Risk Factors Update Summary
- Addition of detailed requirements for cGMP compliance by manufacturers of product candidates and products.
- Potential product candidates may not be suitable for clinical development or generate acceptable data. This could result in significant adverse effects on business operations.
- Expanded international market risks due to regulatory non-compliance could reduce target market and profits.
- Completed enrollment of AMPLIFY-201 trial for ELI-002, 2-peptide formulation, targeting KRAS gene mutations.
- Addition of risks related to disruptions in China manufacturing operations and potential impact on business.
- Identified substantial doubt about ability to continue as a going concern. Incurred losses of $35.2 million in 2023 and $28.2 million in 2022.
- Expanded litigation risks due to potential intellectual property disputes, including patent challenges and infringement claims.
- Reimbursement challenges may delay product commercialization and limit revenue, impacting financial condition significantly.
- Addition of detailed risks related to state privacy laws, including California laws, CCPA, and CPRA, with potential penalties up to $250,000 and private rights of action.
- Expanded exclusive forum provisions to include federal district courts for Securities Act claims.
- Changes in local regulations may require changes in how clinical trials are conducted, resulting in unexpected costs.
- Enhanced protection against multi-forum litigation, potentially incurring significant costs if provisions unenforced.
- Increased complexity and uncertainty in obtaining and enforcing patents, potentially leading to challenges in protecting proprietary technologies.
- Inclusion of the need for timely submission of chemistry, manufacturing, and control documentation to regulatory authorities.
- Risks related to delays in obtaining approval and commercializing product candidates could have a material adverse impact.
- Completed enrollment of AMPLIFY-7P Phase 1 trial for ELI-002, 7-peptide formulation, and initiated Phase 2.
- Increased scrutiny on health care laws and regulations may lead to criminal sanctions and civil penalties.
- Need for substantial additional capital highlighted. Incurred research and development expenses of $23.8 million in 2023 and $18.1 million in 2022.
- Inclusion of GDPR impact on business activities, potential fines up to 20 million Euros or 4% of total worldwide annual turnover.
- Time to obtain FDA approval unpredictable, typically takes many years following clinical trials.
- Clinical trials for ELI-002 require the use of an investigational in vitro diagnostic device. Failure to collaborate successfully may hinder marketing authorization.
- Seeking orphan drug designation may not guarantee benefits or exclusivity. Approval and maintenance are uncertain.
- Failure to comply with environmental laws could lead to fines or penalties affecting business success.
- Inclusion of risks related to reliance on third parties for nonclinical studies and clinical trials.
- Mention of the need to find alternative manufacturing facilities if current facilities are noncompliant.
- Difficulty in patient enrollment for clinical trials may lead to delays or trial abandonment, compromising data quality.
- Potential impact of legislative changes on drug pricing and reimbursement methodologies could reduce profitability.
- Disclosure of risks related to FDA and SEC funding affecting product development, review times, and regulatory approvals.
- Seeking FDA designations like fast track or breakthrough therapy may not expedite development or approval. Approval is not guaranteed.
- Reliance on CMOs for manufacturing may impact business. Delays or issues in manufacturing could affect supply and commercialization.
- Failure can occur at any time during clinical trial process; results of early trials may not predict later-stage trials.
- Increased focus on cybersecurity risks, potential breaches, and impact on financial condition.
- Not previously conducted clinical trials with product candidates; substantial further capital expenditures required.
- Material weaknesses in internal control over financial reporting identified, including lack of accounting staff expertise.
- Increased emphasis on potential consequences of manufacturing deviations and noncompliance with regulatory requirements.
- Highlighting the impact of delays in securing replacement manufacturers on product development timelines.
- Manufacturing complexities may cause delays in development, commercialization, and limit supply of product candidates.
- Adverse events from product candidates could lead to trial suspension, regulatory issues, or product liability claims.
- Regulatory approval process uncertainties may cause significant delays in product development and approval, impacting financials.
- Dependence on patents licensed from MIT emphasized. Incurred expenses related to the Merger, including legal and accounting fees.
- Addition of risks related to managing growth, hiring qualified personnel, and expanding operations, impacting development timelines and costs.
- Utilization of NOL carryforwards totaling approximately $237.8 million federal and $170.4 million state.
- Changes in product candidates could require additional testing, delaying clinical trials and regulatory approvals.
- Risk of loss of uninsured funds held in deposit accounts at SVB due to adverse financial conditions. Deposit insurance limit of $250,000.
- Intellectual property disputes could lead to costly litigation, impacting business operations and financial condition.
- Mention of potential impacts of market volatility, economic conditions, and inflation on business operations and financial performance.
- Inclusion of risks related to cybersecurity incidents, data breaches, and disruptions in IT systems, potentially leading to business interruptions and liability.
- Reliance on licensed patents from MIT exposes the company to risks if licensed rights are narrowed or terminated.
- Operating losses since inception, never profitable. Cash on hand expected to fund operations into the third quarter of 2024.
- Infringement on third-party intellectual property could result in costly litigation, delays, and distractions.
- Disclosure of risks related to securities litigation, stock price volatility, and compliance costs as a public company, affecting profitability and reputation.
- Need for additional funding highlighted. Difficulty in raising capital due to market conditions and perception of inability to continue as a going concern.
Full Text Changes in Most Recent 10-K
Intended use: review the highlighted statements. These are additions to the risk factors disclosure in the most recent 10-K filing compared to the previous 10-K filing. Deleted and moved text is less important and is shown for context.
To view the full company filings, click on the following link to be taken to the SEC EDGAR database landing page for the company: https://www.sec.gov/edgar/browse/?CIK=1601485&owner=exclude
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