Item 1A. Risk Factors

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before making your decision to invest in shares of our common stock, you should carefully consider the risks and uncertainties described below, together with the other information contained in this Annual Report on Form 10-K, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. We cannot assure you that any of the events discussed below will not occur. These events could have a material and adverse impact on our business, financial condition, results of operations and prospects. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment.

Summary of Risk Factors

Our business is subject to a number of risks and uncertainties, including those immediately following this summary. Some of these risks are:

Risks Relatedto Our FinancialPositionand Need forCapital

We have a limitedoperatinghistory,which maymakeitdifficultto evaluatethe successof our businessto dateand to assessour futureviability.We have incurredsignificantoperatinglossessinceour inception and have not generatedany revenue.We expectto incur continuedlossesforthe foreseeablefutureand mayneverachieveor maintainprofitability.

Investmentindrugdevelopmentisahighlyspeculativeundertakingandinvolvesasubstantialdegreeof risk.Wecommencedoperationsin2016and area clinical-stagebiopharmaceuticalcompanywith a limited operatinghistory.Wehave not yetcommercializedany productand we do not expectto generaterevenuefrom salesofany productsforseveral

years,ifatall.Consequently,therehave been limitedoperationsupon which we oryoucanevaluateourbusiness,andpredictionsaboutour futuresuccessor viabilitymaynot be as accurateas theycouldbeifwehada longeroperatinghistoryor a historyof successfullydevelopingand commercializing cancertherapies.FortheyearendedDecember31,2020,wereportedanetlossof$56.9million.AsofDecember31,2020,wehadanaccumulateddeficitof$107.4million.Weexpecttocontinue to incursignificantresearchand developmentand otherexpensesrelatedto our ongoing operations.

Sinceourinception,wehavefocusedsubstantiallyallofoureffortsandfinancialresourceson theresearch, preclinicalandclinicaldevelopmentofour productcandidates,PRT543,PRT811and PRT1419,and our research effortsonotherpotentialproductcandidatestargetingProteinArginineMethyltransferase5,orPRMT5, Myeloid CellLeukemiaSequence1,orMCL1,Cyclin-dependentkinase9,orCDK9, andBrahmahomologue,or BRM, otherwiseknownasSMARCA2..As of December31, 2020, our cashand cashequivalentswere $218.3 million.

Weexpecttoincurincreasinglevelsofoperatinglossesfortheforeseeablefuture,particularlyaswe advance PRT543, PRT811 and PRT1419 through clinical development. Our prior losses, combined with expectedfuturelosses,havehad,andwillcontinueto have, an adverseeffecton our stockholders’equityand workingcapital.Weexpectourresearchanddevelopmentexpensestosignificantlyincreasein connectionwith our additionalplannedclinicaltrialsforour leadproductcandidates,includingtheongoing Phase 1 clinicaltrials andtheplannedexpansioncohortsofPRT543 andPRT811, theongoingPhase1clinicaltrialforPRT1419 and developmentandsubsequentINDsofotherfutureproductcandidateswemaychooseto pursue,including PRT2527,ourCDK9inhibitor,aSMARCA2 proteindegraderandakinaseinhibitor.Inaddition,ifweobtain marketingapprovalforPRT543,PRT811, PRT1419 oranotherproductcandidate,wewillincursignificantsales, marketing and outsourced manufacturing expenses in connection with the commercialization of PRT543, PRT811, PRT1419 orsuchotherproductcandidate,respectively.Wewillalsocontinuetoincuradditionalcosts associatedwith operatingas a publiccompany.As a result,we expectto continueto incursignificantand increasingoperatinglossesfortheforeseeablefuture.Becauseofthenumerousrisksand uncertaintiesassociated withdevelopingpharmaceuticalproducts,weareunabletopredicttheextentofanyfuturelossesorwhenwe willbecomeprofitable,ifatall.Evenifwedobecomeprofitable,wemaynotbeabletosustainorincreaseour profitabilityon a quarterlyor annualbasis.We expectour financialconditionand operatingresultsto fluctuate significantlyfromquarter-to-quarterand year-to-yeardue to a varietyof factors,manyof which arebeyond our control.Accordingly,youshouldnotrelyupon theresultsof any quarterlyor annualperiodsas indicationsof futureoperatingperformance.

Ourabilitytobecomeprofitabledependsupon our abilityto generaterevenue.To date,we have not generatedanyrevenueand we do not know when, or if,we willgenerateany revenue.We do not expectto generatesignificantrevenueunlessand untilwe obtainmarketingapprovalfor,and beginto sell,PRT543, PRT811, PRT1419 oranotherproductcandidate.Ourabilitytogeneraterevenuedependson a numberof factors, including,but not limitedto, our abilityto:

Food and Drug Administration,or theFDA;

• obtain, maintain, protect and defend our intellectual property portfolio; and

To become and remain profitable, we must succeed in designing, developing and eventually commercializingproductsthatgeneratesignificantrevenue.Thiswillrequireustobesuccessfulinarangeof challengingactivities,includingcompletingpreclinicaltestingandclinicaltrialsforour productcandidates, designingadditionalproductcandidates,establishingarrangementswith third partiesfor the manufactureof clinicalsuppliesofourproductcandidates,obtainingmarketingapprovalforour productcandidatesand manufacturing,marketingandsellingany productsforwhich we mayobtainmarketingapproval.We areonly in thepreliminarystagesofmostof theseactivities.We mayneversucceedin theseactivitiesand, even ifwe do, maynevergeneraterevenuesthataresignificantenough to achieveprofitability.

Incaseswherewearesuccessfulinobtainingregulatoryapprovaltomarketoneormoreofourproduct candidates,ourrevenuewillbedependent,inpart,uponthesizeofthemarketsintheterritoriesforwhichwe gainregulatoryapproval,theacceptedpricefortheproduct,theabilitytoobtaincoverageandreimbursement, andwhetherweownthecommercialrightsforthatterritory.Ifthenumberofouraddressablepatientsisnot as significantasweestimate,theindicationapprovedbyregulatoryauthoritiesisnarrowerthanweexpect,or the treatmentpopulationisnarrowedbycompetition,physicianchoiceor treatmentguidelines,we maynot generate significantrevenuefromsalesof such products,even ifapproved.

Becauseofthenumerousrisksanduncertaintiesassociatedwithpharmaceuticalproductdevelopment,we areunabletoaccuratelypredictthetimingoramountof increasedexpenseswe willincuror when, or if,we will beabletoachieveprofitability.IfwedecidetoorarerequiredbytheFDA orregulatoryauthoritiesinother jurisdictionstoperformstudiesor clinicaltrialsin additionto thosecurrentlyexpected,or ifthereareany delays inestablishingappropriatemanufacturingarrangementsfor,ininitiatingor completingour currentand planned clinicaltrialsfor,or in thedevelopmentof, any of our productcandidates,our expensescouldincreasematerially and profitabilitycouldbe furtherdelayed.

Evenifwedoachieveprofitability,wemaynotbeabletosustainorincreaseprofitabilityon a quarterlyor annualbasis.Ourfailuretobecomeand remainprofitablewould depressthevalueof our companyand could impairourabilitytoraisecapital,expand our business,maintainour researchand developmentefforts,diversify ourproductofferingsorevencontinueouroperations.Adeclineinthevalueofourcompanycouldalsocause you to loseallor partof your investment.

We willrequiresubstantialadditionalfunding to pursue our business objectives.Ifwe are unable to raisecapitalwhenneeded or on termsacceptableto us, we could be forced to delay,reduceor eliminateour researchor drug developmentprograms,any futurecommercialization effortsor otheroperations.

Weexpectourexpensestoincreasesubstantiallyinconnectionwithourongoingactivities,particularlyas weadvanceourproductcandidates,PRT543,PRT811andPRT1419, andotherpipelineproductcandidates throughclinicaldevelopment,and seekto designadditionalproductcandidatesfromour discoveryprograms.We expectincreasedexpensesaswecontinueourresearchanddevelopment,initiateadditionalclinicaltrials,and seekmarketingapprovalforourleadprogramsandourotherproductcandidates.In addition,ifwe obtain marketingapprovalforany of our productcandidates,we expectto incursignificantcommercializationexpenses relatedtoproductmanufacturing,marketing,salesanddistribution.Furthermore,we expectto continueto incur additionalcostsassociatedwithoperatingas a publiccompany.Accordingly,we willneed to obtainsubstantial additionalfundinginconnectionwithourcontinuingoperations.Adequateadditionalfinancingmaynot be availabletous on favorableterms,or atall.In addition,we mayseekadditionalcapitaldue to favorablemarket conditionsorstrategicconsiderationsevenifwebelievewehavesufficientfundsforourcurrentor future operatingplans.Ifweareunabletoraisecapitalwhenneededoronfavorableterms,we couldbe forcedto delay, reduceor eliminateour researchand developmentprograms,our commercializationplansor otheroperations.

Webelievethatourexistingcashandcashequivalents willenableustofundouroperatingexpenses,andcapitalexpenditurerequirementsinto 2023. Our futurecapitalrequirementswilldepend on manyfactors,including:

We willrequireadditionalcapitalto completeour planned clinical developmentprogramsforourcurrentproductcandidatesto obtainregulatoryapproval.Our abilityto raise additionalfundswilldepend on financial,economicand marketconditionsand otherfactors,overwhich we may havenoorlimitedcontrol.Ifadequatefundsarenotavailableoncommerciallyacceptabletermswhenneeded, wemaybeforcedtodelay,reduceorterminatethedevelopmentorcommercializationofallorpartofour researchprogramsorproductcandidatesor we maybe unableto takeadvantageof futurebusinessopportunities. Furthermore,any additionalcapital-raisingeffortsmaydivertour managementfrom their day-to-dayactivities, whichmayadverselyaffectourabilitytodevelopandcommercializeourcurrentandfutureproductcandidates, ifapproved.

Raising additionalcapitalmaycause dilutionto our stockholders,includingpurchasersof commonstock,restrictour operationsor requireus to relinquishrightsto our technologiesor product candidates.

Untilsuchtime,ifever,aswe can generatesubstantialproductrevenue,we expectto financeour cashneeds throughacombinationofequityofferings,debtfinancings,collaborations,strategicalliancesand marketing, distributionorlicensingarrangements.Inaddition,wemayseekadditionalcapitaldue to favorablemarket conditionsorstrategicconsiderations,evenifwebelievewehavesufficientfundsforour currentor future operatingplans.Totheextentthatweraiseadditionalcapitalthroughthesaleof equityor convertibledebt securities,yourownershipinterestwillbe diluted,and thetermsof thesesecuritiesmayincludeliquidationor otherpreferencesthatadverselyaffectyourrightsasacommonstockholder.Debt financingand preferredequity financing,ifavailable,mayinvolveagreementsthatincludecovenantslimitingor restrictingour abilityto take specificactions,suchasincurringadditionaldebt,makingacquisitionsor capitalexpendituresor declaring dividends.

Ifwe raiseadditionalfundsthroughcollaborations,strategicalliancesor marketing,distributionor licensing arrangementswiththirdparties,wemayhavetorelinquishvaluablerightstoourtechnologies,futurerevenue streams,researchprogramsorproductcandidatesorgrantlicensesontermsthatmaynotbefavorabletous.If weareunabletoraiseadditionalfundsthroughequityordebtfinancingsor otherarrangementswhen needed,we may be required to delay,

limit,reduceorterminateourresearch,productdevelopmentorfuturecommercializationeffortsorgrantrightstothirdpartiestodevelopandmarketproductcandidatesthatwewould otherwisepreferto developand marketourselves.

Risks Relatedto Design and Developmentof our Product Candidates

We are highlydependenton the successof our productcandidates,PRT543,PRT811and PRT1419, which are in earlyclinicaldevelopment,and PRT2527,which isin preclinicaldevelopment.We have not completedsuccessfullate-stagepivotalclinicaltrialsor obtainedregulatoryapprovalforany product candidate.We mayneverobtainapprovalforany of our productcandidatesor achieveor sustain profitability.

Our futuresuccessishighlydependenton our abilityto obtainregulatoryapprovalfor,and thensuccessfully commercialize,ourproductcandidates,PRT543,PRT811andPRT1419. Weareearlyinourdevelopmentefforts andourleadproductcandidates,PRT543,PRT811andPRT1419,areeachcurrentlyinaPhase1clinicaltrial. Ourotherproductcandidates,includingPRT2527, areinearlierstagesofdevelopment.Wecurrentlyhaveno productsthatareapprovedforsaleinanyjurisdiction.TherecanbenoassurancethatPRT543, PRT811, PRT1419, PRT2527 or our otherproductcandidatesin developmentwillachievesuccessin theirclinicaltrialsor obtainregulatoryapproval.

Ourabilitytogenerateproductrevenues,which we do not expectwilloccurformanyyears,ifever,will dependheavilyonthesuccessfuldevelopmentandeventualcommercializationofPRT543, PRT811, PRT1419, PRT2527 orotherproductcandidatesindevelopment.The successof our productcandidates,includingPRT543, PRT811,PRT1419and PRT2527,willdepend on severalfactors,includingthefollowing:

• successful completion of preclinical studies and clinical trials;

• developing and implementing marketing and reimbursement strategies;

• effectively competing with other therapies;

Manyofthesefactorsarebeyondourcontrol,anditispossiblethatnone of our productcandidateswillever obtainregulatoryapprovalevenifweexpendsubstantialtimeandresourcesseekingsuchapproval.Ifwedo not achieveoneormoreofthesefactorsinatimelymanneroratall,we couldexperiencesignificantdelaysor an inabilityto successfully

commercializeour productcandidates,which would materiallyharmour business. For example,ourbusinesscouldbeharmedifresultsofourongoingclinicaltrialsofPRT543, PRT811 orPRT1419, varyadverselyfromour expectations.

Drug developmentinvolvesa lengthyand expensiveprocess,and clinicaltestingisuncertainas to the outcome.

We currentlyhave threeproductcandidatesin Phase 1 clinicaldevelopmentand additionalproduct candidatesinpreclinicaldevelopment,andtheriskof failureforeachishigh. We areunableto predictwhen or if ourproductcandidateswillproveeffectiveorsafeinhumansor willobtainmarketingapproval.Beforeobtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinicaldevelopmentand thenconductextensiveclinicaltrialsto demonstratethesafetyand efficacyof our productcandidatesinhumans.Clinicaltestingisexpensive,difficulttodesignandimplement,cantakemany yearsto completeand isuncertainas to theoutcome.

Afailureofoneormoreclinicaltrialscanoccuratanystageof testing.The outcomeof preclinicaltesting andearlyclinicaltrialsmaynotbepredictiveofthesuccessof laterclinicaltrialsor of clinicaltrialsof thesame productcandidatesinotherindications,andinterimorpreliminaryresultsofaclinicaltrialdonotnecessarily predictfinalresults.Later-stageclinicaltrialscoulddifferin significantways fromearly-stageclinicaltrials, includingchangestoinclusionandexclusioncriteria,efficacyendpoints,dosingregimenandstatisticaldesign. Inparticular,thesmallnumberofpatientsinourcurrentPhase1clinicaltrialsmaymaketheresultsofthese trialslesspredictiveoftheoutcomeoflaterclinicaltrials.In addition,althoughwe have observedencouraging clinicalactivityinthedoseescalationportionofthePhase1portionofourongoingPRT543 andPRT811 clinical trials,theprimaryobjectivesweretodeterminethesafety,tolerabilityand maximumtolerateddose of PRT543 andPRT811,respectively,andtodeterminearecommendedPhase2dosefortheexpansionportionofour Phase1clinicaltrials,andnottodemonstrateefficacy.Theassessmentsofclinicalactivityfromthisportionof theclinicaltrials,someofwhichwerenotpre-specified,maynotbepredictiveoftheresultsin dose expansion cohorts,specifictumortypesorfurtherclinicaltrialsofPRT543 andPRT811. Inaddition,whilewemaybelieve certainresultsin patients,such as stabledisease,suggestencouragingclinicalactivity,stabledisease is not consideredaresponseforregulatorypurposes.Stabledisease,orSD,isdefinedasfailuretomeetthedefinition ofobjectiveclinicalresponseor progressivedisease.Furthermore,safetyeventsmaybe observedin latertrials thataltertheanticipatedrisk-benefitprofilesof PRT543and PRT811.

We mayincur additionalcostsor experiencedelaysin completing,or ultimatelybe unable to completethe developmentand/or commercializationof PRT543,PRT811,PRT1419,PRT2527or our otherproduct candidates.

Beforewecaninitiateclinicaltrialsofaproductcandidateinanyindication,we mustsubmittheresultsof preclinicalstudiestotheFDA ortocomparableforeignauthorities,respectively,alongwithotherinformation, includinginformationabouttheproductcandidate’schemistry,manufacturingand controlsand our proposed clinicaltrialprotocol,as partof an IND or comparableforeignregulatoryfilings.

TheFDA mayrequireustoconductadditionalpreclinicalstudiesforany productcandidatebeforeitallows ustoinitiatesubsequentclinicaltrialsunderanyIND,whichmayleadto additionaldelaysand increasethecosts of our preclinicaldevelopmentprograms.

Anydelaysinthecommencementorcompletionof our ongoing, plannedor futureclinicaltrialscould significantlyaffectour productdevelopmentcosts.We mayexperiencenumerousunforeseeneventsduring,or as aresultof,clinicaltrialsthatcoulddelayorpreventourabilitytoobtainmarketingapprovalorcommercialize our productcandidates,including:

• lack of adequate funding to continue the clinical trial;

• changes to clinical trial protocol;

Delays,includingdelayscausedbytheabove factors,can be costlyand couldnegativelyaffectour abilityto completeaclinicaltrialorobtaintimelymarketingapprovals.Wedonotknowwhetheranyofourplanned preclinicalstudiesorclinicaltrialswillbeginon a timelybasisor atall,willneed to be restructuredor willbe completedonschedule,oratall.Forexample,theFDA mayplaceapartialorfullclinicalholdonanyofour clinical trials for a variety of reasons, including safety concerns and noncompliance with regulatory requirements.Ifwearenotabletocompletesuccessfulclinicaltrials,wewillnotbeableto obtainregulatory approvaland willnot be ableto commercializeour productcandidates.

Significantpreclinicalorclinicaltrialdelaysalsocouldshortenany periodsduringwhich we mayhave the exclusiverighttocommercializeourproductcandidatesorallowourcompetitorstobringproductstomarket beforewedoandimpairourabilitytosuccessfullycommercializeourproductcandidatesand mayharmour businessand resultsof operations.

Ifwe experiencedelaysor difficultiesin enrollingpatientsin our ongoing or planned clinicaltrials,our receiptof necessaryregulatoryapprovalcould be delayedor prevented.

Wemaynotbeabletoinitiateorcontinueourongoingorplannedclinicaltrialsforourproductcandidates ifweareunabletoidentifyandenrollasufficientnumberofeligiblepatientsto participatein thesetrialsas requiredbytheFDA orcomparableforeignregulatoryauthorities.In addition,someof our competitorscurrently haveongoingclinicaltrialsforproductcandidatesthatwouldtreatthesamepatientsas our clinicalproduct candidates,andpatientswhowouldotherwisebe eligibleforour clinicaltrialsmayinsteadenrollin clinicaltrials ofourcompetitors’productcandidates.ThisisacutelyrelevantforourdevelopmentofPRT543 forthetreatment ofpatientswithmyeloidmalignanciesandothersolidtumors,includingadenoidcysticcarcinoma,or ACC, indicationsforwhichinvestigationaldrugsbyourcompetitorsarecompetingforclinicaltrialparticipants. Patientenrollmentisalsoaffectedby otherfactors,including:

• severity of the disease under investigation;

• the incidence and prevalence of our target indications;

• competing studies or trials with similar eligibility criteria;

• eligibility criteria defined in the protocol for the trial in question;

• efforts to facilitate timely enrollment in clinical trials;

• the ability to monitor patients adequately during and after treatment;

• our ability to obtain and maintain patient consents; and

• proximity and availability of clinical trial sites for prospective patients.

Ourinabilitytoenrolland maintaina sufficientnumberof patientsforour clinicaltrialswould resultin significantdelaysormayrequireustoabandononeormoreclinicaltrialsaltogether.Enrollmentdelaysin our clinicaltrials,includingduetotheCOVID-19pandemic,mayresultinincreaseddevelopmentcosts,which would causethevalueof our companyto declineand limitour abilityto obtainadditionalfinancing.

The COVID-19pandemiccould adverselyimpactour business,includingour clinicaltrialsand clinical trialoperations.

TheCOVID-19 pandemicintheUnitedStatesand in othercountriesin which we have plannedor have activeclinicaltrialsitesand where our third-partymanufacturersoperate, could cause significantdisruptionsthat couldseverelyimpactour businessand clinicaltrials,including:

• inability or unwillingness of subjects to travel to the clinical trial sites;

Suchdisruptionscouldimpede,delay,limitorpreventcompletionofour ongoing clinicaltrialsand preclinicalstudiesor commencementof new clinicaltrialsand ultimatelyleadto thedelayor denialof regulatory approvalofourproductcandidates,whichwouldseriouslyharmour operationsand financialconditionand increaseourcostsandexpenses.WeareinclosecontactwithourCROs, CMOsandclinicalsitesasweseekto mitigatetheimpactofCOVID-19 onourstudiesand currenttimelines.Measureswe have takenin responseto COVID-19 include,where feasible,conductingremoteclinicaltrialsiteactivationsand datamonitoring,and limitingon-sitepatientvisitsby adjustingpatientassessmentsand protocol.However, despitetheseefforts,we haveexperiencedlimiteddelaysin trialsiteinitiations,patientparticipationand patientenrollmentin someof our clinicaltrialsandwemaycontinueto experiencesomedelaysin our clinicaltrialsand preclinicalstudiesand delaysin datacollectionand analysis.These delaysso farhave had a limitedimpact,but thismaychangeas the COVID-19 pandemicandtheresponsetosuchCOVID-19 pandemiccontinuestoevolve,and couldhave an adverseimpactonourtimelinesandourbusiness.TheCOVID-19 pandemiccouldalsoaffectthebusinessofthe FDA, EMAorotherhealthauthorities,whichcouldresultin delaysin meetingsrelatedto plannedor completed clinical trials and ultimately of reviews and approvals of our product candidates. The global COVID-19 pandemiccontinuestorapidlyevolve.TheextenttowhichtheCOVID-19pandemicmayimpactourbusiness andclinicaltrialswilldependonfuturedevelopments,which arehighlyuncertainand cannotbe predictedwith confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptionsandtheeffectivenessofactionstakenintheUnitedStatesand othercountriesto containand treatthe disease.

Adversesideeffectsor othersafetyrisksassociatedwith PRT543,PRT811,PRT1419or our otherproduct candidatescould delayor precludeapproval,cause us to suspend or discontinueclinicaltrialsor abandon furtherdevelopment,limitthe commercialprofileof an approvedproduct,or resultin significantnegativeconsequencesfollowingmarketingapproval,ifany.

Asisthecasewithpharmaceuticalsgenerally,we have observedsideeffectsand adverseeventsassociated withourclinicalproductcandidate,PRT543.Thesesideeffectsincludeddiarrhea,nauseaandfatigue,butnone ofthesesideeffectswereconsideredrelatedtoPRT543. At thehighestdose levelof our clinicalproduct candidate,PRT543,therewereoccurrencesofgrade4thrombocytopeniathatweredeemedrelatedtoPRT543, butthetoxicitywasreversibleaftera one to two week drug holidayand theaffectedpatientsremainedon the studyandwererestartedatalowerdose.We have alsoobservedsideeffectsand adverseeffectsassociatedwith PRT811.Thesesideeffectsincludednausea,constipation,vomitingandhyponatremia,butnoneoftheseside effectswere consideredrelatedto PRT811.

Resultsof our ongoing and plannedclinicaltrialscouldreveala high and unacceptableseverityand prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidatescouldresultinthedelay,suspensionorterminationofclinicaltrialsbyusorregulatoryauthoritiesfor a number of reasons. Furthermore, clinical trials by their nature utilize a sample of the potential patient population.Withalimitednumberofsubjectsandlimitedduration

ofexposure,rareandseveresideeffectsof ourproductcandidatesor thoseof our competitorsmayonly be uncoveredwith a significantlylargernumberof patientsexposedto thedrug.

Additionally,duetothehighmortalityratesofthecancersforwhich we areinitiallypursuingdevelopment andthepretreatednatureofmanypatientsinourongoingclinicaltrialsofPRT543,PRT811andPRT1419,a materialpercentageof patientsin theseclinicaltrialsmaydieduringa trial,which couldimpactdevelopmentof PRT543, PRT811 andPRT1419, respectively.Ifweelectorarerequiredto delay,suspendor terminateany clinicaltrial,thecommercialprospectsofourproductcandidateswillbeharmedand our abilityto generate productrevenuesfromthisproductcandidatewillbedelayedoreliminated.Seriousadverseevents,orSAEs, observedinclinicaltrialscouldhinderor preventmarketacceptanceof our productcandidates.Any of these occurrencesmayharmour business,prospects,financialconditionand resultsof operationssignificantly.

Moreover,ifourproductcandidatesareassociatedwith undesirablesideeffectsin clinicaltrialsor have characteristicsthatareunexpected,wemayelectto abandon or limittheirdevelopmentto morenarrowusesor subpopulationsinwhichtheundesirablesideeffectsorothercharacteristicsarelessprevalent,lesssevereor moreacceptablefromarisk-benefitperspective,whichmaylimitthecommercialexpectationsforour product candidates,ifapproved.Wemayalsoberequiredtomodifyourstudyplansbasedonfindingsinourclinical trials.Suchsideeffectscouldalsoaffectpatientrecruitmentortheabilityofenrolledpatientstocompletethe trial.Manydrugsthatinitiallyshowedpromiseinearlystagetestinghave laterbeen found to causesideeffects thatpreventedfurtherdevelopment.Inaddition,regulatoryauthoritiesmaydrawdifferentconclusions,require additionaltestingtoconfirmthesedeterminations,requiremorerestrictivelabeling,ordenyregulatoryapproval of theproductcandidate.

Itispossiblethat,as we testour productcandidatesin larger,longerand moreextensiveclinicaltrials, includingwithdifferentdosingregimens,or as theuse of our productcandidatesbecomesmorewidespread followinganyregulatoryapproval,illnesses,injuries,discomfortsandotheradverseeventsthatwere observedin earliertrials,as wellas conditionsthatdid not occuror went undetectedin previoustrials,willbe reportedby patients.Ifsuchsideeffectsbecomeknownlaterindevelopmentoruponapproval,ifany,suchfindingsmay harmour business,financialcondition,resultsof operationsand prospectssignificantly.

Inaddition,ifanyofourproductcandidatesreceivemarketingapproval,and we or otherslateridentify undesirablesideeffectscausedby treatmentwith such drug, a numberof potentiallysignificantnegative consequencescouldresult,including:

• regulatory authorities may withdraw approval of the drug;

• we could be sued and held liable for harm caused to patients;

• the drug could become less competitive; and

• our reputation may suffer.

Anyoftheseeventscouldpreventusfromachievingormaintainingmarketacceptanceof our product candidates,ifapproved,andcouldsignificantlyharmourbusiness,financialcondition,resultsof operationsand prospects.

Preliminary,interimand toplinedata fromour clinicaltrialsthatwe announce or publishfromtimeto timemaychange as morepatientdata becomeavailableand are subjectto auditand verification proceduresthatcould resultin materialchanges in the finaldata.

Fromtimetotime,wemaypubliclydisclosepreliminary,interimortoplinedatafromourclinicaltrials, suchasthepreliminarydataanalysisforthePhase1doseexpansionportionsofourPRT543 andPRT811 trials. Theseupdatesarebasedonapreliminaryanalysisofthen-availabledata,andtheresultsand relatedfindingsand conclusionsaresubjectto changefollowinga morecomprehensivereviewof thedatarelatedto theparticular studyortrial.Additionally,interimdatafromclinicaltrialsthatwemaycompletearesubjecttotheriskthatone ormoreoftheclinicaloutcomesmaymateriallychangeas patientenrollmentcontinuesand morepatientdata becomeavailable.Therefore,positiveinterimresultsinanyongoingclinicaltrialmaynot be predictiveof such resultsinthecompletedstudyortrial.Wealsomakeassumptions,estimations,calculationsand conclusionsas partofouranalysesof data,and we maynot have receivedor had theopportunityto fullyand carefullyevaluate alldata.Asaresult,thetoplineresultsthatwe reportmaydifferfromfutureresultsof thesamestudies,or differentconclusionsorconsiderationsmayqualifysuchresults,onceadditionaldatahavebeenreceivedand fullyevaluated.Toplinedataalsoremainsubjecttoauditandverificationproceduresthatmayresultinthefinal databeingmateriallydifferentfromthepreliminarydatawepreviouslypublished.Asaresult,toplinedata shouldbeviewedwithcautionuntilthefinaldataareavailable.Inaddition,we mayreportinterimanalysesof onlycertainendpointsratherthanallendpoints.Adversechangesbetweenpreliminaryorinterimdataand final datacouldsignificantlyharmourbusinessandprospects.Further,additionaldisclosureofinterimdatabyusor byourcompetitorsinthefuturecouldresultinvolatilityinthepriceof our commonstock.See thedescriptionofrisksundertheheading“RisksRelatedtoourCommonStock”formore disclosurerelatedto theriskof volatilityin our stockprice.

Further,others,includingregulatoryagencies,maynot acceptor agreewith our assumptions,estimates, calculations,conclusionsoranalysesor mayinterpretor weigh theimportanceof datadifferently,which could impactthevalueof theparticularprogram,theapprovabilityor commercializationof theparticularproduct candidateorproductandourcompanyingeneral.Inaddition,theinformationwechoosetopubliclydisclose regardingaparticularstudyorclinicaltrialistypicallyselectedfromamoreextensiveamountof available information.Youorothersmaynot agreewith what we determineisthematerialor otherwiseappropriate informationtoincludeinourdisclosure,andanyinformationwedeterminenottodisclosemayultimatelybe deemedsignificantwithrespecttofuturedecisions,conclusions,views, activitiesor otherwiseregardinga particularproduct,productcandidateorourbusiness.Ifthepreliminaryor toplinedatathatwe reportdifferfrom late,finaloractualresults,orifothers,includingregulatoryauthorities,disagreewiththeconclusionsreached, ourabilitytoobtainapprovalfor,andcommercialize,PRT543, PRT811 orPRT1419, orany otherproduct candidatesmaybeharmed,whichcouldharmourbusiness,financialcondition,resultsof operationsand prospects.

We mayexpend our limitedresourcesto pursue a particularproductcandidateor indicationand failto capitalizeon productcandidatesor indicationsthatmaybe moreprofitableor forwhich thereisa greater likelihoodof success.

Becausewehavelimitedfinancialandmanagerialresources,wefocusonresearchprogramsand product candidatesthatwe identifyforspecificindications.As a result,we mayforegoor delaypursuitof opportunities withotherproductcandidatesorforotherindicationsthatlaterproveto have greatercommercialpotential.Our resourceallocationdecisionsmaycauseustofailtocapitalizeonviablecommercialproductsorprofitable marketopportunities.Our spendingon currentand futureresearchand developmentprogramsand product candidatesforspecificindicationsmaynot yieldany commerciallyviableproducts.Ifwe do not accurately evaluatethecommercialpotentialor targetmarketfora particularproductcandidate,we mayrelinquishvaluable rightstothatproductcandidatethroughcollaboration,licensingor otherroyaltyarrangementsin casesin which it wouldhavebeen moreadvantageousforus to retainsoledevelopmentand commercializationrightsto such productcandidate.

We maynot be successfulin our effortsto designadditionalpotentialproductcandidates.

Akeyelementofourstrategyistoidentifymoleculartargetsand interventionpointsleadingto treatment failure,andthenapplyourexpertiseofcancerbiologyand medicinalchemistry,as wellas our in-depth understandingofthecurrentlandscapeofoncologytreatments,todesignsolutionsthatcanbepreciselytailored inatargetclassagnosticfashion.The therapeuticdesignand developmentactivitiesthatwe areconductingmay notbesuccessfulindevelopingproductcandidatesthataresafeand effectivein treatingcanceror otherdiseases. Ourresearchprogramsmayinitiallyshowpromiseinidentifyingpotentialproductcandidates,yetfailto yield productcandidatesforclinicaldevelopmentfora numberof reasons,including:

Researchprogramstoidentifyanddesignnew productcandidatesrequiresubstantialtechnical,financialand humanresources.We maychooseto focusour effortsand resourceson a potentialproductcandidatethat ultimatelyprovestobe unsuccessful.Ifwe areunableto identifyand designsuitableproductcandidatesfor preclinicalandclinicaldevelopment,wewillnot be ableto obtainrevenuesfromthesaleof productsin future periods,whichlikelywouldresultin significantharmto our financialpositionand adverselyimpactour stock price.

Risks Relatedto GovernmentRegulation

The developmentand commercializationof pharmaceuticalproductsare subjectto extensiveregulation, and we maynot obtainregulatoryapprovalsforPRT543,PRT811,PRT1419,PRT2527or any other productcandidates,on a timelybasisor at all.

The clinicaldevelopment,manufacturing,labeling,packaging, storage, recordkeeping,advertising, promotion,export,import,marketing,distribution,adverseeventreporting,includingthesubmissionofsafety andotherpost-marketinginformationandreports,andotherpossibleactivitiesrelatingtoPRT543,PRT811 and PRT1419, currentlyour only productcandidatesin plannedor ongoing clinicaltrials,as wellas any otherproduct candidatethatwemaydevelopinthefuture,aresubjecttoextensiveregulation.Marketingapprovalof drugsin theUnitedStatesrequiresthesubmissionofanNDA totheFDA, andwearenot permittedto marketany product candidateintheUnitedStatesuntilweobtainapprovalfromtheFDAoftheNDAforthatproduct.AnNDA mustbesupportedbyextensiveclinicaland preclinicaldata,as wellas extensiveinformationregarding pharmacology,chemistry,manufacturingandcontrols.Our productcandidatesmustbe approvedby comparable regulatoryauthoritiesin otherjurisdictionspriorto commercialization.

FDAapprovalofanNDA isnotguaranteed,andthereviewandapprovalprocessisanexpensiveand uncertainprocessthatmaytakeseveralyears.Ofthelargenumberofdrugsindevelopmentin theUnitedStates, onlyasmallpercentagewillsuccessfullycompletetheFDA regulatoryapprovalprocessandwillbe commercialized. Accordingly, there can be no assurance that any of our product candidates will receive regulatoryapprovalin theUnitedStates,or otherjurisdictions.

TheFDA alsohassubstantialdiscretionintheapprovalprocess.Thenumberand typesof preclinicalstudies andclinicaltrialsthatwillberequiredforNDAapprovalvariesdependingontheproductcandidate,thedisease ortheconditionthattheproductcandidateisdesignedtotreatandtheregulationsapplicableto any particular productcandidate.Forexample,ifsuccessful,we believethattheexpansionportionsof thePhase 1 clinicaltrials ofPRT543 orPRT811 maybesufficienttosupportFDA approvalofanNDA forPRT543 orPRT811, respectively,buttheFDA maydisagreewiththesufficiencyofour dataand requireadditionalclinicaltrials. Additionally,dependingupontheresultsoftheexpansionportionsofthePhase1clinicaltrialsofPRT543 or PRT811,wemaychoosetoseekSubpartHacceleratedapprovalforPRT543orPRT811,respectively,which would requirecompletionof a confirmatorytrialto validatetheclinicalbenefitof thedrug. Despitethetime and expenseassociatedwithpreclinicalstudiesandclinicaltrials,failurecan occuratany stage.The resultsof preclinicalandearlyclinicaltrialsofPRT543, PRT811, PRT1419, PRT2527 oranyotherproductcandidatemay not be predictiveof theresultsof our later-stageclinicaltrials.

Clinicaltrialfailuremayresultfromamultitudeof factorsincludingflawsin trialdesign,dose selection, placeboeffect,patientenrollmentcriteriaandfailuretodemonstratefavorablesafetyorefficacytraits,and failureinclinicaltrialscan occuratany stage.Companiesin thepharmaceuticalindustryfrequentlysuffer setbacksintheadvancementofclinicaltrialsduetolackofefficacyor adversesafetyprofiles,notwithstanding promisingresultsinearliertrials.Baseduponnegativeorinconclusiveresults,we maydecide,or regulatorsmay requireus,toconductadditionalclinicaltrialsor preclinicalstudies.In addition,dataobtainedfromclinicaltrials aresusceptibletovaryinginterpretations,andregulatorsmaynot interpretour dataas favorablyas we do, which mayfurtherdelay,limitor preventmarketingapproval.

TheFDAcoulddelay,limitordenyapprovalofaproductcandidateformanyreasons,includingbecause theFDA:

• may not deem our product candidate to be safe and effective;

• may disagree regarding the formulation, labeling and/or the specifications;

• may change approval policies or adopt new regulations; or

WehavenotobtainedFDAapprovalforanyproduct.Thislackofexperiencemayimpedeourabilityto obtainFDAapprovalin a timelymanner,ifatall,forour clinicalproductcandidates.

IfweexperiencedelaysinobtainingapprovalorifwefailtoobtainapprovalofPRT543, PRT811 or PRT1419, ourcommercialprospectswillbeharmedandourabilityto generaterevenueswillbe materially impairedwhich would adverselyaffectour business,prospects,financialconditionand resultsof operations.

The acceleratedapprovalpathway forour productcandidatesmaynot leadto a fasterdevelopmentor regulatoryreviewor approvalprocessand does not increasethe likelihoodthatour productcandidates willreceivemarketingapproval.

UndertheFDA’sacceleratedapprovalprogram,theFDA mayapproveadrugforaseriousorlife- threateningillnessthatprovidesmeaningfultherapeuticbenefitto patientsoverexistingtreatmentsbasedupon a surrogateendpointthatisreasonablylikelytopredictclinicalbenefit,or on a clinicalendpointthatcan be measuredearlierthanirreversiblemorbidityor mortality,thatisreasonablylikelyto predictan effecton irreversiblemorbidityormortalityorotherclinicalbenefit,takingintoaccounttheseverity,rarity,or prevalence oftheconditionandtheavailabilityorlackofalternativetreatments.Wemayseekacceleratedapprovalforone ormoreofourproductcandidatesonthebasisofORR withanacceptabledurationofresponse,asurrogate endpointthatwe believeisreasonablylikelyto predictclinicalbenefit.

Fordrugsgrantedacceleratedapproval,post-marketingconfirmatorytrialsarerequiredto describethe anticipatedeffectonirreversiblemorbidityormortalityorotherclinicalbenefit.Theseconfirmatorytrialsmust becompletedwithduediligenceand,insomecases,theFDAmayrequirethatthetrialbedesigned,initiated, and/orfullyenrolledpriortoapproval.Ifany of our competitorswere to receivefullapprovalon thebasisof a confirmatorytrialforanindicationforwhichweareseekingacceleratedapprovalbeforewe receiveaccelerated approval,theindicationweareseekingmayno longerqualifyas a conditionforwhich thereisan unmetmedical needandacceleratedapprovalofour productcandidatewould be moredifficultor maynot occur.Moreover,the FDA maywithdrawapprovalofourproductcandidateapprovedundertheacceleratedapprovalpathway if,for example:

Our failureto obtainmarketingapprovalin foreignjurisdictionswould preventour productcandidates frombeing marketedin thosejurisdictions,and any approvalwe are grantedforour productcandidates in the United Stateswould not assureapprovalof productcandidatesin foreignjurisdictions.

InordertomarketandsellourproductsinanyjurisdictionoutsidetheUnitedStates,wemustobtain separatemarketingapprovalsandcomplywith numerousand varyingregulatoryrequirements.The approval procedurevariesamongcountriesandcaninvolveadditionaltesting.The timerequiredto obtainapprovalmay differsubstantiallyfromthatrequiredtoobtainFDAapproval.Theregulatoryapprovalprocessoutsidethe UnitedStatesgenerallyincludesalloftherisksassociatedwithobtainingFDA approval.Inaddition,inmany countriesoutsidetheUnitedStates,itisrequiredthattheproductbe approvedforreimbursementbeforethe productcanbeapprovedforsaleinthatcountry.Wemaynotobtainapprovalsfromregulatoryauthorities outsidetheUnitedStatesonatimelybasis,ifatall.ApprovalbytheFDA doesnotensureapprovalbyregulatory authoritiesin othercountriesor jurisdictions,and approvalby one regulatoryauthorityoutsidetheUnitedStates doesnotensureapprovalbyregulatoryauthoritiesinothercountriesorjurisdictionsorbytheFDA. Wemaynot beabletosubmitformarketingapprovalsandmaynotreceivenecessaryapprovalstocommercializeour productsin any market.

We maynot be ableto obtainor maintainorphan drug designationor exclusivityforour product candidates.

Regulatoryauthoritiesin somejurisdictions,includingthe United States, may designatedrugs for relatively smallpatientpopulationsas“orphandrugs.”UndertheOrphanDrugAct,theFDA maydesignateadrugasan orphandrugifitisintendedto treata rarediseaseor condition,which isgenerallydefinedas a patientpopulation offewerthan200,000individualsin theUnitedStates,or ifthediseaseor conditionaffectsmorethan200,000 individualsintheUnitedStatesandthereisnoreasonableexpectationthatthecostof developingthedrug forthe typeof diseaseor conditionwillbe recoveredfromsalesof theproductin theUnitedStates.

Orphandrugdesignationentitlesa partyto financialincentives,such as opportunitiesforgrantfunding towardsclinicaltrialcosts,taxadvantagesand user-feewaivers.Additionally,ifa productthathas orphan designationsubsequentlyreceivesthefirstFDA approvalforthediseaseorconditionforwhich ithas such designation,theproductisentitledtoorphandrugexclusivity,whichmeansthattheFDA maynotapproveany otherapplicationsto marketthesamedrug forthesameindicationforsevenyears,exceptin certain circumstances,suchasashowingofclinicalsuperiority(i.e.,anotherproductissafer,moreeffectiveor makesa majorcontributiontopatientcare)overtheproductwithorphanexclusivityorwherethemanufacturerisunable toassuresufficientproductquantity.Competitors,however, mayreceiveapprovalof differentproductsforthe sameindicationforwhichtheorphanproducthas exclusivity,or obtainapprovalforthesameproductbut fora differentindicationthanthatforwhich theorphanproducthas exclusivity.

Wemayapplyforanorphandrug designationin theUnitedStatesor othergeographiesforour product candidatesin thefuture.However, obtainingan orphandrug designationcan be difficult,and we maynot be successfulindoing so. Even ifwe obtainorphandrug designationforour productcandidatesin specific indications,wemaynot be thefirstto obtainregulatoryapprovalof theseproductcandidatesfortheorphan- designatedindication,duetotheuncertaintiesassociatedwith developingpharmaceuticalproducts.In addition, exclusivemarketingrightsin theUnitedStatesmaybe limitedifwe seekapprovalforan indicationbroader than the orphan-designated indication or may be lost if the FDA later determines that the request for orphan designationwasmateriallydefectiveorifthemanufacturerisunabletoassuresufficientquantitiesof theproduct to meettheneedsof patientswith therarediseaseor condition.Orphan drug designationdoes not ensurethatwe willreceivemarketingexclusivityinaparticularmarket,andwecannotassureyouthatany futureapplicationfor orphandrugdesignationin any othergeographyor with respectto any otherproductcandidatewillbe granted. Orphan drug designationneithershortensthedevelopmenttimeor regulatoryreviewtimeof a drug, nor gives the drug any advantagein theregulatoryreviewor approvalprocess.

A Breakthrough Therapy Designationby the FDAforany of our currentor futureproductcandidates maynot leadto a fasterdevelopmentor regulatoryreviewor approvalprocess,and itwould not increase the likelihoodthatthe productcandidatewillreceivemarketingapproval.

Wemayseeka BreakthroughTherapyDesignationforone or moreof our currentor futureproduct candidates.Abreakthroughtherapyisdefinedasadrugthatisintended,aloneorincombinationwithoneor moreotherdrugs,totreataseriousor life-threateningdiseaseor condition,and preliminaryclinicalevidence indicates that the drug may demonstrate

substantialimprovementoverexistingtherapiesononeormore clinicallysignificantendpoints,such as substantialtreatmenteffectsobservedearlyin clinicaldevelopment.For drugsthathavebeendesignatedasbreakthroughtherapies,interactionandcommunicationbetweentheFDA and thesponsorof thetrialcan helpto identifythemostefficientpathforclinicaldevelopmentwhileminimizingthe numberofpatientsplacedinineffectivecontrolregimens.Drugsdesignatedasbreakthroughtherapiesbythe FDAarealsoeligibleforpriorityreviewifsupportedby clinicaldataatthetimeof thesubmissionof theNDA.

DesignationasabreakthroughtherapyisatthediscretionoftheFDA. Accordingly,evenifwebelievethat oneofourproductcandidatesmeetsthecriteriafordesignationasabreakthroughtherapy,theFDA maydisagree and insteaddeterminenot to makesuch designation.In any event,thereceiptof a Breakthrough Therapy Designationforadrugmaynotresultinafasterdevelopmentprocess,review,or approvalcomparedto drugs consideredforapprovalunderconventionalFDAproceduresanditwouldnotassureultimateapprovalbythe FDA.Inaddition,evenifoneormoreofourproductcandidatesqualifyasbreakthroughtherapies,theFDA may laterdecidethattheproductcandidateno longermeetstheconditionsforqualificationor thatthetimeperiodfor FDAreviewor approvalwillnot be shortened.

Ifwe are unable to successfullydevelop,validate,obtainregulatoryapprovalof and commercialize companiondiagnostictestsforany productcandidatesthatrequiresuch tests,or experiencesignificant delaysin doing so, we maynot realizethe fullcommercialpotentialof theseproductcandidates.

Acompaniondiagnosticisamedicaldevice,oftenaninvitrodevice,whichprovidesinformationthatis essentialforthesafeand effectiveuse of a correspondingtherapeuticdrug product.A companiondiagnosticcan beusedtoidentifypatientswhoaremostlikelytobenefitfromthetherapeuticproduct.In thefuture,we may evaluateopportunitiesto develop,eitherby ourselvesor with collaborators,companion diagnostictests for our productcandidatesforcertainindications.

Acompaniondiagnosticisgenerallydevelopedin conjunctionwith theclinicalprogramforan associated therapeuticproduct.Todate,theFDA has requiredpremarketapprovalof the vast majority ofcompaniondiagnosticsforcancer therapies.Generally,whenacompaniondiagnosticisessentialtothesafeandeffectiveuseofa drug product,the FDA requiresthatthecompaniondiagnosticbeapprovedbeforeorconcurrentwith approvalof thetherapeutic productandbeforeaproductcanbecommercialized.Theapprovalofacompaniondiagnosticaspartofthe therapeuticproduct’slabelinglimitstheuseofthetherapeuticproducttoonlythosepatientswhoexpressthe specificgeneticalterationthatthecompaniondiagnosticwas developedto detect.

Developmentofacompaniondiagnosticcouldincludeadditionalmeetingswith regulatoryauthorities,such asapre-submissionmeetingandtherequirementtosubmitaninvestigationaldeviceexemptionapplication.In thecaseofacompaniondiagnosticthatisdesignatedas “significantriskdevice,”approvalof an investigational deviceexemptionbytheFDA andIRBisrequiredbeforesuchdiagnosticisused in conjunctionwith theclinical trialsfora correspondingproductcandidate.

To be successfulin developing,validating,obtainingapprovalof and commercializinga companion diagnostic,weorourcollaboratorswillneedtoaddressa numberof scientific,technical,regulatoryand logistical challenges.Wehavenopriorexperiencewithmedicaldeviceordiagnostictestdevelopment.Ifwechooseto developandseekFDA approvalforcompaniondiagnostictestsonourown,wewillrequireadditionalpersonnel. Wemayrelyonthirdpartiesforthedesign,development,testing,validationandmanufactureof companion diagnostictestsforourtherapeuticproductcandidatesthatrequiresuchtests,theapplicationforandreceiptof anyrequiredregulatoryapprovals,andthecommercialsupplyofthesecompaniondiagnostics.Iftheseparties areunabletosuccessfullydevelopcompaniondiagnosticsforthesetherapeuticproductcandidates,or experience delaysin doing so, we maybe unableto enrollenough patientsforour currentand plannedclinicaltrials,the developmentof thesetherapeuticproductcandidatesmaybe adverselyaffected,these therapeuticproduct candidatesmaynotobtainmarketingapproval,andwemaynotrealizethefullcommercialpotentialof any of thesetherapeuticsthatobtainmarketingapproval.For any productcandidateforwhich a companiondiagnosticis necessarytoselectpatientswhomaybenefitfromuseoftheproductcandidate,anyfailuretosuccessfully developacompaniondiagnosticmaycauseor contributeto delayedenrollmentof our clinicaltrials,and may preventusfrominitiatingapivotaltrial.Inaddition,thecommercialsuccessofanyofourproductcandidates thatrequireacompaniondiagnosticwillbetiedtoanddependentuponthereceiptofrequiredregulatory approvals and the continued ability of such third parties to make the companion diagnostic commercially availabletous on reasonabletermsin therelevantgeographies.Any failureto do so couldmateriallyharmour business,resultsof operationsand financialcondition.

Ifwe decideto pursue a Fast Track Designationby the FDA,itmaynot leadto a fasterdevelopmentor regulatoryreviewor approvalprocess.

WemayseekFastTrackDesignationforoneormoreofourproductcandidates.Ifa drug isintendedforthe treatmentofaseriousorlife-threateningconditionandthedrugdemonstratesthepotentialto addressunmet medicalneedsforthiscondition,theproductsponsormayapplyforFDAFastTrackDesignation.TheFDA has broaddiscretionwhetherto grantthisdesignation,so even ifwe believea particularproduct candidateis eligible forthisdesignation,wecannotassureyouthattheFDAwoulddecidetograntit.EvenifwedoreceiveFast TrackDesignation,wemaynotexperienceafasterdevelopmentprocess,reviewor approvalcomparedto conventionalFDA procedures.TheFDA maywithdrawFastTrackDesignationifitbelievesthatthedesignation isno longersupportedby datafromour clinicaldevelopmentprogram.

Even ifwe obtainmarketingapprovalforour productcandidates,the termsof approvals,ongoing regulationof our productsor otherpost-approvalrestrictionsmaylimithowwe manufactureand market our productsand compliancewith such requirementsmayinvolvesubstantialresources,which could materiallyimpairour abilityto generaterevenue.

AnyproductcandidatesforwhichwereceiveacceleratedapprovalfromtheFDAarerequiredtoundergo one or moreconfirmatoryclinicaltrials.Ifsuch a productcandidatefailsto meetitssafetyand efficacyendpoints in such confirmatoryclinicaltrials,theregulatoryauthoritymaywithdraw its conditionalapproval. There is no assurancethatanysuchproductwillsuccessfullyadvancethroughitsconfirmatoryclinicaltrial(s).Therefore, evenifaproductcandidatereceivesacceleratedapprovalfromtheFDA, suchapprovalmaybewithdrawnata laterdate.

Evenifmarketingapprovalof a productcandidateisgranted,an approvedproductand itsmanufacturerand marketer are subject to ongoing review and extensive regulation, which may include the requirement to implementaREMS ortoconductcostlypost-marketingstudiesor clinicaltrialsand surveillanceto monitorthe safetyor efficacyof theproduct.

Wemustalsocomplywithrequirementsconcerningadvertisingand promotionforany of our product candidatesforwhichweobtainmarketingapproval.Promotionalcommunicationswithrespecttoprescription drugsaresubjecttoavarietyoflegalandregulatoryrestrictionsandmustbeconsistentwiththeinformationin theproduct’sapprovedlabeling.Thus, we willnot be ableto promoteany productswe developfor indicationsor usesforwhich theyarenot approved.

Inaddition,manufacturersof approvedproductsand thosemanufacturers’facilitiesarerequiredto ensure thatqualitycontrolandmanufacturingproceduresconformtocurrentgoodmanufacturingpractices,or cGMPs, whichincluderequirementsrelatingtoqualitycontroland qualityassuranceas wellas thecorresponding maintenanceofrecordsanddocumentationandreportingrequirements.We and our contractmanufacturing organizations,orCMOs,couldbesubjecttoperiodicunannouncedinspectionsby theFDAto monitorand ensure compliancewith cGMPs.

Accordingly,assumingweobtainmarketingapprovalforoneormoreofourproductcandidates,weand our CMOswillcontinuetoexpendtime,moneyandeffortin allareasof regulatorycompliance,including manufacturing,production,productsurveillanceandqualitycontrol.Ifwe arenot ableto complywith post- approvalregulatoryrequirements,wecouldhavethemarketingapprovalsforour productswithdrawnby regulatoryauthoritiesandourabilitytomarketanyfutureproductscouldbelimited,whichcouldadversely affectourabilityto achieveor sustainprofitability.As a result,thecostof compliancewith post-approval regulationsmayhave a negativeeffecton our operatingresultsand financialcondition.

Any productcandidateforwhich we obtainmarketingapprovalwillbe subjectto ongoing enforcementof post-marketingrequirementsby regulatoryagencies,and we could be subjectto substantialpenalties, includingwithdrawal of our productfromthe market,ifwe failto complywith allregulatory requirementsor ifwe experienceunanticipatedproblemswith our products,whenand ifany of themare approved.

Anyproductcandidateforwhichweobtainmarketingapproval,alongwiththemanufacturingprocesses, post-approvalclinicaldata,labeling,advertisingandpromotionalactivitiesforsuch product,willbe subjectto continualrequirementsofandreviewbytheFDA andotherregulatoryauthorities.Theserequirementsinclude, butarenotlimitedto,restrictionsgoverningpromotionofanapprovedproduct,submissionsofsafetyand other post-marketinginformationand reports,registrationand listingrequirements,cGMP requirementsrelatingto manufacturing,qualitycontrol,quality

assuranceand correspondingmaintenanceof recordsand documents,and requirementsregardingdrug distributionand thedistributionof samplesto physiciansand recordkeeping.

TheFDA and otherfederaland stateagencies,includingtheDepartmentof Justice,closelyregulate compliancewith allrequirementsgoverningprescriptiondrug products, including requirementspertainingto marketingandpromotionofdrugsinaccordancewith theprovisionsof theapprovedlabelingand manufacturing ofproductsinaccordancewithcGMPrequirements.Forexample,theFDAandotheragenciesactivelyenforce thelawsandregulationsprohibitingthepromotionofoff-labeluses,and a companythatisfound to have improperlypromotedoff-labelusesmaybe subjectto significantliability.Violationsof such requirementsmay leadtoinvestigationsallegingviolationsoftheFederalFood,Drug,andCosmeticAct,orFDCA, andother statutes,includingtheFalseClaimsActandotherfederalandstatehealthcarefraudandabuselawsaswellas stateconsumerprotectionlaws.Ourfailuretocomplywithallregulatoryrequirements,andlaterdiscoveryof previouslyunknownadverseeventsorotherproblemswithourproducts,manufacturersor manufacturing processes,mayyieldvariousresults,including:

•litigationinvolvingpatientstakingour products;

•restrictionson such products,manufacturersor manufacturingprocesses;

•restrictionson thelabelingor marketingof a product;

•restrictionson productdistributionor use;

•requirementsto conductpost-marketingstudiesor clinicaltrials;

•warningor untitledletters;

•withdrawalof theproductsfromthemarket;

•refusalto approvependingapplicationsor supplementsto approvedapplicationsthatwe submit;

•recallof products;

•fines,restitutionor disgorgementof profitsor revenues;

•suspensionor withdrawalof marketingapprovals;

•damageto relationshipswith any potentialcollaborators;

•unfavorablepresscoverageand damageto our reputation;

•refusalto permittheimportor exportof our products;

•productseizure;or

•injunctionsor theimpositionof civilor criminalpenalties.

Non-compliancebyusor any futurecollaboratorwith regulatoryrequirements,includingsafetymonitoring or pharmacovigilance,and with requirementsrelatedto thedevelopmentof productsfor the pediatricpopulation can alsoresultin significantfinancialpenalties.

Our currentand futurerelationshipswith customersand third-partypayorsmaybe subjectto applicable anti-kickback,fraud and abuse, transparency,healthprivacy,and otherhealthcarelaws and regulations, which could exposeus to significantpenalties,includingcriminal,civil,and administrativepenalties, contractualdamages,reputationalharm and diminishedprofitsand futureearnings.

Healthcareproviders,includingphysicians,andthird-partypayorswillplaya primaryrolein the recommendationandprescriptionofanyproductcandidatesforwhichweobtainmarketingapproval.Our current andfuturearrangementswithhealthcareproviders,third-partypayorsand customersmayexposeus to broadly applicablefraudand abuseand otherhealthcarelaws and regulationsthatmayconstrainthebusinessor financial arrangementsandrelationshipsthroughwhichweresearch,aswellas,market,sellanddistributeanyproducts forwhichweobtainmarketingapproval.Restrictionsunderapplicablefederaland statehealthcarelaws and regulationsthatmaybe applicableto our businessincludethefollowing:

Effortstoensurethatour businessarrangementswith thirdpartieswillcomplywith applicablehealthcare laws and regulationswillinvolvesubstantialcosts.Itispossiblethatgovernmentalauthoritieswill conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicablefraudandabuseorotherhealthcarelawsandregulations.Ifouroperationsarefound to be in violation ofanyoftheselaws or any othergovernmentalregulationsthatmayapplyto us, we maybe subjectto significant civil,criminaland administrativepenalties,damages,fines,disgorgement,imprisonment,exclusionfrom governmentfundedhealthcareprograms,suchasMedicareandMedicaidand otherfederalhealthcareprograms, contractualdamages,reputationalharm,diminishedprofitsand futureearnings,additionalintegrityreportingand oversightobligations,andthecurtailmentor restructuringof our operations,any of which couldadverselyaffect ourabilitytooperateourbusinessandourresultsofoperations.Ifany of thephysiciansor otherhealthcare providersorentitieswithwhomweexpectto do businessisfound to be not in compliancewith applicablelaws, theymaybesubjectto significantcriminal,civiland administrativesanctions,includingexclusionsfrom governmentfundedhealthcareprograms,which couldhave a materialadverseeffecton our business,resultsof operations,financialconditionand prospects.

Recentlyenactedand futurelegislationmayincreasethe difficultyand costforus to obtainmarketing approvalof and commercializeour productcandidatesand decreasethe priceswe mayobtain.

IntheUnitedStatesandsomeforeignjurisdictions,therehavebeenanumberof legislativeand regulatory changesandproposedchangesregardingthehealthcaresystemthatcouldpreventor delaymarketingapprovalof ourproductcandidates,restrictorregulatepost-approvalactivitiesandaffectourabilitytoprofitablysellany productcandidatesforwhich we obtainmarketingapproval.

Forexample,heACA was enacted,asweepinglawintended tobroadenaccesstohealthinsurance,reduceor constrainthegrowth of healthcarespending,enhanceremedies againstfraudandabuse,addnewtransparencyrequirementsforthehealthcareand healthinsuranceindustries, imposenew taxesand feeson thehealthindustryand imposeadditionalhealthpolicyreforms.

Among theprovisionsof theACAof importanceto our potentialproductcandidatesarethefollowing:

• annual fees and taxes on manufacturers of certain branded prescription drugs;

Programarecalculatedfordrugsthatareinhaled,infused,instilled,implantedor injected;

• extension of manufacturers’ Medicaid rebate liability;

• expansion of eligibility criteria for Medicaid programs;

There have been legislative and judicial effortstorepealorreplacecertainaspectsoftheACA, including measures taken during the Trump administration. WhileCongresshas not passedcomprehensiverepeallegislation,ithas enactedlaws thatmodify certain provisionsoftheACAsuchasremovingpenalties, startingJanuary1,2019,fornotcomplyingwiththeACA’s individualmandatetocarryhealthinsurance,eliminatingtheimplementationof certainACA-mandatedfees,and increasingthepoint-of-salediscountthatisowedbypharmaceuticalmanufacturerswho participatein Medicare PartD.In November 2020, the United States Supreme Court held oral arguments on the U.S. Court of Appeals for the Fifth Circuit’s decision that held that the individual mandate is unconstitutional..Itisunclear how such litigationand othereffortsto repealand replacetheACAwillimpacttheACAand our business.

Inaddition,otherlegislativechangeshavebeenproposedandadoptedsincetheACA wasenacted.On August2,2011,theBudgetControlActof2011wassignedintolaw,which,amongotherthings,createdthe JointSelectCommitteeonDeficitReductionto recommendto Congressproposalsforspendingreductions.The Joint Select Committee did not achieve a targeted deficit reduction, triggering the legislation’s automatic reductiontoseveralgovernmentprograms.Thesechangesincludeaggregatereductionsto Medicarepaymentsto providersofupto2%perfiscalyear,which began in 2013, and due to subsequentlegislativeamendmentsto the statute,willremainineffectthrough2030unlessadditionalCongressionalactionistaken.The CoronavirusAid, Relief,andEconomicSecurityAct,ortheCARESAct,whichwassignedintolawin

March2020andis designedto providefinancialsupportand resourcesto individualsand businessesaffectedby the COVID-19 pandemic,suspendedthe2%MedicaresequesterfromMay1,2020throughDecember31,2020,andextended thesequesterbyoneyear,through2030.The Consolidated Appropriations Act, 2021 extended the suspension of the 2% Medicare sequester through March 31, 2021. In January2013, theAmericanTaxpayerReliefAct of 2012 was signed intolaw,which,amongotherthings,reducedMedicarepaymentstoseveralproviders,andincreasedthestatute oflimitationsperiodforthegovernmenttorecoveroverpaymentstoprovidersfromthreetofiveyears.These laws mayresultin additionalreductionsin Medicareand otherhealthcarefunding.

Further,therehas been heightenedgovernmentalscrutinyrecentlyoverthemannerin which drug manufacturerssetpricesfortheirmarketedproducts,which has resultedin severalCongressionalinquiriesand proposedand enactedfederaland statelegislationdesignedto, amongotherthings,bringmoretransparencyto productpricing,reviewtherelationshipbetweenpricingand manufacturerpatientprograms,and reform governmentprogramreimbursementmethodologiesfordrugproducts.At thefederallevel,theTrumpadministrationissuedbudgetproposalsforfiscalyear2021 includesa $135 billionallowanceto supportlegislativeproposalsseekingtoreducedrugprices,increasecompetition,lowerout-of-pocketdrug costs forpatients,andincreasepatientaccesstolower-costgenericandbiosimilardrugs.

In particular, onJuly24,2020andSeptember13,2020,theTrump administrationannouncedseveralexecutiveorders relatedto prescriptiondrug pricingthatseekto implementseveralof theadministration’sproposals.As a result, theFDA alsoreleasedafinalruleonSeptember24,2020providingguidanceforstatesto buildand submit importationplansfordrugsfromCanada. The Trump and Biden administrations both issued executive orders intended to favor government procurement from domestic manufacturers. In addition, the Trump administration issued an executive order specifically aimed at the procurement of pharmaceutical products, which instructed the federal government to develop a list of “essential” medicines and then buy those and other medical supplies that are manufactured, including the manufacture of the API, in the United States. It is unclear whether this executive order or something similar will be implemented by the Biden Administration.

Further,onNovember20,2020,HHS finalizedaregulationremoving safeharborprotectionforpricereductionsfrompharmaceuticalmanufacturersto plansponsorsunderPartD, eitherdirectlyorthroughpharmacybenefitmanagers,unlessthepricereductionisrequiredby law. The rulealso createsanewsafeharborforpricereductionsreflectedatthepoint-of-sale,as wellas a safeharborforcertain fixedfeearrangementsbetweenpharmacybenefitmanagersandmanufacturers.The Centers for Medicare and Medicaid Services, or CMSalsopublishedaninterimfinalrulethatestablishesaMostFavoredNation,or MFN, Model for Medicare Part B drug payment. This regulation would substantially change the drug reimbursement landscape asit basesMedicare PartBpaymentfor50selected drugsonpricesinforeign countriesinsteadofaveragesalesprice,orASP,andestablishesafixedadd-onpaymentinplaceofthecurrent 6percent(4.3percentaftersequestration)ofASP. TheMFN drug paymentamountisexpectedto be lowerthan thecurrentASP-basedpaymentlimitbecauseU.S.drugpricesaregenerallythehighestintheworld.On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule, and itfacesuncertainprospectsfor implementation.

Atthestatelevel,individualstateshave increasinglypassedlegislationand implementedregulations designedtocontrolpharmaceuticalandbiologicalproductpricing,includingpriceor patientreimbursement constraints,discounts,restrictionson certainproductaccessand marketingcostdisclosureand transparency measures,and, in somecases,designedto encourageimportationfromothercountriesand bulk purchasing.

WeexpectthattheACA,as wellas otherhealthcarereformmeasuresthatmaybe adoptedin thefuture,may resultinmorerigorouscoveragecriteriaand in additionaldownward pressureon thepricethatwe receiveforany approvedproduct.The implementationof costcontainmentmeasuresor other healthcarereformsmay prevent us frombeingableto generaterevenue,attainprofitability,or commercializeour products.

Legislativeandregulatoryproposalshavebeenmadetoexpandpost-approvalrequirementsandrestrict salesandpromotionalactivitiesforpharmaceuticalproducts.Wecannotbesurewhetheradditionallegislative changeswillbeenacted,orwhethertheFDAregulations,guidanceorinterpretationswillbechanged,orwhat theimpactofsuchchangesonthemarketingapprovalsof our productcandidates,ifany, maybe. In addition, increasedscrutinybytheU.S. CongressoftheFDA’sapprovalprocessmaysignificantlydelayor prevent marketingapproval,as wellas subjectus to morestringent

productlabelingand post-marketingtestingand other requirements.Itisalsopossiblethatadditionalgovernmentalactionistakento addresstheCOVID-19pandemic.

Governmentsoutsideof the United Statestend to imposestrictpricecontrols,which mayadverselyaffect our revenues,ifany.

Insomecountries,particularlythecountriesoftheEuropeanUnion,ortheEU, thepricingofprescription pharmaceuticalsissubjecttogovernmentalcontrol.Inthesecountries,pricingnegotiationswithgovernmental authoritiescantakeconsiderabletimeafterthereceiptof marketingapprovalfora product.To obtain reimbursement or pricing approval insome countries, wemay berequired toconduct aclinical trial that comparesthecost-effectivenessof our productcandidatesto otheravailabletherapies.Ifreimbursementof our productsisunavailableorlimitedinscopeoramount,orifpricingissetatunsatisfactorylevels,our business couldbe harmed.Political,economicand regulatorydevelopmentsmayfurthercomplicatepricing negotiations, andpricingnegotiationsmaycontinueafterreimbursementhasbeenobtained.Referencepricingusedby various EU memberstates,and paralleltrade,such as arbitragebetweenlow-pricedand high-pricedmemberstates,can furtherreduceprices.Therecan be no assurancethatany countrythathas pricecontrolsor reimbursement limitationsforpharmaceuticalproductswillallowfavorablereimbursementand pricingarrangementsfor any products,ifapprovedinthosecountries.Inaddition,therecentwithdrawaloftheUnitedKingdomfromits membershipintheEU, oftenreferredtoas“Brexit”,couldleadtolegalandregulatoryuncertaintyintheUnited KingdomandmayleadtotheUnitedKingdomandEU adoptingdivergentlawsandregulations,includingthose relatedtothepricingofprescriptionpharmaceuticals,astheUnitedKingdomdetermineswhichEU lawsto replicateor replace.IftheUnitedKingdom were to significantlyalterits regulationsaffectingthe pricing of prescriptionpharmaceuticals,wecouldfacesignificantnewcosts.Asa result,Brexitcouldimpairour abilityto transactbusinessin theEUand theUnitedKingdom.

Laws and regulationsgoverningany internationaloperationswe mayhave in the futuremayprecludeus fromdeveloping,manufacturingand sellingcertainproductcandidatesand productsoutsideof the United Statesand requireus to developand implementcostlycomplianceprograms.

IfweexpandouroperationsoutsideoftheUnitedStates,we mustdedicateadditionalresourcesto comply withnumerouslawsandregulationsineachjurisdictionin which we planto operate.The ForeignCorrupt PracticesAct,orFCPA,prohibitsanyU.S. individualorbusinessfrompaying,offering,authorizingpaymentor offeringanythingofvalue,directlyorindirectly,toanyforeignofficial,politicalpartyorcandidateforthe purposeofinfluencinganyactordecisionofsuchthirdpartyin orderto assisttheindividualor businessin obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the UnitedStatestocomplywithcertainaccountingprovisionsrequiringthecompanytomaintainbooksand records thataccuratelyandfairlyreflectalltransactionsofthecompany,includinginternationalsubsidiaries,andto deviseand maintainan adequatesystemof internalaccountingcontrolsforinternationaloperations.

CompliancewiththeFCPA isexpensiveanddifficult,particularlyincountriesinwhich corruptionisa recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because,inmanycountries,hospitalsareoperatedbythegovernment,and doctorsand otherhospitalemployees areconsideredforeignofficials.Certainpaymentstohospitalsin connectionwith clinicaltrialsand otherwork have been deemedto be improperpaymentsto governmentofficialsand have ledto FCPAenforcementactions.

Various laws, regulations and executive orders also restrict the use and dissemination outside of the UnitedStates,or thesharingwith certainnon-U.S. nationals,of informationclassifiedfornationalsecurity purposes,aswellascertainproductsandtechnicaldatarelatingtothoseproducts.Ifweexpandourpresence outsideoftheUnitedStates,itwillrequireustodedicateadditionalresourcestocomplywiththeselaws,and theselawsmayprecludeusfromdeveloping,manufacturingor sellingcertainproductcandidatesand products outsideof theUnitedStates,which couldlimitour growth potentialand increaseour developmentcosts.

Thefailuretocomplywithlawsgoverninginternationalbusinesspracticesmayresultinsubstantialcivil andcriminalpenaltiesandsuspensionordebarmentfromgovernmentcontracting.The Securitiesand Exchange Commission, or the SEC, also may suspend or bar issuers from trading securities on U.S.exchanges for violationsof theFCPA’saccountingprovisions.

Ifwe failto complywith environmental,healthand safetylaws and regulations,we could becomesubject to finesor penaltiesor incur coststhatcould harm our business.

Weandourthird-partycontractorsaresubjectto numerousforeign,federal,stateand localenvironmental, healthandsafetylaws and regulations,includingthosegoverninglaboratoryproceduresand thehandling,use, storage,treatmentand disposalof hazardousmaterialsand wastes.Our operationsinvolvetheuse of hazardous and flammablematerials,includingchemicalsand biologicalmaterials.Our operationsalso produce hazardous wasteproducts.Wegenerallycontractwiththirdpartiesforthedisposalofthesematerialsandwastes.We cannoteliminatetheriskof contaminationor injuryfromthesematerials.In theeventof contaminationor injury resultingfromouruseofhazardousmaterials,wecouldbeheldliableforanyresultingdamages,andany liabilitycouldexceedour resources,includingany availableinsurance.

Inaddition,ourleasingand operationof realpropertymaysubjectus to liabilitypursuantto certainof these lawsorregulations.UnderexistingU.S.environmentallawsandregulations,currentorpreviousownersor operatorsofrealpropertyandentitiesthatdisposedorarrangedforthedisposalof hazardoussubstancesmaybe heldstrictly,jointlyandseverallyliableforthecostof investigatingor remediatingcontaminationcausedby hazardoussubstancereleases,even iftheydid not know of and were not responsibleforthereleases.

Wecouldincursignificantcostsandliabilitieswhichmayadverselyaffectour financialconditionand operatingresultsforfailuretocomplywithsuchlawsandregulations,including,amongotherthings,civilor criminalfinesandpenalties,propertydamageandpersonalinjuryclaims,costsassociatedwithupgradesto our facilitiesor changesto our operatingprocedures,or injunctionslimitingor alteringour operations.

Althoughwemaintainliabilityinsurancetocoverusforcostsand expenseswe mayincurdue to injuriesto our employees, this insurance may not provide adequate coverage against potential liabilities. We do not maintaininsuranceforenvironmentalliabilityortoxictortclaimsthatmaybe assertedagainstus in connection with our storageor disposalof biological,hazardousor radioactivematerials.

Inaddition,we mayincursubstantialcostsin orderto complywith currentor futureenvironmental,health andsafetylaws and regulations.These currentor futurelaws and regulations,which arebecomingincreasingly morestringent,mayimpairourresearch,developmentorproductionefforts.Ourfailuretocomplywiththese laws and regulationsalsomayresultin substantialfines,penaltiesor othersanctions.

We are subjectto certainU.S.and certainforeignanti-corruption,anti-moneylaundering,export

control,sanctionsand othertradelaws and regulations.We can faceseriousconsequencesforviolations.

U.S. andforeignanti-corruption,anti-moneylaundering,exportcontrol,sanctionsandothertradelaws and regulationsprohibit,amongotherthings,companiesandtheiremployees,agents,CROs, CMOs,legalcounsel, accountants,consultants,contractorsand otherpartnersfromauthorizing,promising,offering,providing, soliciting,orreceivingdirectlyorindirectly,corruptorimproperpaymentsoranythingelseofvalueto or from recipientsinthepublicorprivatesector.Violationsof theselaws can resultin substantialcriminalfinesand civil penalties,imprisonment,thelossoftradeprivileges,debarment,taxreassessments,breachofcontractand fraud litigation,reputationalharmandotherconsequences.Wehavedirectorindirectinteractionswith officialsand employeesof governmentagenciesor government-affiliatedhospitals,universitiesand otherorganizations.We alsoexpectournon-U.S.activities toincreaseovertime.Weexpecttorelyonthirdpartiesforresearch, preclinicalstudiesand clinicaltrialsand/orto obtainnecessarypermits,licenses,patentregistrationsand other marketingapprovals.Wecanbeheldliableforthecorruptor otherillegalactivitiesof our personnel,agents,or partners,even ifwe do not explicitlyauthorizeor have priorknowledge of such activities.

Anyviolationsofthelawsandregulationsdescribedabove mayresultin substantialciviland criminalfines andpenalties,imprisonment,thelossof exportor importprivileges,debarment,taxreassessments,breachof contractand fraudlitigation,reputationalharmand otherconsequences.

Risks Relatedto Our Relianceon Third Parties

We rely,and intendto continueto rely,on thirdpartiesto conduct our clinicaltrialsand performsomeof our researchand preclinicalstudies.Ifthesethirdpartiesdo not satisfactorilycarryout theircontractual duties,failto complywith applicableregulatoryrequirementsor do not meetexpecteddeadlines,our developmentprogramsmay

be delayedor subjectto increasedcostsor we maybe unable to obtain regulatoryapproval,each of which mayhave an adverseeffecton our business,financialcondition, resultsof operationsand prospects.

Wedonothavetheabilitytoindependentlyconductallaspectsofourpreclinicaltestingor clinicaltrials ourselves.As a result,we aredependenton thirdpartiesto conductour ongoing and plannedclinicaltrialsof PRT543,PRT811andPRT1419, andanypreclinicalstudiesandclinicaltrialsofanyotherproductcandidates. Thetimingoftheinitiationandcompletionofthesetrialswillthereforebepartiallycontrolledbysuchthird parties and may result in delays to our development programs. Specifically, we expect CROs, clinical investigatorsandconsultantstoplayasignificantrolein theconductof thesetrialsand thesubsequentcollection andanalysisofdata.However,theseCROs andotherthirdpartiesarenot our employees,and we willnot be able to controlallaspectsof theiractivities.Nevertheless,we areresponsibleforensuringthateachclinicaltrialis conductedinaccordancewith theapplicableprotocoland legal,regulatoryand scientificstandards,and our relianceontheCROs andotherthirdpartiesdoesnot relieveus of our regulatoryresponsibilities.We and our CROsarerequiredtocomplywithgoodclinicalpractices,orGCP, requirements,whichareregulationsand guidelinesenforcedbytheFDA forproductcandidatesin clinicaldevelopment.Regulatoryauthoritiesenforce theseGCP requirementsthroughperiodicinspectionsof trialsponsors,clinicaltrialinvestigatorsand clinicaltrial sites.IfweoranyofourCROs orclinicaltrialsitesfailtocomplywithapplicableGCP requirements,thedata generatedinourclinicaltrialsmaybedeemedunreliable,andtheFDA mayrequireus to performadditional clinicaltrialsbeforeapprovingourmarketingapplications.Wecannotassureyouthat,upon inspection,theFDA willdeterminethatourclinicaltrialscomplywithGCPs. In addition,our clinicaltrialsmustbe conductedwith productproducedundercGMP regulations.Our failureor thefailureof thirdpartieson whom we relyto comply withtheseregulationsmayrequireustostopand/orrepeatclinicaltrials,which would delaythemarketing approvalprocess.

ThereisnoguaranteethatanysuchCROs, clinicaltrialinvestigatorsorotherthirdpartiesonwhichwerely willdevoteadequatetimeandresourcestoourdevelopmentactivitiesor performas contractuallyrequired.Ifany ofthesethirdpartiesfailto meetexpecteddeadlines,adhereto our clinicalprotocolsor meetregulatory requirements,otherwiseperformin a substandardmanner,or terminatetheirengagementswith us, thetimelines forourdevelopmentprogramsmaybeextendedordelayedorourdevelopmentactivitiesmaybe suspendedor terminated. If our clinical trial site terminates for any reason, we may experience the loss of follow-up informationonsubjectsenrolledinsuchclinicaltrialunlessweareabletotransferthosesubjectsto another qualifiedclinicaltrialsite,which maybe difficultor impossible.

Furthermore,thesethirdpartiesmayalsohave relationshipswith otherentities,someof which maybe our competitorsforwhomtheymayalsobeconductingclinicaltrialsor otherpharmaceuticalproductdevelopment activitiesthatcouldharmour competitiveposition.Ifthesethirdpartiesdo not successfullycarryout their contractualduties,meetexpecteddeadlinesorconductourclinicaltrialsin accordancewith regulatory requirementsorour statedprotocols,we willnot be ableto obtain,or maybe delayedin obtaining,marketing approvalsforPRT543, PRT811, PRT1419 oranyotherproductcandidatesandwillnotbeableto,ormaybe delayedin our effortsto, successfullycommercializeour products.

Manufacturingpharmaceuticalproductsiscomplexand subjectto productlossfora varietyof reasons. We relyon third-partysuppliers,includingsinglesourcesuppliers,to manufacturepreclinicaland clinicalsuppliesof our productcandidatesand we intendto relyon thirdpartiesto produce commercial suppliesof any approvedproductcandidate.This relianceon thirdpartiesincreasesthe riskthatwe will not have sufficientquantitiesof our productcandidatesor productsor such quantitiesat an acceptable costor quality,which could delay,preventor impairour developmentor commercializationefforts.

Wedonothaveanymanufacturingfacilities.Werely,andexpectto continueto rely,on thirdpartiesforthe manufactureof our productcandidatesforpreclinicaland clinicaltesting,product developmentpurposes, to supportregulatoryapplicationsubmissions,aswellasforcommercialmanufactureifanyof our product candidatesobtainmarketingapproval.Inaddition,weexpectto contractwith analyticallaboratoriesforrelease andstabilitytestingofourproductcandidates.Thisrelianceonthirdpartiesincreasestheriskthatwe willnot havesufficientquantitiesofourproductcandidatesorproductsorsuchquantitiesatanacceptablecostor quality, whichcoulddelay,preventorimpairourdevelopmentor commercializationefforts.In addition,theongoing COVID-19 pandemicmayresultin disruptionsto theoperationsor an extendedshutdown of certainbusinesses, which couldincludecertainof our contractmanufacturers.

Wemaybeunabletoestablishanyagreementswiththird-partymanufacturersor do so on favorableterms. Evenifweareabletoestablishagreementswiththird-partymanufacturers,relianceon third-partymanufacturers entailsadditionalrisks,including:

• reliance on the third party for regulatory, compliance and quality assurance;

• the possible breach of the manufacturing agreement by the third party;

• carrier disruptions or increased costs that are beyond our control; and

Wehaveonlylimitedsupplyarrangementsinplacewithrespectto our productcandidates,and these arrangementsdonotextendtocommercialsupply.Weacquiremanykeymaterialsonapurchaseorderbasis.As aresult,we do not have long-termcommittedarrangementswith respectto our productcandidatesand other materials.Wewillneedtoestablishone or moreagreementswith thirdpartiesto developand scaleup thedrug manufacturingprocess,conductdrugtesting,andgeneratedatato supporta regulatorysubmission.Ifwe obtain marketingapprovalforanyofourproductcandidates,wewillneedtoestablishanagreementforcommercial manufacturewith a thirdparty.

Inaddition,wearedependentonasolesupplierforcertaincomponentsofourmanufacturingprocess.Even ifweareabletoreplaceanyrawmaterialsorothermaterialswithanalternative,suchalternativesmaycost more,resultinloweryieldsornotbeassuitableforourpurposes.Inaddition,someofthematerialsthatweuse tomanufactureourproductcandidatesarecomplexmaterials,which maybe moredifficultto substitute. Therefore,anydisruptionsarisingfromour solesupplierscouldresultin delaysand additionalregulatory submissions.

Third-partymanufacturersmaynotbeabletocomplywith cGMP regulationsor similarregulatory requirementsoutsideoftheUnitedStates.IftheFDA determinesthatourCMOsarenot in compliancewith FDA lawsandregulations,includingthosegoverningcGMPs,theFDA maydenyanewdrugapplication,orNDA, approval until the deficiencies are corrected or we replace the manufacturer in our application with a manufacturerthatisin compliance.Moreover,our failure,or thefailureof our third-partymanufacturersand suppliers,to complywith applicableregulationscouldresultin sanctionsbeingimposedon us, includingclinical holds, fines, injunctions, civil penalties, seizures or recalls of product candidates or products, operating restrictionsandcriminalprosecutions,anyof which couldsignificantlyand adverselyaffectsuppliesof our products.Inaddition,approvedproductsandthefacilities atwhichtheyaremanufacturedarerequiredto maintainongoingcompliancewithextensiveFDA requirementsandtherequirementsofothersimilaragencies, includingensuringthatqualitycontrolandmanufacturingproceduresconformtocGMPrequirements.As such, ourCMOsaresubjecttocontinualreviewandperiodicinspectionstoassesscompliancewith cGMPs. Furthermore,althoughwedonothaveday-to-daycontrolovertheoperationsofourCMOs,weareresponsible forensuringcompliancewith applicablelaws and regulations,includingcGMPs.

Inaddition,ourthird-partymanufacturersandsuppliersaresubjectto numerousenvironmental,healthand safetylawsandregulations,includingthosegoverningthehandling,use, storage,treatmentand disposalof waste products,andfailuretocomplywithsuchlawsandregulationscouldresultin significantcostsassociatedwith civilor criminalfinesand penaltiesforsuch thirdparties.Based on theseverityof regulatoryactionsthatmaybe broughtagainstthesethirdpartiesinthefuture,ourclinicalorcommercialsupplyofdrugandpackagingand otherservicescouldbe interruptedor limited,which couldharmour business.

Ourproductcandidatesandanyproductsthatwe maydevelopmaycompetewith otherproductcandidates andproductsforaccessto manufacturingfacilities.As a result,we maynot obtainaccessto thesefacilitieson a prioritybasisoratall.Therearealimitednumberof manufacturersthatoperateundercGMP regulationsand that mightbe capableof manufacturingforus.

Asweprepareforlater-stageclinicaltrialsandpotentialcommercialization,we willneed to takestepsto increasethescaleof productionof our productcandidates.We have not yetscaledup the manufacturingprocess forany of our productcandidates.Thirdpartymanufacturersmaybe unableto successfullyincreasethe manufacturingcapacityforanyofourproductcandidatesin a timelyor cost-effectivemanner,or atall.In addition,qualityissuesmayariseduringscale-uporcommercialactivities.Forexample,ifmicrobial,viralor othercontaminationsarediscoveredinourproductcandidatesor in themanufacturingfacilitiesin which our productcandidatesaremade,suchmanufacturingfacilitiesmayneed to be closedforan extendedperiodof time to investigateand remedythecontamination.

Any performance failure on the part of our existing or future manufacturers could delay clinical developmentormarketingapproval.Wedonotcurrentlyhavearrangementsin placeforredundantsupplyor a secondsourceforbulkdrugsubstance.IfourcurrentCMOs forpreclinicaland clinicaltestingcannotperformas agreed, we may be required to replace such CMOs. Although we believe that there are several potential alternativemanufacturerswhocouldmanufactureourproductcandidates,wemayincuraddedcostsanddelays inidentifyingandqualifyinganysuchreplacementmanufactureror be ableto reachagreementwith any alternativemanufacturer.Further,our third-partymanufacturersmayexperiencemanufacturingor shipping difficultiesduetoresourceconstraintsorasaresultof naturaldisasters,labordisputes,unstablepolitical environments,orpublichealthepidemicssuchastherecentCOVID-19 pandemic.Ifourcurrentthird-party manufacturerscannotperformasagreed,wemayberequiredtoreplacesuchmanufacturersandwemaybe unableto replacethemon a timelybasisor atall.

Ourcurrentandanticipatedfuturedependenceuponothersforthemanufactureof our productcandidatesor productsmayadverselyaffectour futureprofitmarginsand our abilityto commercializeany productsthatobtain marketingapprovalon a timelyand competitivebasis.

We mayenterintocollaborationswith thirdpartiesforthe developmentand commercializationof our productcandidates.Ifthosecollaborationsare not successful,we maynot be ableto capitalizeon the marketpotentialof theseproductcandidates.

Wemayseekthird-partycollaboratorsforthedevelopmentand commercializationof someof our product candidatesonaselectbasis.Wehave not enteredintoany collaborationsto date.Our likelycollaboratorsforany futurecollaborationarrangementsincludelargeandmid-sizepharmaceuticalcompanies,regionalandnational pharmaceuticalcompaniesandbiotechnologycompanies.We facesignificantcompetitionin seekingappropriate collaborators.Ourabilitytoreacha definitiveagreementfora futurecollaborationwilldepend, amongother things,uponourassessmentofthefuturecollaborator’sresourcesandexpertise,thetermsand conditionsof the proposedcollaborationand theproposedcollaborator’sevaluationof a numberof factors.

Ifwedoenterintoanysucharrangementswith any thirdparties,we willlikelyhave limitedcontroloverthe amountandtimingofresourcesthatourfuturecollaboratorsdedicateto thedevelopmentor commercializationof ourproductcandidates.Ourabilitytogeneraterevenuesfromthesearrangementswilldependonourfuture collaborators’abilitiesand effortsto successfullyperformthefunctionsassignedto themin these arrangements. Collaborationswith futurecollaboratorsinvolvingour productcandidateswould pose numerousrisksto us, includingthefollowing:

Ifweestablishoneormorecollaborations,alloftherisksrelatingto productdevelopment,regulatory approvalandcommercializationdescribedhereinwouldalsoapplyto theactivitiesof any such future collaborators.

Risks Relatedto Commercializationof our Product Candidates

The incidenceand prevalencefortargetpatientpopulationsof our productcandidateshave not been establishedwith precision.Ifthe marketopportunitiesforour productcandidatesare smallerthan we estimateor ifany approvalthatwe obtainisbased on a narrower definitionof the patientpopulation,our revenuepotentialand abilityto achieveprofitabilitywillbe adverselyaffected.

ThetotaladdressablemarketopportunityforPRT543, PRT811, PRT1419 andanyotherproductcandidates wemaydevelopwillultimatelydependupon,amongotherthings,thediagnosiscriteriaincludedinthefinal labelingforeachsuchproductcandidateifourproductcandidatesareapprovedforsalefortheseindications, acceptancebythemedicalcommunity,patientaccess,drugandanyrelatedcompaniondiagnosticpricingand theirreimbursement.Wemayinitiallyseekregulatoryapprovalofsomeofourproductcandidatesastherapies forrelapsedorrefractorypatients.Thenumberofpatientsinourtargetedcommercialmarketsandelsewhere mayturnouttobelowerthanexpected,patientsmaynot be otherwiseamenableto treatmentwith our drugs,or newpatientsmaybecomeincreasinglydifficulttoidentifyor gainaccessto, allof which would adverselyaffect our resultsof operationsand our business.

Even ifany of our productcandidatesreceivesmarketingapproval,itmayfailto achievethe degreeof marketacceptanceby physicians,patients,third-partypayorsand othersin the medicalcommunity necessaryforcommercialsuccess.

Ifanyofourproductcandidatesreceivesmarketingapproval,itmaynonethelessfailtogainsufficient marketacceptancebyphysicians,patients,third-partypayorsandothersin themedicalcommunity.For example, currentcancertreatments,suchasexistingtargetedtherapies,chemotherapy,and radiationtherapy,arewell establishedinthemedicalcommunity,anddoctorsmaycontinueto relyon thesetreatments.Ifour product candidatesdo not achievean adequatelevelof acceptance,we maynot generatesignificantproduct revenues and we maynot becomeprofitable.The degreeof marketacceptanceof our productcandidates,if approved for commercialsale,willdepend on a numberof factors,including:

• the efficacy and potential advantages compared to alternative treatments;

• the size of the target patient population;

• our ability to offer our products for sale at competitive prices;

• the convenience and ease of administration compared to alternative treatments;

• the strength of marketing and distribution support;

• publicity for our product candidates and competing products and treatments;

• the existence of distribution and/or use restrictions, such as through a REMS;

• the availability of third-party payor coverage and adequate reimbursement;

• the timing of any marketing approval in relation to other product approvals;

• support from patient advocacy groups; and

• any restrictions on the use of our products together with other medications.

We currentlyhave no marketingand salesorganizationand have no experienceas a companyin commercializingproductsand we mayhave to investsignificantresourcesto developthesecapabilities.If we are unable to establishsalesand marketingcapabilitiesor enterintoagreementswith thirdpartiesto marketand sellour products,we maynot be ableto generaterevenue.

Wecurrentlyhavenosalesormarketinginfrastructureandhavenoexperiencein thesale,marketingor distributionofpharmaceuticalproducts.Toachievecommercialsuccessforanyproductforwhich we obtain marketingapproval,we willneed to establishsales,marketingand distributioncapabilities,eitherourselvesor throughcollaborationor otherarrangementswith thirdparties.

Therearerisksinvolvedwith establishingour own salesand marketingcapabilities.For example,recruiting and training a sales force is expensive and time-consuming and could delay any product launch. If the commerciallaunchofaproductcandidateforwhichwerecruitasalesforceandestablishmarketingcapabilities isdelayedor does not occurforany reason,we would have prematurelyor unnecessarilyincurredthese commercializationexpenses.These effortsareexpectedto be costly,and our investmentwould be lostifwe cannotretainor repositionour salesand marketingpersonnel.

Factorsthatmayinhibitour effortsto commercializeour productson our own include:

• unfavorable third-party payor coverage and reimbursement in any geography;

Ifweenterintoarrangementswiththirdpartiestoperformsalesandmarketingservices,ourproduct revenuesandourprofitability,ifany,arelikelytobe lowerthanifwe were to marketand sellany productsthat wedevelopourselves.Inaddition,wemaynot be successfulin enteringintoarrangementswith thirdpartiesto marketandsellourproductcandidatesormaybeunabletodosoontermsthatareacceptabletous.Welikely willhavelittlecontroloversuchthirdparties,andanyofthesethirdpartiesmayfailtodevotethenecessary resourcesandattentionto selland marketour productseffectively.Ifwe do not establishsalesand marketing capabilitiessuccessfully,eitheronourownorincollaborationwiththirdparties,wewillnotbesuccessfulin commercializingany of our productcandidatesforwhich we receivemarketingapproval.

We facesubstantialcompetition,which mayresultin othersdiscovering,developingor commercializing productsbeforeor moresuccessfullythan we do.

Thedevelopmentand commercializationof pharmaceuticalproductsishighlycompetitive.We face competitionwithrespectto our currentproductcandidatesand willfacecompetitionwith respectto any product candidatesthatwemayseektodevelopor commercializein thefuture,frommajorpharmaceuticalcompanies, specialtypharmaceuticalcompaniesand existingor emergingbiotechnologycompanies,academicresearch institutionsandgovernmentalagenciesandpublicandprivateresearchinstitutionsworldwide.Therearea numberofpharmaceuticalandbiotechnologycompaniesthatcurrentlyarepursuingthedevelopmentof precision oncologytherapiesoptimizedto effectivelytargetthekey drivermechanismsin cancerswith high unmetneed, includingBlackDiamondTherapeutics,Inc.,ConstellationPharmaceuticals,Inc.,Kronos Bio, Inc.,Repare TherapeuticsInc.,RevolutionMedicines,Inc.,RelayTherapeutics,Inc.,andZentalisPharmaceuticals,LLC. In addition,wemayfacecompetitionfromcompaniespursuingthedevelopmentofproductcandidatesthatare basedon targetingpathwaysof adaptiveresistance,includingAmgen Inc.,or Amgen, AbbVie Inc.,or AbbVie, AstraZenecaPLC,orAstraZeneca,GlaxoSmithKlineplc,orGlaxoSmithKline,Johnson&Johnson,PfizerInc., or Pfizer,Bayer AG,or Bayer, and NovartisInternationalAG,or Novartis.

Specifically,withrespecttoourleadproductcandidates,weexpectthatour currentproductcandidates PRT543 andPRT811 willcompeteagainstotherPRMT5 inhibitorswhicharecurrentlyinclinicaldevelopment, including those of GlaxoSmithKline (GSK3326595), Johnson & Johnson (JNJ-64619178) and Pfizer (PF-06939999).Developmenteffortsand clinicalresultsof theseotherproductcandidatesmaybe unsuccessful, whichcould result inanegative perception ofPRMT5inhibitors, for instance, andnegatively impact the regulatoryapprovalprocessofourproductcandidates,whichwouldhave a materialand adverseeffecton our business.ForourproductcandidatePRT1419, othercompaniesaredevelopingMCL1inhibitorswith monotherapyand/orcombinationtrialsongoing, includingAmgen (AMG176), AstraZeneca(AZD5991) and Novartis(MIK665).ForourpreclinicalCDK9 program,AstraZeneca,Bayerand Kronos Bio have CDK9 programsin Phase 1 clinicaltrials.

Manyofthecompaniesagainstwhich we arecompetingor againstwhich we maycompetein thefuture, eitheraloneor throughcollaborations,have significantlygreaterfinancialresourcesand expertisein researchand development,manufacturing,preclinicaltesting,conducting clinicaltrials,obtaining regulatoryapprovals and marketingapprovedproductsthanwe do. Mergersand acquisitionsin thepharmaceuticaland biotechnology industriesmayresultinevenmoreresourcesbeingconcentratedamongasmallernumberofourcompetitors. Smallerand otherearly-stagecompaniesmayalsoproveto be significantcompetitors,particularlythrough collaborative arrangements with large and established companies. These third parties compete with us in recruitingandretainingqualifiedscientific,managementandsalesand marketingpersonnel,establishingclinical trialsitesandpatientregistrationforclinicaltrials,aswellasinacquiringtechnologiescomplementaryto,or necessaryfor,our programs.

Furthermore,we also face competitionmore broadly across the oncology marketfor cost-effectiveand reimbursablecancertreatments.Therearea varietyof availabledrug therapiesmarketedforcancer.In many cases,thesedrugsareadministeredincombinationtoenhanceefficacy.Whileour productcandidates,ifany are approved,maycompetewiththeseexistingdrugsand othertherapies,to theextenttheyareultimatelyused in combinationwith or as an adjunctto thesetherapies,our productcandidatesmaynot be competitivewith them. Someofthesedrugsarebrandedandsubjecttopatentprotection,and othersareavailableon a genericbasis. Insurers and other third-party payors may also encourage the use ofgeneric products orspecific branded products.As a result,obtainingmarketacceptanceof, and gainingsignificantshareof themarketfor,any of our product candidates that we successfully introduce to the market may pose challenges. In addition, many companiesaredevelopingnew oncologytherapeutics,and we cannotpredictwhat thestandardof carewillbe as our productcandidatesprogressthroughclinicaldevelopment.

Ourcommercialopportunitycouldbereducedoreliminatedifourcompetitorsdevelopand commercialize productsthataresafer,moreeffective,have feweror lessseveresideeffects,aremoreconvenientto administer, are less expensive or with a more favorable labeling than our current or future product candidates. Our competitorsalsomayobtainFDA,foreignregulatoryauthority,orothermarketingorregulatoryapprovalfor theirproductsmorerapidlythananyapprovalwemayobtainforours,whichcouldresultin our competitors establishingastrongmarketpositionbeforeweareabletoenterthemarket.Thekeycompetitivefactors affectingthesuccessofallofourproductcandidates,ifapproved,arelikelyto be theirefficacy,safety, convenience,price,thelevelof genericcompetitionand theavailabilityof reimbursementfromgovernmentand otherthird-partypayors.

Even ifwe are ableto commercializeany productcandidates,the productsmaybecomesubjectto unfavorablepricingregulations,third-partyreimbursementpracticesor healthcarereforminitiatives, which would harm our business.

The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drug productsvarywidelyfromcountryto country.Currentand futurelegislationmaysignificantlychangethe approvalrequirementsin ways thatcouldinvolveadditionalcostsand causedelaysin obtainingapprovals.Some countriesrequireapprovalof thesalepriceof a drug beforeitcan be marketed.In manycountries,the pricing reviewperiodbeginsaftermarketingorproductlicensingapprovalisgranted.Toobtainreimbursementor pricingapprovalinsomecountries,wemaybe requiredto conducta clinicaltrialthatcomparesthecost- effectivenessofourproductcandidateto otheravailabletherapies.In someforeignmarkets,prescription pharmaceuticalpricingremainssubjectto continuinggovernmentalcontroleven afterinitialapprovalis granted. Asaresult,wemightobtainmarketingapprovalforaproductcandidateinaparticularcountry,butthenbe subjecttopriceregulationsthatdelayourcommerciallaunchoftheproduct,possiblyforlengthytimeperiods, andnegativelyimpacttherevenues,ifany, we areableto generatefromthesaleof theproductin thatcountry. Adversepricinglimitationsmayhinderour abilityto recoupour investmentin one or moreproductcandidates, even ifsuch productcandidatesobtainmarketingapproval.

Ourabilitytocommercializeany productcandidatessuccessfullyalsowilldepend in parton theextentto whichcoverageandadequatereimbursementfortheseproductsand relatedtreatmentswillbe availablefrom third-partypayors,includinggovernmenthealthcareprograms,privatehealthinsurersandotherorganizations. Third-partypayorsdecidewhichmedicationstheywillpay forand establishreimbursementlevels.In theUnited States,theprincipaldecisionsaboutreimbursementfornewmedicinesaretypicallymadebytheCMS,which decideswhetherandtowhat extenta new medicinewillbe coveredand reimbursedunderMedicare.Private payorsoften,but not always,followCMS’s decisionsregardingcoverageand reimbursement.

AprimarytrendintheU.S. healthcareindustryandelsewhereiscostcontainment.Third-partypayorshave attemptedto controlcostsby limitingcoverageand theamountof reimbursementfor particularmedications. Increasingly,third-partypayorsarerequiringthatdrugcompaniesprovidethemwithpredetermineddiscounts fromlistpricesandarechallengingthepriceschargedformedicalproducts.Coverageandreimbursementmay not be available for any product that we commercialize and, even if these are available, the level of reimbursementmaynotbesatisfactory.Reimbursementmayaffectthedemandfor,or thepriceof, any product candidateforwhichweobtainmarketingapproval.Obtainingandmaintainingcoverageand adequate reimbursementforour productsmaybe difficult.We maybe requiredto conductexpensivepharmacoeconomic studiestojustifycoverageandreimbursementorthelevelofreimbursementrelativetoothertherapies.If coverageandadequatereimbursementarenotavailableorreimbursementisavailableonly to limitedlevels,we maynot be ableto successfullycommercializeany productcandidateforwhich we obtainmarketingapproval.

Additionally,wemaydevelop,eitherby ourselvesor with collaborators,companiondiagnostictestsforour productcandidatesforcertainindications.We,orourcollaborators,ifany,willberequiredtoobtaincoverage andreimbursementforthesetestsseparateandapartfromthecoverageand reimbursementwe seekforour productcandidates,once approved.Whilewe have not yetdevelopedany companiondiagnostictestforour product candidates, if we do, there is significant uncertainty regarding our ability to obtain coverage and adequatereimbursementforthesamereasonsapplicableto our productcandidates.

Theremayalsobesignificantdelaysinobtainingcoverageandreimbursementfornewlyapproveddrugs, andcoveragemaybemorelimitedthanthepurposesforwhichthedrugisapprovedbytheFDA orsimilar regulatoryauthoritiesoutsideoftheUnitedStates.Moreover,eligibilityforcoverageandreimbursementdoes notimplythata drug willbe paidforin allcasesor ata ratethatcoversour costs,includingresearch, development,intellectualproperty,manufacture,saleand distributionexpenses. Interimreimbursementlevels for new drugs,ifapplicable,mayalsonot be sufficientto coverour costsand maynot be madepermanent. Reimbursementratesmayvaryaccordingtotheuseofthedrugandtheclinicalsettinginwhichitisused,may bebasedonreimbursement levelsalreadysetforlowercostdrugsandmaybeincorporatedintoexisting paymentsforotherservices.Netpricesfordrugsmaybe reducedby mandatorydiscountsor rebatesrequiredby governmenthealthcareprogramsorprivatepayorsandbyanyfuturerelaxationoflaws thatpresentlyrestrict importsofdrugsfromcountrieswhere theymaybe soldatlowerpricesthanin theUnitedStates.Third-party payorsoftenrelyuponMedicarecoveragepolicyandpaymentlimitationsinsettingtheirownreimbursement policies, but also have their own methods and approval process apart from Medicare determinations. Our inabilitytopromptlyobtaincoverageand adequate

reimbursementratesfromthird-partypayorsforany approved productsthatwedevelopcouldhave a materialadverseeffecton our operatingresults,our abilityto raisecapital neededto commercializeproductsand our overallfinancialcondition.

Product liabilitylawsuitsagainstus could cause us to incur substantialliabilitiesand to limit commercializationof any productsthatwe maydevelop.

Wefaceaninherentriskofproductliabilityexposurerelatedtothetestingof our productcandidatesin humanclinicaltrialsand willfacean even greaterriskifwe commercializeany productsthatwe maydevelop.If wecannotsuccessfullydefendourselvesagainstany claimsthatour productcandidatesor productscaused injuries,wewillincursubstantialliabilities.Regardlessof meritor eventualoutcome,liabilityclaimsmayresult in:

• decreased demand for any product candidates or products that we may develop;

• injury to our reputation and significant negative media attention;

• initiation of investigations by regulators;

• withdrawal of clinical trial participants;

• significant time and costs to defend the related litigation;

• diversion of management and scientific resources from our business operations;

• substantial monetary awards to trial participants or patients;

• loss of revenue;

• reduced resources of our management to pursue our business strategy; and

• the inability to commercialize any products that we may develop.

OurcurrentproductliabilityinsurancecoveragefortheUnitedStatesand certainotherjurisdictionsmaynot beadequatetocoverallliabilitiesthatwemayincur.Welikelywillneedtoincreaseourinsurancecoverageas we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverageisincreasinglyexpensive.Wemaynotbeableto maintaininsurancecoverageata reasonablecostor in anamountadequatetosatisfyanyliabilitythatmayarise.Asuccessfulproductliabilityclaimor seriesof claims broughtagainstus coulddecreaseour cashand adverselyaffectour businessand financialcondition.

Risks Relatedto EmployeeMattersand Our Operations

Our futuresuccessdepends on our abilityto retainkey employeesand to attract,retainand motivate qualifiedpersonneland manage our human capital.

Ourabilitytocompetein thehighlycompetitivebiotechnologyand pharmaceuticalindustriesdependsupon ourabilityto attract,motivateand retainhighlyqualifiedmanagerial,scientificand medicalpersonnel.We are highlydependentonthedevelopmentandmanagementexpertiseofKrisVaddi,Ph.D.,ourfounderandChief ExecutiveOfficer,aswellastheotherprincipalmembersof our management,scientificand clinicalteam.We currentlydo not maintainkey personinsuranceon theseindividuals.Although we have entered into employment agreementswith our executiveofficers,eachof themmayterminatetheiremploymentwith us atany time.

Ourindustryhasexperiencedahighrateofturnoverinrecentyears.Our abilityto competein thehighly competitivepharmaceuticalsindustrydependsupon our abilityto attract,retainand motivatehighlyskilledand experiencedpersonnelwithscientific,clinical,regulatory,manufacturingandmanagementskillsand experience. We conductour operationsin thegreaterDelawarearea,a regionthatishometo otherpharmaceuticalcompanies aswellasmanyacademicandresearchinstitutions,resultingin fiercecompetitionforqualifiedpersonnel.We maynotbeabletoattractorretainqualifiedpersonnelinthefuturedueto theintensecompetitionfora limited numberofqualifiedpersonnelamongpharmaceuticalcompanies.Many of theotherpharmaceuticalcompanies againstwhichwecompetehavegreaterfinancialandotherresources,differentriskprofilesandalongerhistory intheindustrythanwe do. Our competitorsmayprovidehighercompensation,morediverseopportunitiesand/or betteropportunitiesforcareeradvancement.Anyorallofthesecompetingfactorsmaylimitourabilityto continuetoattractand retainhigh qualitypersonnel,which couldnegativelyaffectour abilityto

successfully developandcommercializeourproductcandidatesand to grow our businessand operationsas currently contemplated.

We expectto expand our developmentand regulatorycapabilitiesand potentiallyimplementsales, marketingand distributioncapabilities,and as a result,we mayencounterdifficultiesin managing our growth, which could disruptour operations.

AsofDecember31,2020,wehad68full-timeemployees.Weexpectsignificantgrowthinthenumberof our employeesand thescopeof our operations,particularlyin theareasof clinicaldevelopment,clinical operations,manufacturing,regulatoryaffairsand, ifany of our product candidatesreceivesmarketingapproval, sales,marketingand distribution.To manageour anticipatedfuturegrowth, we mustcontinueto implementand improveourmanagerial,operationaland financialsystems,expand our facilitiesand continueto recruitand train additionalqualifiedpersonnel.Duetoour limitedfinancialresourcesand thelimitedexperienceof our managementteaminmanagingacompanywithsuchanticipatedgrowthandwithdevelopingsales,marketing anddistributioninfrastructure,wemaynotbeabletoeffectivelymanagetheexpansionofouroperationsor recruitand trainadditionalqualifiedpersonnel.The expansionof our operationsmayleadto significantcosts and maydivertour managementand businessdevelopmentresources.

Further,wecurrentlyrely,andfortheforeseeablefuturewillcontinueto rely,in substantialparton certain third-partycontractorganizations,advisorsand consultantsto providecertainservices,includingassuming substantialresponsibilitiesfortheconductofourclinicaltrialsandthemanufactureofPRT543,PRT811and PRT1419, oranyfutureproductcandidates.Wecannotassureyouthattheservicesof such third-partycontract organizations,advisorsandconsultantswillcontinuetobeavailabletousonatimelybasiswhen needed,or that wecanfindqualifiedreplacements.Inaddition,ifweareunabletoeffectivelymanageouroutsourcedactivities orifthequalityoraccuracyoftheservicesprovidedbyourvendorsorconsultantsiscompromisedforany reason,ourclinicaltrialsmaybeextended,delayedorterminated,andwemaynotbe ableto obtainmarketing approvalofPRT543, PRT811, PRT1419 or any futureproductcandidatesor otherwiseadvanceour business.We cannotassureyouthatwewillbeabletoproperlymanageour existingvendorsor consultantsor findother competentoutsidevendorsand consultantson economicallyreasonableterms,or atall.

Ifwearenotabletoeffectivelymanagegrowthandexpandourorganization,we maynot be ableto successfullyimplementthetasksnecessarytofurtherdevelopandcommercializePRT543, PRT811 orPRT1419, ourotherpipelineproductcandidatesor any futureproductcandidatesand, accordingly,maynot achieveour research,developmentand commercializationgoals.

Our employees,clinicaltrialinvestigators,CROs,CMOs, consultants,vendorsand any potential commercialpartnersmayengage in misconductor otherimproperactivities,includingnon-compliance with regulatorystandardsand requirementsand insidertrading.

Weareexposedtotheriskoffraudorothermisconductbyouremployees,clinicaltrialinvestigators, CROs,CMOs,consultants,vendorsandanypotentialcommercialpartners.Misconductbythesepartiescould includeintentional,recklessand/ornegligentconductordisclosureofunauthorizedactivitiestousthatviolates: (i)FDA regulationsorthoseofcomparableforeignregulatoryauthorities,includingthoselaws thatrequirethe reportingoftrue,completeandaccurateinformation,(ii)manufacturingstandards,(iii)federalandstatehealth anddataprivacy,security,fraudand abuse,governmentpricereporting,transparencyreportingrequirements,and other healthcare laws and regulations in the United States and abroad, (iv) sexual harassment and other workplacemisconduct,or (v)laws thatrequirethetrue,completeand accuratereportingof financialinformation ordata.Suchmisconductcouldalsoinvolvetheimproperuse of informationobtainedin thecourseof clinical trials,which couldresultin regulatorysanctionsand causeseriousharmto our reputation.

Wehaveadoptedacodeofconductapplicableto allof our employees,as wellas a disclosureprogramand otherapplicablepoliciesandprocedures,butitisnotalwayspossibletoidentifyanddeteremployeemisconduct, andtheprecautionswetaketodetectandpreventthisactivitymaynotbeeffectivein controllingunknown or unmanagedrisksorlossesorinprotectingus fromgovernmentalinvestigationsor otheractionsor lawsuits stemmingfromafailuretocomplywiththeselawsorregulations.Ifanysuchactionsareinstitutedagainstus, andwearenotsuccessfulindefendingourselvesorassertingourrights,thoseactionscouldhavea significant impactonourbusiness,includingtheimpositionof significantcivil,criminaland administrativepenalties, damages,fines,disgorgement,imprisonment,exclusionfromgovernmentfundedhealthcareprograms,suchas Medicare,Medicaidand otherfederalhealthcareprograms,contractual

damages,reputationalharm, diminished profitsandfutureearnings,additionalintegrityreportingand oversightobligations,and thecurtailmentor restructuringofouroperations,anyofwhichcouldadverselyaffectourabilityto operateour businessand our resultsof operations.

Our internalinformationtechnologysystems,or thoseof our third-partyCROs,CMOs, or othervendors, contractorsor consultants,mayfailor suffersecuritybreaches,cyber-attacks,lossor leakageof data and otherdisruptions,which could resultin a materialdisruptionof our developmentprograms,compromise sensitiveinformationrelatedto our businessor preventus fromaccessingcriticalinformation,potentially exposingus to liabilityor otherwiseadverselyaffectingour business.

Weareincreasinglydependentupon informationtechnologysystems,infrastructureand datato operateour business.Intheordinarycourseofbusiness,wecollect,storeandtransmitconfidentialinformation(including butnotlimitedto intellectualproperty,proprietarybusinessinformationand personalinformation).Itiscritical thatwedosoinasecuremannertomaintaintheconfidentialityandintegrityofsuchconfidentialinformation. Wealsohaveoutsourcedelementsofouroperationstothirdparties,andasaresultwemanageanumberof third-partyCROs, CMOs,vendors,andothercontractorsandconsultantswho have accessto our confidential information.Ourinternalinformationtechnologysystemsandinfrastructurearealsovulnerableto damagefrom naturaldisasters,terrorism,war,telecommunicationandelectricalfailures.Systemfailuresor outages,including any potentialdisruptionsdue to significantlyincreasedglobaldemandon certaincloud-basedsystemsduring the COVID-19 situation,couldcompromiseour abilityto performthesefunctionsin a timelymanner,which could harmourabilitytoconductbusinessordelayourfinancialreporting.Such failurescouldmateriallyadversely affectour operatingresultsand financialcondition.

Despite the implementation of security measures, given their size and complexity and the increasing amountsofconfidentialinformationthattheymaintain,ourinternalinformationtechnologysystemsand thoseof ourthird-partyCROs, CMOs,vendorsandothercontractorsandconsultantsarepotentiallyvulnerableto breakdownor otherdamageor interruptionfromserviceinterruptions,systemmalfunction,accidentsby our employeesorthirdpartyserviceproviders,naturaldisasters,terrorism,war and telecommunicationand electrical failures,aswellas securitybreachesfrominadvertentor intentionalactionsby our employees,third-partyCROs, CMOs, vendors,contractors,consultants,businesspartnersand/orotherthirdparties,or from cyber-attacksby maliciousthirdparties(includingthedeploymentof harmfulmalware,ransomware,denial-of-serviceattacks, socialengineeringand othermeansto affectservicereliabilityand threatentheconfidentiality,integrityand availabilityofinformation),whichmaycompromiseoursysteminfrastructure,orthatofour third-partyCROs, CMOs,vendorsandothercontractorsandconsultants,or leadto dataleakage.The riskof a securitybreachor disruption,particularlythroughcyber-attacksor cyberintrusion,includingby computerhackers,foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attemptedattacksandintrusionsfromaroundtheworldhaveincreased.TheCOVID-19 pandemicisgenerally increasingtheattacksurfaceavailableforexploitation,as morecompaniesand individualswork onlineand work remotely,andassuch,theriskofacybersecurityincidentpotentiallyoccurring,and our investmentin risk mitigationsagainstsuchanincident,isincreasing.Forexample,therehasbeenanincreasein phishingand spam emailsaswellassocialengineeringattemptsfrom“hackers”hopingtousetherecentCOVID-19 pandemicto theiradvantage.Wemaynotbeabletoanticipatealltypesofsecuritythreats,normaywebeableto implement preventivemeasureseffectiveagainstallsuchsecuritythreats.Thetechniquesused by cybercriminalschange frequently,maynotberecognizeduntillaunchedand can originatefroma wide varietyof sources,including outsidegroupssuchasexternalserviceproviders,organizedcrimeaffiliates,terroristorganizationsorhostile foreigngovernmentsoragencies.Totheextentthatanydisruptionorsecuritybreachweretoresultinalossof, ordamageto,ourdataorapplications,orthoseofourthird-partyCROs,CMOs,vendorsandothercontractors andconsultants,orinappropriatedisclosureofconfidentialorproprietaryinformation,wecouldincurliability andreputationaldamageandthefurtherdevelopmentandcommercializationofPRT543, PRT811, PRT1419 or anyfutureproductcandidatescouldbe delayed.Any breach,lossor compromiseof clinicaltrialparticipant personaldatamayalsosubjectustocivilfinesandpenalties,includingunderHIPAA,andotherrelevantstate andfederalprivacylawsintheUnitedStates.Thecostsrelatedtosignificantsecuritybreachesordisruptions couldbe materialand exceedthelimitsof thecybersecurityinsurancewe maintainagainstsuch risks.If the informationtechnologysystemsofourthird-partyCROs, CMOs,vendorsandothercontractorsand consultants becomesubjectto disruptionsor securitybreaches,we mayhave insufficientrecourseagainstsuch thirdparties andwemayhavetoexpendsignificantresourcestomitigatetheimpactofsuchanevent,andtodevelopand implementprotectionsto preventfutureeventsof thisnaturefromoccurring.

Whilewehavenotexperiencedanysuchsystemfailure,accidentorsecuritybreachto date,and believethat ourdataprotectioneffortsandourinvestmentininformationtechnologyreducethelikelihoodofsuchincidents inthefuture,we cannotassureyou thatour dataprotectioneffortsand our investmentin informationtechnology willpreventsignificantbreakdowns,dataleakages,breachesin our systems,or thoseof our third-partyCROs, CMOs,vendorsandothercontractorsandconsultants,or othercyberincidentsthatcouldhave a materialadverse effectuponourreputation,business,operationsorfinancialcondition.Forexample,ifsuchaneventwereto occurandcauseinterruptionsinouroperations,orthoseofourthird-partyCROs, CMOs,vendorsandother contractorsandconsultants,itcouldresultin a materialdisruptionof our programsand thedevelopmentof our productcandidatescouldbedelayed.Inaddition,thelossofclinicaltrialdataforPRT543, PRT811, PRT1419 or anyotherproductcandidatescouldresultindelaysinourmarketingapprovaleffortsandsignificantlyincrease ourcoststorecoverorreproducethedata.Furthermore,significantdisruptionsofour internalinformation technologysystemsorthoseofourthird-partyCROs, CMOs,vendorsandothercontractorsand consultants,or securitybreachescouldresultintheloss,misappropriationand/orunauthorizedaccess,use,ordisclosureof,or thepreventionofaccessto,confidentialinformation(includingtradesecretsor otherintellectualproperty, proprietarybusinessinformationandpersonalinformation),which couldresultin financial,legal,businessand reputationalharmto us. For example,any such eventthatleadsto unauthorizedaccess,use, or disclosureof personalinformation,includingpersonalinformationregardingourclinicaltrialsubjectsor employees,could harmourreputationdirectly,compelustocomplywithfederaland/orstatebreachnotificationlaws and foreign lawequivalents,subjectusto mandatorycorrectiveaction,and otherwisesubjectus to liabilityunderlaws and regulationsthatprotecttheprivacyandsecurityofpersonalinformation,whichcouldresultinsignificantlegal and financialexposureand reputationaldamagesthatcouldpotentiallyhave an adverseeffecton our business.

Failureto complywith healthand data protectionlaws and regulationscould leadto government enforcementactions(which could includecivilor criminalpenalties),privatelitigationand/or adverse publicityand could negativelyaffectour operatingresultsand business.

Weandanypotentialcollaboratorsmaybesubjecttofederal,stateand foreigndataprotectionlaws and regulations(i.e.,lawsandregulationsthataddressprivacyanddatasecurity).In theUnitedStates,numerous federalandstatelaws and regulations,includingfederalhealthinformationprivacylaws, statedatabreach notificationlaws,statehealthinformationprivacylaws and federaland stateconsumerprotectionlaws (e.g., Section5oftheFederalTradeCommissionAct),thatgovernthecollection,use,disclosureandprotectionof health-relatedandotherpersonalinformationcouldapplytoouroperationsortheoperationsofour collaborators. In addition,we mayobtainhealthinformationfromthirdparties(includingresearchinstitutionsfromwhich we obtainclinicaltrialdata)thataresubjecttoprivacyandsecurityrequirementsunderHIPAA, asamendedby HITECH. Dependingonthefactsandcircumstances,wecouldbesubjecttocriminalpenaltiesifweknowingly obtain,use,or discloseindividuallyidentifiablehealthinformationmaintainedby a HIPAA-covered entityin a mannerthatisnot authorizedor permittedby HIPAA.

Internationaldataprotectionlaws,includingRegulation2016/679,knownastheGeneralDataProtection Regulation,orGDPR,mayalsoapplytohealth-relatedandotherpersonalinformationobtainedoutsideofthe UnitedStates.TheGDPR wentintoeffectonMay25,2018.TheGDPR introducednew dataprotection requirementsintheEU, aswellaspotentialfinesfornoncompliantcompaniesofup to thegreaterof €20 million or4%ofannualglobalrevenue.Theregulationimposesnumerousnewrequirementsforthecollection,use and disclosureofpersonalinformation,includingmorestringentrequirementsrelatingto consentand theinformation thatmustbesharedwithdatasubjectsabouthowtheirpersonalinformationisused, theobligationto notify regulatorsandaffectedindividualsof personaldatabreaches,extensivenew internalprivacygovernance obligationsandobligationstohonorexpandedrightsofindividualsin relationto theirpersonalinformation(e.g., therighttoaccess,correctanddeletetheirdata).Inaddition,theGDPR includesrestrictionsoncross-borderdata transfer.TheGDPR willincreaseourresponsibilityandliabilityin relationto personaldatathatwe process,and wemayberequiredtoputinplaceadditionalmechanismstoensurecompliancewiththenewEU dataprotection rules. In addition, the GDPR prohibits the transfer of personal data to countries outside of the European EconomicArea,orEEA, suchastheUnitedStates,whicharenotconsideredbytheEuropeanCommissionto provideanadequatelevelofdataprotection.Switzerlandhasadoptedsimilarrestrictions.Althoughthereare legalmechanismstoallowforthetransferofpersonaldatafromtheEEA andSwitzerlandtotheUnitedStates, theyaresubjectto pendinglegalchallengesthat,ifsuccessful,couldinvalidatethesemechanisms,restrictour abilitytoprocesspersonaldataofEuropeansoutsideofEuropeandadverselyimpactourbusiness.For example, inJuly2020,theEuropeanCourtsofJusticeinvalidatedtheEU-U.S.PrivacyShield,whichenabledthetransfer ofpersonaldatafromEUtotheU.S.forcompaniesthathadself-certifiedtothePrivacyShield.OnAugust10, 2020,theU.S. DepartmentofCommerceandtheEuropeanCommissionannouncednewdiscussionstoevaluate thepotentialforanenhancedEU-U.S.PrivacyShieldframeworktocomplywiththeJuly16judgmentofthe CourtofJustice.WhiletheCourtofJusticeupheldtheuseofotherdatatransfermechanisms,such

asthe BindingCorporateRules,thedecisionhas ledto someuncertaintyregardingtheuse of such mechanismsfordata transferstotheUnitedStates,andthecourtmadeclearthatrelianceonBinding CorporateRules alonemaynot necessarilybesufficientinallcircumstances.Useofthedatatransfermechanismsmustnowbe assessedon a case-by-casebasistakingintoaccountthelegalregimeapplicablein thedestinationcountry,in particular applicablesurveillancelawsandrightsofindividuals.The EuropeanData ProtectionBoard issuedadditional guidanceregardingtheCourtofJustice’sdecisiononNovember11,2020 which imposeshigherburdenson the useof datatransfermechanisms,such as theBinding CorporateRules, forcross-borderdatatransfers.To comply withthisguidance,wemayneed to implementadditionalsafeguardsto furtherenhancethesecurityof data transferredout of theEuropeanEconomicArea, which couldincreaseour compliancecosts,exposeus to further regulatoryscrutinyandliability,andadverselyaffectourbusiness.To theextentthatwe were to relyon Privacy Shield,wewillnotbeabletodosointhefuture,which couldincreaseour costsand our abilityto efficiently processpersonaldatafromtheEU.

Further,BrexithascreateduncertaintywithregardtodataprotectionregulationintheUnitedKingdom. In particular,whiletheDataProtectionActof2018,that“implements”andcomplementstheGDPRachievedRoyal Assenton May 23, 2018 and isnow effectivein theUnitedKingdom, itisstillunclearwhethertransferof data fromtheEEAtotheUnitedKingdomwillremainlawfulunderGDPR.Duringtheperiodof“transition”(i.e., untilDecember31,2020),EUlawwillcontinuetoapplyintheUnitedKingdom,includingtheGDPR,after whichtheGDPR willbeconvertedintoUnitedKingdomlaw. Beginningin 2021, theUnitedKingdom willbe a “thirdcountry”undertheGDPR.Wemay,however,incurliabilities,expenses,costs,andotheroperational lossesunderGDPR andapplicableEU MemberStatesandtheUnitedKingdom privacylaws in connectionwith any measureswe taketo complywith them.

Inaddition,thestateofCaliforniarecentlyenactedtheCaliforniaConsumerPrivacyAct,orCCPA, which createsnewindividualprivacyrightsforCaliforniaconsumers(asdefinedintheCCPA)andplacesincreased privacyandsecurityobligationsonentitieshandlingcertainpersonaldataofconsumersorhouseholds.The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection,useandsharingpractices,providesuchconsumersnewways to opt-outof certainsalesor transfersof personalinformation,andprovideconsumerswithadditionalcausesofaction.TheCCPAwentintoeffecton January1,2020andbecameenforceableby theCaliforniaAttorneyGeneralon July1, 2020, alongwith related regulationswhichcameintoforceonAugust14,2020andmayimpactourbusinessactivitiesandexemplifies thevulnerabilityofourbusinesstotheevolvingregulatoryenvironmentrelatedtopersonaldataand protected healthinformation.Additionally,althoughnot effectiveuntilJanuary1, 2023, theCaliforniaPrivacy Rights Act (the“CPRA”), whichexpandsupontheCCPA, waspassedintherecentelectionon November3, 2020. The CCPA gives(andtheCPRA willgive)Californiaresidentsexpandedprivacyrights,includingtherightto request correction,access,anddeletionoftheirpersonalinformation,therightto opt out of certainpersonalinformation sharing,and therightto receivedetailedinformationabouthow theirpersonalinformationis processed. The CCPA andCPRA provideforunlimitedcivilpenaltiesforviolations,aswellasaprivaterightofactionfordata breachesthatisexpectedtoincreasedatabreachlitigation.TheCCPA andCPRA mayincreaseourcompliance costsandpotentialliability,particularlyintheeventofadatabreach.Additionally,theCCPA hasprompteda numberofproposalsintheU.S. fornewfederalandstate-levelprivacylegislationthat,ifpassed,couldincrease our potentialliability,increaseour compliancecosts,and adverselyaffectour business.

CompliancewithU.S.andinternationaldataprotectionlawsandregulationscouldrequireustotakeon moreonerousobligationsinour contracts,restrictour abilityto collect,use and disclosedata,or in somecases, impactourabilitytooperateincertainjurisdictions.FailuretocomplywithU.S. andinternationaldataprotection laws and regulationscouldresultin governmentenforcementactions(whichcouldincludecivil,criminal,and administrativepenalties),privatelitigationand/oradversepublicityand couldnegativelyaffectour operating resultsand business.Moreover,clinicaltrialsubjectsaboutwhom we or our potentialcollaboratorsobtain information,aswellastheproviderswhosharethisinformationwithus,maycontractuallylimitourabilityto useanddisclosetheinformation.Claimsthatwe have violatedindividuals’privacyrights,failedto complywith dataprotectionlaws,orbreachedourcontractualobligations,evenifwearenotfoundliable,couldbe expensive and timeconsumingto defendand couldresultin adversepublicitythatcouldharmour business.

We or the thirdpartiesupon whom we depend maybe adverselyaffectedby naturaldisastersand our businesscontinuityand disasterrecoveryplans maynot adequatelyprotectus froma seriousdisaster.

Ourcompanyislocatedin Delaware.Any unplannedevent,such as flood,fire,explosion,earthquake, extremeweathercondition,medicalepidemic,includingtheCOVID-19 pandemic,powershortage, telecommunicationfailureorother

naturalormanmadeaccidentsorincidentsthatresultinusbeingunableto fullyutilizeourfacilities,orthemanufacturingfacilitiesofourthird-partyCMOs, mayhave a materialand adverseeffecton our abilityto operateour business,particularlyon a dailybasis,and have significantnegative consequenceson our financialand operatingconditions.For example,our operationsareconcentratedprimarily ontheeastcoastoftheUnitedStates,andanyadverseweathereventor naturaldisaster,such as a hurricaneor heavysnowstorm,couldhaveamaterialadverseeffectonasubstantialportionofouroperations.Extreme weatherconditionsorothernaturaldisasterscouldfurtherdisruptour operations,and have a materialand adverse effectonourbusiness,financialcondition,resultsofoperationsandprospects.Ifa naturaldisaster,power outage orothereventoccurredthatpreventedusfromusingallorasignificantportionofourheadquarters,that damagedcriticalinfrastructure,such as our researchfacilitiesor themanufacturingfacilitiesof our third-party CMOs,orthatotherwisedisruptedoperations,itmaybedifficultor,incertaincases,impossible,forusto continueourbusinessforasubstantialperiodoftime.Thedisasterrecoveryandbusinesscontinuityplanswe have in placemayproveinadequatein theeventof a seriousdisasteror similarevent.We mayincur substantial expensesasaresultofthelimitednatureofourdisasterrecoveryandbusinesscontinuityplans,whichcould haveamaterialadverseeffectonourbusiness.Aspartof our riskmanagementpolicy,we maintaininsurance coverageatlevelsthatwebelieveareappropriateforourbusiness.However,intheeventofan accidentor incidentatthesefacilities,wecannotassureyouthattheamountsofinsurancewillbe sufficientto satisfyany damagesandlosses.Ifourfacilities,orthemanufacturingfacilitiesofourthird-partyCMOs,areunableto operatebecauseofanaccidentorincidentorforanyotherreason,evenforashortperiodoftime,anyorallof ourresearchanddevelopmentprogramsmaybeharmed.Anybusinessinterruptioncouldhaveamaterialand adverseeffecton our business,financialcondition,resultsof operationsand prospects.

Changes in tax laws or regulationsthatare appliedadverselyto us mayhave a materialadverseeffecton our business,cash flow, financialconditionor resultsof operations.

New income,sales,use or othertaxlaws, statutes,rules,regulationsor ordinancescouldbe enactedatany time,which couldadverselyaffectour businessoperationsand financialperformance.Further,existingtax laws, statutes,rules,regulationsorordinancescouldbe interpreted,changed,modifiedor appliedadverselyto us. For example,theTaxCutsandJobsAct,enactedmanysignificantchangestotheU.S.taxlaws.Futureguidance fromtheInternalRevenue Serviceand othertaxauthoritieswith respectto theTax Cuts and Jobs Act mayaffect us,andcertainaspectsoftheTaxCuts and Jobs Act couldbe repealedor modifiedin futurelegislation.For example,theCARES ActmodifiedcertainprovisionsoftheTaxCutsandJobsAct.Inaddition,itisuncertainif andtowhatextentvariousstateswillconformtotheTaxCutsandJobsAct,theCARESAct,oranynewly enactedfederaltaxlegislation.Changesincorporatetaxrates,therealizationof netdeferredtaxassetsrelatingto ouroperations,thetaxationofforeignearnings,andthedeductibilityofexpensesundertheTaxCutsandJobs Act,theCARES Actorfuturereformlegislationcouldhaveamaterialimpactonthevalueofourdeferredtax assets,couldresultin significantone-timecharges,and couldincreaseour futureU.S.taxexpense.

Our abilityto use our net operatinglosscarryforwardsand certainothertax attributesmaybe limited.

We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. Unused losses incurred in taxable years beginning on or prior to December 31, 2017, will carry forward to offset future taxable income, if any, until such unused losses expire. Under the Tax Cuts and Jobs Act, as modified by the CARES Act, unused U.S. federal net operating losses generated in tax years beginning after December 31, 2017, will not expire and may be carried forward indefinitely but the deductibility of such federal net operating losses (particularly those generated in taxable years beginning after December 31, 2020) in taxable years beginning after December 31, 2020, is limited to 80% of current year taxable income. It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act or the CARES Act. In addition, both our current and our future unused losses and other tax attributes may be subject to limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code) if we undergo, or have undergone, an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in our equity ownership by certain stockholders over a three-year period. We have not completed a Section 382 study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since our formation due to the complexity and cost associated with such a study and the fact that there may be additional ownership changes in the future. As a result, our net operating loss carryforwards generated in taxable years beginning on or before December 31, 2017, may expire prior to being used, and the deductibility of our net operating loss carryforwards generated in taxable years beginning after December 31, 2017 in taxable years beginning after December 31, 2020, may be limited, and, if we undergo an ownership change (or if we previously underwent such an ownership change), our ability to use all of our pre-change net operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset our post-change income or taxes may be limited. Similar provisions of state tax law may also apply to limit our use of accumulated

statetaxattributes.Inaddition,atthestatelevel,theremaybeperiods duringwhichtheuseofnetoperatinglossesissuspendedor otherwiselimited,which couldaccelerateor permanentlyincreasestatetaxesowed.Asaresult,evenifweattainprofitability,wemaybeunabletouseallor amaterialportionofournetoperatinglossesandothertaxattributes,whichcouldadverselyaffectourfuture cashflows.

We mayengage in strategictransactionsthatcould impactour liquidity,increaseour expensesand presentsignificantdistractionsto our management.

Fromtimeto time,we mayconsiderstrategictransactions,such as acquisitionsof companies,businessesor assetsandout-licensingorin-licensingof products,productcandidatesor technologies.Additionalpotential transactionsthatwe mayconsiderincludea varietyof differentbusinessarrangements,including spin-offs, strategicpartnerships,jointventures,restructurings,divestitures,businesscombinationsand investments.Any suchtransactionmayrequireustoincurnon-recurringorothercharges,mayincreaseourneartermorlong-term expendituresandmayposesignificantintegrationchallengesordisruptourmanagementorbusiness,which couldadverselyaffectour operationsand financialresults.For example,thesetransactionsmayentailnumerous operationaland financialrisks,including:

• exposure to unknown liabilities;

• higher than expected acquisition and integration costs;

• write-downs of assets or goodwill or impairment charges;

• increased amortization expenses;

• inability to retain key employees of any acquired businesses.

Our portfolioof investmentsmaybe subjectto market,interestand creditriskthatmayreduceitsvalue.

Thevalueof our investmentsmaydeclinedue to increasesin interestrates,downgradesof thebonds and othersecuritiesincludedin our commercialmoneymarketaccountportfolioand instabilityin theglobalfinancial marketsthatreducestheliquidityofsecuritiesincludedinourportfolio.Inaddition,theCOVID-19pandemic hasandmaycontinuetoadverselyaffectthefinancialmarketsin someor allcountriesworldwide.Each of these eventsmaycauseus to recordchargesto reducethecarryingvalueof our investmentportfolioor sellinvestments forlessthanouracquisitioncost.Althoughweattempttomitigatetheserisksthroughdiversificationof our investmentsandcontinuousmonitoringof our portfolio’soverallriskprofile,thevalueof our investmentsmay neverthelessdecline.

Risks Relatedto IntellectualProperty

Ifwe are unable to obtainand maintainsufficientpatentprotectionforour productcandidates,or ifthe scopeof the patentprotectionisnot sufficientlybroad, thirdparties,includingour competitors,could developand commercializeproductssimilaror identicalto ours, and our abilityto commercializeour productcandidatessuccessfullymaybe adverselyaffected.

Oursuccessdependsinlargepartonour abilityto protectour proprietarytechnologiesthatwe believeare importanttoourbusiness,includingpursuing,obtainingandmaintainingpatentprotectionintheUnitedStates and other countries intended to cover the compositions of matter ofourproduct candidates, for example, PRT543, PRT811 and PRT1419, their methods of use, related technologies and other inventions that are importanttoourbusiness.Inadditiontopatentprotection,wealsorelyon tradesecretsto protectaspectsof our businessthatarenotamenableto,orthatwedonotconsiderappropriatefor,patentprotection.Ifwe do not adequatelypursue,obtain,maintain,protectorenforceour intellectual

property,thirdparties,includingour competitors,maybeabletoerodeor negateany competitiveadvantagewe mayhave, which couldharmour businessand abilityto achieveprofitability.

Toprotectourproprietaryposition,wehavecurrentlyfiledpatentapplicationsintheUnitedStatesrelated toourproductcandidatesthatweconsiderimportanttoourbusiness,includingpatentapplicationsrelatingto compositionsofmattercoveringourcompounds,theprocessesformanufacturingsuch compoundsand use of suchcompoundsintherapies.WehavealsofiledpatentapplicationsabroadrelatingtoPRT543andPRT811.

Thepatentapplicationand approvalprocessisexpensive,time-consumingand complex.We maynot be ableto file,prosecuteandmaintainallnecessaryordesirablepatentapplicationsatareasonablecostor in a timely manneror in alljurisdictions.We alsocannotpredictwhetherthepatentapplicationswe arecurrentlypursuing willissueaspatentsinanyparticularjurisdictions.Itisalsopossiblethatwewillfailtoidentifypatentable aspectsofourresearchanddevelopmentoutputbeforeitistoo lateto obtainpatentprotection.Moreover, dependingonthetermsofanyfuturelicenseagreementstowhichwemaybecomeaparty,we maynot have the righttocontrolthepreparation,filing,and prosecutionof patentapplications,or to maintainthepatents,covering technologylicensedfromthirdparties.Therefore,thesepatentsandpatentapplicationsmaynotbeprosecuted and enforcedin a mannerconsistentwith thebestinterestsof our business.

Furthermore,thepatentpositionof biotechnologyand pharmaceuticalcompaniesgenerallyishighly uncertain.Noconsistentpolicyregardingthebreadthofclaimsallowedin biotechnologyand pharmaceutical patentshas emergedto datein theUnitedStatesor in manyforeignjurisdictions.The standardsappliedby the UnitedStatesPatentandTrademarkOffice,ortheUSPTO, andforeignpatentofficesingrantingpatentsarenot alwaysapplieduniformlyorpredictably.Inaddition,thedeterminationofpatentrightswithrespectto biological andpharmaceuticalproductscommonlyinvolvescomplexlegalandfactualquestions,which have in recentyears beenthesubjectofmuchlitigation.Asaresult,theissuance,scope,validity,enforceabilityand commercialvalue ofourpatentrightsarehighlyuncertain.Thus,wecannotofferany assurancesaboutwhich, ifany, patentswill issue,thebreadthofanysuchpatents,whetheranyissuedpatentswillbefoundinvalidand unenforceableor will bethreatenedbythirdpartiesor whetherany issuedpatentswilleffectivelypreventothersfromcommercializing competingtechnologiesandproductcandidates.Whilewehavefiledpatentapplicationscoveringaspectsof our currentproductcandidates,wecurrentlyhaveonlyoneissuedU.S. patentcoveringPRT543 thatisexpectedto expirenoearlierthanAugust9,2038,andoneissuedU.S. patentcoveringPRT811 thatisexpectedtoexpireno earlierthanMarch14, 2039. We do not yethave issuedpatentson allof our productcandidates.

Ourpendingpatentapplicationscannotbeenforcedagainstthirdpartiespracticingthetechnologyclaimed in such applicationsunlessand untilatleastone patentissuesfromsuch applications.Assuming the other requirementsforpatentabilityaremet,currently,thefirsttofileapatentapplicationisgenerallyentitledto the patent.However,priortoMarch16,2013,intheUnitedStates,thefirstto inventwas entitledto thepatent. Publicationsof discoveriesin thescientificliteratureoftenlagbehindtheactualdiscoveries,and patent applicationsintheUnitedStatesandotherjurisdictionsaretypicallynot publisheduntil18 monthsafterfiling,or insomecasesnotatall.SincepatentapplicationsintheUnitedStatesandmostothercountriesareconfidential foraperiodoftimeafterfiling,andsomeremainsountilissued,wecannotbecertainthatwewerethefirstto fileorinvent(priortoMarch16,2013)anypatentapplicationrelatedtoourproductcandidates.In addition,we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentableaspectsofourresearchanddevelopmentoutput,suchasouremployees,collaborators,CROs, CMOs, hospitals,independenttreatmentcenters,consultants,independentcontractors,suppliers,advisorsand otherthird parties;however,anyofthesepartiesmaybreachtheagreementsand disclosesuch outputbeforea patent applicationisfiled,therebyjeopardizingour abilityto seekpatentprotection.Furthermore,ifthirdpartieshave filedpatentapplicationsrelatedto our productcandidatesor technology,we maynot be ableto obtainour own patentrightsto thoseproductcandidatesor technology.

Moreover,becausetheissuanceofapatentisnot conclusiveas to itsinventorship,scope,validityor enforceability,our patentsor pendingpatentapplicationsmaybe challengedin thecourtsor patentofficesin the UnitedStatesand abroad.For example,we maybe subjectto a third-partypre-issuancesubmissionof priorartto theUSPTO or becomeinvolvedin post-grantreviewprocedures,oppositions,derivations,revocation, reexaminations,interpartesrevieworinterferenceproceedings,intheUnitedStatesorelsewhere,challenging ourpatentrightsorthepatentrightsofothers.Anadversedeterminationin any such submission,proceedingor litigationcouldreducethescopeof, or invalidate,our patentrights,allowthirdpartiesto commercializeour technologyorproductsandcompetedirectlywithus,withoutpaymenttous,or resultin our inabilityto manufactureorcommercializeproductswithoutinfringingthird-partyrights.Moreover,we may

have to participateininterferenceproceedingsdeclaredbytheUSPTOtodeterminepriorityofinventionorinpost-grantchallengeproceedings,suchasoppositionsina foreignpatentoffice,thatchallengepriorityof inventionor other featuresofpatentability.Suchchallengesmayresultinlossof exclusivityor in our patentclaimsbeingnarrowed, invalidatedor heldunenforceable,in whole or in part,which couldlimitour abilityto stopothers from using or commercializingsimilaroridenticaltechnologyandproductsorlimitthedurationofthepatentprotectionof our technologyandproducts.Suchchallengesalsomayresultinsubstantialcostandrequiresignificanttimefrom ourscientistsandmanagement,eveniftheeventualoutcomeisfavorabletous.Anyoftheforegoingcouldhave a materialadverseeffecton our business,financialcondition,resultsof operations,and prospects.

Inaddition,giventheamountof timerequiredforthedevelopment,testingand regulatoryreviewof new productcandidates,ourpatentsprotectingsuchproductcandidatesmightexpirebeforeor shortlyaftersuch productcandidatesarecommercialized.Asaresult,our intellectualpropertymaynot provideus with sufficient rightstoexcludeothersfromcommercializingproductssimilaroridenticaltoours.Moreover,someofour patentsandpatentapplicationsmayinthefuturebeco-ownedwiththirdparties.Ifweareunableto obtainan exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitorscouldmarketcompetingproductsandtechnology.Inaddition,wemayneedthecooperationof any suchco-ownersofourpatentsinordertoenforcesuchpatentsagainstthirdparties,and such cooperationmaynot beprovidedtous.Anyoftheforegoingcouldhaveamaterialadverseeffectonourcompetitiveposition, business,financialconditions,resultsof operations,and prospects.

Ourpendingandfuturepatentapplicationsmaynotresultinpatentsbeingissuedthatprotectour product candidates,in whole or in part,or which effectivelypreventothers from commercializingcompetitiveproducts. Changesineitherthepatentlaws or interpretationof thepatentlaws in theUnitedStatesand othercountriesmay diminishthevalueofourpatentsornarrowthescopeof our patentprotection.In addition,thelaws of foreign countriesmaynotprotectourrightstothesameextentorinthesamemannerasthelawsoftheUnitedStates. Forexample,Europeanpatentlawrestrictsthepatentabilityofmethodsoftreatmentofthehumanbodymore thanUnitedStateslaw does.

Evenifourpatentapplicationsissueas patents,theymaynot issuein a formthatwillprovideus with any meaningfulprotection,preventcompetitorsor otherthirdpartiesfromcompetingwith us or otherwiseprovideus withanycompetitiveadvantage.Moreover,thecoverageclaimedin a patentapplicationcan be significantly reducedbeforethepatentisissuedanditsscopecanbereinterpretedafterissuance.Consequently,wedonot knowwhetheranyofourproductcandidateswillbeprotectableorremainprotectedbyvalidandenforceable patents.Our competitorsand otherthirdpartiesmaybe ableto circumventour patentsby developingsimilaror alternativetechnologiesor productsin a non-infringingmanner.Our competitorsand otherthirdpartiesmayalso seekapprovalto markettheirown productssimilarto or otherwisecompetitivewith our products.Alternatively, ourcompetitorsorotherthirdpartiesmayseektomarketgenericversionsor “follow-on”versionsof any approvedproductsbysubmittingabbreviatednewdrugapplications,orANDAs, ornewdrug applicationsunder Section505(b)(2)oftheFDCA, respectively,totheFDA duringwhichtheymayclaimthatpatentsownedbyus areinvalid,unenforceableornotinfringed.Inthesecircumstances,wemayneedtodefendorassertourpatents, orboth,includingbyfilinglawsuitsallegingpatentinfringement.Inanyof thesetypesof proceedings,a courtor otheragencywith jurisdictionmayfindour patentsinvalidor unenforceable,or thatour competitorsare competinginanon-infringingmanner.Thus,evenifwehavevalidandenforceablepatents,thesepatentsstill maynotprovideprotectionagainstcompetingproductsor processessufficientto achieveour businessobjectives. Anyoftheforegoingcouldhaveamaterialadverseeffecton our competitiveposition,business,financial conditions,resultsof operations,and prospects.

Furthermore,futurepatentsmaybe subjectto a reservationof rightsby one or morethirdparties.For example,totheextenttheresearchresultingin futurepatentrightsor technologiesisfundedin thefuturein part bytheU.S. government,thegovernmentcouldhave certainrightsin any resultingpatentsand technology, includinganon-exclusivelicenseauthorizingthegovernmentto use theinventionor to have othersuse the inventiononitsbehalffornon-commercialpurposes.IftheU.S.governmentthendecidestoexercisethese rights,itisnotrequiredtoengageusasitscontractorin connectionwith doing so. These rightsmayalsopermit thegovernmenttodiscloseourconfidentialinformationtothirdpartiesandtoexercisemarch-inrightsto use or allowthirdpartiesto use our licensedtechnology.The governmentmayalsoexerciseitsmarch-inrightsifit determinesthatactionisnecessarybecausewe failedto achievepracticalapplicationof thegovernment-funded technology,becauseactionisnecessarytoalleviatehealthorsafetyneeds,tomeetrequirementsof federal regulations,ortogivepreferencetoU.S. industry.Inaddition,ourrightsin such government-fundedinventions maybesubjectto certainrequirementsto manufactureproductsembodyingsuch inventionsin theUnitedStates. Anyexercisebythe

governmentofaforementionedproprietaryrightscouldharmour competitiveposition, business,financialcondition,resultsof operations,and prospects.

Changes to the patentlaw in the United Statesand otherjurisdictionscould diminishthe valueof patents in general,therebyimpairingour abilityto protectour products.

Asisthecasewithotherpharmaceuticalcompanies,oursuccessisheavilydependenton intellectual property,particularlypatents.Obtainingand enforcingpatentsin thepharmaceuticalindustryinvolvesboth technologicalandlegalcomplexityandisthereforecostly,timeconsumingand inherentlyuncertain.Changes in eitherthepatentlawsor interpretationof thepatentlaws in theUnitedStatescouldincreasetheuncertaintiesand costssurroundingtheprosecutionofpatentapplicationsandtheenforcementor defenseof issuedpatents.Recent patentreformlegislationintheUnitedStatesandothercountries,includingtheLeahy-SmithAmericaInvents Act,ortheLeahy-SmithAct,signedintolawinSeptember2011,couldincreasethoseuncertaintiesandcosts. TheLeahy-SmithActincludesanumberofsignificantchangestoU.S. patentlaw.Theseincludeprovisionsthat affecttheway patentapplicationsareprosecuted,redefinepriorartand providemoreefficientand cost-effective avenuesforcompetitorstochallengethevalidityofpatents.For example,theLeahy-SmithAct allowsthird-party submissionofpriorarttotheUSPTOduringpatentprosecutionandadditionalprocedurestoattackthevalidity ofapatentbyUSPTO administeredpost-grantproceedings,includingpost-grantreview,interpartesreview,and derivation proceedings. In addition, the Leahy-Smith Act has transformed the U.S. patent system from a “first-to-invent”systemto a “first-to-file”systemin which, assumingthatotherrequirementsforpatentabilityare met,thefirstinventorto filea patentapplicationwillbe entitledto thepatenton an invention regardlessof whetherathirdpartywasthefirsttoinventtheclaimedinvention.Thefirst-to-fileprovisions,however,only becameeffectiveon March16, 2013. Itisnot yetclearwhat, ifany, impacttheLeahy-SmithAct willhave on the operationof our business.However, theLeahy-SmithAct and itsimplementationcouldmakeit more difficultto obtainpatentprotectionforourinventionsandincreasetheuncertaintiesand costssurroundingtheprosecutionof ourorourfuturecollaborationpartners’patentapplicationsandtheenforcementor defenseof our or our future collaborationpartners’issuedpatents,allofwhichcouldharmourbusiness,resultsof operations,financial conditionand prospects.

Inaddition,thepatentpositionsof companiesin thedevelopmentand commercializationof biologicsand pharmaceuticalsareparticularlyuncertain.TheU.S. SupremeCourt has ruledon severalpatentcasesin recent years,eithernarrowingthescopeofpatentprotectionavailableincertaincircumstancesorweakeningtherights ofpatentownersincertainsituations.This combinationof eventshas createduncertaintywith respectto the validity and enforceability of patents, once obtained. Additionally, there have been recent proposals for additionalchangesto thepatentlaws of theUnitedStatesand other countriesthat, if adopted, could impactour abilitytoenforceourproprietarytechnology.DependingonfutureactionsbytheU.S. Congress,theU.S. courts, theUSPTO andtherelevantlaw-makingbodiesinothercountries,thelaws and regulationsgoverningpatents couldchangeinunpredictablewaysthatcouldhaveamaterialadverseeffecton our existingpatentportfolioand weakenourabilitytoobtainnewpatentsortoenforceourexistingpatentsandpatentsthatwe mightobtainin the future.

We maybecomeinvolvedin lawsuitsor administrativedisputesto protector enforceour patentsor other intellectualproperty,which could be expensive,timeconsumingand unsuccessful.

Competitors and other third parties may infringe, misappropriate or otherwise violate our patents, trademarks,copyrights,tradesecretsorotherintellectualproperty.Tocounterinfringement,misappropriationor otherviolations,wemayberequiredtofileinfringement,misappropriationorotherviolationclaims,whichcan beexpensiveandtimeconsuminganddivertthetimeandattentionofourmanagementandbusinessand scientificpersonnel.Inaddition,manyof our adversariesin theseproceedingsmayhave theabilityto dedicate substantiallygreaterresourcesto prosecutingtheselegalactionsthanwe can.

PRLD US Equity

PRLD · 10-K · period ended 2020-12-31

Item 1A. Risk Factors

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PRLD · 10-K · period ended 2020-12-31

Item 1A. Risk Factors

PRLD US Equity