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Financial report summary
?Risks
- In connection with our reorganization, the composition of our executive management team and board of directors will change significantly.
- We have incurred significant operating losses since inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.
- Our recurring losses, negative cash flows and significant accumulated deficit have raised substantial doubt regarding our ability to continue as a going concern.
- We have a limited operating history and have never generated any revenue from product sales, which may make it difficult to evaluate the success of our business to date and to assess our future viability.
- We will need substantial additional funding to pursue our business objectives. If we are unable to raise capital when needed or on terms favorable to us, we could be forced to curtail our planned operations and the pursuit of our growth strategy.
- Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our intellectual property or future revenue streams.
- Fluctuations in exchange rates may adversely affect our results of operations.
- We depend entirely on the success of a limited number of product candidates, which are in clinical development. If we do not obtain regulatory approval for and successfully commercialize one or more of our product candidates or we experience significant delays in doing so, we may never become profitable.
- We will depend on Organon for the development and commercialization of ebopiprant.
- Clinical trials are very expensive, time-consuming and difficult to design and implement and involve uncertain outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.
- Clinical trials may be delayed, suspended or terminated for many reasons, which will increase our expenses and delay the time it takes to develop our product candidate.
- The regulatory approval process of the FDA, EMA or any comparable foreign regulatory agency may be lengthy, time-consuming and unpredictable.
- While we have previously sought, and intend to seek in the future, formal advice and guidance from the FDA or other applicable foreign regulatory agencies prior to advancing our product candidate into further studies or pivotal clinical trials, the results of our clinical trials may not satisfy the requirements of the FDA or other applicable foreign regulatory authorities, and we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of such product candidate.
- Our clinical trials may fail to demonstrate the safety and efficacy of our product candidate, or serious adverse or unacceptable side effects may be identified during the development of our product candidate, which could prevent or delay regulatory approval and commercialization, increase our costs or necessitate the abandonment or limitation of the development of some of our product candidate.
- We depend on enrollment of patients in our clinical trials for our product candidate. If we are unable to enroll patients in our clinical trials, our research and development efforts could be adversely affected.
- We may not be successful in our efforts to in-license or acquire additional product candidates for other serious conditions compromising women’s reproductive health and pregnancy.
- We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
- We may become exposed to costly and damaging liability claims, either when testing our product candidate in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims.
- We have never commercialized a product candidate and we may lack the necessary expertise, personnel and resources to successfully commercialize any of our products that receive regulatory approval on our own or together with collaborators.
- We operate in a highly competitive and rapidly changing industry.
- The successful commercialization of certain of our product candidate will depend in part on the extent to which governmental authorities and health insurers establish coverage and adequate reimbursement levels, as well as pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidate, if approved, could limit our ability to market those products and decrease our ability to generate revenue.
- Even if any of our current or future product candidates, including nolasiban receive regulatory approval, or if ebopiprant, receives regulatory approval, they will remain subject to ongoing regulatory oversight.
- Off-label use is common in the indications for which our product candidate is under development, which may result in enforcement actions by the FDA and other regulatory agencies for violations of the laws and regulations prohibiting the promotion of off-label uses.
- Even if any of our product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
- If we fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose license rights that are important to our business.
- Our intellectual property in-licensed from third parties may be subject to disagreements over contract interpretations, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.
- We rely on third parties to conduct our preclinical studies and clinical trials and if these third parties perform in an unsatisfactory manner, our business could be substantially harmed.
- We rely on our third-party manufacturers to source the supply of the materials for our product candidate. The inability to obtain supply of the materials for our product candidate would materially and adversely affect our business.
- We have, and may in the future, enter into collaborations with third parties to develop our product candidate. If these collaborations are not successful, our business could be harmed.
- If we are not able to establish or maintain collaborations, we may have to alter some of our future development and commercialization plans.
- Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
- Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidate and may affect the prices we may set.
- Our business operations and current and future relationships with investigators, health care professionals, consultants, third-party payors and customers may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
- If we fail to comply with our obligations under our existing and any future intellectual property licenses with third parties or if such licenses are subject to a disagreement over contract interpretation, we could lose license rights that are important to our business or be subject to a narrowing of the scope of our rights to the relevant intellectual property or technology or an increase of our financial or other obligations to our licensors.
- If we are unable to obtain and maintain patent protection for our technology and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
- We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent which might adversely affect our ability to develop and market our product candidate.
- Patent terms may be inadequate to protect our competitive position on our product candidate for an adequate amount of time.
- Intellectual property rights do not necessarily address all potential threats to our business.
- Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our product candidate.
- Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.
- We may become involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time-consuming and unsuccessful.
- We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.
- We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties.
- We may be subject to claims challenging the inventorship of our patents and other intellectual property.
- Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
- Our inability to protect our confidential information and trade secrets would harm our business and competitive position.
- Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
- Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business.
- Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel.
- Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
- If our information technology systems or sensitive information, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, and other adverse consequences.
- If we fail or are perceived to have failed to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation, increased compliance costs and/or adverse publicity, which could negatively affect our operating results and business.
- Our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
- We may be negatively impacted by volatility in the political and economic environment, such as the ongoing crisis in Ukraine, economic downturns and increases in interest rates, recent and potential future disruptions in access to bank deposits and lending commitments due to bank failures and a period of sustained inflation across the markets in which we operate could result in higher operating costs and may negatively impact our business and financial performance.
- Our common shares were delisted from The Nasdaq Capital Market and are currently traded on the over-the-counter (“OTC”) market. There is currently a limited and sporadic trading market for our common shares, and liquidity of the common shares is limited. We also expect to deregister our common shares under the Exchange Act.
- “Penny stock” rules may make buying or selling our securities difficult which may make our common shares less liquid and make it harder for investors to buy and sell our securities.
- The price of our common shares may be volatile and may fluctuate due to factors beyond our control.
- Future sales, or the possibility of future sales, of a substantial number of our common shares could adversely affect the price of our common shares.
- We do not expect to pay dividends in the foreseeable future.
- We are a Swiss stock corporation. The rights of our shareholders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions.
- U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive officers or members of our Board of Directors.
- Our status as a Swiss stock corporation means that our shareholders enjoy certain rights and we are subject to certain corporate limitations that may limit our flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs.
- If we are a “passive foreign investment company,” or PFIC, there could be adverse U.S. federal income tax consequences to U.S. Holders.
- If a U.S. Holder is treated as owning at least 10% of our common shares, such holder may be subject to adverse U.S. federal income tax consequences.
- As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase in the future, which could adversely affect our net income and cash flows.
- Future changes to tax laws could materially adversely affect our company and reduce net returns to our shareholders.
- Our ability to use our net operating loss carryforwards, or NOL, to offset future taxable income may be subject to certain limitations.
Management Discussion
- Revenue decreased by $2.6 million, or 12% for the year ended December 31, 2022 as compared to December 31, 2021. The decrease was primarily the result of:
- Research and development expenses decreased by $43.2 million, or 80%, during the year ended December 31, 2022 as compared to 2021. The decreased expense was primarily due to:
- General and administrative expenses decreased by $0.3 million, or 1%, during the year ended December 31, 2022 as compared to 2021. The decreased expense is primarily due to a decrease in personnel-related expenses such as salaries and bonuses.