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Risks

• Risks Related to Our Business
• If we are unable to continue to successfully develop poziotinib, ROLONTIS, or any of our other pipeline products, our business, prospects, operating results, and financial condition will be materially harmed.
• Clinical trials may fail to demonstrate the safety and efficacy of our drug products, which could prevent or significantly delay obtaining regulatory approval.
• We currently generate no revenue from commercial sales and future commercial sales may not be sufficient to sustain our business operations.
• The COVID-19 pandemic and the future outbreak of other highly infectious or contagious diseases, could materially and adversely impact or disrupt our business and our financial condition, results of operations, cash flows and performance.
• The pharmaceutical and biotechnology industries are intensely competitive. We are aware of several competitors attempting to develop and market products competitive to our in-development products, which may reduce or eliminate our commercial opportunities in the future.
• Our supply of APIs, and drug products are and will remain dependent upon the production capabilities of contract manufacturing organizations (CMOs) and other third-parties for related supplies and logistical services. Some of these vendors are based overseas. If they are not able to meet our requirements and/or FDA scrutiny, we may be limited in our ability to meet demand for our products, ensure regulatory compliance, or maximize profit on the future sale of our products. In addition, our dependence on these ex-U.S. vendors also subjects us to business interruption risks related to COVID-19, and/or similar outbreaks, which could have a material adverse impact on us.
• Our future sales will depend on coverage and reimbursement from third-party payers and a reduction in the coverage and/or reimbursement for our products could have a material adverse effect on our product sales, business and results of operations.
• A breakdown or breach of our information technology systems and cybersecurity efforts could subject us to liability, reputational damage or interrupt the operation of our business.
• Reports of adverse events or safety concerns involving our in-development products or similar agents, could delay or prevent us from obtaining or maintaining regulatory approval or negatively impact sales.
• Our dependence on key executives, scientists and sales and marketing personnel could impact the development and management of our business.
• A significant portion of our revenue has historically been derived from a limited number of distributors - and is expected to persist for our in-development drugs upon potential FDA approval.
• Our efforts to acquire or in-license and develop additional drug products may fail and/or our in-licensed products may fail to perform as we anticipate, which might limit our ability to grow our business.
• Adverse economic conditions may have material adverse consequences on our business, results of operations and financial condition as well as our ability to raise additional capital.
• We are a small company relative to our principal competitors, and our limited financial resources may limit our ability to develop and market our drug products.
• If actual future payments for allowances for discounts, returns, rebates and chargebacks exceed the estimates we made at the time of the sale of our products, our financial position, results of operations, and cash flows may be materially and negatively impacted.
• Our business strategy requires that we engage in transactions that increase our capital requirements, cause us to incur debt or assume contingent liabilities, and possibly dilute our stockholders.
• Our collaborations with outside scientists may be subject to change, which could limit our access to their expertise.
• We may rely on CROs and other third parties to conduct clinical trials and, in such cases, we are unable to directly control the timing, conduct and expense of our clinical trials.
• Competition for patients in conducting clinical trials may prevent or delay product development and strain our limited financial resources.
• We may have conflicts with our third-party development partners that could delay or prevent the development or commercialization of our drug products.
• From time to time we may need to in-license patents and proprietary technologies from third parties, which may be difficult or expensive to obtain.
• The potential size of the market for our drug products is uncertain.
• If our employees, representatives or agents fail to comply with regulatory standards and requirements, we could be exposed to financial, reputational or other harm.
• We have a history of net losses. We expect to continue to incur net losses and may not achieve profitability for some time, if at all.
• Risks Related to Our Industry
• Failure to obtain regulatory approval outside the U.S. will prevent us from marketing our product candidates abroad.
• Even after we receive regulatory approval to market our drug products, the market may not be receptive to our drug products upon their commercial introduction, which would negatively impact our ability to achieve profitability.
• Guidelines and recommendations published by various organizations can reduce the use of our products.
• Legislative or regulatory reform of the healthcare system and pharmaceutical industry related to pricing, coverage or reimbursement may hurt our ability to sell our products profitably or at all.
• If we market products in a manner that violates federal or state health care fraud and abuse laws, we may be subject to civil or criminal penalties, including exclusion from participation in government health care programs.
• We may be involved in additional lawsuits to defend or enforce our patents, which could be expensive, time-consuming and unsuccessful.
• We could be adversely affected by violations of the FCPA and other worldwide anti-bribery laws.
• Pricing for pharmaceutical products has come under increasing scrutiny by governments, legislative bodies and enforcement agencies. Changes in laws and regulations that control drug pricing for government programs allow for negotiated pricing or limit product coverage, and reduced reimbursements may adversely impact our operating results and our business.
• Risks Related to Our Common Stock
• Future issuances of our common stock or instruments convertible or exercisable into our common stock, may materially and adversely affect the price of our common stock and cause dilution to our existing stockholders.
• The market price and trading volume of our common stock fluctuate significantly and could result in substantial losses for individual investors.
• Provisions of our charter, and bylaws may make it more difficult for someone to acquire control of us or replace current management even if doing so would benefit our stockholders, which may lower the price an acquirer or investor would pay for our stock.
• From time to time we may need to in-license patents and proprietary technologies from third parties, which may be difficult or expensive to obtain.
• If we are unable to adequately protect our technology or enforce our patent rights, our business could suffer.
• Intellectual property rights do not necessarily address all potential threats.
• If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business.
• If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.
• We may not be able to protect our intellectual property rights throughout the world.
• Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
• 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.
• Intellectual property rights are complex and uncertain and therefore may subject us to infringement claims.
• We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
• We may be involved in additional lawsuits to defend or enforce our patents, which could be expensive, time-consuming and unsuccessful.
• We may be subject to claims challenging the inventorship of our patents and other intellectual property.
• Some intellectual property that we have in-licensed may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.-based companies. Compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S. manufacturers.
• Our failure to establish and maintain effective internal control over financial reporting could result in material misstatements in our financial statements, our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our common stock to decline.
• Changes in our effective income tax rate could adversely affect our profitability. Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
• Earthquakes or other natural or man-made disasters and business interruptions could adversely affect our business.
• We are subject to the risks of securities and related litigation, which may expose us to substantial liabilities and could seriously harm our business.