Emmaus Life Sciences (EMMA)

Risks

• We have operated at a loss and may continue to operate at a loss for the foreseeable future.
• We are dependent on financing to sustain our operations, and there is substantial doubt regarding our ability to continue as a going concern.
• We are dependent on the commercial success of our only approved product, Endari®.
• We may expend our limited resources to pursue a product candidate or indication and fail to capitalize on product candidates or indications for which there is a greater likelihood of commercial success.
• We face intense competition from companies with greater resources than us, and if our competitors are successful in marketing or develop alternative treatments our commercial opportunities may be reduced or eliminated.
• If we are unable to achieve and maintain adequate levels of coverage and reimbursement for Endari®, on reasonable pricing terms, its commercial success may be severely hindered.
• The majority of Endari® sales are to a few customers and loss of a customer could adversely affect our results of operations.
• The market exclusivity for SCD in the U.S. is limited and Endari® will have no market exclusivity in the United Arab Emirates, where it was recently approved for marketing, or other countries in the Middle East North Africa (MENA) region where applications for marketing approval are pending, which lack of exclusivity could adversely affect the commercial success of Endari®.
• Many of our potential customers are in markets with underdeveloped health care systems.
• A variety of risks associated with marketing Endari® internationally could hurt our business.
• We may not be able to anticipate the demand for and appropriate supply of Endari®.
• If the L-glutamine manufacturer upon which we rely fails to produce in the volumes and quality that we require on a timely basis or fails to comply with stringent regulations applicable to pharmaceutical manufacturers, we may face interruptions in the commercialization of, or be unable to meet demand for, our L- glutamine based products, and may lose any marketing exclusivity and potential revenues.
• Endari® may cause undesirable side effects or have other unexpected properties that could result in post-approval regulatory action.
• The use of any of our product candidates in clinical trials and in the market may expose us to liability claims.
• We will need to increase the size and complexity of our organization in the future, and we may experience difficulties in managing our growth and executing our growth strategy.
• We rely heavily on Yutaka Niihara, M.D., M.P.H., our Chairman and Chief Executive Officer, and the loss of his services would have a material adverse effect upon our business and prospects.
• Our business and operations may be adversely affected by information technology (“IT”) system failures or cybersecurity or data breaches.
• Historical material weaknesses in our internal controls over financial reporting have not been fully remediated.
• We may not be able to obtain and enforce intellectual property rights that cover our commercial activities or are sufficient to prevent third parties from competing against us.
• We depend on licenses of certain patents for the development of some of our product candidates. If any of these licenses terminate, or if any of the licensed patents is successfully challenged, we may be unable to continue the development of the affected product candidates.
• If we are unable to protect proprietary technology that we invent and develop, we may not be able to compete effectively, and our business and financial prospects may be harmed.
• Endari® is subject to ongoing and continued regulatory review, compliance with which may result in significant expense and limit our ability to commercialize Endari®.
• We may not be able to receive regulatory approval of PGLG treatment for diverticulosis or other indications, which would adversely affect our financial and operating condition.
• The development process to obtain FDA approvals for new drugs therapies is very costly and time consuming and if we cannot complete our clinical trials in a cost-effective manner, our operations may be adversely affected.
• We may not be able to complete clinical trial programs for any of our product candidates successfully within any specific time period or at all, and if such clinical trials take longer to complete than we project, our ability to execute our current business strategy will be adversely affected.
• We may be required to suspend, repeat or terminate our clinical trials if they do not meet regulatory requirements, the results are negative or inconclusive, human subject protections are inadequate, the trials are not well designed, or clinical investigators fail to comply with all requirements for the conduct of trials under the applicable IND, any of which may result in significant negative repercussions on our business and financial condition.
• Changes in regulatory requirements and guidance or unanticipated events during our clinical trials may occur, which may result in necessary changes to clinical trial protocols, informed consents and clinical trial budgets, any of which changes could result in increased costs to us, delay our development timeline or reduce the likelihood of successful completion of the clinical trial.
• There are various uncertainties related to the research, development and commercialization of Kainos’s KM10544 IRAK4 inhibitor to treat cancers and the cell sheet engineering regenerative medicine products we are developing which could negatively affect our ability to commercialize such products.
• Health care reform measures and changes in policies, funding, staffing and leadership at the FDA and other agencies could hinder or prevent the commercial success of Endari®.
• If we fail to comply with federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
• Even though we have obtained Orphan Drug designation for Endari®, we may not be able to maintain Orphan Drug marketing exclusivity for Endari®or any of our other product candidates.
• Any product candidate for which we obtain marketing approval would be subject to post-marketing regulatory requirements and limitations and could be subject to recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with such regulatory requirements or if we experience unanticipated problems in commercializing any of our product candidates, when and if any of them are approved by regulators.
• Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of our product candidates and then commercialize them as products and affect the prices we may obtain.
• EJ Holdings has no revenues and is dependent on us to fund its business and operations, and there is no assurance that we can continue to provide needed funding or that EJ Holdings will be able to continue its activities.
• EJ Holdings is subject to risks inherent in a new business and may not be successful.
• We do not control EJ Holdings, and EJ Holdings may engage in activities contrary to our best interests.
• EJ Holdings retains discretion over its use of any funds that we provide to it.
• We have been delinquent in our past SEC reporting obligations and if we fail to timely file our future SEC reports, our security holders and prospective investors will not have current information regarding our financial statements and status of our business and operations and our common stock may no longer be eligible for quotation on the OTC Markets Group, Inc.
• Stockholders may experience future dilution from future equity offerings.
• A substantial number of shares of common stock may be sold in the market, which may depress the market price for our common stock.
• We may issue preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock.