Item 1A. Risk Factors.
Investing in our common stock involves a high degree
of risk. Before you decide to invest in our common stock, you should consider carefully the risks described below, together with the other
information contained in this Report, including “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our consolidated financial statements and related notes. We believe the risks described below are the risks that
are material to us as of the date of this Report. The occurrence of any of the events or developments discussed in the risk factors below
could have a material and adverse impact on our business, financial condition, results of operations and cash flows and, in such case,
our future prospects would likely be materially and adversely affected. In these circumstances, the market price of our common stock could
decline, and you may lose all or part of your investment.
Risk Factor Summary
Below is a summary of material
factors that make an investment in our common stock speculative or risky. Importantly, this summary does not address all of the risks
and uncertainties that we face and you should not consider this section to be a complete discussion of all potential risks or uncertainties
that may substantially impact our business.
Risks Related to Our Limited Operating History,
Financial Condition and Capital Requirements
Risks Related to Clinical Development and Potential
Regulatory Approval
Risks Related to Our Reliance on Third Parties
Risks Related to Commercialization of Elraglusib
and any Future Product Candidates
Risks Related to Our Intellectual Property
Risks Related to Our Business Operations and Industry
Risks Associated to our Common Stock
Risks Related to Our Limited Operating History, Financial Condition
and Capital Requirements
We have a limited operating history, have incurred
significant operating losses since our inception and expect to incur significant operating losses for the foreseeable future. We have
a high risk of never generating revenue or becoming profitable or, if we achieve profitability, it may not be sustained.
Biopharmaceutical product development
is a highly speculative undertaking and involves a substantial degree of risk. We are a clinical-stage biopharmaceutical company with
a relatively limited operating history upon which you can evaluate our business and prospects. We commenced operations in January 2015
and have not generated revenue from the sale of our products. Therefore, there is limited historical financial or operational information
upon which to evaluate our performance. Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties
frequently encountered by companies in their early stages of operations. Many if not most companies in our industry at our stage of development
never become profitable and are acquired or go out of business before successfully developing any product that generates revenue from
commercial sales or enables profitability.
We have incurred losses since
our inception in January 2015 through December 31, 2024 and our accumulated deficit was approximately $132.4 million at December 31, 2024.
Substantially all of our losses have resulted from expenses incurred in connection with our research and development activities and from
general and administrative costs associated with our operations. We expect to continue to incur substantial and increasing operating losses
over the next several years as we continue the clinical development of, seek regulatory approval for and potentially commercialize elraglusib
and any future product candidates, as well as operate as a public company.
The magnitude of our future losses
and when, if ever, we will become profitable are uncertain. We do not have any products that have generated any revenues from commercial
sales, and do not expect to generate revenues from the commercial sale of products in the near future, if ever. If we are unable to successfully
develop, obtain requisite approval for and commercialize elraglusib or any future product candidates, we may never generate revenue. Our
ability to generate revenue and achieve profitability will depend on, among other things, successful completion of the development of
our product candidates; obtaining necessary regulatory approvals from the FDA and international regulatory agencies; establishing manufacturing,
sales, and marketing arrangements with third parties; obtaining adequate reimbursement by third-party payers; and raising sufficient funds
to finance our activities. If we are unsuccessful at some or all of these undertakings, our business, financial condition, and results
of operations are expected to be materially and adversely affected.
To become and remain profitable,
we must succeed in developing, obtaining regulatory approvals for, and eventually commercializing products that generate significant revenue.
This will require us to be successful in a range of challenging activities, including completing clinical trials and preclinical studies
of elraglusib and any future product candidates, acquiring or developing additional product candidates, obtaining regulatory approval
for elraglusib and any future product candidates and manufacturing, marketing, and selling any products for which we may obtain regulatory
approval. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we
do, may never generate revenue that is significant enough to achieve profitability. In addition, we have not yet demonstrated an ability
to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly
in the biopharmaceutical industry. Because of the numerous risks and uncertainties associated with biopharmaceutical product development,
we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure
to become and remain profitable may have an adverse effect on the value of our company and could impair our ability to raise capital,
expand our business, maintain our research and development efforts, diversify our product candidates, achieve our strategic objectives
or even continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
Our financial condition raises substantial doubt
as to our ability to continue as a going concern.
As of December 31, 2024, we had
approximately $8.6 million in cash and cash equivalents and working capital of approximately $0.4 million. We have incurred and expect
to continue to incur significant costs in the development of our sole drug candidate, elraglusib. Our consolidated financial statements
have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. To date, we have not generated product revenues from our activities and
have incurred substantial operating losses. We expect that we will continue to generate substantial operating losses for the foreseeable
future until we complete development and approval of our product candidates. We expect to continue to fund our operations primarily through
utilization of our current financial resources and additional raises of capital.
These conditions raise substantial
doubt about our ability to continue as a going concern. Additionally, our independent registered public accounting firm included in its
audit opinion for the year ended December 31, 2024 an explanatory paragraph that there is substantial doubt as to our ability to continue
as a going concern. We plan to address these conditions by raising funds from public or private offerings of equity or debt securities
and other funding sources. However, there can be no assurance that such funding will be available to us, will be obtained on terms favorable
to us or will provide us with sufficient funds to meet our objectives. The reaction of investors to the inclusion of a going concern statement
by our auditors and our potential inability to continue as a going concern may materially adversely affect our ability to raise new capital
or enter into partnerships. If we become unable to continue as a going concern, we may have to liquidate our assets and the value we receive
for our assets in liquidation or dissolution could be significantly lower than the value reflected in our consolidated financial statements.
We will require substantial additional capital
to finance our operations, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to
delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.
The development of biopharmaceutical
product candidates, including conducting preclinical studies and clinical trials, is a very time-consuming, capital-intensive and uncertain
process. Our operations have consumed substantial amounts of cash since inception. We expect our expenses to substantially increase in
connection with our ongoing activities, particularly as we conduct our ongoing and planned clinical trials of elraglusib and potentially
seek regulatory approval for elraglusib and any future product candidates we may develop. In addition, if we are able to progress elraglusib
through development and commercialization, we expect to be required to make milestone and royalty payments pursuant to various license
or collaboration agreements with third parties. If we obtain regulatory approval for elraglusib or any future product candidates, we also
expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution. Because the
outcome of any clinical trial or preclinical study is highly uncertain, we cannot reliably estimate the actual amount of capital necessary
to successfully complete the development and commercialization of elraglusib or any future product candidates. Furthermore, we incur additional
costs associated with operating as a public company.
Based on our current operating
plan, we believe that our existing cash and cash equivalents will not be sufficient to fund our operations for the twelve (12) months
following the date of this Report.
Our estimates and assumptions
regarding our operating costs may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our operating
plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek
additional funds sooner than planned.
Our existing capital will not
be sufficient to complete development of elraglusib in any form, or any future product candidates, and we require substantial capital
in order to advance elraglusib and any future product candidates through clinical trials, regulatory approval and commercialization. Accordingly,
we will need to obtain substantial additional funding in connection with our continuing operations. Our ability to raise additional funds
may be adversely impacted by global economic conditions, disruptions to, and volatility in, the credit and financial markets in the United
States and worldwide, and diminished liquidity and credit availability. If the equity and credit markets deteriorate, it may make any
necessary debt or equity financing more difficult, more costly and more dilutive. If we are unable to raise capital when needed or on
attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization
efforts, or even cease operations. We expect to finance our cash needs through public or private equity or debt financings or other capital
sources, including potential collaborations, licenses, and other similar arrangements. 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. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect
our ability to develop elraglusib or any future product candidates.
Our future capital requirements
will depend on many factors, including without limitation:
· our ability to raise sufficient funds when, and if, required.
Conducting clinical
trials and preclinical studies and potentially identifying future product candidates 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 commercialize
elraglusib or any future product candidates. If approved, elraglusib and any future product candidates may not achieve commercial success.
We expect that our commercial revenue, if any, will initially be derived from sales of elraglusib, which we do not expect to be commercially
available for several years, if at all. Commercial success in the United States may depend upon acceptance and coverage by federal healthcare
program and third-party payors, and it can be time consuming and costly to demonstrate that any of our products should be covered.
Accordingly, in the near term,
we intend to seek and 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, including as a result of financial and credit market deterioration or instability,
market-wide liquidity shortages, geopolitical events or otherwise.
Raising additional capital may cause dilution
to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. In addition,
any capital obtained by us may be obtained on terms that are unfavorable to us, our investors, or both.
Until such time, if ever, as we
can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital
sources, including potential collaborations, licenses and other similar arrangements. We do not have any committed external source of
funds. As we attempt to raise additional financing, which we intend to do in the near term, there can be no assurance that we will be
able to secure such additional financing in sufficient quantities or at all. We may be unable to raise additional capital for reasons
including, without limitation, our operational and/or financial performance, investor confidence in us and the biopharmaceutical industry,
credit availability from banks and other financial institutions, the status of current projects and our prospects for obtaining any necessary
regulatory approvals. Potential investors’ capital investments may have shifted to other opportunities with perceived greater returns
and/or lower risk thereby reducing capital available to us, if available at all.
In addition, any additional financing
might not be available, and even if available, may not be available on terms favorable to us or our then-existing investors. We may seek
to raise funds through public or private equity offerings, debt financings, corporate collaboration or licensing arrangements, mergers,
acquisitions, sales of intellectual property or other financing vehicles or arrangements. To the extent that we raise additional capital
by issuing equity securities or other securities (including convertible debt), our then-existing investors will experience dilution, and
the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
If we raise funds through debt financings or bank loans, we may become subject to restrictive covenants, such as incurring additional
debt, making capital expenditures or declaring dividends. Such restrictions could adversely impact our ability to conduct our operations
and execute our business plan. Moreover, if we raise funds through debt financings or bank loans, our assets may be pledged as collateral
for the debt, and the interests of our then-existing investors would be subordinated to the debt holders or banks. In addition, our use
of and ability to exploit assets pledged as collateral for debt or loans may be restricted or forfeited. To the extent that we raise additional
funds through collaboration or licensing arrangements, we may be required to relinquish valuable rights to our future revenue streams,
product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that are not favorable
to us and/or that may reduce the value of our common stock. If we are not able to raise funding when needed under acceptable terms or
at all, then we would be required to delay, limit, reduce, curtail, abandon or terminate our product development or future commercialization
efforts, or grant rights to develop and market product candidates that we might otherwise prefer to develop and market ourselves, or on
less favorable terms than we would otherwise choose, or sell assets, or cease operations entirely.
Risks Related to Clinical Development and Potential
Regulatory Approval
We do not have and may never have any approved
products on the market. Our business is highly dependent upon receiving approvals from various governmental agencies and will be severely
harmed if we are not granted approval to manufacture and sell our product candidates.
In order for us to commercialize
elraglusib for the treatment of mPDAC or for any other disease indication, or any other product candidate, we must obtain regulatory approvals
of such treatment for the applicable indication. Satisfying regulatory requirements is an expensive process that typically takes many
years and involves extensive compliance with requirements covering research and development, testing, manufacturing, quality control,
labeling, and promotion of drugs for human use. To obtain necessary regulatory approvals, we must, among other requirements, complete
clinical trials demonstrating that our products are safe and effective for a particular indication. In addition, before we can initiate
clinical development for any future preclinical 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, and we are also required to submit
comparable applications to foreign regulatory authorities for clinical trials outside of the United States. The FDA or comparable foreign
regulatory authorities may require us to conduct additional preclinical studies for any future product candidates before it allows us
to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays or increase the costs of developing
future product candidates. There can be no assurance that our products will prove to be safe and effective, that our preclinical or clinical
trials will demonstrate the necessary safety and effectiveness of our product candidates, or that we will succeed in obtaining regulatory
approval for any treatment we develop even if such safety and effectiveness are demonstrated.
Any delays or difficulties we
encounter in our clinical trials may delay or preclude regulatory approval from the FDA or from international regulatory organizations.
Any delay or preclusion of regulatory approval would be expected to delay or preclude the commercialization of our products. Examples
of delays or difficulties that we may encounter in our clinical trials include without limitation the following:
Any success we may achieve at
a given stage of our clinical trials does not guarantee that we will achieve success at any subsequent stage, including without limitation
final FDA approval.
We may encounter delays or rejections
in the regulatory approval process because of additional government regulation resulting from future legislation or administrative action,
or from changes in the policies of the FDA or other regulatory bodies during the period of product development, clinical trials, or regulatory
review. In addition, legislative and regulatory agendas, as they relate to healthcare and pharmaceutical industries and the economy as
a whole, of the Trump administration and the U.S. Congress currently remain uncertain. Failure to comply with any current or future applicable
regulatory requirements may result in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension
of production, or an injunction preventing certain activity, as well as other regulatory action against our product candidates or us.
As a company, we have no experience in successfully obtaining regulatory approval for a product and thus may be poorly equipped to gauge,
and may prove unable to manage, risks relating to obtaining such approval.
Outside the United States, our
ability to market a product is contingent upon receiving clearances from appropriate non-U.S. regulatory authorities. Non-U.S. regulatory
approval typically includes all of the risks associated with FDA clearance discussed above as well as geopolitical uncertainties and the
additional uncertainties and potential prejudices faced by U.S. pharmaceutical companies conducting business abroad. In certain cases,
pricing restrictions and practices can make achieving even limited profitability very difficult.
We currently depend entirely on the success
of elraglusib, which is our only product candidate. If we are unable to advance elraglusib in clinical development, obtain regulatory
approval and ultimately commercialize elraglusib in a timely manner, our business will be materially harmed.
We currently only have one product
candidate, elraglusib, which is in Phase 2 clinical development for the treatment of mPDAC as its lead indication. Our business presently
depends entirely on our ability to successfully develop, obtain regulatory approval for, and commercialize elraglusib in a timely manner.
This may make an investment in our company riskier than similar companies that have multiple product candidates in active development
and may be able to better sustain the delay or failure of a lead product candidate. The success of elraglusib will depend on several factors,
including the following:
If we are unable to develop,
obtain regulatory approval for, or if approved, successfully manufacture and commercialize elraglusib, or if we experience delays as a
result of any of the above factors or otherwise, our business would be materially harmed.
Even if we complete all planned clinical trials
including a Phase 3 trial in the future, there is no guarantee that at the time of submission the FDA will accept our NDA.
The regulation and control of
new drugs in the United States is based on the NDA, and every new drug is the subject of an approved NDA before U.S. commercialization.
Through the NDA application, the developer of a drug candidate formally proposes that the FDA approve a new pharmaceutical for sale and
marketing in the United States. The data gathered during the animal studies and human clinical trials of an IND become part of the NDA.
Clinical trials must be conducted
in accordance with the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject
to oversight by these governmental agencies and ethics committees or one or more IRBs at the medical institutions and clinical trial sites
where the clinical trials are conducted. We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs
of the institutions in which such trials are being conducted, or by a data safety monitoring board for such trial or by the FDA or comparable
foreign regulatory authorities. Such authorities may impose such a suspension, including a clinical hold, or termination due to a number
of factors, including, among other reasons, failure to conduct the clinical trial in accordance with GCP and other regulatory requirements
or our clinical protocols, inspection of the clinical trial operations or trial site, or investigation of principal or sub-investigators
conducting our clinical trials, by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold,
unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations
or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements
and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit
our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.
Failure by us or any of our third-party
vendors, manufacturers, or trial sites to comply with applicable regulatory requirements may result in criminal prosecution, civil penalties,
recall or seizure of products, total or partial suspension of production, or an injunction preventing certain activity, as well as other
regulatory action against our product candidates or us. As a company, we have no experience in successfully obtaining regulatory approval
for a product and thus may be poorly equipped to gauge, and may prove unable to manage, risks relating to obtaining such approval.
Outside the United States, our
ability to market a product is contingent upon receiving clearances from appropriate non-U.S. regulatory authorities. Non-U.S. regulatory
approval typically includes all of the risks associated with FDA clearance discussed above as well as the failure of enrolled patients
in foreign countries to adhere to clinical protocols as a result of differences in healthcare services or cultural customs, managing additional
administrative burdens associated with foreign regulatory schemes, and political and economic risks, including war or embargoes, relevant
to such foreign countries. In certain cases, pricing restrictions and practices can make achieving even limited profitability very difficult.
Clinical and preclinical drug development involves
a lengthy and expensive process with uncertain timelines and outcomes, and the results of preclinical studies and early clinical trials
are not necessarily predictive of future results. Elraglusib or any future product candidates may not achieve favorable results or receive
regulatory approval on a timely basis, if at all.
Drug development is expensive
and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any clinical trials or preclinical
studies will be conducted as planned, including whether we are able to meet expected timeframes for data readouts, or completed on schedule,
if at all, and failure can occur at any time during the trial or study process, including due to factors that are beyond our control.
Despite promising preclinical or clinical results, elraglusib or any other future product candidate can unexpectedly fail at any stage
of clinical or preclinical development. The historical failure rate for product candidates in our industry is high.
The results from preclinical studies
or clinical trials of elraglusib, any future product candidate, or a competitor’s product candidate in the same class may not predict
the results of later clinical trials of elraglusib or any future product candidate, and interim, topline or preliminary results of a clinical
trial are not necessarily indicative of final results. Elraglusib or any future product candidate in later stages of clinical trials may
fail to show the desired characteristics despite having progressed through preclinical studies and initial clinical trials. It is not
uncommon to observe results in clinical trials that are unexpected based on preclinical studies and early clinical trials, and many product
candidates fail in clinical trials despite very promising early results.
Moreover, preclinical and clinical
data may be susceptible to varying interpretations and analyses. A number of companies in the biopharmaceutical and biotechnology industries
have suffered significant setbacks in clinical development even after achieving promising results in earlier studies. Such setbacks have
occurred and may occur for many reasons, including, but not limited to: clinical sites and investigators may deviate from clinical trial
protocols, whether due to lack of training or otherwise, and we may fail to detect any such deviations in a timely manner; patients may
fail to adhere to any required clinical trial procedures, including any requirements for post-treatment follow-up; our product candidates
may fail to demonstrate safety, purity or potency (or efficacy) in certain patient subpopulations, which has not been observed in earlier
trials due to limited sample size, lack of analysis or otherwise; or our clinical trials may not adequately represent the patient populations
we intend to treat, whether due to limitations in our trial designs or otherwise, such as where one patient subgroup is overrepresented
in the clinical trial. There can be no assurance that we will not suffer similar setbacks despite the data we observed in earlier or ongoing
studies. Based upon negative or inconclusive results, we or any current or any future collaborator may decide, or regulators may require
us, to conduct additional preclinical studies or clinical trials, which would cause us to incur additional operating expenses and delays
and may not be sufficient to support regulatory approval on a timely basis or at all.
We may not be successful in our efforts to advance
elraglusib in additional indications. We may expend our limited resources to pursue a new product candidate or a particular indication
for elraglusib and fail to capitalize on more profitable or successful alternatives.
Because we have limited financial
and managerial resources, we focus on the development of elraglusib for specific indications. We may fail to generate additional clinical
development opportunities for elraglusib for a number of reasons, including that elraglusib may, in indications we are seeking or may
seek in the future, be shown to have harmful side effects, limited to no efficacy or other characteristics that suggest it is unlikely
to receive marketing approval and/or achieve market acceptance in such potential indications. Our resource allocation and other decisions
may cause us to fail to identify and capitalize on viable potential product candidates or additional indications for elraglusib. Our spending
on current and future research and development programs for new product candidates or additional indications for elraglusib may not yield
any commercially viable product candidates or indications. If we do not accurately evaluate the commercial potential or target market
for a particular indication or product candidate, we may fail to develop such product candidate or indication, or relinquish valuable
rights to that product candidate through collaborations, license agreements and other similar arrangements in cases where it would have
been more advantageous for us to retain sole development and commercialization rights to such indication or product candidate, or negotiate
less advantageous terms for any such arrangements than is optimal.
Additionally, we may pursue additional
in-licenses or acquisitions of development-stage assets or programs, which entails additional risk to us. Identifying, selecting and acquiring
promising product candidates requires substantial technical, financial and human resources expertise. Efforts to do so may not result
in the actual acquisition or license of a particular product candidate, potentially resulting in a diversion of our management’s
time and the expenditure of our resources with no resulting benefit. For example, if we are unable to identify programs that ultimately
result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring and developing products
that ultimately do not provide a return on our investment.
Use of elraglusib or any future product candidates
could be associated with side effects, adverse events or other properties or safety risks, which could delay or preclude regulatory approval,
cause us to suspend or discontinue clinical trials, abandon elraglusib or any future product candidate, limit the commercial profile of
an approved label or result in other significant negative consequences that could severely harm our business, financial condition, results
of operations and prospects.
As is the case with oncology
drugs generally, it is likely that there may be side effects and adverse events associated with use of elraglusib or any future product
candidates’ use. Results of our clinical trial collaborators or any future collaborators could reveal a high and unacceptable severity
and prevalence of expected or unexpected side effects or unexpected characteristics. Undesirable side effects caused by our product candidates
when used alone or in combination with approved or investigational drugs could cause us or regulatory authorities to interrupt, delay
or halt clinical trials and could result in a more restrictive label or lead to the delay or denial of regulatory approval by the FDA
or comparable foreign regulatory authorities. The drug-related side effects could affect patient recruitment or the ability of enrolled
patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial
condition, results of operations and prospects significantly.
Moreover, if elraglusib or any
future product candidates are associated with undesirable side effects in clinical trials or demonstrate characteristics that are unexpected,
we may elect to abandon their development or limit their development to more narrow uses or subpopulations in which the undesirable side
effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit
the commercial expectations for such product candidate if approved. Unacceptable enhancement of certain toxicities may be seen when elraglusib
or any future product candidates are combined with standard of care therapies, or when they are used as single agents. We may also be
required to modify our development and clinical trial plans based on findings in our ongoing clinical trials. Many compounds that initially
showed promise in early-stage testing for treating cancer have later been found to cause side effects that prevented further development
of the compounds.
It is possible that as we, our
collaborators or any future collaborators test elraglusib or any future product candidates in larger, longer and more extensive clinical
trials, including with different dosing regimens, or as the use of these product candidates becomes more widespread following any regulatory
approval, more illnesses, injuries, discomforts and other adverse events than were observed in earlier trials, as well as new conditions
that did not occur or went undetected in previous trials, may be discovered. If such side effects become known later in development or
upon approval, if any, such findings may harm our business, financial condition, results of operations and prospects significantly.
With regard to our lead product
candidate, elraglusib, unforeseen side effects from elraglusib could arise either during clinical development or, if approved, after
elraglusib has been marketed. This could cause regulatory approvals for, or market acceptance of, elraglusib harder and costlier to obtain.
To date, elraglusib as a single
agent and in combination with a variety of chemotherapy has been shown in a Phase 1 trial to be well-tolerated. However, these data were
obtained in advanced cancer patients across many different cancer types and at different doses of elraglusib. The results of our planned
or any future clinical trials in single cancer types may show that the side effects of elraglusib are unacceptable or intolerable, especially
when compared with standard of care and in earlier stage patients, which could interrupt, delay or halt clinical trials. This could result
in delay of, or failure to obtain, marketing approval from the FDA or EMA and other regulatory authorities or result in marketing approval
from the FDA or EMA and other regulatory authorities with restrictive label warnings.
If elraglusib receives marketing approval and we
or others later identify undesirable or unacceptable side effects caused by the use of elraglusib:
· we may be subject to limitations on how we may promote the product;
· sales of the product may decrease significantly;
· we may be subject to litigation or product liability claims; and
· our reputation may suffer.
Any of these events could prevent
us or our potential future collaborators from achieving or maintaining market acceptance of elraglusib and/or could substantially increase
commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of elraglusib.
If we experience delays or difficulties in the
enrollment of subjects to our clinical trials, our receipt of necessary regulatory approvals could be delayed or otherwise adversely affected.
Identifying, screening and enrolling
patients to participate in clinical trials of our product candidates is critical to our success, and we may not be able to identify, recruit,
enroll and dose a sufficient number of patients with the required or desired characteristics to complete our clinical trials in a timely
manner. We may not be able to initiate or continue certain clinical trials for elraglusib or any future product candidates if we are unable
to identify and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory
authorities outside the United States. The timing of our clinical trials depends on our ability to recruit patients to participate as
well as to subsequently dose these patients and complete required follow-up periods. Patient enrollment, a significant factor in the timing
of clinical trials, is affected by many factors, including the size and characteristics of the patient population, the proximity of patients
to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, the risk that enrolled patients
will not complete a clinical trial, our ability to recruit clinical trial investigators with the appropriate competencies and experience,
and competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product
candidates being studied in relation to other available therapies, including any new products that may be approved for the indications
we are investigating as well as any product candidates under development. We will be required to identify and enroll a sufficient number
of patients for each of our clinical trials and monitor such patients adequately during and after treatment. Potential patients for any
planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting, which could adversely
impact the outcomes of our trials and could have safety concerns for the potential patients. Potential patients for any planned clinical
trials may also not meet the entry criteria for such trials. In particular, because our planned clinical trials of elraglusib are focused
on indications with relatively small patient populations, our ability to enroll eligible patients may be limited or may result in slower
enrollment than we anticipate.
In addition, we may experience
enrollment delays related to increased or unforeseen regulatory, legal and logistical requirements at certain clinical trial sites. These
delays could be caused by reviews by regulatory authorities and contractual discussions with individual clinical trial sites. Any delays
in enrolling and/or dosing patients in our planned clinical trials could result in increased costs, delays in advancing our product candidates,
delays in testing the effectiveness of our product candidates or in termination of the clinical trials altogether.
We may not be able to fully enroll
our clinical trials if other pharmaceutical companies with ongoing clinical trials for products with similar indications as our product
candidates recruit from these patient populations. The timing of our clinical trials depends, 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. Patient enrollment may also be affected by
other factors, including:
· size of the patient population and process for identifying patients;
· design of the clinical trial protocol;
· eligibility and exclusion criteria;
· perceived risks and benefits of the product candidates under study;
· time of year in which the trials are initiated or conducted;
· severity of the diseases under investigation;
· ability to obtain and maintain subject consents;
· ability to enroll and treat patients in a timely manner;
· risk that enrolled subjects will drop out before completion of the trials;
· proximity and availability of clinical trial sites for prospective patients;
· ability to monitor subjects adequately during and after treatment; and
· patient referral practices of physicians.
If patients are unwilling or unable
to participate in our trials for any reason, including the existence of concurrent clinical trials for similar target populations, the
availability of approved therapies, or the fact that enrolling in our trials may prevent patients from taking a different product, or
we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting patients, conducting trials and obtaining
regulatory approval of elraglusib or any future product candidates may be delayed. 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.
Enrollment delays in these clinical
trials may result in increased time and development costs for our product candidates, which could materially affect our financial condition.
As a company, we have not yet completed a Phase
2 clinical trial and have limited experience in completing regulatory filings, and any delays in regulatory filings could materially affect
our financial condition.
We will need to successfully complete
clinical trials in order to obtain FDA or comparable foreign regulatory approval to market elraglusib or any future product candidates.
Carrying out clinical trials and the submission of a successful NDA or other comparable foreign regulatory submission is a complicated
process. As a company, we have not yet completed a Phase 2 clinical trials of our product candidates, nor have we demonstrated the ability
to obtain marketing approvals, manufacture product candidates at a commercial scale, or conduct sales and marketing activities necessary
for the successful commercialization of a product. We may also choose to conduct a number of additional clinical trials of elraglusib
in parallel over the next several years, which may be a difficult process to manage with our limited resources and which may divert attention
of management. FDA or other regulatory authority could also require us to conduct additional trials which may further delay approval of
our product. Consequently, we have no historical basis as a company by which you can evaluate or predict reliably our future success or
viability.
We have limited experience with
regulatory filings with agencies such as the FDA or EMA, and we have not yet completed a Phase 2 clinical trial for elraglusib or any
other product candidate. We also have limited experience as a company in preparing and submitting marketing applications and have not
previously submitted an NDA or other comparable foreign regulatory submission for any product candidate. In addition, we have had limited
interactions with the FDA and cannot be certain how many additional clinical trials of elraglusib or any future product candidate will
be required or how such additional trials should be designed. Consequently, we may be unable to successfully and efficiently execute and
complete necessary clinical trials in a way that leads to submission of an NDA and regulatory approval of any of our product candidates.
We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product
candidates that we develop. Failure to commence or complete, or delays in, our ongoing or planned clinical trials could prevent us from
or delay us in submitting NDAs or other comparable foreign regulatory submissions for and commercializing our product candidates. Any
delay in our regulatory filings for our product candidates, and any adverse development or perceived adverse development with respect
to the applicable regulatory authority’s review of such filings, including, without limitation, the FDA’s issuance of a “refuse
to file” letter or a request for additional information, could materially affect our financial condition.
As a result, we cannot be certain
that our ongoing and planned clinical trials or preclinical studies will be successful. Any safety concerns observed in any one of our
clinical trials in our targeted indications could limit the prospects for regulatory approval of elraglusib in those and other indications,
which could have a material adverse effect on our business, financial condition, results of operations and prospects.
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, 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 different conclusions or considerations may qualify such results once
additional data have been received and fully evaluated. Interim, topline, and preliminary data also remain subject to audit and verification
procedures that may result in the final data being materially different from the preliminary data we previously published. As a result,
such data should be viewed with caution until the final data are available. Interim, topline, and preliminary data from clinical trials
that we may complete are 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 preliminary, interim or topline data and final data could significantly
harm our business prospects.
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 the 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, 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
elraglusib and any future product candidates may be harmed, which could harm our business, operating results, prospects, or financial
condition.
Serious adverse events, undesirable side effects
(including emergent drug-drug interactions between elraglusib and any of the other therapeutic agents given to the clinical trial subjects)
or other unexpected properties of our current or future product candidates may be identified during development or after approval, which
could halt their development or lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to
approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on
the use of our product candidates thereby limiting the commercial potential of such product candidate.
To date, elraglusib is the only
product candidate we have tested in humans. As we continue our development of elraglusib and initiate clinical trials of any future product
candidates, serious adverse events, undesirable side effects or unexpected characteristics may emerge or be reported, causing us to abandon
these product candidates or limit their development to more narrow uses or subpopulations in which the serious adverse events, undesirable
side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Even if our
product candidates initially show promise in early clinical trials, the side effects of therapies are frequently only detectable after
they are tested in large, Phase 2 or Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial
scale after approval. Sometimes, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the
product candidate or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other
medications. If serious adverse or unexpected side effects are identified during development and are determined to be attributed to our
product candidates, or the result of drug-drug interactions between our product candidate and any of the concomitant therapies given
to the trial subjects, we, the FDA or comparable foreign regulatory authorities, or IRBs and other reviewing entities, could interrupt,
delay, or halt clinical trials and could result in a more restrictive label, a REMS or the delay or denial of regulatory approval by
the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authorities may also require, or we may
voluntarily develop strategies for managing adverse events during clinical development, which could include restrictions on our enrollment
criteria, the use of stopping criteria, adjustments to a study’s design, or the monitoring of safety data by a data monitoring
committee, among other strategies. Any requests from the FDA or comparable foreign regulatory authority for additional data or information
could also result in substantial delays in the approval of our product candidates.
Drug-related side effects could also affect subject
recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims. Any of these occurrences
may harm our business, financial condition and prospects significantly. In addition, if one or more of our product candidates receives
marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant
negative consequences could result, including:
· regulatory authorities may withdraw approvals of such product;
· regulatory authorities may require additional warnings on the label;
· we may be required to change the way the product is administered;
· we could be sued and held liable for harm caused to patients; and
· the product may become less competitive, and our reputation may suffer.
The therapeutic-related side
effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability
claims. Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved,
and could significantly harm our business, financial condition, results of operations, stock price and prospects.
We anticipate that many of our product candidates
may be tested and, if approved, used in combination with third-party drugs and/or devices, some of which may still be in development,
and we have limited or no control over the supply, regulatory status or regulatory approval of such drugs and/or devices.
We anticipate developing our product
candidates for use in combination with other oncology pharmaceuticals, including chemotherapies and cellular and targeted therapies (e.g.,
immune checkpoint inhibitors). We cannot be certain that current or potential future commercial relationships will provide us with a steady
supply of such drugs or devices on commercially reasonable terms or at all.
Any failure to maintain or enter
into new successful commercial relationships, or the expense of purchasing platinum-based and other chemotherapies, or any other combination
products, or any devices in the market, may delay our development timelines, increase our costs and jeopardize our ability to develop
our product candidates as commercially viable therapies. If any of these occur, our business, financial condition, results of operations,
stock price and prospects may be materially harmed. Moreover, the development of product candidates for use in combination with another
product or product candidate may present challenges that are not faced for single agent product candidates. For our product candidates
that may be used in combination with other chemotherapies, or any other combination products or any devices, the FDA may require us to
use more complex clinical trial designs in order to evaluate the contribution of each product and product candidate to any observed effects.
It is possible that the results of these trials could show that there are adverse events tied to the interaction of elraglusib with any
of the other therapies, or that any positive previous trial results are attributable to the combination therapy and not our product candidates.
Moreover, following product approval, the FDA may require that products or devices used in conjunction with each other be cross labeled
for combined use. To the extent that we do not have rights to the other product or device, this may require us to work with a third party
to satisfy such a requirement. The ability to obtain cooperation from the third party may impact our ability to respond to the FDA’s
requests which could impact our ability to achieve regulatory approval. Moreover, developments related to the other product or device
may impact our clinical trials as well as our commercial prospects should we receive marketing approval. Such developments may include
changes to the safety or efficacy profile of the other product or device, changes to the availability of the approved product or device,
and changes to the standard of care.
In the event that any future collaborator
or supplier of other chemotherapies, or any other products administered in combination, or any devices used, with our product candidates
does not supply their products on commercially reasonable terms or in a timely fashion, we would need to identify alternatives for accessing
these products. This could cause our clinical trials to be delayed and limit the commercial opportunities for our product candidates,
in which case our business, financial condition, results of operations, stock price and prospects may be materially harmed.
We may seek additional Orphan Drug, Fast Track, Breakthrough or orphan
and priority (“PRIME”) designations for one or more of our current and future product candidates, but we might not receive
any such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval
process.
Our lead product candidate, elraglusib,
has been given FTD from the FDA for development in the treatment of pancreatic cancer, and we may seek FTD for other indications or future
product candidates. The FTD program is intended to expedite or facilitate the process for reviewing product candidates that meet certain
criteria. Specifically, biologics are eligible for Fast Track designation if they are intended, alone or in combination with one or more
drugs or biologics, to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical
needs for the disease or condition. Fast Track designation applies to the combination of the product candidate and the specific indication
for which it is being studied. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the
applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.
An NDA submitted for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections
of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the
sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays
any required user fees upon submission of the first section of the NDA. Fast Track designation does not ensure that we will receive marketing
approval or that approval will be granted within any particular timeframe or at all. We may not experience a faster development, regulatory
review or approval process with Fast Track designation compared to conventional FDA procedures. Additionally, the FDA may withdraw Fast
Track designation, for reasons such as it comes to believe a drug candidate no longer adequately addresses an unmet medical need or that
the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee
qualification for the FDA’s priority review procedures. If we seek Fast Track designation for other indications, or if we pursue
breakthrough or PRIME designations from FDA or EMA, respectively, we may not receive such designations. Many product candidates that have
received Fast Track designation have ultimately failed to obtain approval.
We, or any future collaborators, may not be
able to obtain and maintain orphan drug exclusivity for our product candidates in the United States and Europe.
Elraglusib has been granted ODD
for the treatment of pancreatic cancer, glioblastomas, neuroblastoma and soft tissue sarcomas in the United States. We may seek additional
ODD or regulatory incentives for other indications, for the oral dosage form of elraglusib, or for future product candidates in the United
States, EU, Japan or Australia. We may not be able to obtain such designations.
While elraglusib currently has
been granted ODD from the FDA for limited indications, we may not be able to maintain this orphan drug exclusivity. Further, even if we
obtain ODD for a future product candidate or for elraglusib with respect to a different indication, we may not be able to maintain orphan
drug exclusivity for that drug or indication. For example, ODD may be removed if the prevalence of an indication increases beyond the
patient number limit required to maintain designation. Generally, if a drug with an ODD subsequently receives the first marketing approval
for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the EMA
or the FDA from approving another marketing application for the same product in the same indication for that time period. Orphan drug
exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer
is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. Moreover, even
after an orphan drug is approved, the FDA can subsequently approve a different drug for the same condition if the FDA concludes that the
later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care compared
to our product.
The FDA may reevaluate the Orphan
Drug Act and its regulations and policies, and similarly the EMA may reevaluate its policies and regulations. We do not know if, when,
or how the FDA or EMA may change their orphan drug regulations and policies in the future, and it is uncertain how any changes might affect
our business. Depending on what changes the FDA and/or EMA may make to their orphan drug regulations and policies, our business could
be adversely impacted.
We rely on third parties for the manufacture
and shipping of elraglusib for clinical development and expect to continue to do so for the foreseeable future. If we or our licensees,
development collaborators, or suppliers are unable to manufacture our products in sufficient quantities or at defined quality specifications,
or are unable to obtain regulatory approvals for the manufacturing facility, we may be unable to develop and/or meet demand for our products
and lose time to market and potential revenues.
Completion of our clinical trials
and commercialization of our product candidates require access to, or development of, facilities to manufacture a sufficient supply of
our product candidates. We do not own or operate manufacturing facilities and have no plans to develop our own clinical or commercial-scale
manufacturing capabilities. We rely on a third-party manufacturer for the production of elraglusib and expect to continue to rely on third-party
manufacturers for commercial manufacture if elraglusib or any future product candidates receive regulatory approval. The facilities used
by third-party manufacturers to manufacture elraglusib or any future product candidate must be approved for the manufacture of such product
candidate by the FDA and any comparable foreign regulatory authority pursuant to inspections that will be conducted after we submit an
NDA to the FDA or any comparable submission 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 the manufacture of products. In addition,
we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified
personnel.
If the FDA or any comparable foreign
regulatory authority does not approve these facilities for the manufacture of elraglusib or any future product candidates or if it withdraws
any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability
to develop, obtain regulatory approval for or market elraglusib or any future product candidates, if approved. Our failure, or the failure
of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical
holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of elraglusib or any future
product candidates, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of
elraglusib or any future product candidates. We may not be successful in identifying additional or replacement third-party manufacturers,
or in negotiating acceptable terms with any we do identify. We may face competition for access to these manufacturers’ facilities
and may be subject to manufacturing delays if the manufacturers give other clients higher priority than they give to us. Even if we are
able to identify an additional or replacement third-party manufacturer, the delays and costs associated with establishing and maintaining
a relationship with such manufacturer may have a material adverse effect on us.
Before we begin to commercially
manufacture elraglusib or any other product candidate, we must obtain regulatory approval of the manufacturing facility and process by
the FDA and any comparable foreign regulatory authority pursuant to inspections that will be conducted after we submit an NDA to the FDA
or any comparable submission to a foreign regulatory authority. Manufacturing of drugs for clinical and commercial purposes must comply
with cGMP. We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers’ for compliance
with cGMP requirements for the manufacture of products. 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