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What changed in Aligos Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Aligos Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+516 added−629 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-12)

Top changes in Aligos Therapeutics, Inc.'s 2024 10-K

516 paragraphs added · 629 removed · 413 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

146 edited+32 added−98 removed181 unchanged
Biggest changeEvidence for the inhibition of cccDNA establishment/replenishment can be found in Figure 9, where the rates of multiple important cccDNA-derived viral antigens (HBsAg, HBcrAg, and HBeAg) are reduced over time and in a dose responsive manner (Yuen et al., AASLD 2023). 11 Figure 8 – DNA over time in HBeAg positive subjects dosed with ALG-000184 with or without ETV or ETV alone (Yuen et al., AASLD 2023) Figure 9 – HBV antigens over time in HBeAg positive subjects dosed with 300 mg ALG-000184 with or without ETV (Yuen et al., AASLD 2023) 12 Long term dosing in HBeAg positive and HBeAg negative subjects will continue throughout 2024, and interim safety, PK, and antiviral activity data will be presented at scientific conferences throughout the year.
Biggest changeEvidence for the inhibition of cccDNA establishment/replenishment can be found in Figure 4, where the rates of multiple important cccDNA‑derived viral antigens (HBsAg, HBcrAg, and HBeAg) are reduced over time and in a dose responsive manner (Yuen et al., AASLD 2024).
Our management team consists of a group of highly collaborative, culturally diverse executives with decades of drug discovery and development experience and a proven track record of success in the areas of viral infections and liver diseases.
Management Our management team consists of a group of highly collaborative, culturally diverse executives with decades of drug discovery and development experience and a proven track record of success in the areas of viral infections and liver diseases.
Many of our competitors have established distribution channels for the commercialization of their products, whereas we have no such channel or capabilities. In addition, many competitors have greater name recognition and more extensive collaborative relationships. 15 Any drug candidates that we successfully develop and commercialize may compete with existing therapies and/or new therapies that may become available in the future.
Many of our competitors have established distribution channels for the commercialization of their products, whereas we have no such channel or capabilities. In addition, many competitors have greater name recognition and more extensive collaborative relationships. Any drug candidates that we successfully develop and commercialize may compete with existing therapies and/or new therapies that may become available in the future.
A fast track drug candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and 26 determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
A fast track drug candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
National Institutes of Health, ClinicalTrials.gov. For purposes of NDA approval, human clinical trials are typically divided into three or four phases. Although the phases are usually conducted sequentially, they may overlap or be combined. • Phase 1 . The drug is initially introduced into healthy human subjects or into patients with the target disease or condition.
National Institutes of Health, ClinicalTrials.gov. 19 For purposes of NDA approval, human clinical trials are typically divided into three or four phases. Although the phases are usually conducted sequentially, they may overlap or be combined. • Phase 1 . The drug is initially introduced into healthy human subjects or into patients with the target disease or condition.
Working in collaboration with KU Leuven, CISTIM, and the CD3, our team has discovered multiple nanomolar potent potential drug candidates targeting the 3C-like protease of coronaviruses, which have shown pan-coronavirus activity and do not require ritonavir boosting based on nonclinical studies.
Working in collaboration with KU Leuven, CISTIM, and the CD3, our team has discovered multiple potent potential drug candidates targeting the 3C-like protease of coronaviruses, which have shown pan-coronavirus activity and do not require ritonavir boosting based on nonclinical studies.
An estimated 1.5% to 6.5% of the global population was estimated to have an ongoing inflammatory response to these excess fat deposits, which was referred to as NASH (non-alcoholic steatohepatitis), and is now called MASH. Over the past several years, the prevalence of MASH has continued to rise.
An estimated 1.5% to 6.5% of the global population was estimated to have an ongoing inflammatory response to these excess fat deposits, which was previously referred to as NASH (non-alcoholic steatohepatitis), and is now called MASH. Over the past several years, the prevalence of MASH has continued to rise.
These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or 20 entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the efficacy 24 criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the efficacy criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
In June 2022, the license to such patents became non-exclusive 17 with respect to all fields except for the treatment and prevention of HBV; however, we may select up to six compounds which will maintain exclusivity with respect to all therapeutic and prophylactic uses.
In June 2022, the license to such patents became non-exclusive with respect to all fields except for the treatment and prevention of HBV; however, we may select up to six compounds which will maintain exclusivity with respect to all therapeutic and prophylactic uses.
In the case of employees, the agreements provide that all inventions conceived of by the individual during the course of employment, and which relate to or are reasonably capable or being used in our current or planned business or research and development, are our exclusive property.
In the case of employees, the agreements provide that all inventions conceived of by the individual during the course of employment, and which relate to or are reasonably capable or being used in 15 our current or planned business or research and development, are our exclusive property.
In this event, the application must be resubmitted with the additional information and is subject to payment of additional user fees. 25 The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
In this event, the application must be resubmitted with the additional information and is subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the drug candidate, including involvement of senior managers.
The designation includes all of the fast track program 21 features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the drug candidate, including involvement of senior managers.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
In connection with any infringement suit, neither party can enter into a settlement without the prior written consent of the other. 19 The Luxna Agreement will expire upon expiration of the last-to-expire patent licensed to us under the agreement. We may terminate the Luxna Agreement at any time for convenience by providing Luxna with 90 days’ written notice.
In connection with any infringement suit, neither party can enter into a settlement without the prior written consent of the other. 14 The Luxna Agreement will expire upon expiration of the last-to-expire patent licensed to us under the agreement. We may terminate the Luxna Agreement at any time for convenience by providing Luxna with 90 days’ written notice.
Such license is initially exclusive with respect to specified licensed patents owned by Emory and non-exclusive with respect to certain of Emory’s specified know-how.
Such 12 license is initially exclusive with respect to specified licensed patents owned by Emory and non-exclusive with respect to certain of Emory’s specified know-how.
Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. 29 Moreover, the process for determining whether a third-party payor will provide coverage for a drug product may be separate from the process for setting the price of a drug product or for establishing the reimbursement rate that such a payor will pay for the drug product.
Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. 24 Moreover, the process for determining whether a third-party payor will provide coverage for a drug product may be separate from the process for setting the price of a drug product or for establishing the reimbursement rate that such a payor will pay for the drug product.
For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, see the section titled “Risk Factors—Risks related to intellectual property.” Trademarks Our trademark portfolio contains several trademark applications and registrations, including U.S. and foreign, as of December 31, 2023.
For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, see the section titled “Risk Factors—Risks related to intellectual property.” Trademarks Our trademark portfolio contains several trademark applications and registrations, including U.S. and foreign, as of December 31, 2024.
The issued U.S. patent has an expected expiration date of March 2037, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2037 and 2041, excluding any potentially available patent term extensions or adjustments.
The issued U.S. patents have an expected expiration date of March 2037, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2037 and 2041, excluding any potentially available patent term extensions or adjustments.
In addition to the intended effect 7 of lowering liver lipid levels in MASH patients, lowering serum lipid levels via THR‑ agonism may also have favorable consequences in this population, which has a high rate of underlying cardiovascular disease.
In addition to the intended effect of lowering liver lipid levels in MASH patients, lowering serum lipid levels via THR‑ b agonism may also have favorable cardiovascular consequences in this population, which has a high rate of underlying cardiovascular disease.
Two orally available therapeutics have been authorized for emergency use for the outpatient treatment of COVID-19, but both have important limitations related to sub-optimal efficacy (molnupiravir, a nucleoside analog; Merck) or the need for ritonavir boosting (PF-07321332/nirmatrelvir, a protease inhibitor; Pfizer).
Two orally available therapeutics have been authorized for the outpatient treatment of COVID-19, but both have important limitations related to sub-optimal efficacy (molnupiravir, a nucleoside analog; Merck) or the need for ritonavir boosting (PF‑07321332/nirmatrelvir, a viral protease inhibitor; Pfizer).
In addition, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, beginning January 1, 2024.
In addition, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024.
The SEC maintains a site on the worldwide web that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. 32
The SEC maintains a site on the worldwide web that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. 27
Coronaviruses—ALG-097558 and additional potential drug candidates We own a patent family that includes two issued U.S. patents, one non-provisional U.S. application, one PCT application and one foreign application all of which have claims directed to compositions of matter and method of use, including for ALG‑097558, our lead drug candidate for the treatment of coronavirus.
Coronaviruses—ALG-097558 and additional potential drug candidates We own a patent family that includes one issued U.S. patent, one non-provisional U.S. application, and 26 foreign patent application all of which have claims directed to compositions of matter and method of use, including for ALG‑097558, our lead drug candidate for the treatment of coronavirus.
Hepatitis B—ALG‑000184 and additional potential drug candidates We own a patent family that includes two issued U.S. patents, one non-provisional U.S. patent application, and 31 applications pending across multiple jurisdictions that have claims directed to composition of matter, including for ALG‑000184 (our lead CAM-E molecule), pharmaceutical composition and method of use claims.
Drug candidate intellectual property Hepatitis B—ALG‑000184 and additional potential drug candidates We own a patent family that includes 2 issued U.S. patents, one non-provisional U.S. patent application, and 31 applications pending across multiple jurisdictions that have claims directed to composition of matter, including for ALG‑000184 (our lead CAM-E molecule), pharmaceutical composition and method of use claims.
We may opportunistically explore additional licensing agreements, collaborations or partnerships to develop our drug candidates in larger market indications where we could accelerate development utilizing the resources of larger biopharmaceutical companies, or to commercialize them in specific geographies.
We may opportunistically explore additional licensing agreements, collaborations or partnerships to develop our drug candidates in larger market indications where we could accelerate development utilizing the resources of larger biopharmaceutical companies, or to commercialize them in specific geographies. • Expanding our development capabilities and pipeline.
The expected expiration dates of our issued patents are between 2039 and 2042, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2039 to 2043, excluding any potentially available patent term extensions and/or patent term adjustments.
The expected expiration dates of our issued patents are between 2040 and 2042, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2040 to 2044, excluding any potentially available patent term extensions and/or patent term adjustments.
Specifically, antiviral activity data demonstrated that 300 mg ALG-000184 + ETV resulted in profound reductions in HBV DNA which were superior to that achieved with ETV alone (Figure 8). Furthermore, the extent of HBV DNA suppression was similar whether ALG-000184 was dosed alone or in combination with ETV, potentially indicating ETV did not meaningfully contribute to observed DNA lowering effects.
Specifically, antiviral activity data demonstrated that 300 mg ALG‑000184 monotherapy resulted in 3 profound reductions in HBV DNA which were greater than achieved with ETV alone (Figure 3). Furthermore, the extent of HBV DNA suppression was similar whether ALG‑000184 was dosed alone or in combination with ETV, potentially indicating ETV did not meaningfully contribute to observed HBV DNA lowering effects.
The prodrug of ALG‑001075, ALG‑000184, has been evaluated as single and multiple doses in HVs and CHB subjects and been found to be well tolerated, with favorable PK, and substantial antiviral activity.
The prodrug of ALG‑001075, ALG‑000184, has been evaluated as single and multiple doses in HVs and subjects with chronic HBV infection and been found to be well tolerated, with favorable PK, and substantial antiviral activity.
Drug candidates like resmetirom, which preferentially binds the THR‑ subtype, have been shown in clinical trials to lower lipid levels in serum and the liver, while avoiding the unwanted effects associated with THR-α stimulation.
Drugs like resmetirom, which preferentially binds the THR‑ b subtype, have been shown in clinical trials to lower lipid levels in serum and the liver, while avoiding the unwanted effects associated with THR-α stimulation.
Good faith negotiations between us and Merck would be performed to enact a transition plan. In February 2023, Merck provided us written notice of termination for one of the targets in the collaboration.
Good faith negotiations between us and Merck would be performed to enact a transition plan. In February 2023 and May 2024, Merck provided us written notice of termination for both of the targets in the collaboration.
These treatments do not lead to either a functional or a complete cure in the vast majority of patients, and in the case of nucleoside analogs, may require life-long treatment.
These treatments do not lead to either a functional or a complete cure in the vast majority of patients, and in the case of nucleos(t)ide analogs, may require life-long treatment.
This patent family also includes claims directed to combination treatment with our lead molecule with other modes of action drugs and drug candidates directed against CHB. Our issued U.S.
This patent family also includes claims directed to combination treatment with our lead molecule with other modes of action drugs and drug candidates directed against chronic HBV infection. Our issued U.S.
Emerging antiviral activity data also indicate that ALG-000184 may be inhibiting cccDNA establishment/replenishment (2nd MOA), which is an important component of maintaining the HBV life cycle and the disruption of which may enhance the rates of functional cure.
Antiviral activity data has also indicated that ALG‑000184 may be inhibiting cccDNA establishment (2nd MOA), which is an important component of maintaining the HBV life cycle and the disruption of which may enhance the rates of functional cure.
CHB competitors Current FDA-approved treatments for chronic HBV infection include peg-IFNα, marketed by Roche Holding AG (Roche), and oral antiviral agents such as nucleoside analogs, marketed by Gilead Sciences, Inc. (Gilead) and Bristol-Myers Squibb Company.
Chronic HBV infection competitors Current FDA-approved treatments for chronic HBV infection include peg-IFNα, marketed by Roche Holding AG (Roche), and oral antiviral agents such as nucleos(t)ide analogs, marketed by Gilead Sciences, Inc. (Gilead) and Bristol-Myers Squibb Company.
Licensed intellectual property Emory University We have licensed exclusive rights to a patent estate from Emory in the CAM-E chemical space, consisting of two issued U.S. patents, one pending non-provisional U.S. patent application as well as 13 issued foreign patents and 29 foreign patent applications.
Licensed intellectual property Emory University We have licensed exclusive rights to a patent estate from Emory in the CAM-E chemical space, consisting of 2 issued U.S. patents, one pending non-provisional U.S. patent application as well as 16 issued foreign patents and 22 foreign patent applications.
Regarding our owned patent portfolio, as of December 31, 2023, we own 22 issued U.S. patents, 27 U.S. non-provisional patent applications, 6 U.S. provisional patent applications (excluding any non-expired U.S. provisional applications to which priority has already been claimed), 17 PCT applications, 2 issued foreign patents and 269 foreign patent applications, including pending applications in the Arab Emirates, ARIPO, Argentina, Australia, Brazil, Canada, Chile, China, Colombia, Eurasia, Egypt, the EU, Georgia, Indonesia, Israel, India, Japan, South Korea, Malaysia, Mexico, New Zealand, OAPI, Peru, Philippines, Russian Federation, Singapore, Thailand, Taiwan, Ukraine, Uzbekistan and South Africa.
Regarding our owned patent portfolio, as of December 31, 2024, we own 30 issued U.S. patents, 17 U.S. non-provisional patent applications, 8 U.S. provisional patent applications (excluding any non-expired U.S. provisional applications to which priority has already been claimed), 13 PCT applications, 14 issued foreign patents and 243 foreign patent applications, including pending applications in the Arab Emirates, ARIPO, Argentina, Australia, Brazil, Canada, Chile, China, Colombia, Eurasia, Egypt, the EU, Georgia, Indonesia, Israel, India, Japan, South Korea, Malaysia, Mexico, New Zealand, OAPI, Peru, Philippines, Russian Federation, Singapore, Thailand, Taiwan, Ukraine, Uzbekistan and South Africa.
For our drug candidates, we have filed and licensed certain patent applications and we generally intend to pursue patent protection covering compositions of matter, methods of making, and methods of use of such drug candidates. As of December 31, 2023, we own 5 U.S. patents with claims directed to ALG-000184, ALG-055009, ALG-125755 and ALG-097558.
For our drug candidates, we have filed and licensed certain patent applications and we generally intend to pursue patent protection covering compositions of matter, methods of making, form and formulation, and methods of use of such drug candidates. As of December 31, 2024, we own 7 U.S. patents with claims directed to either ALG‑000184, ALG‑055009, ALG‑125755 and ALG‑097558.
Item 1. B usiness. Overview We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of metabolic dysfunction associated steatohepatitis (MASH), chronic hepatitis B (CHB) and coronavirus (e.g., SARS-CoV-2 and related infections).
Item 1. B usiness. Overview We are a clinical-stage biotechnology company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of chronic hepatitis B virus (HBV) infection, metabolic dysfunction-associated steatohepatitis (MASH), and coronavirus infections (e.g., SARS‑CoV‑2, SARS‑CoV, MERS‑CoV, and other related infections).
With respect to licensed products which do not contain such compounds, the royalties span a range of percentage rates within the mid-single digits if a Phase 1 clinical trial is initiated for the product within three years of the effective date of the Emory License Agreement, and range from a low-single digit to a mid-single digit rate if a Phase 1 clinical trial is initiated more than three years after the effective date.
With respect to licensed products which do not contain such compounds, the royalties span a range of percentage rates within the mid-single digits if a Phase 1 clinical trial is initiated for the product within three years of the effective date of the Emory License Agreement, and range from a low-single digit to a mid-single digit rate if a Phase 1 clinical trial is initiated more than three years after the effective date. 13 The Emory License Agreement will expire upon expiration of the last-to-expire patent licensed to us thereunder.
Coronaviruses We have one allowed U.S. patent application, four U.S. non-provisional patent applications, four PCT applications and 22 foreign applications that include claims directed to compositions of matter, pharmaceutical compositions, and methods of use for treating coronaviruses. Some of these applications are co-owned by Aligos 22 and a collaborator.
Coronaviruses We have 2 allowed U.S. patent application, 4 U.S. non-provisional patent applications, 2 US provisional patent applications, 4 PCT applications and 25 foreign applications that include claims directed to compositions of matter, pharmaceutical compositions, and methods of use for treating coronaviruses. Some of these applications are co-owned by Aligos and a collaborator.
ALG‑000184 (CAM-E) for CHB CAM-Es are a class of small molecule antiviral agents that accelerate HBV capsid assembly and inhibit pgRNA encapsidation (1st MOA), resulting in lower circulating HBV pgRNA and DNA levels and empty viral capsids.
CAM‑Es are a class of small molecule antiviral agents that accelerate HBV capsid assembly and inhibit pgRNA encapsidation (1st MOA), resulting in empty viral capsids and lower circulating HBV DNA and RNA levels.
Our drug candidate, ALG‑097558, is at least 6-fold more potent in cell-based assays than nirmatrelvir against a panel of SARS-CoV-2 variants (including Omicron), has broad pan-coronavirus activity, and is not projected to require ritonavir boosting.
Our drug candidate, ALG‑097558, is 3-fold more potent in cell-based assays than nirmatrelvir against a panel of SARS‑CoV‑2 variants (including Omicron), has broad pan-coronavirus activity, and does not require ritonavir boosting.
CAM‑Es are also believed to regulate the establishment/replenishment of cccDNA (2nd MOA), a major factor for the persistence of HBV infection and which is detectable by circulating HBV antigen levels (HBsAg, HBcrAg, and HBeAg).
CAM‑Es are also believed to regulate the establishment of cccDNA (2nd MOA), a major factor for the persistence of HBV infection which can be assessed by circulating HBV antigen levels (HBsAg, HBcrAg, and HBeAg).
(together with GlaxoSmithKline plc (GSK)), Arrowhead Pharmaceuticals, Inc. (together with Janssen Pharmaceuticals, Inc. (Janssen)), and Vir Biotechnology, Inc. (together with Alnylam Pharmaceuticals, Inc.). Several companies are developing CAM-Es, including Johnson & Johnson, Assembly Biosciences Inc., Arbutus Biopharma Corporation, Roche and Enanta Pharmaceuticals.
(together with GlaxoSmithKline plc (GSK)), Arrowhead Pharmaceuticals, Inc. (together with Janssen Pharmaceuticals, Inc. (Janssen)), and Vir Biotechnology, Inc. (together with Alnylam Pharmaceuticals, Inc.). Several companies are developing CAM-Es, including Assembly Biosciences Inc. and Enanta Pharmaceuticals.
These patent families also disclose combination therapies with our lead molecule. Our issued U.S. Patent 1,1091,467 21 is expected to expire in May 2040, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2040 and 2043, excluding any potentially available patent term extensions or patent term adjustments.
These patent families also disclose combination therapies with our lead molecule. Our issued U.S. Patents 1,1091,467 and 12,180,192 are expected to expire in May 2040, and any patents that issue from our non-provisional U.S. application is expected to expire between 2040 and 2044, excluding any potentially available patent term extensions or patent term adjustments.
Several companies, including Altimmune, Inc., GSK, Janssen and Transgene SA, are developing therapeutic vaccines for HBV, and several others have approved HBV vaccines, including Dynavax Technologies, Inc., GSK, Johnson & Johnson, and Merck. Replicor, Inc. is developing nucleic acid polymers (NAPs) for use in CHB patients.
Several companies, including GSK and Janssen, are developing therapeutic vaccines for HBV, and several others have approved HBV vaccines, including Dynavax Technologies, Inc., GSK, Johnson & Johnson, and Merck. Replicor, Inc. is developing nucleic acid polymers (NAPs) for use in patients with chronic HBV infection.
Several approved drugs are being studied for their utility in reducing the severity of SARS-CoV-2 infections, including Soliris by Alexion Pharmaceuticals Inc., Atea Pharmaceuticals, Inc. , Jakafi by Incyte Corporation, and Kevzara by Sanofi S.A./Regeneron Pharmaceuticals, Inc. There are significant efforts globally to develop both therapeutic and 16 prophylactic drug candidates including by Enanta Pharmaceuticals, Pardes Biosciences, Novartis, and Shionogi.
Several approved drugs are being studied for their utility in reducing the severity of SARS-CoV-2 infections, including Soliris by Alexion Pharmaceuticals Inc. and Jakafi by Incyte Corporation. There are significant efforts globally to develop both therapeutic and prophylactic drug candidates including by Enanta Pharmaceuticals and Shionogi.
Several large and small pharmaceutical companies are developing programs with various mechanisms of action, to be used alone or in combination, with the goal of achieving higher rates of functional or complete cure in patients with CHB. Companies with oligonucleotide agents in clinical development include Arbutus Biopharma Corporation, Dicerna Pharmaceuticals, Inc. (together with Roche), Ionis Pharmaceuticals, Inc.
Several large and small pharmaceutical companies are developing programs with various mechanisms of action, to be used alone or in combination, with the goal of achieving higher rates of viral suppression or functional cure in patients with chronic HBV infection. Companies with oligonucleotide agents in clinical development include Arbutus Biopharma Corporation, Ionis Pharmaceuticals, Inc.
At these conferences, data were presented that showed ALG‑055009 was well tolerated, had dose proportional PK and low variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones) – see Figures 6 and 7.
At these conferences, data were presented that showed ALG‑055009 was well tolerated, had dose proportional PK and low variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones without any clinical evidence of thyroid dysfunction).
Discovery pipeline intellectual property MASH We have four issued U.S. patents, two U.S. non-provisional patent applications and 35 foreign patent applications that include claims directed to compositions of matter and methods of use with our additional drug candidates for the treatment of MASH. These applications also disclose combination therapies with our drug candidates and other compounds for treating MASH.
MASH We have 4 issued U.S. patents and 4 foreign patent applications that include claims directed to compositions of matter and methods of use with our additional drug candidates for the treatment of MASH. These applications also disclose combination therapies with our drug candidates and other compounds for treating MASH.
Among the ACA’s provisions of importance to the pharmaceutical industry, in addition to those otherwise described above, are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively, and a cap on the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price (AMP); • a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, including individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; 30 • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Among the ACA’s provisions of importance to the pharmaceutical industry, in addition to those otherwise described above, are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively, and a cap on the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price (AMP); • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, including individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. 25 Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.
Our lead candidate, ALG‑097558, is at least 6-fold more potent than nirmatrelvir and other PIs in clinical development in cell-based assays against a panel of SARS-CoV-2 variants (including Omicron). It also demonstrates broad pan-coronavirus activity, and based on emerging clinical data, is not projected to require ritonavir boosting.
ALG‑097558 is our lead protease inhibitor (PI) and is 3-fold more potent than nirmatrelvir and other PIs in clinical development in cell-based assays against a panel of SARS‑CoV‑2 variants (including Omicron). It also demonstrates broad pan-coronavirus activity, and based on clinical data, does not require ritonavir boosting.
Hepatitis B We own multiple additional patent families of applications that include claims directed to compositions of matter, pharmaceutical compositions and methods of use for the treatment of CHB with our additional drug candidates.
Discovery pipeline intellectual property Hepatitis B We own multiple additional patent families of applications that include claims directed to compositions of matter, pharmaceutical compositions and methods of use for the treatment of chronic HBV infection with our additional drug candidates.
Failure to comply with applicable FDA or other requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA clinical holds, refusal to approve pending applications, withdrawal of an approval, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution. 23 The process required by the FDA before drug candidates may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies, where all supporting safety and toxicity studies are performed in accordance with the FDA’s Good Laboratory Practice (GLP) regulations; • submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made; • approval by an independent institutional review board (IRB), representing each clinical site before a clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (GCP) regulations to establish the safety and efficacy of the product candidate for each proposed indication; • preparation of and submission to the FDA of a new drug application (NDA); • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility(ies) where the product is manufactured to assess compliance with current good manufacturing practice (cGMP) regulations, and of selected clinical investigation sites to assess compliance with GCP; and • FDA review and approval of an NDA to permit commercial marketing of the product for its particular labeled uses in the United States.
The process required by the FDA before drug candidates may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies, where all supporting safety and toxicity studies are performed in accordance with the FDA’s Good Laboratory Practice (GLP) regulations; • submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made; 18 • approval by an independent institutional review board (IRB), representing each clinical site before a clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (GCP) regulations to establish the safety and efficacy of the product candidate for each proposed indication; • preparation of and submission to the FDA of a new drug application (NDA); • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility(ies) where the product is manufactured to assess compliance with current good manufacturing practice (cGMP) regulations, and of selected clinical investigation sites to assess compliance with GCP; and • FDA review and approval of an NDA to permit commercial marketing of the product for its particular labeled uses in the United States.
Luxna We have licensed rights to a patent estate from Luxna in the oligonucleotide chemical space, consisting of six issued U.S. patents, one non-provisional U.S. patent application and 15 issued foreign patents and four foreign patent applications.
Luxna We have licensed rights to a patent estate from Luxna in the oligonucleotide chemical space, consisting of 7 issued U.S. patents, and 15 issued foreign patents and 3 foreign patent applications.
Early-stage discovery efforts In addition to our development stage drug candidates, we are pursuing backup candidates in order to create a robust portfolio of assets which we can draw upon to create an optimized combination regimen for treatment in all of our disease areas of interest.
We are also pursuing backup candidates in order to create a robust portfolio of assets which we can draw upon to create an optimized regimen for treatment in all of our disease areas of interest.
This patent family also discloses combination therapies with our lead molecule. Our issued U.S patent 11,851,422 expires in 2042, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire in 2042, excluding any potentially available patent term extensions or adjustments.
This patent family also discloses combination therapies with our lead molecule. Our issued U.S patent 11,851,422 expires in 2042, and any patent that issues from our non-provisional patent application is expected to expire in 2042, excluding any potentially available patent term extension or adjustment.
Currently, we are initiating a Phase 2a proof of concept study (HERALD) under an amendment to an open investigational new drug application (IND). The study’s design is a 12-week randomized, placebo-controlled trial evaluating 4 doses of ALG-055009 vs. placebo in approximately 100 subjects with presumed liver fibrosis stage 1-3 (F1-F3) MASH.
We completed a Phase 2a proof of concept study (HERALD) under an amendment to an open investigational new drug application (IND) in 2024. The study was designed as a 12‑week randomized, double‑blind, placebo‑controlled trial evaluating 4 doses of ALG‑055009 vs. placebo in 102 subjects with presumed liver fibrosis stage 1-3 (F1-F3) MASH.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a drug, complete withdrawal of the drug from the market or drug recalls; • fines, warning or untitled letters or holds on post-approval clinical studies; 28 • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing drug approvals; • drug seizure or detention, or refusal of the FDA to permit the import or export of drugs; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a drug, complete withdrawal of the drug from the market or drug recalls; • fines, warning or untitled letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing drug approvals; • drug seizure or detention, or refusal of the FDA to permit the import or export of drugs; or • injunctions or the imposition of civil or criminal penalties. 23 The FDA may also require post-approval studies and clinical trials if the FDA finds that scientific data, including information regarding related drugs, deem it appropriate.
Our team’s collective experience and success in discovering and developing drugs targeting MASH and viruses, combined with our in-house expertise in small molecule and oligonucleotide drug discovery, gives us a differentiated set of capabilities, which has enabled us to rapidly establish a robust pipeline of multiple novel drug candidates, as summarized in the pipeline chart below.
Our team’s collective experience and success in discovering and developing drugs targeting liver and viral diseases, combined with our in-house expertise in drug discovery, gives us a differentiated set of capabilities, which has enabled us to rapidly establish a robust pipeline of multiple novel drug candidates.
New competitors may emerge, smaller or early-stage companies may grow, either on their own or through collaborative arrangements with large and established companies and competitors may concentrate through mergers and acquisitions. MASH competitors There currently are no FDA-approved treatments for MASH.
New competitors may emerge, smaller or early-stage companies may grow, either on their own or through collaborative arrangements with large and established companies and competitors may concentrate through mergers and acquisitions.
Our principal executive offices are located at One Corporate Dr., 2nd Floor, South San Francisco, California 94080, and our telephone number is (800) 466-6059. Our website address is www.aligos.com .
Corporate information We were founded in February 2018 as a Delaware corporation. Our principal executive offices are located at One Corporate Dr., 2nd Floor, South San Francisco, California 94080, and our telephone number is (800) 466-6059. Our website address is www.aligos.com .
Several companies are focused on antibody treatments, including Amgen Inc. (together with Adaptive Biotechnologies Corporation), AbCellera Biologics, Inc. (together with Eli Lilly and Company), Regeneron Pharmaceuticals, Inc. and Vir Biotechnology, Inc. (together with GSK, Biogen Inc. and WuXi Biologics Ltd.).
Several companies are focused on antibody treatments, including Regeneron Pharmaceuticals, Inc. and Vir Biotechnology, Inc. (together with GSK, Biogen Inc. and WuXi Biologics Ltd.).
We have exclusively licensed proprietary technologies that enhance our oligonucleotide platform. These technologies include third generation bridged nucleic acid (BNA) and N-acetylgalactosamine (GalNAc) chemistries, which can improve liver targeting, increase potency, and enhance pharmacokinetic properties. Small interfering RNAs (siRNAs) siRNAs are a class of double-stranded, non-coding RNA that interferes with viral replication by silencing gene expression.
These technologies include third generation bridged nucleic acid (BNA) and N-acetylgalactosamine (GalNAc) chemistries, which can improve liver targeting, increase potency, and enhance pharmacokinetic properties. Small interfering RNAs (siRNAs) siRNAs are a class of double-stranded, non-coding RNA that can interfere with viral replication by silencing gene expression. Multiple siRNAs have demonstrated significant reductions in HBsAg levels in clinical trials.
The issued U.S. patents are expected to expire between October 2030 and February 2038, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire between 2035 and 2038, excluding any potentially available patent term extensions or adjustments.
Our issued patents and any patents that issue from our U.S. non-provisional or foreign patent applications in these patent families are expected to expire between 2040 to 2044, excluding any potentially available patent term extensions or patent term adjustments.
Our issued U.S. patent 11,549,110 is projected to expire in March 2041, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire in 2041, excluding any additional term from a potential patent term extension or adjustment.
Our issued U.S. patents 11,549,110 and 12,129,469 are projected to expire in March 2041, excluding any additional term from a potential patent term extension or adjustment.
ALG‑000184: Potential best-in-class small molecule CAM-E for CHB CHB is the most common viral infection in the world and an area of substantial unmet medical need. There are over 296 million chronic carriers worldwide and approximately 1.5 million individuals become newly infected every year despite the availability of an efficacious prophylactic vaccine.
Figure 1: Aligos Development Pipeline 1 Chronic HBV Infection Chronic HBV infection is the most common viral infection in the world and an area of substantial unmet medical need. There are over 296 million chronic carriers worldwide and approximately 1.5 million individuals become newly infected every year despite the availability of an efficacious prophylactic vaccine.
Patent, three non-provisional U.S. patents and 30 foreign patent applications pending across multiple jurisdictions that have claims directed to compositions of matter, including ALG‑125755, our lead siRNA candidate, and methods of use. This patent family also discloses combination therapies with our lead molecule.
Hepatitis B—ALG‑125755 and additional potential drug candidates We own a patent family that includes 2 issued U.S. Patents, 3 non-provisional U.S. patents and 30 foreign patent applications pending across multiple jurisdictions that have claims directed to compositions of matter and methods of use for ALG‑125755, our lead siRNA candidate. This patent family also discloses combination therapies with our lead molecule.
With respect to both our licensed and our owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any current patents or any patents that may be granted to us in the future will be commercially useful in protecting our platforms and drug candidates and the methods used to manufacture them.
Any patents that issue from our U.S. non-provisional and foreign patent applications are expected to expire from 2041 to 2044, excluding any potentially available patent term extensions or patent term adjustments. 17 With respect to both our licensed and our owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any current patents or any patents that may be granted to us in the future will be commercially useful in protecting our platforms and drug candidates and the methods used to manufacture them.
Oligonucleotides manufacturing Oligonucleotide manufacturing technology has matured significantly over the last several decades, with advanced oligonucleotide synthesizers commercially available to support smaller-scale synthesis, and a network of oligonucleotide contract manufacturers available to support larger-scale syntheses.
Like our approach for oligonucleotides, our internal CMC team conducts process development and optimization, and supports our contract manufacturers with technology transfer. 10 Oligonucleotides manufacturing Oligonucleotide manufacturing technology has matured significantly over the last several decades, with advanced oligonucleotide synthesizers commercially available to support smaller-scale synthesis, and a network of oligonucleotide contract manufacturers available to support larger-scale syntheses.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the drug within required specifications. Additionally, the FDA will typically inspect one or more clinical sites to assure that relevant trial data was obtained in compliance with GCP requirements.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the drug is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the drug within required specifications.
A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA may ultimately decide that an application does not satisfy the regulatory criteria for approval.
A complete response letter indicates that the review cycle of the application is complete, and the application is not ready for approval. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.
Our Approach to Research and Development Our small molecule and oligonucleotide platforms are designed to allow us to discover drug candidates that can be used to develop potentially best-in-class combination regimens.
To date, we have secured licenses for technology from Emory, Luxna and AM Chemicals, LLC (AM Chemicals). 8 Our Approach to Research and Development Our small molecule and oligonucleotide platforms are designed to allow us to discover drug candidates that can be used to develop potentially best-in-class regimens.
Preliminary data have been presented for several of these cohorts (Hou et al., EASL 2023, Yuen et al., AASLD 2023) and indicate that ALG‑000184 dosed for up to 48 weeks has shown to be well tolerated with a favorable PK profile and potentially best-in-class antiviral activity.
Preliminary data from several of these cohorts (Agarwal et al., EASL 2024; Yuen et al., AASLD 2024) have been presented, showing that ALG‑000184 (± ETV), administered for up to 92 weeks, was well tolerated, exhibited a favorable PK profile, and demonstrated potentially best‑in‑class antiviral activity.
As a condition of NDA approval, the FDA may require a Risk Evaluation and Mitigation Strategy (REMS) program to help ensure that the benefits of the drug outweigh its risks. If the FDA determines a REMS program is necessary, the drug sponsor must develop and submit a REMS as part of its NDA prior to approval.
If the FDA determines a REMS program is necessary, the drug sponsor must develop and submit a REMS as part of its NDA prior to approval.
We are also presently seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG-097558 for the treatment of COVID-19 and future coronavirus pandemics.
We are also seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG‑097558 for the treatment of COVID‑19 and future coronavirus pandemics. Early-stage discovery efforts In addition to our development stage drug candidates, we are targeting additional novel liver and viral targets with our drug discovery platform.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
Patents 11,191,747 and 11,771,680 are projected to expire in April 2040, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire in 2040, excluding any potentially available patent term extensions or adjustments. Hepatitis B—ALG‑125755 and additional potential drug candidates We own a patent family that includes one issued U.S.
Patents 11,191,747 and 11,771,680 are projected to expire in April 2040, and any patents that issue from our non-provisional U.S. and foreign patent applications are expected to expire in 2040, excluding any potentially available patent term extensions or adjustments. 16 MASH—ALG‑055009 and additional potential drug candidates We own a patent family that includes 2 issued U.S. patents, one U.S. non-provisional application, 2 U.S. provisional applications, one PCT application, 4 issued foreign applications and 28 foreign applications which have claims directed to compositions of matter, manufacturing, formulations and method of use for ALG‑055009, our lead drug candidate for the treatment of MASH.
Luxna’s rights to the intellectual property subject to the Luxna Agreement stem from an exclusive license (the Luxna-Osaka Agreement) from Osaka University (Osaka) for certain rights pertaining to modifications of XNA and other gapmer technologies covered by the licensed patents.
We are also required to pay Luxna a low-single digit royalty percentage on net sale of applicable products, if any. Luxna’s rights to the intellectual property subject to the Luxna Agreement stem from an exclusive license (the Luxna-Osaka Agreement) from Osaka University (Osaka) for certain rights pertaining to modifications of XNA and other gapmer technologies covered by the licensed patents.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFuture growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining and motivating additional employees; • managing our internal development efforts effectively, including the clinical and FDA review process for our current drug candidates and any other drug candidate we develop, while complying with our contractual obligations to contractors and other third parties; and • expanding and enhancing our operational, financial and management controls, reporting systems and procedures.
Biggest changeFuture growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining and motivating additional employees; • managing our internal development efforts effectively, including the clinical and FDA review process for our current drug candidates and any other drug candidate we develop, while complying with our contractual obligations to contractors and other third parties; and • expanding and enhancing our operational, financial and management controls, reporting systems and procedures. 74 Our future financial performance and our ability to advance development of and, if approved, commercialize our current drug candidates and any other drug candidate we develop will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
Certain potential patients may have or develop a resistance to our potential therapies or otherwise be unable to be treated with our potential therapies for COVID-19, HBV or other viral diseases as a result of their genetic makeup.
Certain potential patients may have or develop a resistance to our potential therapies or otherwise be unable to be treated with our potential therapies for HBV, COVID-19 or other viral diseases as a result of their genetic makeup.
The availability of such COVID-19 vaccines and each of Pfizer’s and Merck’s oral COVID-19 drug may reduce or eliminate the need for our potential COVID therapies to treat the disease and therefore negatively impact the commercial opportunity.
The availability of such COVID-19 vaccines and each of Pfizer’s and Merck’s oral COVID-19 drug may reduce or eliminate the need for our potential COVID-19 therapies to treat the disease and therefore negatively impact the commercial opportunity.
While we own some issued or allowed patents with respect to our programs, including our CHB and MASH programs, we do not own or in-license any issued patents with claims that specifically recite our ALG-125755 or ALG-097558 drug candidates.
While we own some issued or allowed patents with respect to our programs, including our CHB and MASH programs, we do not own or in-license any issued patents with claims that specifically recite our ALG-097558 or ALG-125755 drug candidates.
These provisions include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; 85 • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by our chief executive officer or, in the absence of a chief executive officer, president or by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by our chief executive officer or, in the absence of a chief executive officer, president or by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
We expect that we are or will be subject to additional risks related to these international business markets and relationships, including: • different regulatory requirements for approval of drug candidates in foreign countries, including challenging processes for marketing biopharmaceutical products; • reduced protection for and enforcement of intellectual property rights; • heightened or different data privacy and information security laws, regulations and policies; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; 51 • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities; • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires; and • disruptions resulting from the impact of public health pandemics or epidemics (including, for example, the COVID-19 pandemic).
We expect that we are or will be subject to additional risks related to these international business markets and relationships, including: • different regulatory requirements for approval of drug candidates in foreign countries, including challenging processes for marketing biopharmaceutical products; • reduced protection for and enforcement of intellectual property rights; • heightened or different data privacy and information security laws, regulations and policies; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities; • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires; and • disruptions resulting from the impact of public health pandemics or epidemics (including, for example, the COVID-19 pandemic).
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; 46 • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the drug candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents for participation in our clinical trials and, where appropriate, biopsies for future patient enrichment efforts; • the risk that patients enrolled in clinical trials will not remain in the trial through the completion of evaluation; and • disruption by man-made or natural disasters, or public health pandemics or epidemics or other business interruptions.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the drug candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents for participation in our clinical trials and, where appropriate, biopsies for future patient enrichment efforts; • the risk that patients enrolled in clinical trials will not remain in the trial through the completion of evaluation; and • disruption by man-made or natural disasters, or public health pandemics or epidemics or other business interruptions.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statutes or specific intent to violate them; • the Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiology assistants and certified nurse-midwives) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the 68 relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and healthcare laws in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statutes or specific intent to violate them; 62 • the Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiology assistants and certified nurse-midwives) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and healthcare laws in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
The commencement and rate of completion of nonclinical studies and clinical trials for a drug candidate may be delayed by many factors, including: 40 • inability or failure by us or third parties to comply with regulatory requirements, including the requirements of good laboratory practice (GLP); • inability to generate sufficient nonclinical or other in vivo or in vitro data to support the initiation of clinical studies; • delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; • obtaining sufficient quantities of our drug candidates for use in nonclinical studies and clinical trials from third-party suppliers on a timely basis; and • delays due to other global-scale potentially catastrophic events, including other public health pandemics or epidemics, terrorism, war, and climate changes.
The commencement and rate of completion of nonclinical studies and clinical trials for a drug candidate may be delayed by many factors, including: • inability or failure by us or third parties to comply with regulatory requirements, including the requirements of good laboratory practice (GLP); • inability to generate sufficient nonclinical or other in vivo or in vitro data to support the initiation of clinical studies; • delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; • obtaining sufficient quantities of our drug candidates for use in nonclinical studies and clinical trials from third-party suppliers on a timely basis; and • delays due to other global-scale potentially catastrophic events, including other public health pandemics or epidemics, terrorism, war, and climate changes.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: 35 • the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to time; • the timing and status of enrollment for our clinical trials; • the timing of regulatory approvals, if any, in the United States and internationally; • the timing of expanding our operational, financial and management systems and personnel, including personnel to support our clinical development, quality control, manufacturing and commercialization efforts and our operations as a public company; • the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity produced, and the terms of any agreements we enter into with third-party suppliers; • the timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement, including our existing license agreements with Emory University (Emory) and KU Leuven; • coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products; • the timing and cost to establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with current or future collaborators; • expenditures that we may incur to acquire, develop or commercialize additional products and technologies; • expenditures that we may incur in any lawsuits related to our drug candidates or commenced against us; • the level of demand for any future approved products, which may vary significantly over time; • future accounting pronouncements or changes in accounting principles or our accounting policies; and • the timing and success or failure of nonclinical studies and clinical trials for our drug candidates or competing drug candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: • the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to time; • the timing and status of enrollment for our clinical trials; • the timing of regulatory approvals, if any, in the United States and internationally; 30 • the timing of expanding our operational, financial and management systems and personnel, including personnel to support our clinical development, quality control, manufacturing and commercialization efforts and our operations as a public company; • the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity produced, and the terms of any agreements we enter into with third-party suppliers; • the timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement, including our existing license agreements with Emory University (Emory) and KU Leuven; • coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products; • the timing and cost to establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with current or future collaborators; • expenditures that we may incur to acquire, develop or commercialize additional products and technologies; • expenditures that we may incur in any lawsuits related to our drug candidates or commenced against us; • the level of demand for any future approved products, which may vary significantly over time; • future accounting pronouncements or changes in accounting principles or our accounting policies; and • the timing and success or failure of nonclinical studies and clinical trials for our drug candidates or competing drug candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners.
The degree of market acceptance of any drug candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the ability to obtain sufficient third-party coverage and adequate reimbursement, including with respect to the use of the approved product as a combination therapy; • adoption of a companion diagnostic and/or complementary diagnostic (if any); and • the prevalence and severity of any side effects.
The degree of market acceptance of any drug candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; 43 • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the ability to obtain sufficient third-party coverage and adequate reimbursement, including with respect to the use of the approved product as a combination therapy; • adoption of a companion diagnostic and/or complementary diagnostic (if any); and • the prevalence and severity of any side effects.
Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; • fines, untitled and warning letters, or holds on clinical trials; • refusal by the FDA or other regulatory authorities to approve pending applications or supplements to approved applications we filed or suspension or revocation of license approvals; • product seizure or detention, or refusal to permit the import or export of the product; and 50 • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; • fines, untitled and warning letters, or holds on clinical trials; • refusal by the FDA or other regulatory authorities to approve pending applications or supplements to approved applications we filed or suspension or revocation of license approvals; • product seizure or detention, or refusal to permit the import or export of the product; and • injunctions or the imposition of civil or criminal penalties.
Collaborations involving our current and future drug candidates may pose the following risks to us: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products (if any) or drug candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or may otherwise not perform satisfactorily in carrying out these activities; 63 • collaborators may not properly prosecute, maintain, enforce or defend our intellectual property rights or may use our proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation, or other intellectual property proceedings; • collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we may not have the exclusive right to develop, license or commercialize such intellectual property; • disputes may arise with respect to ownership of any intellectual property developed pursuant to our collaborations; • disputes may arise between a collaborator or strategic partner and us that cause the delay or termination of the research, development or commercialization of the drug candidate, or that result in costly litigation or arbitration that diverts management attention and resources; and • if a current or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated.
Collaborations involving our current and future drug candidates may pose the following risks to us: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products (if any) or drug candidates; 57 • a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or may otherwise not perform satisfactorily in carrying out these activities; • collaborators may not properly prosecute, maintain, enforce or defend our intellectual property rights or may use our proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation, or other intellectual property proceedings; • collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we may not have the exclusive right to develop, license or commercialize such intellectual property; • disputes may arise with respect to ownership of any intellectual property developed pursuant to our collaborations; • disputes may arise between a collaborator or strategic partner and us that cause the delay or termination of the research, development or commercialization of the drug candidate, or that result in costly litigation or arbitration that diverts management attention and resources; and • if a current or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated.
Disputes may arise between us and our licensing partners regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which technology and processes of one party infringe intellectual property of the other party that are not subject to the licensing agreement; • rights to sublicense patent and other rights to third parties; • any diligence obligations with respect to the use of the licensed technology in relation to development and commercialization of our drug candidates, and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property; • rights to transfer or assign the license; and • the effects of termination.
Disputes may arise between us and our licensing partners regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; 66 • whether and the extent to which technology and processes of one party infringe intellectual property of the other party that are not subject to the licensing agreement; • rights to sublicense patent and other rights to third parties; • any diligence obligations with respect to the use of the licensed technology in relation to development and commercialization of our drug candidates, and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property; • rights to transfer or assign the license; and • the effects of termination.
We may also experience numerous unforeseen events prior to, during, or as a result of our nonclinical studies or clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the drug candidates we develop, including: • regulators, Institutional Review Boards (IRBs) or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations (CROs); • the number of patients required for clinical trials may be larger than we anticipate; 42 • it may be difficult to enroll a sufficient number of suitable patients, or enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require us to add new clinical trial sites or investigators; • the supply or quality of materials for drug candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and • we may experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions.
We may also experience numerous unforeseen events prior to, during, or as a result of our nonclinical studies 36 or clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the drug candidates we develop, including: • regulators, Institutional Review Boards (IRBs) or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations (CROs); • the number of patients required for clinical trials may be larger than we anticipate; • it may be difficult to enroll a sufficient number of suitable patients, or enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require us to add new clinical trial sites or investigators; • the supply or quality of materials for drug candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and • we may experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions.
The success of our current and future drug candidates will depend on many factors, which may include the following: • sufficiency of our financial and other resources to complete the necessary nonclinical studies and clinical trials, and our ability to raise any additional required capital on acceptable terms, or at all; • our ability to develop and successfully utilize our drug discovery platforms; • the timely and successful completion of our nonclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • acceptance of investigational new drug applications (INDs), clinical trial applications (CTAs) and/or similar applications in other jurisdictions for our planned and future clinical trials; • whether we are required by the FDA or a comparable foreign regulatory agency to conduct additional clinical trials or other studies beyond those planned to support approval of our drug candidates; • successful enrollment and completion of clinical trials; • successful data from our clinical program that supports an acceptable risk-benefit profile of our drug candidates in the intended populations; • receipt and maintenance of marketing approvals from applicable regulatory authorities; • establishing agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our drug candidates are approved; • our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (cGMPs); 39 • entry into collaborations to further the development of our drug candidates in select indications or geographies; • obtaining, maintaining and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; • enforcing and defending our intellectual property rights and having and successfully executing an intellectual property life cycle management strategy that supports long-term product development and commercialization goals; • obtaining and maintaining regulatory exclusivity for our drug candidates; • successfully launching commercial sales of our drug candidates, if approved; • acceptance of the drug candidate’s benefits and uses, if approved, by patients, the medical community and third-party payors; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our drug candidates following approval; • effectively competing with other therapies; and • obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors.
The success of our current and future drug candidates depends on many factors, which may include the following: • sufficiency of our financial and other resources to complete the necessary nonclinical studies and clinical trials, and our ability to raise any additional required capital on acceptable terms, or at all; • our ability to develop and successfully utilize our drug discovery platforms; • the timely and successful completion of our nonclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • acceptance of investigational new drug applications (INDs), clinical trial applications (CTAs) and/or similar applications in other jurisdictions for our planned and future clinical trials; • whether we are required by the FDA or a comparable foreign regulatory agency to conduct additional clinical trials or other studies beyond those planned to support approval of our drug candidates; • successful enrollment and completion of clinical trials; 33 • successful data from our clinical program that supports an acceptable risk-benefit profile of our drug candidates in the intended populations; • receipt and maintenance of marketing approvals from applicable regulatory authorities; • establishing agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our drug candidates are approved; • our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (cGMPs); • entry into collaborations to further the development of our drug candidates in select indications or geographies; • obtaining, maintaining and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; • enforcing and defending our intellectual property rights and having and successfully executing an intellectual property life cycle management strategy that supports long-term product development and commercialization goals; • obtaining and maintaining regulatory exclusivity for our drug candidates; • successfully launching commercial sales of our drug candidates, if approved; • acceptance of the drug candidate’s benefits and uses, if approved, by patients, the medical community and third-party payors; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our drug candidates following approval; • effectively competing with other therapies; and • obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors.
Our ability to generate revenue from product sales depends heavily on our and our current and potential future collaborators’ success in: • completing clinical and nonclinical development of drug candidates and programs and identifying and developing new drug candidates; • seeking and obtaining marketing approvals for any drug candidates that we develop; • launching and commercializing drug candidates for which we obtain marketing approval by establishing a sales force, marketing, medical affairs and distribution infrastructure or, alternatively, collaborating with a commercialization partner; • achieving adequate coverage and reimbursement by third-party payors for drug candidates that we develop; 33 • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for drug candidates that we develop, if approved; • obtaining market acceptance of drug candidates that we develop as viable treatment options; • technological and market developments; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations in such collaborations; • maintaining, protecting, enforcing and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; • defending against third-party interference, infringement or other intellectual property-related claims, if any; and • attracting, hiring and retaining qualified personnel.
Our ability to generate revenue from product sales depends heavily on our and our current and potential future collaborators’ success in: • completing clinical and nonclinical development of drug candidates and programs and identifying and developing new drug candidates; • seeking and obtaining marketing approvals for any drug candidates that we develop; • launching and commercializing drug candidates for which we obtain marketing approval by establishing a sales force, marketing, medical affairs and distribution infrastructure or, alternatively, collaborating with a commercialization partner; • achieving adequate coverage and reimbursement by third-party payors for drug candidates that we develop; 28 • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for drug candidates that we develop, if approved; • obtaining market acceptance of drug candidates that we develop as viable treatment options; • technological and market developments; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations in such collaborations; • maintaining, protecting, enforcing and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; • defending against third-party interference, infringement or other intellectual property-related claims, if any; and • attracting, hiring and retaining qualified personnel.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability 84 to use its pre-change net operating loss (NOL) carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss (NOL) carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations (collectively, Trade Laws), prohibit, among other matters, companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper 88 payments or anything else of value to or from recipients in the public or private sector.
U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations (collectively, Trade Laws), prohibit, among other matters, companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
Our future capital requirements depend on many factors, including: • the scope, progress, results and costs of researching and developing our drug candidates and programs, and of conducting nonclinical studies and clinical trials; • the timing of, and the costs involved in, obtaining marketing approvals for drug candidates we develop if clinical trials are successful; • the cost of commercialization activities for our current drug candidates, and any future drug candidates we develop, whether alone or in collaboration, including marketing, sales and distribution costs if our current drug candidates or any future drug candidate we develop is approved for sale; • the cost of manufacturing our current and future drug candidates for clinical trials in preparation for marketing approval and commercialization; • our ability to establish and maintain strategic licenses or other arrangements and the financial terms of such agreements including milestone payments to our licensors; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; 34 • any lawsuits related to our drug candidates or commenced against us; • the timing, receipt and amount of sales of, or profit share or royalties on, our future products, if any; • the emergence of competing therapies for hepatological indications and viral diseases and other adverse market developments; and • any acquisitions or in-licensing of other programs or technologies.
Our future capital requirements depend on many factors, including: • the scope, progress, results and costs of researching and developing our drug candidates and programs, and of conducting nonclinical studies and clinical trials; • the timing of, and the costs involved in, obtaining marketing approvals for drug candidates we develop if clinical trials are successful; • the cost of commercialization activities for our current drug candidates, and any future drug candidates we develop, whether alone or in collaboration, including marketing, sales and distribution costs if our current drug candidates or any future drug candidate we develop is approved for sale; • the cost of manufacturing our current and future drug candidates for clinical trials in preparation for marketing approval and commercialization; • our ability to establish and maintain strategic licenses or other arrangements and the financial terms of such agreements including milestone payments to our licensors; 29 • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • any lawsuits related to our drug candidates or commenced against us; • the timing, receipt and amount of sales of, or profit share or royalties on, our future products, if any; • the emergence of competing therapies for hepatological indications and viral diseases and other adverse market developments; and • any acquisitions or in-licensing of other programs or technologies.
Our current drug candidates, and any future drug candidates we develop, will require additional nonclinical and clinical development, management of clinical, nonclinical and manufacturing activities, marketing approval in the United States and other markets, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supply for both clinical development and commercial production, building of a commercial 38 organization, and substantial investment and significant marketing efforts before we generate any revenues from product sales.
Our current drug candidates, and any future drug candidates we develop, will require additional nonclinical and clinical development, management of clinical, nonclinical and manufacturing activities, marketing approval in the United States and other markets, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supply for both clinical development and commercial production, building of a commercial organization, and substantial investment and significant marketing efforts before we generate any revenues from product sales.
For instance, the Pfizer/BioNTech BNT162b2, the adenovirus type 26 (Ad26) vaccine by Janssen Pharmaceutical Companies of Johnson & Johnson, Moderna mRNA-1273 and Novavax NVX-CoV2373 COVID-19 vaccines have been approved and/or authorized for emergency use and are in the process of being widely being administered in various countries throughout the world which could adversely impact the need for our potential COVID-19 44 therapies.
For instance, the Pfizer/BioNTech BNT162b2, the adenovirus type 26 (Ad26) vaccine by Janssen Pharmaceutical Companies of Johnson & Johnson, Moderna mRNA-1273 and Novavax NVX-CoV2373 COVID-19 vaccines have been approved and/or authorized for emergency use and are in the process of being widely being administered in various countries throughout the world which could adversely impact the need for our potential COVID-19 therapies.
If the third parties that we engage to supply any materials or manufacture product for our nonclinical studies and clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing these studies and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us or at all.
If the third parties that we engage to supply any materials or manufacture product for our nonclinical studies and clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing 61 these studies and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us or at all.
A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as 51 substantial treatment effects observed early in clinical development.
In addition, if the breadth or strength of the claims of our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future drug candidates, or could have a material adverse effect on our ability to raise funds 70 necessary to continue our research programs or clinical trials.
In addition, if the breadth or strength of the claims of our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future drug candidates, or could have a material adverse effect on our ability to raise funds necessary to continue our research programs or clinical trials.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a 78 distraction to management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. Intellectual property rights do not necessarily address all potential threats.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. Intellectual property rights do not necessarily address all potential threats.
Government-imposed quarantines and any future work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions, the potential impact of changing government orders in response to health pandemics or epidemics and other limitations on our ability to conduct our business in the ordinary course.
Government-imposed quarantines and any future work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions, the potential impact of changing government orders in response to health pandemics or epidemics and other limitations on our ability to conduct our business in the 31 ordinary course.
It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits 81 stemming from a failure to comply with these laws or regulations.
It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
Some of our third-party manufacturers we use for the supply of materials for drug candidates or other materials necessary to manufacture product to conduct clinical trials may be located in countries affected by the outbreak, and, should they experience disruptions such as temporary closures or suspension of services, we would likely experience delays in advancing these trials.
Some of our third-party manufacturers we use for the supply of materials for drug candidates or other materials necessary to manufacture product to conduct clinical trials may be located in countries affected by the 37 outbreak, and, should they experience disruptions such as temporary closures or suspension of services, we would likely experience delays in advancing these trials.
If these relationships and any related compensation result in perceived or actual conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the clinical trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be 43 jeopardized, which could result in the delay or rejection of any applications we submit.
If these relationships and any related compensation result in perceived or actual conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the clinical trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any applications we submit.
If we and our current or future collaborators and licensors are unable to obtain and maintain sufficient intellectual property protection for our drug candidates or other drug candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize drug candidates similar or identical to ours, and our ability to successfully commercialize our drug candidates and other drug candidates that we may pursue may be impaired.
If we and our current or future collaborators and licensors are unable to obtain and maintain sufficient intellectual property protection for our drug candidates or other drug candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize drug candidates similar or identical 63 to ours, and our ability to successfully commercialize our drug candidates and other drug candidates that we may pursue may be impaired.
Public health pandemics or epidemics, political instability, terrorist attacks, other acts of violence or war or other unexpected events could materially interrupt our business operations (or those of the third parties upon whom we depend), cause consumer confidence and spending to decrease or result in increased volatility in the United 90 States and worldwide financial markets and economy.
Public health pandemics or epidemics, political instability, terrorist attacks, other acts of violence or war or other unexpected events could materially interrupt our business operations (or those of the third parties upon whom we depend), cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy.
In June 2022, the license to such patents became non-exclusive with respect to all fields except for the treatment and prevention of HBV. For more information regarding our license agreements, see the section titled “Business—License agreements and collaborations” of this report. Any of the foregoing could harm our competitive position, business, financial condition, results of operations and prospects.
In June 2022, the license to such patents became non-exclusive with respect to all fields except for the treatment and prevention of HBV. For more information regarding our license agreements, see the section titled “Business—License agreements and 67 collaborations” of this report. Any of the foregoing could harm our competitive position, business, financial condition, results of operations and prospects.
These actions could result in abandonment or lapse of our patents or patent applications, 75 resulting in partial or complete loss of patent rights in Russia. In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees from the U.S. without consent or compensation.
These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia. In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees from the U.S. without consent or compensation.
Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or 53 to in-license novel compounds that could make the drug candidates that we develop obsolete. Further, mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.
Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the drug candidates that we develop obsolete. Further, mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.
If these third-party manufacturers are unable to successfully scale up the manufacture of our drug candidates in sufficient quality and quantity, the 66 development, testing and clinical trials of that drug candidate may be delayed or infeasible, and regulatory approval or commercial launch of that drug candidate may be delayed or not obtained, which could significantly harm our business.
If these third-party manufacturers are unable to successfully scale up the manufacture of our drug candidates in sufficient quality and quantity, the development, testing and clinical trials of that drug candidate may be delayed or infeasible, and regulatory approval or commercial launch of that drug candidate may be delayed or not obtained, which could significantly harm our business.
In addition, the route of administration for our potential therapies could be inconvenient and/or not commercially viable, which could also limit the potential market for our therapies. 52 If the market opportunities for our drug candidates are smaller than we estimate, it could have an adverse effect on our business, financial condition, results of operations and prospects.
In addition, the route of administration for our potential therapies could be inconvenient and/or not commercially viable, which could also limit the potential market for our therapies. If the market opportunities for our drug candidates are smaller than we estimate, it could have an adverse effect on our business, financial condition, results of operations and prospects.
If our assumptions change or if actual circumstances differ from our assumptions, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock. Item 1B. Unresolve d Staff Comments. None.
If our assumptions change or if actual circumstances differ from our assumptions, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock. 86 Item 1B. Unresolve d Staff Comments. None.
The FDA may also require a REMS as a condition of approval of any drug candidate, which could include requirements for a Medication Guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk-minimization tools.
The FDA may also require a REMS as a condition of approval of any drug candidate, which could include requirements for a 44 Medication Guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk-minimization tools.
Relatedly, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points. Even though the FDA has since resumed standard inspection operations, any resurgence of the virus or emergence of new variants may lead to further inspectional or administrative delays.
Relatedly, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points. Even though the FDA has since resumed standard inspection 46 operations, any resurgence of the virus or emergence of new variants may lead to further inspectional or administrative delays.
A disruption or termination in the supply of nonclinical or clinical drug supplies due to our reliance on third parties and/or a disruption in the supply chain generally could delay, prevent or impair our development or commercialization efforts. In order to conduct clinical trials of drug candidates, we will need to have them manufactured in potentially large quantities.
A disruption or termination in the supply of nonclinical or clinical drug supplies due to our reliance on third parties and/or a disruption in the supply chain generally could delay, prevent or impair our development or commercialization efforts. 60 In order to conduct clinical trials of drug candidates, we will need to have them manufactured in potentially large quantities.
Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our drug candidates or the use of our drug candidates. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a 73 patent and the patent’s prosecution history.
Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our drug candidates or the use of our drug candidates. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs, delay development of our drug candidates and be a distraction to management.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such 72 claims, litigation could result in substantial costs, delay development of our drug candidates and be a distraction to management.
Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Unauthorized parties may also attempt to copy or reverse 89 engineer certain aspects of our drug candidates that we consider proprietary.
Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our drug candidates that we consider proprietary.
Site initiation and patient enrollment may be delayed due to prioritization of hospital 37 resources toward the disease, and potential patients may not be able or willing to comply with clinical trial protocols, whether due to quarantines impeding patient movement or interrupting healthcare services, or due to potential patient concerns regarding interactions with medical facilities or staff.
Site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the disease, and potential patients may not be able or willing to comply with clinical trial protocols, whether due to quarantines impeding patient movement or interrupting healthcare services, or due to potential patient concerns regarding interactions with medical facilities or staff.
If unacceptable toxicities or other undesirable side effects arise in the development of any of our current or future drug candidates, we could suspend or terminate our trials, or the FDA or comparable foreign regulatory 47 authorities could order us to cease clinical trials or deny approval of the drug candidate for any or all targeted indications.
If unacceptable toxicities or other undesirable side effects arise in the development of any of our current or future drug candidates, we could suspend or terminate our trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of the drug candidate for any or all targeted indications.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. As our 54 operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.
Obtaining, 69 maintaining, defending and enforcing pharmaceutical patents is costly, time consuming and complex, and we may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner.
Obtaining, maintaining, defending and enforcing pharmaceutical patents is costly, time consuming and complex, and we may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner.
As a result, we cannot be sure that we will be able to submit INDs in the United States, or CTAs or similar applications in other jurisdictions, on the timelines we expect, if at all, and we cannot be sure that submission of INDs, CTAs or similar applications will result in the FDA or other regulatory authorities allowing additional clinical trials to begin.
As a result, we cannot be sure that we will be able to submit INDs in the United States, or CTAs or similar applications in other jurisdictions, on the timelines we expect, if at all, and we cannot be sure that submission 34 of INDs, CTAs or similar applications will result in the FDA or other regulatory authorities allowing additional clinical trials to begin.
Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved drugs that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize drugs and our overall financial condition.
Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved drugs that 50 we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize drugs and our overall financial condition.
Even if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. 59 Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
Even if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs, to conduct or otherwise support certain nonclinical studies and clinical trials for our drug candidates, including ALG‑055009, ALG‑000184, ALG-097558 and ALG-125755, and we control only certain aspects of their activities.
We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs, to conduct or otherwise support certain nonclinical studies and clinical trials for our drug candidates, including ALG‑000184, ALG‑055009, and ALG-097558, and we control only certain aspects of their activities.
In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, or in-license needed technology or other drug candidates. There could also be public announcements of the results of the hearing, motions, or other interim proceedings or developments.
In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, or in-license 71 needed technology or other drug candidates. There could also be public announcements of the results of the hearing, motions, or other interim proceedings or developments.
The inability to recruit, or the loss of services of certain executives, significant employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations and prospects. 79 We currently have no sales organization.
The inability to recruit, or the loss of services of certain executives, significant employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations and prospects. We currently have no sales organization.
If we fail to keep pace with technological change, we may be unable to compete effectively. Technological advances or products 54 developed by our competitors may render our drug candidates obsolete, less competitive or not economical, thereby adversely affecting our business, financial condition and results of operations.
If we fail to keep pace with technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our drug candidates obsolete, less competitive or not economical, thereby adversely affecting our business, financial condition and results of operations.
An adverse result in any litigation proceeding could put one or 76 more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.
An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business, results of operations, financial condition and prospects.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business, results of operations, financial condition and 75 prospects.
Further, any regulatory approval for our drug candidates may be withdrawn. If we fail to comply with the applicable regulatory requirements, our target market will be reduced and our ability to realize the full market potential of our drug candidates will be harmed and our business, financial condition, results of operations and prospects could be harmed.
Further, any regulatory approval for our drug candidates may be withdrawn. If we fail 45 to comply with the applicable regulatory requirements, our target market will be reduced and our ability to realize the full market potential of our drug candidates will be harmed and our business, financial condition, results of operations and prospects could be harmed.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. 64 We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.
We cannot assure you that, upon inspection, the FDA will determine that any of our future nonclinical studies or clinical trials will comply with GLP or GCP, as applicable. In addition, our nonclinical studies and clinical trials must be conducted with drug candidates produced under cGMP regulations.
We cannot assure you that, upon inspection, the FDA will determine that any of our future nonclinical studies or clinical trials will comply with GLP or GCP, as applicable. In addition, our nonclinical studies and clinical trials must be conducted with drug candidates produced under cGMP 59 regulations.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.
Our 84 efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license, which could adversely affect our business, financial condition, results of operations and prospects.
Accordingly, our efforts to enforce our intellectual property rights around the world may be 69 inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license, which could adversely affect our business, financial condition, results of operations and prospects.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim 83 proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial 85 new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
Securing 48 regulatory approval requires the submission of extensive nonclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the drug candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.
Securing regulatory approval requires the submission of extensive nonclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the drug candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.
Under these provisions, the FDA may, among other things, require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted. 57 In addition, the FDA requires pre-approval of promotional materials for accelerated approval products, once approved.
Under these provisions, the FDA may, among other things, require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted. In addition, the FDA requires pre-approval of promotional materials for accelerated approval products, once approved.
Consequently, the exercise by holders of our non-voting common stock of their option to make this conversion will have the effect of increasing the relative voting power of such holders, and correspondingly decreasing the voting power of the holders of our common stock, which may limit an investor’s ability to influence corporate matters.
Consequently, the exercise by holders of our non-voting common stock of their option to make this conversion will have the effect of increasing the relative voting power of such holders, and correspondingly decreasing the voting power of the holders of our 78 common stock, which may limit an investor’s ability to influence corporate matters.
We cannot predict which, if any, patents in our current portfolio or patents we may obtain in the future will be eligible for listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents or the outcome of any such suit.
We cannot predict which, if any, patents in our current portfolio or patents we may obtain in the future will be eligible for 49 listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents or the outcome of any such suit.
The GDPR applies enhanced protections to health or sensitive personal data and other special categories of personal data, including some of the personal data we process in respect of clinical trial 61 participants which may be subject to additional compliance obligations and to local law derogations.
The GDPR applies enhanced protections to health or sensitive personal data and other special categories of personal data, including some of the personal data we process in respect of clinical trial participants which may be subject to additional compliance obligations and to local law derogations.
Similarly, although we will control the prosecution of jointly developed patents resulting from our collaboration with the Rega Institute for Medical Research and the CD3 under the KU Leuven Agreement, we are obligated to consult with such parties with respect to prosecution of these patents.
Similarly, although we will control the prosecution of jointly developed patents resulting from our collaboration with the Rega Institute for Medical Research and the CD3 under the KU Leuven Agreement, we are obligated to consult with such parties with respect 65 to prosecution of these patents.
If disputes over intellectual property that we have licensed prevent or 72 impair our ability to maintain our current licensing arrangements on acceptable terms or at all, we may be unable to successfully develop and commercialize the affected drug candidates.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms or at all, we may be unable to successfully develop and commercialize the affected drug candidates.
And, in March 2022, we announced our discontinuation of further development of ALG-020572 due to an unanticipated serious adverse event involving significant increase in alanine aminotransferase (ALT) in one CHB subject and several additional subjects experiencing ALT flares.
And, in March 2022, we announced our discontinuation of further development of ALG-020572 due to an unanticipated serious adverse event involving significant increase in alanine aminotransferase (ALT) in one subject and several additional subjects experiencing ALT flares.
If public perception is influenced by claims that the use 49 of therapies in our therapeutic areas of focus are unsafe, whether related to our therapies or those of our competitors, our products may not be accepted by the general public or the medical community.
If public perception is influenced by claims that the use of therapies in our therapeutic areas of focus are unsafe, whether related to our therapies or those of our competitors, our products may not be accepted by the general public or the medical community.
We entered into a License Agreement with Emory in June 2018 (the Emory License Agreement), a Research, Licensing and Commercialization Agreement with KU Leuven in June 2020 and an amendment in July 2023 and a 58 License Agreement with Luxna in December 2018 and an amendment in April 2020 (as amended, the Luxna Agreement).
We entered into a License Agreement with Emory in June 2018, a Research, Licensing and Commercialization Agreement with KU Leuven in June 2020 and an amendment in July 2023 and a License Agreement with Luxna in December 2018 and an amendment in April 2020 (as amended, the Luxna Agreement).
Our current shares outstanding and resulting market valuation do not reflect shares of our common stock issuable upon the exercise of pre-funded warrants and common warrants that are exercisable at the discretion of 91 the holders of such warrants.
Our current shares outstanding and resulting market valuation do not reflect shares of our common stock issuable upon the exercise of pre-funded warrants and common warrants that are exercisable at the discretion of the holders of such warrants.
Further, from January 1, 2021, we have to comply with the United Kingdom GDPR (UK GDPR), which, together, with the amended Data Protection Act 2018, retains the GDPR in UK national law (collectively, the “UK GDPR”), and imposes separate but similar obligations to those under the GDPR and comparable penalties, including fines up to the greater of £17.5 million or 4% of global turnover of the annual global revenues of the noncompliant undertaking.
Further, from January 1, 2021, we have to comply with the United Kingdom GDPR (UK GDPR), which, together, with the amended Data Protection Act 2018, retains the GDPR in UK national law (collectively, the UK GDPR), and imposes separate but similar obligations to those under the GDPR and comparable penalties, including fines up to the greater of £17.5 million or 4% of global turnover of the annual global revenues of the noncompliant undertaking.
The market price for our common stock may be influenced by many factors, including: • the success of our and competitive products or technologies; • results of clinical trials and nonclinical studies or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our drug candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license drug candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; •changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; • the COVID-19 pandemic or future public health pandemics or epidemics; and • investors’ general perception of us and our business.
The market price for our common stock may be influenced by many factors, including: • the success of our and competitive products or technologies; • results of clinical trials and nonclinical studies or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our drug candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license drug candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; 76 • market conditions in the pharmaceutical and biotechnology sectors; • general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; • future public health pandemics or epidemics; and • investors’ general perception of us and our business.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
Alternatively, we may allocate internal resources to a drug 56 candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
Alternatively, we may allocate internal resources to a drug candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
The mechanism of action of our MASH drug candidates is complex, and we do not know the degree to which it will translate into a therapeutic benefit, if any, in MASH or any other indication, and we do not know the degree to which the complex mechanism of action may contribute to long-term safety issues or adverse events when our drug candidates are taken for prolonged periods, as is inherent in the treatment of MASH.
The mechanism of action of our CHB drug candidates is complex, and we do not know the degree to which it will translate into a therapeutic benefit, if any, in CHB or any other indication, and we do not know the degree to which the complex mechanism of action may contribute to long-term safety issues or adverse events when our drug candidates are taken for prolonged periods, as is inherent in the treatment of CHB.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; and • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors.
Biggest changeKey elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; and • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profile.
For more information , see the section titled “Risk Factor— Risks related to product development and regulatory process—Our business and operations may suffer in the event that our information technology systems, or those used by our CROs or other contractors or consultants, fail or suffer security breaches.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (Committee) oversight of cybersecurity and other information technology risks.
For more information , see the section titled “Risk Factor— Risks related to product development and regulatory process—Our business and operations may suffer in the event that our information technology systems, or those used by our CROs or other contractors or consultants, fail or suffer security breaches.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (Committee) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us ; and alerts and reports produced by security tools deployed in the IT environment. 87
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, 92 business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Our management team’s experience includes a combined 25 years of experience in managing IT environments including assessing the overall risk management program and material risks, as well as building our cybersecurity framework over the past six years.
Our Executive Director, Information Technology's experience includes 25 years of experience in managing IT environments including assessing the overall risk management program and material risks, as well as building our cybersecurity framework over the past six years.
The Committee reports to the full Board regarding its activities, including those related to cybersecurity. Our management team, lead by our Executive Director, Information Technology, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises our retained external cybersecurity consultants.
Our management team, lead by our Executive Director, Information Technology, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises our retained external cybersecurity consultants.
The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives reports from management on our cybersecurity risks, at a minimum annually and as needed. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Committee receives reports from management on our cybersecurity risks, at a minimum annually and as needed. In addition, management updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Added
We face risks from cybersecurity threats that, if realized are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, regardless of the outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of associated costs and diversion of management time.
Biggest changeHowever, regardless of the outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of associated costs and diversion of management time. Item 4. Mine Safe ty Disclosures. Not applicable. 88 PART II
Removed
On March 26, 2022, the Company received notice of a complaint (the Complaint) filed by Janssen Biopharma, LLC (Janssen), which generally concerned an alleged breach by certain of our employees of their obligations to Janssen as prior employees of Janssen by purporting to assign to Aligos various inventions allegedly owned by Janssen.
Removed
The Complaint was filed on March 9, 2022 in the Superior Court of the State of California, County of San Mateo, against the Company, Lawrence M. Blatt, Chairman, Chief Executive Officer and Director of the Company, and Leonid Beigelman, the former President and a former Director of the Company. The Complaint alleged breach of contract by Lawrence M.
Removed
Blatt and Leonid Beigelman and tortious interference with contract by the Company and sought declaratory judgment of ownership of certain intellectual property by the Company, among other claims. The 93 Complaint stated that Janssen is seeking injunctive relief, assignment of certain intellectual property from us to Janssen and monetary damages.
Removed
On August 4, 2022, the Company filed counterclaims against Janssen alleging Janssen had engaged in unfair competition and promissory fraud, and on August 22, 2022, the Company filed its response to the Complaint.
Removed
On October 16, 2023, the Company entered into a settlement agreement with Janssen that provides for the resolution of the action brought by Janssen alleging breach of contract by Lawrence M. Blatt, and Leonid Beigelman, and tortious interference with contract by the Company and seeking declaratory judgment of ownership of certain intellectual property by the Company, among other claims.
Removed
Pursuant to the settlement agreement, Janssen agreed to dismiss the action and released the Company, Dr. Blatt and Dr. Beigelman from the claims alleged. In addition, pursuant to the Settlement Agreement, the Company agreed to dismiss the counterclaims against Janssen alleging unfair competition and promissory fraud and released Janssen from the alleged counterclaims. Item 4. Mine Safe ty Disclosures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers. None. Item 6. [Reserved]. 95
Biggest changeIn December 2024, an investor net exercised a Common Warrant to purchase an aggregate of 48,822 shares of Common stock and was issued 22,024 shares of Common Stock. Use of Proceeds. None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. None. Item 6. [Reserved]. 89
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2023. Recent Sales of Unregistered Securities None. Use of Proceeds. None.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2024.
Prior to October 20, 2020, there was no public trading market for our common stock. Holders of Record As of March 8, 2024, there were 46 holders of record of our common stock, which consist of 44 holders of record of our voting common stock and two holders of record of our non-voting common stock.
Prior to October 20, 2020, there was no public trading market for our common stock. Holders of Record As of March 6, 2025, there were 33 holders of record of our common stock, which consist of 31 holders of record of our voting common stock and 2 holders of record of our non-voting common stock.
Added
Recent Sales of Unregistered Securities In October 2024, an investor exercised a Pre-Funded Warrant to purchase an aggregate of 263,000 shares of Common stock for an aggregate purchase price of $657.50 and was issued 263,000 shares of Common Stock.
Added
In November 2024, an investor exercised a Pre-Funded Warrant to purchase an aggregate of 244,000 shares of Common stock for an aggregate purchase price of $610.00 and was issued 244,000 shares of Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of operations Comparison of the years ended December 31, 2023 and 2022 The following table summarizes our operating expenses for the years ended December 31, 2023 and 2022: Twelve Months Ended December 31, Change 2023 2022 ($) % Revenue from collaborations $ 9,338 $ 13,907 $ (4,569 ) -33 % Revenue from customers 6,191 — $ 6,191 100 % Operating expenses: Research and development 73,040 85,077 (12,037 ) -14 % General and administrative 30,616 26,410 4,206 16 % Total operating expenses 103,656 111,487 (7,831 ) -7 % Loss from operations (88,127 ) (97,580 ) 9,453 -10 % Interest and other income, net: Interest income, net 4,297 1,521 $ 2,776 183 % Other income (expense), net (3,054 ) 119 $ (3,173 ) -2669 % Total interest and other income, net 1,243 1,640 (397 ) -24 % Loss before provision for income taxes (86,884 ) (95,940 ) $ 9,056 -9 % Income tax expense (795 ) (106 ) $ (689 ) 650 % Net Loss (87,679 ) (96,046 ) $ 8,367 -9 % Revenue from collaborations Revenue from collaborations was $9.3 million for the year ended December 31, 2023, compared to $13.9 million for the year ended December 31, 2022, a decrease of $4.6 million.
Biggest changeIn addition, under current tax law, federal NOL carryforwards generated in periods after December 31, 2017, may be carried forward indefinitely but, may only be used to offset 80% of our taxable income. 94 Results of operations Comparison of the years ended December 31, 2024 and 2023 The following table summarizes our operating expenses for the years ended December 31, 2024 and 2023: Twelve Months Ended December 31, Change 2024 2023 ($) % Revenue from collaborations $ 334 $ 9,338 $ (9,004 ) -96 % Revenue from customers 3,611 6,191 (2,580 ) -42 % Operating expenses: Research and development 70,269 73,040 (2,771 ) -4 % General and administrative 22,830 30,616 (7,786 ) -25 % Total operating expenses 93,099 103,656 (10,557 ) -10 % Loss from operations (89,154 ) (88,127 ) (1,027 ) 1 % Interest and other income, net: Interest income, net 1,670 4,297 (2,627 ) -61 % Other income (expense), net 2,736 (885 ) 3,621 -409 % Change in fair value of common warrants (46,132 ) (2,169 ) (43,963 ) 2027 % Loss before income tax (130,880 ) (86,884 ) (43,996 ) 51 % Income tax provision (331 ) (795 ) 464 -58 % Net loss (131,211 ) (87,679 ) (43,532 ) 50 % Revenue from collaborations Revenue from collaborations was $0.3 million for the year ended December 31, 2024, compared to $9.3 million for the year ended December 31, 2023, a decrease of $9.0 million.
We track direct external research and development expenses on a program-specific basis (CHB, coronaviruses, MASH and early-stage programs).
Research and development expenses We track direct external research and development expenses on a program-specific basis (CHB, coronaviruses, MASH and early-stage programs).
Financing activities During Fiscal 2023, net cash provided by financing activities was $88.3 million, consisting primarily of $87.9 million from the issuance of common stock, common warrants and pre-funded warrants in the PIPE, the issuance of shares through our employee stock purchase plan, partially offset by payments of our finance leases.
During Fiscal 2023, net cash provided by financing activities was $88.3 million, consisting primarily of $87.9 million from the issuance of common stock, common warrants and pre-funded warrants in the PIPE, the issuance of shares through our employee stock purchase plan, partially offset by payments of our finance leases.
Our future capital requirements will depend on many factors, including: • the scope, progress, results and costs of researching and developing our drug candidates and programs, and of conducting nonclinical studies and clinical trials; • the timing of, and the costs involved in, obtaining marketing approvals for drug candidates we develop if clinical trials are successful; • the cost of commercialization activities for our current drug candidates, and any future drug candidates we develop, whether alone or in collaboration, including marketing, sales and distribution costs if our current drug candidates or any future drug candidate we develop is approved for sale; 102 • the cost of manufacturing our current and future drug candidates for clinical trials in preparation for marketing approval and commercialization; • our ability to establish and maintain strategic licenses or other arrangements and the financial terms of such agreements; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • the timing, receipt and amount of sales of, or profit share or royalties on, our future products, if any; • the emergence of competing therapies for hepatological indications and viral diseases and other adverse market developments; and • any acquisitions or in-licensing of other programs or technologies.
Our future capital requirements will depend on many factors, including: • the scope, progress, results and costs of researching and developing our drug candidates and programs, and of conducting nonclinical studies and clinical trials; • the timing of, and the costs involved in, obtaining marketing approvals for drug candidates we develop if clinical trials are successful; • the cost of commercialization activities for our current drug candidates, and any future drug candidates we develop, whether alone or in collaboration, including marketing, sales and distribution costs if our current drug candidates or any future drug candidate we develop is approved for sale; • the cost of manufacturing our current and future drug candidates for clinical trials in preparation for marketing approval and commercialization; • our ability to establish and maintain strategic licenses or other arrangements and the financial terms of such agreements; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • the timing, receipt and amount of sales of, or profit share or royalties on, our future products, if any; • the emergence of competing therapies for hepatological indications and viral diseases and other adverse market developments; and • any acquisitions or in-licensing of other programs or technologies.
Research and development costs consist primarily of costs incurred for the identification and development of our drug candidates through our technology platforms, which include: • salaries, benefits and other employee-related costs, including stock-based compensation expense, for personnel engaged in research and development functions; • costs of outside consultants, including their fees, and related travel expenses; • costs associated with in-process research and development, including license fees and milestones paid to third-party collaborators for technologies with no alternative use; • costs related to production of clinical materials, including fees paid to contract manufacturers; • expenses incurred under agreements with collaborators that perform nonclinical activities; • costs related to compliance with regulatory requirements; and 98 • facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.
Research and development costs consist primarily of costs incurred for the identification and development of our drug candidates through our technology platforms, which include: • salaries, benefits and other employee-related costs, including stock-based compensation expense, for personnel engaged in research and development functions; • costs of outside consultants, including their fees, and related travel expenses; • costs associated with in-process research and development, including license fees and milestones paid to third-party collaborators for technologies with no alternative use; • costs related to production of clinical materials, including fees paid to contract manufacturers; • expenses incurred under agreements with collaborators that perform nonclinical activities; • costs related to compliance with regulatory requirements; and • facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.
Provision for income taxes Since our inception in 2018, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.
Income tax provision Since our inception in 2018, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.
We are also presently seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG-097558 for the treatment of COVID-19 and future coronavirus pandemics.
We are also seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG‑097558 for the treatment of COVID‑19 and future coronavirus pandemics.
The Company enters into contracts in the normal course of business that includes arrangements with clinical research organizations, vendors for preclinical research and vendors for manufacturing. These agreements generally allow for cancellation with notice. As of December 31, 2023, the Company had no material non-cancellable purchase commitments.
The Company enters into contracts in the normal course of business that includes arrangements with clinical research organizations, vendors for preclinical research and vendors for manufacturing. These agreements generally allow for cancellation with notice. As of December 31, 2024, the Company had no material non-cancellable purchase commitments.
We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our MASH drug candidate ALG-055009, which we have initiated clinical trials, as well as our research and development of our other drug candidates within our coronavirus and CHB programs.
We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our CHB drug candidate ALG-000184, which we have initiated clinical trials, as well as our research and development of our other drug candidates within our MASH and coronavirus programs.
Off-balance sheet arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 104 Indemnification agreements We enter into standard indemnification arrangements in the ordinary course of business.
Off-balance sheet arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 99 Indemnification agreements We enter into standard indemnification arrangements in the ordinary course of business.
We have elected to use the extended transition period for any new or revised accounting standards during the period in which we remain an EGC; however, we may adopt certain new or revised accounting standards early. 106 We will remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.
We have elected to use the extended transition period for any new or revised accounting standards during the period in which we remain an EGC; however, we may adopt certain new or revised accounting standards early. 100 We will remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) the last day of the fiscal year ending after the fifth anniversary of our initial public offering, i.e., December 31, 2025.
We have rationally designed these T cell activating drug candidates to partition preferentially to the liver and thereby potentially mitigate systemic toxicity in an effort to develop better tolerated PD-1/PD-L1 inhibitors for CHB patients. Lead molecules developed to date show similar in vivo efficacy in tumor models to approved PD-1/PD-L1 antibodies.
We have rationally designed these T cell activating drug candidates to partition preferentially to the liver and thereby potentially mitigate systemic toxicity with the goal to develop better tolerated PD-1/PD-L1 inhibitors for CHB patients. Lead molecules developed to date show in vivo efficacy in tumor models similar to approved PD-1/PD-L1 antibodies.
Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional pharmacokinetics (PK) with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones).
Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional PK with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones without any clinical evidence of thyroid dysfunction).
This is due to the completion of the 100 Original Agreement with Merck in the first quarter of 2023, leaving the Amended collaboration agreement with Merck to continue in the year ended December 2023.
This is due to the completion of the Original Agreement with Merck in the first quarter of 2023, leaving the Amended collaboration agreement with Merck to continue in the year ended December 2023. The Amended collaboration agreement with Merck ended in May 2024.
The Australian NOL and research and development tax credits have no expiration date. 99 Under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period), our ability to use our pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
Under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period), our ability to use our pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
As of December 31, 2023, we also had federal and state research and development tax credit carryforwards of $0.2 million and $0.2 million, respectively. The federal research and development tax credit carryforwards begin to expire in 2043, while the state research and development tax credit carryforwards can be carried forward indefinitely.
As of December 31, 2024, we also had federal and state research and development tax credit carryforwards of $1.9 million and $1.2 million, respectively. The federal research and development tax credit carryforwards begin to expire in 2043, while the state research and development tax credit carryforwards can be carried forward indefinitely.
Net cash used as a result of changes in our operating assets and liabilities of $9.5 million consisted of a increase in accrued liabilities of $0.9 million, an increase of $0.5 million in deferred revenue from customers, and a decrease in other current assets of $2.3 million, offset by a decrease of $2.4 103 million in operating lease liabilities, a decrease of $2.2 million in accounts payable, and a decrease of $8.7 million in deferred revenue from collaborations.
Net cash used as a result of changes in our operating assets and liabilities of $9.5 million consisted of an increase in accrued liabilities of $0.9 million, and a decrease in other current assets of $2.3 million, offset by a decrease of $2.4 million in operating lease liabilities, a decrease of $2.2 million in accounts payable, and a decrease of $8.1 million in deferred revenue.
Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party service providers. For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses. 105 Research and development expenses We expense research and development costs as incurred.
Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party service providers. For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses.
Interest and other income, net Interest and other income, net comprises interest income, net and other income (expense), net. Interest income, net primarily consists of interest earned on our cash, cash equivalents, and investments. Other income (expense), net consists primarily of foreign currency exchange gains and losses.
Interest and other income, net Interest and other income, net comprises interest income, and other income, net. Interest income, net primarily 93 consists of interest earned on our cash, cash equivalents, and investments. Other income, net consists primarily of accretion/amortization of investments and foreign currency exchange gains/losses.
For these studies, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class substantial HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg positive subjects receiving 300 mg ALG‑000184 (Hou et. al, AASLD 2022).
In these study phases, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class multi-log 10 HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg+ subjects receiving 300 mg ALG000184 (Hou et. al, AASLD 2022).
To achieve this, we are developing a portfolio of differentiated CHB drug candidates, including a small molecule Capsid Assembly Modulator that results in the production of empty viral capsids (CAM-E) and small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD‑1/PD-L1) interaction.
To achieve this, we are developing a portfolio of differentiated chronic HBV infection drug candidates, including a small molecule CAM that results in the production of empty viral capsids and small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD‑1/PD-L1) interaction.
In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with KU Leuven, the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the CD3.
In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with the Rega Institute at Katholieke Universiteit Leuven (KU Leuven), the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the Centre for Drug Design and Discovery (CD3).
As of December 31, 2023, we had federal net operating loss (NOL) carryforwards of $3.7 million available to reduce taxable income and these NOLs can be carried forward indefinitely. We have state NOL carryforwards of $12.7 million as of December 31, 2023, available to reduce future state taxable income, which expire at various dates beginning in 2038.
As of December 31, 2024, we had federal net operating loss (NOL) carryforwards of $41.8 million available to reduce taxable income and these NOLs can be carried forward indefinitely. We have state NOL carryforwards of $90.7 million as of December 31, 2024, available to reduce future state taxable income, which expire at various dates beginning in 2043.
Net cash used as a result of changes in our operating assets and liabilities of $1.6 million consisted of a decrease in accrued liabilities of $9.1 million, an increase of $0.3 million in right of use assets, a decrease of $1.8 million in operating lease liabilities, and a decrease of $0.1 million in other liabilities, partially offset by a decrease in other current assets of $5.6 million, an increase of $1.7 million in accounts payable, and an increase of $2.5 million in deferred revenue from collaborations.
Net cash used as a result of changes in our operating assets and liabilities of $5.0 million consisted of a decrease of $2.7 million in operating lease liabilities, a decrease of $1.2 million in deferred revenue, and an increase in other current assets of $0.2 million, partially offset by an increase in accrued liabilities of $1.4 million, and an increase of $0.1 million in accounts payable.
Because of the numerous risks and uncertainties associated with our research and development programs and because the extent to which we may enter into collaborations with third parties for development of our drug candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our drug candidates.
Furthermore, we may elect to raise additional capital on an opportunistic basis to fund operations. 97 Because of the numerous risks and uncertainties associated with our research and development programs and because the extent to which we may enter into collaborations with third parties for development of our drug candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our drug candidates.
Our small molecule lead compounds also demonstrate greater PD-L1 target occupancy at a lower dose in a humanized PD-L1 subcutaneous tumor model compared to competitor small molecule PD-L1 inhibitors. We have recently selected two lead molecules and have initiated scale-up to enable further advancement towards clinical development.
Our small molecule lead compounds also demonstrate greater PD-L1 target occupancy at a lower dose in a humanized PD-L1 subcutaneous tumor model compared to competitor small molecule PD-L1 inhibitors. We have recently selected a lead molecule, ALG‑093940, and are completing in vivo studies to enable further advancement towards clinical development.
During Fiscal 2022, operating activities used $79.4 million of cash, primarily resulting from our net loss of $96.0 million and cash used as a result of changes in our operating assets and liabilities of $1.6 million, partially offset by non-cash charges of $18.2 million.
During Fiscal 2023, operating activities used $79.0 million of cash, primarily resulting from our net loss of $87.7 million and cash used as a result of changes in our operating assets and liabilities of $9.5 million, partially offset by non-cash charges of $18.2 million.
Overview We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of metabolic dysfunction associated steatohepatitis (MASH), chronic hepatitis B (CHB) and coronavirus (e.g., SARS-CoV-2 and related infections).
Overview We are a clinical-stage biotechnology company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of chronic HBV infection, MASH, and coronavirus infections (e.g., SARS‑CoV‑2, SARS‑CoV, MERS‑CoV, and other related infections).
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. Furthermore, we may elect to raise additional capital on an opportunistic basis to fund operations.
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
Revenue from customers Revenue from customers was $6.2 million for the year ended December 31, 2023 , primarily due to the agreement with Amoytop signed in 2023. Refer to footnote 12, Revenue from Contracts with Customers for further information. There was no revenue recognized from customers in the year ended December 31, 2022.
Revenue from customers Revenue from customers was $3.6 million for the year ended December 31, 2024, compared to $6.2 million for the year ended December 31, 2023, a decrease of $2.6 million, primarily due to the agreement with Amoytop, which was signed in 2023. Refer to footnote 12, Revenue from Contracts with Customers for further information.
In this same study, we have also evaluated relative bioavailability where we have shown the soft gelatin capsules to be used on Phase 2 studies, delivers similar exposures compared to the solution used in Phase 1 studies; we observed low intersubject PK variability and there was no evidence of a meaningful food effect.
In this same study, we also evaluated relative bioavailability where we showed the soft gelatin capsules used in the Phase 2a study described below delivered similar exposures compared to the solution formulation used in the SAD/MAD parts of the Phase 1 study; we observed low intersubject PK variability and there was no evidence of a meaningful food effect.
We expect to share topline data from this study at a scientific conference in the second quarter of 2024. 97 Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium.
Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium.
Based on the favorable profile after dosing up to 300 mg ALG‑000184 x 28 days, additional Phase 1b cohorts are currently ongoing and evaluating the risk-benefit profile of up to 300 mg doses of ALG‑000184 with or without entecavir (ETV) therapy for up to 96 weeks in HBeAg positive/negative CHB subjects.
Based on the favorable profile observed with dosing up to 300 mg of ALG-000184 for 28 days, additional Phase 1 cohorts are currently underway to evaluate the risk-benefit profile of ALG-000184 at doses of 300 mg, with or without entecavir (ETV) therapy, for up to 96 weeks in HBeAg+ and HBeAg- subjects with chronic HBV infection.
Our second area of focus seeks to enhance the viral suppression and rate of functional cure for CHB, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease and, the most common form of liver cancer, hepatocellular carcinoma (HCC).
ALG‑000184: Potential best ‑ in ‑ class small molecule CAM ‑ E for chronic HBV infection Our primary area of focus seeks to enhance the viral suppression and rate of functional cure for chronic HBV infection, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease, and the most common form of liver cancer, HCC.
The Company received gross proceeds of approximately $92.1 million, and after deducting the placement agent fees and expenses and offering costs, net proceeds were approximately $86.2 million. 101 As of December 31, 2023, we had cash, cash equivalents and investments of $135.7 million.
Each 2023 Warrant is exercisable for one share of common stock. The Company received gross proceeds of $92.1 million, and after deducting the placement agent fees and expenses and offering costs, net proceeds were $86.2 million. As of December 31, 2024, we had cash, cash equivalents and investments of $56.9 million.
Our third area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19.
ALG‑097558: Potential best-in-class small molecule ritonavir-free pan-coronavirus protease inhibitor Another area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19.
Preliminary data have been presented for several of these cohorts 96 (Hou et al., EASL 2023, Yuen et al., AASLD 2023) and indicate that ALG‑000184 dosed for up to 48 weeks has shown to be well tolerated with a favorable PK profile and potentially best-in-class antiviral activity.
Preliminary data from several of these cohorts (Agarwal et al., EASL 2024; Yuen et al., AASLD 2024) have been presented, showing that ALG‑000184, administered for up to 92 weeks, was well tolerated, exhibited a favorable PK profile, and demonstrated potentially best-in-class antiviral activity.
Other income (expense), net Other income (expense), net was an expense, net of $3.1 million for the year ended December 31, 2023 compared to income, net of $0.1 million for the year ended December 31, 2022, a difference of $3.2 million.
Other income, net Other income, net was an income of $2.7 million for the year ended December 31, 2024 compared to expense of $0.9 million for the year ended December 31, 2023, a difference of $3.6 million. The difference was due to an increase in the accretion of short-term investments.
Components of our results of operations Operating expenses Our operating expenses since inception have consisted solely of research and development costs and general and administrative costs. Research and development expenses We rely substantially on third parties to conduct our discovery activities, nonclinical studies, clinical trials and manufacturing.
Research and development expenses We rely substantially on third parties to conduct our discovery activities, nonclinical studies, clinical trials and manufacturing.
There was also a decrease of $0.5 million in depreciation, and a decrease of $2.9 million in employee-related costs, of which $0.9 million related to stock-based compensation. This was partially offset by an increase of $0.9 million in facility expenses.
This is primarily due to a decrease of $4.2 million in employee-related costs, of which $1.8 million related to stock-based compensation. There was also a decrease of $0.3 million in depreciation and a decrease of $0.7 million in facility expenses.
We plan to conduct the clinical pharmacology studies in the second half of 2024 through the end of 2025 as part of this NIAID contract. We expect to receive approximately $11.0 million in funds across these two NIH awards and contracts to support these activities.
We filed an IND in the third quarter of 2024 and clinical studies in special populations were initiated in the second half of 2024 as part of this NIAID contract. We expect to receive approximately $13.8 million in funds across these two NIH awards and contracts to support these activities.
General and administrative expenses General and administrative expenses were $30.6 million for the year ended December 31, 2023, compared to $26.4 million for the year ended December 31, 2022, an increase of $4.2 million.
General and administrative expenses General and administrative expenses were $22.8 million for the year ended December 31, 2024, compared to $30.6 million for the year ended December 31, 2023, a decrease of $7.8 million.
Section 107 of the JOBS Act provides that an “emerging growth company” (an EGC) can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
Emerging growth company status In April 2012, the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” (an EGC) can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In October 2023, we completed a private investment in public equity (PIPE) offering and entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which we agreed to issue 31,429,266 shares of our common stock, par value $0.001 per share, pre-funded warrants to purchase an aggregate of 81,054,686 shares of our common stock (the “2023 Pre-Funded Warrants”), and common warrants to purchase an aggregate of 56,241,973 shares of our common stock (the “Common Warrants,” and together with the 2023 Pre-Funded Warrants, the "Warrants").
In October 2023, we completed a PIPE offering and entered into a securities purchase agreement (the "2023 Securities Purchase Agreement") pursuant to which we issued 1,257,168 shares of our common stock, par value $0.001 per share, pre-funded warrants to purchase an aggregate of 3,242,018 shares of our common stock (the “2023 Pre-Funded Warrants”), and common warrants to purchase an aggregate of 2,249,680 shares of our common stock (the “2023 Common Warrants,” and together with the 2023 Pre-Funded Warrants, the "2023 Warrants").
This is due to an increase of $6.5 million of third-party expenses primarily due to higher legal and patent attorney costs, partially offset by a decrease of $0.5 million of employee-related costs, of which $0.8 million related to stock-based compensation (partially offset by other immaterial items), a decrease of $0.2 million in depreciation and recruiting costs, and a decrease of $1.5 million in facility expenses.
This is due to a decrease of $4.2 million of third-party expenses primarily due to reduced legal and IP spend, a decrease of $3.0 million of employee-related costs, of which $2.0 million related to stock-based compensation, and a decrease of $1.3 million in facility and depreciation expenses.
The Company had $6.0 million of Australian NOL carryforwards and $0.7 million of Australian research and development tax credit carryforwards available.
As of December 31, 2024, the Company had $8.4 million of Australian NOL carryforwards and $0.6 million of Australian research and development tax credit carryforwards available. The Australian NOL carryforwards and research and development tax credits have no expiration date.
Interest income, net Interest income, net increased to $4.3 million for the year ended December 31, 2023 from $1.5 million for the year ended December 31, 2022, an increase of approximately $2.8 million, primarily due to an increase in market interest rates.
Interest income, net Interest income, net was $1.7 million for the year ended December 31, 2024 compared to $4.3 million for the year ended December 31, 2023, a decrease of approximately $2.6 million, primarily due to an decrease in market interest rates and a lower average investment balance.
During Fiscal 2022, investing activities used $26.3 million of cash, consisting primarily of $104.3 million of investment purchases, and $0.9 million of purchases of property and equipment, partially offset by $78.9 million of investment maturities.
Investing activities During Fiscal 2024, investing activities used $18.3 million of cash, consisting primarily of investment purchases of $108.1 million partially offset by investment maturities of $90.0 million. During Fiscal 2023, investing activities provided $45.0 million of cash, consisting primarily of investment maturities.
We have not yet commercialized any products and we do not expect to generate revenue from sales of any drug candidates for at least several years, if ever. Our operations have been financed primarily by net proceeds from the sale and issuance of our convertible preferred stock, net proceeds from our IPO, and the issuance of convertible debt.
Our net losses were $131.2 million and $87.7 million for the years ended December 31, 2024 and 2023, respectively. We have had no revenue from product sales. We have not yet commercialized any products and we do not expect to generate revenue from sales of any drug candidates for at least several years, if ever.
Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses. We have no internal manufacturing capabilities or sales force and outsource a substantial portion of our clinical trial work to third parties.
We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses.
During Fiscal 2022, net cash provided by financing activities was $0.2 million, consisting primarily of $0.2 million from the issuance of common stock from the exercise of employee stock options and the issuance of shares through our employee stock purchase plan, partially offset by payments of our finance leases.
Financing activities During Fiscal 2024, net cash provided by financing activities was $0.4 million, primarily from share purchases through our employee stock purchase plan.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2023 2022 Net cash used in operating activities $ (78,997 ) $ (79,389 ) Net cash provided by (used in) investing activities 44,981 (26,293 ) Net cash provided by financing activities 88,328 164 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 54,312 $ (105,518 ) Operating activities During Fiscal 2023, operating activities used $79.0 million of cash, primarily resulting from our net loss of $87.7 million and cash used as a result of changes in our operating assets and liabilities of $9.5 million, partially offset by non-cash charges of $18.2 million.
If we are unable to raise additional funds through equity or debt financings or collaborations, strategic alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce and/or terminate our product development programs or any future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves. 98 Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2024 2023 Net cash and cash equivalents used in operating activities $ (80,743 ) $ (78,997 ) Net cash and cash equivalents (used in) provided by investing activities (18,279 ) 44,981 Net cash and cash equivalents provided by financing activities 355 88,328 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (98,667 ) $ 54,312 Operating activities During Fiscal 2024, operating activities used $80.7 million of cash, primarily resulting from our net loss of $131.2 million and cash used as a result of changes in our operating assets and liabilities of $5.0 million, partially offset by non-cash charges of $55.4 million.
In addition to collecting safety and PK data, this study is also designed to assess multiple efficacy biomarkers, which include MRI-PDFF and other non-invasive tests previously shown to be impacted by treatment with THR‑ß agonists.
The primary endpoint of this study was percent relative change in liver fat content by MRI-PDFF at Week 12. This study also evaluated the safety and PK of ALG-055009 treatment and its effect on multiple other efficacy biomarkers, including other non-invasive tests previously shown to be impacted by treatment with THR‑β agonists.
Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years.
As of December 31, 2024, we had an accumulated deficit of $618.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
The following table summarizes these research and development costs, in thousands: Year ended December 31, 2023 2022 Direct research and development expenses by development program: Metabolic dysfunction-associated steatohepatitis program $ 7,899 $ 3,489 Chronic Hepatitis B program 7,345 20,681 Coronaviruses program 8,421 5,651 Other early-stage programs 9,213 11,324 Total direct research and development expenses $ 32,879 $ 41,145 Total indirect research and development expenses 40,161 43,932 Total research and development expense $ 73,040 $ 85,077 General and administrative expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions.
The following table summarizes these research and development costs, in thousands: Year ended December 31, 2024 2023 Direct research and development expenses by development program: Chronic Hepatitis B program $ 8,270 $ 7,345 Metabolic dysfunction-associated steatohepatitis program 19,171 7,899 Coronaviruses program 4,511 8,421 Other early-stage programs 3,507 9,213 Total direct research and development expenses 35,459 32,878 Total indirect research and development expenses 34,810 40,162 Total research and development expense $ 70,269 $ 73,040 95 Research and development expenses were $70.3 million for the year ended December 31, 2024, compared to $73.0 million for the year ended December 31, 2023, a decrease of $2.8 million.
We have completed the initial Phase 1a study in HVs for our CAM-E, ALG‑000184, and a Phase 1b dose ranging study evaluating the safety, PK and antiviral activity of 10-300 mg doses of ALG‑000184 for 28 days among untreated HBV e-antigen (HBeAg) positive/negative CHB subjects.
A multi-part Phase 1 study is ongoing, with the completed evaluation of the safety, tolerability, and pharmacokinetic profile of ALG-000184 in HVs. Additionally, a dose-ranging phase assessing the safety, pharmacokinetics, and antiviral activity of 10-300 mg doses of ALG-000184 administered over 28 days in untreated HBeAg+/- subjects with chronic HBV infection has also been completed.
Our lead candidate, ALG‑097558, has been shown to be at least 6-fold more potent than nirmatrelvir and other PIs in clinical development in cell-based assays against a panel of SARS-CoV-2 variants (including Omicron). It also has demonstrated broad pan-coronavirus activity, and based on emerging Phase 1 clinical data, is not expected to require ritonavir boosting.
This collaboration led to the discovery of ALG‑097558 which has completed Phase 1 first-in-human evaluation in healthy volunteers and advanced into a clinical trial evaluating high-risk COVID-19 patients. ALG‑097558 has been shown to be at least 3-fold more potent than nirmatrelvir and other PIs in clinical development against a panel of SARS-CoV-2 variants (including Omicron).
Currently, we are initiating a Phase 2a proof of concept study (HERALD) under an amendment to an open investigational new drug application (IND). The study’s design is a 12-week randomized, placebo-controlled trial evaluating 4 doses of ALG-055009 vs. placebo in approximately 100 subjects with presumed liver fibrosis stage 1-3 (F1-F3) MASH.
Based on these promising Phase 1 data, we initiated the Phase 2a HERALD study (NCT06342947) at sites across the United States. The study was a 12-week randomized, double-blind, placebo-controlled trial evaluating 4 doses (0.3 mg, 0.5 mg, 0.7 mg, and 0.9 mg) of ALG-055009 vs. placebo in 102 subjects with presumed MASH and liver fibrosis at stages 1-3 (F1-F3).
This drug candidate recently completed evaluation in a Phase 1 study in healthy volunteers (HVs) (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily doses).
We believe these advantages position ALG‑055009 as a strong candidate to become a best-in-class THR-β agonist. A first-in-human Phase 1 study of ALG‑055009 in HVs (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily multiple ascending doses (MAD)) has been completed.
We performed a Code Section 382 analysis in 2023 and determined there was an ownership change that resulted in Section 382 limitations. As of the ownership change, $288.6 million and $407.1 million of federal and state net operating losses, respectively, and $9.7 million and $4.8 million of research and development credit carryforwards were written off.
We performed a Code Section 382 analysis in 2023 and determined there was an ownership change that resulted in Section 382 limitations, the impact of which is reflected in the financial statements. We performed a Code Section 382 analysis in 2024 and determined no further ownership change.
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We utilize our proprietary small molecule and oligonucleotide platforms to develop pharmacologically optimized drug candidates designed to achieve improved treatment outcomes. Our primary area of focus is MASH, a complex, chronic liver disease where combination regimens may prove beneficial. Our most advanced drug candidate for MASH is ALG‑055009, a small molecule thyroid hormone receptor beta (THR‑ß) agonist.
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The Aligos team has a demonstrated track record of success in drug development and medicinal chemistry in liver and viral diseases, resulting in three potential best‑in‑class drug candidates. Our pipeline of drug candidates includes ALG‑000184 for CHB, ALG‑055009 for MASH, ALG‑097558 for coronavirus infections, and a portfolio of preclinical programs.
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We anticipate dosing to begin in the second quarter of 2024 and with topline safety and 12 week MRI-PDFF data from this study in the fourth quarter of 2024.
Added
ALG‑000184 is our potential best‑/first‑in‑class Capsid Assembly Modulator (CAM‑E) for chronic HBV infection with enhanced pharmacologic properties vs. competitor CAM‑E drugs and has demonstrated greater HBV DNA suppression compared to the standard of care, NAs, as well as multi-log 10 reductions in viral antigens in Phase 1 clinical studies conducted to date.
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We believe ALG‑055009 has the potential to become a best‑in‑class THR‑ß agonist and could play an integral role in future MASH combination regimens based on its enhanced potency, beta selectivity, and its PK profile versus other THR‑ß drugs in development.
Added
ALG‑055009 is our potential best‑in‑class THR‑β agonist for MASH with enhanced pharmacologic properties vs. competitor THR-β agonists. Phase 2a topline data demonstrated that ALG‑055009 dose groups met the primary endpoint with statistically significant reductions in liver fat at Week 12 as measured by MRI-PDFF.
Removed
In addition to our small molecule THR‑ß program, we are also progressing oligonucleotide projects for MASH, including the collaboration with Merck. The programs are currently progressing through preclinical activities.
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ALG‑097558 is our potential best‑in‑class small molecule coronavirus 3CL PI which is at least 3-fold more potent in cell-based assays of coronavirus infection than other approved CoV PIs and can be dosed twice daily without the requirement for ritonavir co-dosing based on Phase 1 clinical studies conducted to date.
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Specifically, antiviral activity data in subjects dosed with 300 mg ALG‑000184 + ETV for up to 48 weeks are available in cohorts (Part 4 Cohorts 2 and B) of HBeAg positive subjects with normal/elevated baseline ALT. In these cohorts, we observed mean DNA reductions of 6.8 log 10 IU/mL.
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Data from the 300 mg ALG‑000184 monotherapy cohort with up to 92 weeks in HBeAg+ and up to 84 weeks in HBeAg- subjects demonstrated sustained HBV DNA suppression ( 90 Compared to Phase 3 studies with the current standard of care NAs, tenofovir disoproxil fumarate (TDF) and tenofovir alafenamide (TAF) (Buti et al., Lancet Gastro, 2016; Chen et al., Lancet Gastro 2016), these Phase 1 data to date indicate that ALG‑000184 treatment may be superior to NAs in HBeAg+/- subjects in achieving HBV DNA levels We are also exploring additional ways to boost immune responses via small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD-L1) transmembrane protein and its interaction with Programmed Cell Death Protein 1 (PD-1).
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Notably, subjects in these cohorts who initially received ETV x 12 weeks had more modest reductions in HBV DNA as compared to subjects receiving ALG‑000184 + ETV over the same time period.
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ALG‑055009: Potential best-in-class small molecule THR-β agonist for MASH MASH is a complex, chronic liver disease which is a leading cause of liver-related morbidity including cirrhosis, hepatocellular carcinoma, liver transplant, and end-stage liver disease. In 2024, the FDA approved resmetirom, a THR-β agonist, as the first drug for the treatment of MASH.
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In addition, subjects initially receiving ETV only then experienced further reductions in HBV DNA levels once they started receiving the combination of ETV and ALG‑000184, and their HBV DNA levels also reached levels exceeding 6 log 10 IU/mL, indicating an additive antiviral effect of ALG-000184 with ETV.
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However, additional therapies may address unmet needs, including the potential for improved efficacy and a more favorable risk-benefit profile. To achieve this, ALG-055009 has been purposefully designed to exhibit significantly greater potency (approximately 50-fold higher compared to resmetirom in head-to-head in vitro studies) and enhanced β selectivity, along with optimized pharmacologic properties to deliver an improved PK profile.
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Further, as of February 28, 2024, subjects receiving 300 mg ALG‑000184 monotherapy had similar DNA reductions as subjects receiving 300 mg ALG‑000184 + ETV and no subject has experienced viral breakthroughs.
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We announced positive topline data from this study in 2024, demonstrating that ALG-055009 dose groups were well-tolerated and met the primary endpoint. Specifically, doses of 0.5 mg to 0.9 mg ALG-055009 demonstrated statistically significant reductions in liver fat at Week 12, with placebo-adjusted median 91 relative reductions up to 46.2% as measured by MRI-PDFF.
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This indicates ETV is not meaningfully contributing to observed antiviral activity and there is no evidence of emergence of resistance after dosing with ALG‑000184 monotherapy for up to 48 weeks, the last time point studied to date.
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Up to 70% of subjects achieved ≥30% relative reduction in liver fat compared to baseline. Eighteen subjects who were on stable GLP-1 agonist therapy qualified for enrollment in the study, with liver fat content meeting the inclusion criteria of ≥10% at baseline as measured by MRI-PDFF.
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We have also observed in subjects dosed with either 100 or 300 mg of ALG-000184 + ETV that mean blood levels of all the three major viral antigens (HBsAg, HBeAg, and HBV core-related antigen (HBcrAg)) all declined by at least 1.2 log 10 units and these declines were dose related.
Added
Notably, 11 of 14 subjects on stable GLP-1 agonists treated with ALG-055009 had liver fat decreases, whereas 4 of 4 subjects on stable GLP-1 agonists treated with placebo had increases in liver fat over the 12-week dosing period. In the Phase 2a study, ALG‑055009 demonstrated a favorable tolerability profile with no evidence of clinical hyper/hypothyroidism.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeShould U.S. interest rates decline, interest income would be reduced in future periods for short- and long-term investments which mature and the proceeds of which are reinvested in similar instruments at lower interest rates. Additionally, the fair value of our short-term and long-term investments is subject to change as a result of potential changes in market interest rates.
Biggest changeShould U.S. interest rates decline, interest income would be reduced in future periods for short-term investments which mature and the proceeds of which are reinvested in similar instruments at lower interest rates. Additionally, the fair value of our short-term investments is subject to change as a result of potential changes in market interest rates.
We are exposed to market risk related to changes in interest rates applicable to our investment portfolio of cash equivalents and short-term and long-term investments. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
We are exposed to market risk related to changes in interest rates applicable to our investment portfolio of cash equivalents and short-term investments. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
As of December 31, 2023, we estimate that a hypothetical 100 basis point adverse movement would not result in a material impact on our financial position or results of operations or cash flows. Foreign currency exchange risk We have employees and operations, including contracts with third-party vendors, in Europe through our subsidiary Aligos Belgium BVBA.
As of December 31, 2024, we estimate that a hypothetical 100 basis point adverse movement would not result in a material impact on our financial position or results of operations or cash flows. Foreign currency exchange risk We have employees and operations, including contracts with third-party vendors, in Europe through our subsidiary Aligos Belgium BVBA.
A 10% increase or decrease in current exchange rates would not have a material effect on our financial position or results of operations or cash flows. 107
A 10% increase or decrease in current exchange rates would not have a material effect on our financial position or results of operations or cash flows. 101
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk Our cash, cash equivalents and investments of $135.7 million as of December 31, 2023, consist of bank deposits, money market funds, certificates of deposit and US Treasury available-for-sale securities.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk Our cash, cash equivalents and investments of $56.9 million as of December 31, 2024, consist of bank deposits, money market funds, and US Treasury available-for-sale securities.

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