674) from Gilead Sciences, Inc., tirzepatide from Eli Lilly and Company, ervogastat (PF-06865571) and clesacostat (PF-05221304) from Pfizer Inc., pegozafermin (BIO89-100) from 89bio, Inc., denifanstat (TVB-2640) from Sagimet Biosciences Inc., efocipegtrutide (HM15211) from Hanmi Pharmaceutical Co., Ltd., survodutide (BI 456906) from Boehringer Ingelheim International GmbH, ION224 from Ionis Pharmaceuticals, Inc., rencofilstat (CRV431) from Hepion Pharmaceuticals, Inc., HTD1801 from HighTide Therapeutics Inc., GSK4532990 (ARO-HSD) from GlaxoSmithKline plc., ALN-HSD from Alnylam Pharmaceuticals, Inc./ Regeneron Pharmaceuticals Inc., efinopegdutide (MK-6024) from Merck & Co., Inc., and pemvidutide (ALT-801) from Altimmune, Inc.

In addition, we are aware of active programs at Aligos Therapeutics, Inc., Arrowhead Pharmaceuticals, Inc., Ascletis Biopharmaceutical, AstraZeneca PLC, Boston Pharmaceuticals Inc., Can-Fite BioPharma Ltd., ChemomAb Ltd., CohBar, Inc., Corcept Therapeutics Inc., CytoDyn Inc., D&D Pharmatech, Inc., Durect Corporation, Enyo Pharma SA, Inc., Future Medicine Co., Ltd., Galecto, Inc., Hepagene Therapeutics, Inc., Kowa Company, Ltd., MediciNova Inc., NorthSea Therapeutics BV, Pliant Therapeutics, Inc., Poxel SA, Seal Rock Therapeutics, Inc., Theratechnologies Inc., Yuhan Corporation, and Cadila Healthcare Limited (a.k.a.

In addition, we are aware of active programs at Aligos Therapeutics, Inc., Arrowhead Pharmaceuticals, Inc., Ascletis Biopharmaceutical, AstraZeneca PLC, Boston Pharmaceuticals Inc.., ChemomAb Ltd., CohBar, Inc., Corcept Therapeutics Inc., CytoDyn Inc., D&D Pharmatech, Inc., Durect Corporation, Enyo Pharma SA, Inc., Future Medicine Co., Ltd., Galecto, Inc., Hepagene Therapeutics, Inc., Kowa Company, Ltd., MediciNova Inc., NorthSea Therapeutics BV, Poxel SA, Rivus Pharmaceuticals Inc., Seal Rock Therapeutics, Inc., Theratechnologies Inc., Yuhan Corporation, and Cadila Healthcare Limited (a.k.a.

Zydus Cadila).

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However, both treatments are invasive, requiring surgical intervention, and these do not appear to have an effect on the most pervasive form of X-ALD, adrenomyeloneuropathy, or AMN.

There are several experimental therapies that are in various stages of clinical development for X-ALD by companies, including Minoryx Therapeutics S.L., Neuraxpharm Group, Poxel SA, and SwanBio Therapeutics, Inc., which may be competitive with VK0214, if approved.

There are several experimental therapies that are in various stages of clinical development for X-ALD by companies, including Minoryx Therapeutics S.L., Neuraxpharm Group, Poxel SA, and Spur Therapeutics, Inc., which may be competitive with VK0214, if approved.

In the U.S., there are currently no marketed therapies for the maintenance or improvement of lean body mass, bone mineral density or physical function in patients recovering from non-elective hip fracture surgery.

However, VK5211, if approved, will face competition from experimental therapies that are in various stages of clinical development for conditions characterized by muscle wasting by companies including Biophytis SA, Helsinn Group, MyMD Pharmaceuticals, Inc., and Pluri Inc.

(formerly Pluristem Therapeutics Inc.).

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The applicable exclusivity period is seven years in the United States and ten years in Europe.

exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

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The facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our drug candidates or any of our other potential products.

In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our drug candidates or any of our other potential products or the associated quality systems for compliance with the regulations applicable

to the activities being conducted.

Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements.

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Disagreements between parties to a collaboration arrangement can lead to delays in developing or commercializing the applicable drug candidate and can be difficult to resolve in a mutually beneficial manner.

In some cases, collaborations with biopharmaceutical companies and other third parties are terminated or allowed to expire by the other party.

In some cases, collaborations with biopharmaceutical

companies and other third parties are terminated or allowed to expire by the other party.

Any such termination or expiration would adversely affect our business, financial condition and results of operations.

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We cannot be certain that reimbursement will be available for our current drug candidates or any other drug candidate we may develop.

Additionally, even if there is a viable commercial market, if the level of reimbursement is below our expectations, our anticipated revenue and gross margins will be adversely affected.

Additionally, even if there is a viable

commercial market, if the level of reimbursement is below our expectations, our anticipated revenue and gross margins will be adversely affected.

Third-party payors, such as government or private healthcare insurers, carefully review and increasingly question and challenge the coverage of and the prices charged for drugs.

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We believe our drugs will be priced significantly higher than existing generic drugs and consistent with current branded drugs.

If we are unable to show a significant benefit relative to existing generic drugs, Medicare,

Medicaid and private payors may not be willing to provide reimbursement for our drugs, which would significantly reduce the likelihood of our products gaining market acceptance.

If we are unable to show a significant benefit relative to existing generic drugs, Medicare, Medicaid and private payors may not be willing to provide reimbursement for our drugs, which would significantly reduce the likelihood of our products gaining market acceptance.

We expect that private insurers will consider the efficacy, cost-effectiveness, safety and tolerability of our potential products in determining whether to approve reimbursement for such products and at what level.

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The legislation also expanded Medicaid drug rebates and created an alternative rebate formula for certain new formulations of certain existing products that is intended to increase the rebates due on those drugs.

The Centers for Medicare & Medicaid Services, or CMS, which administers the Medicaid Drug Rebate Program, also has proposed to expand Medicaid rebates to the utilization that occurs in the territories of the U.S., such as Puerto Rico and the Virgin Islands.

Puerto Rico and the Virgin Islands.

Further, beginning in 2011, the PPACA imposed a significant annual fee on companies that manufacture or import branded prescription drug products and required manufacturers to provide a discount, equal to 70% off, effective as of 2019, the negotiated price of prescriptions filled by beneficiaries in the Medicare Part D coverage gap, referred to as the “donut hole.” Legislative and regulatory proposals have been introduced at both the state and federal level to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

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In the U.S., we are subject to various federal and state healthcare “fraud and abuse” laws, including anti-kickback laws, false claims laws and other laws intended, among other things, to reduce fraud and abuse in federal and state healthcare programs.

The federal Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer, or a party acting on its behalf, to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug, or other good or service for which payment in whole or in part may be made under a federal healthcare program, such as Medicare or Medicaid.

a federal healthcare program, such as Medicare or Medicaid.

Although we seek to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances.

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Violations of fraud and abuse laws may be punishable by criminal or civil sanctions, including penalties, fines or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S.

private individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under the false claims laws of several states.

In addition, private individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under the false claims laws of several states.

Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare services reimbursed by any source, not just governmental payors.

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In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, which includes the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States.

The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to 4% of global revenues or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

The GDPR also permits data protection authorities to require destruction of

improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to 4% of global revenues or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

In addition, the GDPR provides that EU member states may make their own additional laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

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The decision, which took effect on the day of its adoption, concludes that the United States ensures an adequate level of protection for personal data transferred from the EEA to companies certified to the DPF.

However, it remains too soon to tell

how the future of Privacy Shield 2.0 will evolve and what impact it will have on our international activities.

However, it remains too soon to tell how the future of Privacy Shield 2.0 will evolve and what impact it will have on our international activities.

At least one challenge to the DPF is pending before the Court of Justice of the European Union.

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Similar laws passed in Virginia, Colorado, Connecticut, and Utah took effect in 2023.

Additionally, Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas and others have adopted privacy laws, which take effect from July 1, 2024 through 2026.

Additionally, Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas and others have adopted privacy laws, which took or will take effect from July 1, 2024 through 2026.

Some state laws also minimize what data can be collected from consumers and how businesses may use and disclose it.

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Our success depends on our continued ability to attract, retain and motivate highly qualified management and scientific personnel.

As of June 30, 2024, we had twenty-eight full-time employees, two part-time employees and a small number of consultants, which may make us more reliant on our individual employees than companies with a greater number of employees.

As of September 30, 2024, we had thirty-three full-time employees, one part-time employee and a small number of consultants, which may make us more reliant on our individual employees than companies with a greater number of employees.

The loss of any of our key personnel could delay or prevent the development of our drug candidates.

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Our research and development activities involve the controlled use of hazardous materials, chemicals and various radioactive compounds, and we will need to develop additional safety procedures for the handling and disposing of hazardous materials.

If an accident occurs, we could be held liable for resulting damages, which could be substantial.

accident occurs, we could be held liable for resulting damages, which could be substantial.

We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials.

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We have experienced cybersecurity incidents in the past and expect that we will experience cybersecurity incidents in the future.

If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation and potential notification of the

breach to counter-parties and data subjects could be material.

If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counter-parties and data subjects could be material.

To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our development programs and the development of our drug candidates could be delayed.

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Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments.

Any such transaction may require us to incur non-recurring or other charges, may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our business, financial condition and results of operations.

Any such transaction may require us to incur non-recurring or other charges, may increase our near-

and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our business, financial condition and results of operations.

For example, these transactions may entail numerous operational and financial risks, including:

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A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from consideration by certain investors who may elect to invest with our competition instead.

Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks.

Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or

expose us to new risks.

Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, or results of operations, including the sustainability of our business over time.

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We currently have intellectual property rights to develop our drug candidates through a license from Ligand.

As of June 30, 2024, we owned or co-owned 111 patent applications and 27 patents.

As of September 30, 2024, we owned or co-owned 139 patent applications and 32 patents.

Because our programs require the use of proprietary rights held by Ligand, the growth of our business will likely depend in part on our ability to maintain and exploit these proprietary rights.

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Our intellectual property includes licenses covering issued patents and pending patent applications for composition of matter, method of use and method of manufacture.

As of June 30, 2024, for each of VK2809 and VK0214, we in-licensed three patents in the U.S.

additional patents in certain foreign jurisdictions, and owned or co-owned and in-licensed three U.S.

As of September 30, 2024, for each of VK2809 and VK0214, we in-licensed three patents in the U.S.

and additional patents in certain foreign jurisdictions, and owned or co-owned and in-licensed three U.S.

patents, four U.S.

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patent and one Japanese patent directed to VK0214, and owned two additional U.S.

patents, two PCT applications, and several patent applications in the U.S.

and certain foreign jurisdictions directed to VK2809 as of June 30, 2024.

For VK5211, as of June 30, 2024, we in-licensed ten patents and one patent application in the U.S.

patents, one PCT application, and several patent applications in the U.S.

and certain foreign jurisdictions directed to VK2809 as of September 30, 2024.

For VK5211, as of September 30, 2024, we in-licensed ten patents and one patent application in the U.S.

and several other patents and patent applications in certain foreign jurisdictions.

As of June 30, 2024, for our GLP-1 program, we own one U.S.

patent, additional patents in certain foreign jurisdictions, three PCT applications, and several patent applications in the U.S.

As of September 30, 2024, for our GLP-1 program, we own one U.S.

patent, additional patents in certain foreign jurisdictions, two PCT applications, and several patent applications in the U.S.

and certain foreign jurisdictions.

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A finding of infringement could prevent us from commercializing our drug candidates or force us to cease some of our business operations, which could materially and adversely affect our business, financial condition and results of operations.

Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar material and adverse effect on our business, financial condition and results of operations.

Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar material and adverse effect on our business, financial condition and

results of operations.

In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

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and (5) tortious interference with contract.

In a related action, we also filed suit against the same Ascletis Defendants in the International Trade Commission for unlawful and unfair methods of competition.

In a related action, we also filed suit against the same Ascletis Defendants in the International Trade Commission, or the ITC, for unlawful and unfair methods of competition.

On October 3, 2024, the ITC’s Chief Administrative Law Judge issued a Notice of his determination that the Ascletis Defendants misappropriated our trade secrets and engaged in discovery misconduct, warranting monetary and non-monetary sanctions.

Lawsuits to protect our intellectual property rights can be time consuming and costly.

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Depending on decisions by the U.S.

Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we might obtain in the future.

Congress, the federal courts and the USPTO, the laws and regulations

governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we might obtain in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

10 unchanged sentences

Competitors may use our licensed and owned technologies in jurisdictions where we have not licensed or obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain or license patent protection, but where patent enforcement is not as strong as that in the U.S.

These products may compete with our products in

jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

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

6 unchanged sentences

Many countries, including European Union countries, India, Japan and China, have compulsory licensing laws under which a patent owner may be compelled under certain circumstances to grant licenses to third parties.

In those countries, as of June 30, 2024, we had several licensed and owned patents and several licensed and owned patent applications and may have limited remedies if such patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of such patents.

In those countries, as of September 30, 2024, we had several licensed and owned patents and several licensed and owned patent applications and may have limited remedies if such patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of such patents.

This could limit our potential revenue opportunities.

9 unchanged sentences

We employ individuals who were previously employed at other biopharmaceutical companies.

Although we have no knowledge of any such claims against us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.

Although we have no knowledge of any such claims against us, we may be subject to claims that we or our employees, consultants or independent contractors have

inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.

Litigation may be necessary to defend against these claims.

53 unchanged sentences

*Our management owns a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of June 30, 2024, our executive officers, directors and 5% or greater stockholders beneficially owned 32.8% of our common stock.

As of September 30, 2024, our executive officers, directors and 5% or greater stockholders beneficially owned 32.7% of our common stock.

Therefore, our executive officers, directors and 5% or greater stockholders have the ability to influence us through this ownership position.

28 unchanged sentences

In addition, we expect that we will need to hire additional personnel in our finance department to help us comply with the various requirements applicable to public companies.

The expenses incurred by public companies generally to meet SEC reporting, Sarbanes-Oxley Act compliance, finance and accounting and corporate governance requirements have been increasing in recent years as a result of changes in, and the adoption of, new rules and regulations applicable to public companies.

The expenses incurred by public companies generally to meet

SEC reporting, Sarbanes-Oxley Act compliance, finance and accounting and corporate governance requirements have been increasing in recent years as a result of changes in, and the adoption of, new rules and regulations applicable to public companies.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.

58 unchanged sentences

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

What changed 10-Q

Item 1A. Risk Factors