美國
證券交易委員會
華盛頓特區20549
表格
(標記一個)
根據1934年證券交易法第13或15(d)條款的季度報告。 |
截至2024年6月30日季度結束
或
根據1934年證券交易法第13或15(d)條款的過渡報告 |
過渡期從_____到_____
委員會檔案編號：
（根據其章程所指定的正式名稱）
（國家或其他管轄區的 公司成立或組織） |
（IRS僱主 |
(主要行政辦公室地址) |
(郵政編碼) |
公司電話號碼，包括區號：（
在法案第12(b)條的規定下注冊的證券：
每個類別的標題 |
|
交易 符號: |
|
在其上註冊的交易所的名稱 |
|
|
請在以下複選框中打勾，指示註冊人：(1)在前12個月(或註冊人被要求提交這些報告的更短期間內)已經提交了1934年證券交易法第13或15(d)條規定需要提交的所有報告；以及(2)在過去的90天內一直受到了此類文件提交要求的限制。
請在以下複選框中打勾，指示註冊人是否已經電子提交了根據Regulation S-T規則405條(本章節的§232.405條)需要提交的所有互動數據文件在過去的12個月內(或註冊人被要求提交這些文件的更短期間內)。
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速報告人 |
|
☐ |
|
加速文件提交人 |
|
☐ |
|
☒ |
|
較小的報告公司 |
|
||
新興成長公司 |
|
|
|
|
|
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。
請在以下空格內打勾，表示註冊人是不是外殼公司（按交易所法則120億.2條定義）。 是 ☐ 否
截至2024年11月6日，登記人持有
目錄
|
|
頁面 |
|
|
|
1 |
||
|
|
|
第I部分 |
3 |
|
|
|
|
項目1。 |
3 |
|
|
3 |
|
|
4 |
|
|
5 |
|
|
7 |
|
|
8 |
|
項目2。 |
25 |
|
項目3。 |
35 |
|
項目4。 |
36 |
|
|
|
|
第二部分 |
38 |
|
|
|
|
項目1。 |
38 |
|
項目1A。 |
38 |
|
項目2。 |
90 |
|
項目3。 |
90 |
|
項目4。 |
90 |
|
項目5。 |
91 |
|
項目6。 |
92 |
|
94 |
||
i
特別 關於前瞻性聲明的注意事項關於前瞻性聲明
這 根據第10-Q表格的季度報告（「10-Q表格」），包含前瞻性陳述。除了本10-Q表格中包含的歷史事實陳述之外，所有其他陳述，包括關於我們未來經營結果、財務狀況、業務策略、產品候選藥物、計劃進行的前期和非臨床研究和臨床試驗、前期和非臨床研究、臨床試驗成果、研發成本、監管批准、成功的時間和可能性、以及管理層對未來經營目標和計劃，都屬於前瞻性陳述。這些陳述涉及一些已知和未知的風險、不確定性和其他重要因素，有些情況下超出我們的控制，可能導致我們的實際結果、業績或成就與前瞻性陳述所表達或暗示的任何未來結果、業績或成就明顯不同。
在某些情況下，您可以通過"可能"，"將"，"應該"，"會"，"期望"，"計劃"，"預期"，"可能"，"打算"，"目標"，"項目"，"相信"，"估計"，"預測"，"潛在"，"繼續"等詞語或這些詞語的否定形式或其他類似表達來識別前瞻性陳述。本文中包含的前瞻性陳述 第10-Q表格中包括但不限於以下關於的聲明：
1
我們主要基於當前對我們的業務、我們所處行業的期望和預測，以及我們認爲可能影響我們的業務、財務控件、運營結果和前景的財務趨勢，來制定這些前瞻性陳述。這些前瞻性陳述並不保證未來的表現或發展。這些前瞻性陳述僅代表本表格10-Q日期時的情況，並受到「風險因素」部分及本表格10-Q其他地方描述的多種風險、不確定性和假設的影響。由於前瞻性陳述本質上受到風險和不確定性的影響，其中一些是無法預測或量化的，因此您不應將這些前瞻性陳述視爲對未來事件的預測。我們的前瞻性陳述中反映的事件和情況可能無法實現或發生，實際結果可能與前瞻性陳述中預計的結果存在重大差異。除非法律要求，我們不計劃公開更新或修訂本聲明中的任何前瞻性陳述，無論是基於任何新信息、未來事件，或其他原因。
此外，「我們相信」等表態反映了我們對相關主題的信念和觀點。這些表態基於我們在本10-Q表格日期之時可以獲取到的信息，儘管我們認爲這些信息構成了這些表態的合理依據，但這些信息可能是有限或不完整的，我們的表態不應被視爲我們對所有可能獲得的相關信息進行了全面調查或審查。這些表態本質上是不確定的，因此請注意不要過分依賴這些表態。
2
第一部分——財務信息ANCIAL 信息
項目1 控件1. 基本報表。
AN2治療公司
精簡資產負債表
(以千爲單位，除每股數量和每股金額外)
(未經審計)
|
|
九月三十日， |
|
|
12月31日， |
|
||
|
|
2024 |
|
|
2023 |
|
||
資產 |
|
|
|
|
|
|
||
流動資產： |
|
|
|
|
|
|
||
現金及現金等價物 |
|
$ |
|
|
$ |
|
||
短期投資 |
|
|
|
|
|
|
||
預付費用和其他流動資產 |
|
|
|
|
|
|
||
總流動資產 |
|
|
|
|
|
|
||
所有基金類型投資 |
|
|
— |
|
|
|
|
|
其他資產，長期 |
|
|
— |
|
|
|
|
|
資產總額 |
|
$ |
|
|
$ |
|
||
負債和股東權益 |
|
|
|
|
|
|
||
流動負債: |
|
|
|
|
|
|
||
應付賬款 |
|
$ |
|
|
$ |
|
||
應計薪酬 |
|
|
|
|
|
|
||
應計負債 |
|
|
|
|
|
|
||
其他流動負債 |
|
|
|
|
|
|
||
流動負債合計 |
|
|
|
|
|
|
||
總負債 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
股東權益: |
|
|
|
|
|
|
||
優先股，$0.0001 |
|
|
|
|
|
|
||
普通股，每股面值爲 $0.0001； |
|
|
|
|
|
|
||
其他資本公積 |
|
|
|
|
|
|
||
累計其他綜合收益 |
|
|
|
|
|
|
||
累積赤字 |
|
|
( |
) |
|
|
( |
) |
股東權益總額 |
|
|
|
|
|
|
||
負債和股東權益總額 |
|
$ |
|
|
$ |
|
||
附註是這些未經審計的中期未經審計的基本財務報表的組成部分。
3
AN2治療公司
簡化財務報表 經營業績和綜合虧損
(以千爲單位，除每股數量和每股金額外)
(未經審計)
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
運營費用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
研究和開發 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
一般和行政 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
重組費用 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
運營費用總額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
運營損失 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
其他收入，淨額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
歸屬於普通股股東的淨虧損 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
歸屬於普通股股東的每股淨虧損，基本虧損和攤薄後 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
用於計算基本和攤薄後每股淨虧損的加權平均股數 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他綜合損失： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
未實現的投資收益（虧損） |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
綜合虧損 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
附註是這些未經審計的中期未經審計的基本財務報表的組成部分。
4
AN2 THERAPEUTICS, INC.
股東權益的概括報表
（以千爲單位，股數除外）
(未經審計)
|
|
普通股 |
|
|
額外的 |
|
|
累計 |
|
|
累計 |
|
|
總計 |
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
資本 |
|
|
收益（損失） |
|
|
虧損 |
|
|
股權 |
|
||||||
2023年12月31日的餘額。 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
GAAP gross margin |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票期權行使時發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售投資的未實現損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2024年3月31日的結餘 |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
限制性股票單位解除後發行普通股 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售投資的未實現損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2024年6月30日的餘額 |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
GAAP gross margin |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
限制性股票單位解除後發行普通股 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售金融資產未實現收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2024年9月30日的餘額 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
5
|
|
普通股 |
|
|
額外的 |
|
|
累計 |
|
|
累計 |
|
|
總計 |
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
資本 |
|
|
收益（損失） |
|
|
虧損 |
|
|
股權 |
|
||||||
2022年12月31日的餘額 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
GAAP gross margin |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售金融資產未實現收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2023年3月31日的餘額 |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
在「按市場」發行普通股中，減去佣金和發行成本$ |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售金融資產未實現收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2023年6月30日的餘額 |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
在承銷提供中發行普通股，減去承銷商佣金和發行成本，爲$ |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
GAAP gross margin |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票期權行使時發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
對早期行使的股票期權的歸屬權 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
基於股票的補償 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
可供出售金融資產的未實現損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2023年9月30日的餘額 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
附註是這些未經審計的中期未經審計的基本財務報表的組成部分。
6
AN2治療公司
精簡現金流量表
(以千爲單位)
(未經審計)
|
|
截至九個月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
經營活動中使用的現金流量 |
|
|
|
|
|
|
||
淨虧損 |
|
$ |
( |
) |
|
$ |
( |
) |
調整爲淨損失到經營活動現金流量淨使用： |
|
|
|
|
|
|
||
基於股票的薪酬費用 |
|
|
|
|
|
|
||
非現金租賃費用 |
|
|
— |
|
|
|
|
|
投資折扣淨增值 |
|
|
( |
) |
|
|
( |
) |
運營資產和負債的變化： |
|
|
|
|
|
|
||
預付款和其他資產 |
|
|
( |
) |
|
|
( |
) |
應付賬款 |
|
|
( |
) |
|
|
|
|
應計薪酬 |
|
|
( |
) |
|
|
|
|
應計負債 |
|
|
( |
) |
|
|
|
|
營運租賃負債 |
|
|
— |
|
|
|
( |
) |
其他流動負債 |
|
|
|
|
|
|
||
用於經營活動的淨現金 |
|
|
( |
) |
|
|
( |
) |
投資活動現金流量 |
|
|
|
|
|
|
||
投資購買 |
|
|
( |
) |
|
|
( |
) |
投資到期日 |
|
|
|
|
|
|
||
投資活動產生的淨現金流量 |
|
|
|
|
|
( |
) |
|
籌資活動現金流量 |
|
|
|
|
|
|
||
從承銷發行普通股所得收益，扣除佣金和發行費用 |
|
|
— |
|
|
|
|
|
從「市場發行」普通股所得收益，扣除佣金和發行費用 |
|
|
— |
|
|
|
|
|
根據員工股票購買計劃發行普通股所得款項 |
|
|
|
|
|
|
||
行使股票期權所得 |
|
|
|
|
|
|
||
融資活動提供的淨現金 |
|
|
|
|
|
|
||
現金及現金等價物淨增加額 |
|
|
|
|
|
|
||
期初現金及現金等價物餘額 |
|
|
|
|
|
|
||
期末現金及現金等價物 |
|
$ |
|
|
$ |
|
||
非現金融資項目的補充披露 |
|
|
|
|
|
|
||
應付賬款和應計負債中包含的遞延發行成本 |
|
$ |
— |
|
|
$ |
|
|
附註是這些未經審計的中期未經審計的基本財務報表的組成部分。
7
AN2 Therapeutics，Inc。
No適用於未經審計的簡明基本報表
附註1. 公司業務組織和描述
業務描述
AN2 Therapeutics, Inc.（以下簡稱「公司」）是一家專注於發現和開發源自其硼化學平台的新型小分子藥物的生物製藥公司。AN2擁有一系列正在研發中的基於硼的化合物，用於治療光翼病、非結核分枝桿菌（NTM）和白馬鼻疽病，同時還有早期項目專注於傳染病和腫瘤學領域的靶向。該公司於2017年2月在特拉華州註冊成立，於2019年11月開始運營，在2022年3月25日開始在納斯達克全球精選市場以「ANTX」爲標的進行交易，總部位於加利福尼亞州門洛帕克。
自2019年11月開始運營以來，公司已將幾乎所有資源用於進行研究和開發活動，包括針對其首個產品候選藥物epetraborole以及其他產品候選藥物的研究，業務規劃和重組，招聘人員，籌集資金，併爲這些運營提供總體和行政支持。
首次公開募股
於2022年3月24日，公司向美國證券交易委員會提交的S-1表格（文件編號333-263295）登記聲明，關於其首次公開發行普通股（「IPO」）的註冊聲明生效。首次公開發行於2022年3月29日結束，公司發行了
2022年4月8日，IPO的承銷商行使了購買公司普通股的額外選擇權，公開發行價爲每股$
市場開盤時的發行
2023年4月6日，公司與Cowen and Company, LLC簽訂了一項銷售協議（「銷售協議」），Cowen and Company, LLC作爲公司的銷售代理（「代理人」） 發行和銷售的總毛銷售額爲$
包銷發行—James Trust有權要求在2025年2月7日之前的任何日期進行一次完全市場營銷的包銷發行。
2023年8月15日，公司與Cowen and Company、Leerink Partners LLC和evercore Group L.L.C.簽訂了承銷協議（「承銷協議」），作爲若干承銷商的代表，發行並賣出
8
注2. 報告基礎和重要會計政策摘要
呈現基礎
公司的基本報表已按照美國通用會計準則（"U.S. GAAP"）編制。
未經審計的中期簡明財務信息
附註列出的截至2024年9月30日的簡明資產負債表，截至2024年9月30日止三個和九個月的簡明綜合損益表和簡明股東權益表，以及截至2024年9月30日和2023年止九個月的簡明現金流量表均爲未經審計。未經審計的中期簡明財務報表是根據經審計的年度財務報表的相同依據編制的，並且在管理層意見中，反映了按2024年9月30日公司資產負債狀況、三個和九個月截至2024年9月30日和2023年的業務結果以及截至2024年9月30日和2023年的現金流量等所需的所有調整，其中僅包括正常重複調整。有關截至2024年9月30日及2023年的三和九個月的財務數據和其他信息也是未經審計的。截至2024年9月30日的三和九個月的結果不一定反映可預期的2024年12月31日，任何其他中間期間或將來年度或時間段的結果。這裏包括的2023年12月31日資產負債表來源於該日期的審計財務報表。部分披露從中期簡明財務報表中精簡或省略。因此，應閱讀這些未經審計的中期簡明財務報表與公司截至2023年12月31日的以及包括在公司年度報告10-K中的截至2023年12月31日的審計財務報表共同閱讀。如在2024年3月29日提交給美國證券交易委員會（「SEC」）的文件中所述。
風險和不確定性
流動性
在首次公開募股之前，公司的業務歷來是通過發行可贖回可轉換優先股來融資的。自成立以來，公司已經遭受了重大損失，並且經營活動產生了負淨現金流。截至2024年9月30日和2023年9月30日的九個月，公司分別錄得淨虧損$
截至2024年9月30日，公司現金、現金等價物和投資額爲$
9
分部
公司作爲 業務運營和管理其業務。
使用估計
按照美國通用會計準則編制財務報表要求管理層進行影響資產和負債的報告金額和披露截至財務報表日期的附屬資產和負債金額，以及報告期間費用金額的估計和判斷。管理層定期評估其估計，包括涉及研發應計費用、資產和負債的公允價值以及以股票爲基礎的補償。管理層根據歷史經驗和管理層認爲在情況下合理的各種其他市場特定和相關假設來確定其估計。實際結果可能不同於這些估計。
研發費用
所有研發支出，包括由第三方執行的工作，在發生時被列爲費用。研發成本包括薪水和其他與人員相關的費用，包括相關的以股票爲基礎的補償、諮詢費用和設施成本，以及支付給代表公司進行某些研發活動的其他實體的費用。在收到用於研發的貨物或服務之前支付的款項被資本化，直到收到貨物或服務。
作爲準備財務報表過程的一部分，公司估計其應計費用。該過程涉及審查報價和合同，確定已代表公司執行的服務，估計已執行的服務水平以及爲尚未向公司開具發票或以其他方式通知實際成本的服務所發生的成本。公司的大多數服務提供商按月延遲發票服務，或在達到合同里程碑時發票。公司根據每個報告期末公司已知事實和情況，對其應計費用進行估計。公司應計研發費用中的重要估計與與合同製造、臨床和其他研究機構、學術研究中心以及其他供應商發生的費用有關，這些費用是與公司尚未結算的研究和開發活動相關的。
按股票補償計算的費用
公司根據授予日期估計的每個獎項的公平價值，衡量和確認向員工、董事和非員工授予的股權分類股權獎勵的補償費用。員工和董事獎勵的補償費用根據整個獎項的服務期間（通常是整個獎項的獲 vesting 期間）以直線方式確認。賠償費用將隨着放棄的發生進行調整。非員工獎勵的補償費用的確認與公司如果用現金支付所購買的商品或提供的服務的方式和期間相同。
用於計算按股票爲基礎的補償費用的股票期權的公允價值的評估模型是 Black-Scholes 期權定價模型（Black-Scholes 模型）。Black-Scholes 模型要求管理層對計算中使用的變量做出假設和判斷，包括預期期限、普通股的預期波動率、假定的無風險利率以及公司可能支付的預期分紅。管理層使用預期期限的簡化計算（基於獲 vesting 日期和合同期限結束之間的中點）作爲其股票期權的預期期限，因爲公司已經得出結論，其股票期權歷史不提供合理的基礎來估計預期期限。波動率基於具有相同特徵的實體普通股的歷史波動率的平均值。風險類似公司。 無風險利率基於授予期內與期權預期壽命對應的美國國債收益率曲線。 公司使用假定的分紅派息率
10
對於包含績效條件的期權獎勵，在績效條件可能得到滿足的時期內確認薪酬成本。用於期權意識如果歸因於流動性事件或控制權變更，則在事件發生之前，不太可能達到業績條件。因此，在實現基於績效的歸屬條件之前，不會確認任何薪酬支出。
現金和現金等價物
公司將購買時到期日爲三個月或更短的所有高流動性投資視爲現金等價物。由貨幣市場基金組成的現金等價物按公允價值列報。截至2024年9月30日和2023年12月31日，該公司的現金及現金等價物爲美元
投資
投資包括美國國債、商業票據、美國政府機構證券、資產支持證券和公司債務證券。公司的所有投資均被歸類爲可供出售，按估計公允價值記賬，並以現金等價物、短期投資或長期投資形式報告。管理層在收購投資時確定投資的適當分類，並在每個資產負債表日評估此類分類的適當性。合同到期日超過12個月的投資被視爲長期投資。出售投資的成本（如果有）基於特定的識別方法。
可供出售投資的未實現收益和虧損作爲股東權益（赤字）的單獨組成部分在累計的其他綜合（虧損）收益中列報。對於處於未實現虧損狀況的可供出售債務證券，公司首先評估其是否打算出售，或者更有可能需要在收回攤銷成本基礎之前出售該證券。如果滿足有關出售意向或要求的任一標準，則證券的攤銷成本基礎將減記爲公允價值，並在運營報表和綜合虧損報表中的其他收益（支出）中確認。如果兩個標準都不滿足，公司將評估公允價值的下降是否與信貸相關因素或其他因素有關。在進行評估時，管理層會考慮公允價值在多大程度上低於攤銷成本、評級機構對證券評級的任何變化以及與證券特別相關的不利條件等因素。與信貸相關的減值損失受公允價值小於攤銷成本基礎的金額的限制，通過其他收入淨額的信貸損失備抵進行記錄。由於非信貸因素導致的公允價值下降低於攤銷成本基礎而造成的任何未實現虧損與未實現收益一起作爲股東權益的單獨組成部分在累計其他綜合收益（虧損）中確認。可供出售證券的已實現收益和虧損以及公允價值的下降（如果有）包含在經營報表和綜合虧損表中淨額的其他收益中。
爲了識別和衡量與信貸相關的減值，公司的政策是將適用的應計利息排除在相關證券的公允價值和攤銷成本基礎上。公司選擇及時註銷無法收回的應計應收利息餘額，公司的定義爲拖欠90天的到期利息。應計利息註銷將通過沖銷利息收入來記錄。應計應收利息記入公司未經審計的中期簡明資產負債表上的預付費用和其他流動資產。
截至2024年9月30日和2023年12月31日，該公司的投資額爲美元
11
信用風險的集中度
可能使公司面臨信用風險集中的金融工具包括現金、現金等價物和投資。該公司的現金通過美國的金融機構進行投資。該公司的投資包括由高評級公司實體或美國政府發行的債務證券和資產支持證券。公司對任何個體公司實體的風險敞口均受其投資政策的限制。存款已經並將繼續超過聯邦保險限額。該公司將其現金等價物投資於高評級貨幣市場基金。公司在此類帳戶中沒有出現任何信貸損失。
如果持有現金的金融機構違約，公司將面臨信用風險，金融（簡稱 「資產負債表」）。2023年3月，加州金融保護與創新部關閉了該公司使用的一家金融機構，該部指定聯邦存款保險公司爲接管人。直到 2024 年 9 月 30 日，該公司沒有資產負債表外的信用風險集中。
政府合同
2022年9月，公司獲得了費用報銷合同授予，根據該合同，公司有資格獲得高達美元
撥款協議
2022年9月，公司與佐治亞大學研究基金會（「UGARF」）簽訂了分包協議，最多可獲得美元
2023年9月，公司與比爾和梅琳達·蓋茨基金會（「BMGF」）簽訂了贈款協議，以提供高達 $ 的資金
2024年7月，公司修訂了與UGARF簽訂的2022年分包合同協議，要求提供金額爲美元的額外資金
2024年9月，公司與BMGF簽訂了第二年的延續撥款協議，以提供高達$的資金
12
公司根據ASC 958-605，不以營利爲目的實體 - 收入確認，在符合資格的成本發生且滿足贈款協議條件時確認贈款收入。當贈款收入的收取合理確定時，公司將其所發生的研發費用減少，並記錄相應的應收贈款。現金在發生符合條件的成本之前從贈款中收到時，記錄爲負債，並作爲減少所發生的符合條件的研發費用進行確認（見註釋4—資金安排）。
綜合損失
綜合損失包括淨損失和排除在淨損失之外的某些股東權益變動。公司的其他綜合損失由可供出售投資的未實現損益的淨變動組成。在截至2024年和2023年9月30日的九個月中，公司的未實現淨損失爲$
每股淨虧損
歸屬於普通股股東的基本淨損失每股是通過將歸屬於普通股股東的淨損失除以期間內流通的普通股加權平均數計算得出的，不考慮潛在的稀釋性證券。歸屬於普通股股東的稀釋淨損失每股是通過將歸屬於普通股股東的淨損失除以期間內流通的普通股和潛在稀釋性證券的加權平均數來計算的。根據稀釋淨損失每股的計算，股票期權、未歸屬的限制性股票單位（RSUs）和與未歸屬的股票期權相關的可回購普通股被視爲潛在的稀釋性證券。每股歸屬於普通股股東的基本和稀釋淨損失是按照參與證券所要求的兩類方法進行呈現的。公司還將早期行使的股票期權所發行的可回購股票視爲參與證券，因爲這些股票的持有者在普通股支付股息時擁有不失權的股息權利。早期行使並受可回購條款限制的股票持有者沒有合同義務在公司的損失中分享。因此，淨損失完全歸屬於普通股股東。由於公司在所有報告期間均報告了淨損失，稀釋淨損失每股與這些期間的基本淨損失每股相同，因爲潛在稀釋性證券的影響將是反稀釋的。
重組費用
重組費用主要包括員工遣散費和其他與終止員工相關的費用，部分被與某些被終止員工簽署的諮詢協議相關的股票薪酬費用的減少所抵消。公司依據終止福利是基於持續福利安排還是一次性福利安排來記錄重組費用。公司按照ASC 712《非退休後就業福利》對已經記錄的持續福利安排進行會計處理，例如那些由僱傭協議或預先存在的遣散政策所記錄的安排。根據ASC 712，後就業福利的負債在義務可能發生且可以合理估計的情況下記錄。公司按照ASC 420《退出或處置成本義務》對一次性就業福利安排進行會計處理。
13
JOBS法案會計選舉
本公司是根據2012年《啓動我們業務啓動法案》（「JOBS 法案」）定義的新興成長公司。根據JOBS 法案，新興成長公司可以推遲採用JOBS 法案頒佈後發佈的新的或修訂的會計標準，直到這些標準適用於私營公司。本公司已選擇利用此擴展過渡期，以遵守對上市公司和私營公司有效日期不同的新或修訂會計標準，直到以下兩者中發生較早的時間：（i）本公司不再是新興成長公司，或（ii）積極且不可撤銷地選擇退出《JOBS 法案》提供的擴展過渡期。本公司可以利用這些條款最多五年（即到2027年3月），除非本公司在更早的日期停止成爲新興成長公司。因此，這些基本報表可能與按上市公司有效日期遵守新或修訂會計公告的公司不具可比性。
最近未採納的會計聲明
不時地，財務會計標準委員會（「FASB」）或其他標準制定機構發佈新的會計公告，並在指定的生效日期由本公司採納。除非另有說明，本公司相信，近期發佈的尚未生效的標準不會對其簡明基本報表和披露產生重大影響。作爲一家「新興成長」公司，本公司計劃利用某些來自各種報告要求的臨時豁免，並利用額外的過渡救濟。
在2023年11月，FASB發佈了ASU 2023-07，部門報告（主題280）：可報告部門披露的改進（「ASU 2023-07」）。ASU 2023-07中的修訂旨在改善可報告部門的披露，主要通過增強對重大部門費用的披露。ASU 2023-07適用於2023年12月15日之後開始的年度期間，以及2024年12月15日之後開始的中期期間。本ASU中的修訂應追溯適用於財務報表中呈現的所有以前期間。允許提前採用。本公司正在評估這一標準對其基本報表和相關披露的影響。
在2023年12月，FASB發佈了ASU 2023-09，《所得稅（主題740）：所得稅披露的改進》（以下簡稱「ASU 2023-09」）。ASU 2023-09要求增強有關稅率調節和支付的所得稅信息的年度披露。ASU 2023-09自2024年12月15日之後開始的年度期間生效，並可前瞻性或追溯性採用。允許提前採用。公司正在評估此標準對其基本報表和相關披露的影響。
公司在資產和負債的評估中，使用在交易當日有市場參與者之間的買方或賣方交易中產生的價格來衡量其資產和負債的公允價值。公司制定了基於用於衡量公允價值的輸入的公允價值層次結構。
公司自2023年1月1日起採用ASU 2016-13。公司將某些金融資產和負債計入公允價值。有關公允價值的會計指導框架提供了一種衡量公允價值的方法，澄清了公允價值的定義，並擴大了有關公允價值衡量的披露。公允價值被定義爲在報告日市場參與者之間進行有序交易時可獲得的出售資產或轉讓負債（退出價格）。會計指導建立了一個三層次的層次結構，優先考慮在衡量公允價值時所使用的估值方法的輸入，如下所示：
14
公司的主要金融工具包括現金、現金等價物和投資、預付費用、應付賬款以及應計負債。除了現金等價物和投資外，公司金融工具的賬面金額因其相對較短的到期時間而與公允價值大致相符。
下表展示了公司的金融資產，包括分類爲可供出售投資的現金等價物和投資，這些資產定期按公允價值計量（以千計）：
|
|
2024年9月30日 |
|
|||||||||||||||
|
|
級別 |
|
攤銷成本 |
|
|
未實現收益 |
|
|
未實現損失 |
|
|
估算公允價值 |
|
||||
貨幣等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
|
一級 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
商業本票 |
|
二級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
短期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國財政證券 |
|
一級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
商業本票 |
|
二級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
美國政府機構證券 |
|
二級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
企業債務證券 |
|
二級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
總計 |
|
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
2023年12月31日 |
|
|||||||||||||||
|
|
級別 |
|
攤銷成本 |
|
|
未實現收益 |
|
|
未實現損失 |
|
|
估算公允價值 |
|
||||
貨幣等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
|
一級 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
短期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國財政證券 |
|
一級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
美國財政證券 |
|
二級 |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
商業本票 |
|
二級 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
美國政府機構證券 |
|
二級 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
資產支持證券 |
|
二級 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
企業債務證券 |
|
二級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
長期投資: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國財政證券 |
|
一級 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
美國政府機構證券 |
|
二級 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
總計 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
公司將其貨幣市場所有基金類型和美國國債證券分類爲公允價值層級中的第一級資產，價值基於活躍市場中的報價市場價格，且沒有估值調整。
公司將其對美國國債證券、商業票據、美國政府機構證券、資產支持證券和公司債券證券的投資分類爲公允價值層級中的第二級。這些投資的公允價值通過考慮從第三方定價服務獲得的估值來估算。定價服務採用行業標準估值模型，包括收入和市場基礎的方法，所有顯著輸入均可觀察到，直接或間接，來估算公允價值。這些輸入包括已報告的交易和同類或相似證券的經紀商/交易商報價、發行人信用利差、基準證券、基於歷史數據的提前還款/違約預測及其他可觀察輸入。
截至2024年9月30日,
截至2024年9月30日，公司的短期投資到期日距資產負債表日不足一年。
15
公司沒有意向在未實現的虧損頭寸中賣出證券，並且不認爲他們需要在未攤銷成本基礎收回證券之前出售證券。此外，公司評估了其證券的信用損失，並認爲市場價值下降主要歸因於當前經濟和市場條件，而非信用相關。因此，
截至2024年9月30日和2023年12月31日公司應收利息爲$
注4.資金安排
NIAID合同
2022年9月，公司收到NIAID授予的成本報銷合同，用於支持前期、1期研究和其他活動，以推動epetraborole進入晚期發展階段，用於治療急性全身型痛風桿菌病和其他生物威脅病原體。公司有資格在總共的期限內獲得高達$
截至2024年9月30日 公司截至2023年12月31日已記錄應收賬款$
UGARF Grant
In September 2022, the Company entered into a subcontract agreement with the UGARF to conduct preclinical activities on behalf of UGARF (「UGARF Agreement」). The UGARF reimburses the Company under an award from Wellcome. The Company is eligible to receive up to $
BMGF資助
2023年9月，公司獲得了來自比爾和梅琳達·蓋茨基金會的成本報銷合同獎勵（「2023 BMGF協議」），根據該協議，公司獲得了
16
2024年9月，公司與比爾及梅琳達·蓋茨基金會簽訂了第二年的延續費用補償合同（「2024年BMGF協議」），根據該合同，公司獲得了 $
截至2024年9月30日和2023年12月31日，該公司的記錄爲美元
注5. 合作與許可協議
Anacor許可協議
在2019年11月，公司與Anacor製藥公司（「Anacor」）簽訂了一項獨佔的全球許可協議，涉及Anacor控制的某些化合物和其他知識產權，用於治療、診斷或預防所有人類疾病（「Anacor許可」）。Anacor許可將在最後一項版稅條款到期時終止。任何一方可因另一方的重大違約在補救期後終止Anacor許可，或在與另一方相關的某些破產事件發生後立即終止。公司有權在書面通知後，在首次監管批准之前或之後的通知之前，方便地終止協議。
作爲交換，公司支付了Anacor一筆不可退款的$
公司還同意在各項開發里程碑達成時向Anacor支付進一步款項，累計最高爲$
17
在2021年12月，公司對Anacor許可進行了修訂，涉及Anacor控制的某些化合物和其他知識產權，用於治療、診斷或預防某些細菌病原體（「Anacor許可修訂」）。Anacor許可修訂對Anacor許可的財務條款沒有影響。
在截至2024年和2023年9月30日的三個月和九個月期間，沒有確認任何開發、監管、商業或銷售里程碑或特許權使用費支付。因此，公司沒有在合併的運營報表中記錄任何研發費用——相關方。
Brii生物科學協議
在2019年11月，公司簽署了一項許可協議，授予Brii Biosciences Limited在中國、香港、臺灣和澳門獨家開發和商業化某些化合物的權利，用於治療人類疾病。公司沒有
注6. 資產負債表元件
應計負債
應計負債包括以下內容（以千爲單位）：
|
|
9月30日, |
|
|
2023年12月31日, |
|
||
|
|
2024 |
|
|
2023 |
|
||
應計研發相關費用 |
|
$ |
|
|
$ |
|
||
應計專業服務費用 |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
|
||
總應計負債 |
|
$ |
|
|
$ |
|
||
注7.承諾和或有事項
備用金
公司不時可能會參與到普通業務過程中產生的法律程序中。截至2024年9月30日和2023年12月31日，公司並未受到任何重大法律程序的影響，目前公司也不是任何法律程序的當事方。如果結果對公司不利，管理層認爲，這種情況目前預計將在個別或總體上對公司的業務、財務狀況或整體運營結果產生重大不利影響。
18
擔保和賠償
根據特拉華州法律以及經過修訂的公司章程和章程細則，並根據與某些高管和董事的賠償協議，公司爲其高管和董事在其請求下以此身份提供賠償，針對特定事件或情況，受限於某些限制。賠償期的期限持續到高管或董事可能面臨的任何因其在此身份下的作爲或不作爲所產生的程序爲止。未來賠償的最大潛在金額是無限的；然而，公司目前持有董事和高管責任保險。該保險限制了公司的風險，並可能使其能夠收回部分任何未來支付的金額。公司認爲這些賠償義務的公允價值是微乎其微的。因此，公司沒有在任何報告期內確認與這些義務相關的任何負債。
輔助全球健康協議
2019年和2020年，輔助全球健康科技基金L.P.（「輔助」）投資於公司的A系列可贖回可轉換優先股融資時，公司與輔助簽訂了全球健康協議，根據該協議，公司同意通過公共衛生項目和私營購買者在低收入和中低收入國家（根據世界銀行和協議的定義）支持創新且價格合理的藥物的創建。
輔助的投資支持公司產品候選藥物epetraborole的發展，以用於協議中定義的美沙酮流行和美沙酮高風險國家。這些全球准入承諾自A系列可贖回可轉換優先股融資的結束日期起生效，並將保持有效，直到輔助不再是公司的股東。
全球健康協議包含公司同意的各種肯定和否定條款，包括合理努力使用非稀釋資金開發約定產品，並在目標國家向有需要的人提供幫助，前提是公司不以虧本價格銷售產品。其他條款包括禁止使用投資進行宣傳，試圖影響立法，影響任何公共選舉或選民登記活動，或促進恐怖活動，以及遵守某些環保、社會和治理要求以及反腐敗要求。如果公司未能遵守這些非財務條款，則Adjuvant可能有權要求償還其未用於全球健康協議中列明目的的任何投資部分。
與Adjuvant在2021年對公司的B系列可贖回可轉換優先股融資的投資相結合，公司簽署了一份修訂和重述的全球健康協議（「Adjuvant修正案」）。Adjuvant修正案擴大了Adjuvant的投資支持，包括爲公司產品候選者epetraborole的開發，旨在滿足結核病流行和結核病高風險國家的需求。
與Adjuvant在公司首次公開募股（IPO）中的普通股投資相關，公司簽署了一份修訂和重述的全球健康協議，日期爲2022年3月24日（「Adjuvant IPO修正案」）。作爲Adjuvant IPO修正案的一部分，Adjuvant於2022年3月購買了
19
注8產權
普通股
公司的公司章程經修改，授權公司發行最多
Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors (the 「Board」). No dividends have been declared to date.
On April 6, 2023, the Company entered into a Sales Agreement with Cowen and Company, LLC as the Company’s Agent, to issue and sell up to an aggregate gross sales of $
2023年8月15日，公司與Cowen and Company, LLC、Leerink Partners LLC和Evercore Group L.L.C.簽訂了一份包銷協議，作爲多家包銷商的代表發行並賣出
作爲未來發行的普通股份，按照摺合計算基準，截至2024年9月30日和2023年12月31日，包括以下內容： 董事會保留的普通股份，按照折算計算基準，截至2024年9月30日和2023年12月31日，包括以下內容：
|
|
9月30日, |
|
|
2023年12月31日, |
|
||
|
|
2024 |
|
|
2023 |
|
||
已發行且流通的期權 |
|
|
|
|
|
|
||
未獲授限制性股票單位 |
|
|
|
|
|
— |
|
|
授權用於未來發行的期權 |
|
|
|
|
|
|
||
ESPP，授權用於未來發行 |
|
|
|
|
|
|
||
總計 |
|
|
|
|
|
|
||
優先股
公司章程，經修訂，授權公司最多發行
20
股東權益計劃
2024年8月15日，公司與Equiniti Trust Company, LLC簽訂了一項權利協議，該協議由董事會批准。
注9. 股權激勵計劃和基於股票的補償
2022股權激勵計劃
公司在首次公開募股（IPO）完成時採納了2022股權激勵計劃（「2022計劃」），該計劃規定向公司員工授予激勵股票期權（「ISO」），並向員工、董事和顧問授予非法定股票期權（「NSO」）、股票增值權、限制性股票獎勵、限制性股票單元（「RSU」）、業績獎勵和其他形式的獎勵。截至2024年9月30日，,
公司最初爲2022計劃預留了
根據2022計劃可能發行的公司普通股的初始數量將不超過
自公司成立以來至2024年9月30日，公司已向員工、董事和顧問發放了期權和RSUs。截至2024年9月30日,
21
ISOs granted to newly hired employees under the 2022 Plan generally vest
股票補償費用
下表總結了公司在截至2024年和2023年9月30日止三個和九個月內，在利潤表和綜合損益表中承認的以股票爲基礎的薪酬費用的組成部分。 三個和九個月截至2024年和2023年9月30日結束時的情況（以千爲單位）：
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
研發費用 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
一般和行政費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總計 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
期權活動
股票期權活動總結如下：
|
|
期權總數未公開 |
|
|
加權平均 |
|
|
加權平均剩餘合同期限 |
|
|
總內在價值 |
|
||||
2023年12月31日未行使的股票期權 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
已授予 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
已行權 |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
被取消 |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
已投資並預計在2024年9月30日完全投資 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
截至2024年9月30日可行使的期權 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
截至2024年9月30日，公司尚未承認的股權報酬費用爲 $
2024年9月30日結束的九個月內授予的期權的加權平均授予日期公允價值爲 $
22
RSU活動
RSU賦予持有者在歸屬時獲得公司普通股的權利。RSU的公允價值基於授予日期公司普通股的收盤價格。
RSU活動的總結如下：
|
|
單位數目 |
|
|
加權平均 |
|
||
2023年12月31日的未歸屬股份 |
|
|
— |
|
|
$ |
— |
|
已發行 |
|
|
|
|
$ |
|
||
已歸屬和釋放 |
|
|
( |
) |
|
$ |
|
|
被取消 |
|
|
( |
) |
|
$ |
|
|
2024年9月30日前尚未獲授的股份 |
|
|
|
|
$ |
|
||
2022員工股票購買計劃
公司的2022年員工股票購買計劃（「ESPP」）有兩個元件：一個是旨在根據《法典》第423條款合格的「員工股票購買計劃」（「423 元件」），另一個是未旨在合格的（「非423元件」）。ESPP允許符合條件的員工通過工資扣除以折扣價購買公司的普通股。
在某些資本化事件的情況下，可能會進行調整，
截至2024年9月30日的三個月和九個月期間，公司確認了一筆微不足道的金額和$
注10每股淨虧損
以下表格列示了基本和攤薄每股淨虧損的計算（以千爲單位，除了股數和每股金額）。
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
分子： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
歸屬於普通股股東的淨損失 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
分母： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
用於計算每股虧損的加權平均普通股，基本和稀釋後。 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
每股普通股股東淨虧損，基本與稀釋後 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
23
由於公司在所有報告期內處於虧損地位，基本每股淨虧損與每股稀釋淨虧損相同，因爲包括所有潛在的普通股份將具有反稀釋效果。
|
|
9月30日, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
已發行和未行使期權 |
|
|
|
|
|
|
||
未歸屬的RSU |
|
|
|
|
|
— |
|
|
尚未實現的期權股普通股提前行使 |
|
|
|
|
|
|
||
總計 |
|
|
|
|
|
|
||
附註11. 關聯交易
截至2024年和2023年9月30日的九個月內公司分別擁有未行使的權證作爲負債。
註釋 12.重組費用
2024 年 8 月 8 日，該公司宣佈削減約
24
項目1 控件2. 管理層的財務狀況和業績分析。
以下關於我們截至2024年9月30日的財務狀況及2024年和2023年截止9月30日的三個月和九個月營業結果的討論與分析，應與我們在本季度報告表10-Q（「表10-Q」）中包含的簡明基本報表及相關附註共同閱讀，以及作爲我們2023年12月31日結束的年度報告表10-K一部分包含的審計基本報表和相關附註。 除非本表10-Q中另有說明或上下文另有要求，否則本表10-Q中對「AN2」、「公司」、「我們」、「我們」和「我們的」的引用均指代AN2 Therapeutics, Inc.
本討論和分析以及本表格10-Q的其他部分包含基於當前信念、計劃和預期的前瞻性聲明，這些聲明與未來事件及我們的未來財務績效相關，涉及風險、不確定性和假設，例如關於我們對業務的意圖、計劃、目標和預期的聲明。我們的實際結果及某些事件的時間安排可能因多種因素而與這些前瞻性聲明所描述或暗示的內容有重大差異，包括本表格10-Q第二部分第1A項中列出的「風險因素」。另請參閱標題爲「關於前瞻性聲明的特別說明」的部分。
概覽
我們是一家生物製藥公司，專注於從我們的硼化學平台發現和開發新型小分子療法。AN2目前正在開發一系列基於硼的化合物，針對恰加斯病、非結核分枝桿菌（「NTM」）和墨爾登熱，同時還有早期階段的項目，專注於傳染病和腫瘤學領域的目標。
自2019年11月開始運營以來，我們將幾乎所有的研發資源投入到了開發首個藥物候選產品epetraborole上，該產品是用於治療難治性 複合物的 複雜（「MAC」）肺部疾病，是NTm肺部疾病的一種形式。2024年8月8日，我們宣佈了EBO-301研究的2/3期評估epetraborole在優化背景方案（「OBR」）之上的療效難治性MAC肺病的二期部分的頭號結果。研究的二期部分達到了展示一種新型患者報告的結果（PRO）工具和epetraborole + OBR組（39.5％）與安慰劑 + OBR組（25.0％；治療差異13.9％，p=0.19）具有更高PRO基礎臨床反應率的主要目標。在第6個月的痰培養轉變率，即關鍵次要終點，治療組之間相似（epetraborole + OBR組爲13.2％，安慰劑 + OBR組爲10.0％；治療差異3.4％，p=0.64）。在試驗中，epetraborole通常耐受性良好。
在宣佈這些結果後，我們開始進一步審查第2階段的數據，以確定該計劃未來的最佳發展路徑。到目前爲止，我們已經確定在兩項患者報告結果（PRO）分析中有名義上具有統計學意義的結果，表明epetraborole患者在改善臨床症狀方面優於安慰劑患者。首個指標爲預先設定的生活質量（支氣管擴張）（QoL-B）PRO的次要終點顯示，通過最小二乘均值（LSM）方法計算，接受epetraborole治療的患者在症狀改善方面表現出顯著統計學意義。值得注意的是，這個是同一終點Insmed, Inc.最近宣佈爲原發性端點的ENCORE第3期MAC治療試驗中的。第二個是後驗分析 LSm 計算的MACrO2 PRO結果，也顯示出EPetraborole患者與安慰劑組相比在臨床症狀改善方面具有顯著統計學意義。我們相信這兩個發現提供了潛在的臨床概念證明，並且兩項PRO測量改進似乎符合FDA的建議，反映在最近的指導文件中，即用於支持NTm藥物批准的試驗應將基於PRO的臨床結果作爲主要終點。我們將繼續進行數據分析，並計劃於2025年上半年要求與FDA進行第2階段結束會議，討論重新啓動TR-MAC關鍵第3期試驗的潛力。
在我們持續評估epetraborole在NTm中的未來發展機會時，我們已經推進了我們的管線項目。到2025年，我們預計將在查加斯病中啓動一期臨床試驗，並在美利奧病中進行二期概念驗證試驗。我們還預計將在腫瘤學和感染疾病的早期階段項目中取得進展，以在2025年生產多達三種開發化合物。
25
2024年8月8日，我們還宣佈將我們的員工減少約50%，該決定經董事會批准，與我們計劃的重組有關，重組是在停止EBO-301研究後進行的，以進一步延長我們的運營資金。與裁員相關，我們確認了截至2024年9月30日的三個月和九個月內的遣散費及其他費用共220萬美元，主要包括與遣散支付和其他員工終止相關的費用260萬美元，部分抵消了由於對與某些被解僱員工簽署的諮詢協議應用修改會計法而導致的股票補償費用減少40萬美元。我們預計，到2024年底，裁員將基本完成。
到目前爲止，我們已經承擔了重大的營業費用。我們預計隨着我們推進當前和未來的產品候選物通過臨床前、非臨床和臨床開發，尋求監管批准，併爲商業化提前準備並在獲得批准後進行；收購、發現、驗證和開發額外的產品候選物；獲取、維護、保護和執行我們的知識產權組合；僱傭額外人員；並承擔作爲一家上市公司而產生的費用。
我們沒有任何獲批銷售的產品，自公司成立以來也未產生任何營業收入。截止2024年9月30日的九個月內，我們的淨損失分別爲4380萬美元和4780萬美元。到2024年9月30日，我們的累計虧損爲19830萬美元。我們的運營資金來源於可贖回可轉換優先股的銷售和發行，以及我們的首次公開募股（「IPO」）、市場發行股票計劃（「ATm Offering」）和承銷發行（「Underwritten Offering」）的收入。從2019年11月到2020年10月，我們通過銷售A系列可贖回可轉換優先股籌集了1200萬美元的資金。2021年3月，我們通過銷售B系列可贖回可轉換優先股籌集了8000萬美元的資金。在2022年3月和4月，我們完成了首次公開募股，籌得的總收入爲7940萬美元，扣除承銷折扣、佣金和發行費用後的淨收入爲7040萬美元。2023年6月，我們通過市場發行籌集的總收入爲2000萬美元，扣除佣金和發行費用後的淨收入爲1910萬美元。2023年8月，我們通過承銷發行籌集的總收入爲7000萬美元，扣除佣金和發行費用後的淨收入爲6550萬美元。
截至2024年9月30日，我們擁有9340萬美元的現金、現金等價物和投資。我們相信我們可供使用的現金將足以支持我們按照當前經營計劃進行計劃的運營至少延續本10-Q表格日期後的十二個月。
我們產生產品營業收入的能力將取決於我們一個或多個產品候選者的成功開發、監管批准和最終商業化。在我們能夠從產品銷售中產生收入之前，如果有的話，我們預計將通過私人或公開股權或債務融資、與企業來源的合作或其他安排、非稀釋性融資或其他融資來源來爲我們的運營融資。適當的資金可能無法以可接受的條款提供給我們，甚至完全無法獲得。如果我們未能在需要時籌集資本或達成這樣的協議，我們可能會不得不顯著延遲、縮減或停止我們產品候選者的開發和商業化。
我們計劃繼續使用第三方服務提供商，包括外部研究實驗室、臨床研究組織（「CROs」）和合同製造組織（「CMOs」），以進行我們的臨床前、非臨床和臨床開發，並製造和供應在開發和商業化我們的產品候選者過程中使用的材料。我們目前沒有銷售團隊。如果我們獲得任何產品候選者的監管批准，我們打算聘請並部署一個專業的銷售團隊，這將增加我們的運營成本。
由於我們的業務、臨床開發和監管工作等多種因素的持續發展，我們的運營結果可能會因年度和季度而有很大變化，因此我們認爲不同期間之間對我們運營結果的比較可能沒有實際意義，也不應作爲我們未來表現的指示。有關與我們的業務、臨床開發和監管工作等多種因素相關的風險和不確定性的更多信息，請參見「第二部分 第1A項—風險因素」。
26
我們經營業績的組成部分
運營費用
研發費用
我們的研發費用幾乎全部由與我們首個產品候選者epetraborole以及其他產品候選者的開發相關的費用組成。這些費用包括與第三方（包括CRO、CMO、臨床前和非臨床測試機構，以及學術和非營利機構）達成協議所產生的費用。研發費用還包括諮詢費、許可費、薪資和人員相關費用，包括工資和獎金、工資稅、員工福利成本以及我們研發員工的非現金股權激勵。我們將在發生時將內部和外部的研發費用進行支出。
我們預計未來研發費用將大幅增加，因爲我們將我們的產品候選者推進到臨床試驗並尋求監管批准。進行必要的臨床研究以獲得監管批准的過程既昂貴又耗時。隨着臨床研究進入後期階段，通常變得規模更大且費用更高，而我們需要對與臨床研究費用相關的費用計提做出估計，這涉及一定程度的估算。我們產品候選者的成功開發存在很高的不確定性。我們產品候選者的實際成功概率可能受到與藥物開發相關的各種風險和不確定性的影響，包括在本10-Q表格中「風險因素」部分中列出的風險。目前，我們無法合理估計完成當前或任何未來產品候選者剩餘開發所需的性質、時間或成本。因此，由於這些不確定性，我們無法判斷我們的研發項目的持續時間和完成成本，以及我們何時以及在多大程度上能夠通過商業化和銷售產品候選者來產生營業收入。
一般和行政費用
我們的管理和行政費用主要包括工資和與員工相關的費用，包括薪水和獎金、工資稅、員工福利成本，以及非現金的基於股票的補償。其他管理和行政費用包括追求我們知識產權的專利保護的法律費用，以及審計、稅務、一般法律服務和其他外部諮詢與供應商服務的專業服務費用。我們預計未來我們的管理和行政費用將繼續增加，包括與法律、會計、監管和稅務相關的服務費用，這些費用涉及遵守納斯達克證券市場有限責任公司和證券交易委員會（"SEC"）的要求，以及董事和高管責任保險費用，以及投資者關係活動。
重組費用
我們的重組費用主要包括員工遣散費和其他與員工解僱相關的費用，同時減少了與某些被解僱員工簽訂的諮詢協議相關的股票獎勵支出。
其他收入，淨額
其他收入淨額包括我們在現金、現金等價物和投資上所賺取的利息收入和投資收入。
27
業務運營結果
2024年9月30日和2023年同比三個月的比較
下表列出了我們經營業績的重要元件：
|
|
三個月已結束 |
|
|
|
|
|
|
|
|||||||
|
|
九月三十日 |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
改變 |
|
|
百分比變化 |
|
||||
|
|
（以千計，百分比除外） |
|
|||||||||||||
運營費用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
研究和開發 |
|
$ |
8,287 |
|
|
$ |
14,429 |
|
|
$ |
(6,142 |
) |
|
|
(43 |
%) |
一般和行政 |
|
|
3,484 |
|
|
|
3,751 |
|
|
|
(267 |
) |
|
|
(7 |
%) |
重組費用 |
|
|
2,243 |
|
|
|
— |
|
|
|
2,243 |
|
|
|
100 |
% |
運營費用總額 |
|
|
14,014 |
|
|
|
18,180 |
|
|
|
(4,166 |
) |
|
|
(23 |
%) |
運營損失 |
|
|
(14,014 |
) |
|
|
(18,180 |
) |
|
|
4,166 |
|
|
|
(23 |
%) |
其他收入，淨額 |
|
|
1,267 |
|
|
|
1,473 |
|
|
|
(206 |
) |
|
|
(14 |
%) |
淨虧損 |
|
$ |
(12,747 |
) |
|
$ |
(16,707 |
) |
|
$ |
3,960 |
|
|
|
(24 |
%) |
研發費用
截至2024年9月30日三個月的研究與開發費用爲830萬美元，相比於截至2023年9月30日三個月的1440萬美元。610萬美元的減少主要是由於臨床試驗費用、人員相關費用、臨床前和研究費用、諮詢和外部服務以及其他成本的減少，部分抵消了化學制造和控制（「CMC」）費用的增加。臨床試驗費用下降了430萬美元，主要是由於終止了EBO-301試驗。人員相關費用下降了120萬美元，主要是由於我們的重組活動。臨床前和研究費用下降了80萬美元，主要是由於非稀釋性資金支持費用的時間安排和某些研究項目優先級的重新安排。其他成本減少了30萬美元，諮詢和外部服務減少了10萬美元。這些減少部分抵消了CMC成本增加的60萬美元，這是由於與Chagas和melioidosis項目相關的CMC活動增加，部分抵消了2023年特定中間和註冊批量製造活動的完成導致的較低成本。在截至2024年9月30日的三個月中，關於我們的資金安排的營業費用總計110萬美元得到了確認。在截至2023年9月30日的三個月中，關於我們的資金安排的營業費用總計40萬美元得到了確認，主要與CMC活動和研究項目有關。
以下表格顯示了我們按活動類型劃分的研發費用：
|
|
截至三個月 |
|
|
|
|
|
|
|
|||||||
|
|
9月30日, |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|
變更百分比 |
|
||||
|
|
(以千爲單位，除了百分比) |
|
|||||||||||||
臨床試驗費用 |
|
$ |
2,685 |
|
|
$ |
6,973 |
|
|
$ |
(4,288 |
) |
|
|
(61 |
%) |
人事相關費用 |
|
|
2,702 |
|
|
|
3,960 |
|
|
|
(1,258 |
) |
|
|
(32 |
%) |
諮詢和外部服務 |
|
|
1,286 |
|
|
|
1,426 |
|
|
|
(140 |
) |
|
|
(10 |
%) |
臨床前和研究費用 |
|
|
388 |
|
|
|
1,159 |
|
|
|
(771 |
) |
|
|
(67 |
%) |
化學制造和控制 |
|
|
1,102 |
|
|
|
537 |
|
|
|
565 |
|
|
|
105 |
% |
其他費用 |
|
|
124 |
|
|
|
374 |
|
|
|
(250 |
) |
|
|
(67 |
%) |
研發總費用 |
|
$ |
8,287 |
|
|
$ |
14,429 |
|
|
$ |
(6,142 |
) |
|
|
(43 |
%) |
一般和行政費用
截至2024年9月30日的三個月內，一般和管理費用爲350萬美元，而截至2023年9月30日的三個月爲380萬美元。300,000美元的減少主要歸因於專業服務費用減少300,000美元。
28
重組費用
截至2024年9月30日的三個月內，重組費用爲220萬美元，其中包括260萬美元的遣散費和其他員工解僱相關費用，部分抵消了因對某些被解僱員工簽訂的諮詢協議應用修改會計而導致的40萬美元股票補償費用的減少。在截至2023年9月30日的三個月內沒有重組費用。
其他收入，淨額
其他收入淨額爲2024年9月30日結束的三個月爲130萬美元，而2023年9月30日結束的三個月爲150萬美元。這20萬美元的減少是由於2024年現金、現金等價物和投資餘額較2023年更低所致。
2024年9月30日和2023年相比的九個月對比
下表列出了我們經營業績的重要元件：
|
|
九個月已結束 |
|
|
|
|
|
|
|
|||||||
|
|
九月三十日 |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
改變 |
|
|
百分比變化 |
|
||||
|
|
（以千計，百分比除外） |
|
|||||||||||||
運營費用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
研究和開發 |
|
$ |
35,091 |
|
|
$ |
39,952 |
|
|
$ |
(4,861 |
) |
|
|
(12 |
%) |
一般和行政 |
|
|
10,856 |
|
|
|
10,868 |
|
|
|
(12 |
) |
|
|
(0 |
%) |
重組費用 |
|
|
2,243 |
|
|
|
— |
|
|
|
2,243 |
|
|
|
100 |
% |
運營費用總額 |
|
|
48,190 |
|
|
|
50,820 |
|
|
|
(2,630 |
) |
|
|
(5 |
%) |
運營損失 |
|
|
(48,190 |
) |
|
|
(50,820 |
) |
|
|
2,630 |
|
|
|
(5 |
%) |
其他收入，淨額 |
|
|
4,391 |
|
|
|
2,986 |
|
|
|
1,405 |
|
|
|
47 |
% |
淨虧損 |
|
$ |
(43,799 |
) |
|
$ |
(47,834 |
) |
|
$ |
4,035 |
|
|
|
(8 |
%) |
研發費用
截至2024年9月30日的九個月，研發費用爲3510萬美元，而截至2023年9月30日的九個月爲4000萬美元。減少的490萬美元主要是由於CMC費用、臨床試驗成本、臨床前和研究學習費用及其他費用的減少，部分被諮詢和外部服務以及人員相關費用的增加所抵消。CMC費用減少了370萬美元，主要是由於2023年中間和註冊批次製造活動的完成，以及在終止EBO-301試驗後減少的epetraborole開發活動。臨床試驗費用減少了100萬美元，因EBO-301試驗的第二階段部分完成及第三階段部分終止。臨床前和研究學習費用減少了90萬美元，主要是由於與epetraborole相關的活動和合同研究的減少，部分被早期研究項目增加所抵消。其他費用減少了30萬美元。這些費用部分被諮詢和外部服務費用增加90萬美元以支持我們的合同和早期研究工作，以及人員相關費用增加10萬美元所抵消。在截至2024年9月30日的九個月期間，確認了200萬美元的營業費用報銷，涉及我們的資金安排。在截至2023年9月30日的九個月期間，確認了70萬美元的營業費用報銷，主要涉及CMC活動和研究工作。
29
以下表格顯示了我們按活動類型劃分的研發費用：
|
|
九個月已結束 |
|
|
|
|
|
|
|
|||||||
|
|
九月三十日 |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
改變 |
|
|
百分比變化 |
|
||||
|
|
（以千計，百分比除外） |
|
|||||||||||||
臨床試驗費用 |
|
$ |
13,128 |
|
|
$ |
14,113 |
|
|
$ |
(985 |
) |
|
|
(7 |
%) |
人事相關費用 |
|
|
12,047 |
|
|
|
11,959 |
|
|
|
88 |
|
|
|
1 |
% |
諮詢和外部服務 |
|
|
4,141 |
|
|
|
3,226 |
|
|
|
915 |
|
|
|
28 |
% |
臨床前和研究費用 |
|
|
2,175 |
|
|
|
3,066 |
|
|
|
(891 |
) |
|
|
(29 |
%) |
化學制造和控制 |
|
|
2,789 |
|
|
|
6,449 |
|
|
|
(3,660 |
) |
|
|
(57 |
%) |
其他開支 |
|
|
811 |
|
|
|
1,139 |
|
|
|
(328 |
) |
|
|
(29 |
%) |
研發費用總額 |
|
$ |
35,091 |
|
|
$ |
39,952 |
|
|
$ |
(4,861 |
) |
|
|
(12 |
%) |
一般和行政費用
截至2024年和2023年9月30日，管理和行政費用爲1090萬美元。
重組費用
截至2024年9月30日，重組費用爲220萬美元，包括260萬美元的遣散費和其他僱員解僱相關支出，部分被應用於與特定被解僱員工簽訂的諮詢協議的修改會計減少的40萬美元股權補償費用部分抵消。2023年9月30日前九個月沒有重組費用。
其他收入，淨額
其他收入淨額在2024年9月30日結束的九個月內爲440萬美元，而在2023年的九個月內爲300萬美元。140萬美元的增長是由於2024年與2023年相比，利率期貨較高，現金、現金等價物和投資餘額較高。
流動性和資本資源
流動性來源
自成立以來，我們一直處於淨虧損狀態。在截至2024年9月30日和2023年9月30日的九個月內，我們分別發生了淨虧損4380萬和4780萬，並預計在未來的期間將遭受大量額外虧損。截至2024年9月30日，我們的累計虧損爲19830萬。截至2024年9月30日，我們擁有現金、現金等價物和投資9340萬。根據我們當前的業務計劃，我們相信現有的現金將足以支持我們計劃的運營，至少在本表格10-Q日期後的12個月內。
到目前爲止，我們主要通過我們的承銷發行、ATm發行、首次公開募股和私募配售來爲我們的運營提供資金。在2023年8月，我們通過承銷發行大約產生了6550萬美元的收入，扣除佣金和發行費用。在2023年6月，我們通過ATm發行大約產生了1910萬美元的淨收益，扣除佣金和發行費用。在2022年3月和4月，我們從首次公開募股中獲得了大約7040萬美元的淨收益，扣除承銷折扣、佣金和發行費用。在首次公開募股之前，我們通過可贖回可轉換優先股的發行籌集了9160萬美元。在我們的首次公開募股結束時，所有未償還的可贖回可轉換優先股股份都轉換爲我們普通股的股份。
30
截至2024年3月31日，考慮到我們2024年4月從ATM計劃獲得的2360萬美元的淨收益之前，我們的現金及現金等價物和短期投資爲9930萬美元。我們預計根據我們當前的經營計劃，我們現有的現金、現金等價物和短期投資將足以支持我們的計劃運營，直到2026年。但是，我們對於我們財務資源支持我們的運營的期間的預測是一種前瞻性陳述，其中涉及風險和不確定性，實際結果可能有所不同。我們的估計是基於可能被證明是錯誤的假設，並且我們可能比預期更早地耗盡資本資源。此外，進行臨床試驗的過程是昂貴的，這些試驗的進展和開支時間是不確定的。
我們尚未獲得任何產品銷售批准，並且從與客戶簽訂的合同中也從未產生過任何營業收入。我們預計除非並直至獲得目前和未來任何產品候選藥物的監管批准並使其商業化，否則不會產生任何有意義的收入，但我們不知道這些事件將何時發生，或是否會發生。從歷史上看，由於開發我們的最初藥物候選產品 epetraborole 所需的持續努力，已經造成我們出現運營虧損和現金流負增長，包括進行正在進行的臨床前和非臨床研究、臨床試驗、註冊API和藥品生產材料製造，以及爲這些業務提供一般性和行政支持。我們預計隨着我們將產品候選推進臨床開發，並尋求監管批准、準備並且（如果獲批）進行商業化，並繼續進行研究和開發工作，我們的負現金流將在接下來的幾年內顯著增加。我們面臨着與開發新產品候選藥物通常相關的所有風險，並且可能會遇到意想不到的支出、困難、問題、延遲和其他未知因素，這些因素可能對我們的業務產生不利影響。此外，我們預計將繼續承擔作爲一家上市公司運營所需的成本。我們預計會需要在持續運營過程中獲得大量額外資金，因爲我們不預計在可預見的未來能夠從經營活動中獲得正現金流量。
在我們能夠從產品候選者的商業化中產生足夠的營業收入之前，甚至可能永遠不能，我們預計將通過公開或股權投資發行或債務融資來滿足我們未來的現金需求。額外的資本可能無法以合理的條件獲得，如果能夠獲得的話。如果我們無法以足夠的金額或對我們可接受的條件籌集額外的資金，我們可能不得不顯著推遲、縮減或停止開發或商業化一個或多個當前或未來的產品候選者。如果我們通過發行股權或可轉換債務證券籌集額外資金，可能會導致現有股東的股份稀釋和固定支付義務增加。此外，作爲向我們提供額外資金的條件，未來的投資者可能會要求並可能獲得優於現有股東的權利。如果我們負債，我們可能會受到限制我們運營的契約的約束，這可能會削弱我們的競爭力，例如限制我們承擔額外債務的能力，限制我們獲取、出售或許可知識產權的能力，以及可能會對我們經營業務的能力產生負面影響的其他操作限制。此外，我們與第三方簽訂的任何未來合作可能在短期內提供資本，但我們可能不得不放棄對我們產品候選者的寶貴權利或以不利於我們的條件授予許可。上述任何情況都可能嚴重損害我們的業務、財務狀況、運營結果和前景。
我們所依賴的運營資本需求預測是基於可能被證明不正確的假設，並且我們可能比預期更早地使用所有可用的資本資源。由於與研究、開發和產品候選者的商業化相關的衆多風險和不確定性，我們無法估計我們的運營資本需求的確切金額。我們未來的資本需求取決於許多因素，包括：
31
對於我們目前和未來任何產品候選開發過程中的任何這些變量或其他變量的結果的改變均可能顯著改變與該產品候選開發相關的成本和時間。此外，我們的運營計劃可能會在未來發生變化，我們將繼續需要額外的資金來滿足運營需求以及與這些運營計劃相關的資本需求。我們未來融入的任何債務融資可能會對我們施加額外的契約，限制我們的運營，包括限制我們承擔留置權或其他債務、支付分紅 派息、回購我們的普通股、進行某些投資或參與某些合併、合併或資產出售交易的能力。我們融入的任何債務融資或額外股本可能包含對我們或我們的股東不利的條款。
我們可能無法獲得足夠基金類型以可接受條款或根本沒有。如果我們未能在需要時籌集資金，可能會對我們的財務狀況和追求業務策略的能力產生負面影響。如果我們無法在需要時籌集額外資金，則可能需要推遲、減少或終止部分或全部的開發項目和臨床試驗，或者可能還需要終止對我們當前和未來產品候選者的權利。如果我們需要與他人合作和其他安排以補充我們的資金，可能不得不放棄某些限制我們開發和商業化產品候選者的權利，或者可能具有對我們或我們的股東不利的其他條款，這可能會重大影響我們的業務和財務狀況。
請查看本10-Q表格中標題爲「風險因素」的部分，以獲取與我們大量資本需求相關的其他風險。
現金流量表摘要
下表列出現金的主要來源和用途摘要：
|
|
九個月已結束 |
|
|||||
|
|
九月三十日 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
（以千計） |
|
|||||
用於經營活動的現金 |
|
$ |
(43,984 |
) |
|
$ |
(36,220 |
) |
由（用於）投資活動提供的現金 |
|
|
61,469 |
|
|
|
(43,698 |
) |
融資活動提供的現金 |
|
|
372 |
|
|
|
85,315 |
|
現金和現金等價物的淨增長 |
|
$ |
17,857 |
|
|
$ |
5,397 |
|
經營活動現金流出淨額
2024年9月30日結束的九個月中，經營活動使用的淨現金爲4400萬美元，其中包括4380萬美元的淨虧損，主要是由於使用資金開發我們的首個藥物產品候選者，以及我們的淨營運資產和負債減少400萬美元，部分抵消了非現金費用380萬美元。我們的營運資產和負債減少主要是由於應計負債、應計報酬和應付賬款減少，其他流動負債增加所致。非現金費用包括650萬美元的股權補償費用，部分抵消了投資折讓淨增值270萬美元。
32
截至2023年9月30日，運營活動中使用的淨現金爲3620萬美元，其中包括4780萬美元的淨虧損，原因是用於開發我們的初期藥物產品候選者的基金，部分抵消的是我們的淨營運資產和負債淨額減少了690萬美元以及非現金費用減少了470萬美元。 我們營運資產和負債的淨減少主要是由於應計負債、應付賬款和其他流動負債增加。 非現金費用包括股權補償支出620萬美元，部分抵消了投資折讓淨增加150萬美元。
投資活動提供的現金（使用）
截至2024年9月30日的九個月內，投資活動提供的淨現金爲6150萬美元，主要包括來自投資到期的8380萬美元收益，部分抵消了2230萬美元的投資購買。
截至2023年9月30日，投資活動使用的淨現金爲4370萬美元，主要包括11230萬美元的投資購買和6860萬美元的投資到期收益，部分抵消。
融資活動產生的現金流量
截至2024年9月30日的九個月內，融資活動提供的淨現金爲40萬美元，其中包括通過員工股票購買計劃發行普通股獲得的20萬美元和通過行使期權獲得的20萬美元。
截至2023年9月30日，融資活動提供的淨現金爲8530萬美元，其中包括自承銷發行的普通股淨收益6580萬美元，自ATM發行的普通股淨收益1910萬美元，自員工股票購買計劃和股票期權行權的普通股發行收益40萬美元。
合同責任和承諾
2019年11月，我們與Anacor簽訂了一項獨家全球許可協議，涵蓋了由Anacor控制用於治療、診斷或預防疾病的特定化合物和其他知識產權。作爲獲得開發、製造和商業化指定化合物的世界範圍內、可轉讓的獨家權利和許可證，我們在2019年11月向Anacor支付了200萬美元的預付款，併發行了Anacor公司我們的A系列可贖回可轉換優先股。我們同意在實現各種開發里程碑時向Anacor支付進一步款項，最高總額爲200萬美元，實現各種商業和銷售門檻里程碑時支付最高總額爲12500萬美元，以及依據特定轉讓安排收到的最高50%知識產權費用。知識產權費用受到某些慣例扣減的影響，包括缺乏專利覆蓋和仿製品投放市場等。我們還同意按銷售額的一定比例支付Anacor銷售版稅，比例範圍從個位數到中位數。
我們與第三方合同機構在正常業務過程中籤訂合同，用於進行臨床前和非臨床研究以及臨床試驗，製造和供應我們用於運營目的的臨床前、非臨床、臨床試驗和其他服務和產品。這些合同通常規定在通知後一定期限內可以終止，因此我們認爲這些協議下不可取消的義務並不重要。
最近的會計聲明
請參閱本季度報告10-Q第I部分第1項中「最近採納的會計準則」章節，位於「註釋2——呈現基礎和重要會計政策摘要」中的基本報表註釋。
33
重要的會計政策、重大判斷和估計的使用
根據普通會計準則編制財務報表及相關披露要求我們做出影響簡明財務報表及附註中金額報告的判斷、假設和估計。「注2—重大會計政策摘要」【基本報表】在我們截至2023年12月31日年度報告的基本報表中描述了編制財務報表所使用的重大會計政策和方法。我們的關鍵會計估計，截至我們年度報告表10-k第II部分第7項中「管理層討論及分析財務狀況和經營業績」中確定的2023年12月31日年度，但不限於，對研發和股票補償使用的估計進行了討論。這些會計政策和估計要求在編制簡明財務報表時使用重大的判斷和假設，實際結果可能與報告的金額存在實質性差異。
JOBS法案會計選舉
《工作機會法案》允許像我們這樣的「新興成長型企業」或「EGC」推遲採納《工作機會法案》頒佈後發佈的新或修訂的會計準則，直到這些準則適用於私營公司爲止。我們選擇利用這一延長的時間來遵守對公共和私人公司具有不同有效日期的新或修訂會計準則，直至我們不再是新興成長型企業，或者在《工作機會法案》規定的延長過渡期之前肯定且不可撤銷地選擇退出該延長過渡期。因此，我們提供的信息可能與遵守新或修訂的會計準則的公司的信息不可比較。
此外，我們打算依靠《初創企業支持法案》提供的其他豁免，包括但不限於，不需要遵守《薩班斯-豪利法案》第404(b)條的審計人員驗證要求。
在以下事件最早發生之前，我們將繼續作爲EGC：（1）我們首次財政年度的最後一天，年總收入超過12.35億美元；（2）當我們符合「大型高速文件報告者」的條件，非關聯方持有至少70000萬美元的股權證券的日期；（3）在之前三年期間發行的非可轉換債務證券超過10億美元的日期；以及（4）在我們首次公開募股五週年之後的財政年度的最後一天。
34
項目1 控件3.市場風險的定量和定性披露。
利率靈敏度
我們面臨與利率變動相關的市場風險。 截至2024年9月30日，我們擁有9340萬美元的現金、現金等價物和投資，主要包括貨幣市場基金和可交易證券，主要由投資級、短期和長期固收證券以及政府證券組成。
我們投資活動的主要目標是保護資本以支持我們的運營。我們還尋求在不承擔重大風險的情況下最大化投資收入。爲了實現我們的目標，我們按照董事會批准的投資政策，保持現金、現金等價物和投資的投資組合。
我們的投資面臨利率期貨風險，如果市場利率上升，其價值可能會下降。在所呈現的任何時段內，利率發生假設的10%相對變化不會對我們的基本報表產生實質影響。我們認爲通貨膨脹、利率變動或匯率波動未對我們任何呈現的時期的營運業績產生顯著影響。
外匯風險
我們的一小部分支出以外幣計價。未來美元價值的波動可能會影響我們在美國境外支付的服務價格。在截至2024年9月30日的季度中，我們未面臨重大外幣風險。
通貨膨脹的影響
通貨膨脹通常通過提高我們的勞動成本和運營成本來影響我們，包括臨床試驗、非臨床研究和製造業-半導體成本。我們認爲，通貨膨脹對本表格10-Q其他地方包含的我們未經審計的中期簡明基本報表沒有產生重大影響。
35
項目1 控件第四部分：管理和程序。
披露控件和程序的評估
我們的管理層，在我們的首席執行官（「CEO」）和致富金融(臨時代碼)官（「CFO」）的參與下，已評估了我們的披露控制和程序的有效性（如《1934年證券交易所法》修訂條例13a-15(e)和15d-15(e)中定義的），截至本10-Q表格所涵蓋期間結束時。
根據《交易法》第13a-15(e)和15d-15(e)條款定義的「披露控制和程序」一詞是指公司爲確保在其根據《交易法》提交或報告的文件中要求披露的信息被錄入、處理、彙總和報告所設計的控制和其他程序，這些操作必須在SEC規則和表格指定的時間內完成。披露控制和程序包括但不限於確保要求披露的信息能夠被收集並傳達給公司的管理層（包括首席執行官和首席財務官）或執行類似職能的人員的控制和程序，以允許及時作出關於必要披露的決定。管理層認識到，任何控制和程序，無論設計和運作得多麼好，僅能提供合理的保證，以達到其目標，管理層必然在評估可能的控制和程序的成本效益關係時運用其判斷力。
我們的首席執行官和首席財務官已得出結論，截至2024年9月30日，由於在2023年12月31日結束的年度報告中之前披露的財務報告內部控制的重大缺陷，我們的披露控制和程序未能有效。
儘管發現了重大弱點，管理層（包括我們的CEO和CFO）已根據執行的程序認定，包含在這份第10-Q表格季度報告中的簡化基本報表是按照美國通用會計準則編制的。
先前確定的財務報告內部控制方面的重大弱點
在準備2022年3月IPO的過程中，我們發現了公司財務報告的內部控制方面的實質性弱點。實質性弱點是指公司財務報告的內部控制中存在的缺陷，或缺陷的組合，使得公司的年度或中期財務報表可能發生重大錯誤的可能性無法及時被預防或發現。
已鑑定出的重大弱點如下，並且在2024年9月30日仍然存在：
36
上述重大缺陷導致對應計費用餘額的調整，這些調整是在發佈基本報表之前進行了，截止到2019年和2020年12月31日。此外，這些重大缺陷可能導致我們所有帳戶或披露的重大錯誤，從而在年度或中期基本報表中產生重大錯誤，這些錯誤無法被防止或發現。
這些信息技術缺陷沒有導致對基本報表的調整。然而，這些信息技術缺陷在彙總後可能會影響有效的職責分離，以及信息技術依賴控制的有效性（例如，自動化控制，處理對一個或多個斷言的重大錯誤陳述風險，以及支持系統生成數據和報告有效性的信息技術控制和基礎數據），這可能導致無法預防或檢測的錯誤陳述，潛在影響所有基本報表帳戶和披露。因此，管理層已確定，彙總的信息技術缺陷構成重大缺陷。
財務報告內部控制的變化
在2024年9月30日結束的三個月內，未發生影響或可能對我們的財務報告內部控制有重大影響的交易所法案第13a-15(f)和15d-15(f)下定義的內部控制變化。
控制系統不管多麼完善並運作良好，只能提供合理的保證而不是絕對的保證，控制系統的目標正在被實現。此外，任何控制系統的設計都必須反映出資源的限制，並且必須考慮所有控制的益處相對於其成本。由於所有控制系統的固有限制，在任何控制問題和欺詐實例被檢測出之前，沒有任何控制評估可以提供絕對保證。這些固有限制包括決策中的判斷可能是錯誤的，也可能由於錯誤或疏忽而發生故障。控制系統也可能被某些人的個人行爲所規避，被兩個或多個人的勾結所規避，或被管理層對控制的修改所規避。任何控制系統的設計也基於某些關於未來事件發生可能性的假設，不能保證在所有可能的未來條件下任何設計都能成功實現其聲明的目標。隨着時間的推移，由於條件的變化或遵守政策或程序的程度惡化，控制可能變得不充分。
在設計和評估我們的披露控制和程序時，管理層認識到，無論裝備有多好的控制和程序，都只能在合理的範圍內提供實現所需控制目標的合理保障。此外，披露控制和程序的設計必須反映出存在資源約束和管理必須在評估可能的控制和程序的成本與收益之間進行判斷的事實。
37
第二部分——其他R 信息
項目1 控件1. 法律訴訟。
第I部分，附註7 - 承諾和業務風險的信息已納入參考。
項目1 控件第1A部分 風險因素。
投資於我們的普通股涉及高度風險。在投資於我們的普通股之前，您應仔細考慮以下所述風險以及所有在本表格10-Q中包含的其他信息，包括我們的未經審計的基本報表和相關附註以及標題爲「管理層對財務狀況和經營業績的討論與分析」的部分。下文描述的任何事件或發展可能損害我們的業務、財務狀況、經營業績和增長前景。除非另有說明，這些風險因素中對我們業務可能受損的參考將包括對我們業務、聲譽、財務狀況、經營業績和前景的損害。在此類事件中，我們的普通股市場價格可能下跌，您可能會損失全部或部分投資。我們目前不知道的其他風險和不確定因素，或我們目前認爲不重要的因素，也可能損害我們的業務運營。
風險因素摘要
投資我們普通股涉及很高的風險，因爲我們的業務受到許多風險和不確定性的影響，如下所述。使投資我們的普通股具有風險的主要因素和不確定性包括但不限於：
38
與我們的財務狀況和資本需求有關的風險
我們是一家臨床階段的生物製藥公司，運營歷史有限，且沒有獲得商業銷售批准的產品。自創立以來，我們已經遭受了重大損失。我們預計在接下來的幾年中將繼續虧損，可能永遠無法實現或維持盈利。
生物製藥產品的開發是一項高度投機的工作，並涉及到相當大程度的風險。我們是一家處於臨床階段的生物製藥公司，業務歷史有限，您無法評估我們的業務和前景。目前我們沒有獲得任何產品的商業銷售批准，也沒有從產品銷售中產生任何營業收入，並自2017年成立以來每年都虧損。此外，作爲一家公司，我們經驗有限，尚未證明具有成功克服新興領域中公司經常遇到的許多風險和不確定性的能力，特別是在生物製藥行業。
在2024年8月，我們宣佈了評估我們初始產品候選藥物epetraborole在治療抵抗性MAC肺病患者中的2/3期臨床試驗的2期部分的頂線數據。雖然該研究的2期部分在展示一種新的患者報告結果（PRO）工具的潛在有效性和epetraborole + OBR組（39.5%）與安慰劑 + OBR組（25.0%；治療差異13.9%，p=0.19）中更高的基於PRO的臨床響應率方面達到了主要目標，但第6個月的痰培養轉陰這一關鍵次要終點在治療組間是相似的（epetraborole + OBR組爲13.2%，安慰劑 + OBR組爲10.0%；治療差異3.4%，p=0.64）。考慮到這些結果，我們決定結束試驗。儘管持續的數據審查表明在該指徵中繼續開發的潛力，但在完成審查或與FDA討論後，我們可能會判斷推遲或中止開發。
39
截至2023年12月31日，我們的淨損失爲6470萬美元；截至2024年9月30日和2023年9月30日，淨損失分別爲4380萬美元和4780萬美元。截止到2024年9月30日，我們累計赤字爲19830萬美元。到目前爲止，我們的運營資金主要來自於我們的承銷發行（「承銷發行」）、我們的市場報價股票發行計劃（「ATm發行」）、我們的首次公開募股（IPO）以及我們可贖回優先股的出售。我們將幾乎所有的財務資源和精力投入到研發中，包括臨床前研究、非臨床研究、製造業-半導體、臨床試驗以及與我們運營相關的一般和行政成本。我們預計在未來幾年內將繼續產生大量的費用和運營損失。我們的淨損失可能會在季度和年度之間顯著波動。
我們預計我們的支出將大幅增加，因爲我們：
爲了變得並保持盈利，我們必須成功地開發並最終商業化能夠產生重要營業收入的藥物。這將需要我們在一系列具有挑戰性的活動中取得成功，包括完成產品候選者的臨床前和非臨床研究以及臨床試驗，獲得監管批准，製造、營銷和銷售獲得監管批准的任何產品，以及發現和開發額外的產品候選者。我們只在大多數這些活動的初級階段。我們可能永遠也無法在這些活動中取得成功，即使我們成功了，也可能無法產生足夠重要的營業收入來實現盈利。
由於與藥物開發相關的衆多風險和不確定性，我們無法準確預測費用的時間或金額，以及我們何時或是否能夠實現盈利。如果監管機構要求我們進行除了目前預期的研究以外的其他研究，或者我們的臨床試驗或任何產品候選者的開發出現進一步的延遲，我們的費用可能會增加。
即使我們實現盈利，也可能無法在季度或年度基礎上維持或增加盈利。我們未能實現盈利或繼續保持盈利可能會抑制我們普通股的價值，並且會影響我們籌集資本、拓展業務、維持研發工作或繼續經營的能力。我公司普通股價值下降也可能導致您失去全部或部分投資。
40
我們有限的經營歷史可能會讓您難以評估我們業務至今的成功，並評估我們未來的生存能力。
我們於2019年11月開始積極運營，到目前爲止，我們的運營主要集中在籌集資金、開發epetraborole、拓寬我們在epetraborole開發方面的專業知識、進行臨床前和非臨床研究、製造臨床試驗材料、準備和啓動臨床試驗，以及一般和行政運營。作爲一家公司，我們尚未展現出成功完成關鍵臨床試驗、獲得監管批准、製造商業產品或安排第三方代表我們進行這些工作的能力，或進行成功商業化所需的銷售和營銷活動。因此，您對我們未來成功或生存能力的任何預測可能不如我們擁有更長運營歷史時那樣準確。
我們面臨並可能遇到意想不到的費用、困難、複雜性、延誤及其他已知或未知因素，這些因素可能影響我們實現業務目標。例如，在2024年8月，我們宣佈了評估我們初始產品候選藥物epetraborole在治療難治性MAC肺病患者中進行的2/3期臨床試驗的第2階段的頂線數據。儘管該研究的第2階段達成了其主要目標，展示了一種新型患者報告結局(PRO)工具的潛在驗證，以及epetraborole + OBR組的PRO基礎臨床反應率高於安慰劑 + OBR組(39.5% 對 25.0%；治療差異 13.9%，p=0.19)，但在第6個月的痰培養轉陰這一關鍵次要終點，治療組之間的結果相似（epetraborole + OBR組爲13.2%，而安慰劑 + OBR組爲10.0%；治療差異3.4%，p=0.64）。鑑於這些結果，我們決定終止該試驗，目前正在審查試驗數據以判斷下一步措施。
此外，我們需要在某個時候成功地從一個注重研發的公司轉變爲一個能夠支持商業活動的公司。我們可能在這樣的轉型中並不成功。
我們預計由於多種因素，許多因素超出了我們的控制，我們的財務控件和經營結果將繼續在季度和年度之間顯著波動。因此，您不應將任何季度或年度期間的結果作爲未來經營業績的指示。
我們可能無法實現最近業務重組和裁員所預期的好處，而且在實施過程中可能會產生額外成本或其他困難。
2024年8月，我們宣佈了一項業務重組計劃，並實施了裁員措施。這些舉措的目的是將組織和資源集中在用於治療恙蟲病、NTM、癰疽病、其他傳染病和腫瘤的候選藥物和開發化合物上。我們認爲這些變化是必要的，以便簡化我們的組織結構，並基於我們第2期臨床試驗評估我們初始候選藥物epetraborole在治療難治性MAC肺病患者中的頂線結果的結果，以及我們決定停止針對該難治性患者群體的epetraborole開發工作。
然而，我們的業務策略變化和裁員可能會產生意想不到的後果和成本，例如機構知識和專業技能的喪失，超出我們預期的員工流失，剩餘員工士氣的降低，以及我們可能無法實現預期收益的風險，所有這些都可能對我們的開發活動、產品候選開發進展能力和經營成果或財務控件產生不利影響。由於裁員，我們已爲截至2024年9月30日的三個月和九個月確認了220萬美元的遣散費和其他費用，主要包括遣散支付和其他相關的員工解僱費用。
41
我們可能會承擔其他費用、成本、未來現金支出或損失，這些並未當前考慮，是由於可能發生的事件而導致的，或與修訂後的業務策略和人員減少有關。此外，我們可能無法成功地將離職員工的職責和義務分配給留任的員工。
我們還可能發現，裁員和成本削減措施將使我們難以開拓新的機會和項目，並要求我們僱傭合格的替代人員，這可能需要我們承擔額外的意料之外的成本和費用。此外，並不能保證我們將成功實現我們的任何新目標。我們未能成功完成以上任何活動和目標可能會對我們的業務、財務狀況、運營結果和增長前景產生負面影響。
我們需要大量額外資金以滿足我們的財務需求並追求我們的業務目標。如果我們無法在需要時籌集資金，我們可能被迫推遲、減少或完全停止我們當前和未來的產品開發計劃或未來的商業化努力。
我們相信我們目前的現金、現金等價物和投資將爲我們至少未來12個月內的營業費用和資本支出需求提供資金。然而，與我們持續的經營和計劃活動相關，我們需要獲得大量額外資金。我們未來的資本需求將取決於許多因素，包括：
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of drugs that we do not expect to be commercially available for several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs or any future commercialization efforts.
42
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or to any of our product candidates.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or any product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our development of our product candidates or future commercialization efforts or grant rights to a third party to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
We have a contractual commitment to develop epetraborole for global health initiatives, which may affect our ability to develop and commercialize epetraborole in certain countries and may impact our intellectual property rights. Our strategy for our global health initiatives depends on receiving non-dilutive funding, and we as a company have limited experience with this strategy.
Under our Global Health Agreement with Adjuvant, we have a contractual commitment to use reasonably diligent endeavors to develop epetraborole and any other mutually agreed-upon products for melioidosis, tuberculosis, and other indications for at-risk developing countries at accessible pricing and at reasonable volume, including selling epetraborole and any other mutually agreed-upon products in certain target countries at or slightly above the cost of sales, so long as we do not sell products at a loss. Under the Global Health Agreement, we made certain commitments to develop epetraborole and any other mutually agreed-upon products and to pursue regulatory strategies and product registrations. If we do not maintain compliance with these and other program-related global access commitments under the Global Health Agreement, Adjuvant may be entitled to repayment for any portion of its investment that is not used for the purposes outlined in the Global Health Agreement. Our obligations under the Global Health Agreement may affect our ability to commercialize epetraborole in certain countries.
Our strategy for developing epetraborole for global health initiatives depends on receiving non-dilutive funding from sources such as public and private agencies and foundations. We, as a company, have limited experience with non-dilutive funding, and we may not be able to obtain additional non-dilutive funding to support our needs to fund our global health initiatives. For example, we cannot be certain that there will be additional awards, contracts, grants or funding sources or solicitations available to support our development efforts, that our other grant applications and funding proposals will be successful, or that we will be able to continue satisfying the award criteria of the NIAID contract award or any grants or funding awarded to us. If we fail to receive additional non-dilutive funding, progress in our global health initiatives may be impaired or delayed.
43
Risks Related to the Development of Our Product Candidates
If we do not obtain regulatory approval for and successfully commercialize any of our product candidates, or if we experience significant delays in doing so, we may never become profitable.
We currently have no products approved for sale and have historically invested a significant portion of our efforts and financial resources on the development of our initial product candidate, epetraborole, as a treatment for treatment-refractory MAC lung disease. Although we have now discontinued our development efforts with respect to epetraborole in the treatment-refractory MAC population studied in the EBO-301 trial, our business remains heavily dependent on the successful development, regulatory approval, and, if approved, commercialization of our product candidates. We cannot be certain that any product candidate will receive regulatory approval or will be successfully commercialized even if it receives regulatory approval. The research, development, manufacturing, safety, efficacy, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to comprehensive regulation by the FDA and other comparable foreign regulatory authorities.
Before obtaining regulatory approvals for the commercial sale of any product candidates, we must demonstrate through preclinical and nonclinical studies and clinical trials that the product candidate is safe and effective for use in each target indication. Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage during our nonclinical studies, clinical trials or drug product manufacturing process. These delays or failures could be caused by a variety of factors, including but not limited to, toxicity, safety, tolerability, efficacy, problems with clinical trial enrollment, drug product availability, stability, and impurity issues related to drug product manufacturing. For example, in August 2024, we announced topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole in patients with treatment-refractory MAC lung disease. Although the Phase 2 part of the study met its primary objective in demonstrating the potential validation of a novel patient-reported outcome (PRO) tool and a higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs. placebo + OBR (25.0%; treatment difference 13.9%, p=0.19), sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs. 10.0% placebo + OBR; treatment difference 3.4%, p=0.64). Given these results, we decided to close out the trial and commence a review of data to help inform further development. Although that ongoing data review has to date indicated the potential to continue development in this indication, it is possible that we will determine after completion of the review or discussions with FDA to defer or discontinue development of epetraborole in NTM.
Failure to obtain regulatory approval for our product candidates in the United States or other territories will prevent us from commercializing and marketing such product candidates. The success of our product candidates will depend on several additional factors, including:
44
If we do not achieve these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would harm our business.
We may not be successful in our efforts to build a pipeline of product candidates.
A key element of our strategy is to develop our AN2 drug discovery platform, build a pipeline of product candidates and progress these product candidates through clinical development for the treatment of Chagas disease, NTM, melioidosis, other infectious diseases, and in oncology. We may not be able to develop product candidates that are safe and effective for any proposed use. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, as a result of significant safety, tolerability and other negative characteristics or limitations that may prevent successful regulatory approval or limit market acceptance or reimbursements from third-party payors. If we do not successfully develop and commercialize any of our product candidates, we will not be able to obtain product revenue in future periods, which could significantly harm our financial position and adversely affect the trading price of our common stock.
There can be no assurance that the clinical trials we conduct will be sufficient for product approval.
Prior to marketing any product candidate in the United States, we must demonstrate that such product candidate is safe and provide substantial evidence of effectiveness for its intended uses. The FDA has generally interpreted the “substantial evidence” requirements as requiring sponsors to conduct two adequate and well-controlled Phase 3 clinical trials. However, in some circumstances, the FDA may conclude that substantial evidence of efficacy has been demonstrated through the conduct of one adequate and well-controlled clinical trial, plus confirmatory evidence (whether obtained prior to or after such trial). Regardless of the clinical development plans we decide to pursue with respect to our product candidates, there can be no assurance that the FDA will not require additional clinical trials for approval of such product candidates beyond the trials that we currently plan to conduct, even if we successfully complete the trial and believe the results are sufficiently positive.
As a company, we have limited experience designing and conducting clinical trials in the United States or other geographies and may be unable to design and execute a clinical trial to support regulatory approval. In addition, the design and results of our clinical trials may not be sufficient to support approval, since factors such as an inappropriate dosage or flaws in the design of a clinical trial may not become apparent until the clinical trial is in progress or data are available.
45
There is a high failure rate for product candidates proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. For example, in August 2024, we announced topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole in patients with treatment-refractory MAC lung disease. Although the Phase 2 part of the study met its primary objective in demonstrating the potential validation of a novel patient-reported outcome (PRO) tool and a higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs. placebo + OBR (25.0%; treatment difference 13.9%, p=0.19), sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs. 10.0% placebo + OBR; treatment difference 3.4%, p=0.64). Given these results, we decided to close out the trial and commence a review of data to help inform further development. Although that ongoing data review has to date indicated the potential to continue development in this indication, it is possible that we will determine after completion of the review or discussions with FDA to defer or discontinue development of epetraborole in NTM.
If clinical trials of our product candidates fail to demonstrate safety and/or efficacy of such product candidates to the satisfaction of the FDA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
We may not commercialize, market, promote, or sell any product candidate without obtaining regulatory approval from the FDA or other comparable regulatory authorities, and we may never receive such approvals. It is impossible to predict when or if any of our product candidates will be deemed effective or safe in humans and receive regulatory approval. Before obtaining regulatory approval from regulatory authorities for the sale of any of our product candidates, we must complete preclinical and nonclinical development and conduct extensive clinical trials to demonstrate the safety and efficacy of such product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical and nonclinical studies and clinical trials have nonetheless failed to obtain regulatory approval of their products. In addition, before we can initiate clinical trials for any product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND or similar regulatory submission. The FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our preclinical development programs.
We may experience numerous unforeseen events prior to, during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize any of our product candidates, including, but not limited to:
46
If we are required to conduct additional clinical trials or other testing of any of our product candidates beyond the studies that we currently contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns observed in these trials or tests, we may:
47
We do not know whether any of our preclinical and nonclinical studies or clinical trials will begin as planned, will need to be restructured, or will be completed on schedule or at all. Significant preclinical and nonclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.
We cannot predict whether or when bacteria may develop resistance to any of our antibacterial product candidates, which could affect the revenue potential of our product candidates.
We are developing certain of our product candidates to treat bacterial infections. The bacteria responsible for these infections evolve quickly and may develop antibiotic resistance caused by spontaneous mutations in the genes encoding the cellular target of the antibiotic. In some cases, resistance mechanisms can be transferred within and between bacterial species. Prescription or use of our product candidates, if approved, could depend on the type and rate of resistance of the targeted bacteria. Although we do intend to analyze the potential of emergence of resistance to our product candidates and only select those that we believe have low resistance potential, we cannot predict whether or when bacterial resistance may develop. Such bacterial resistances, if and when identified, could adversely affect the conduct or results of our clinical trials, and could adversely affect the market potential of the product candidate, if approved. The growth of drug-resistant infections in community settings or in countries with poor public health infrastructures, or the potential use of any product candidates outside of controlled hospital settings, could contribute to the rise of resistance.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential, or result in significant negative consequences following any potential regulatory approval.
Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates, whether used alone on in combination with other therapies, could cause us or regulatory authorities to interrupt, delay or halt clinical trials or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities, or, if such product candidates are approved, result in a more restrictive label and other post-approval requirements. Any treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial, or could result in potential product liability claims. Any of these occurrences may harm our business, financial condition, results of operations and growth prospects significantly.
Additional adverse events may emerge (along with additional data further defining previously identified risks) in any ongoing or subsequent clinical trials and there may be unforeseen serious adverse events or side effects that differ from those seen in studies completed to date. It is possible that as we test our product candidates in larger, longer and more extensive clinical programs, or as use of such product candidates becomes more widespread, if they receive regulatory approval, subjects will report illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials. Many times, side effects are only detectable after investigational drugs are tested in large-scale clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that any of our product candidates has unexpected side effects or causes serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked, which would harm our business.
Even if we believe our product candidates demonstrate clinical efficacy, any unacceptable adverse side effects or toxicities, when administered in the presence of other pharmaceutical products, which can arise at any stage of development, may outweigh potential benefits. We may observe adverse or significant adverse events or drug-drug interactions in future preclinical studies or clinical trial candidates, which could result in the delay or termination of development, prevent regulatory approval or limit market acceptance if ultimately approved.
48
Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trial of any of our product candidates, the commercial prospects of such product candidate may be harmed and our ability to generate revenue through its sale may be delayed or eliminated. Any of these occurrences may significantly harm our business.
Additionally, if any of our product candidates receive regulatory approval, regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or the adoption of a REMS program to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the drug for distribution to patients and a communication plan to health care practitioners. Furthermore, if we or others later identify undesirable side effects caused by any product candidates, several potentially significant negative consequences could result, including:
Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate, if approved, or could substantially increase commercialization costs and expenses, which could delay or prevent us from generating revenue from the sale of our product candidates and harm our business and results of operations.
If we are not successful in discovering, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.
Although a substantial amount of our effort will focus on potential clinical testing and potential regulatory approval of our current and future product candidates, including the development of AN2-502998, a boron-based small molecule therapeutic candidate for the treatment of Chagas disease, epetraborole for NTM or melioidosis, and other development compounds, an element of our strategy is to discover, develop and commercialize a portfolio of product candidates to treat diseases with high unmet need. We are seeking to do so by utilizing our targeted-design AN2 drug discovery platform, which uses bacterial genomics and state-of-the-art molecular and dynamic models to design active new compounds that target known mechanisms. We focus our clinical development on pathogens, drug targets, and patients with high, unmet medical needs to leverage the development and regulatory paths available for first-in-class or best-in-class therapeutics. Research efforts to identify and develop product candidates require substantial technical, financial, and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following:
49
If we fail to develop and successfully commercialize our product candidates, our business and future prospects may be harmed and our business will be more vulnerable to any problems that we encounter in developing and commercializing our product candidates.
If we experience delays or difficulties in the enrollment of patients in clinical trials, our clinical development activities and receipt of necessary regulatory approvals could be delayed or prevented.
Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials will depend, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. We may not be able to initiate, continue or complete clinical trials of any product candidates that we develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials, as required by the FDA or other comparable regulatory authorities. We have limited experience enrolling patients in our clinical trials and cannot predict how successful we will be in enrolling patients in future clinical trials.
Patient enrollment is also affected by other factors including:
In particular, we may face delays and difficulties in enrollment in our planned trials of certain of our product candidates because Chagas disease and certain other conditions we may target include rare diseases (i.e., the size of the targeted patient population is small). Because of this, we may experience difficulties in recruiting sufficient patients into certain of our planned clinical trials.
50
Additionally, other pharmaceutical companies and research institutions targeting these same diseases are recruiting clinical trial patients from these patient populations, which may make it more difficult to fully enroll any clinical trials. We also rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and preclinical studies. Though we have entered into agreements governing their services, we will have limited influence over their actual performance. Our inability to enroll a sufficient number of patients for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. We have experienced enrollment delays in the past. Enrollment delays in these clinical trials may result in further increased development costs for our product candidates, which would reduce the capital we have available to support our current and future product candidates and may result in our need to raise additional capital earlier than planned and could cause the value of our common stock to decline and limit our ability to obtain additional financing.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or have a greater likelihood of success.
Because we have limited financial and management resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. 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 collaboration, 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.
Interim “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publicly disclose interim, topline or preliminary data from our clinical trials and preclinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, topline or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the topline or preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available.
Interim data from clinical trials that we may complete are further subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between interim, topline or preliminary data and final data could significantly harm our business prospects. Further, disclosure of such data by us or by our competitors could result in volatility in the price of our common stock.
51
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, operating results, growth prospects.
We may conduct clinical trials for our product candidates outside of the United States, and the FDA may not accept data from such trials, in which case our development plans may be delayed, which could materially harm our business.
We conduct and may in the future conduct one or more of our clinical trials or a portion of our clinical trials for our product candidates outside the United States. The acceptance of study data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for regulatory approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the U.S. or the relevant jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept such data, it may result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.
Risks Related to Our Dependence on Third Parties
We rely on third parties to conduct our preclinical and nonclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidates may be delayed.
We are dependent on third parties to conduct our clinical trials, nonclinical studies and preclinical studies. Specifically, we have engaged CROs and consultants to conduct our ongoing and planned preclinical and nonclinical studies and clinical trials, in each case in accordance with trial protocols and regulatory requirements. We also expect to engage CROs for any of our other product candidates that may progress to clinical development. We expect to rely on CROs, as well as other third parties, such as clinical data management organizations, medical institutions, and clinical investigators, to conduct those preclinical and nonclinical studies, clinical trials, and manufacture of our clinical trial material. Currently, we rely on single source third-party research institutions, laboratories, clinical research and manufacturing organizations for research and development. Agreements with such third parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements, or fail to enter into alternative arrangements in a timely manner, our product development activities would be delayed.
52
Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, we and our CROs are required to comply with regulations and comply with good laboratory practice requirements for the conduct of certain preclinical studies and GCP requirements for clinical trials, which are regulations and guidelines enforced by the FDA, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Similar regulatory requirements apply outside the United States, including the International Council for Harmonisation of Technical Requirements for the Registration of Pharmaceuticals for Human Use. Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. Failure to comply with these requirements by us or by third parties can result in FDA refusal to approve applications based on the clinical data, enforcement actions, adverse publicity and civil and criminal sanctions.
There is no guarantee that any of our CROs, investigators or other third parties will devote adequate time and resources to such trials or studies or perform as contractually required. If any of these third parties fails to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, or otherwise perform in a substandard manner, our clinical trials may be extended, delayed or terminated. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize such product candidates.
In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA of any NDA we submit. Any such delay or rejection could prevent us from commercializing our product candidates.
We also expect to rely on other third parties to store and distribute product supplies for our clinical trials. Any performance failure or regulatory noncompliance on the part of our distributors could delay clinical development or regulatory approval of our product candidates or commercialization of such product candidates, resulting in additional losses and depriving us of potential product revenue.
Our reliance on single-sourced third parties to manufacture our product candidates increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
We do not own or operate manufacturing facilities for the production of clinical or commercial supplies of the product candidates that we are developing or evaluating, nor are we contemplating plans to do so. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. Our strategy is to continue to outsource all manufacturing of our product candidates and approved products, if any, to third parties.
In order to conduct clinical trials of our product candidates and prepare for commercialization, we will need to identify suitable manufacturers with the capabilities to manufacture our compounds in large quantities in a manner consistent with existing regulations. Our current and future third-party manufacturers may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities at any other time. If our manufacturers are unable to successfully scale up the manufacture of our current or future product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained, which could significantly harm our business.
53
We do not currently have any agreements with third-party manufacturers for the long-term commercial supply of any of our product candidates. In the future, we may be unable to enter into agreements with third-party manufacturers for commercial supplies of such product candidates or may be unable to do so on acceptable terms.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails risks, including:
The facilities used by our third-party manufacturers must be approved for the manufacture of our product candidates by the FDA, or any comparable foreign regulatory authority, pursuant to inspections that will be conducted after we submit an NDA to the FDA, or submit a comparable marketing application to a foreign regulatory authority. We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP requirements for manufacture of our product candidates. If these third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or any comparable foreign regulatory authority, they will not be able to secure and/or maintain regulatory approval for the use of their manufacturing facilities.
In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.
Our product candidates may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.
If the third parties that we engage to supply any materials or manufacture product for our preclinical and nonclinical studies and clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing these studies and trials while we identify and qualify replacement suppliers, and we may be unable to obtain replacement supplies on terms that are favorable to us. In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it will be more difficult for us to develop such product candidates and compete effectively.
Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive regulatory approval on a timely and competitive basis.
54
Risks Related to the Commercialization of Our Product Candidates
Even if any of our product candidates receives regulatory 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.
Even if we obtain approvals from the FDA or other comparable regulatory agencies and are able to initiate commercialization of any of our product candidates, such product candidates may not achieve market acceptance among physicians, patients and third-party payors and, ultimately, may not be commercially successful. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:
If the market size of any product candidate that obtains regulatory approval is significantly smaller than we anticipate, it may not achieve market acceptance or commercial success. This could significantly and negatively impact our business, financial condition, results of operations and growth prospects.
55
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
The development and commercialization of new drug products is highly competitive. We face competition from major multi-national pharmaceutical companies, biotechnology companies, specialty pharmaceutical companies and generic drug companies with respect to the product candidates that we intend to develop and commercialize. Potential competitors also include academic institutions, government agencies and other public and private research organizations. If our competitors obtain regulatory approval from the FDA or other comparable regulatory authorities for their product candidates more rapidly than we do, it could result in our competitors establishing a strong market position before we are able to enter the market. Our competitors may also succeed in developing, acquiring or licensing technologies and drug products that are more effective, more effectively marketed and sold, or less costly than any product candidates that we may develop, which could render our product candidate non-competitive and obsolete.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical and nonclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do as an organization. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. In addition, following the announcement of topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole, we effected a restructuring resulting in the elimination of a significant portion of the workforce and could result in additional unplanned loss of personnel. Continued disruption caused by the transition or by the loss of ongoing services of any qualified scientific and management personnel could delay or prevent the successful development of our current and future product candidates.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any product candidates that we may develop. Our competitors also may obtain approval from the FDA or other comparable regulatory agencies for their product candidates more rapidly than we may obtain approval for ours, which could result in product approval delays if a competitor obtains market exclusivity from the FDA or any comparable regulatory agencies or our competitors establish a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic drugs. Additional drugs may become available on a generic basis over the coming years. If any of our product candidates achieve regulatory approval, we expect that they will be priced at a significant premium over competitive generic drugs.
If we are unable to establish sales, marketing and distribution capabilities for our product candidates, or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing our product candidates, if and when they are approved.
We do not have a sales or marketing infrastructure and have limited experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any product candidate for which we may obtain regulatory approval, we will need to establish a sales and marketing organization or enter into collaboration, distribution and other marketing arrangements with one or more third parties to commercialize such product candidate. In the United States and other key markets, we intend to build a commercial organization to target areas with the greatest incidence of conditions for which we may at some point obtain regulatory approval and recruit experienced sales, marketing and distribution professionals. The development of sales, marketing and distribution capabilities will require substantial resources, will be time-consuming and could delay any product launch. We may decide to work with regional specialty pharmacies, distributors, and/or multi-national pharmaceutical companies to leverage their commercialization capabilities to commercialize any product candidate for which we may obtain regulatory approval outside of the United States.
56
If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization costs. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. In addition, we may not be able to hire a sales force in the United States that is sufficient in size or has adequate expertise to target the areas that we intend to target. If we are unable to establish a sales force and marketing and distribution capabilities, our operating results may be adversely affected.
Factors that may inhibit our efforts to commercialize our drugs on our own include:
If we are unable to establish our own sales, marketing and distribution capabilities in the United States and other jurisdictions in which any of our product candidates are approved and, instead, enter into arrangements with third parties to perform these services, our revenues and profitability, if any, are likely to be lower than if we were to sell, market and distribute any product candidates that we develop ourselves. We may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing any product candidates.
Coverage and adequate reimbursement may not be available for any of our product candidates, which could make it difficult for us to sell profitably, if approved.
Market acceptance and sales of any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these drugs and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and other private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage and adequate reimbursement for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its list of covered drugs, or formulary, it will be placed. The position on a payor’s formulary generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our drugs, and providers are unlikely to prescribe our drugs, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our drugs and their administration.
57
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain regulatory approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidates that we develop.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.
We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any drugs that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
Our product liability insurance coverage may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of any product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise, if at all. Our product liability insurance policy contains various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.
There are a variety of risks associated with marketing our product candidates internationally, which could affect our business.
We may seek regulatory approval for our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:
58
These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability.
Risks Related to Our Business, Industry and Managing Our Growth
We operate with a small team and our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
We are highly dependent on the management, research and development, financial and business development expertise of Eric Easom, our co-founder, president, and chief executive officer, Sanjay Chanda, Ph.D., our chief development officer, Lucy Day, our chief financial officer, Josh Eizen, J.D., our chief legal and operating officer, Michael R.K. (Dickon) Alley, Ph.D., our co-founder and SVP research fellow and head of biology, Stephen Prior, Ph.D., our chief strategy officer, and Vincent Hernandez, our senior vice president research and head of chemistry, as well as the other members of our research, development, and business teams. Each may terminate employment with us at any time. We do not maintain “key person” insurance for any of our executives or employees.
Our limited personnel and resources may result in greater workloads for our employees compared to those at companies with which we compete for personnel, which may lead to higher levels of employee dissatisfaction and turnover. Recruiting and retaining qualified research, development, and business personnel and, if we progress the development of our product candidates, commercialization, manufacturing, and sales and marketing personnel, will be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development, and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our product candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of research and development personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high-quality personnel, our ability to pursue our growth strategy will be limited.
59
Macroeconomic uncertainties have in the past and may continue to adversely impact our business, financial condition, results of operations and growth prospects.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, higher interest rates and uncertainty about economic stability. Higher interest rates, coupled with reduced government spending and volatility in financial markets may increase economic uncertainty and affect consumer spending. Similarly, volatility and disruptions in global markets and supply chains and global conflicts may adversely affect our business or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. To the extent that macroeconomic uncertainties continue to harm our business, financial condition, results of operations and growth prospects, many of the other risks described in this “Risk Factors” section will be exacerbated.
We have identified material weaknesses in our internal control over financial reporting. Due to our failure to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.
Prior to the completion of the IPO, we had been a private company with limited accounting personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial reporting. In connection with the preparation of our financial statements, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses are as follows:
60
These IT deficiencies did not result in adjustments to the financial statements. However, the IT deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined the IT deficiencies in the aggregate constitute a material weakness.
We cannot assure you that there will not be future material weaknesses in our internal control over financial reporting in the future. The failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations, or cash flows. These identified material weaknesses, or any additional material weaknesses, in our internal control over financial reporting may cause investors to lose confidence in the accuracy and completeness of our financial reports and/or cause the market price of our common stock to decline, and we could be subject to sanctions or investigations by Nasdaq Stock Market LLC, the SEC or other regulatory authorities. Failure to remediate material weaknesses in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
If in the future, we need to expand our research, development, and business capabilities and implement sales, marketing, and distribution capabilities, we may encounter difficulties in managing such growth, which could disrupt our operations.
Although we recently effected a restructuring to reduce our workforce by approximately 50%, if the development of our product candidates progresses, we may experience growth in the scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if any of our product candidates receives regulatory approval, sales, marketing and distribution. To manage any such growth, we will need to implement and improve our managerial, operational, and financial systems, expand our facilities and recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such growth, we may not be able to effectively manage such an expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may also lead to significant costs and may divert our management and research and development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.
If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
From time to time, we may evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary drug products, intellectual property rights, technologies or businesses, as deemed appropriate to carry out our business plan. Any potential acquisition or strategic collaboration may entail numerous risks, including:
61
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent and other intellectual property protection for our technology, or for our product candidates, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.
We do not own any issued patents and we in-license patents and patent applications for our product candidates, and our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates. We seek to protect our proprietary position by in-licensing intellectual property relating to our product candidates including patent applications in the United States and abroad related to our technology and product candidates that are important to our business. If we or our licensors do not adequately protect the intellectual property we in-license or own, competitors may be able to use our technologies and erode or negate any competitive advantage that we may have, which could harm our business and ability to achieve profitability. To protect our proprietary positions, we and our licensors file patent applications in the United States and abroad related to our novel technologies and product candidates that are important to our business. The patent application and prosecution process is expensive and time-consuming. We and our current licensors and licensees, or any future licensors and licensees, may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We or our current licensors and licensees, or any future licensors or licensees may also fail to identify patentable aspects of our research and development before it is too late to obtain patent protection, or fail to continue to prosecute patents relating to our product candidates. Therefore, these and any of our in-licensed patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or filing of our licensors’ patents or our patent applications may exist, or may arise in the future, such as with respect to proper priority claims, inventorship, claim scope or patent term adjustments. If our current licensors and licensees, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised and we might not be able to prevent third parties from making, using, and selling competing products. We cannot predict whether the patent applications we and our licensors or licensees are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors. If there are material defects in the form or preparation of our or our licensors’ patents or patent applications, such patents or applications may be invalid and unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how, and we may not be able to prevent such competitors from commercializing such equivalent knowledge, methods, and know-how. Any of these outcomes could impair our ability to prevent competition from third parties and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and has been the subject of much litigation in recent years. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds and technologies commonly involves complex legal and factual questions, which has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Furthermore, recent changes in patent laws in the United States, including the America Invents Act of 2011, and future changes in patent laws in or outside the United States may affect the scope, strength and enforceability of our patent rights or the nature of proceedings that may be brought by us related to our patent rights.
62
We may not be aware of all third-party intellectual property rights potentially relating to our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in patents or pending patent applications that we in-license or own, or that we or our licensors were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity and commercial value of our patent rights cannot be predicted with any certainty. Moreover, we or our licensors may be subject to a third-party pre-issuance submission of prior art to the U.S. Patent and Trademark Office (“USPTO”), or become involved in opposition, derivation, reexamination, inter partes review, or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates, and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize product candidates without infringing third-party patent rights.
Our licensors’ pending and future patent applications and our own pending and future patent applications may not result in patents being issued that protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Even if our or our licensors’ patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection against competing products or processes sufficient to achieve our business objectives, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our in-licensed patents or any patents we may own in the future by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may seek to market generic versions of any approved products by submitting abbreviated NDAs to the FDA in which they claim that patents licensed by us or may be owned by us in the future are invalid, unenforceable, and/or not infringed. Alternatively, our competitors may seek approval to market their own products similar to or otherwise competitive with our product candidates. In these circumstances, we may need to defend and/or assert our in-licensed or owned patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court, or other agency with jurisdiction may find our in-licensed patents or any owned patents, should such patents issue in the future, invalid and/or unenforceable.
The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability, and our in-licensed patents or patents we may own in the future may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and product candidates, or limit the duration of the patent protection of our technology and product candidates. In addition, given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Any impairment of our intellectual property rights, or our failure to protect our intellectual property rights adequately, could give third parties access to our technology and product candidates and could materially and adversely impact our business, financial condition, results of operations and growth prospects.
63
Our rights to develop and commercialize our technology and our other product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Anacor. If we fail to comply with our obligations in the agreements under which we in-license or acquire development or commercialization rights to products, technology, or data from third parties, we could lose such rights that are important to our business.
For certain product candidates, we rely on licenses to certain patent rights and other intellectual property that are important or necessary to the development of these compounds. For example, we depend on a license agreement from Anacor, a biopharmaceutical company that originally developed epetraborole and is currently a wholly-owned subsidiary of Pfizer. Additionally, we have licensed our rights under the Anacor agreement in China, Hong Kong, Taiwan and Macau to Brii Biosciences.
Anacor has relied upon, and any future licensors may have relied upon, third-party companies, consultants or collaborators, or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed. We have sublicensed certain patents from Anacor that are owned, maintained and prosecuted by GSK. If third-party companies such as GSK fail to prosecute, maintain, enforce and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our product candidates that are the subject of such licensed rights could be adversely affected. Further, we rely upon Anacor’s compliance with its license agreement with GSK to maintain our sublicense to such patents owned by GSK, and any termination of Anacor’s license agreement with GSK could result in us losing our license to epetraborole. Further development and commercialization of our product candidates may require us to enter into additional license or collaboration agreements. Our future licenses may not provide us with exclusive rights to use the licensed patent rights and other intellectual property, or may not provide us with exclusive rights to use such patent rights and intellectual property in all relevant fields of use and in all territories in which we wish to develop or commercialize our product candidates in the future.
Our license agreement with Anacor, and other intellectual property-related agreements we may enter into in the future may impose diligence and other obligations, including payment of milestones and royalties. For example, our license agreement from Anacor requires us to satisfy diligence requirements, including using commercially reasonable efforts to develop and commercialize products. If we fail to comply with our obligations to Anacor or any future licensors, those counterparties may have the right to terminate the license agreements, in which event we might not be able to develop, manufacture, or market any product candidate licensed under the agreements, which could materially adversely affect the value of the product candidate being developed under any such agreement and further involve termination of our rights to important intellectual property or technology.
In spite of our efforts, Anacor imposes or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements. If such in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, our competitors would have the freedom to seek regulatory approval of, and to market, products identical to our product candidates and the licensors to such in-licenses could prevent us from commercializing product candidates that rely upon the patents or other intellectual property rights which were the subject matter of such terminated agreements. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Under our license agreement with Anacor, and any future license agreements, disputes may arise regarding intellectual property subject to a licensing agreement, including:
64
In addition, the license agreements involving intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We may not be successful in obtaining necessary rights to any product candidates we may develop through acquisitions and in-licenses.
We currently have rights to intellectual property, through licenses from third parties, to identify and develop product candidates. We may find it necessary or prudent to obtain licenses from such third-party intellectual property holders in order to avoid infringing these third-party patents. For example, many pharmaceutical companies, biotechnology companies and academic institutions compete with us and may be filing patent applications potentially relevant to our business. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to license rights to us. 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 or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or product candidate, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
65
We may become involved in lawsuits to protect or enforce our owned or in-licensed patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.
Competitors or other third parties may infringe, misappropriate or otherwise violate our in-licensed issued patents or other intellectual property we may own. To counter such infringement, misappropriation or other unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against third parties could provoke these parties to assert counterclaims against us alleging that we infringe, misappropriate or otherwise violate their patents, trademarks, copyrights or other intellectual property. In addition, our in-licensed patents may become involved in inventorship or priority disputes. Third parties may raise challenges to the validity of certain of our in-licensed patent claims and may in the future raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. For example, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in derivation, revocation, reexamination, post-grant review (“PGR”), inter partes review (“IPR”), interference proceedings and equivalent proceedings in foreign jurisdictions, such as opposition proceedings challenging any patents that we may own or in-license. Such submissions may also be made prior to a patent’s issuance, precluding the granting of a patent based on one of our owned or licensed pending patent applications. A third party may also claim that our potential future owned patents or licensed patent rights are invalid or unenforceable in a litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, invalidate, or render unenforceable, our potential future owned patents or licensed patent rights, allow third parties to commercialize our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights In a patent infringement proceeding, there is a risk that a court will decide that a patent we in-license is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents are upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our in-licensed patents do not cover the invention. An adverse outcome in a litigation or proceeding involving our in-licensed patents could limit our ability to assert our in-licensed patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Similarly, in the future, we expect to rely on trademarks to distinguish our product candidates that are approved for marketing, if any, and if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.
In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Moreover, there can be no assurance that we will have sufficient financial or other resources to adequately file and pursue such infringement claims, which typically last for years before they are concluded. Some of our competitors and other third parties may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating, or successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a negative impact on our ability to compete in the marketplace, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
66
Third parties may initiate legal proceedings alleging that we are infringing misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could significantly harm our business.
Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our proprietary chemistry technology without infringing, misappropriating or otherwise violating the intellectual property of third parties. Numerous third-party U.S. and non-U.S. issued patents exist in the area of antibacterial treatment, including compounds, formulations, treatment methods, and synthetic processes that may be applied towards the synthesis of antibiotics. If any such patents of third parties cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned.
There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation, or other adversarial proceedings regarding intellectual property rights with respect to our technology or product candidates, including interference proceedings before the USPTO. Third parties may assert claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance.
If we are found to have infringed, misappropriated, or otherwise violated any third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing, or commercializing our product candidates. Alternatively, we may be required to obtain a license from such third party in order to use technology and continue developing, manufacturing or marketing product candidates that infringe or violate such third party’s intellectual property. However, we may not be able to obtain any such required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We may also be required to pay substantial ongoing royalty or license payments or fees or comply with other unfavorable terms. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent or other intellectual property right. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative effect on our business. Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. During the course of litigation, there could be public announcements or the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Negative publicity related to a decision by us to initiate such enforcement actions against a customer or former customer, regardless of its accuracy, may adversely impact our other customer relationships or prospective customer relationships, harm our brand and business and could cause the market price of our common stock to decline. Any of the foregoing arising from uncertainty in legal proceedings could materially and adversely impact our business, financial condition, results of operations and growth prospects.
We may be subject to claims by third parties asserting that we or our employees, consultants, and advisors have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.
Many of our employees, consultants and advisors were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of third parties in their work for us, we may be subject to claims that we or such employees, consultants and advisors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s former employer. We may also in the future be subject to claims that we have caused an employee to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these potential claims.
67
In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, such employees and contractors may breach the agreement and claim the developed intellectual property as their own. Further, we may be unsuccessful in executing such agreements with each party who, in fact, conceives, or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A court could prohibit us from using technologies or features that are essential to our product candidates if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and could be a distraction to management. In addition, any litigation or threat thereof may adversely affect our ability to hire employees or contract with independent service providers. Moreover, a loss of key personnel or their work product could hamper or prevent our ability to commercialize our product candidates. Any of the foregoing could have a material adverse impact on our business, financial condition, results of operations and growth prospects.
Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.
We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of our competitors. We have not yet selected trademarks for our product candidates and have not yet begun the process of applying to register trademarks for our product candidates. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties who have prior rights to our trademarks or third parties who have prior rights to similar trademarks may oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our product candidates, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. At times, competitors may adopt trade names or trademarks similar to ours, thereby diluting or impeding our ability to build brand identity and possibly leading to market confusion. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks and may not be able to prevent such third parties from using and marketing any such trademarks.
In addition, any proprietary name we propose to use with any product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. If we are unable to establish name recognition based on our trademarks, we may not be able to compete effectively and our business, financial condition, results of operations and growth prospects may be adversely affected.
68
If we are unable to protect the confidentiality of our proprietary information, know-how and trade secrets, the value of our product candidates could be adversely affected and our business and competitive position would be harmed.
In addition to seeking patent protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. However, these agreements may be inadequate to protect our proprietary and intellectual property rights. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets. In addition, we may not be able to obtain adequate remedies for any such breaches. Although we use reasonable efforts to protect this proprietary information and technology, we also cannot guarantee that we have entered into such agreements with each party that may have or have had access to our confidential information, know-how, trade secrets or other proprietary information or each individual who has developed intellectual property on our behalf. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, distracting to management, and time-consuming, and the outcome is unpredictable and varied depending on the jurisdiction. In addition, some courts inside and outside the United States, in countries in which we operate or intend to operate, are less willing, or unwilling, to protect trade secrets, know-how and other proprietary information. Any claims or litigation could cause us to incur significant expenses. Some third parties may be able to sustain the costs of complex litigation more effectively than we can because they have substantially greater resources.
Our employees, consultants, and other parties may unintentionally or willfully disclose our information or technology to competitors and there can be no assurance that the legal protections and precaution taken by us will be adequate to prevent misappropriation of our technology or that competitors will not independently develop technologies equivalent or superior to ours. Trade secrets and know-how can be difficult to protect. Our competitors or other third parties may independently develop knowledge, methods and know-how equivalent to our trade secrets. Additionally, competitors could purchase our product candidates and replicate some or all of the competitive advantages we derive from our development efforts for technologies on which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
69
If we or our licensors do not obtain patent term extension and data exclusivity for any product candidates we or our licensors may develop, our business may be materially harmed.
Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents we license or may own in the future protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to our product candidates. Depending upon the timing, duration, and specifics of any FDA approval of any of our product candidates, one or more of our in-licensed U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 (the “Hatch-Waxman Amendments”). The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and growth prospects could be materially harmed.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned or in-licensed patents and applications. In certain circumstances, we rely on our licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. In some cases, we or our licensors may not be able to obtain patent protection for certain licensed technology outside the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions where we or our licensors do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our in-licensed inventions in all countries outside the United States, even in jurisdictions where our licensors do pursue patent protection or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
Competitors may use our technologies in jurisdictions where we or our licensors have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates and our preclinical programs. Our in-licensed patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
70
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain 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 in-licensed patents, if pursued and obtained, or the marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our in-licensed patents at risk of being invalidated or interpreted narrowly and our in-licensed patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and growth prospects may be adversely affected.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.
Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, record-keeping, labeling, storage, approval, advertising, promotion, sale, import, export and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable foreign regulatory authorities, with regulations differing from country to country. Failure to obtain regulatory approval for a product candidate will prevent us from commercializing the product candidate. We currently do not have any products approved for sale in any jurisdiction. For example, we are not permitted to market any product candidate in the United States until we receive regulatory approval of an NDA from the FDA. We as a company only have limited experience in filing and supporting the applications necessary to gain regulatory approvals and may rely on third-party contract research organizations to assist us in this process.
Approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development. For instance, changes to leadership and the reorganization and rededication of critical resources at the FDA and within similar governmental health authorities across the world, may impact the ability of new products and services from being developed or commercialized in a timely manner. Regulations and requirements vary among jurisdictions, including in Japan and Europe. We have not obtained regulatory approval for any product candidate, and it is possible that our product candidates will never obtain regulatory approval.
We have not sought or obtained regulatory approval for any product candidate, and it is possible that any product candidates we may seek to develop will never obtain regulatory approval. In order to obtain approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe that the nonclinical or clinical data for a product candidate is promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. The FDA may also require us to conduct additional nonclinical studies or clinical trials for product candidates either prior to or post-approval, and it may otherwise object to elements of our clinical development program.
71
The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:
Of the large number of drugs in development, only a small percentage complete the FDA or foreign regulatory approval processes and are successfully commercialized. The lengthy review process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval, which would significantly harm our business, financial condition, results of operations and growth prospects.
Even if we eventually receive approval of an NDA or foreign marketing application for our product candidates, the FDA, or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, often referred to as Phase 4 clinical trials, and the FDA may require the implementation of a REMS, which may be required to ensure safe use of the drug after approval. The FDA or the applicable foreign regulatory agency also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects.
72
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA and foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or foreign regulatory authorities’ ability to perform routine functions. Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections at domestic and foreign manufacturing facilities at various points. Even though the FDA has since resumed standard inspection operations, any resurgence of the virus may lead to other inspectional or administrative delays. If a prolonged government shutdown occurs, or if global health concerns hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We may not be able to obtain or maintain orphan drug designations for any product candidates, and we may be unable to take advantage of the benefits associated with orphan drug designation, including the potential for market exclusivity.
Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a diagnosed patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. Similar laws exist in Europe and Japan. The European Commission may grant a product orphan medicinal product designation if the product is intended for the treatment, prevention or diagnosis of a life-threatening or very serious condition, with a prevalence in the European Union of not more than five in 10,000 people, and where either no satisfactory method of diagnosis, prevention or treatment of the condition in question exists, or if such method exists that the medicinal product will be of significant benefit to those affected by that condition.
As part of our business strategy, we intend to seek orphan drug designation, where applicable, from the FDA and orphan medicinal product designation from the European Commission; however, we may not be able to obtain or maintain this status for our product candidates. There can be no assurance that any regulatory authority will grant any orphan drug designations.
In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. In addition, if a product candidate that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, it is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
73
More than one product may be approved by the FDA for the same orphan disease or condition, as long as the products are different drugs, as determined by the FDA. As a result, if any of our product candidates is approved by the FDA and receives orphan drug exclusivity, absent other applicable exclusivities, the FDA can still approve other drugs for use in treating the same indication or disease, which could create a more competitive market for us. The failure to successfully obtain orphan drug exclusivity would adversely affect our business.
Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same disease or condition. Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the same disease or condition if such regulatory authority concludes that the later drug is clinically superior if it is shown to be safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
We may attempt to seek accelerated approval in the United States for certain of our product candidates. If we are not able to use that pathway, we may be required to conduct additional clinical trials beyond those that are contemplated, which would increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals, if we receive them at all. In addition, even if an accelerated approval pathway is available to us, it may not lead to expedited approval of our product candidates, or approval at all.
Under the FDCA and implementing regulations, the FDA may grant accelerated approval to a product candidate to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies, upon a determination that the product has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug.
The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies to verity and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through fiscal year 2023. Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA new statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval. Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.
Prior to seeking accelerated approval for any of our product candidates we intend to seek feedback from the FDA or will otherwise evaluate ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
74
Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed in these territories. Any approval we are granted for our product candidates in the United States would not assure approval of such product candidates in foreign jurisdictions.
In order to market and sell our product candidates in Japan, the European Union, United Kingdom, other areas of Asia, Australia, and any other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain approval from the FDA. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining approval from the FDA. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and data from clinical studies approved by the FDA may not be accepted by foreign regulatory agencies, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, failure to obtain approval in one jurisdiction may impact our ability to obtain approval elsewhere. We may not be able to file for marketing authorization and may not receive necessary approvals to commercialize our product candidates in any market.
Even if we obtain regulatory approvals for our product candidates, the terms of approvals and ongoing regulation of such product candidates may limit how we manufacture and market the product candidates and compliance with such requirements may involve substantial resources, which could materially impair our ability to generate revenue.
Even if regulatory approval of any of our product candidates is granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation, including with respect to the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for the product. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with cGMPs and GCPs for any clinical trials, In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements including ensuring that quality control and manufacturing procedures conform to cGMP, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We and our contract manufacturers could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMP.
Accordingly, assuming we receive regulatory approval for one or more product candidates, we and our contract manufacturers will continue to expend time, money, and effort in all areas of regulatory compliance. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. In addition, failure to comply with FDA and other comparable foreign regulatory requirements may subject our company to administrative or judicially imposed sanctions, including:
75
The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.
The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product candidates we develop. We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States 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 be subject to enforcement action and we may not achieve or sustain profitability.
The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
The FDA and other regulatory authorities strictly regulates marketing, labeling, advertising and promotion of prescription drugs. These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored scientific and educational activities, and promotional activities involving the internet and off-label promotion. For example, any regulatory approval that the FDA grants is limited to those specific diseases and indications for which a product is deemed to be safe and effective by FDA. While physicians in the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote any products will be narrowly limited to those indications that are specifically approved by the FDA.
If we are found to have promoted such off-label uses, we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion any product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business, financial condition, results of operations and growth prospects.
76
Our employees, independent contractors, principal investigators, CROs, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other misconduct or failure to comply with applicable regulatory requirements. Misconduct, errors, or omissions by employees and independent contractors, such as principal investigators, CROs, consultants, commercial partners, and vendors, could include failures to comply with regulations of the FDA and other comparable regulatory authorities, to provide accurate information to such regulators, to comply with manufacturing standards we have established, to comply with healthcare fraud and abuse laws, to report financial information or data accurately, to disclose unauthorized activities to us, or to comply with requirements of government contracts (e.g., the NIAID contract). In particular, sales, marketing, and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including, but not limited to, research, manufacturing, distribution, pricing, discounting, marketing, and promotion, sales commission, customer incentive programs, and other business arrangements. Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct. It is not always possible to identify and deter employee and independent contractor misconduct, and any precautions we take to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits, and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment, or restructuring of our operations, any of which could adversely affect our ability to operate.
If we successfully commercialize any of our product candidates, failure to comply with our reporting and payment obligations under U.S. governmental pricing programs could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
If we participate in the Medicaid Drug Rebate Program and/or Medicare Part D, if and when we successfully commercialize a product candidate, we will be required to report certain pricing information for such product candidate to the Centers for Medicare & Medicaid Services, the federal agency that administers the Medicaid and Medicare programs. We may also be required to report pricing information to the U.S. Department of Veterans Affairs. If we become subject to these reporting requirements, we will be liable for errors associated with our submission of pricing data, for failure to report pricing data in a timely manner, and for overcharging government payers, which can result in civil monetary penalties under the Medicaid statute, the federal civil False Claims Act, and other laws and regulations.
77
Our current and future relationships with healthcare professionals, principal investigators, consultants, customers, and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency and other healthcare laws and regulations, which could expose us to penalties.
Healthcare providers, physicians, and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain regulatory approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers, and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws that may constrain the business or financial arrangements and relationships through which we research, sell, market, and distribute any product candidates for which we obtain regulatory approval. In addition, we may be subject to physician payment transparency laws and regulations by the federal government and by the states and foreign jurisdictions in which we conduct our business. The applicable federal, state, and foreign healthcare laws that may affect our ability to operate include the following:
78
Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including future collaborators, are found not to be in compliance with applicable laws, they may be subject to criminal, civil, or administrative sanctions, including exclusions from participation in government healthcare programs, which could also affect our business.
Changes in healthcare policies, laws, and regulations may impact our ability to obtain approval for, or commercialize our product candidates, if approved.
In the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system in an effort to contain costs, improve quality, and expand access to care. In the United States, there have been and continue to be a number of healthcare-related legislative initiatives, as well as executive, judicial, and Congressional challenges to existing healthcare laws that have significantly affected, and could continue to significantly affect, the healthcare industry. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. In addition, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs and review the relationship between pricing and manufacturer patient programs. For example, the IRA, among other things (i) directs the U.S. Department of Health and Human Services (“HHS”) to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023. On August 29, 2023 HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. HHS has and will continue to issue and update guidance as these programs are implemented. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
79
At the state level, legislatures have become increasingly active in passing legislation and implementing 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. Outside of the United States, particularly in the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of regulatory approval for a product. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidates to other available therapies. If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.
We are subject to privacy and data security laws, rules, regulations, policies, industry standards, and contractual obligations, and our failure to comply with them could harm our business.
We maintain a large quantity of information, including confidential business information and information related to our employees and may maintain or have responsibility for the maintenance of personal information in connection with the conduct of our clinical trials. As such, we are subject to laws and regulations governing the privacy and security of such information. In the United States, there are numerous federal and state privacy and data security laws and regulations governing the collection, use, disclosure, and protection of personal information that apply or could apply to our operations or the operations of our partners, including federal and state health information privacy laws, federal and state security breach notification laws, and federal and state consumer protection laws. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues, in particular in relation to health information, which may affect our business and is expected to increase our compliance costs and exposure to liability. In addition, we may obtain health information from third parties, including research institutions from which we obtain clinical trial data, that are subject to privacy and security requirements under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and the regulations promulgated thereunder. Depending on the facts and circumstances, we could be subject to significant penalties if we obtain, use or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA.
Compliance with these and any other applicable privacy and data security laws, regulations and other requirements we may be subject to in the future is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms ensuring compliance with such data protection rules. If we fail to comply with any such laws, regulations or other requirements, we may face significant fines and penalties that could adversely affect our business, financial condition, results of operations or growth prospects. Any failure or perceived failure by us or our third-party processors to comply with these data protection and privacy laws, regulations and requirements could result in significant government enforcement actions, which could include civil, criminal, and administrative penalties, orders requiring that we change our practices, claims for damages, and other liabilities, regulatory investigations and enforcement action, private litigation, significant costs (including in investigating and defending such claims, in remediation measures or changes to our operations), and adverse publicity, any of which could negatively affect our business, financial condition, results of operations and growth prospects. Furthermore, the laws are not consistent, and compliance in the event of a widespread data breach is costly. In addition, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements.
80
With laws, regulations, and other obligations relating to privacy and data protection imposing new and relatively burdensome obligations, and with the substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices and may incur significant costs and expenses in an effort to do so. We are currently in the process of developing and updating our policies and procedures in accordance with requirements under applicable data privacy and protection laws and regulations. We rely on our CROs to ensure compliance with data-privacy regulations that may arise in our trials. Other than our website privacy policy, we do not currently have any formal data privacy policies and procedures in place and have not completed formal assessments of whether we are in compliance with all applicable data privacy laws and regulations. Additionally, if third parties with which we work, such as vendors or service providers, violate applicable laws, rules or regulations or our policies, such violations may also put our or our clinical trial and employee data, including personal data, at risk, and our business, financial condition, results of operations and growth prospects may be adversely affected.
We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business.
We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls, the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.
We may engage third parties to sell any approved product candidates outside the United States, to conduct clinical trials, and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors, and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract, and fraud litigation, reputational harm, and other consequences.
We are also subject to export control, import, and trade sanctions laws and regulations which may restrict or prohibit altogether the provision, sale, or supply of our product candidates to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo. Obtaining the necessary export license or other authorization for a particular transaction may be time-consuming and may result in the delay or loss of sales opportunities. Violations of U.S. export control, import, or sanctions laws and regulations can result in significant fines or penalties and possible incarceration for responsible employees and managers.
81
Risks Related to Ownership of Our Common Stock
Concentration of ownership of our common stock among our existing executive officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions and matters submitted to stockholders for approval.
Our executive officers, directors, and current beneficial owners of 5% or more of our capital stock and their respective affiliates beneficially own, in the aggregate, a significant percentage of our outstanding common stock. As a result, these persons, acting together, would be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors, any merger, consolidation, or sale of all or substantially all of our assets, or other significant corporate transactions. In addition, these persons, acting together, may have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership may harm the market price of our common stock by:
In addition, some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares were sold in our IPO and recent financings and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.
A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly.
We cannot predict what effect, if any, sales of our shares in the public market or the availability of shares for sale will have on the market price of our common stock. However, future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options, or the perception that such sales may occur, could adversely affect the market price of our common stock.
We also expect that significant additional capital may be needed in the future to continue our planned operations. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
82
Provisions in our corporate charter documents and under Delaware law, and the adoption of a rights plan, could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger, acquisition, or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our Board is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board. Among other things, these provisions:
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired more than 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.
Additionally, in August 2024, we entered into a Rights Agreement, which was previously approved by the Board. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right for each share of the Common Stock of the Company outstanding at the Record Date (individually, a “Right” and collectively, the “Rights”). Each Right entitles the registered holder thereof, after the Rights become exercisable and until August 15, 2025 (or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series A Preferred, of the Company at a price of $6.50 per one one-thousandth of a share of Series A Preferred, subject to adjustment. The Rights will expire on August 15, 2025, subject to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or terminated. The Rights Agreement could have the effect of discouraging, delaying or preventing a change in management or control over us. While there is no plan to do so at this time, our Board may choose to extend the current Rights Agreement or adopt a new rights agreement in the future.
83
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forums for substantially all disputes between us and our stockholders, including claims under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:
Furthermore, our amended and restated certificate of incorporation also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. However, these provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Any person purchasing or otherwise acquiring or holding any interest in shares of our capital stock is deemed to have received notice of and consented to the foregoing provisions. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds more favorable for disputes with us or with our directors, officers, other employees or agents, or our other stockholders, which may discourage such lawsuits against us and such other persons, or may result in additional expense to a stockholder seeking to bring a claim against us. Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, results of operations and growth prospects.
We will have broad discretion in the use of our cash, and may invest or spend our cash in ways with which you do not agree and in ways that may not increase the value of your investment.
Our management will have broad discretion in the application of our cash, and could spend our cash in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a negative impact on our business, cause the price of our common stock to decline, and delay the development of our pipeline programs as well as commercial preparedness.
84
We do not anticipate paying any cash dividends on our capital stock in the foreseeable future, and accordingly, stockholders must rely on capital appreciation, if any, for any return on their investment.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our existing operations. In addition, any future credit facility or debt securities may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. If we do not pay cash dividends, you could receive a return on your investment in our common stock only if you are able to sell your shares in the future and the market price of our common stock has increased when you sell your shares. As a result, investors seeking cash dividends should not purchase our common stock.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of December 31, 2023, we had federal and state net operating loss (“NOLs”) carryforwards of approximately $58.2 million and $122.6 million, respectively. Under the Tax Cuts and Jobs Act of 2017 (“the Tax Act”), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), our NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income. There is variation in how states have responded and may continue to respond to the Tax Act or the CARES Act. In addition, under Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We may have experienced ownership changes in the past and may experience ownership changes in the future. As a result, our ability to use our pre-change NOLs and tax credits to offset post-change taxable income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
General Risk Factors
The trading price of our common stock has been and may continue to be volatile.
The trading price of our common stock has been subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their shares at or above the price paid for the shares. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Form 10-Q, these factors include:
85
These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their shares of our common stock at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common stock. In addition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
Some companies that have experienced volatility in the trading price of their shares have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices. Defending against litigation is costly and time-consuming and could divert our management’s attention and our resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common stock.
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.
The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. We currently have research coverage by a limited number of equity research analysts. Equity research analysts may elect not to continue to provide research coverage of our common stock, and such lack of research coverage may adversely affect the market price of our common stock. We will not have any control over the analysts or the content and opinions included in their reports. The price of our shares could decline if one or more equity research analysts downgrade our shares or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our shares could decrease, which in turn could cause the trading price or trading volume of our common stock to decline.
86
We are incurring significantly increased costs as a result of operating as a company whose common stock is publicly traded in the United States, and our management is devoting substantial time to new compliance initiatives.
As a public company in the United States, we are incurring significant legal, accounting, and other expenses. These expenses will likely be even more significant after we no longer qualify as an emerging growth company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq Stock Market LLC, and other applicable securities rules and regulations impose various requirements on public companies in the United States, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations has increased our legal and financial compliance costs and has made some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur or the timing of such costs.
However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
Pursuant to Section 404, we will be required to furnish a report by our senior management on our internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, we have engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, engage outside consultants, and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. Identifying material weaknesses could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
87
Significant disruptions of our or our vendors’ information technology systems or cybersecurity incidents could result in significant financial, legal, regulatory, business, and reputational harm to us.
We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business. In the ordinary course of our business, we collect, store, process, and transmit large amounts of confidential information, including intellectual property, proprietary business information, personal information (including health information), and other confidential information. It is critical that we do so in a secure manner to maintain the confidentiality, integrity, and restricted availability of such information. We have also outsourced elements of our operations, including elements of our information technology infrastructure and data processing, to third parties and, as a result, we manage a number of third-party vendors who have access to our computer networks or our information. In addition, many of those third parties in turn subcontract or outsource some of their responsibilities to other third parties. While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks, and exposures, the accessibility and distributed nature of our information technology systems, and the information stored on those systems, make such systems (and the information stored therein) vulnerable to risks that threaten the confidentiality, integrity and availability of these systems and information, including unintentional or malicious, internal, and external attacks on our technology environment. Vulnerabilities can be exploited by diverse threat actors and attack vectors, including through inadvertent or intentional actions of our employees, third-party vendors, business partners, or by malicious third parties. Cybersecurity incidents are increasing in their frequency, levels of persistence, sophistication, and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives (including industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states, and others, and utilizing increasingly sophisticated techniques and tools – including AI – that circumvent security controls, evade detection and remove or obfuscate forensic evidence. In addition to access to, loss of or the extraction of information, such attacks could involve the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering/phishing, malicious code embedded in software, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information technology systems or information. In addition, the prevalent use of mobile devices increases the risk of cybersecurity incidents.
Significant disruptions of our or our third-party vendors’ or business partners’ information technology systems or other similar cybersecurity incidents could adversely affect our business operations and result in the loss, misappropriation, and unauthorized access, use or disclosure of, or the prevention of access to, information, which could result in financial, legal, regulatory, business, and reputational harm to us. In addition, any impact to the confidentiality, integrity or availability of information technology systems and the information stored therein, whether from attacks on our or third-party technology environment or from computer viruses, natural disasters, terrorism, war, telecommunication and electrical failures, or other threats, could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from ongoing, completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. We cannot ensure that our cybersecurity and data protection efforts and our investment in information technology, or the efforts or investments of CROs, consultants or other third parties with which we work, will prevent breakdowns or breaches in our or their systems or other cybersecurity incidents, including those that cause loss, destruction, unavailability, alteration, dissemination of, or damage, or unauthorized access to, or processing of, our data, including personal information, assets, and other data processed or maintained on our behalf, that could have a material adverse effect upon our reputation, business, financial condition, results of operations and growth prospects.
88
While we have implemented security measures intended to protect our information technology systems and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or cybersecurity incidents or that our security measures and processes will be fully implemented, complied with or effective. Nor can we be certain that our third-party vendors or business partners have sufficient measures or processes in place to protect their information technology systems and infrastructure. We, our third-party vendors and business partners are, from time to time, subject to attacks and cybersecurity incidents. While we have not to our knowledge experienced an incident that has had a material impact on our operations or financial results, there is no way of knowing with certainty whether we have experienced any material cybersecurity incidents that have not been discovered. While we have no reason to believe this to be the case, attackers have become very sophisticated in the way they conceal access to systems, and many companies that have been attacked are not aware that their systems or information have been compromised. Any event that leads to unauthorized access, use, or disclosure of information, including personal information regarding our patients or employees, or other adverse impact to the availability, integrity or confidentiality of our information technology systems, infrastructure or information, could disrupt our business, harm our reputation, compel us to comply with applicable federal and state breach notification laws and foreign law and contractual equivalents, subject us to time-consuming, distracting, and expensive litigation (including class actions), regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of database contents, or otherwise subject us to liability under laws, regulations, and contractual obligations, including those that protect the privacy and security of personal information. It could also result in increased costs to us, including costs to investigate, mitigate and remediate vulnerabilities and incidents, and result in significant legal and financial exposure and reputational harm. In addition, any failure or perceived failure by us or our vendors or business partners to comply with our privacy, confidentiality, or data security-related legal or other obligations to third parties, or any further cybersecurity incidents, may result in governmental investigations, enforcement actions, regulatory fines, litigation, or public statements against us by advocacy groups or others, and could cause third parties, including clinical sites, regulators, or current and potential partners, to lose trust in us, or we could be subject to claims by third parties that we have breached our privacy- or confidentiality-related obligations. Moreover, cybersecurity incidents and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. Any of the foregoing could have a material adverse effect on our reputation, business, financial condition, results of operations and growth prospects.
We are an “emerging growth company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.
We are an “emerging growth company” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted by SEC rules and plan to rely on exemptions from certain disclosure requirements that are applicable to other SEC-registered public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404, not being required to comply with the auditor requirements to communicate critical audit matters in the auditor’s report on the financial statements, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies. We have taken advantage of reduced reporting burdens in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q. In particular, in our Annual Reports on Form 10-K, we have provided only two comparative periods of audited financial statements. We also have not provided all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not “emerging growth companies.”
89
Recent and potential future changes to U.S. and non-U.S. tax laws could materially adversely affect our company.
Existing, new, or future changes in tax laws, regulations, and treaties, or the interpretation thereof, in addition to tax policy initiatives and reforms under consideration in the United States or internationally and other initiatives could have an adverse effect on the taxation of international businesses. Furthermore, countries where we are subject to taxes, including the United States, are independently evaluating their tax policy and we may see significant changes in legislation and regulations concerning taxation. For example, the Tax Act, the CARES Act and the recently enacted IRA made many significant changes to the U.S. tax laws. The Tax Act made broad and complex changes to the Code, including, among other things, reducing the federal corporate tax rate. Additionally, beginning in 2022, the Tax Act required the capitalization of research and experimentation expenses with amortization periods over five and fifteen years pursuant to Code Section 174 (“Section 174”), which could impact our effective tax rate and cash flow. Future guidance from the U.S. Internal Revenue Service and other tax authorities with respect to any such tax legislation may affect us, and certain aspects of the previously enacted legislation could be repealed or modified in future legislation. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, the IRA, or any newly enacted federal tax legislation. Other legislative changes could also affect the taxation of holders of our common stock. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our effective tax rates in the future in countries where we are subject to tax and have an adverse effect on our overall tax rate in the future, along with increasing the complexity, burden, and cost of tax compliance. We urge our stockholders to consult with their legal and tax advisors with respect to any such legislative changes and the potential tax consequences of investing in or holding our common stock.
Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses.
Our agreements with third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement or other liabilities relating to or arising from our contractual obligations. Large indemnity payments could harm our business, financial condition, results of operations and growth prospects. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability. Any dispute with a third party with respect to such obligations could have adverse effects on our relationship with that third party and relationships with other existing or new partners, harming our business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
None.
Use of Proceeds from Public Offering of Common Stock
On March 24, 2022, our registration statement on Form S-1 (File No. 333-263295) was declared effective by the SEC for our IPO. There has been no material change in the use of proceeds from our IPO as described in our final prospectus dated March 24, 2022 pursuant to Rule 424(b)(4).
Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
90
Item 5. Other Information.
During the fiscal quarter ended September 30, 2024, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of 1934, as amended)
91
Item 6. Exhibit
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
|
|
|
|
Incorporated by Reference |
||||||
Exhibit Number |
|
Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
3.1 |
|
|
8-K |
|
001-41331 |
|
3.1 |
|
June 24, 2024 |
|
3.2 |
|
|
S-1 |
|
333-263295 |
|
3.4 |
|
March 4, 2022 |
|
3.3 |
|
|
8-K |
|
001-41331 |
|
3.1 |
|
August 19, 2024 |
|
4.1 |
|
|
8-K |
|
001-41331 |
|
4.1 |
|
August 19, 2024 |
|
31.1* |
|
|
|
|
|
|
|
|
|
|
31.2* |
|
|
|
|
|
|
|
|
|
|
32.1*† |
|
|
|
|
|
|
|
|
|
|
32.2*† |
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document** |
|
|
|
|
|
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document** |
|
|
|
|
|
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document** |
|
|
|
|
|
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document** |
|
|
|
|
|
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document** |
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
|
|
|
|
|
* Filed herewith.
92
** The following materials are formatted in Inline XBRL (Extensible Business Reporting Language): (i) the cover page; (ii) the Condensed Balance Sheets as of September 30, 2024 and December 31, 2023; (iii) the Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023; (iv) the Condensed Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023; (vi) the Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023; (vii) Notes to Condensed Financial Statements tagged as blocks of text.
† The certification attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
93
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 13, 2024.
|
|
AN2 Therapeutics, Inc. |
|
|
|
|
|
|
|
By: |
/s/ Eric Easom |
|
|
|
Eric Easom |
|
|
|
Chief Executive Officer and Director |
|
|
|
|
|
|
By: |
/s/ Lucy O. Day |
|
|
|
Lucy O. Day |
|
|
|
Chief Financial Officer |
|
|
|
(Principal Financial Officer and Principal Accounting Officer) |
94