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What changed in Galecto, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Galecto, Inc.'s 2022 and 2023 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 2023 report.

+558 added−676 removedSource: 10-K (2024-03-08) vs 10-K (2023-03-09)

Top changes in Galecto, Inc.'s 2023 10-K

558 paragraphs added · 676 removed · 383 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

150 edited+58 added−190 removed240 unchanged
Biggest changeFailure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending New Drug Applications, or NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. 27 The process required by the FDA before a drug may be marketed in the United States generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; • Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin; • Approval of the protocol and related documentation by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed drug product for each indication; • Submission to the FDA of an NDA, including payment of application user fees; • A determination by the FDA within 60 days of its receipt of an NDA to accept the marketing application for review; • Satisfactory completion of an FDA advisory committee review, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the product is produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • Satisfactory completion of FDA audits of clinical trial sites that generated the data in support of the NDA to assure compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA.
Biggest changeThe process required by the FDA before a drug may be marketed in the United States generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; • Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin; • Approval of the protocol and related documentation by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed drug product for each indication; • Submission to the FDA of an NDA, including payment of application user fees; 15 • A determination by the FDA within 60 days of its receipt of an NDA to accept the marketing application for review; • Satisfactory completion of an FDA advisory committee review, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the product is produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • Satisfactory completion of FDA audits of clinical trial sites that generated the data in support of the NDA to assure compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA.
We believe GB1211 has the potential to treat multiple types of fibrosis and oncology indications. Within the field of fibrotic diseases, our initial target indication for GB1211 is liver cirrhosis, a severe, progressive disease that ultimately leads to liver failure and for which there are limited treatment options and no FDA-approved disease modifying therapeutics available.
We believe GB1211 has the potential to treat multiple types of fibrosis and oncology indications. Fibrotic Disease Indications (Liver Cirrhosis) Within the field of fibrotic diseases, our initial target indication for GB1211 is liver cirrhosis, a severe, progressive disease that ultimately leads to liver failure and for which there are limited treatment options and no FDA-approved disease modifying therapeutics available.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that rare disease or condition. If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. • Phase 2: The investigational product is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. • Phase 3: The investigational product is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The investigational product is initially introduced into healthy human subjects or patients with the target 16 disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. • Phase 2: The investigational product is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. • Phase 3: The investigational product is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
A separate application will, however, still be required. • National authorization procedures —There are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products that fall outside the scope of the centralized procedure: 40 • Decentralized procedure —Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EEA country of medicinal products that have not yet been authorized in any EEA country and that do not fall within the mandatory scope of the centralized procedure. • Mutual recognition procedure —In the mutual recognition procedure, a medicine is first authorized in one EEA member state, in accordance with the national procedures of that country.
A separate application will, however, still be required. • National authorization procedures —There are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products that fall outside the scope of the centralized procedure: • Decentralized procedure —Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EEA country of medicinal products that have not yet been authorized in any EEA country and that do not fall within the mandatory scope of the centralized procedure. • Mutual recognition procedure —In the mutual recognition procedure, a medicine is first authorized in one EEA member state, in accordance with the national procedures of that country.
The mechanisms at work include checkpoint inhibitor-type mechanisms (inhibition of TGF-β signaling, LAG-3, T-cell receptor, interferon gamma) and mechanisms potentially enhancing PD-1/PD-L1 activity, as evidenced by preclinical data that we recently presented at the 2022 American Society of Clinical Oncology Annual Meeting showing that GB1211 reversed a galectin-3 induced blockage of the checkpoint inhibitors atezolizumab and pembrolizumab and exhibited synergistic effects with these checkpoint inhibitors.
The mechanisms at work include checkpoint inhibitor-type mechanisms (inhibition of TGF-β signaling, LAG-3, T-cell receptor, interferon gamma) and mechanisms potentially enhancing PD-1/PD-L1 activity, as evidenced by preclinical data that we presented at the 2022 American Society of Clinical Oncology Annual Meeting showing that GB1211 reversed a galectin-3 induced blockage of the checkpoint inhibitors atezolizumab and pembrolizumab and exhibited synergistic effects with these checkpoint inhibitors.
We believe that this is the first study in a population of Child-Pugh Class B decompensated cirrhosis patients of non-viral etiology showing changes in a series of liver parameters that are potentially clinically meaningful. NSCLC Background Lung cancer is the most common fatal malignancy in the developed world accounting for approximately 1.7 million deaths per year worldwide.
We believe that this was the first study in a population of Child-Pugh Class B decompensated cirrhosis patients of non-viral etiology showing changes in a series of liver parameters that are potentially clinically meaningful. 7 NSCLC Background Lung cancer is the most common fatal malignancy in the developed world accounting for approximately 1.7 million deaths per year worldwide.
For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned contains a new active substance not yet authorized in the EEA, or is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EEA.
For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned contains a new active substance not yet authorized in the EEA, or is a significant therapeutic, scientific 26 or technical innovation, or if its authorization would be in the interest of public health in the EEA.
Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our product on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to 28 each payor supporting scientific, clinical and cost-effectiveness data for the use of our product on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
Additionally, marketing authorization may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder of the authorized orphan product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder of the authorized orphan product cannot supply enough orphan medicinal product.
Additionally, marketing authorization may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more 27 effective or otherwise clinically superior; (ii) the marketing authorization holder of the authorized orphan product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder of the authorized orphan product cannot supply enough orphan medicinal product.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. 33 Once an approval of a drug is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. Once an approval of a drug is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving 24 quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Strict deadlines have been established for the assessment of clinical trial applications. Should we utilize third-party distributors, compliance with such foreign governmental regulations would generally be the responsibility of such distributors, who may be independent contractors over whom we have limited control. 41 Brexit and the Regulatory Framework in the U.K.
Strict deadlines have been established for the assessment of clinical trial applications. Should we utilize third-party distributors, compliance with such foreign governmental regulations would generally be the responsibility of such distributors, who may be independent contractors over whom we have limited control. Brexit and the Regulatory Framework in the U.K.
Furthermore, in the clinic, a retrospective study showed that patients with high tumor staining for galectin-3 were resistant to treatment with pembrolizumab, an anti-PD-1 antibody approved for the treatment of NSCLC, and, by contrast, patients with low galectin-3 had a good response to pembrolizumab and a reduction in tumor volume (see Figure 14 below).
Furthermore, in the clinic, a retrospective study showed that patients with high tumor staining for galectin-3 were resistant to treatment with pembrolizumab, an anti-PD-1 antibody approved for the treatment of NSCLC, and, by contrast, patients with low galectin-3 had a good response to pembrolizumab and a reduction in tumor volume (see Figure 1 below).
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a drug product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; 42 • cost-effective; and • neither experimental nor investigational.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a drug product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational.
The deposition of excess collagen and the formation of fibrosis can cause remodeling of surrounding healthy tissue and the loss of normal organ or tissue function. Fibrotic disease can affect tissues throughout the body including the lungs, liver, heart, kidneys and vascular system. Fibrosis typically progresses slowly and can ultimately lead to organ failure and death.
The deposition of excess collagen and the formation of fibrosis can cause remodeling of surrounding 4 healthy tissue and the loss of normal organ or tissue function. Fibrotic disease can affect tissues throughout the body including the lungs, liver, heart, kidneys and vascular system. Fibrosis typically progresses slowly and can ultimately lead to organ failure and death.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. 30 The FDA also may require the submission of a REMS if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA also may require the submission of a REMS if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug.
The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.
The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. 18 After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.
Accordingly, this review process typically takes 12 months and eight months, respectively from the date the NDA is submitted to the FDA. The FDA does not always meet its PDUFA goal dates for standard or priority NDAs, and the review process is often extended by FDA requests for additional information or clarification.
Accordingly, this review process typically takes 12 months and eight months, respectively from the date the NDA is submitted to the FDA. The FDA does not always meet its PDUFA goal dates for standard or priority NDAs, and the review process is often extended by FDA 17 requests for additional information or clarification.
The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for priority review in an effort to facilitate the review and to shorten the FDA’s goal for taking action on an NDA for a new molecular entity from ten months to six months from the date of filing.
The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for priority review in an effort to facilitate the review and to shorten the FDA’s goal for taking action on an NDA for a new molecular entity from ten months to six months from the date of 19 filing.
Fast Track designation, Breakthrough Therapy designation and Priority Review designation do not change the standards for approval but may expedite the development or review process. Drugs granted accelerated approval also must meet the same statutory standards for safety and effectiveness as those granted traditional approval. 32 U.S.
Fast Track designation, Breakthrough Therapy designation and Priority Review designation do not change the standards for approval but may expedite the development or review process. Drugs granted accelerated approval also must meet the same statutory standards for safety and effectiveness as those granted traditional approval. U.S.
If we continue to pursue patent protection, and if any patents issue based on our pending applications, we expect such patents to expire in 2036, absent any patent term extension in the United States. Our other patent families include two pending U.S. patent applications and pending foreign counterpart patent applications.
If we continue to pursue patent protection, and if any patents issue based on our pending applications, we expect such patents to expire in 2036, absent any patent term extension in the United States. 14 Our other patent families include two pending U.S. patent applications and pending foreign counterpart patent applications.
In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.
In addition, drug manufacturers and other entities involved in the 20 manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.
There are a large number of large biotechnology and biopharmaceutical companies that are currently pursuing the development of products for the treatment of fibrosis and cancer, and smaller number of companies seeking to develop treatments for liver cirrhosis.
There are a large number of large biotechnology and biopharmaceutical companies that are pursuing the development of products for the treatment of fibrosis and cancer, and smaller number of companies seeking to develop treatments for liver cirrhosis.
When bone-marrow based production of blood cells is significantly reduced, myelofibrosis patients also suffer from enlarged spleens due to overabundance of blood-forming stem cells. Myelofibrosis is considered to be a chronic leukemia which, in a subset of patients, can transform into an acute form of leukemia. Median overall survival is approximately 2.25 to 11.25 years.
When bone-marrow-based production of blood cells is significantly reduced, myelofibrosis patients also suffer from enlarged spleens due to overabundance of blood-forming stem cells. Myelofibrosis is considered to be a chronic leukemia that, in a subset of patients, can transform into an acute form of leukemia. Median overall survival is approximately 2.25 to 11.25 years.
Patent Nos. 10,150,732, 10,570,094 and 11,072,585, which are directed to composition of matter of and methods of treatment using compound GB2064. These issued U.S. patents are expected to expire in 2036, absent any patent term extension. The third issued patents, U.S. Patent Nos. 10,774,069 and 11,459,309, are directed to crystalline forms of GB2064.
Patent Nos. 10,150,732, 10,570,094, 11,072,585, and 11,793,797 which are directed to composition of matter of and methods of treatment using compound GB2064. These issued U.S. patents are expected to expire in 2036, absent any patent term extension. The third issued patents, U.S. Patent Nos. 10,774,069 and 11,459,309, are directed to crystalline forms of GB2064.
These topline results showed statistically significant reductions in ALT (p GB1211 exhibited a favorable tolerability profile in patients with decompensated liver cirrhosis in the GULLIVER-2 trial. Five of 15 patients on GB1211 and four of 15 patients on placebo reported nine and eight treatment-emergent adverse events (TEAEs), respectively.
These topline results showed statistically significant reductions in ALT (p GB1211 exhibited a favorable safety and tolerability profile in patients with decompensated liver cirrhosis in the GULLIVER-2 trial. Five of 15 patients on GB1211 and four of 15 patients on placebo reported nine and eight treatment-emergent adverse events, or TEAEs, respectively.
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 45
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 30
The current standard of care for myelofibrosis consists of inhibitors of the JAK2 protein kinase, which alleviate the disease symptoms through inhibition of cell proliferation but do not directly target or reduce the fibrosis of the bone marrow. As a result, a significant unmet need remains.
The current standard of care for myelofibrosis includes inhibitors of the JAK2 protein kinase, which alleviate the disease symptoms through inhibition of cell proliferation but do not directly target or reduce the fibrosis of the bone marrow. As a result, a significant unmet need remains.
These data suggest that galectin-3 up-regulation within the liver is a basic response to liver injury, irrespective of the initiating agent or disease process. As a result, we believe galectin-3 inhibitors have the potential to be a therapy for NASH or liver cirrhosis.
These data suggest that galectin-3 up-regulation within the liver is a basic response to liver injury, irrespective of the initiating agent or disease process. As a result, we believe galectin-3 inhibitors have the potential to be a therapy for MASH or liver cirrhosis.
Galecto has committed to supply GB1211 for this Phase 2 trial. The randomized, double-blind placebo controlled, investigator-initiated Phase 2 trial is expected to evaluate whether the addition of GB1211 increases the response rate of pembrolizumab in metastatic melanoma and HNSCC patients.
Galecto has committed to supply GB1211 for this Phase 2 trial. This randomized, double-blind placebo-controlled, investigator-initiated Phase 2 trial is designed to evaluate whether the addition of GB1211 increases the response rate of pembrolizumab in metastatic melanoma and HNSCC patients.
During the fourth quarter of 2022, at the American Association for the Study of Liver Diseases' (AASLD) The Liver Meeting® 2022, we announced topline results from our Phase 1b/2a GULLIVER-2 trial of GB1211 that is focused on safety and effect on liver function and fibrosis biomarkers in patients with decompensated liver cirrhosis.
During the fourth quarter of 2022, at the American Association for the Study of Liver Diseases' (AASLD) The Liver Meeting® 2022, we announced topline results from our Phase 1b/2a trial of GB1211, or the GULLIVER-2 trial, that was focused on safety and effect on liver function and fibrosis biomarkers in patients with decompensated liver cirrhosis.
Thus, galectin-3 could be a biomarker for anti-PD-1/PD-L1 resistance and, therefore, also be a marker for patients who may benefit from galectin-3 inhibition, which could enable a biomarker-based therapy. We believe the emerging data of galectin-3 as a checkpoint inhibitor resistance mechanism supports a key role for our oral galectin-3 inhibitor candidates in cancer therapy.
Thus, galectin-3 could be a biomarker for anti-PD-1/PD-L1 resistance and, therefore, also be a marker for patients who may benefit from galectin-3 inhibition. We believe the emerging data of galectin-3 as a checkpoint inhibitor resistance mechanism supports a key role for our oral galectin-3 inhibitor candidates in cancer therapy.
Mice dosed with 10mg/kg GB1211 twice a day had significantly lower levels of liver fibrosis compared to mice given placebo as detected by histological staining of liver sections with a collagen-specific dye, picrosirius red. This reduction in fibrosis was observed in the absence of changes in liver weight or body weight.
Mice dosed with 10 mg/kg GB1211 twice a day had significantly lower levels of liver fibrosis compared to mice given placebo as detected by histological staining of liver sections with a collagen-specific dye, picrosirius red. This reduction in fibrosis was observed in the absence of changes in liver weight or body weight.
If third-party payors do not consider our drugs to be cost-effective compared to other available therapies, they may not cover our drugs after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our drugs on a profitable basis.
In addition, if third-party payors do not consider 29 our drugs to be cost-effective compared to other available therapies, they may not cover our drugs after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our drugs on a profitable basis.
Because a central aspect of the mechanism of action for GB1211 in combination with a checkpoint inhibitor is to remove galectin-3 from the lymphocytes and the tumor cells, and thereby increase lymphocyte-based tumor killing, we believe this could also be a positive signal of enhanced lymphocyte activation.
Because a central aspect of the mechanism of action design for GB1211 in combination with a checkpoint inhibitor is to remove galectin-3 from the lymphocytes and the tumor cells, and thereby increase lymphocyte-based tumor killing, we believe this could possibly be a positive signal of enhanced lymphocyte activation.
Hence, by inhibiting LOXL2 and galectin-3, it may be possible to reduce tumor growth, enhance the effect of anticancer treatments and hence reduce disease progression and potentially improve survival. Figure 2.
Hence, by inhibiting LOXL2 and galectin-3, it may be possible to reduce tumor growth, enhance the effect of anticancer treatments and hence reduce disease progression and potentially improve survival.
The key competitive factors affecting the success of our product candidates are likely to be efficacy, safety, cost, and convenience. Intellectual property Our owned patents and patent applications relate to our fibrosis-inhibiting compounds and include patents and patent applications directed to new compositions of matter and to methods of treating lung, kidney and liver disorders.
The key competitive factors affecting the success of our product candidates are likely to be efficacy, safety, cost, and convenience. Intellectual property Our owned patents and patent applications relate to our fibrosis-inhibiting compounds and include patents and patent applications directed to new compositions of matter and to methods of treating cancer and liver, kidney and other disorders.
Our people’s voices are central to identifying how we, as an organization, can strengthen the organization further and maintain high retention. In 2022, we initiated a bi-annual employee satisfaction survey throughout the organization, showing strong engagement scores throughout 2022. Our future focus is to maintain and grow employee satisfaction by working systematically based on the feedback received from our team.
Our people’s voices are central to identifying how we, as an organization, can strengthen the organization further and maintain high retention. In 2022, we initiated a bi-annual employee satisfaction survey throughout the organization. Our future focus is to maintain and grow employee satisfaction by working systematically based on the feedback received from our team.
Our Solution - GB2064 We have chosen to pursue myelofibrosis as our first indication for GB2064 due to the upregulation of the LOXL2 in a number of fibrotic diseases, including myelofibrosis, the drug activity seen in preclinical data, the rapid rate of progression of the disease, and the relative ease of following disease progression through serum samples and bone marrow biopsies.
Our Solution - GB2064 We chose to pursue myelofibrosis as our first indication for GB2064 due to the upregulation of LOXL2 in a number of fibrotic diseases, the drug activity seen in preclinical data, the rapid rate of progression of the disease, and the relative ease of following disease progression through serum samples and bone marrow biopsies.
Because a central aspect of the mechanism of action for GB1211 in combination with a checkpoint inhibitor is to remove galectin-3 from the lymphocytes and the tumor cells, and thereby increase lymphocyte-based tumor killing, we believe this could also be a positive signal of enhanced lymphocyte activation.
Because a central aspect of the mechanism of action design for GB1211 in combination with a checkpoint inhibitor is to remove 2 galectin-3 from the lymphocytes and the tumor cells, and thereby increase lymphocyte-based tumor killing, we believe this could possibly be a positive signal of enhanced lymphocyte activation.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions; • federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the federal Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Centers for Medicare and Medicaid Services, or CMS, under the Open Payments Program, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), to certain non-physician providers such as physician assistants and nurse practitioners, and to teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and 35 • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial 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 that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions; • federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the federal Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Centers for Medicare and Medicaid Services, or CMS, under the Open Payments Program, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), to certain non-physician providers such as physician assistants and nurse practitioners, and to teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial 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 that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug 22 manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. 23 Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of a pharmaceutical manufacturer’s business activities could be subject to challenge under one or more of such laws.
Based on the favorable tolerability profile of our compounds observed to date, we believe our galectin-3 inhibitor therapies could be suitable for many clinical situations. In addition to galectin-3 inhibitors, we are progressing galectin-1 and galectin-9 inhibitors which may be useful in certain types of cancer.
Based on the favorable tolerability profile of our compounds observed to date, we believe our galectin-3 inhibitor therapies could be suitable for many clinical situations. In addition to our galectin-3 inhibitor candidates, we may develop galectin-1 and galectin-9 inhibitors, which may be useful in certain types of cancer.
GB1211 As of March 1, 2023, we owned three patent families that included three issued U.S. patents, three pending U.S. patent application, as well as pending foreign counterpart patent applications, relating to our product candidate, GB1211. One patent family includes U.S. Patent No. 10,526,360, U.S. Patent No. 10,774,102 and U.S.
GB1211 As of March 1, 2024, we owned three patent families that included four issued U.S. patents, two pending U.S. patent application, as well as pending foreign counterpart patent applications, relating to our product candidate, GB1211. One patent family includes U.S. Patent No. 10,526,360, U.S. Patent No. 10,774,102 and U.S.
GB1211 was generally well-tolerated with no drug-related serious adverse events at any doses up to the maximum dose tested of 400mg.
GB1211 was generally well-tolerated with no drug-related serious adverse events at any doses up to the maximum dose tested of 400 mg.
Companies that we are aware of that are targeting the treatment of fibrotic and related diseases include large companies with significant financial resources such as Pharmaxis Ltd, Biogen, Inc., AbbVie Inc., Gilead Sciences, Inc., Pliant Therapeutics, Inc., Galectin Therapeutics, Inc., FibroGen, Inc., Liminal BioSciences, Inc., Galapagos NV, Bristol Myers Squibb Co., Madrigal Pharmaceuticals, Inc., Inventiva, Akero Therapeutics, Inc., Boehringer Ingelheim, Roche/Genentech and Novartis AG.
Companies that we are aware of that are targeting the treatment of fibrotic and related diseases include large companies with significant financial resources such as AbbVie Inc., Akero Therapeutics, Inc., Biogen, Inc., Boehringer Ingelheim, Bristol Myers Squibb Co., Galectin Therapeutics, Inc., Gilead Sciences, Inc., Madrigal Pharmaceuticals, Inc., Novartis AG, Pharmaxis Ltd, Pliant Therapeutics, Inc. and Roche/Genentech.
The data from the intermediate assessment of the MYLOX-1 trial and the published literature on the LOXL2 mechanism suggest that LOXL2 inhibition may also be important in other solid and liquid tumor types as well as in fibrotic diseases.
The topline data from the MYLOX-1 trial and the published literature on the LOXL2 mechanism suggest that LOXL2 inhibition may also be important in other solid and liquid tumor types as well as in fibrotic diseases.
In the fourth quarter of 2021, we announced that we had entered into a clinical trial supply agreement with Roche for our Phase 2a GALLANT-1 trial of GB1211 in combination with atezolizumab, a PD-L1 checkpoint inhibitor, for the treatment of first-line NSCLC.
In November 2021, we announced that we had entered into a clinical trial supply agreement with Roche for our Phase 2a trial, or the GALLANT-1 trial, examining GB1211 in combination with atezolizumab, a PD-L1 checkpoint inhibitor, for the treatment of first-line NSCLC.
In preclinical models, GB2064 is approximately 400-fold more selective for human LOXL2 over other human LOX enzymes. GB2064 has shown activity in a number of preclinical models of fibrosis; has demonstrated good pharmacokinetics; and was generally well-tolerated in a Phase 1 trial in healthy adults.
In preclinical models, GB2064 was approximately 400-fold more selective for human LOXL2 over other human LOX enzymes. GB2064 showed activity in a number 12 of preclinical models of fibrosis, demonstrated good pharmacokinetics and was generally well-tolerated in a Phase 1 trial in healthy adults.
Phase 2a Clinical Trial in NSCLC – GALLANT-1 Trial In the fourth quarter of 2021, we announced that we had entered into a clinical trial supply agreement with Roche for our Phase 2a GALLANT-1 trial of GB1211 in combination with atezolizumab, a PD-L1 checkpoint inhibitor, for the treatment of first-line NSCLC.
Completed Clinical Trial in NSCLC – GALLANT-1 Trial (Part A) In November 2021, we announced that we had entered into a clinical trial supply agreement with Roche for our Phase 2a GALLANT-1 trial of GB1211 in combination with atezolizumab, a PD-L1 checkpoint inhibitor, for the treatment of first-line NSCLC.
Furthermore, in the clinic, a retrospective study showed that patients with high tumor staining for galectin-3 were resistant to treatment with pembrolizumab, an anti-PD-1 antibody approved for the treatment of NSCLC, and, by contrast, patients with low galectin-3 had a good response to pembrolizumab and a reduction in tumor volume.
Furthermore, in the clinic, a retrospective study showed that patients with high tumor staining for galectin-3 were resistant to treatment with pembrolizumab, an anti-PD-1 antibody approved for the treatment of non-small cell lung cancers, or NSCLC, and, by contrast, patients with low galectin-3 had a good response to pembrolizumab and a reduction in tumor volume.
Overlapping biology in fibrosis and cancer through galectin-3 and LOXL2 9 Galectin-3 Galectin-3 is a lectin central to the development of fibrotic disease across multiple tissue types and is part of a pre-innate galectin immune defense developmentally conserved for over 500 million years, which steers local inflammation and when chronically activated, drives the development of fibrosis via several pathways and several cell inflammatory cell types and fibrocytes.
Galectin-3 Galectin-3 is a lectin central to the development of fibrotic disease across multiple tissue types and is part of a pre-innate galectin immune defense developmentally conserved for over 500 million years, which steers local inflammation and when chronically activated, drives the development of fibrosis via several pathways and several cell inflammatory cell types and fibrocytes.
Completed Phase 1 Clinical Trial We have completed a Phase 1 single ascending dose and multiple ascending dose trial of GB2064 in 78 healthy volunteers. Volunteers received single doses of 150, 450, 1000, 2000 or 2500mg of GB2064 or daily doses of 150, 750, 2000mg or placebo for seven days.
Completed Phase 1 Clinical Trial We completed a Phase 1 single ascending dose and multiple ascending dose trial of GB2064 in 78 healthy volunteers. Volunteers received single doses of 150, 450, 1000, 2000 or 2500 mg of GB2064 or daily doses of 150, 750, 2000 mg or placebo for seven days.
In the intermediate assessment, four out of five evaluable myelofibrosis patients who received GB2064 monotherapy for at least six months experienced a ≥ 1-grade reduction in collagen fibrosis of the bone marrow, an improvement suggesting that GB2064 could impact the progression of the disease and potentially be disease modifying.
Six out of ten evaluable myelofibrosis patients who received GB2064 monotherapy for at least six months experienced a ≥ 1-grade reduction in collagen fibrosis of the bone marrow, an improvement suggesting that GB2064 could impact the progression of the disease and be disease-modifying.
With our science and knowledge at the center of our business, we have a team of knowledgeable and highly skilled employees who are crucial to the success of our business.
We consider our relationship with our employees to be strong. With our science and knowledge at the center of our business, we have a team of knowledgeable and highly skilled employees who are crucial to the success of our business.
Overview of Clinical Trials 23 Preclinical Data The effect of GB1211 was evaluated in a mouse model of carbon-tetrachloride-induced liver fibrosis. In two separate studies, fibrosis was induced in mice, which were then given either GB1211 or placebo.
Development of GB1211 Preclinical Data The effect of GB1211 was evaluated in a mouse model of carbon-tetrachloride-induced liver fibrosis. In two separate studies, fibrosis was induced in mice, which were then given either GB1211 or placebo.
Galectin-3 is a central regulator of chronic inflammation and fibrogenesis. Although not present in normal hepatocytes, galectin-3 expression is markedly increased in cirrhotic human liver secondary to a wide range of etiologies including viral-induced liver disease (Hepatitis B and C), NASH, autoimmune, copper or iron overload, primary biliary cirrhosis and alcohol-induced liver disease.
Although not present in normal hepatocytes, galectin-3 expression is markedly increased in cirrhotic human liver secondary to a wide range of etiologies including viral-induced liver disease (Hepatitis B and C), MASH, autoimmune, copper or iron overload, primary biliary cirrhosis and alcohol-induced liver disease.
However, we know of no other companies currently in clinical development with an inhaled or orally available small molecule inhibitor of galectin-3 or an orally available small molecule inhibitor of LOXL2 for myelofibrosis.
However, we know of no other companies in clinical development with an orally available small molecule inhibitor of galectin-3 or an orally available small molecule inhibitor of LOXL2.
GB1211 for the Treatment of Fibrosis and Cancer We believe GB1211, a selective oral galectin-3 inhibitor, has the potential to treat multiple types of fibrosis and oncology indications.
Our Clinical Product Candidate Portfolio GB1211 for the Treatment of Fibrosis and Cancer We believe GB1211, a selective oral galectin-3 inhibitor, has the potential to treat multiple types of fibrosis and oncology indications.
It is possible that governmental and enforcement authorities will conclude that a pharmaceutical manufacturer’s business practices do not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
Efforts to ensure that business arrangements comply with applicable healthcare laws involve substantial costs. It is possible that governmental and enforcement authorities will conclude that a pharmaceutical manufacturer’s business practices do not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
Other legislative and regulatory changes have been proposed and adopted in the United States since the ACA was enacted: • The U.S. Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year.
Other legislative and regulatory changes have been proposed and adopted in the United States since the ACA was enacted: • The U.S. Budget Control Act of 2011, among other things, created measures for spending reductions by Congress that include aggregate reductions of Medicare payments to providers of 2% per fiscal year, which remains in effect through 2031.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: • the demand for our product candidates, if we obtain regulatory approval; • our ability to set a price that we believe is fair for our products; • our ability to obtain coverage and reimbursement approval for a product; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: • the demand for our product candidates, if we obtain regulatory approval; • our ability to set a price that we believe is fair for our products; • our ability to obtain coverage and reimbursement approval for a product; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital. 25 Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability.
Our initial focus is developing GB2064 for the treatment of myelofibrosis, a malignant disease of the bone marrow in which progressive fibrosis reduces the ability to form blood cells in the bone marrow. This indication allows us to take and examine serial bone marrow biopsies where we can study GB2064’s potential impact on bone marrow collagen.
Our initial focus was to develop GB2064 for the treatment of myelofibrosis, a malignant disease of the bone marrow in which progressive fibrosis reduces the ability to form blood cells in the bone marrow. This indication allowed us to take and examine serial bone marrow biopsies where we westudy GB2064’s potential impact on bone marrow collagen.
The consistency of the reductions in liver enzymes shown in this severe form of liver cirrhosis, the progressive improvement we observed over 12 weeks and the favorable safety profile observed in the GULLIVER-2 trial lead us to believe that a broader study in patients with compensated and/or decompensated cirrhosis could show broader clinical activity, providing a potential regulatory path to approval as the first FDA-approved therapy in liver cirrhosis.
The consistency of the reductions in liver enzymes shown in this severe form of liver cirrhosis, the progressive improvement we observed over 12 weeks and the favorable safety profile observed in the GULLIVER-2 trial lead us to believe that a study in patients with compensated and/or decompensated cirrhosis could show broader clinical activity.
The mechanisms at work include checkpoint inhibitor-type mechanisms (inhibition of TGF-β signaling, LAG-3, T-cell receptor, interferon gamma) and mechanisms potentially enhancing PD-1/PD-L1 activity, as evidenced by preclinical data that we recently presented at the 2022 American Society of Clinical Oncology Annual Meeting showing that GB1211 reversed a galectin-3 induced blockage of the checkpoint inhibitors atezolizumab and pembrolizumab and exhibited synergistic effects with these checkpoint inhibitors.
The mechanisms at work include checkpoint inhibitor-type mechanisms (inhibition of TGF-β signaling, LAG-3, T-cell receptor, interferon gamma) and mechanisms potentially enhancing PD-1/PD-L1 activity, as evidenced by preclinical data showing that GB1211 reversed a galectin-3 induced blockage of the checkpoint inhibitors atezolizumab and pembrolizumab and exhibited synergistic activity with these checkpoint inhibitors.
Even when HSCT is restricted to the subpopulation of patients who are deemed healthy enough to withstand the treatment, there is a one-year treatment-related mortality rate of between 12 percent and 25 percent.
However, HSCT in myelofibrosis patients is a procedure associated with a high treatment-related mortality rate. Even when HSCT is restricted to the subpopulation of patients who are deemed healthy enough to withstand the treatment, there is a one-year treatment-related mortality rate of between 12 percent and 25 percent.
GB2064 As of March 1, 2023, we owned three patent families that included five issued U.S. patents, two pending U.S. patent applications, as well as issued and pending foreign counterpart patent and patent applications, relating to our product candidate, GB2064. These patent families include U.S.
GB2064 As of March 1, 2024, we owned three patent families that included six issued U.S. patents, one pending U.S. patent application, as well as issued and pending foreign counterpart patent and patent applications, relating to our product candidate, GB2064. These patent families include U.S.
Patent No. 11,377,464, which are directed to composition of matter of D-galactopyranose compounds of which compound GB1211 is a species. The issued U.S. patents are 26 expected to expire in 2036, absent any patent term extension.
Patent No. 11,377,464, which are directed to composition of matter of D-galactopyranose compounds of which compound GB1211 is a species and includes U.S. Patent No. 11,919,921 which are directed to a method of treatment wherein GB1211 is a species. The issued U.S. patents are expected to expire in 2036, absent any patent term extension.
In the EU, for example, a clinical trial authorization application, or CTA, must be submitted for each clinical protocol to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively.
In the EU, for example, a clinical trial authorization application, or CTA, must be submitted for each clinical protocol to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the CTA is accepted in accordance with a country’s requirements, the clinical trial may proceed.
As a result, submission of an IND may or may not result in the FDA allowing clinical trials to initiate. 28 Clinical Trials Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the control of the trial sponsor, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Clinical Trials Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the control of the trial sponsor, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
While the historical view was that established fibrosis is very difficult to impact, our preclinical data suggest that galectin-3 inhibition could reduce established fibrosis and the disease processes that drive the disease progression.
While the historical view was that established fibrosis is very difficult to impact, our preclinical data suggest that galectin-3 inhibition could reduce established fibrosis and the disease processes that drive the disease progression. Galectin-3 is a central regulator of chronic inflammation and fibrogenesis.
The galectin-3 mediated fibrosis is central to IPF and to several cancer types. The galectin-3 inhibitors inhibit the carbohydrate recognition domain stopping the attachment of galectin-3 to sugar moieties on cell surfaces receptors, and therefore stops its activation of key molecules like the receptors for TGF- b and VEGF.
Galectin-3 inhibitors inhibit the carbohydrate recognition domain stopping the attachment of galectin-3 to sugar moieties on cell surfaces receptors, and therefore stops its activation of key molecules like the receptors for TGF- b and VEGF.
We are currently developing GB2064, a selective oral LOXL2 inhibitor, for the treatment of myelofibrosis. The LOXL2 mechanism may also be important in other solid and liquid tumor types as well as fibrotic diseases.
As part of this strategy, we are developing GB2064, a selective oral small molecule inhibitor of LOXL2, for the treatment of fibrotic diseases, including myelofibrosis. The LOXL2 mechanism may also be important in other solid and liquid tumor types.
Overview of Ongoing Clinical Trial – MYLOX-1 Trial During the third quarter of 2021, we initiated the Phase 2a MYLOX-1 trial examining GB2064 for the treatment of myelofibrosis.
Completed Phase 2b Trial - MYLOX-1 Trial During the third quarter of 2021, we initiated the Phase 2a MYLOX-1 trial examining GB2064 for the treatment of myelofibrosis.
In the intermediate assessment, four out of five evaluable myelofibrosis patients who received GB2064 monotherapy for at least six months experienced a ≥ 1-grade reduction in collagen fibrosis of the bone marrow (see Figure 13 below), an improvement suggesting that GB2064 could impact the progression of the disease and potentially be disease modifying.
Six out of ten evaluable myelofibrosis patients who received GB2064 monotherapy for at least six months experienced a ≥ 1-grade reduction in collagen fibrosis of the bone marrow, an improvement suggesting that GB2064 could impact the progression of the disease and be disease-modifying.
Many tumors overexpress galectin-3, which mechanistically is linked to several cancer promoting mechanisms, including those linked to programmed cell death receptor 1 (PD-1) or its ligand, PD-L1 resistance and chemotherapy resistance, and may ultimately lead to worse clinical outcomes.
Oncology Indications We are also exploring GB1211 for the treatment of oncology indications. Many tumors overexpress galectin-3, which mechanistically is linked to several cancer-promoting mechanisms, including those linked to programmed cell death receptor 1 (PD-1) or its ligand, PD-L1 resistance and chemotherapy resistance, and may ultimately lead to worse clinical outcomes.
Both LOXL2 and galectin-3 have been shown to also play central roles in cancer progression and the formation of fibrosis associated with the tumor and in the tumor microenvironment (TME). These effects help tumors grow, metastasize and evade anticancer treatments.
It is these mechanisms that we are targeting with our proprietary product candidates. Both LOXL2 and galectin-3 have been shown to also play central roles in cancer progression and the formation of fibrosis associated with the tumor and in the tumor microenvironment (TME). These effects help tumors grow, metastasize and evade anticancer treatments.
The effects of the IRA on our business and the healthcare industry in general is not yet known. Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.
Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.
As we continue to develop our product candidates, we intend to seek additional patent protection in the United States, EU and in other key commercial markets worldwide.
As we continue to develop our product candidates and subject to the outcome of our exploration of strategic alternatives, we may seek additional patent protection in the United States, EU and in other key commercial markets worldwide.
Hence, blockade of galectin-3 may lead to increased T-cell number and activity in the tumor, though inhibition of these many factors. 22 Based on the wide tumor and metastasis promoting actions of galectin-3, we believe that our compounds targeting galectin-3 could counter many of the detrimental effects of galectin-3 and may be suitable as single agents or in combination with other checkpoint inhibitors, chemotherapy or chemo-irradiation therapies.
Based on the wide tumor and metastasis promoting actions of galectin-3, we believe that our compounds targeting galectin-3 could counter many of the detrimental effects of galectin-3 and may be suitable as single agents or in combination with other checkpoint inhibitors, chemotherapy or chemo-irradiation therapies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates, including GB0139, GB2064, GB1211 and any our other product candidates we develop in the future; • the clinical development plans we establish for these product candidates; • the number of, and development requirements for, other product candidates that we develop; • the timelines of our clinical trials and the overall costs to finish the clinical trials due to geopolitical instability and conflict and economic challenges caused by the COVID-19 pandemic; • the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities; • our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates, and the terms of such arrangements; • whether we are able to enter into and maintain collaboration agreements, including the terms of and timing of payments under any such agreements; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; 47 • the extent to which we acquire or in-license other products, product candidates, or technologies; • the effect of competing clinical, technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • changes in economic conditions, including rising inflation and interest rates, lower consumer confidence and volatile equity capital markets; and • the costs of continuing to operate as a public company.
Biggest changeOur future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the timing and outcome of our exploration of potential strategic alternatives; • our financial requirements following any strategic transaction; • timing of and costs associated with our restructuring, and the savings benefits we expect to receive from the restructuring; 34 • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates, including GB1211, GB2064 and any our other product candidates we develop in the future; • the clinical development plans we establish for these product candidates; • the scope, progress, results and costs of discovery, research, preclinical development, laboratory testing and clinical trials for our current and future product candidates; • the impacts of rising inflation and interest rates, geopolitical instability, changes in international trade relationships and conflicts; • the number of, and development requirements for, other product candidates that we develop; • the timelines of our clinical trials and the overall costs to finish clinical trials due to geopolitical instability and conflict; • the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities; • our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates, and the terms of such arrangements; • whether we are able to enter into and maintain collaboration agreements, including the terms of and timing of payments under any such agreements; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the extent to which we acquire or in-license other products, product candidates, or technologies; • the ability to receive additional non-dilutive funding, including grants from organizations and foundations; • the effect of competing clinical, technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • changes in economic conditions, lower consumer confidence and volatile equity capital markets; and • the costs of continuing to operate as a public company.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.
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 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.
This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications invented or developed using U.S. government funding, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies; • it is possible that our pending patent applications will not result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past and will continue to do so in the future.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications invented or developed using U.S. government funding, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies; • it is possible that our pending patent applications will not result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; 58 • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past and will continue to do so in the future.
If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: • infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; • substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; • a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party licenses its product rights to us, which it is not required to do; • if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our product candidates and any license that is available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property; and 74 • the need to redesign our product candidates or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: • infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; • substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; • a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party licenses its product rights to us, which it is not required to do; • if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our product candidates and any license that is available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property; and • the need to redesign our product candidates or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
Any future collaborations we enter into may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities; 82 • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not provide us with timely and accurate information regarding development progress and activity under any future license agreement, which could adversely impact our ability to report progress to our investors and otherwise plan development of our product candidates; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us; and • collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Any future collaborations we enter into may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; 69 • collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not provide us with timely and accurate information regarding development progress and activity under any future license agreement, which could adversely impact our ability to report progress to our investors and otherwise plan development of our product candidates; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us; and • collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
In cases where data from clinical trials conducted outside the United States are intended to serve as the sole basis for approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice; (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA 57 considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In cases where data from clinical trials conducted outside the United States are intended to serve as the sole basis for approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice; (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMP could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of an existing or future collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMP could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of an existing or future collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; 68 • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
The designation of a product candidate as a breakthrough therapy provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and ensure collection of appropriate data needed to support approval; more frequent written correspondence from FDA about such things as the design of the proposed clinical trials and use of biomarkers; intensive guidance on an efficient drug development program, beginning as early as Phase 1; organizational commitment involving senior managers; and eligibility for rolling review and priority review.
The designation of a product candidate as a breakthrough therapy provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and ensure collection of appropriate data needed to support approval; more frequent written correspondence from FDA about such things as 43 the design of the proposed clinical trials and use of biomarkers; intensive guidance on an efficient drug development program, beginning as early as Phase 1; organizational commitment involving senior managers; and eligibility for rolling review and priority review.
Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully utilize our facilities, or the manufacturing facilities of our third-party contract manufacturers, may have a material and adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions.
Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics and pandemics, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully utilize our facilities, or the manufacturing facilities of our third-party contract manufacturers, may have a material and adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or withdrawal of approvals; • product seizure or detention or refusal to permit the import or export of our product candidates; and 64 • consent decrees or injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or withdrawal of approvals; • product seizure or detention or refusal to permit the import or export of our product candidates; and • consent decrees or injunctions or the imposition of civil or criminal penalties.
Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of product candidates, once approved.
Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors may not cover, or 48 provide adequate reimbursement for, long-term follow-up evaluations required following the use of product candidates, once approved.
Such collaborators may develop adjacent or competing products to ours that are outside the scope of our patents; • we may not develop additional proprietary technologies for which we can obtain patent protection; 72 • it is possible that product candidates or diagnostic tests we develop may be covered by third parties’ patents or other exclusive rights; or • the patents of others may have an adverse effect on our business.
Such collaborators may develop adjacent or competing products to ours that are outside the scope of our patents; • we may not develop additional proprietary technologies for which we can obtain patent protection; • it is possible that product candidates or diagnostic tests we develop may be covered by third parties’ patents or other exclusive rights; or • the patents of others may have an adverse effect on our business.
Despite our efforts to bring practices into compliance with the GDPR and before the effective date of the ePrivacy Regulation, we may not be 68 successful either due to internal or external factors such as resource allocation limitations. Non-compliance could result in proceedings against us by governmental entities, customers, data subjects, consumer associations or others.
Despite our efforts to bring practices into compliance with the GDPR and before the effective date of the ePrivacy Regulation, we may not be successful either due to internal or external factors such as resource allocation limitations. Non-compliance could result in proceedings against us by governmental entities, customers, data subjects, consumer associations or others.
Even if we obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
Even if we obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies 61 licensed to us. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
If we are unable to reach agreements with suitable collaborators on a timely basis, 83 on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
Several jurisdictions in which we operate have tax laws with detailed transfer pricing rules that require all transactions with non-resident related parties be priced using arm’s length pricing principles, and that contemporaneous documentation must exist to support such pricing. There is a risk that the taxing authorities may not deem our transfer pricing documentation acceptable.
Several jurisdictions in which we operate have tax laws with detailed transfer pricing rules that require all transactions with non-resident related parties be priced using arm’s length pricing principles, and that contemporaneous documentation must exist to support such pricing. There is a risk that the relevant taxing authorities may not deem our transfer pricing documentation acceptable.
Even if the side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance of the approved product due to its tolerability versus other therapies. If we continue to encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Even if the side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance of the approved product due to its tolerability versus other therapies. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
For instance, Great Britain will now no longer be covered by the centralized procedures for obtaining 69 EEA-wide marketing and manufacturing authorizations from the EMA (under the Northern Irish Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland) and a separate process for authorization of drug products will be required in Great Britain, resulting in an authorization covering the U.K. or Great Britain only.
For instance, Great Britain will now no longer be covered by the centralized procedures for obtaining EEA-wide marketing and manufacturing authorizations from the EMA (under the Northern Irish Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland) and a separate process for authorization of drug products will be required in Great Britain, resulting in an authorization covering the U.K. or Great Britain only.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we 64 cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable intellectual property or other rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
If we raise additional 35 capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable intellectual property or other rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
Our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
The uncertainty concerning the U.K.’s legal, political and economic relationship with the EU after Brexit may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise) beyond the date of Brexit.
The uncertainty concerning the U.K.’s legal, political and economic relationship with the EU after Brexit may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading 55 agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise) beyond the date of Brexit.
Such mechanisms include re-examination, inter partes review, post-grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is 77 unpredictable.
Such mechanisms include re-examination, inter partes review, post-grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
The FDA or comparable foreign regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidates, if approved. We intend to develop certain of our product candidates and potentially other product candidates in combination with other therapies, which exposes us to additional risks.
The FDA or comparable 42 foreign regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidates, if approved. We intend to develop certain of our product candidates and potentially other product candidates in combination with other therapies, which exposes us to additional risks.
Seeking foreign regulatory approvals could result in significant 62 delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
Some of our competitors 75 may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.
Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.
Additionally, a California ballot initiative, the California Privacy Rights Act, or the CPRA, was passed in November 2020 and became effective January 1, 2023. The CPRA imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.
Additionally, a California ballot initiative, the California Privacy Rights Act, or the CPRA, was passed in November 2020 and became effective January 1, 2023. The CPRA imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal 53 information.
While we currently have agreements in place with the institutions from which we receive our tissue samples, we do not have any exclusive arrangements with such sources, and there is no guarantee that we will be able to maintain or renew such agreements on commercially reasonable terms, if at all.
While we currently have agreements in place with the institutions from which we receive our tissue samples, we do not have any 67 exclusive arrangements with such sources, and there is no guarantee that we will be able to maintain or renew such agreements on commercially reasonable terms, if at all.
Our business is highly dependent on the success of our product candidates, GB0139, GB1211, GB2064, as well as any other product candidates that we advance into the clinic. All of our product candidates may require significant additional preclinical and clinical development before we may be able to seek regulatory approval for and launch a product commercially.
Our business is highly dependent on the success of our product candidates, GB1211 and GB2064, as well as any other product candidates that we advance into the clinic. All of our product candidates may require significant additional preclinical and clinical development before we may be able to seek regulatory approval for and launch a product commercially.
From 2020 to 2022, the COVID-19 pandemic caused delays in certain of our studies, including (i) a delay in recruitment for our ongoing Phase 2b trial of GB0139 in IPF patients, which has resulted in certain trial protocol amendments and increased costs and (ii) a delay in the initiation and recruitment of our planned and ongoing clinical trials of GB1211 and GB2064.
From 2020 to 2022, the COVID-19 pandemic caused delays in certain of our studies, including (i) a delay in recruitment for our Phase 2b trial of GB0139 in IPF patients, which resulted in certain trial protocol amendments and increased costs and (ii) a delay in the initiation and recruitment of our planned and ongoing clinical trials of GB1211 and GB2064.
Recent or future patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. Under the enacted Leahy-Smith America Invents Act, or 71 the America Invents Act, after March 2013, the United States moved from a “first-to-invent” to a “first-inventor-to-file” system.
Recent or future patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. Under the enacted Leahy-Smith America Invents Act, or the America Invents Act, after March 2013, the United States moved from a “first-to-invent” to a “first-inventor-to-file” system.
The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business. We conduct our operations globally from several locations including Denmark, the United States, Sweden, the U.K. and Canada.
The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business. We conduct our operations globally from several locations including Denmark, the United States, the U.K. and Canada.
There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and biopharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, inter partes review, post grant review, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and biopharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, inter partes review, post grant 60 review, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke 65 third parties to assert claims against us.
If any of our relationships with these third-party CROs or other third parties terminate, we may not be able to enter into arrangements with alternative CROs or other third parties or to do so on commercially reasonable terms. 80 Switching or adding additional CROs involves additional cost and requires management time and focus.
If any of our relationships with these third-party CROs or other third parties terminate, we may not be able to enter into arrangements with alternative CROs or other third parties or to do so on commercially reasonable terms. Switching or adding additional CROs involves additional cost and requires management time and focus.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the 93 inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
In addition, there are risks associated with process development and large-scale manufacturing for clinical trials or commercial scale including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, compliance with good manufacturing practices, lot consistency and timely availability of raw materials.
In addition, there are risks associated with process development and large-scale manufacturing for clinical trials or commercial scale including, among others, cost overruns, potential problems with process scale-up, process reproducibility, 44 stability issues, compliance with good manufacturing practices, lot consistency and timely availability of raw materials.
Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.
Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate 74 the risk of accidental contamination or injury from these materials.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct our planned and ongoing clinical trials of GB0139, GB2064 and GB1211 and any future product candidates that we may develop, seek regulatory approvals for any of our product candidates and to launch and commercialize any products for which we receive regulatory approval.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct our planned and ongoing clinical trials of GB1211, GB2064 and any future product candidates that we may develop, seek regulatory approvals for any of our product candidates and to launch and commercialize any products for which we receive regulatory approval.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. 94 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
In addition, acquisitions may cause our effective tax rate to increase, depending on the jurisdictions in which the acquired operations are located. Certain of our subsidiaries may provide financing, products and services to, and may undertake certain significant transactions with, us or other of our subsidiaries in different jurisdictions.
In addition, acquisitions may cause our worldwide effective tax rate to increase, depending on the jurisdictions in which the acquired operations are located. Certain of our subsidiaries may provide financing, products and services to, and may undertake certain significant transactions with, us or other of our subsidiaries in different jurisdictions.
Because of the number and variability of factors that will determine our use of our existing cash, cash equivalents and marketable securities, their ultimate use may vary substantially from their currently intended use. Our management might not apply our existing cash, cash equivalents and marketable securities in ways that ultimately increase the value of our common stock.
Because of the number and variability of factors that will determine our use of our existing cash, cash equivalents and marketable securities, their ultimate use may vary substantially from their currently intended use. Our management might not 80 apply our existing cash, cash equivalents and marketable securities in ways that ultimately increase the value of our common stock.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million (£17.5 million) or 4% of the annual global revenues of the noncompliant company, whichever is greater. 86 We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters, and our business continuity and disaster recovery plans may not adequately protect us from any such serious disaster.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million (£17.5 million) or 4% of the annual global revenues of the noncompliant company, whichever is greater. 72 We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters, and our business continuity and disaster recovery plans may not adequately protect us from any such serious disaster.
If the therapies we use in 55 combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or comparable foreign regulatory authorities may require us to conduct additional clinical trials.
If the therapies we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or comparable foreign regulatory authorities may require us to conduct additional clinical trials.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even a successful defense of these claims would require significant financial and management resources.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even a successful defense of these claims would 45 require significant financial and management resources.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have 78 patent protection but where enforcement is not as strong as that in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the United States.
In some countries, we may be 66 required to conduct a clinical study or other studies that compare the cost-effectiveness of any of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
In some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of any of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
These proceedings are expensive and may consume our time or other resources. We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office, or EPO, or other foreign patent offices. The costs of these opposition 76 proceedings could be substantial and may consume our time or other resources.
These proceedings are expensive and may consume our time or other resources. We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office, or EPO, or other foreign patent offices. The costs of these opposition proceedings could be substantial and may consume our time or other resources.
If these third parties do not 79 successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize any potential product candidates.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize any potential product candidates.
Market opportunity estimates and growth forecasts included in this Annual Report on Form 10-K or that we may otherwise provide are subject to significant uncertainty and are based on assumptions and estimates which may not prove to be 87 accurate.
Market opportunity estimates and growth forecasts included in this Annual Report on Form 10-K or that we may otherwise provide are subject to significant uncertainty and are based on assumptions and estimates which may not prove to be accurate.
The enrollment of patients depends on many factors, including: • the patient eligibility and exclusion criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients; • the willingness or availability of patients to participate in our trials (including due to fears of contracting COVID-19 and other highly infectious or contagious diseases) or known or perceived risks associated with our product candidates; • the proximity of patients to trial 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 and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • the availability of competing commercially available therapies and other competing product candidates’ clinical trials; • our ability to obtain and maintain patient informed consents; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
The enrollment of patients depends on many factors, including: • the patient eligibility and exclusion criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients; 41 • the willingness or availability of patients to participate in our trials (including due to fears of contracting highly infectious or contagious diseases) or known or perceived risks associated with our product candidates; • the proximity of patients to trial 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 and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • the availability of competing commercially available therapies and other competing product candidates’ clinical trials; • our ability to obtain and maintain patient informed consents; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take 73 against such misconduct may not provide an adequate remedy to protect our interests fully.
Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any marketing application, and previous responses to inspection observations.
As such, we and our contract manufacturers will be subject to continual review and 50 inspections to assess compliance with cGMP and adherence to commitments made in any marketing application, and previous responses to inspection observations.
If we are unable to obtain or maintain third party 81 manufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully.
If we are unable to obtain or maintain third party manufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully.
We also may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval for, or to commercialize, GB0139 or any of our other fibrosis or oncology product candidates in development, including: • regulators or institutional review boards, or 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; • the FDA or other comparable regulatory authorities may disagree with our clinical trial design, including with respect to dosing levels administered in our planned and ongoing clinical trials, which may delay or prevent us from initiating or continuing our clinical trials with our originally intended trial design; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations, or CROs, which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • the number of subjects required for clinical trials of any product candidates may be larger than we anticipate, or subjects 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 that we add new clinical trial sites or investigators; • due to the impact of economic challenges caused by the COVID-19 pandemic and uncertainty in various global markets caused by geopolitical instability, we may experience delays or interruptions to our manufacturing supply chain, or we could suffer delays in reaching, or we may fail to reach, agreement on acceptable terms with third-party service providers on whom we rely; 52 • additional delays and interruptions to our clinical trials could extend the duration of the trials and increase the overall costs to finish the trials as our fixed costs are not substantially reduced during delays; • we may elect to, or regulators, IRBs, DSMBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • we may not have the financial resources available to complete our planned and ongoing clinical trials, or the cost of clinical trials of any product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate to initiate or complete a given clinical trial; and • the FDA or other comparable foreign regulatory authorities may require us to submit additional data such as long-term toxicology studies or impose other requirements before permitting us to initiate a clinical trial.
We also may experience numerous unforeseen events during, or as a result of, any future clinical trials that could delay or prevent our ability to receive marketing approval for, or to commercialize, any of our fibrosis or oncology product candidates in development, including: • regulators or institutional review boards, or 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; • the FDA or other comparable regulatory authorities may disagree with our clinical trial design, including with respect to dosing levels administered in our planned and ongoing clinical trials, which may delay or prevent us from initiating or continuing our clinical trials with our originally intended trial design; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations, or CROs, which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • the number of subjects required for clinical trials of any product candidates may be larger than we anticipate, or subjects 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 that we add new clinical trial sites or investigators; • due to the impact of economic challenges caused by global pandemics and uncertainty in various global markets caused by geopolitical instability, we may experience delays or interruptions to our manufacturing supply chain, or we could suffer delays in reaching, or we may fail to reach, agreement on acceptable terms with third-party service providers on whom we rely; • additional delays and interruptions to our clinical trials could extend the duration of the trials and increase the overall costs to finish the trials as our fixed costs are not substantially reduced during delays; • we may elect to, or regulators, IRBs, DSMBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; 40 • we may not have the financial resources available to complete our planned and ongoing clinical trials, or the cost of clinical trials of any product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate to initiate or complete a given clinical trial; and • the FDA or other comparable foreign regulatory authorities may require us to submit additional data such as long-term toxicology studies or impose other requirements before permitting us to initiate a clinical trial.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
We likely will have little control over such third parties, and any of them may 49 fail to devote the necessary resources and attention to sell and market our products effectively.
See the section entitled, “ Business – Government Regulation – Coverage and Reimbursement. ” 61 Government authorities and other third-party payors decide which drugs and treatments they will cover and the amount of reimbursement.
See the section entitled, “ Business – Government Regulation – Coverage and Reimbursement. ” Government authorities and other third-party payors decide which drugs and treatments they will cover and the amount of reimbursement.
There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
There has been increasing legislative 51 and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
Competition for skilled personnel in our industry is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. To induce valuable employees to remain with us, in addition to salary and cash incentives, we have provided stock options that vest over time.
Competition for skilled personnel in our industry is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. To induce valuable employees to remain with us, in addition to salary and cash incentives, we have provided stock options and restricted stock units that vest over time.
Despite our efforts to retain valuable employees, members of our management, scientific and development 85 teams may terminate their employment with us on short notice. Our key employees are at-will employees, which means that any of our employees could leave our employment at any time, with or without notice.
Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. Our key 71 employees are at-will employees, which means that any of our employees could leave our employment at any time, with or without notice.
Our future growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining and motivating additional employees; • managing our development and commercialization efforts effectively, including the clinical and FDA review process for GB0139 and any other fibrosis or oncology product candidates, while complying with our contractual obligations to contractors and other third parties; and • improving our operational, financial and management controls, reporting systems and procedures.
Our future growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining and motivating additional employees; • managing our development and commercialization efforts effectively, including the clinical and FDA review process for our fibrosis and oncology product candidates, while complying with our contractual obligations to contractors and other third parties; and • improving our operational, financial and management controls, reporting systems and procedures.
The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.
The value to employees of stock options and restricted stock units that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.
Most product candidates that commence clinical trials are never approved as therapeutic products, and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of GB0139 or any of our other fibrosis or oncology product candidates.
Most product candidates that commence clinical trials are never approved as therapeutic products, and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of any of our fibrosis or oncology product candidates.
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline. Item 1B. Unresolve d Staff Comments. None. 95
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline. 82 Item 1B. Unresolve d Staff Comments. None.
Certain of our clinical trials may also involve invasive procedures, such as bone marrow biopsies in our MYLOX-1 trial, which may lead some patients to drop out of trials to avoid these follow-up procedures.
Certain of our clinical trials may also involve invasive procedures, such as bone marrow biopsies in our recently completed MYLOX-1 trial, which may lead some patients to drop out of trials to avoid these follow-up procedures.
We face an inherent risk of product liability as a result of testing GB0139 and any of our other fibrosis or oncology product candidates in clinical trials and will face an even greater risk if we commercialize any products.
We face an inherent risk of product liability as a result of testing our fibrosis or oncology product candidates in clinical trials and will face an even greater risk if we commercialize any products.
The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget. We expect to continue to rely on third-party manufacturers if we receive regulatory approval for GB0139 or any other fibrosis or oncology product candidate.
The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget. We expect to continue to rely on third-party manufacturers if we receive regulatory approval for any of our fibrosis or oncology product candidates.
Any delay in entering into new strategic collaboration agreements related to our product candidates could delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market. Risks Related to Managing Our Business and Operations We may encounter difficulties in managing our growth, which could adversely affect our operations.
Any delay in entering into new strategic collaboration agreements related to our product candidates could delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market. 70 Risks Related to Managing Our Business and Operations We may encounter difficulties in managing our organization, which could adversely affect our operations.
Additionally, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, changes in our ownership may limit the amount of our net operating loss carryforwards and tax credit carryforwards that could be utilized annually to offset our future taxable income, if any.
Additionally, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, changes in our ownership may limit the amount of our net operating loss carryforwards and tax credit carryforwards that could be utilized annually to offset our future taxable income, if any. Under Section 382 of the Code and applicable U.S.
Furthermore, products currently approved for other indications could be discovered to be effective treatments of the biological processes that drive fibrosis as well, which could give such products significant regulatory and market timing advantages over GB0139 or other fibrosis product candidates that we may develop.
Furthermore, products currently approved for other indications could be discovered to be effective treatments of the biological processes that drive fibrosis as well, which could give such products significant regulatory and market timing advantages over any fibrosis product candidates that we may develop.
Data Protection Act 2018 set out the U.K.’s data protection regime, which is independent from but aligned to the EU’s data protection regime. The U.K. Government has announced plans to reform its data protection legal framework in the Data Reform Bill, but those have been put on hold. Non-compliance with the U.K.
Data Protection Act 2018 set out the U.K.’s data protection regime, which is independent from but aligned to the EU’s data protection regime. The U.K. Government has announced plans to reform its data protection legal framework in the Data Reform Bill, but those have been put on hold.
Our business may be harmed if we are unable to avail ourselves of these or any other expedited development and regulatory pathways. We currently conduct and may in the future conduct clinical trials for our product candidates outside the United States.
Our business may be harmed if we are unable to avail ourselves of these or any other expedited development and regulatory pathways. We have conducted and may in the future conduct clinical trials for our product candidates outside the United States.
Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Europe can be less extensive than those in the United States and Europe.
We have limited intellectual property rights outside the United States and Europe. Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Europe can be less extensive than those in the United States and Europe.
For instance, in the dose selection phase of our Phase 2a GALLANT-1 trial for the first-line treatment of NSCLC, we observed two serious adverse events of autoimmune-type skin rashes (showing perivascular lymphocytic infiltrates), which were determined by the principal investigator to be related to the administration of atezolizumab.
For instance, in the dose selection phase of our Phase 2a GALLANT-1 trial evaluating GB1211 in combination with atezolizumab for the first-line treatment of NSCLC, we observed two serious adverse events of autoimmune-type skin rashes (showing perivascular lymphocytic infiltrates), which were determined by the principal investigator to be related to the administration of atezolizumab.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts; • our ability to obtain marketing approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • our ability to attract, hire and retain qualified personnel; 48 • expenditures that we will or may incur to develop additional product candidates; • the level of demand for our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates; • general market conditions or extraordinary external events, such as increased economic uncertainty in the United States and abroad or the economic challenges caused by the COVID-19 pandemic; • the changing and volatile U.S. and global economic environments; and • future accounting pronouncements or changes in our accounting policies.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and outcome of our exploration of potential strategic alternatives; • our financial requirements following any strategic transaction; • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts; • our ability to obtain marketing approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional product candidates; 36 • the level of demand for our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates; • general market conditions or extraordinary external events, such as increased economic uncertainty in the United States and abroad; • the changing and volatile U.S. and global economic environments; and • future accounting pronouncements or changes in our accounting policies.
We currently have no products that are approved for commercial sale and may never be able to develop marketable products. We are very early in our development efforts, and our product candidates, including GB0139, are in early clinical development.
We currently have no products that are approved for commercial sale and may never be able to develop marketable products. We are very early in our development efforts, and our product candidates, including GB1211 and GB2064, are in early clinical development.
In connection with our efforts to expand our pipeline of product candidates, we may enter into certain licenses or other collaboration agreements in the future pertaining to the in-license of rights to additional product candidates. Such agreements may impose various diligence, milestone payment, royalty, insurance or other obligations on us.
In connection with our efforts to expand our pipeline of product candidates and our exploration of strategic alternatives, we may enter into certain licenses or other collaboration agreements in the future pertaining to the in-license of rights to additional product candidates. Such agreements may impose various diligence, milestone payment, royalty, insurance or other obligations on us.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of GB0139 or any of our other fibrosis or oncology product candidates in development. We may experience delays in initiating or completing clinical trials.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our fibrosis or oncology product candidates. We may experience delays in initiating or completing clinical trials.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, the facilities that we lease are the following: Location Primary Use Approximate Square Footage Lease Expiration Date Renewal Option Ole Maaloes Vej 3, DK-2200 Copenhagen N, Denmark Office space 4,000 January 31, 2025 None Evergreen House North, Grafton Place, London, NW1 2DX Office space 1,000 February 29, 2024 None Sahlgrenska Science Park AB, Medicinaregatan 8A, 413 90 Gothenburg, Sweden Office space 388 May 30, 2023 None Stevenage Open Innovation Bioscience Park, Stevenage, Hertfordshire, SG1 2FX Laboratory space 1,046 August 8, 2025 None We believe that our current facilities are sufficient to meet our current and near-term needs and that, should it be needed, suitable additional space will be available.
Biggest changeAs of December 31, 2023, the facilities that we lease are the following: Location Primary Use Approximate Square Footage Lease Expiration Date Renewal Option Ole Maaloes Vej 3, DK-2200 Copenhagen N, Denmark Office space 4,000 January 31, 2025 None Evergreen House North, Grafton Place, London, NW1 2DX Office space 1,000 February 29, 2024 None Stevenage Open Innovation Bioscience Park, Stevenage, Hertfordshire, SG1 2FX Laboratory space 1,046 December 31, 2023 None We believe that our current facilities are sufficient to meet our current and near-term needs and that, should it be needed, suitable additional space will be available. 83

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 96 PART II
Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 84 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrior to that time, there was no established public trading market for our common stock. Holders of Our Common Stock As of March 1, 2023, we had 25,673,474 outstanding shares of common stock and no outstanding shares of preferred stock. At March 1, 2023, there were 27 holders of record of our common stock.
Biggest changePrior to that time, there was no established public trading market for our common stock. Holders of Our Common Stock As of March 1, 2024, we had 27,112,697 outstanding shares of common stock and no outstanding shares of preferred stock. At March 1, 2024, there were 23 holders of record of our common stock.
We expect to use the net proceeds from the offering described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on October 30, 2020. 97 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Res erved. 98
We expect to use the net proceeds from the offering described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on October 30, 2020. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Res erved. 85
As of December 31, 2022, $20.7 million of the net proceeds from our IPO have been used for general working capital purposes, including the funding of our clinical development programs. We have invested the unused net proceeds from the offering in money market accounts and marketable debt securities.
As of December 31, 2023, $56.5 million of the net proceeds from our IPO have been used for general working capital purposes, including the funding of our clinical development programs. We have invested the unused net proceeds from the offering in money market accounts and marketable debt securities.

Item 7. Management's Discussion & Analysis

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

59 edited+40 added−22 removed38 unchanged
Biggest changeOur future funding requirements will depend on many factors, including, but not limited to: • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates, including GB0139, GB2064, GB1211 and any other product candidates we may develop in the future; • the clinical development plans we establish for these product candidates; • the number of, and development requirements for, other product candidates that we develop; • the timelines of our clinical trials and the overall costs to finish the clinical trials due to geopolitical instability and conflict and economic challenges caused by the COVID-19 pandemic; • the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities; • our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates, and the terms of such arrangements; • whether we are able to enter into and maintain collaboration agreements, including the terms of and timing of payments under any such agreements; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; 105 • the extent to which we acquire or in-license other products, product candidates, or technologies; • the effect of competing clinical, technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • changes in economic conditions, including rising inflation and interest rates, lower consumer confidence and volatile equity capital markets; and • the costs of continuing to operate as a public company.
Biggest changeOur future funding requirements will depend on many factors, including, but not limited to: • the timing and outcome of our exploration of potential strategic alternatives; • our financial requirements following any strategic transaction; • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates, including GB1211, GB2064 and any our other product candidates we develop in the future; • the clinical development plans we establish for these product candidates; 93 • the scope, progress, results and costs of discovery, research, preclinical development, laboratory testing and clinical trials for our current and future product candidates; • the impacts of rising inflation and interest rates, geopolitical instability, changes in international trade relationships and conflicts; • the number of, and development requirements for, other product candidates that we develop; • the timelines of our clinical trials and the overall costs to finish clinical trials due to geopolitical instability and conflict; • the outcome, timing and cost of meeting regulatory requirements established by the FDA, EMA and other comparable foreign regulatory authorities; • our ability to enter into contract manufacturing arrangements for supply of API and manufacture of our product candidates, and the terms of such arrangements; • whether we are able to enter into and maintain collaboration agreements, including the terms of and timing of payments under any such agreements; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the extent to which we acquire or in-license other products, product candidates, or technologies; • the ability to receive additional non-dilutive funding, including grants from organizations and foundations; • the effect of competing clinical, technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • changes in economic conditions, lower consumer confidence and volatile equity capital markets; and • the costs of continuing to operate as a public company.
Net Cash Provided by Financing Activities Cash provided by financing activities of $0.5 million for the year ended December 31, 2022 was the result of net proceeds from the issuance of our common stock.
Cash provided by financing activities of $0.5 million for the year ended December 31, 2022 was the result of net proceeds from the issuance of our common stock.
We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition 96 period provided in the JOBS Act.
" In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
If and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
On November 4, 2021, we filed with the SEC, and the SEC declared effective on November 12, 2021, a registration statement on 103 Form S-3, or the Registration Statement, which registers the offering, issuance and sale of up to $200.0 million of our common stock, preferred stock, debt securities, warrants, subscription rights and/or units of any combination thereof.
On November 4, 2021, we filed with the SEC, and the SEC declared effective on November 12, 2021, a registration statement on Form S-3, or the Registration Statement, which registers the offering, issuance and sale of up to $200.0 million of our common stock, preferred stock, debt securities, warrants, subscription rights and/or units of any combination thereof.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Research and Development Costs We incur substantial expenses associated with clinical trials.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. 94 Research and Development Costs We incur substantial expenses associated with clinical trials.
Our business, financial condition and results of operations could be materially and adversely affected by further negative impact on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.
Our business, financial condition and results of operations could be materially and adversely affected by further negative impact 87 on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.
Other Income (Expense), Net Our other income (expense), net is comprised of: • Interest income: The interest income earned on our cash, cash equivalents and marketable securities is recorded in our statements of operations . • Gain (loss) on sales of marketable securities: The loss on the sales of our marketable securities are recorded in our statements of operations. • Foreign exchange: The functional currency of our subsidiaries in Denmark and Sweden is the Euro.
Other Income (Expense), Net Our other income (expense), net is comprised of: • Interest income: The interest income earned on our cash, cash equivalents and marketable securities is recorded in our statements of operations . • Gain (loss) on sales of equipment: The gain on the sales of our equipment are recorded in our statements of operations. • Gain (loss) on sales of marketable securities: The loss on the sales of our marketable securities are recorded in our statements of operations. • Foreign exchange: The functional currency of our subsidiaries in Denmark and Sweden is the Euro.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The 95 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) if the market value of our shares held by non-affiliates is more than $250 million but less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year.
We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million.
The tax benefits recognized in the financial statements from such positions are measured based on the largest amount that is more than 50% likely to be realized upon ultimate settlement. We have not recorded any uncertain tax positions as of December 31, 2022 or 2021.
The tax benefits recognized in the financial statements from such positions are measured based on the largest amount that is more than 50% likely to be realized upon ultimate settlement. We have not recorded any uncertain tax positions as of December 31, 2023 or 2022.
The fair value of our awards in the year ended December 31, 2021 has been estimated using Black-Scholes based on the following assumptions: term of 6.0 years; volatility of 90.5%; risk-free rate of 0.7%; and no expectation of dividends We will continue to use judgment in evaluating the assumptions utilized for our equity-based compensation expense calculations on a prospective basis.
The fair value of our awards in the year ended December 31, 2022 has been estimated using Black-Scholes based on the following assumptions: term of 6.0 years; volatility of 90.0%; risk-free rate of 1.7%; and no expectation of dividends We will continue to use judgment in evaluating the assumptions utilized for our equity-based compensation expense calculations on a prospective basis.
The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including: • successful completion of preclinical studies and initiation of clinical trials for GB0139, our other current fibrosis and oncology product candidates and any future product candidates; • successful completion of our ongoing Phase 2 clinical trials for GB0139, GB2064 and GB1211, and any clinical trials for future product candidates; • data from our clinical programs that support an acceptable risk-benefit profile of our product candidates in the intended patient populations; • acceptance by the FDA, regulatory authorities in Europe, Health Canada or other regulatory agencies of regulatory filings for GB0139, GB2064, GB1211 and any future product candidates; • expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates; • successful application for and receipt of marketing approvals from applicable regulatory authorities; • obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates; • arrangements with third-party manufacturers for, or establishment of, commercial manufacturing capabilities; • establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effective competition with other therapies; • obtainment and maintenance of coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors; • maintenance, enforcement, defense and protection of our rights in our intellectual property portfolio; • avoidance of infringement, misappropriation or other violations with respect to others’ intellectual property or proprietary rights; and • maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals. 101 We may never succeed in achieving regulatory approval for any of our product candidates.
The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including: • successful completion of preclinical studies and clinical trials for our current fibrosis and oncology product candidates and any future product candidates; • data from our clinical programs that support an acceptable risk-benefit profile of our product candidates in the intended patient populations; • acceptance by the FDA, regulatory authorities in Europe, Health Canada or other regulatory agencies of regulatory filings for GB1211, GB2064 and any future product candidates; • maintenance of a workforce of experienced scientists and others to continue to develop our product candidates; • successful application for and receipt of marketing approvals from applicable regulatory authorities; • obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates; • arrangements with third-party manufacturers for, or establishment of, commercial manufacturing capabilities; • establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effective competition with other therapies; • obtainment and maintenance of coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors; • maintenance, enforcement, defense and protection of our rights in our intellectual property portfolio; • avoidance of infringement, misappropriation or other violations with respect to others’ intellectual property or proprietary rights; and • maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals.
We use a Black-Scholes option pricing model to determine fair value of our stock options. The Black-Scholes option pricing model includes various assumptions, including the fair value of common shares, expected life of stock options, the expected volatility based on the historical volatility of a publicly traded set of peer companies and the expected risk-free interest rate.
The Black-Scholes option pricing model includes various assumptions, including the fair value of common shares, expected life of stock options, the expected volatility based on the historical volatility of a publicly traded set of peer companies and the expected risk-free interest rate.
In addition, economic uncertainty in various global markets, including the U.S. and Europe, caused by political instability and conflict, such as the ongoing conflict in Ukraine, and economic challenges caused by the COVID-19 pandemic, have led to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions, which have caused record inflation globally.
Economic uncertainty in various global markets, including the U.S. and Europe, caused by political instability and conflict, such as the ongoing conflict in Ukraine and in Israel, have led to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions, which have caused record inflation globally.
We have historically met the requirements to receive a tax credit in Denmark of up to $0.9 million per year for losses resulting from research and development costs of up to approximately $4.1 million per year. The tax credit is reported as a reduction to research and development expense in the consolidated statements of operations.
We have historically met the requirements to receive a tax credit in Denmark of up to $0.8 million per year for losses resulting from research and development costs of up to approximately $3.7 million per year. The tax credit is reported as a reduction to research and development expense in the consolidated statements of operations.
General and administrative expenses General and administrative expenses were $13.0 million for the year ended December 31, 2022, compared to $13.7 million for the year ended December 31, 2021.
General and administrative expenses General and administrative expenses were $12.7 million for the year ended December 31, 2023, compared to $13.0 million for the year ended December 31, 2022.
Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 108
Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. Effects of Inflation Our assets are primarily monetary, consisting of cash and cash equivalents.
The fair value of our awards in the year ended December 31, 2022 has been estimated using Black-Scholes based on the following assumptions: term of 6.0 years; volatility of 90.0%; risk-free rate of 1.7%; and no expectation of dividends.
The fair value of our awards in the year ended December 31, 2023 has been estimated using Black-Scholes based on the following assumptions: term of 6.0 years; volatility of 91.0%; risk-free rate of 3.8%; and no expectation of dividends.
Net Cash Used in Investing Activities Cash provided by investing activities of $12.4 million for the year ended December 31, 2022 was attributable to $57.5 million in proceeds from the sale of marketable securities, offset by $44.9 million for the purchase of marketable securities and $0.2 million for the purchase of property and equipment.
Cash provided by investing activities of $12.4 million for the year ended December 31, 2022 was attributable to $57.5 million in proceeds from the sale of marketable securities, offset by $44.9 million for the purchase of marketable securities and $0.2 million for the purchase of property and equipment. 92 Net Cash Provided by Financing Activities Cash provided by financing activities of $2.9 million for the year ended December 31, 2023 was the result of net proceeds from the issuance of our common stock.
Other income (expense), net Other expense was $(0.4) million for the year ended December 31, 2022, compared to other income of $0.5 million for the year ended December 31, 2021.
Other income (expense), net Other income, net was $1.6 million for the year ended December 31, 2023, compared to other (expense), net of $(0.4) million for the year ended December 31, 2022.
We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others.
We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2022 2021 (in thousands) Net cash used in operating activities $ (42,932 ) $ (52,308 ) Net cash provided by (used in) investing activities 12,384 (48,048 ) Net cash provided by financing activities 507 — Net decrease in cash and cash equivalents $ (30,041 ) $ (100,356 ) Net Cash Used in Operating Activities Cash used in operating activities of $42.9 million during the year ended December 31, 2022 was attributable to our net loss of $61.6 million, offset by a net increase of $11.9 million in our working capital and in non-cash items of $6.8 million principally with respect to non-cash stock-based compensation, non-cash amortization of premiums and discounts on marketable securities and non-cash amortization of the right of use lease asset.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (36,911 ) $ (42,932 ) Net cash provided by investing activities 22,330 12,384 Net cash provided by financing activities 2,876 507 Net decrease in cash and cash equivalents $ (11,705 ) $ (30,041 ) Net Cash Used in Operating Activities Cash used in operating activities of $36.9 million during the year ended December 31, 2023 was attributable to our net loss of $38.3 million and a net decrease of $4.4 million in our working capital, offset by a net increase in non-cash items of $5.8 million principally with respect to non-cash stock-based compensation, non-cash amortization of the right of use lease asset, non-cash amortization of premiums and discounts on marketable securities and non-cash depreciation of equipment.
We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.
As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements.
The extent and duration of these market disruptions, whether as a result of the military conflict between Russia and Ukraine and effects of the Russian sanctions, geopolitical tensions, record inflation or otherwise, are impossible to predict, but could be substantial.
The extent and duration of these market disruptions, whether as a result of the military conflict between Russia and Ukraine and effects of the Russian sanctions, geopolitical tensions, record inflation or otherwise, are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this report.
For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.
For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. 89 Depending on the results of the strategic alternatives being pursued, research and development activities may continue to account for a significant portion of our operating expenses in the future.
Cash used in operating activities of $52.3 million during the year ended December 31, 2021 was attributable to our net loss of $51.8 million together with a net decrease of $6.6 million in our working capital, offset by an increase in non-cash items of $6.1 million principally with respect to non-cash stock-based compensation and non-cash amortization of premiums and discounts on marketable securities.
Cash used in operating activities of $42.9 million during the year ended December 31, 2022 was attributable to our net loss of $61.6 million, offset by a net increase of $11.9 million in our working capital and in non-cash items of $6.8 million principally with respect to non-cash stock-based compensation, non-cash amortization of premiums and discounts on marketable securities and non-cash amortization of the right of use lease asset.
During the quarter ended December 31, 2022, we sold an aggregate of 71,363 shares of our common stock under the ATM Program at a weighted average selling price of $1.62 per share.
During the year ended December 31, 2023, we sold an aggregate of 1,460,305 shares of our common stock under the ATM Program at a weighted average selling price of $2.10 per share.
On November 2, 2020, we completed our IPO in which we raised $86.3 million in net proceeds.
Since inception, we have had significant operating losses. On November 2, 2020, we completed our IPO in which we raised $86.3 million in net proceeds.
In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development.
Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Cash used in investing activities of $48.0 million for the year ended December 31, 2021 was attributable to $84.2 million for the purchase of marketable securities and $0.2 million for the purchase of property and equipment, offset by $36.4 million in proceeds from the sale of marketable securities.
Net Cash Used in Investing Activities Cash provided by investing activities of $22.3 million for the year ended December 31, 2023 was attributable to $48.1 million in proceeds from the sale of marketable securities and $0.1 million for the proceeds from the sale of equipment, offset by $25.9 million for the purchase of marketable securities.
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses; costs related to third-party clinical research, manufacturing and development services; costs relating to the build-out of our headquarters and other offices, our laboratories and our manufacturing facility; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; clinical costs; manufacturing costs; legal and other regulatory expenses and general overhead costs.
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses; costs related to third-party clinical research, manufacturing and development services; laboratory expenses and costs for related supplies; clinical costs; manufacturing costs; legal and other regulatory expenses and general overhead costs.
We account for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation , or ASC 718. In accordance with ASC 718, compensation cost is measured at estimated fair value and is recognized as compensation expense over the vesting period during which service is provided in exchange for the award.
In accordance with ASC 718, compensation cost is measured at estimated fair value and is recognized as compensation expense over the vesting period during which service is provided in exchange for the award. We use a Black-Scholes option pricing model to determine fair value of our stock options.
During the year ended December 31, 2022, we sold an aggregate of 390,560 shares of our common stock under the ATM Program at a weighted average selling price of $1.92 per share. We had no sales under the ATM Program during the year ended December 31, 2021.
During the year ended December 31, 2022, we sold an aggregate of 390,560 shares of our common stock under the ATM Program at a weighted average selling price of $1.92 per share. Our net losses were $38.3 million and $61.6 million for the years ended December 31, 2023 and 2022, respectively.
If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders, will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights as a common stockholder.
Simultaneous with the filing of the Registration Statement, we entered into an Open Market Sale Agreement SM with Jefferies LLC, as sales agent, to provide for the issuance and sale of up to $50.0 million of our common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement, or the ATM Program.
Our operations to date have been financed primarily from our initial public offering, or IPO, the issuance of common stock through our Open Market Sale Agreement SM with Jefferies LLC, as sales agent, to provide for the issuance and sale of up to $50.0 million of our common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus, or the ATM Program, the issuance of convertible preferred shares and convertible notes.
If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends.
As of December 31, 2022, the Company’s wholly owned subsidiaries were PharmAkea, Inc., Galecto Securities Corporation and Galecto Biotech AB. Galecto ApS, a Danish operating company, was Galecto Biotech AB’s wholly owned subsidiary.
Shares in Galecto Biotech AB, a Swedish operating company, were exchanged at a one-to-one ratio for shares in Galecto, Inc. in a common control/tax-free reorganization. As of December 31, 2023, the Company’s wholly owned subsidiaries were PharmAkea, Inc., Galecto Securities Corporation and Galecto Biotech AB. Galecto ApS, a Danish operating company, was Galecto Biotech AB’s wholly owned subsidiary.
Transactions denominated in currencies other than the Euro result in exchange gains and losses that are recorded in our consolidated statements of operations. 102 Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following sets forth our results of operations for the years ended December 31, 2022 and 2021: Year Ended December 31, Change 2022 2021 Amount Percent (in thousands) Operating expenses Research and development $ 48,206 $ 38,488 $ 9,718 25% General and administrative 13,001 13,739 (738 ) -5% Total operating expenses 61,207 52,227 8,980 17% Loss from operations (61,207 ) (52,227 ) (8,980 ) 17% Other income (expense), net (417 ) 475 (892 ) -188% Net loss $ (61,624 ) $ (51,752 ) $ (9,872 ) 19% Research and development expenses Research and development expenses were comprised of: Year Ended December 31, 2022 2021 Change (in thousands) Preclinical studies and clinical trial-related activities $ 26,488 $ 17,358 $ 9,130 Chemistry, manufacturing and control 7,019 9,989 (2,970 ) Personnel 9,331 7,383 1,948 Consultants and other costs 5,368 3,758 1,610 Total research and development expenses $ 48,206 $ 38,488 $ 9,718 Research and development expenses were $48.2 million for the year ended December 31, 2022, compared to $38.5 million for the year ended December 31, 2021.
Transactions denominated in currencies other than the Euro result in exchange gains and losses that are recorded in our consolidated statements of operations. 90 Results of Operations – Comparison of the Years Ended December 31, 2023 and 2022 The following sets forth our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 Amount Percent (in thousands) Operating expenses Research and development $ 23,770 $ 48,206 $ (24,436 ) -51% General and administrative 12,687 13,001 (314 ) -2% Restructuring costs 3,448 — 3,448 100% Total operating expenses 39,905 61,207 (21,302 ) -35% Loss from operations (39,905 ) (61,207 ) 21,302 -35% Other income (expense), net 1,556 (417 ) 1,973 -473% Net loss $ (38,349 ) $ (61,624 ) $ 23,275 -38% Research and development expenses Research and development expenses were comprised of: Year Ended December 31, 2023 2022 Change (in thousands) Preclinical studies and clinical trial-related activities $ 7,849 $ 26,488 $ (18,639 ) Chemistry, manufacturing and control 2,157 7,019 (4,862 ) Personnel 7,488 9,331 (1,843 ) Consultants and other costs 6,276 5,368 908 Total research and development expenses $ 23,770 $ 48,206 $ (24,436 ) Research and development expenses were $23.8 million for the year ended December 31, 2023, compared to $48.2 million for the year ended December 31, 2022.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses.
Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
We could also enter into additional research, manufacturing, supplier and other agreements in the future, which may require up-front payments and even long-term commitments of cash. Emerging Growth Company and Smaller Reporting Company Status As an EGC under the JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies.
Emerging Growth Company and Smaller Reporting Company Status As an EGC under the JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies.
Liquidity and Capital Resources Sources of Liquidity Our operations to date have been financed primarily through our IPO, the issuance of common stock through our at-the-market program and the issuance of convertible preferred shares and convertible notes. Since inception, we have had significant operating losses.
The increase of $2.0 million was primarily due to increased interest income, net and increased foreign exchange loss, net. 91 Liquidity and Capital Resources Sources of Liquidity Our operations to date have been financed primarily through our IPO, the issuance of common stock through our at-the-market program and the issuance of convertible preferred shares and convertible notes.
If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we modify our estimates of accrued expenses accordingly on a prospective basis. 106 Stock-based Compensation We have issued stock-based compensation awards through the granting of stock options, which generally vest over a four-year period.
We generally accrue expenses related to clinical trials based on contracted amounts applied to the level of patient enrollment and activity. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we modify our estimates of accrued expenses accordingly on a prospective basis.
The increase of $9.7 million was primarily related to an increase in clinical trial-related expenses of $9.1 million resulting from our four Phase 2 clinical trials, increased personnel costs due to additional headcount of $1.2 million and personnel costs for non-cash stock-based compensation of $0.7 million and increased other research and development costs of $1.6 million, offset by decreased chemistry, manufacturing and control, or CMC, activities of $2.9 million.
The decrease of $24.4 million was primarily related to decreased clinical trial-related expenses of $18.6 million due to discontinued clinical trial activities, decreased chemistry, manufacturing and control, or CMC, activities of $4.9 million and decreased personnel costs of $1.8 million, offset by increased consulting related costs and other research and development costs of $0.9 million.
Recently Adopted Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to our consolidated financial statements for the years ended December 31, 2022 and 2021 for a discussion of recent accounting pronouncements. 107 Contractual Obligations We enter into contracts in the normal course of business with third-party service providers for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes.
Contractual Obligations We enter into contracts in the normal course of business with third-party service providers for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes.
Our net losses were $61.6 million and $51.8 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $217.7 million and $66.1 million in cash, cash equivalents and marketable securities.
Since inception, we have had significant operating losses. Our net loss was $38.3 million and $61.6 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $256.1 million and $33.2 million in cash, cash equivalents and marketable securities. Galecto, Inc. was incorporated in Delaware in October 2019.
Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities.
Our most advanced product candidate, GB0139, is in Phase 2b clinical development and our other current fibrosis and oncology product candidates are in early stages of clinical development. Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates.
Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the outcome of our exploration of strategic alternatives, as well as partnering and/or funding additional activities in order to achieve the successful development and eventual commercialization of one or more of these product candidates.
We recorded a reduction to research and development expense of $0.8 million and $0.9 million for the year ended December 31, 2022 and 2021, respectively. The credits are available the following year, in 2023 and 2024, respectively. Our direct research and development expenses are not currently tracked on a program-by-program basis.
We recorded a reduction to research and development expense of $0.8 million in both periods for the year ended December 31, 2023 and 2022, respectively. The credits are available the following year, in 2024 and 2025, respectively. We have qualified for the R&D Expenditure Credit (RDEC) in United Kingdom for preclinical laboratory and in-patient clinical trials.
We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates.
The RDEC is available the following year, in 2024. Our direct research and development expenses are not currently tracked on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and 88 developing product candidates.
Any such disruptions may also magnify the impact of other risks described in this report. 99 For additional information on the various risks posed by the COVID-19 pandemic and global economic uncertainty, please read the section entitled “Risk Factors” in this Annual Report on Form 10-K.
For additional information on the various risks posed by global economic uncertainties, please read the section entitled “Risk Factors” in this Annual Report on Form 10-K. Components of Operating Results Operating Expenses Our operating expenses since inception have consisted primarily of research and development expenses and general and administrative costs.
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. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.
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. Our estimates do not include any cash, cash equivalents and marketable securities that will be needed to fund a potential strategic transaction nor our financial needs following the consummation of any strategic transaction.
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. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.
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. Our estimates do not include any cash, cash equivalents and marketable securities that will be needed to fund a potential strategic transaction nor our financial needs following the consummation of any strategic transaction.
Personnel costs consist of salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, business operations and other administrative functions. We expect our general and administrative expenses to continue over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company.
Personnel costs consist of salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, business operations and other administrative functions. We anticipate that our general and administrative expenses will decrease in the near future compared to prior periods due to the recent restructuring announced in connection with our exploration of strategic alternatives.
We will monitor the extent to which our deferred tax assets may be realized and adjust the valuation allowance accordingly.
We will monitor the extent to which our deferred tax assets may be realized and adjust the valuation allowance accordingly. Recently Adopted Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to our consolidated financial statements for the years ended December 31, 2023 and 2022 for a discussion of recent accounting pronouncements.
We had no cash used in or provided by financing activities for the year ended December 31, 2021. 104 Funding Requirements Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future.
Because our resource requirements could materially change depending on the outcome of our ongoing strategic alternative review process, we are unable to estimate the exact amount of our working capital requirements. Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future.
Removed
Our operations to date have been financed primarily from our initial public offering, or IPO, the issuance of convertible preferred shares and convertible notes. Since inception, we have had significant operating losses. Our net loss was $61.6 million and $51.8 million for the years ended December 31, 2022 and 2021, respectively.
Added
In September 2023, we announced a corporate restructuring that resulted in a substantial reduction of our workforce and that we have initiated a process to evaluate strategic alternatives. As part of our ongoing strategic review process, we are exploring potential strategic alternatives that include, without limitation, a stock or asset acquisition, merger, business combination or other transaction.
Removed
As of December 31, 2022, we had an accumulated deficit of $217.7 million and $66.1 million in cash, cash equivalents and marketable securities. Galecto, Inc. was incorporated in Delaware in October 2019. Shares in Galecto Biotech AB, a Swedish operating company, were exchanged at a one-to-one ratio for shares in Galecto, Inc. in a common control/tax-free reorganization.
Added
We are also exploring strategic transactions regarding our product candidates and related assets, including, without limitation, licensing transactions and asset sales. We expect to devote substantial time and resources to exploring strategic alternatives in order to maximize stockholder value.
Removed
In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a public company. See "Item 1A.
Added
Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all.
Removed
Risk Factors - Risks Related Our Financial Position and Need for Additional Capital - We have incurred significant net losses since inception and we expect to continue to incur significant net losses for the foreseeable future.
Added
We have not set a timetable for completion of this strategic review process, and our board of directors has not approved a definitive course of action.
Removed
Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities of $66.1 million as of December 31, 2022, will be sufficient to continue funding our development activities into the second half of 2024.
Added
Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value or that we will make any cash distributions to our stockholders.
Removed
The spread of COVID-19 and identification of new variants and subvariants of the virus has impacted the global economy and, both directly and indirectly, businesses and commerce.
Added
We currently expect our expenses to decrease in the near future due to our decision to stop development of certain of our product candidates and reduce our workforce while we explore strategic alternatives. Our remaining product candidates, GB1211 and GB2064, are in Phase 2 of clinical development.
Removed
As worker shortages have occurred, supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.
Added
However, we expect our research and development expenses, general and administrative expenses, and capital expenditures will decrease in the near future compared to prior periods due to the recent restructuring announced in connection with our exploration of strategic alternatives.
Removed
The ongoing economic challenges of the COVID-19 pandemic and its effects on our business and operations are uncertain.
Added
We anticipate that our expenses will increase substantially if, and as, we: • negotiate and consummate a strategic business transaction; • advance our fibrosis and oncology product candidates and any future product candidates through clinical development, and, if successful, later-stage clinical trials; • advance our preclinical development programs into clinical development; • experience delays or interruptions to preclinical studies, clinical trials, our receipt of services from our third-party service providers on whom we rely, or our supply chain, including delays and economic uncertainty in various global markets caused by geopolitical instability and conflict and economic challenges caused by global health crises such as the COVID-19 pandemic; • seek regulatory approvals for any product candidates that successfully complete clinical trials; 86 • commercialize our fibrosis and oncology product candidates and any future product candidates, if approved; • increase the amount of research and development activities to discover and develop product candidates; • hire additional clinical development, quality control, scientific and management personnel; • expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development and manufacturing efforts, general and administrative functions and our operations as a public company; • 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 third parties; • maintain, expand and protect our intellectual property portfolio; and • invest in or in-license other technologies or product candidates.
Removed
Components of Operating Results Operating Expenses Our operating expenses since inception have consisted primarily of research and development expenses and general and administrative costs.
Added
We expect to continue to incur costs and expenditures in connection with the process of evaluating our strategic alternatives. There can be no assurance, however, that we will be able to successfully consummate any particular strategic transaction.
Removed
The majority of our clinical spending in the years ended December 31, 2022 and 2021 was on GB0139. 100 We expect to continue to incur research and development expenses for the foreseeable future as we continue to invest in research and development activities related to developing GB0139, GB2064, GB1211 and any other product candidates we may develop, including investments in conducting clinical trials, manufacturing and otherwise advancing our programs.
Added
The process of continuing to evaluate these strategic options may be very costly, time-consuming and complex and we have incurred, and may in the future incur, significant costs related to this continued evaluation, such as legal, accounting and advisory fees and expenses and other related charges.
Removed
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.

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