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Risks

• Risks Related to Our Intellectual Property
• Risks Related to Our Business and Operations
• Risks Related to Financial Condition and Capital Requirements
• Risks Related to the Ownership of Our Common Stock
• Risks Related to the Discovery, Development, and Commercialization of Our Product Candidates
• Since 2017, we have concentrated a substantial portion of our research and development efforts on the treatment and detection of Alzheimer’s disease, an area of research that has seen significant failure rates. Further, our product candidates are based on new scientific approaches and novel technology, which makes it difficult to predict the time and cost of product candidate development and likelihood of success.
• We are heavily dependent on the success of simufilam and SavaDx, our product candidates which are still under clinical development. If these product candidates do not receive regulatory approval, we will be unable to generate product revenue and our business may be harmed.
• We have a limited operating history in our business targeting Alzheimer’s disease and no history of product approvals for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
• We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.
• There can be no assurance that results of smaller Phase 1 and Phase 2 clinical trials with simufilam will be reproduced in the additional large, well-controlled studies that are required to demonstrate safety and efficacy in order to potentially receive regulatory approval.
• We may encounter substantial delays in our clinical studies or may not be able to conduct or complete our clinical studies on the timelines we expect, if at all.
• If physicians and patients do not accept and use our drugs, we will not achieve sufficient product revenues and our business will suffer.
• We may not be successful in developing our product candidates in neurodegeneration.
• We currently have no in-house capabilities to manufacture or commercialize our product candidates and we rely on third-party commercial drug manufacturers for clinical drug supplies. If we are unable to develop our own manufacturing, sales, marketing and distribution capabilities, or if we are not successful in contracting with third parties for these services on favorable terms, or at all, our product revenues could be adversely impacted.
• Alzheimer’s disease has failed every attempt at drug approval.
• We may not be successful in our efforts to expand our technology or product candidates in other indications.
• If we fail to successfully identify and develop additional product candidates, our commercial opportunity will be limited to Alzheimer’s disease or other neurodegenerations.
• Early indications of safety, tolerability or biomarker results from our small clinical studies with simufilam may not predict the results of later studies.
• We have never obtained FDA approval for a diagnostic test and we may not be able to secure such approval in a timely manner or at all.
• If we do not compete effectively with scientific and commercial competitors, we may not be able to successfully develop our diagnostic test for Alzheimer’s disease.
• We will need to develop our own proprietary antibodies to advance our SavaDx and our diagnostic program.
• We have concentrated a substantial portion of our research and development efforts on the treatment and detection of Alzheimer’s disease, an area of research that has seen significant failure rates. Further, our product candidates are based on new scientific approaches and novel technology, which makes it difficult to predict the time and cost of product candidate development.
• Our Phase 2 clinical studies with simufilam in patients with Alzheimer’s disease are not designed to show a statistically meaningful difference between those patients who receive placebo and those who receive drug.
• We may encounter difficulties enrolling patients in our clinical studies, and our clinical development activities could thereby be delayed or otherwise adversely affected.
• Our clinical studies may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, which would prevent, delay, or limit the scope of regulatory approval and commercialization.
• If our drug candidate causes or contribute to a death or a serious injury before or after approval, we will be subject to medical reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
• The market opportunities for simufilam and SavaDx, if approved, may be smaller than we anticipate.
• We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced, or more effective than ours, any of which may harm our business operations.
• Our ability to market and promote our product candidates will be determined and limited by FDA-approved labeling.
• Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
• If we fail to comply with the complex federal, state, local and foreign laws and regulations that apply to our business, we could suffer severe consequences that could materially and adversely affect our operating results and financial condition.
• Government agencies may establish and promulgate usage guidelines that could limit the use of our product candidates.
• Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.
• If our product candidates receive regulatory approval, we and our collaborators will be subject to ongoing FDA obligations and continued regulatory review, such as continued safety reporting requirements, and we and our collaborators may also be subject to additional FDA post-marketing obligations or new regulations, all of which may result in significant expense and limit our and our collaborators’ ability to commercialize our potential drugs.
• Enacted and future legislation may increase the difficulty and cost for us to commercialize our product candidates and may reduce the prices we are able to obtain for our product candidates.
• Our relationships with customers and payors will be subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings.
• Any future litigation against us could be costly and time-consuming to defend.
• A recent federal court ruling may mandate significant new disclosure requirements for clinical data dating back over a decade which may lead to costly or burdensome disclosures.
• Risks Related to Our Intellectual Property
• If we are unable to obtain and maintain sufficient patent protection for any product candidates we develop, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop may be adversely affected.
• U.S. intellectual property rights around diagnostic methods is a complex, evolving area of law and effective patent claims may not be available to us for our investigational diagnostic product candidate, SavaDx, in the United States.
• Issued patents covering our product candidates and other technologies could be found invalid or unenforceable if challenged in court or before administrative bodies in the U.S. or abroad.
• If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed.
• If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
• If any of our patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively.
• If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected.
• We may not be able to protect our intellectual property and proprietary rights throughout the world.
• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
• We may be subject to claims challenging the inventorship of our patents and other intellectual property.
• We may not be successful in obtaining necessary rights to our product candidates or other technologies.
• We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property which may prevent or delay the development of our product candidates.
• We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming, and unsuccessful.
• Intellectual property rights do not necessarily address all potential threats.
• Risks Related to Our Business and Operations
• Our reliance on third parties for both the supply and manufacture of materials for our product candidates carries the risk that we will not have sufficient quality or quantities of such materials or product candidates, or that such supply will not
• be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.
• Our internal computer systems, or those used by third parties on whom we rely, may fail or suffer other breakdowns, cyberattacks, or information security breaches that could compromise the confidentiality, integrity, and availability of such systems and data, result in material disruptions of our development programs and business operations, risk disclosure of confidential, financial, or proprietary information, and affect our reputation.
• Our business involves environmental risks that may result in liability for us.
• Business disruptions and lack of appropriate levels of commercial insurance could seriously harm our future revenue and financial condition and increase our costs and expenses.
• Social media platforms present risks and challenges.
• We expect to rely on third parties to conduct our studies and some aspects of our research, and such third parties may not perform satisfactorily, which could delay or harm our studies, research, and testing.
• We do not own any manufacturing facilities and we rely on third-party commercial drug manufacturers for clinical drug supply.
• We are a small company with a limited number of employees. We are highly dependent on our key personnel, and if we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
• We may need to cease our operations if we are unable to attract and retain key personnel.
• If our current research collaborators or scientific advisors terminate their relationships with us or develop relationships with a competitor, our ability to continue our business operations could be adversely affected.
• We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur net losses for the foreseeable future.
• We have no product revenues and may never achieve revenues or profitability based on product revenues.
• We may require additional capital to fund our operations and to complete the development of our product candidates. A failure to obtain this necessary capital on acceptable terms, or at all, could force us to delay, limit, reduce, or terminate our commercialization efforts, product development, or other operations.
• Global credit and financial market conditions could negatively impact the value of our portfolio of cash equivalents and our ability to meet our financing objectives.
• We do not know whether a sufficient market will continue to develop for our common stock or what the market price of our common stock will be, and, as a result, it may be difficult for investors to sell shares of our common stock.
• The market price of our common stock has historically been highly volatile, and we expect it to continue to be volatile, which could result in substantial losses for investors who purchase our shares.
• If we are unable to maintain effective internal controls, our business, financial position, and results of operations could be adversely affected.
• Anti-takeover provisions in our charter documents and Delaware law may prevent or delay removal of incumbent management or a change of control.
• We may sell additional equity or debt securities to fund our operations, and have outstanding securities exercisable for our common stock, which may result in dilution to our stockholders and impose restrictions on our business.