Attached files
Exhibit 99.4
Risk Factor Update
Risk factors that could cause actual
results to differ from our expectations and that could negatively
impact our financial condition and results of operations are
discussed below and elsewhere herein. Additional risks and
uncertainties not presently known to us or that are currently not
believed to be significant to our business may also affect our
actual results and could harm our business, financial condition and
results of operations. If any of the risks or uncertainties
described below or any additional risks and uncertainties actually
occur, our business, results of operations and financial condition
could be materially and adversely affected. This risk factor update is
focused on the specific impacts of gedatolisib on our business. For
more information on the risks related to our operations as a whole
and our specific CELsignia CDx programs, please see Part I, Item 1A
of our Annual Report for the year ended December 31,
2020.
Risks Relating to Our Business
We have a limited operating history and we may never generate
revenue or profit.
We
are a clinical-stage biotechnology company that commenced
activities in January 2012. We only have a limited operating
history and our business plan has not been tested. Since inception,
we have had no revenue and have incurred significant operating
losses. We have financed our operations primarily through equity
and debt offerings. To generate revenue and become and remain
profitable, we must continue to pursue our integrated companion
diagnostic (CDx) and therapeutic (Rx) strategy that leverages our
CELsignia CDx platform. To do so, we need to successfully complete
our five existing clinical trial collaborations, continue to
develop other CELsignia tests for other cancer sub-types, cultivate
partnerships with pharmaceutical companies, and develop and
commercialize gedatolisib pursuant to our license agreement with
Pfizer. We must also build operational and financial infrastructure
to support commercial operations, train and manage employees, and
market and sell our CELsignia tests (as a companion diagnostic
and/or as a stand-alone test) and, once fully developed and
commercialized, our anticipated drug products.
We
may never succeed in any of these activities and, even if we do, we
may never generate revenue that is sufficient to achieve
profitability. We expect to continue to incur significant expenses
and operating losses for the foreseeable future, and the net losses
we incur may fluctuate significantly from quarter to quarter. Our
failure to become and remain profitable would decrease our value
and could impair our ability to raise capital, maintain or expand
our research and development efforts, expand our business, or
continue our operations.
Our inability to raise additional capital on acceptable terms in
the future may limit our ability to develop and commercialize our
integrated companion diagnostic and therapeutic
strategy.
We
may require additional capital to finance capital expenditures and
operating expenses over the next several years as we launch our
integrated companion diagnostic and therapeutic strategy and expand
our infrastructure, commercial operations and research and
development activities. We may seek to raise additional capital
through equity offerings, debt financings, collaborations or
licensing arrangements. Additional funding may not be available to
us on acceptable terms, or at all. If we raise funds by issuing
equity securities, dilution to our stockholders could result. Any
equity securities issued may also provide for rights, preferences
or privileges senior to those of holders of our existing
securities. The incurrence of additional indebtedness or the
issuance of certain equity securities could result in increased
fixed payment obligations and could also include restrictive
covenants, such as limitations on our ability to incur additional
debt or issue additional equity, limitations on our ability to
acquire or license intellectual property rights, and other
operating restrictions that could adversely affect our ability to
conduct our business. In the event that we enter into
collaborations or licensing arrangements to raise capital, we may
be required to accept unfavorable terms. If we are not able to
secure additional funding when needed, we may have to delay, reduce
the scope of or eliminate one or more research and development
programs or selling and marketing initiatives. In addition, we may
have to work with a partner on one or more of our products or
market development programs, which could lower the economic value
of those programs to our company.
-1-
Risks Related to Our Initial Drug Product, Gedatolisib
Our future strategy is dependent on the success of our initial drug
product, gedatolisib, as well as other drug products we may
develop. If we are unable to successfully complete clinical
development of, obtain regulatory approval for or commercialize our
drug products, or if we experience delays in doing so, our business
will be materially harmed.
To
date, we have not yet completed any registrational clinical trials
or the development of any drug products. Our future success and
ability to generate revenue from our drug products, which we do not
expect will occur for several years, if ever, is dependent on our
ability to successfully develop, obtain regulatory approval for and
commercialize one or more drug products. We may not have the
financial resources to continue development of, or to modify
existing or enter into new collaborations for, a drug product if we
experience any issues that delay or prevent regulatory approval of,
or our ability to commercialize, our drug products,
including:
●
our
inability to demonstrate to the satisfaction of the FDA or
comparable foreign regulatory authorities that our drug products
are safe and effective;
●
insufficiency
of our financial and other resources to complete the necessary
preclinical studies and clinical trials;
●
negative
or inconclusive results from our preclinical studies, clinical
trials or the clinical trials of others for drug products similar
to ours, leading to a decision or requirement to conduct additional
preclinical studies or clinical trials or abandon a
program;
●
product-related
adverse events experienced by subjects in our clinical trials or by
individuals using drugs or therapeutic biologics similar to our
drug products;
●
delays
in submitting applications, or delays or failure in obtaining the
necessary approvals from regulators to commence a clinical trial or
a suspension or termination of a clinical trial once
commenced;
●
conditions
imposed by the FDA or comparable foreign regulatory authorities
regarding the scope or design of our clinical trials;
●
poor
effectiveness of our drug products during clinical
trials;
●
better
than expected performance of control arms, such as placebo groups,
which could lead to negative or inconclusive results from our
clinical trials;
●
delays
in enrolling subjects in clinical trials;
●
high
drop-out rates of subjects from clinical trials;
●
inadequate
supply or quality of drug products or other materials necessary for
the conduct of our clinical trials;
●
greater
than anticipated clinical trial or manufacturing
costs;
●
unfavorable
FDA or comparable regulatory authority inspection and review of a
clinical trial site;
●
failure
of our third-party contractors or investigators to comply with
regulatory requirements or otherwise meet their contractual
obligations in a timely manner, or at all;
●
delays
and changes in regulatory requirements, policy and guidelines,
including the imposition of additional regulatory oversight around
clinical testing generally or with respect to our therapies in
particular; or
●
varying
interpretations of data by the FDA and comparable foreign
regulatory authorities.
The preliminary efficacy and safety data reported for the B2151009
Phase 1b clinical trial was provided to us by Pfizer and is subject
to change once data cleansing and data verification activities are
completed.
The
preliminary efficacy and safety data reported for the B2151009
Phase 1b clinical trial was provided to us by Pfizer. Pfizer
provided this data as of a data cutoff date of January 11, 2021,
before Pfizer had cleaned the data, locked the clinical database,
and completed preparation of a final Clinical Study Report. We have
not independently reviewed or verified the data, which includes
case report forms (CRF) for each patient and reconciliation with
the data endpoints reported. We may discover, upon performing the
study close out activities for B2151009, which includes
reconciliation and adjudication of the endpoint reported data with
the CRF, inconsistencies with the data as originally provided by
Pfizer to us. As a result, the data presented as of the date hereof
is subject to change once data cleaning and verification activities
have been completed and other study close-out procedures are
completed.
-2-
We were not involved in the early development of gedatolisib;
therefore, we are dependent on third parties having accurately
generated, collected, interpreted and reported data from certain
preclinical and clinical trials gedatolisib.
We
had no involvement with or control over the initial preclinical and
clinical development of gedatolisib. We are dependent on third
parties having conducted their research and development in
accordance with the applicable protocols and legal, regulatory and
scientific standards; having accurately reported the results of all
preclinical studies and clinical trials conducted with respect to
such drug product; and having correctly collected and interpreted
the data from these trials. If these activities were not compliant,
accurate or correct, the clinical development, regulatory approval
or commercialization of our drug product will be adversely
affected.
As an organization, we have never successfully completed any
registrational clinical trials, and we may be unable to do so for
any drug candidates we may develop.
We
will need to successfully complete registrational clinical trials
in order to obtain the approval of the FDA or comparable foreign
regulatory authorities to market our drug products. Carrying out
clinical trials, including later-stage registrational clinical
trials, is a complicated process. As an organization, we have not
previously completed any registrational clinical trials. In order
to do so, we will need to build and expand our clinical development
and regulatory capabilities, and we may be unable to recruit and
train qualified personnel. We also expect to continue to rely on
third parties to conduct our clinical trials. If these third
parties do not successfully carry out their contractual duties,
meet expected deadlines or comply with regulatory requirements, we
may not be able to obtain regulatory approval of or commercialize
any potential product candidates. Consequently, we may be unable to
successfully and efficiently execute and complete necessary
clinical trials in a way that leads to submission and approval of
our drug products. We may require more time and incur greater costs
than our competitors and may not succeed in obtaining regulatory
approval of any drug products that we develop. Failure to commence
or complete, or delays in, our planned clinical trials, could
prevent us from or delay us in commercializing our drug
products.
If we encounter difficulties enrolling patients in any of our
clinical trials, our clinical development activities could be
delayed or otherwise adversely affected.
The timely completion of clinical trials in accordance with their
protocols depends, among other things, on our ability to enroll a
sufficient number of patients who remain in the trial until its
conclusion. We may experience difficulties in patient enrollment in
our clinical trials for a variety of reasons,
including:
●
the
patient eligibility and exclusion criteria defined in the
protocol;
●
the
size of the patient population required for analysis of the
clinical trial’s primary endpoints;
●
the
proximity of patients to clinical trial sites;
●
the
design of the clinical trial;
●
our
ability to recruit clinical trial investigators with the
appropriate competencies and experience, and the ability of these
investigators to identify and enroll suitable
patients;
●
perception
of the safety profile of our drug products;
●
our
ability to obtain and maintain patient consents; and
●
the
risk that patients enrolled in clinical trials will drop out of the
trials before completion.
Delays
in patient enrollment may result in increased costs or may affect
the timing or outcome of our clinical trials, which could prevent
completion of these trials and adversely affect our ability to
advance the development of our product candidates.
Clinical development involves a lengthy and expensive process, with
an uncertain outcome. We may incur additional costs or experience
delays in completing, or ultimately be unable to complete, the
development and commercialization of our product
candidates.
To
obtain the requisite regulatory approvals to commercialize any drug
products, we must demonstrate through extensive preclinical studies
and clinical trials that such drug product is safe and effective in
humans. Clinical testing is expensive and can take many years to
complete, and its outcome is inherently uncertain. We may be unable
to establish clinical endpoints that applicable regulatory
authorities would consider clinically meaningful, and a clinical
trial can fail at any stage of testing.
-3-
Differences
in trial design between early-stage clinical trials and later-stage
clinical trials make it difficult to extrapolate the results of
earlier clinical trials to later clinical trials. Moreover,
clinical data are often susceptible to varying interpretations and
analyses, and many companies that have believed their product
candidates performed satisfactorily in clinical trials have
nonetheless failed to obtain marketing approval of their products.
Additionally, we are conducting and plan to conduct some open-label
trials, where both the patient and investigator know whether the
patient is receiving the investigational product candidate or
either an existing approved drug or placebo. Most typically,
open-label clinical trials test only the investigational product
candidate and sometimes may do so at different dose levels.
Open-label clinical trials are subject to various limitations that
may exaggerate any therapeutic effect as patients in those trials
are aware when they are receiving treatment. Open-label clinical
trials may be subject to a “patient bias” where
patients perceive their symptoms to have improved merely due to
their awareness of receiving an experimental treatment. In
addition, open-label clinical trials may be subject to an
“investigator bias” where those assessing and reviewing
the outcomes of the clinical trials are aware of which patients
have received treatment and may interpret the information of the
treated group more favorably given this knowledge. Where a
randomized, placebo-controlled clinical trial is designed to allow
enrolled subjects to cross-over to the treatment arm, there may be
a risk of inadvertent unblinding of subjects prior to cross-over,
which may limit the clinical meaningfulness of those data and may
require the conduct of additional clinical trials. As such, the
results from an open-label trial may not be predictive of future
clinical trial results with any of our product candidates for which
we include an open-label clinical trial when studied in a
controlled environment with a placebo or active
control.
Successful
completion of clinical trials is a prerequisite to submitting a new
drug application, or NDA, to the FDA and similar marketing
applications to comparable foreign regulatory authorities for each
drug product and, consequently, the ultimate approval and
commercial marketing of any drug products. We may experience delays
in initiating or completing clinical trials and preparing for
regulatory submissions. We also may experience numerous unforeseen
events during, or as a result of, any future clinical trials that
we could conduct that could delay or prevent our ability to receive
marketing approval or commercialize our current product candidates
or any future product candidates. Our costs will increase if we
experience delays in clinical testing or marketing approvals. We do
not know whether any of our clinical trials will begin as planned,
will need to be reassigned or will be completed on schedule, or at
all. Significant clinical trial delays also could shorten any
periods during which we may have the exclusive right to
commercialize our product candidates and may allow our competitors
to bring products to market before we do, potentially impairing our
ability to successfully commercialize our product candidates and
harming our business and results of operations. Any delays in our
clinical development programs may harm our business, financial
condition and results of operations significantly.
The successful development of biopharmaceuticals is highly
uncertain.
Successful
development of biopharmaceuticals is highly uncertain and is
dependent on numerous factors, many of which are beyond our
control. Product candidates that appear promising in the early
phases of development may fail to reach the market for several
reasons including, among other things, that clinical trial results
may show the product candidates to be less effective than expected
or to have unacceptable side effects or toxicities; we may fail to
receive the necessary regulatory approvals or there may be a delay
in receiving such approvals; or the proprietary rights of others
and their competing products and technologies that may prevent our
product candidates from being commercialized.
The
length of time necessary to complete clinical trials and to submit
an application for marketing approval for a final decision by a
regulatory authority varies significantly from one drug product to
the next and from one country to the next, and may be difficult to
predict. Even if we are successful in obtaining marketing approval,
commercial success of any approved products will also depend in
large part on the availability of coverage and adequate
reimbursement from third-party payors, including government payors
such as the Medicare and Medicaid programs and managed care
organizations in the U.S. or country specific governmental
organizations in foreign countries, which may be affected by
existing and future healthcare reform measures designed to reduce
the cost of healthcare. Third-party payors could require us to
conduct additional studies, including post-marketing studies
related to the cost effectiveness of a product, to qualify for
reimbursement, which could be costly and divert our resources. If
government and other healthcare payors were not to provide coverage
and adequate reimbursement for our products once approved, market
acceptance and commercial success would be reduced.
In
addition, if any of our drug products receive marketing approval,
we will be subject to significant post-approval regulatory
obligations. In addition, there is always the risk that we, a
regulatory authority or a third party might identify previously
unknown problems with a product post-approval, such as adverse
events of unanticipated severity or frequency. Compliance with
these requirements is costly, and any failure to comply or other
issues with our drug products post-approval could adversely affect
our business, financial condition and results of
operations.
-4-
We face significant competition from other biopharmaceutical
companies, and our operating results will suffer if we fail to
compete effectively.
The
biopharmaceutical industry is characterized by intense competition
and rapid innovation. Our competitors may be able to develop other
compounds or drugs that are able to achieve similar or better
results. Our potential competitors include major multinational
pharmaceutical companies, established biotechnology companies,
specialty pharmaceutical companies and universities and other
research institutions. 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 and well-established sales forces.
Smaller or early-stage companies may also prove to be significant
competitors, particularly as they develop novel approaches to
treating disease indications that our product candidates are also
focused on treating. Established pharmaceutical companies may also
invest heavily to accelerate discovery and development of novel
therapeutics or to in-license novel therapeutics that could make
the product candidates that we develop obsolete. Mergers and
acquisitions in the biotechnology and pharmaceutical industries may
result in even more resources being concentrated in our
competitors. Competition may increase further as a result of
advances in the commercial applicability of technologies and
greater availability of capital for investment in these industries.
Our competitors, either alone or with collaboration partners, may
succeed in developing, acquiring or licensing on an exclusive basis
drug or biologic products that are more effective, safer, more
easily commercialized or less costly than our product candidates or
may develop proprietary technologies or secure patent protection
that we may need for the development of our technologies and
products. We believe the key competitive factors that will affect
the development and commercial success of our product candidates
are efficacy, safety, tolerability, reliability, convenience of
use, price and reimbursement.
Even
if we obtain regulatory approval of drug products, the availability
and price of our competitors’ products could limit the demand
and the price we are able to charge for our product candidates. We
may not be able to implement our business plan if the acceptance of
our product candidates is inhibited by price competition or the
reluctance of physicians to switch from existing methods of
treatment to our product candidates, or if physicians switch to
other new drug or biologic products or choose to reserve our
product candidates for use in limited circumstances.
Even if any drug product we develop receives marketing approval, it
may fail to achieve the degree of market acceptance by physicians,
patients, third-party payors and others in the medical community
necessary for commercial success.
If
any future drug product we develop receives marketing approval,
whether as a single agent or in combination with other therapies,
it may nonetheless fail to gain sufficient market acceptance by
physicians, patients, third-party payors and others in the medical
community. If the product candidates we develop do not achieve an
adequate level of acceptance, we may not generate significant
product revenues and we may not become profitable. The degree of
market acceptance of any product candidate, if approved for
commercial sale, will depend on a number of factors,
including:
●
efficacy
and potential advantages compared to other treatments;
●
the
ability to offer our products, if approved, for sale at competitive
prices;
●
convenience
and ease of administration compared to other
treatments;
●
the
willingness of the target patient population to try new therapies
and of physicians to prescribe these therapies;
●
the
strength of marketing and distribution support;
●
the
ability to obtain sufficient third-party coverage, market access
and adequate reimbursement; and
●
the
prevalence and severity of any side effects.
-5-
Risks Related to Our Reliance on Third Parties
We will rely on third parties to conduct certain aspects of our
preclinical studies and clinical trials. If these third parties do
not successfully carry out their contractual duties, meet expected
deadlines or comply with regulatory requirements, we may not be
able to obtain regulatory approval for, or commercialize, any
potential product candidates.
We
will depend upon third parties to conduct certain aspects of our
preclinical studies and depend on third parties, including
independent investigators, to conduct our clinical trials, under
agreements with universities, medical institutions, contract
research organizations, or CROs, strategic partners and others. We
expect to negotiate budgets and contracts with such third parties,
which may result in delays to our development timelines and
increased costs.
We
continue to build our infrastructure and hire personnel necessary
to execute our operational plans. We will rely especially heavily
on third parties over the course of our clinical trials, and, as a
result, may have limited control over the clinical investigators
and limited visibility into their day-to-day activities, including
with respect to their compliance with the approved clinical
protocol. Nevertheless, we are responsible for ensuring that each
of our clinical trials is conducted in accordance with the
applicable protocol, legal and regulatory requirements and
scientific standards, and our reliance on third parties does not
relieve us of our regulatory responsibilities. We and these third
parties are required to comply with GCP requirements, which are
regulations and guidelines enforced by the FDA and comparable
foreign regulatory authorities for product candidates in clinical
development. Regulatory authorities enforce these GCP requirements
through periodic inspections of clinical trial sponsors, clinical
investigators and clinical trial sites. If we or any of these third
parties fail to comply with applicable GCP requirements, the
clinical data generated in our clinical trials may be deemed
unreliable and the FDA or comparable foreign regulatory authorities
may require us to suspend or terminate these trials or perform
additional preclinical studies or clinical trials before approving
our marketing applications. We cannot be certain that, upon
inspection, such regulatory authorities will determine that any of
our clinical trials comply with GCP requirements. In addition, our
clinical trials must be conducted with product produced under cGMP
requirements and may require a large number of
patients.
Our
failure or any failure by these third parties to comply with these
regulations may require us to repeat clinical trials, which would
delay the regulatory approval process. Moreover, our business may
be adversely affected if any of these third parties violates
federal or state fraud and abuse or false claims laws and
regulations or healthcare privacy and security laws.
Any
third parties conducting aspects of our preclinical studies or our
clinical trials will not be our employees and, except for remedies
that may be available to us under our agreements with such third
parties, we cannot control whether or not they devote sufficient
time and resources to our preclinical studies and clinical
programs. These third parties may also have relationships with
other commercial entities, including our competitors, for whom they
may also be conducting clinical trials or other product development
activities, which could affect their performance on our behalf. If
these third parties do not successfully carry out their contractual
duties or obligations or meet expected deadlines, if they need to
be replaced or if the quality or accuracy of the preclinical or
clinical data they obtain is compromised due to the failure to
adhere to our protocols or regulatory requirements or for other
reasons, our development timelines, including clinical development
timelines, may be extended, delayed or terminated and we may not be
able to complete development of, obtain regulatory approval of or
successfully commercialize our product candidates. As a result, our
financial results and the commercial prospects for our product
candidates would be harmed, our costs could increase and our
ability to generate revenue could be delayed or precluded
entirely.
-6-
Our reliance on third parties to formulate and manufacture our drug
product will expose us to a number of risks that may delay the
development, regulatory approval and commercialization of our drug
product or result in higher product costs.
We
have no direct experience in drug formulation or manufacturing and
do not intend to establish our own manufacturing facilities. We
lack the resources and expertise to formulate or manufacture our
own product candidates. Instead, we will contract with one or more
manufacturers to manufacture, supply, store and distribute drug
supplies for our clinical trials. If our drug product receives FDA
approval, we will rely on one or more third-party contractors to
manufacture our drugs. Our anticipated future reliance on a limited
number of third-party manufacturers exposes us to risks that, among
other things, we may be unable to identify manufacturers on
acceptable terms or at all because the number of potential
manufacturers is limited and the FDA must approve any replacement
contractor; our third-party manufacturers might be unable to
formulate and manufacture our drugs in the volume and of the
quality required to meet our clinical and/or commercial needs, if
any; our future contract manufacturers may not perform as agreed or
may not remain in the contract manufacturing business for the time
required to supply our clinical trials or to successfully produce,
store and distribute our products; and our contract manufacturers
may fail to comply with good manufacturing practice and other
government regulations and corresponding foreign standards. Each of
these risks could delay our clinical trials, the approval, if any,
of our product candidates by the FDA, or the commercialization of
our product candidates or result in higher costs or deprive us of
potential product revenues.
Risks Related to Intellectual Property
We depend on intellectual property licensed from third parties,
including from Pfizer for our lead product candidate, and
termination of this license could result in the loss of significant
rights, which would harm our business.
We
are dependent on patents, know-how and proprietary technology, both
our own and licensed from others. All patents covering gedatolisib
and any combination therapies using our product candidates are
licensed from third parties. Any termination of a product license
could result in the loss of significant rights and would cause
material adverse harm to our ability to commercialize our product
candidates.
Disputes
may also arise between us and our licensors regarding intellectual
property subject to a license agreement, including:
●
the
scope of rights granted under the license agreement and other
interpretation-related issues;
●
whether
and the extent to which our technology and processes infringe on
intellectual property of the licensor that is not subject to the
licensing agreement;
●
our
right to sublicense patent and other rights to third parties under
collaborative development relationships;
●
our
diligence obligations with respect to the use of licensed
technology in relation to our development and commercialization of
our product candidates and what activities satisfy those diligence
obligations; and
●
the
ownership of inventions and know-how resulting from the joint
creation or use of intellectual property by our licensors and us
and our partners.
If
disputes over intellectual property that we have licensed prevent
or impair our ability to maintain our current licensing
arrangements on acceptable terms, we may be unable to successfully
develop and commercialize the affected product
candidates.
We
are generally also subject to all of the same risks with respect to
protection of intellectual property that we own, as we are for
intellectual property that we license. If we or our licensors fail
to adequately protect this intellectual property, our ability to
commercialize products could materially suffer.
-7-
If we fail to comply with our obligations under our patent license
with Pfizer, we could lose license rights that are important to our
business.
We
are a party to a license agreement with Pfizer pursuant to which we
in-license key patents for our gedatolisib. This license imposes
various diligence, milestone payment, royalty, insurance and other
obligations on us. If we fail to comply with these obligations,
Pfizer may have the right to terminate the license, in which event
we would not be able to develop or market the products covered by
such licensed intellectual property. We may have limited control
over the maintenance and prosecution of these in-licensed rights,
activities or any other intellectual property that may be related
to our in-licensed intellectual property. For example, we cannot be
certain that such activities by these licensors have been or will
be conducted in compliance with applicable laws and regulations or
will result in valid and enforceable patents and other intellectual
property rights. We have limited control over the manner in which
our licensors initiate an infringement proceeding against a
third-party infringer of the intellectual property rights, or
defend certain of the intellectual property that is licensed to us.
It is possible that the licensors’ infringement proceeding or
defense activities may be less vigorous than had we conducted them
ourselves.
We may not be successful in obtaining or maintaining necessary
rights to develop any future product candidates on acceptable
terms.
Because
our programs may involve additional product candidates that may
require the use of proprietary rights held by third parties, the
growth of our business may depend in part on our ability to
acquire, in-license or use these proprietary rights. 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 as necessary or important to our
business operations. We may fail to obtain any of these licenses at
a reasonable cost or on reasonable terms, if at all, which could
harm our business. We may need to cease use of the compositions or
methods covered by such third-party intellectual property rights,
and may need to seek to develop alternative approaches that do not
infringe on such intellectual property rights which may entail
additional costs and development delays, even if we were able to
develop such alternatives, which may not be feasible. Even if we
are able to obtain a license, it may be non-exclusive, thereby
giving our competitors access to the same technologies licensed to
us. In that event, we may be required to expend significant time
and resources to develop or license replacement
technology.
The
licensing and acquisition of third-party intellectual property
rights is a competitive area, and companies, which may be more
established, or have greater resources than we do, may also be
pursuing strategies to license or acquire third-party intellectual
property rights that we may consider necessary or attractive in
order to commercialize our product candidates. More established
companies may have a competitive advantage over us due to their
size, cash resources and greater clinical development and
commercialization capabilities. There can be no assurance that we
will be able to successfully complete such negotiations and
ultimately acquire the rights to the intellectual property
surrounding the additional product candidates that we may seek to
acquire.
Risks Related to Government Regulation
We may not obtain the necessary regulatory approvals to
commercialize our product candidate.
We will need FDA approval to commercialize our
product candidate in the U.S. In order to obtain FDA approval, we
must submit to the FDA a new drug application, or NDA,
demonstrating that the drug product is safe for humans and
effective for its intended use. This demonstration requires
significant research and animal tests, which are referred to as
pre-clinical studies, as well as human tests, which are referred to
as clinical trials. Satisfaction of the FDA’s regulatory
requirements typically takes many years, depends upon the type,
complexity and novelty of the drug product and requires substantial
resources for research, development and testing. We cannot predict
whether our research and clinical approaches will result in a drug
that the FDA considers safe for humans and effective for indicated
uses. The FDA has substantial discretion in the drug approval
process and may require us to conduct additional pre-clinical and
clinical testing or to perform post-marketing studies. The approval
process may also be delayed by changes in government regulation,
future legislation or administrative action or changes in FDA
policy that occur prior to or during our regulatory review. Delays
in obtaining regulatory approvals may delay
commercialization of, and our ability to derive product revenues
from, our drug product; impose costly procedures on us; or diminish
any competitive advantages that we may otherwise enjoy. Even if we comply with all FDA requests, the FDA
may ultimately reject our NDA. We cannot be sure that we will ever
obtain regulatory clearance for our drug product. Failure to obtain
FDA approval of our drug product will severely undermine our
business by reducing our number of salable products and, therefore,
corresponding product revenues.
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The FDA or comparable foreign regulatory authorities may disagree
with our regulatory plan for our product candidates.
The
general approach for FDA approval of a new drug is dispositive data
from one or more well-controlled Phase 3 clinical trials of the
product candidate in the relevant patient population. Phase 3
clinical trials typically involve a large number of patients, have
significant costs and take years to complete.
Our
clinical trial results may not support approval of our product
candidates. In addition, our product candidates could fail to
receive regulatory approval, or regulatory approval could be
delayed, for many reasons, including the following:
●
the
FDA or comparable foreign regulatory authorities may disagree with
the dosing regimen, design or implementation of our clinical
trials;
●
we
may be unable to demonstrate to the satisfaction of the FDA or
comparable foreign regulatory authorities that our product
candidates are safe and effective for any of their proposed
indications;
●
we
may encounter safety or efficacy problems caused by the COVID-19
pandemic;
●
the
results of clinical trials may not meet the level of statistical
significance required by the FDA or comparable foreign regulatory
authorities for approval;
●
we
may be unable to demonstrate that our product candidates’
clinical and other benefits outweigh their safety
risks;
●
the
FDA or comparable foreign regulatory authorities may disagree with
our interpretation of data from preclinical studies or clinical
trials;
●
the
data collected from clinical trials of our product candidates may
not be sufficient to the satisfaction of the FDA or comparable
foreign regulatory authorities to support the submission of an NDA
or other comparable submission in foreign jurisdictions or to
obtain regulatory approval in the U.S. or elsewhere;
●
the
FDA or comparable foreign regulatory authorities may fail to
approve the manufacturing processes or facilities of third-party
manufacturers with which we contract for clinical and commercial
supplies; and
●
the
approval policies or regulations of the FDA or comparable foreign
regulatory authorities may significantly change in a manner
rendering our clinical data insufficient for approval.
Breakthrough Therapy Designation or Fast Track Designation from the
FDA may not actually lead to a faster development or regulatory
review or approval process.
We
may seek Breakthrough Therapy Designation or Fast Track Designation
for our product candidates. If a product is intended for the
treatment of a serious or life-threatening condition and the
product demonstrates the potential to address unmet medical needs
for this condition, the product sponsor may apply for Fast Track
Designation. The FDA has broad discretion whether or not to grant
this designation, so even if we believe one of our product
candidates is eligible for this designation, we cannot assure you
that the FDA would decide to grant it. Even if we do receive Fast
Track Designation, we may not experience a faster development
process, review or approval compared to conventional FDA
procedures. The FDA may withdraw Fast Track Designation if it
believes that the designation is no longer supported by data from
our clinical development program.
A
breakthrough therapy is defined as a product that is intended,
alone or in combination with one or more other products, to treat a
serious or life-threatening disease or condition, and preliminary
clinical evidence indicates that the product may demonstrate
substantial improvement over existing therapies on one or more
clinically significant endpoints, such as substantial treatment
effects observed early in clinical development. For products that
have been designated as breakthrough therapies, interaction and
communication between the FDA and the sponsor of the trial can help
to identify the most efficient path for clinical development while
minimizing the number of patients placed in ineffective control
regimens.
Designation
as a breakthrough therapy is within the discretion of the FDA.
Accordingly, even if we believe one of our product candidates meets
the criteria for designation as a breakthrough therapy, the FDA may
disagree and instead determine not to make such designation. In any
event, the receipt of a Breakthrough Therapy Designation may not
result in a faster development process, review or approval compared
to products considered for approval under conventional FDA
procedures and does not assure ultimate approval by the FDA. In
addition, even if a product candidate qualifies as a breakthrough
therapy, the FDA may later decide that the product no longer meets
the conditions for qualification and rescind the Breakthrough
Therapy Designation.
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Obtaining and maintaining regulatory approval of our product
candidates in one jurisdiction does not mean that we will be
successful in obtaining regulatory approval of our product
candidates in other jurisdictions.
Obtaining and
maintaining regulatory approval of our product candidates in one
jurisdiction does not guarantee that we will be able to obtain or
maintain regulatory approval in any other jurisdiction, while a
failure or delay in obtaining regulatory approval in one
jurisdiction may have a negative effect on the regulatory approval
process in others. For example, even if the FDA grants marketing
approval of a product candidate, a comparable foreign regulatory
authority must also approve the manufacturing, marketing and
promotion of the product candidate in those countries.
Approval procedures
vary among jurisdictions and can involve requirements and
administrative review periods different from, and greater than,
those in the U.S., including additional preclinical studies or
clinical trials, as clinical trials conducted in one jurisdiction
may not be accepted by regulatory authorities in other
jurisdictions. In many jurisdictions outside the U.S., a product
candidate must be approved for reimbursement before it can be
approved for sale in that jurisdiction. In some cases, the price
that we intend to charge for our products is also subject to
approval.
We may
also submit marketing applications in other countries. Regulatory
authorities in jurisdictions outside of the U.S. have requirements
for approval of product candidates with which we must comply prior
to marketing in those jurisdictions. Obtaining foreign regulatory
approvals and compliance with foreign regulatory requirements could
result in significant delays, difficulties and costs for us and
could delay or prevent the introduction of our products in certain
countries. If we fail to comply with the regulatory requirements in
international markets and/or receive applicable marketing
approvals, our target market will be reduced and our ability to
realize the full market potential of our product candidates will be
harmed.
Even if we receive regulatory approval of any product candidates,
we will be subject to ongoing regulatory obligations and continued
regulatory review, which may result in significant additional
expense and we may be subject to penalties if we fail to comply
with regulatory requirements or experience unanticipated problems
with our product candidates.
If any
of our product candidates are approved, they will be subject to
ongoing regulatory requirements for manufacturing, labeling,
packaging, storage, advertising, promotion, sampling,
record-keeping, conduct of post-marketing studies and submission of
safety, efficacy and other post-marketing information, including
both federal and state requirements in the U.S. and requirements of
comparable foreign regulatory authorities. In addition, we will be
subject to continued compliance with requirements for any clinical
trials that we conduct post-approval.
Manufacturers and
manufacturers’ facilities are required to comply with
extensive FDA and comparable foreign regulatory authority
requirements. Accordingly, we and others with whom we work must
continue to expend time, money and effort in all areas of
regulatory compliance, including manufacturing, production and
quality control.
Any
regulatory approvals that we receive for our product candidates may
be subject to limitations on the approved indicated uses for which
the product may be marketed or to the conditions of approval, or
contain requirements for potentially costly post-marketing testing,
including Phase 4 clinical trials and surveillance to monitor the
safety and efficacy of the product candidate. Certain endpoint data
we hope to include in any approved product labeling also may not
make it into such labeling, including exploratory or secondary
endpoint data such as patient-reported outcome measures. The FDA
may impose consent decrees or withdraw approval if compliance with
regulatory requirements and standards is not maintained or if
problems occur after the product reaches the market. Later
discovery of previously unknown problems with our product
candidates, including adverse events of unanticipated severity or
frequency, or with our third-party manufacturers or manufacturing
processes, or failure to comply with regulatory requirements, may
result in revisions to the approved labeling to add new safety
information, imposition of post-marketing studies or clinical
trials to assess new safety risks or imposition of distribution
restrictions or other restrictions under a REMS program. Other
potential consequences include, among other things:
●
restrictions on the
marketing or manufacturing of our products, withdrawal of the
product from the market or voluntary or mandatory product
recalls;
●
fines, warning
letters or holds on clinical trials;
●
refusal by the FDA
to approve pending applications or supplements to approved
applications filed by us or suspension or revocation of license
approvals;
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●
product seizure or
detention or refusal to permit the import or export of our product
candidates; and
●
injunctions or the
imposition of civil or criminal penalties.
The FDA
strictly regulates marketing, labeling, advertising and promotion
of products that are placed on the market. Products may be promoted
only for the approved indications and in accordance with the
provisions of the approved label. The policies of the FDA and
comparable foreign regulatory authorities may change and additional
government regulations may be enacted that could prevent, limit or
delay regulatory approval of our product candidates. We cannot
predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action,
either in the U.S. or abroad. If we are slow or unable to adapt to
changes in existing requirements or the adoption of new
requirements or policies, or if we are not able to maintain
regulatory compliance, we may lose any marketing approval that we
may have obtained and we may not achieve or sustain
profitability.
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