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The following information should be read in conjunction with Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” of this Quarterly Report.
+Added: Summary Risk Factors
+Added: Investing in our common stock involves a high degree of risk because our business is subject to numerous risks and uncertainties, as fully described below.
+Added: The principal factors and uncertainties that make investing in our common stock risky include, among others:
+Added: • There is no guarantee that our acquisition of Viridian will increase stockholder value.
+Added: • We will need to raise additional capital, and if we are unable to do so when needed, we will not be able to continue as a going concern.
+Added: • We have historically incurred losses, have a limited operating history on which to assess our business, and anticipate that we will continue to incur significant losses for the foreseeable future.
+Added: • We may not be entitled to forgiveness of our recently received Paycheck Protection Program loan, and our application for the Paycheck Protection Program loan could in the future be determined to have been impermissible or could result in damage to our reputation.
+Added: • We have never generated any revenue from product sales and may never be profitable.
+Added: • Raising additional capital may cause dilution to our stockholders, restrict our operations, or require us to relinquish rights.
+Added: • Clinical trials are costly, time consuming, and inherently risky, and we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
+Added: • Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial viability of an approved label, or result in significant negative consequences following marketing approval, if any.
+Added: • We are heavily dependent on the success of our product candidates, which are in the early stages of clinical development.
+Added: Some of our product candidates have produced results only in non-clinical settings, or for other indications than those for which we contemplate conducting development and seeking U.S.
+Added: Food and Drug Administration, or FDA, approval, and we cannot give any assurance that we will generate data for any of our product candidates sufficiently supportive to receive regulatory approval in our planned indications, which will be required before they can be commercialized.
+Added: • Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier preclinical studies and clinical trials may not be predictive of future clinical trial results.
Risks Related to Our Financial Condition and Capital Requirements
+Added: There is no guarantee that our acquisition of Viridian will increase stockholder value.
+Added: In October 2020, we acquired Viridian.
+Added: We cannot guarantee that implementing the Merger and related transactions will not impair stockholder value or otherwise adversely affect our business.
+Added: The Merger poses significant integration challenges between our businesses and management teams which could result in management and business disruptions, any of which could harm our results of operation, business prospects, and impair the value of such acquisition to our stockholders.
We will need to raise additional capital, and if we are unable to do so when needed, we will not be able to continue as a going concern.
This Quarterly Report includes disclosures regarding our management’s assessment of our ability to continue as a going concern.
−Removed: As of June 30, 2020, we had $30.6 million of cash and cash equivalents, and we had $8.1 million of outstanding debt principal obligations under our note payable to Silicon Valley Bank and other notes payable.
−Removed: Based on our current operating plan, we believe our current resources, will be sufficient to fund our operations and allow us to meet our liquidity needs into the third quarter of 2021.
−Removed: As a result, we will need to raise additional capital to fund our operations and service our debt obligations.
+Added: As of September 30, 2020, we had $30.1 million of cash and cash equivalents, and we had $8.1 million of outstanding debt principal obligations under our note payable to Silicon Valley Bank and other notes payable.
+Added: We expect that our current cash and cash equivalents, including approximately $91.0 million we received on October 30, 2020 from the sale of our Series A Preferred Stock in the Financing plus the cash held by Viridian at the time of the acquisition, will enable us to fund our operating expenses and capital expenditure requirements through the end of 2023.
+Added: We will need to raise additional capital to continue to fund our operations and service our debt obligations in the future.
If we are unable to raise additional capital when needed, we will not be able to continue as a going concern.
+Added: In addition, if our stockholders do not timely approve the conversion of our Series A Preferred Stock, then the holders of our Series A Preferred Stock may be entitled to require us to settle their shares of Series A Preferred Stock for cash at a price per share equal to the fair value of the Series A Preferred Stock, as described in our certificate of designation relating to the Series A Preferred Stock.
+Added: If we are required to settle a significant amount of the Series A Preferred Stock, we expect we would not have sufficient liquidity to settle the Series A Preferred Stock.
Developing our product candidates requires a substantial amount of capital.
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There can be no assurances that sufficient funds will be available to us when required or on acceptable terms, if at all.
−Removed: In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.
−Removed: This outbreak is causing major disruptions to businesses and markets worldwide as the virus spreads.
−Removed: We cannot predict what the long-term effects of this pandemic and the resulting economic disruptions may have on our liquidity and results of operations.
−Removed: The extent of the effect of the COVID-19 pandemic on our liquidity and results of operations will depend on a number of future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict.
−Removed: The COVID-19 pandemic may make it more difficult for us to enroll patients in any future clinical trials or cause us to further delay enrollment or announcement of results from our ongoing clinical trials.
−Removed: The economic uncertainty surrounding the COVID-19 pandemic may also dramatically reduce our ability to secure debt or equity financing necessary to support our operations.
−Removed: We are unable to currently estimate the financial effect of the pandemic.
−Removed: If the pandemic continues to be a severe worldwide crisis, it could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
If we are unable to raise additional capital when required or on acceptable terms, we may be required to:
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• file for bankruptcy or cease operations altogether.
−Removed: For instance, in August 2019 we began implementing two phases of a cost restructuring plan to streamline the organization, reduce costs, and direct resources to advance cobomarsen and miR-29 mimics, including remlarsen and MRG-229, while reducing investments in new discovery research.
−Removed: The restructuring plan identified approximately 44 positions for elimination, or approximately 50% of our then total workforce, primarily associated with research and development and corresponding project, general, and administrative support.
+Added: For instance, in August 2019 we initiated a cost restructuring plan to streamline the organization, reduce costs, and direct resources towards prioritized initiatives and product candidates, which provided a reduction of approximately 50% of
+Added: workforce in place at that time, primarily associated with research and development functions.
If we are unable to raise additional capital, we may be forced to undergo additional restructuring efforts or cease some or all of our operations altogether.
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Additionally, any capital raising efforts are subject to significant risks and contingencies, as described in more detail under the risk factor titled “ Raising additional capital may cause dilution to our stockholders, restrict our operations, or require us to relinquish rights.
−Removed: In the past, our management has concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt existed as to our ability to continue as a going concern, and our management may make a similar determination in the future.
−Removed: In the past, our management has concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt existed as to our ability to continue as a going concern.
−Removed: Though our management has not made such a conclusion as of June 30, 2020, we cannot predict whether our management will make a similar determination regarding our ability to continue as a going concern in the future.
−Removed: Changing circumstances may cause us to consume capital significantly faster or slower than we currently anticipate.
−Removed: If, in the future, we are delayed in completing or are unable to complete additional funding and/or a strategic transaction, we may discontinue our development activities or operations, but there are no assurances that these actions would be sufficient to allow us to continue to operate as a going concern.
−Removed: Therefore, even if we resolve this uncertainty, our independent registered public accountants and/or management could conclude that uncertainty as to our ability to continue as a going concern could exist at a future date.
We have historically incurred losses, have a limited operating history on which to assess our business, and anticipate that we will continue to incur significant losses for the foreseeable future.
−Removed: We are a clinical-stage biopharmaceutical company with a limited operating history.
+Added: We are a biopharmaceutical company with a limited operating history.
We have historically incurred net losses.
−Removed: During the six months ended June 30, 2020 and 2019, net loss was $14.5 million and $20.5 million, respectively.
−Removed: As of June 30, 2020, we had an accumulated deficit of $182.7 million.
−Removed: As of June 30, 2020, we had cash and cash equivalents of $30.6 million.
+Added: During the nine months ended September 30, 2020 and 2019, net loss was $20.0 million and $31.8 million, respectively.
+Added: As of September 30, 2020, we had an accumulated deficit of $188.1 million.
+Added: As of September 30, 2020, we had cash and cash equivalents of $30.1 million.
In March 2017, we entered into the ATM Agreement with Cowen under which we may offer and sell, from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million through Cowen as our sales agent.
−Removed: Through July 31, 2020, we had sold, pursuant to the terms of the ATM Agreement, 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million after deducting initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.
−Removed: In August 2018, we entered into the LLS Stock Purchase Agreement with LLS for the sale of up to $5.0 million of shares of our common stock to LLS and its affiliates under the LLS Purchase Agreement.
+Added: Through October 30, 2020, we had sold, pursuant to the terms of the ATM Agreement, 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million after deducting initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.
+Added: In August 2018, we entered into the LLS Stock Purchase Agreement with LLS for the sale of up to $5.0 million of shares of our common stock to LLS and its affiliates under the LLS Stock Purchase Agreement.
In October 2019, the LLS Stock Purchase Agreement was assigned by LLS to LLS TAP.
−Removed: Through July 31, 2020, we had issued an aggregate of 757,351 shares of our common stock to LLS and its affiliates in the LLS Offering, for aggregate net proceeds of approximately $1.4 million, after deducting expenses incurred in connection with the LLS Offering.
−Removed: As a result of the modifications of the SOLAR trial we announced in December 2019, we do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as
−Removed: such, do not expect we will receive the remaining proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
+Added: Through October 30, 2020, we had issued an aggregate of 757,351 shares of our common stock to LLS and its affiliates in the LLS Offering, for aggregate net proceeds of approximately $1.4 million, after deducting expenses incurred in connection with the LLS Offering.
+Added: We do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as such, do not expect we will receive the remaining proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
In December 2019, we entered into the Aspire Agreement with Aspire Capital.
Pursuant to this agreement, we may issue up to $20.0 million of shares of our common stock from time to time.
−Removed: Through July 31, 2020, we had issued an aggregate of 8,290,350 shares of common stock under the Aspire Agreement, which amount includes (i) 959,079 shares of common stock issued to Aspire Capital as consideration for its commitment to purchase shares of our common stock under the Aspire Agreement, (ii) 1,598,465 shares of common stock issued to Aspire Capital for an aggregate sale price of $1.0 million as an initial purchase under the Aspire Agreement, or the Initial Purchase Shares, and (iii) 5,732,806 shares of common stock issued to Aspire Capital for an aggregate sale price of $8.5 million as purchase shares under the terms of the Aspire Agreement.
+Added: Through October 30, 2020, we had issued an aggregate of 8,740,350 shares of common stock under the Aspire Agreement, which amount includes (i) 959,079 shares of common stock issued to Aspire Capital as consideration for its commitment to purchase shares of our common stock under the Aspire Agreement, (ii) 1,598,465 shares of common stock issued to Aspire Capital for an aggregate sale price of $1.0 million as an initial purchase under the Aspire Agreement, or the Initial Purchase Shares, and (iii) 6,182,806 shares of common stock issued to Aspire Capital for an aggregate sale price of $8.8 million as purchase shares under the terms of the Aspire Agreement.
In February 2020, we entered into the 2020 Underwriting Agreement with the Underwriter.
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The combined price to the public in the 2020 Public Offering for each share of common stock and accompanying one-half warrant was $1.00, which resulted in approximately $13.9 million of net proceeds to us after deducting underwriting commissions and discounts and other estimated offering expenses payable by us and excluding the proceeds, if any, from the exercise of the warrants.
−Removed: We believe that we have sufficient capital to fund our operations in the normal course of business in order to meet our liquidity needs into the third quarter of 2021.
−Removed: We will continue to require substantial additional capital to continue our preclinical and clinical development and potential commercialization activities.
−Removed: Accordingly, we will need to raise substantial additional capital to continue to fund our operations.
+Added: In October 2020, we entered into the Purchase Agreement with the Investors.
+Added: Pursuant to the Purchase Agreement, we agreed to sell an aggregate of approximately 195,290 shares of Series A Preferred Stock for an aggregate purchase price of approximately $91.0 million in the Financing.
+Added: Each share of Series A Preferred Stock is convertible into 1,000 shares of our common stock, subject to specified conditions.
+Added: The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series A Preferred Stock are set forth in the Certificate of Designation.
+Added: We expect that our current cash and cash equivalents, including approximately $91.0 million we received on October 30, 2020 from the sale of our Series A Preferred Stock in the Financing, plus the cash held by Viridian at the time of the acquisition, will enable us to fund our operating expenses and capital expenditure requirements through the end of 2023.
+Added: We will need to raise
+Added: substantial additional capital to continue to fund our operations in the future.
The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts and the long-term effects of the COVID-19 pandemic.
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If we are unable to acquire additional capital or resources, we will be required to modify our operational plans to complete future milestones.
−Removed: For instance, in August 2019 we began implementing two phases of a cost restructuring plan to streamline the organization, reduce costs, and direct resources to advance cobomarsen and miR-29 mimics, including remlarsen and MRG-229, while reducing investments in new discovery research.
−Removed: The restructuring plan identified approximately 44 positions for elimination, or approximately 50% of our then total workforce, primarily associated with research and development and corresponding project, general, and administrative support.
+Added: For instance, in August 2019 we initiated a cost restructuring plan to streamline the organization, reduce costs, and direct resources towards prioritized initiatives and product candidates, which provided a reduction of approximately 50% of workforce in place at that time, primarily associated with research and development functions.
We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate.
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We expect to invest significant funds into the research and development of our current product candidates to determine the potential to advance these product candidates to regulatory approval.
−Removed: If we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which our product candidates may receive approval, and our ability to achieve sufficient market acceptance, pricing, coverage
−Removed: and adequate reimbursement from third-party payors, and adequate market share for our product candidates in those markets.
+Added: If we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which our product candidates may receive approval, and our ability to achieve sufficient market acceptance, pricing, coverage and adequate reimbursement from third-party payors, and adequate market share for our product candidates in those markets.
Even if we obtain adequate market share for our product candidates, because the potential markets in which our product candidates may ultimately receive regulatory approval could be very small, we may never become profitable despite obtaining such market share and acceptance of our products.
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In April 2020, we received proceeds of $1.7 million from a loan, or the PPP Loan, under the Paycheck Protection Program, or PPP, of the recently enacted Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act.
−Removed: Under the PPP, we may apply for and be granted forgiveness for all or a part of the PPP Loan.
−Removed: We intend to use the proceeds of the PPP Loan to retain current employees, maintain payroll, and make lease and utility payments.
+Added: We have used the proceeds of the PPP Loan to retain current employees, maintain payroll, and make lease and utility payments.
The PPP Loan matures on April 23, 2022 and bears annual interest at a rate of 1.0%.
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The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed.
−Removed: Under the PPP, we may apply for and be granted forgiveness for all or part of the PPP Loan.
+Added: In October 2020, we applied for forgiveness of our PPP Loan, but we cannot guarantee that we will be granted forgiveness for all or any part of the PPP Loan.
The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by us during the eight-week period after the loan origination for certain purposes, including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 75% of the loan amount is used for eligible payroll costs.
Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during the covered eight-week period will qualify for forgiveness.
−Removed: We will be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, in accordance with the amortization schedule described above, and we cannot provide any assurance that we will be eligible for loan forgiveness,
−Removed: that we will ultimately apply for forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the U.S.
+Added: We will be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, in accordance with the amortization schedule described above, and we cannot provide any assurance that we will be eligible for loan forgiveness, that we will ultimately apply for forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the U.S.
Small Business Administration, or the SBA.
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We will also have to develop or acquire manufacturing capabilities or continue to contract with contract manufacturers in order to continue development and potential commercialization of our product candidates.
−Removed: For instance, if the costs of manufacturing our drug product are not commercially feasible, we will need to develop or procure our drug product in a commercially feasible manner in order to successfully
−Removed: commercialize a future approved product, if any.
+Added: For instance, if the costs of manufacturing our drug product are not commercially feasible, we will need to develop or procure our drug product in a commercially feasible manner in order to successfully commercialize a future approved product, if any.
Additionally, if we are not able to generate revenue from the sale of any approved products, we may never become profitable.
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To the extent that we raise additional capital through the sale of equity, including pursuant to any sales under the ATM Agreement, the Aspire Agreement, the LLS Stock Purchase Agreement, convertible debt or other securities convertible into equity, the ownership interest of our stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our stockholders.
−Removed: For instance, through July 31, 2020, we had sold (i) pursuant to the terms of the ATM Agreement 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million, (ii) pursuant to the Aspire Agreement 7,331,271 shares of our common stock for aggregate net proceeds of approximately $9.3 million, (iii) pursuant to the LLS Stock Purchase Agreement 757,351 shares of our common stock for aggregate net proceeds of approximately $1.4 million, and (iv) pursuant to the 2020 Public Offering 15,000,000 shares of our common stock for aggregate net proceeds of approximately $13.9 million.
+Added: For instance, in October 2020, we sold 195,290 shares of our Series A Preferred Stock in the Financing to the Investors for gross proceeds of approximately $91.0 million.
+Added: Subject to receiving the requisite stockholder approval, each share of Series A Preferred Stock is convertible into an aggregate of 1,000 shares of our common stock.
+Added: We are required to solicit the consent of our stockholders with regard to conversion of the shares of Series A Preferred Stock issued in the Financing.
+Added: If our stockholders fail to approve such
+Added: matters, we may be subject to financial penalties that could materially harm our business.
+Added: In addition, through October 30, 2020, we had sold (i) pursuant to the terms of the ATM Agreement, 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million, (ii) pursuant to the Aspire Agreement, 7,781,271 shares of our common stock for aggregate net proceeds of approximately $9.7 million, (iii) pursuant to the LLS Stock Purchase Agreement, 757,351 shares of our common stock for aggregate net proceeds of approximately $1.4 million, and (iv) pursuant to the 2020 Public Offering, 15,000,000 shares of our common stock for aggregate net proceeds of approximately $13.9 million.
After giving effect to these sales, we anticipate that we will continue to make sales of our common stock under the ATM Agreement and the Aspire Agreement from time to time into the foreseeable future, and we may sell shares of our common stock of up to $37.9 million and up to $10.2 million in additional aggregate value under the ATM Agreement and Aspire Agreement, respectively.
−Removed: As a result of the modifications of the SOLAR trial we announced in December 2019, we do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as such, do not expect we will receive the remaining $3.5 million in proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
+Added: We do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as such, do not expect we will receive the remaining $3.5 million in proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
Sales under the ATM Agreement, the Aspire Agreement, or the LLS Stock Purchase Agreement dilute the ownership interest of our stockholders and may cause the price per share of our common stock to decrease.
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We cannot be assured that we will be able to obtain additional funding if and when necessary to fund our entire portfolio of product candidates to meet our projected plans.
−Removed: If we are unable to obtain funding on a timely basis, we may be required to delay or discontinue one or more of our development programs or the commercialization of any product
−Removed: candidates or be unable to expand our operations or otherwise capitalize on potential business opportunities, which could materially harm our business, financial condition, and results of operations.
+Added: If we are unable to obtain funding on a timely basis, we may be required to delay or discontinue one or more of our development programs or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on potential business opportunities, which could materially harm our business, financial condition, and results of operations.
We have also historically received funds directly or indirectly from state and federal government grants for research and development.
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The ongoing COVID-19 pandemic may materially affect our ability to complete our clinical trials in a timely fashion or at all.
−Removed: For example, as a result of the COVID-19 pandemic, we have delayed the anticipated timing of the SOLAR trial topline data availability.
−Removed: We cannot guarantee that we will not have to delay enrollment or any other aspect of our other proposed clinical trials as a result of the COVID-19 pandemic.
Any inability to successfully complete clinical development and obtain regulatory approval for our product candidates could result in additional costs to us or impair our ability to generate revenue.
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Clinical trial delays could also shorten any periods during which our products have patent protection and may allow competitors to develop and bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
−Removed: The approach we are taking to discover and develop novel therapeutics that target microRNAs is unproven and may never lead to marketable products.
−Removed: The scientific discoveries that form the basis for our efforts to discover and develop our product candidates are relatively recent.
−Removed: To date, neither we nor any other company has received regulatory approval to market therapeutics utilizing microRNA-targeted molecules.
−Removed: The scientific evidence to support the feasibility of developing drugs based on these discoveries is both preliminary and limited.
−Removed: Successful development of microRNA-targeted therapeutic products by us will require solving a number of issues, including providing suitable methods of stabilizing the therapeutic product and delivering it into target cells in the human body.
−Removed: In addition, any product candidates that we develop may not demonstrate in patients or subjects the chemical and pharmacological properties ascribed to them in laboratory and preclinical trials, and they may interact with human biological systems in unforeseen, ineffective, or even harmful ways.
−Removed: For instance, our clinical and preclinical data to date has not been fully validated and we cannot assure that, after validation, our clinical trial data will be complete and consistent.
−Removed: If we do not successfully develop and commercialize product candidates based upon this technological approach, we may not become profitable and the value of our capital stock may decline.
−Removed: Further, our focus on microRNA technology for developing product candidates as opposed to multiple, more proven technologies for drug development, increases the risk associated with our business.
−Removed: If we are not successful in developing an approved product using microRNA technology, we may not be able to identify and successfully implement an alternative product development strategy.
−Removed: In addition, work by other companies pursuing similar technologies may encounter setbacks and difficulties that regulators and investors may attribute to our product candidates, whether appropriately or not.
−Removed: Our microRNA-targeted therapeutic product candidates are based on a relatively novel technology, which makes it unusually difficult to predict the time and cost of development and the time and cost, or likelihood, of subsequently obtaining regulatory approval.
−Removed: To date, no microRNA-targeted therapeutics have been approved for marketing in the United States.
−Removed: We have concentrated our research and development efforts to date on a limited number of product candidates based on our microRNA-targeted therapeutic platform and identifying our initial targeted disease indications.
−Removed: Our future success depends on our successful development of viable product candidates.
−Removed: Only three of our product candidates, cobomarsen, remlarsen, and MRG-110, are in clinical development, and the remainder of our product candidates are in preclinical development.
−Removed: There can be no assurance that we will not experience problems or delays in developing our product candidates and that such problems or delays will not cause unanticipated costs, or that any such development problems can be solved.
−Removed: For instance, in December 2019, we decided to cease enrollment in our SOLAR trial, and we no longer believe the results of the SOLAR trial, due to the smaller number of patients than originally planned, would allow for accelerated approval in the United States.
−Removed: We cannot predict if we will encounter similar delays in the development of our other product candidates in the future.
−Removed: Additionally, the FDA, the European Medicines Agency, and other regulatory authorities, have relatively limited experience with microRNA-targeted therapeutics.
−Removed: No regulatory authority has granted approval to anyone, including us, to market or commercialize microRNA-targeted therapeutics, which may increase the complexity, uncertainty, and length of the regulatory review and approval process for our product candidates.
−Removed: If our product candidates fail to prove to be safe and effective, and commercially viable, our product candidate pipeline would have little, if any, value, which would have a material adverse effect on our business, financial condition, or results of operations.
−Removed: The clinical trial, product approval, and manufacturing requirements of the FDA, the European Medicines Agency, and other regulatory authorities, and the criteria these regulators use to evaluate the safety and efficacy of a product candidate, vary substantially according to the type, complexity, novelty, and intended use of the product candidate.
−Removed: The regulatory review and
−Removed: approval process for novel product candidates such as microRNA-targeted therapeutics could be more expensive and take longer than for other, better known or more extensively studied product candidates.
−Removed: It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in either the United States or the European Union, or EU, or from other countries or regions of the world, or how long it will take to commercialize our product candidates, even if approved for marketing.
−Removed: Approvals by one regulatory agency may not be indicative of the likelihood of approval by other regulatory bodies.
−Removed: Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product candidate to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations, and prospects may be harmed.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial viability of an approved label, or result in significant negative consequences following marketing approval, if any.
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They additionally may result in a delay of regulatory approval by the FDA or comparable foreign authorities, or, even in the instance that an affected product candidate is approved, may result in a restrictive drug label.
−Removed: Our cobomarsen, remlarsen, and MRG-110 product candidates have been studied in only a limited number of patients with a confirmed diagnosis or healthy volunteers.
−Removed: Through the most recent clinical data release date in July 2019, the most common non-serious adverse events (occurring in ≥10% of subjects) in patients with mycosis fungoides, or MF, regardless of whether they were thought to be due to cobomarsen, were neutropenia, fatigue, arthralgia, injection site pain, pruritus, dry skin, nausea, diarrhea, constipation, headache, upper respiratory tract infection, nasal congestion, back pain, oropharyngeal pain, and tumor flare.
−Removed: Self-limited grade 3 or grade 4 adverse events, probably or possibly related to cobomarsen included laboratory abnormalities (neutropenia, leukopenia, lymphopenia, hypokalemia, increased transaminases), pruritus, rash, tumor flare, tumor pain, and erythema.
−Removed: At the highest dose administered in ATLL patients, which is no longer utilized, single episodes of localized edema and exfoliative erythroderma (generalized skin scaling) in one subject, were noted as serious related adverse events.
+Added: Our product candidates have been studied in only a limited number of patients with a confirmed diagnosis or healthy volunteers.
We may experience a higher rate or severity of adverse events and comparable or higher rates of discontinuation of trial participants in our future clinical trials.
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However, with a limited number of subjects and limited duration of exposure, we cannot be fully assured that rare and severe side effects of our product candidates will be uncovered.
−Removed: Such rare and severe side effects may only be uncovered with a significantly larger number of patients or subjects
−Removed: exposed to the drug.
+Added: Such rare and severe side effects may only be uncovered with a significantly larger number of patients or subjects exposed to the drug.
If such safety problems occur or are identified after our product candidates reach the market, the FDA may require that we amend the labeling of the product or recall the product or may even withdraw approval for the product.
−Removed: Our microRNA-targeted therapeutic approach is novel.
−Removed: Negative public opinion and increased regulatory scrutiny of microRNA or other nucleic acid-based therapies may damage public perception of the safety of our product candidates and adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.
−Removed: MicroRNA therapy remains a novel technology, with no microRNA-targeted therapeutic product approved to date in the United States.
−Removed: Public perception may be influenced by claims that microRNA therapy is unsafe, and microRNA therapy may not gain the acceptance of the public or the medical community.
−Removed: In particular, our success will depend upon physicians who specialize in the treatment of the diseases targeted by our product candidates, prescribing therapies that involve the use of our product candidates in lieu of, or in addition to, existing therapies with which they are familiar and for which greater clinical data may be available.
−Removed: More restrictive government regulations or negative public opinion regarding microRNA or other nucleic acid-based therapeutics could have an adverse effect on our business, financial condition, or results of operations and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop.
−Removed: Serious adverse events, or SAEs, in microRNA clinical trials for our competitors’ products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity, could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.
−Removed: For instance, in June 2016, the FDA placed a regulatory hold on the clinical trial of a microRNA- or nucleic acid-focused biopharmaceutical company with a microRNA-targeted product candidate for the treatment of hepatitis C virus due to SAEs in that trial.
−Removed: This company also voluntarily halted a Phase 1 clinical trial in patients with kidney disease due to unexpected toxicity issues in July 2018.
−Removed: Another microRNA-focused biopharmaceutical company also voluntarily halted an ongoing Phase 1 clinical trial for a microRNA-targeted therapy for multiple cancers in September 2016 due to multiple immune-related serious adverse events.
−Removed: We cannot predict what effect, if any, these clinical holds will have on the government and public perception of our product candidates.
−Removed: We are heavily dependent on the success of our product candidates, which are in the early stages of clinical development.
−Removed: Some of our product candidates have produced results only in non-clinical settings, or for other indications than those for which we contemplate conducting development and seeking FDA approval, and we cannot give any assurance that we will generate data for any of our product candidates sufficiently supportive to receive regulatory approval in our planned indications, which will be required before they can be commercialized.
+Added: We are heavily dependent on the success of our product candidates, which are in the early stages of development, and we cannot give any assurance that we will generate data for any of our product candidates sufficiently supportive to receive regulatory approval in our planned indications, which will be required before they can be commercialized.
We have invested substantially all of our effort and financial resources to identify, acquire, and develop our portfolio of product candidates.
−Removed: Our future success is dependent on our ability to successfully further develop, obtain regulatory approval for, and commercialize one or more product candidates.
+Added: Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and commercialize one or more product candidates.
We currently generate no revenue from sales of any products, and we may never be able to develop or commercialize a product candidate.
−Removed: We currently have multiple product candidates in clinical development.
−Removed: Of these product candidates, cobomarsen has been predominantly administered in patients with MF.
−Removed: This is only one of the multiple indications for which we plan to develop this product candidate.
−Removed: Additionally, our clinical and preclinical data to date is not validated, and we cannot assure that, after validation, our clinical trial data will be complete and consistent.
−Removed: There can be no assurance that the data that we develop for our product candidates in our planned indications will be sufficiently supportive to obtain regulatory approval.
−Removed: In December 2019, we decided to cease enrollment in our SOLAR trial, and we no longer believe that results from the SOLAR clinical trial, based on a smaller number of patients than originally planned, could potentially allow us to apply for accelerated approval in the United States.
−Removed: As a result, we cannot guarantee if we will be able to raise sufficient capital necessary to complete a Phase 3 clinical trial of cobomarsen or when, if ever, we will be able to seek approval of cobomarsen.
−Removed: In addition, none of our other product candidates have advanced into a pivotal clinical trial for our proposed indications, and it may be years before any such clinical trial is initiated and completed, if at all.
+Added: We currently have a limited number of product candidates.
+Added: There can be no assurance that the data that we may or may not develop for our product candidates in our planned indications will be sufficiently supportive to obtain regulatory approval.
+Added: None of our product candidates have advanced through a pivotal clinical trial for our proposed indications, and it may be years before any such clinical trial is initiated and completed, if at all.
We are not permitted to market or promote any of our product candidates before they receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates.
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Failure can occur at any time during the clinical trial process.
−Removed: Additionally, microRNAs are a new class of drug target and as such may have some potentially unknown risks from both an efficacy and safety perspective.
The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of larger, later-stage controlled clinical trials.
Product candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks in subsequent clinical trials.
−Removed: Our clinical trials to date have been conducted on a small number of patients or healthy volunteers in limited numbers of clinical sites for a limited number of indications.
−Removed: We will have to conduct larger, well-controlled trials in our proposed indications to verify the results obtained to date and to support any regulatory submissions for further clinical development.
−Removed: A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles despite promising results in earlier, smaller clinical trials.
−Removed: For instance, in June 2016, the FDA placed a regulatory hold on the clinical trial of a microRNA-focused biopharmaceutical company with a microRNA product candidate for the treatment of hepatitis C virus due to SAEs in that trial.
−Removed: This company also voluntarily halted a Phase 1 clinical trial in patients with kidney disease due to unexpected toxicity issues in July 2018.
−Removed: Another microRNA-focused biopharmaceutical company also voluntarily halted an ongoing Phase 1 clinical trial for a microRNA therapy for multiple cancers in September 2016 due to multiple immune-related severe adverse events.
+Added: We will have to conduct well-controlled trials in our proposed indications to support any regulatory submissions for further clinical development.
+Added: A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical
+Added: trials due to lack of efficacy or adverse safety profiles despite promising results in earlier, smaller clinical trials.
Moreover, clinical data are often susceptible to varying interpretations and analyses.
−Removed: We do not know whether any Phase 2, Phase 3, or other clinical trials we are conducting or may conduct will demonstrate consistent or adequate efficacy and safety of our product candidates, with respect to the proposed indication for use, sufficient to receive regulatory approval to market our drug candidates.
+Added: We do not know whether any Phase 2, Phase 3, or other clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety of our product candidates, with respect to the proposed indication for use, sufficient to receive regulatory approval to market our drug candidates.
We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.
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If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaborations, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a collaboration arrangement.
−Removed: We may find it difficult to enroll and maintain patients or subjects in our clinical trials, in part due to the limited number of patients or subjects who have the diseases for which our product candidates are being studied.
−Removed: We cannot predict if we will continue to have difficulty enrolling and maintaining patients or subjects in our current or future clinical trials.
+Added: We may find it difficult to enroll and maintain patients or subjects in our future clinical trials, in part due to the limited number of patients or subjects who have the diseases for which our product candidates are being studied.
+Added: We cannot predict if we will have difficulty enrolling and maintaining patients or subjects in our future clinical trials.
Difficulty in enrolling and maintaining patients or subjects could delay or prevent clinical trials of our product candidates.
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The timing of our clinical trials depends in part on the rate at which we can recruit patients or subjects to participate in clinical trials of our product candidates, and we may experience delays in our clinical trials if we encounter difficulties in enrollment.
−Removed: The eligibility criteria of our planned clinical trials may further limit the available eligible trial participants as we expect to require that patients or subjects have specific characteristics that we can measure or meet the criteria to assure their conditions are appropriate for inclusion in our clinical trials.
−Removed: For instance, prior to ending enrollment in our SOLAR trial in 2019, we planned to enroll approximately 65 patients per treatment group in the SOLAR trial of cobomarsen in patients with MF.
−Removed: Due in part to enrollment delays, we decided to end enrollment in the SOLAR trial by the end of 2019.
−Removed: We cannot guarantee that we will not encounter similar enrollment delays in future clinical trials.
−Removed: Accordingly, we may not be able to identify, recruit, enroll, and maintain a sufficient number of patients or subjects to complete our clinical trials in a timely manner because of the perceived risks and benefits of the product candidate under study, the availability and efficacy of competing therapies and clinical trials, the option for patients to choose alternate existing approved therapies, and the willingness of physicians to participate in our planned clinical trials.
−Removed: Our ability to enroll patients in our clinical trials may be further impacted by the
−Removed: COVID-19 pandemic, or any future disease pandemic.
−Removed: Health concerns may cause patients to be unwilling to participate in clinical trials if they view themselves at particular risk from the virus, or clinical trial sites in areas particularly impacted by the COVID-19 pandemic or any other future disease pandemic may close entirely.
−Removed: For instance, in our SOLAR trial, as a result of the COVID-19 pandemic, patient monitoring and dosing has been suspended at some clinical sites.
−Removed: We cannot guarantee that the COVID-19 pandemic, or any other future disease pandemics, will not similarly impact enrollment in any future clinical trials.
+Added: The eligibility criteria of our clinical trials may further limit the available eligible trial participants as we expect to require that patients or subjects have specific characteristics that we can measure or meet the criteria to assure their conditions are appropriate for inclusion in our clinical trials.
+Added: Accordingly, we may not be able to identify, recruit, enroll, and maintain a sufficient number of patients or subjects to complete our future clinical trials in a timely manner because of the perceived risks and benefits of the product candidate under study, the availability and efficacy of competing therapies and clinical trials, the option for patients to choose alternate existing approved therapies, and the willingness of physicians to participate in our planned clinical trials.
+Added: Our ability to enroll patients in our planned clinical trials may be further impacted by the COVID-19 pandemic, or any future disease pandemic.
+Added: Health concerns may cause patients to be unwilling to participate in clinical trials if they view themselves at particular risk from the virus, or future clinical trial sites in areas particularly impacted by the COVID-19 pandemic or any other future disease pandemic may close entirely.
+Added: We cannot guarantee that the COVID-19 pandemic, or any other future disease pandemics, will not impact enrollment in any future clinical trials.
If patients or subjects are unwilling or unable to participate in our clinical trials for any reason, the timeline for conducting trials and obtaining regulatory approval of our product candidates may be delayed.
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If we cannot successfully defend against product liability claims, we could incur substantial liability and costs.
−Removed: Some of our microRNA-targeted therapeutic candidates have shown adverse events in clinical trials, including nausea, diarrhea, fatigue, headache, upper respiratory tract infection, injection site erythema, neutropenia, elevated aspartate aminotransferase and creatine kinase levels, itchiness, among others.
−Removed: In almost all cases, these events were mild to moderate and self-limited.
−Removed: There is a risk that our future product candidates may induce similar or more severe adverse events.
Patients with the diseases targeted by our product candidates may already be in severe and advanced stages of disease and have both known and unknown significant preexisting and potentially life-threatening health risks.
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As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition, or results of operations.
−Removed: Although we have product liability insurance, which covers our clinical trials in the United States, for up to $5.0 million per occurrence, up to an aggregate limit of $5.0 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer.
−Removed: We will also likely be required to increase our product liability insurance coverage for the advanced clinical trials that we plan to initiate.
+Added: Although we have product liability insurance, which covers our historical clinical trials in the United States, for up to $5.0 million per occurrence, up to an aggregate limit of $5.0 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer.
+Added: We will also likely be required to increase our product liability insurance coverage for any future clinical trials that we may initiate.
If we obtain marketing approval for any of our product candidates, we will need to expand our insurance coverage to include the sale of commercial products.
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Product liability claims may subject us to the foregoing and other risks, which could have a material adverse effect on our business, financial condition, or results of operations.
−Removed: We may not be able to develop or identify a technology that can effectively deliver our product candidates to the intended diseased cells or tissues, and any failure in such delivery technology could adversely affect and delay the development of any or all of our other product candidates.
−Removed: In connection with our clinical trials of cobomarsen, remlarsen, and MRG-110, we have used various routes of administration, including intravenous, intralesional, subcutaneous, and intradermal injections.
−Removed: While we have observed in our clinical trials that some or all of these routes of administration may be effective in delivering adequate levels of our product candidates to produce a therapeutic response, we cannot guarantee that this will be the case in any current or future clinical trials of our product candidates.
−Removed: If we fail to develop effective routes of delivery to the target diseased cells or tissues, such failure could adversely affect and delay the development of our product candidates.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
−Removed: A potential breakthrough therapy designation by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
+Added: We expect the product candidates we develop will be regulated as biologics, and therefore they may be subject to competition sooner than anticipated.
+Added: The Biologics Price Competition and Innovation Act of 2009, or BPCIA, was enacted as part of the Affordable Care Act to establish an abbreviated pathway for the approval of biosimilar and interchangeable biological products.
+Added: The regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an approved biologic.
+Added: Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the reference product was approved under a Biologics License Application, or BLA.
+Added: The law is complex and is still being interpreted and implemented by the FDA.
+Added: As a result, its ultimate impact, implementation, and meaning are subject to uncertainty.
+Added: While it is uncertain when processes intended to implement BPCIA may be fully adopted by the FDA, any of these processes could have a material adverse effect on the future commercial prospects for our biological products.
+Added: We believe that any of the product candidates we develop that is approved in the United States as a biological product under a BLA should qualify for the 12-year period of exclusivity.
+Added: However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.
+Added: Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
+Added: In addition, the approval of a biologic product biosimilar to one of our product candidates could have a material adverse impact on our business as it may be significantly less costly to bring to market and may be priced significantly lower than our product candidates.
+Added: We may seek Breakthrough Therapy designation for one or more of our product candidates from the FDA, but we might not receive such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process.
We may seek a breakthrough therapy designation from the FDA for some of our product candidates.
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If our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-approval requirements, the FDA may seek to withdraw accelerated approval.
−Removed: We may seek accelerated approval for our product candidates, including cobomarsen.
+Added: We may seek accelerated approval for our product candidates.
The FDA may grant accelerated approval to a product designed to treat a serious or life-threatening condition that provides meaningful therapeutic advantage over available therapies and demonstrates an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.
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On December 18, 2019, the U.S.
−Removed: Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well.
−Removed: On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and has allotted one hour for oral arguments, which are expected to occur in the fall.
+Added: Court of Appeals for the 5th
+Added: Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well.
+Added: On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case.
It is unclear how such litigation and other efforts to repeal and replace the Affordable Care Act will impact the Affordable Care Act and our business.
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The CARES Act, which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare rate reduction sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030.
−Removed: In addition, on April 18, 2020, CMS announced that Qualified Health Plan (QHP) issuers under the ACA may suspend activities related to the collection and reporting of quality data that would have otherwise been reported between May and June 2020 given the challenges healthcare providers are facing responding to the COVID-19 virus.
+Added: In addition, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
+Added: For example, on August 6, 2020, the Trump administration issued another executive order that instructs the federal government to develop a list of “essential” medicines and then buy them and other medical supplies from U.S.
+Added: manufacturers instead of from companies around the world, including China.
+Added: The order is meant to reduce regulatory barriers to domestic pharmaceutical manufacturing and catalyze manufacturing technologies needed to keep drug prices low and the production of drug products in the United States.
We may be subject, directly or indirectly, to foreign, federal, and state healthcare fraud and abuse laws, false claims laws, and health information privacy and security laws.
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• the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
−Removed: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which imposes specified obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information without the appropriate authorization, on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates, individuals, and entities
−Removed: that perform services for them that involve the creation, use, maintenance, or disclosure of individually identifiable health information;
−Removed: • the federal Physician Payments Sunshine Act under the Affordable Care Act which requires manufacturers of drugs, devices, biologics, and medical supplies, with certain exceptions, to report annually to the Center for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers, as well as their immediate family members and applicable group purchasing organizations;
−Removed: • the GDPR and other EU member state data protection legislation as well as that of the United Kingdom, which requires data controllers and processors, to adopt administrative, physical, and technical safeguards designed to protect personal data, including health-related data, including mandatory contractual terms with third-party providers, requirements for establishing an appropriate legal basis for processing personal data, transparency requirements related to communications with data subjects regarding the processing of their personal data, standards for obtaining consent from individuals to process their personal data, notification requirements to individuals about the processing of their personal data, an individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data, increased requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the United States;
+Added: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which imposes specified obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information without the appropriate authorization, on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates, individuals, and entities that perform services for them that involve the creation, use, maintenance, or disclosure of individually identifiable health information;
+Added: • the federal Physician Payments Sunshine Act under the Affordable Care Act which requires manufacturers of drugs, devices, biologics, and medical supplies, with certain exceptions, to report annually to the Center for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians, as defined by such law, and teaching hospitals, and ownership and investment interests held by physicians, as well as their immediate family members and applicable group purchasing organizations.
+Added: Beginning in 2022, applicable manufacturers also will be required to report such information regarding its relationships with physician assistants,
+Added: nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse midwives during the previous year;
+Added: • the GDPR and other EU member state data protection laws as well as those of Switzerland and the United Kingdom, which require, in part, data controllers and processors, to adopt administrative, physical, and technical safeguards designed to protect personal data, including health-related data, including mandatory contractual terms with third-party providers, requirements for establishing an appropriate legal basis for processing personal data, transparency requirements related to communications with data subjects regarding the processing of their personal data, standards for obtaining consent from individuals to process their personal data, notification requirements to individuals about the processing of their personal data, an individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data, increased requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the European Economic Area, or the EEA, Switzerland, and the United Kingdom, including to the United States;
• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including governmental and private payors, to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
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Reliance on government funding for our programs may add uncertainty to our research and commercialization efforts with respect to those programs that are tied to such funding and may impose requirements that limit our ability to take specified actions, increase the costs of commercialization and production of product candidates developed under those programs and subject us to potential financial penalties, which could materially and adversely affect our business, financial condition, and results of operations.
−Removed: During the course of our development of our product candidates, we have been funded in part through federal and state grants, including but not limited to the funding we received from Yale University pursuant to a subcontract agreement with Yale University.
+Added: During the course of our development of our product candidates, we have been funded in part through federal and state grants.
In addition to the funding we have received to date, we have applied and intend to continue to apply for federal and state grants to receive additional funding in the future.
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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 our business, financial condition, or results of operations.
−Removed: Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds.
+Added: Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposal of hazardous materials, including the components of our product candidates and other hazardous
We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials.
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Compliance or the failure to comply with such laws could increase the costs of our products and services, could limit their use or adoption, and could otherwise negatively affect our operating results and business.
−Removed: Regulation of data processing is evolving, as federal, state, and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and security, and the collection, processing, storage, transfer, and use of data.
−Removed: We and our collaborators may be subject to current, new, or modified federal, state, and foreign data protection laws and regulations (e.g., laws and regulations that address data privacy and data security, including, without limitation, health data).
+Added: Regulation of personal data or personal information processing is evolving, as federal, state, and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and security, and the collection, processing, storage, transfer, and use of such data.
+Added: We, our collaborators, and our service providers may be subject to current, new, or modified federal, state, and foreign data protection laws and regulations (e.g., laws and regulations that address data privacy and data security, including, without limitation, health data).
These new or proposed laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions, and guidance on implementation and compliance practices are often updated or otherwise revised, which adds to the complexity of processing personal data.
−Removed: These and other requirements could require us or our collaborators to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators’ ability to process or use data in order to support the provision of our products or services, affect our or our partners’ ability to offer our products and services or operate in certain locations, cause regulators to reject, limit, or disrupt our clinical trial activities, result in increased expenses, reduce overall demand for our products and services and make it more difficult to meet expectations of or commitments to customers or collaborators.
+Added: These and other requirements could require us or our collaborators to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators’ ability to process or use data in order to support the provision of our products or services, affect our or our collaborators’ ability to offer our products and services or operate in certain locations, cause regulators to reject, limit, or disrupt our clinical trial activities, result in increased expenses, reduce overall demand for our products and services and make it more difficult to meet expectations of or commitments to customers or collaborators.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state information privacy laws (e.g., the California Consumer Privacy Act of 2018, or CCPA), state health information privacy laws, and federal and state consumer protection laws and regulations (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our collaborators.
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The CCPA became effective on January 1, 2020.
−Removed: The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (broadly defined as all California residents) and provide such consumers new ways to opt-out of certain sales of personal information.
−Removed: The CCPA provides for civil penalties for violations, as well as a private right of action and statutory damages for data breaches that is expected to increase class action data breach litigation.
+Added: The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California residents and provide such residents new data privacy rights.
+Added: The CCPA imposes new operational requirements for covered businesses and provides for civil penalties for violations, as well as a private right of action and statutory damages for data breaches that is expected to increase class action data breach litigation.
Although there are limited exemptions for clinical trial data, the CCPA’s implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and the CCPA may increase our compliance costs and potential liability.
Many similar privacy laws have been proposed at the federal level and in other states.
−Removed: Foreign data protection laws, including, without limitation, the EU’s GDPR that took effect in May 2018, and member state data protection legislation, may also apply to health-related and other personal information that we process, including, without limitation, personal data relating to clinical trial participants in the EU and the United Kingdom.
−Removed: These laws impose strict obligations on the ability to process health-related and other personal information of data subjects in the EU and the United Kingdom, including, among other things, standards relating to the privacy and security of personal data, which require the adoption of administrative, physical and technical safeguards designed to protect such information.
+Added: The CCPA exemplifies the vulnerability of our business to the evolving regulatory environment related to personal information.
+Added: Foreign data protection laws, including, without limitation, the EU’s GDPR that took effect in May 2018, and member state data protection laws, may also apply to health-related and other personal information that we process, including, without limitation, personal data relating to clinical trial participants in the EU, Switzerland, and the United Kingdom.
+Added: These laws impose strict obligations on the ability to process health-related and other personal information of data subjects in the EU, Switzerland, and the United Kingdom, including, among other things, standards relating to the privacy and security of personal
+Added: data, which require the adoption of administrative, physical and technical safeguards designed to protect such information.
These laws may affect our use, collection, analysis, and transfer (including cross-border transfer) of such personal information.
These laws include several requirements relating to transparency requirements related to communications with data subjects regarding the processing of their personal data, obtaining the consent of the individuals to whom the personal data relates, limitations on data processing, establishing a legal basis for processing, notification of data processing obligations or security incidents to appropriate data protection authorities or data subjects, the security and confidentiality of the personal data and various rights that data subjects may exercise.
−Removed: The GDPR prohibits the transfer, without an appropriate legal basis, of personal data to countries outside of the European Economic Area, or EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection.
−Removed: Switzerland has adopted similar restrictions.
−Removed: Although there are legal mechanisms to allow for the transfer of personal data from the EEA and Switzerland to the United States, uncertainty about compliance with EU data protection laws remains and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary to research, develop, and market our products and services.
−Removed: For example, ongoing legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the EEA to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S.
+Added: The GDPR increases our obligations with respect to clinical trials conducted in the EU by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial participants and investigators.
+Added: European data protection laws, including the GDPR, prohibit the transfer, without an appropriate legal basis, of personal data to countries outside of the EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection and as a result, increases the scrutiny for transfers of personal data from clinical trial sites located in the EU to the United States.
+Added: Switzerland and the United Kingdom have adopted similar restrictions.
+Added: Although there are legal mechanisms to allow for the transfer of personal data from the EEA, Switzerland, and United Kingdom to the United States, uncertainty about compliance with EU data protection laws remains and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary to research, develop, and market our products and services.
+Added: For example, legal challenges in the EU to the mechanisms that allow companies to transfer personal data from the EU to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S.
and Swiss-U.S.
Privacy Shield Framework.
+Added: Specifically, on July 16, 2020, the Court of Justice of the European Union invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S.
+Added: Privacy Shield and raised questions about whether one of the primary alternatives to the EU-U.S.
+Added: Privacy Shield, namely, the European Commission’s Standard Contractual Clauses, can lawfully be used for personal data transfers from the EU to the United States or most other countries.
+Added: At present, there are few, if any, viable alternatives to the EU-U.S.
+Added: Privacy Shield and the Standard Contractual Clauses.
+Added: Similarly, the Swiss Federal Data Protection and Information Commissioner announced the use of the Swiss-U.S.
+Added: Privacy Shield is inadequate for personal data transfers from Switzerland to the U.S.
+Added: Authorities in the UK may similarly invalidate use of the EU-U.S.
+Added: Privacy Shield for transfers of personal data from the United Kingdom to the U.S.
+Added: Inability to transfer personal data from the EU, Switzerland or United Kingdom to the United States may restrict our clinical trial activities in the EU and limit our ability to collaborate with service providers and other companies subject to European data protection laws.
+Added: Further, the United Kingdom’s decision to leave the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.
+Added: In particular, while the Data Protection Act of 2018, which “implements” and complements the GDPR achieved Royal Assent on May 23, 2018 and is now effective in the United Kingdom, it is still unclear whether the transfer of data from the EU to the United Kingdom will in future remain lawful under GDPR.
+Added: During the period of “transition” (i.e., until December 31, 2020), EU law will continue to apply in the United Kingdom, including the GDPR, and transfers of data from the EU to the United Kingdom are permitted without the need for any “adequacy mechanism.
+Added: Unless the EU Commission makes an “adequacy finding” in respect of the United Kingdom before January 1, 2021, from that date the United Kingdom will be a “third country” under the GDPR and transfers of data from the EU to the United Kingdom will require an “adequacy mechanism”, such as the Standard Contractual Clauses.
Additionally, other countries have passed or are considering passing laws requiring local data residency and/or restricting the international transfer of data.
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Companies that violate the GDPR can face fines of up to the greater of 20 million Euros or 4% of their worldwide annual turnover (revenue).
−Removed: The GDPR has increased our responsibility and liability in relation to personal data that we process, requiring us to put in place additional mechanisms to ensure compliance with the GDPR and other EU and international data protection rules.
+Added: The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal data.
+Added: The GDPR and other changes in laws and regulations associated with the enhanced protection of certain types of personal data, such as health data (including personal data from our clinical trials) have increased our responsibility and liability in relation to personal data that we process, requiring us to put in place additional mechanisms to ensure compliance with such data protection laws, regulations and rules.
+Added: These laws, regulations and rules could require us to change our business practices and put in place additional compliance mechanisms;
+Added: may interrupt or delay our development, regulatory and commercialization activities;
+Added: and increase our cost of doing business.
Failure to comply with U.S.
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Claims that we have violated individuals’ privacy rights or failed to comply with data protection laws or applicable privacy notices even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
+Added: Any failure by our third-party collaborators, service providers, contractors, or consultants to comply with applicable law, regulations or contractual obligations related to data privacy or security could result in proceedings against us by governmental entities or others.
+Added: We may publish privacy policies and other documentation regarding our collection, processing, use and disclosure of personal information and/or other confidential information.
+Added: Although we endeavor to comply with our published policies and other documentation, we may at times fail to do so or may be perceived to have failed to do so.
+Added: Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our published policies and documentation.
+Added: Such failures can subject us to potential foreign, local, state, and federal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.
+Added: Moreover, subjects about whom we or our partners obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.
+Added: Claims that we have violated individuals’ privacy rights or failed to comply with data protection laws or applicable privacy notices even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Any of these matters could materially adversely affect our business, financial condition, or operational results.
Risks Related to Our Intellectual Property
−Removed: We may not be successful in obtaining or maintaining necessary rights to microRNA targets, product compounds and processes for our development pipeline through acquisitions and in-licenses.
−Removed: Presently, we have rights to the intellectual property, through licenses from third parties and under patents and patent applications that we own, to modulate only a subset of the known microRNA targets.
−Removed: Because our programs may involve a range of microRNA targets, including targets that require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license, or use these proprietary rights.
−Removed: In addition, our product candidates may require specific formulations to work effectively and efficiently and these rights may be held by others.
−Removed: We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify.
−Removed: The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.
−Removed: These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.
−Removed: For example, we have previously collaborated and may continue to collaborate with U.S.
−Removed: and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions.
−Removed: Typically, these institutions
−Removed: provide an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration.
−Removed: Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to it.
−Removed: If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
−Removed: In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
−Removed: We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.
−Removed: If we are unable to successfully obtain rights to third-party intellectual property rights, our business, financial condition, and prospects for growth could suffer.
We intend to rely on patent rights, trade secret protections, and confidentiality agreements to protect the intellectual property related to our product candidates and any future product candidates.
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Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.
−Removed: We, independently or together with our licensors, have filed several patent applications covering various aspects of our product candidates.
+Added: We, independently or together with our licensors, have filed patent applications covering various aspects of our product candidates.
We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patent, or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties.
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We will likely rely on patent term extensions, and we cannot provide any assurances that any such patent term extensions will be obtained and, if so, for how long.
−Removed: As a result, we may not be able to maintain exclusivity for our product candidates for an extended period after regulatory
−Removed: approval, if any, which would negatively impact our business, financial condition, results of operations, and prospects.
+Added: As a result, we may not be able to maintain exclusivity for our product candidates for an extended period after regulatory approval, if any, which would negatively impact our business, financial condition, results of operations, and prospects.
If we do not have sufficient patent terms or regulatory exclusivity to protect our product candidates, our business and results of operations will be adversely affected.
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Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow our technology to be patentable over the prior art.
−Removed: Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either:
+Added: Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain
+Added: that we were the first to either:
(i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications.
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federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
−Removed: Accordingly, a third party may attempt to use the USPTO procedures to
−Removed: invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
+Added: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
Additionally, the rights of review and appeal for IPR decisions is an area of law that is still developing.
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Numerous third-party U.S.
−Removed: issued patents and pending applications exist in the area of microRNA.
−Removed: We are aware of U.S.
−Removed: and foreign patents and pending patent applications owned by third parties that cover therapeutic uses of microRNA replacements and inhibitors.
+Added: issued patents and pending applications exist in the area of our product candidates.
From time to time, we may also monitor these patents and patent applications.
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In addition, or alternatively, we may consider whether to seek to negotiate a license of rights to technology covered by one or more of such patents and patent applications.
−Removed: If any patents or patent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates, including cobomarsen, remlarsen, or MRG-110, and certain preclinical compounds such as MRG-229 as planned, absent such a license, which may not be available to us on commercially reasonable terms, or at all.
+Added: If any patents or patent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned, absent such a license, which may not be available to us on commercially reasonable terms, or at all.
It is also possible that we have failed to identify relevant third-party patents or applications.
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We may fail to identify relevant patents or patent applications or may identify pending patent applications of potential interest but incorrectly predict the likelihood that such patent applications may issue with claims of relevance to our technology.
−Removed: In addition, we may be unaware of one or more issued patents that would be infringed by the manufacture, sale, or use of a current or future product candidate, or we may incorrectly conclude that a third-party patent is invalid, unenforceable, or not infringed by our activities.
+Added: In addition, we may be unaware of one or more issued patents that would be infringed by the manufacture, sale, or use of a current or future product candidate, or we may incorrectly conclude that a third-party patent is
+Added: invalid, unenforceable, or not infringed by our activities.
Additionally, pending patent applications that have been published can, subject to specified limitations, be later amended in a manner that could cover our technologies, our product candidates, or the use of our product candidates.
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and foreign-issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates.
−Removed: As the biotechnology and pharmaceutical industries
−Removed: expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
+Added: As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates.
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Even if we are able to license or acquire third-party intellectual property rights that are necessary for our product candidates, there can be no assurance that they will be available on favorable terms.
−Removed: We collaborate with U.S.
−Removed: and foreign academic institutions to identify product candidates, accelerate our research, and conduct development.
−Removed: Typically, these institutions have provided us with an option to negotiate an exclusive license to any of the institution’s rights in the patents or other intellectual property resulting from the collaboration.
−Removed: Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us.
−Removed: If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue a program of interest to us.
If we are unable to successfully obtain and maintain rights to required third-party intellectual property, we may have to abandon development of that product candidate or pay additional amounts to the third party, and our business and financial condition could suffer.
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While we normally seek and gain the right to fully prosecute the patents relating to our product candidates, there may be times when patents relating to our product candidates are controlled by our licensors.
−Removed: For instance, under our agreement entered into in June 2010, and subsequently amended in October 2011, amended and restated in December 2012, and further amended in August 2019, or the RICC License Agreement, with Santaris Pharma A/S, which subsequently changed its name to Roche Innovation Center Copenhagen A/S, or RICC, which was acquired by F.
−Removed: Hoffmann-La Roche Ltd in 2014, we have negotiated the right to direct RICC’s representatives with regard to specific patent matters, but these representatives still are responsible for the prosecution of patents and patent applications licensed to us under the agreement.
−Removed: If RICC or any of our future licensors fail to appropriately follow our instructions with regard to the prosecution and maintenance of patent protection for patents covering any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected, and we may not be able to prevent competitors from making, using, importing, and selling competing products.
+Added: If any of our licensors fail to appropriately follow our instructions with regard to the prosecution and maintenance of patent protection for patents covering any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected, and we may not be able to prevent competitors from making, using, importing, and selling competing products.
In addition, even where we now have the right to control patent prosecution of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensors in effect from actions prior to us assuming control over patent prosecution.
If we fail to comply with obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
−Removed: We are a party to a number of intellectual property license and supply agreements that are important to our business and expect to enter into additional license agreements in the future.
−Removed: Our existing agreements impose, and we expect that future license agreements will impose, various diligence, milestone payments, royalties, purchasing, and other obligations on us.
+Added: We are a party to intellectual property licenses and supply agreements that are important to our business and expect to enter into additional license agreements in the future.
+Added: Our existing agreements impose, and we expect that future license agreements will
+Added: impose, various diligence, milestone payments, royalties, purchasing, and other obligations on us.
If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, our agreements may be subject to termination by the licensor, in which event we would not be able to develop, manufacture, or market products covered by the license or subject to supply commitments.
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Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
−Removed: The legal systems of some countries, particularly some developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
+Added: The legal systems of some countries, particularly some developing countries, do not favor the enforcement of
+Added: patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
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Although we generally do not expect to begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the trial, any significant delay or discontinuity in the supply of a product candidate, or the active ingredient or other material components in the manufacture of the product candidate, could delay completion of our clinical trials and potential timing for regulatory approval of our product candidates, which would harm our business and results of operations.
−Removed: We rely and expect to continue to rely on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved, and our commercialization of any of our product
−Removed: candidates could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of government regulators, fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.
+Added: Our manufacturing process is complex and we may encounter difficulties in production, which would delay or prevent our ability to provide a sufficient supply of our product candidates for future clinical trials or commercialization, if approved.
+Added: The process of manufacturing our biologic product candidates is complex, highly regulated, variable and subject to numerous risks.
+Added: Our manufacturing process will be susceptible to product loss or failure, or product variation that may negatively impact patient outcomes, due to logistical issues associated with preparing the product for administration, infusing the patient with the product, manufacturing issues or different product characteristics resulting from the inherent differences in starting materials, variations between reagent lots, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment and/or programs, vendor or operator error and variability in product characteristics.
+Added: Even minor variations in starting reagents and materials, or deviations from normal manufacturing processes could result in reduced production yields, product defects, manufacturing failure and other supply disruptions.
+Added: If microbial, viral or other contaminations are discovered in our product candidates or in any of the manufacturing facilities in which products or other materials are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
+Added: Any failure in the foregoing processes could render a batch of product unusable, could affect the regulatory approval of such product candidate, could cause us to incur fines or penalties or could harm our reputation and that of our product candidates.
+Added: We may make changes to our manufacturing process for various reasons, such as to control costs, increase yield or dose, achieve scale, decrease processing time, increase manufacturing success rate or for other reasons.
+Added: Changes to our process made during the course of clinical development could require us to show the comparability of the product used in earlier clinical phases or at earlier portions of a trial to the product used in later clinical phases or later portions of the trial.
+Added: Other changes to our manufacturing process made before or after commercialization could require us to show the comparability of the resulting product to the product candidate used in the clinical trials using earlier processes.
+Added: Such showings could require us to collect additional nonclinical or clinical data from any modified process prior to obtaining marketing approval for the product candidate produced with such modified process.
+Added: If such data are not ultimately comparable to that seen in the earlier trials or earlier in the same trial in terms of safety or efficacy, we may be required to make further changes to our process and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate, which would materially adversely affect our business, financial condition, results of operations and growth prospects.
+Added: We rely and expect to continue to rely on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved, and our commercialization of any of our product candidates could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of government regulators, fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.
We do not currently have, nor do we currently plan to develop, the infrastructure or capability internally to manufacture our clinical supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale.
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If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidates to patients or subjects in clinical trials would be jeopardized.
−Removed: Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending
−Removed: upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
−Removed: Our business has been, and may in the future be, adversely affected by the effects of health epidemics, including the recent COVID-19 outbreak, in regions where we or third parties on which we rely have clinical trial sites or other business operations.
−Removed: We have clinical trial sites in countries or regions that have been directly affected by COVID-19 and depend on third party manufacturing operations for various stages of our supply chain that may be affected by COVID-19 in the future.
+Added: Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
+Added: Our business has been, and may in the future be, adversely affected by the effects of health epidemics, including the recent COVID-19 outbreak, in regions where we or third parties on which we rely have business operations.
+Added: We may have future clinical trial sites in countries or regions that have been directly affected by COVID-19 and depend on third party manufacturing operations for various stages of our supply chain that may be affected by COVID-19 in the future.
In addition, if COVID-19 continues to be a worldwide pandemic, it could materially affect our operations globally.
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There is a risk that countries or regions may be less effective at containing COVID-19 than others, or it may be more difficult to contain if the outbreak reaches a larger population or broader geography, in which case the risks described herein could be elevated significantly.
−Removed: The ongoing COVID-19 pandemic may materially affect our ability to complete our clinical trials in a timely fashion or at all.
−Removed: For example, as a result of the COVID-19 pandemic, we have delayed the anticipated timing of the SOLAR trial topline data availability.
−Removed: While most clinical sites in the SOLAR trial remain active, patient monitoring and dosing has been suspended at some sites.
−Removed: While a subset of patients have been on the study for a sufficient period of time to provide topline data before the COVID-19 pandemic, other patients have missed, or are at risk for missing, required doses or in-person site visits for the collection of primary endpoint patient data.
−Removed: In particular, collection of primary endpoint patient data requires in-person visits at clinical trial sites, and the COVID-19 pandemic prevents us from receiving this data from numerous patients in the SOLAR trial.
−Removed: We are actively monitoring the effects of the COVID-19 pandemic on the SOLAR trial but cannot predict at this time when we will be able to collect uninterrupted endpoint data, with consistent dosing, in all remaining patients in the SOLAR trial.
−Removed: Accordingly, we no longer expect to release top-line data for the SOLAR trial in the third quarter of 2020 and cannot currently predict when such results will be available.
−Removed: We also cannot predict if the COVID-19 pandemic, or any other future health epidemic, may cause similar delays to any other future clinical trial we may plan in the future.
−Removed: In addition, although we have not experienced any disruption in our supply chain, if COVID-19 continues to spread, third-party manufacturing of our drug product candidates and suppliers of the materials used in the production of our drug product candidates may be impacted by restrictions resulting from the COVID-19 outbreak, which may disrupt our supply chain or limit our ability to manufacture drug product candidates for our clinical trials.
+Added: The ongoing COVID-19 pandemic may materially affect our ability to commence clinical trials in a timely fashion or at all.
+Added: We cannot predict if the COVID-19 pandemic, or any other future health epidemic, may cause delays to future planned clinical trials.
+Added: In addition, although we have not experienced any significant disruption in our supply chain, if COVID-19 continues to spread, third-party manufacturing of our drug product candidates and suppliers of the materials used in the production of our drug product candidates may be impacted by restrictions resulting from the COVID-19 outbreak, which may disrupt our supply chain or limit our ability to manufacture drug product candidates for our clinical trials.
The ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change.
−Removed: We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole.
+Added: We do not yet know the full extent of potential delays or impacts on our business, our planned clinical trials, healthcare systems or the
+Added: global economy as a whole.
However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.
We may be unable to realize the potential benefits of any collaboration.
−Removed: Even if we are successful in entering into a collaboration with respect to the development and/or commercialization of one or more product candidates, there is no guarantee that the collaboration will be successful.
+Added: Even if we are successful in entering into a future collaboration with respect to the development and/or commercialization of one or more product candidates, there is no guarantee that the collaboration will be successful.
Collaborations may pose a number of risks, including:
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As a result, a collaboration may not result in the successful development or commercialization of our product candidates.
−Removed: For instance, in October 2011, we entered into the Servier Collaboration Agreement with Servier for the research, development, and commercialization of RNA-targeting therapeutics in cardiovascular disease, which was subsequently amended.
−Removed: In August 2019, Servier terminated the Servier Collaboration Agreement effective in February 2020.
−Removed: As a result, no product candidate will ever be successfully commercialized under the Servier Collaboration Agreement.
−Removed: While we regained all global rights to MRG-110 in all indications as a result of the termination of the Servier Collaboration Agreement, we cannot guarantee that we will be able to continue development of MRG-110 without finding a new collaborator in the future.
−Removed: Any future collaboration regarding MRG-110 may be on substantially worse commercial terms than those offered by Servier or we may not be successful in entering into any future collaborations regarding MRG-110.
−Removed: As a result, we cannot guarantee when, if ever, we will be able to further develop MRG-110 following termination of the Servier Collaboration Agreement.
We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract.
In the event we have to perform under these indemnification provisions, we could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: In the normal course of business, we periodically enter into academic, commercial, service, collaboration, licensing, consulting, and other agreements that contain indemnification provisions.
−Removed: With respect to our academic and other research agreements, we typically indemnify the institution and related parties from losses arising from claims relating to the products, processes, or services made, used, sold, or performed pursuant to the agreements for which we have secured licenses, and from claims arising from our or our sublicensees’ exercise of rights under the agreement.
−Removed: With respect to our collaboration agreements, we indemnify our collaborators from any third-party product liability claims that could result from the production, use, or consumption of the product, as well as for alleged infringements of any patent or other intellectual property right by a third party.
+Added: In the normal course of business, we periodically enter into commercial, service, licensing, consulting, and other agreements that contain indemnification provisions.
+Added: With respect to our research agreements, we typically indemnify the party and related parties from losses arising from claims relating to the products, processes, or services made, used, sold, or performed pursuant to the agreements for which we have secured licenses, and from claims arising from our or our sublicensees’ exercise of rights under the agreement.
+Added: With respect to future collaboration agreements, we may indemnify our collaborators from any third-party product liability claims that could result from the production, use, or consumption of the product, as well as for alleged infringements of any patent or other intellectual property right by a third party.
With respect to consultants, we indemnify them from claims arising from the good faith performance of their services.
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Even if we are able to successfully enter into a collaboration regarding the development or commercialization of our product candidates, we cannot guarantee that such a collaboration will be successful.
−Removed: For instance, in October 2011, we entered into the Servier Collaboration Agreement with Servier for the research, development, and commercialization of RNA-targeting therapeutics in cardiovascular disease, which was subsequently amended.
−Removed: In August 2019, Servier terminated the Servier Collaboration Agreement effective in February 2020.
−Removed: As a result, no product candidate will ever be successfully commercialized under the Servier Collaboration Agreement.
−Removed: While we regained all global rights to MRG-110 in all indications as a result of the termination of the Servier Collaboration Agreement, we cannot guarantee that we will be able to continue development of MRG-110 without finding a new collaborator in the future.
−Removed: Any future collaboration regarding MRG-110 may be on substantially worse commercial terms than those offered by Servier or we may not be successful in entering into any future collaborations regarding MRG-110.
−Removed: As a result, we cannot guarantee when, if ever, we will be able to further develop MRG-110 following termination of the Servier Collaboration Agreement.
Any delays in identifying suitable collaborators and entering into agreements to develop and/or commercialize our product candidates could delay the development or commercialization of our product candidates, which may reduce their competitiveness even if they reach the market.
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If we are unable to do so, we may not be able to develop our product candidates or bring them to market and our business may be materially and adversely affected.
−Removed: If the market opportunities for our product candidates are smaller than we believe they are, we may not meet our revenue expectations and, assuming approval of a product candidate, our business may suffer.
−Removed: Because the patient populations in the market for our product candidates may be small, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.
−Removed: Given the small number of patients who have the diseases that we are targeting, our eligible patient population and pricing estimates may differ significantly from the actual market addressable by our product candidates.
−Removed: For instance, the lead indication of cobomarsen is MF.
−Removed: The estimated prevalence of MF is 16,000 to 20,000 cases in the United States, only a subset of which may benefit from treatment with cobomarsen.
−Removed: Our projections of both the number of people who have this disease, as well as the subset of people with this disease who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.
−Removed: These estimates have been derived from a variety of sources, including the scientific literature, patient foundations, or market research, and may prove to be incorrect.
−Removed: Further, new studies may change the estimated incidence or prevalence of these diseases.
−Removed: The number of patients may turn out to be lower than expected.
−Removed: Additionally, while we believe that the data in our Phase 1 clinical trials for cobomarsen, remlarsen, and MRG-110 are supportive of application to other indications, there can be no assurance that our clinical trials in those indications will support efficacy of our product candidates in such expanded indications.
−Removed: Likewise, the potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment with our product candidates, and new
−Removed: patients may become increasingly difficult to identify or gain access to, which would adversely affect our business, financial condition, results of operations and prospects.
We face substantial competition and our competitors may discover, develop, or commercialize products faster or more successfully than us.
The development and commercialization of new drug products is highly competitive.
−Removed: We face competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, universities, and other research institutions worldwide with respect to cobomarsen, remlarsen, MRG-110, and the other product candidates that we may seek to develop or commercialize in the future.
−Removed: We are aware that the following companies have therapeutics marketed or in development for CTCL:
−Removed: Argenx, Bristol-Myers Squibb Company, Celgene Corporation, Helsinn Group, innate Pharma, Kyowa Hakko Kirin, Merck & Co., Inc., Mylan Pharmaceuticals Inc., Novartis International AG, Spectrum Pharmaceuticals, Inc., Seattle Genetics, Inc., Takeda Pharmaceutical Company Ltd, and Valeant Pharmaceuticals International, Inc.
−Removed: We are also aware that several companies have marketed therapeutics for pulmonary fibrosis, including Boehringer Ingelheim GmbH, Galapagos NV, and F.
−Removed: Hoffmann-La Roche Ltd.
−Removed: Our competitors may succeed in developing, acquiring, or licensing technologies and drug products that are more effective or less costly than cobomarsen, remlarsen, MRG-110, or any other product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive.
−Removed: In addition to the competition we face from alternative therapies for the diseases we intend to target with our product candidates, we are aware of several companies that are also working specifically to develop microRNA-targeted therapeutics, including Regulus Therapeutics, Inc., and InteRNA Technologies, B.V.
−Removed: Further, there are several companies working to develop other types of oligonucleotide therapeutic products, including Ionis Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Arrowhead Pharmaceuticals, Inc., Dicerna Pharmaceuticals, Inc., STELLAS Life Sciences Group, Inc., Silence Therapeutics AG, and Wave Life Sciences Ltd.
+Added: We face competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, universities, and other research institutions worldwide with respect to our product candidates that we may seek to develop or commercialize in the future.
+Added: We are aware that the following companies have therapeutics marketed or in development for TED:
+Added: Horizon Therapeutics and Immunovant, Inc.
+Added: If approved, VRDN-001 will also compete against generic medications, such as corticosteroids, that are prescribed for and surgical procedures for the treatment of TED.
+Added: Our competitors may succeed in developing, acquiring, or licensing technologies and drug products that are more effective or less costly than our product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive.
+Added: Our competitors may also adopt a similar licensing and development strategy as ours with regard to the development of an existing anti-IGF-1R monoclonal antibody for the treatment of TED.
+Added: competitor was able to effect this strategy in a more efficient manner, there may be less demand for our product candidates if any are approved.
Many of our competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations.
Third-party payors, including governmental and private insurers, may also encourage the use of generic products.
−Removed: For example, if cobomarsen, remlarsen, or MRG-110 is approved, it may be priced at a significant premium over other competitive products.
−Removed: This may make it difficult for cobomarsen, remlarsen, MRG-110, or any other future products to compete with these products.
+Added: For example, if VRDN-001 is approved, it may be priced at a significant premium over other competitive products.
+Added: This may make it difficult for VRDN-001 or any other future products to compete with these products.
If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.
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These organizations may also establish exclusive collaborative or licensing relationships with our competitors.
−Removed: Failure of cobomarsen, remlarsen, MRG-110, or other product candidates to effectively compete against established treatment options or in the future with new products currently in development would harm our business, financial condition, results of operations, and prospects.
+Added: Failure of VRDN-001 or our other product candidates to effectively compete against established treatment options or in the future with new products currently in development would harm our business, financial condition, results of operations, and prospects.
The commercial success of any of our current or future product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community.
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We may not be successful in any efforts to identify, license, discover, develop, or commercialize additional product candidates.
−Removed: Although a substantial amount of our effort will focus on the continued clinical testing, potential approval, and commercialization of our existing product candidates, the success of our business is also expected to depend in part upon our ability to identify, license, discover, develop, or commercialize additional product candidates.
+Added: Although a substantial amount of our effort will focus on clinical testing, potential approval, and commercialization of our existing product candidates, the success of our business is also expected to depend in part upon our ability to identify, license, discover, develop, or commercialize additional product candidates.
Research programs to identify new product candidates require substantial technical, financial, and human resources.
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It is difficult to predict what CMS will decide with respect to reimbursement for novel product candidates and what reimbursement codes our product candidates may receive if approved.
−Removed: Outside the United States, international operations are generally subject to extensive governmental price controls and other price-restrictive regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to put pressure on the pricing and usage of products.
+Added: Outside the United States, international operations are generally subject to extensive governmental price controls and other price-restrictive regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and
+Added: other countries has and will continue to put pressure on the pricing and usage of products.
In many countries, the prices of products are subject to varying price control mechanisms as part of national health systems.
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In addition, the Trump administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers.
−Removed: The Department of Health and Human Services solicited feedback on some of these measures and has implemented others under its existing authority.
+Added: The Department of Health and Human Services, or HHS, solicited feedback on some of these measures and has implemented others under its existing authority.
+Added: Additionally, on July 24, 2020, President Trump announced four executive orders related to prescription drug pricing that attempt to implement several of the Trump administration proposals, including (i) a policy that would tie certain Medicare Part B drug prices to international drug prices, or the “most favored nation price,” the details of which were released on September 13, 2020 and also expanded to cover certain Part D drugs;
+Added: (ii) an order that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada;
+Added: (iii) an order that directs HHS to finalize the rulemaking process on modifying the Anti-Kickback Statute safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers;
+Added: (iv) a policy that reduces costs of insulin and epipens to patients of federally qualified health centers.
+Added: While some of these and other measures may require additional authorization to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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Risks Related to Our Business Operations
−Removed: Our future success depends in part on our ability to retain our president and chief executive officer and to attract, retain, and motivate other qualified personnel.
−Removed: We are highly dependent on William S.
−Removed: Marshall, Ph.D., our president and chief executive officer, the loss of whose services may adversely impact the achievement of our objectives.
−Removed: Marshall could leave our employment at any time, as he is an “at will” employee.
+Added: Our future success depends in part on our ability to retain our chief executive officer, our president and chief operating officer, and to attract, retain, and motivate other qualified personnel.
+Added: We are highly dependent on Lee Rauch, our chief executive officer, and Jonathan Violin Ph.D., our president and chief operating officer, the loss of whose services may adversely impact the achievement of our objectives.
+Added: Rauch and Dr.
+Added: Violin could leave our employment at any time, as he is an “at will” employee.
Recruiting and retaining other qualified employees, consultants, and advisors for our business, including scientific and technical personnel, will also be critical to our success.
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In addition, failure to succeed in development and commercialization of our product candidates may make it more challenging to recruit and retain qualified personnel.
−Removed: The inability to recruit and retain qualified personnel, or the loss of the services of Dr.
−Removed: Marshall, may impede the progress of our research, development, and commercialization objectives and would negatively impact our ability to succeed in our product development strategy.
+Added: The inability to recruit and retain qualified personnel, or the loss of the services of Ms.
+Added: Violin, may impede the progress of our research, development, and commercialization objectives and would negatively impact our ability to succeed in our product development strategy.
We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations.
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Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.
−Removed: If we do not effectively manage changes in our operations, our business may be harmed;
−Removed: we have taken substantial restructuring charges in the past and we may need to take material restructuring charges in the future.
−Removed: The expansion of our business, as well as business contractions and other changes in our business requirements, have in the past, and may in the future, require that we adjust our business and cost structures by incurring restructuring charges.
−Removed: Restructuring activities involve reductions in our workforce at some locations and closure of certain facilities.
−Removed: All of these changes have in the past placed, and may in the future place, considerable strain on our research and development activities and financial and management control systems and resources, including decision support, accounting management, information systems and facilities.
−Removed: If we do not effectively manage our financial and management controls, reporting systems, and procedures to manage our employees, our business could be harmed.
−Removed: For instance, in August 2019 we began implementing two phases of a cost restructuring plan to streamline the organization, reduce costs, and direct resources to advance cobomarsen and miR-29 mimics, including remlarsen and MRG-229, while reducing investments in new discovery research.
−Removed: The restructuring plan identified approximately 44 positions for elimination, or approximately 50% of our then total workforce.
−Removed: The eliminated positions related primarily to research and development and corresponding project, general, and administrative support.
−Removed: Through June 30, 2020, we had recorded cumulative restructuring expense of approximately $2.3 million and expect to incur approximately $0.1 million in additional restructuring expense, primarily related to retention, during the remainder of 2020.
−Removed: We may be required to incur additional charges in the future to align our operations and cost structures with global economic conditions, market demands, cost competitiveness, and our clinical development activities.
−Removed: If we are required to incur additional restructuring charges in the future, our operating results, financial condition, and cash flows could be adversely impacted.
−Removed: Additionally, there are other potential risks associated with our restructuring that could adversely affect us, such as delays encountered with the finalization and implementation of the restructuring activities, work stoppages, and the failure to achieve targeted cost savings.
Failure in our information technology and storage systems or those of third parties upon whom we rely could significantly disrupt the operation of our business and adversely impact our financial condition.
Our ability to execute our business plan and maintain operations depends on the continued and uninterrupted performance of our information technology, or IT, systems or those of third parties upon whom we rely.
−Removed: IT systems are vulnerable to risks and damages from a variety of sources, including telecommunications or network failures, malicious human acts, and natural
−Removed: disasters (such as a tornado, an earthquake, or a fire).
+Added: IT systems are vulnerable to risks and damages from a variety of sources, including telecommunications or network failures, malicious human acts, and natural disasters (such as a tornado, an earthquake, or a fire).
Moreover, despite network security and back-up measures, some of our and our vendors’ servers are potentially vulnerable to physical or electronic break-ins, including cyber-attacks, computer viruses, and similar disruptive problems.
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In addition, security incidents or breaches or those of our current or future collaborators or third-party service providers could result in a risk of loss or unauthorized access to or disclosure of the information we process.
−Removed: This, in turn, could require notification under applicable data privacy regulations or contracts, and could lead to litigation, governmental audits, investigations, fines, penalties and other possible liability, damage our relationships with our collaborators, trigger indemnification and other contractual obligations, cause us to incur investigation, mitigation and remediation expenses, and have a negative impact on our ability to conduct clinical trials.
+Added: This, in turn, could require notification under applicable data privacy regulations or contracts, and could lead to litigation, governmental audits, investigations, fines, penalties and other possible liability, damage our relationships with our collaborators, trigger indemnification and other contractual obligations, cause us to incur investigation, mitigation and remediation expenses, and
+Added: have a negative impact on our ability to conduct clinical trials.
For example, the loss of clinical trial data for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
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Immediately following this transaction, we completed a short-form merger with Private miRagen in which we were the surviving corporation and changed our name to Miragen Therapeutics, Inc.
−Removed: These transactions are referred to herein as the Merger.
−Removed: The Merger resulted in an ownership change for us and, accordingly, our NOL and tax credit carryforwards are subject to limitation.
−Removed: It is possible that we have in the past undergone and may in the future undergo, additional ownership changes besides the Merger, that could result in additional limitations on our NOL and tax credit carryforwards.
+Added: These transactions resulted in an ownership change for us and, accordingly, our NOL and tax credit carryforwards are subject to limitation.
+Added: It is possible that we have in the past undergone and may in the future undergo, additional ownership changes that could result in additional limitations on our NOL and tax credit carryforwards.
In addition, at the state level, there may be periods during which the use of net operating losses is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
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Risks Related to Ownership of our Common Stock
−Removed: The market price of our common stock has historically been volatile, and the market price of our common stock may drop in the future.
−Removed: The market price of our common stock has been, and may continue to be, subject to significant fluctuations.
−Removed: Market prices for securities of early-stage pharmaceutical, biotechnology, and other life sciences companies have historically been particularly volatile.
−Removed: Some of the factors that may cause the market price of our common stock to fluctuate include:
−Removed: • our ability to obtain regulatory approvals for cobomarsen, remlarsen, MRG-110, or other product candidates, and delays or failures to obtain such approvals;
−Removed: • failure of any of our product candidates, if approved, to achieve commercial success;
−Removed: • failure to maintain our existing third-party license and supply agreements;
−Removed: • changes in laws or regulations applicable to our product candidates;
−Removed: • any inability to obtain adequate supply of our product candidates or the inability to do so at acceptable prices;
−Removed: • adverse regulatory authority decisions;
−Removed: • introduction of new products, services, or technologies by our competitors;
−Removed: • failure to meet or exceed financial and development projections we may provide to the public and the investment community;
−Removed: • the perception of the pharmaceutical industry by the public, legislatures, regulators, and the investment community;
−Removed: • announcements of significant acquisitions, strategic collaborations, joint ventures, or capital commitments by us or our competitors;
−Removed: • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;
−Removed: • additions or departures of key personnel;
−Removed: • significant lawsuits, including patent or stockholder litigation;
−Removed: • if securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our business and stock;
−Removed: • changes in the market valuations of similar companies;
−Removed: • general market or macroeconomic conditions, including the ongoing COVID-19 pandemic;
−Removed: • sales of our common stock by us or our stockholders in the future;
−Removed: • trading volume of our common stock;
−Removed: • announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships, or capital commitments;
−Removed: • adverse publicity relating to microRNA-targeted therapeutics generally, including with respect to other products and potential products in such markets;
−Removed: • the introduction of technological innovations or new therapies that compete with our potential products;
−Removed: • changes in the structure of health care payment systems;
−Removed: • period-to-period fluctuations in our financial results.
−Removed: Moreover, the capital markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies, including as a result of the ongoing COVID-19 pandemic.
−Removed: These broad market fluctuations may also adversely affect the trading price of our common stock.
−Removed: In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies.
−Removed: Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.
+Added: Pursuant to the terms of the Merger Agreement, we are required to recommend that our stockholder approve the conversion of all outstanding shares of our Series A Preferred Stock into shares of our common stock.
+Added: We cannot guarantee that our stockholders will approve this matter, and if they fail to do so our operations may be materially harmed.
+Added: Under the terms of the Merger Agreement, we agreed to use commercially reasonable efforts to call and hold a meeting of our stockholders to obtain the requisite approval for the conversion of all outstanding shares of Series A Preferred Stock issued in the Merger and private placement into shares of our common stock, as required by the Nasdaq listing rules, within 70 days after the date of the Merger Agreement and, if such approval is not obtained at that meeting, to seek to obtain such approval at an annual or special stockholders meeting to be held at least every six months thereafter until such approval is obtained, which would be time consuming and costly.
+Added: Additionally, if our stockholders do not timely approve the conversion of our Series A Preferred Stock, then the holders of our Series A Preferred Stock may be entitled to require us to settle their shares of Series A Preferred Stock for cash at a price per share equal to the fair value of the Series A Preferred Stock, as described in our certificate of designation relating to the Series A Preferred Stock.
+Added: If we are forced to settle a significant amount of the Series A Preferred Stock, it could materially affect our results of operations, including raising a substantial doubt about the entity’s ability to continue as a going concern within one year from November 12, 2020.
Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our common stock.
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In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with The Nasdaq Capital Market’s listing requirements.
−Removed: On October 28, 2019, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that the listing of our common stock was not in compliance with Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market, as the minimum bid price of our listed securities was less than $1.00 per share for the previous 30 consecutive business days.
−Removed: Under Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until April 27, 2020, to regain compliance with the rule.
−Removed: In April 2020, Nasdaq announced that it would toll the compliance period for companies to regain compliance with the minimum bid price continued listing requirement through and including June 30, 2020.
−Removed: As result, to regain compliance, the minimum bid price of our listed securities must close at $1.00 per share or more for a minimum of 10 consecutive business days, which was achieved on June 30, 2020.
−Removed: We have requested that our stockholders approve a reverse stock split of our common stock at our 2020 annual meeting of stockholders in connection with our recent inability to satisfy the minimum bid price listing requirement, but we cannot guarantee that our stockholders will approve this proposal.
+Added: On October 8, 2020, we received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market notifying it that, for the last 30 consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market, or the Minimum Bid Price Requirement.
+Added: In accordance with Nasdaq Listing Rules, the Company has an initial period of 180 calendar days to regain compliance with the minimum bid price rule.
+Added: If we do not regain compliance with the Minimum Bid Price Requirement by April 6, 2021, then we may be eligible for an additional 180 calendar day compliance period.
+Added: We are actively monitoring our stock price and will consider any and all options available to regain compliance.
+Added: The alternatives to trading on the Nasdaq Stock Market or another national securities exchange are generally considered to be less efficient and less broad-based than the national securities exchanges and the liquidity of our common stock will likely be reduced if it fails to regain compliance with the Minimum Bid Price Requirement.
There can be no assurance that we will be successful in maintaining the listing of our common stock on The Nasdaq Capital Market.
This could impair the liquidity and market price of our common stock.
−Removed: In addition, the delisting of our common stock from a national exchange could have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our common stock as a result of that delisting could adversely affect our ability to raise capital on terms acceptable to us, or at all.
−Removed: We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
−Removed: We incur significant legal, accounting, and other expenses associated with public company reporting requirements.
−Removed: We also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and The Nasdaq Stock Market LLC, or Nasdaq.
−Removed: These rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
−Removed: These rules and regulations may also make it difficult and expensive for us to obtain directors’ and officers’ liability insurance.
−Removed: As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers, which may adversely affect investor confidence and could cause our business or stock price to suffer.
−Removed: From June 2014 to December 31, 2019, we qualified as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
−Removed: As of January 1, 2020, we no longer qualified as an emerging growth company.
−Removed: While we were an “emerging growth company,” we were allowed certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and financial statements in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote to approve executive
−Removed: compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: Because we are no longer an emerging growth company, we will incur significant additional costs associated with compliance with reporting requirements applicable to non-emerging growth companies.
+Added: In addition, the delisting of our common stock
+Added: from a national exchange could have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our common stock as a result of that delisting could adversely affect our ability to raise capital on terms acceptable to us, or at all.
Anti-takeover provisions in our charter documents and under Delaware law and the terms of some of our contracts could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management.
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Future sales of shares by existing stockholders could cause our stock price to decline.
+Added: Concurrently and in connection with the execution of the Merger Agreement, certain Viridian securityholders as of immediately prior to the Merger, and the directors and officers of the Company as of immediately following the Merger entered into the Lock-up Agreements, pursuant to which each such stockholder will be subject to a 180 day lockup on the sale or transfer of
+Added: shares of our common stock held by each such stockholder at the closing of the Merger, including those shares received by Viridian securityholders in the Merger.
+Added: Upon expiration of this 180-day lockup period, these shares will become eligible for sale in the public market.
+Added: On October 30, 2020, we also entered into the Registration Rights Agreement with the Investors.
+Added: Pursuant to the Registration Rights Agreement, we will prepare and file a resale registration statement with the SEC by the Filing Deadline.
+Added: We will use our reasonable best efforts to cause this registration statement to be declared effective by the SEC within 30 calendar days of the Filing Deadline (or within 60 calendar days if the SEC reviews the registration statement).
+Added: Once this registration statement is declared effective, the shares subject to the registration statement will no longer constitute restricted securities and may be sold freely in the public markets, subject to lapse on any related contractual restrictions related thereto of any Investor.
If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after legal restrictions on resale lapse, the trading price of our common stock could decline.
−Removed: In addition, shares of our common stock
−Removed: that are subject to our outstanding options will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act of 1933, as amended.
+Added: In addition, shares of our common stock that are subject to our outstanding options will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act of 1933, as amended.
Future sales and issuances of equity and debt could result in additional dilution to our stockholders.
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For instance, in March 2017, we entered into the ATM Agreement with Cowen, under which we may offer and sell, from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million through Cowen as our sales agent.
−Removed: Through July 31, 2020, we had sold, pursuant to the terms of the ATM Agreement, 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million after deducting initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.
+Added: Through October 30, 2020, we had sold, pursuant to the terms of the ATM Agreement, 2,846,449 shares of our common stock for aggregate net proceeds of approximately $11.6 million after deducting initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.
In August 2018, we entered into the LLS Stock Purchase Agreement with LLS, which was later assigned to LLS TAP, for the sale of up to $5.0 million of shares of our common stock to LLS and its affiliates under the LLS Purchase Agreement.
−Removed: Through July 31, 2020, we had issued an aggregate of 757,351 shares of our common stock to LLS and its affiliates in the LLS Offering, for aggregate net proceeds of approximately $1.4 million, after deducting expenses incurred in connection with the LLS Offering.
−Removed: As a result of the modifications of the SOLAR trial we announced in December 2019, we do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as such, do not expect we will receive the remaining proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
+Added: Through October 30, 2020, we had issued an aggregate of 757,351 shares of our common stock to LLS and its affiliates in the LLS Offering, for aggregate net proceeds of approximately $1.4 million, after deducting expenses incurred in connection with the LLS Offering.
+Added: We do not anticipate meeting the milestones under the LLS Stock Purchase Agreement and as such, do not expect we will receive the remaining proceeds available under the LLS Stock Purchase Agreement unless the agreement is amended, which we can provide no assurances will occur.
In December 2019, we entered into the Aspire Agreement with Aspire Capital.
Pursuant to this agreement, we may issue up to $20.0 million of shares of our common stock from time to time.
−Removed: Through July 31, 2020, we had issued an aggregate of 8,290,350 shares of common stock under the Aspire Agreement, which amount includes approximately (i) 959,079 shares of common stock issued to Aspire Capital as consideration for its commitment to purchase shares of our common stock under the Aspire Agreement, (ii) 1,598,465 shares of common stock issued to Aspire Capital for an aggregate sale price of $1.0 million as an initial purchase under the Aspire Agreement, or the Initial Purchase Shares, and (iii) 5,732,806 shares of common stock issued to Aspire Capital for an aggregate sale price of $8.5 million as purchase shares under the terms of the Aspire Agreement.
+Added: Through October 30, 2020, we had issued an aggregate of 8,740,350 shares of common stock under the Aspire Agreement, which amount includes approximately (i) 959,079 shares of common stock issued to Aspire Capital as consideration for its commitment to purchase shares of our common stock under the Aspire Agreement, (ii) 1,598,465 shares of common stock issued to Aspire Capital for an aggregate sale price of $1.0 million as an initial purchase under the Aspire Agreement, or the Initial Purchase Shares, and (iii) 6,182,806 shares of common stock issued to Aspire Capital for an aggregate sale price of $8.8 million as purchase shares under the terms of the Aspire Agreement.
In February 2020, we entered into the 2020 Underwriting Agreement with the Underwriter.
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If the warrants are exercised in the future, our stockholders may experience additional dilution, which could cause our stock price to fall.
+Added: In October 2020, we issued 195,290 shares of Series A Preferred Stock for gross proceeds of approximately $91.0 million.
+Added: Subject to receiving the requisite stockholder approval, each share of Series A Preferred Stock is convertible into an aggregate of 1,000 shares of our common stock.
+Added: In October 2020, we issued 203,202 shares of Series A Non-Voting Convertible Preferred Stock to the Viridian stockholders as consideration under the Merger Agreement.
+Added: Subject to receiving the requisite stockholder approval, each share of Series A Non-Voting Convertible Preferred Stock is convertible into an aggregate of 1,000 shares of our common stock.
In addition, pursuant to our equity incentive plans, we may grant equity awards and issue additional shares of our common stock to our employees, directors and consultants, and the number of shares of our common stock reserved for future issuance under certain of these plans will be subject to automatic annual increases in accordance with the terms of the plans.
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For example, these stockholders, acting together, may be able to control elections of directors, amendments of organizational documents, or approval of any merger, sale of assets, or other major corporate transaction.
−Removed: This may prevent or discourage
−Removed: unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders.
+Added: This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders.
+Added: General Risk Factors
+Added: The market price of our common stock has historically been volatile, and the market price of our common stock may drop in the future.
+Added: The market price of our common stock has been, and may continue to be, subject to significant fluctuations.
+Added: Market prices for securities of early-stage pharmaceutical, biotechnology, and other life sciences companies have historically been particularly volatile.
+Added: Some of the factors that may cause the market price of our common stock to fluctuate include:
+Added: • our ability to obtain regulatory approvals for our product candidates, and delays or failures to obtain such approvals;
+Added: • failure of any of our product candidates, if approved, to achieve commercial success;
+Added: • failure to maintain our existing third-party license and supply agreements;
+Added: • changes in laws or regulations applicable to our product candidates;
+Added: • any inability to obtain adequate supply of our product candidates or the inability to do so at acceptable prices;
+Added: • adverse regulatory authority decisions;
+Added: • introduction of new products, services, or technologies by our competitors;
+Added: • failure to meet or exceed financial and development projections we may provide to the public and the investment community;
+Added: • the perception of the pharmaceutical industry by the public, legislatures, regulators, and the investment community;
+Added: • announcements of significant acquisitions, strategic collaborations, joint ventures, or capital commitments by us or our competitors;
+Added: • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;
+Added: • additions or departures of key personnel;
+Added: • significant lawsuits, including patent or stockholder litigation;
+Added: • if securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our business and stock;
+Added: • changes in the market valuations of similar companies;
+Added: • general market or macroeconomic conditions, including the ongoing COVID-19 pandemic;
+Added: • sales of our common stock by us or our stockholders in the future;
+Added: • trading volume of our common stock;
+Added: • announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships, or capital commitments;
+Added: • the introduction of technological innovations or new therapies that compete with our potential products;
+Added: • changes in the structure of health care payment systems;
+Added: • period-to-period fluctuations in our financial results.
+Added: Moreover, the capital markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies, including as a result of the ongoing COVID-19 pandemic.
+Added: These broad market fluctuations may also adversely affect the trading price of our common stock.
+Added: In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies.
+Added: Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.
+Added: We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
+Added: We incur significant legal, accounting, and other expenses associated with public company reporting requirements.
+Added: We also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and The Nasdaq Stock Market LLC, or Nasdaq.
+Added: These rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
+Added: These rules and regulations may also make it difficult and expensive for us to obtain directors’ and officers’ liability insurance.
+Added: As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers, which may adversely affect investor confidence and could cause our business or stock price to suffer.
+Added: From June 2014 to December 31, 2019, we qualified as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
+Added: As of January 1, 2020, we no longer qualified as an emerging growth company.
+Added: While we were an “emerging growth company,” we were allowed certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and financial statements in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote to approve executive compensation and shareholder approval of any golden parachute payments not previously approved.
+Added: Because we are no longer an emerging growth company, we will incur significant additional costs associated with compliance with reporting requirements applicable to non-emerging growth companies.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business, or our market, our stock price and trading volume could decline.
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