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What changed in PLIANT THERAPEUTICS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of PLIANT THERAPEUTICS, 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.

+463 added−508 removedSource: 10-K (2024-02-27) vs 10-K (2023-03-09)

Top changes in PLIANT THERAPEUTICS, INC.'s 2023 10-K

463 paragraphs added · 508 removed · 351 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

116 edited+38 added−29 removed159 unchanged
Biggest changeThe EU GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data (i.e., data relating to identified or identifiable individuals), including requirements relating to having legal bases for processing personal data, transferring such personal data outside the EEA, including to the United States, processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, responding to individuals’ requests to exercise their rights in respect of their personal data, implementing safeguards to protect the security and confidentiality of personal data, having data processing agreements with third parties who process personal data on our behalf, providing notification of data breaches, and taking certain measures when engaging third-party processors, conducting data protection impact assessments, and record-keeping.
Biggest changeThe GDPR is wide-ranging in scope and imposes numerous requirements on controllers that process personal data (i.e., data relating to identified or identifiable individuals), including requirements around (among others): accountability and transparency, relating to having legal bases for processing personal data, including specific requirements for obtaining valid consent where consent is the legal basis for processing, responding to individuals’ requests to exercise their rights in respect of their personal data, implementing safeguards to protect the security and confidentiality of personal data to provide notification of personal data breaches to data protection authorities and affected individuals in certain circumstances, having data processing agreements with third parties who process personal data on our behalf, and to undertake due diligence in relation to such third-party processors, considering data protection when any new products or services are developed and designed, as well as obligations for data protection impact assessments, record-keeping and accountability.
These laws, regulations, and actions, and any state or federal healthcare reform measures that may be adopted in the future, could reduce coverage or reimbursement Medicare and other government programs, may result in a similar reduction in coverage or payment from private payers, and may otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
These laws, regulations, and actions, and any state or federal healthcare reform measures that may be adopted in the future, could reduce coverage or reimbursement from Medicare and other government programs, may result in a similar reduction in coverage or payment from private payers, and may otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
In the United States, these laws include, without limitation, state and federal anti- kickback, false claims, physician transparency, and patient data privacy and security laws and regulations, including but not limited to those described below: • the federal Anti-Kickback Statute, or AKS, which makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer or pay any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, that is intended to induce or reward, referrals including the purchase recommendation, order or prescription of a particular drug for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs.
In the United States, these laws include, without limitation, state and federal anti- kickback, false claims, physician payment transparency, price transparency, and patient data privacy and security laws and regulations, including but not limited to those described below: • the federal Anti-Kickback Statute, or AKS, which makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer or pay any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, that is intended to induce or reward, referrals including the purchase recommendation, order or prescription of a particular drug for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs.
Violations of the False Claims Act can result in civil penalties of up to more than $25,000 per false claim or statement (an amount adjusted annually for inflation) plus three times the amount of damages sustained by the government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent 17 Table of Contents pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act, created under Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biological products 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) , nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse-midwives, and 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, transparency and disclosure laws, 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 and, in some states, the reporting of drug wholesale acquisition costs or average manufacturer prices, information related to new drug launches, and drug price increases above certain statutory thresholds; 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.
Violations of the False Claims Act can result in civil penalties of up 18 to more than $25,000 per false claim or statement (an amount adjusted annually for inflation) plus three times the amount of damages sustained by the government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act, created under Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biological products 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) , nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse-midwives, and 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, transparency and disclosure laws, 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 and, in some states, the reporting of drug wholesale acquisition costs or average manufacturer prices, information related to new drug launches, and drug price increases above certain statutory thresholds; 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.
Failure 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.
Failure to comply with the applicable U.S. requirements at any 13 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.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety 17 risks; or imposition of distribution or other restrictions under a REMS program.
In the EU this is under the Transparency Regulation No 1049/ 2001, EMA Policy 0043, EMA Policy 0070, as well as the Clinical Trials Regulation No 536/2014, all of which impose on sponsors the obligation to make publicly available certain information stemming from clinical studies, either proactively or in response to third party requests.
In the EU this is under the Transparency Regulation No 1049/ 2001, EMA Policy 0043, EMA Policy 0070, as well as the Clinical Trials Regulation No 536/2014, all of which impose on sponsors the obligation to make publicly 22 available certain information stemming from clinical studies, either proactively or in response to third party requests.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required 15 specifications.
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; 12 Table of Contents • Approval by an independent institutional review board, or IRB, 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 to establish the safety and efficacy of the proposed drug product for each indication; • Submission to the FDA of an NDA; • Satisfactory completion of an FDA advisory committee review, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which 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 drug’s identity, strength, quality and purity; • Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; • Payment of user fees and securing FDA approval of the NDA; and • Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
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 by an independent institutional review board, or IRB, 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 to establish the safety and efficacy of the proposed drug product for each indication; • Submission to the FDA of an NDA; • Satisfactory completion of an FDA advisory committee review, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which 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 drug’s identity, strength, quality and purity; • Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; • Payment of user fees and securing FDA approval of the NDA; and • Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
Additionally, we expect to experience pricing pressures in connection with the sale of any future approved product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes.
Additionally, we expect to experience pricing pressures in connection with the sale of any future approved product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative and regulatory changes.
To obtain a marketing authorization in Switzerland, a company must submit a marketing authorization application to Swissmedic, Switzerland’s national authorization and supervisory authority for medicinal products and medical devices. There are no international agreements on mutual recognition of authorizations in relation to medicinal products.
To obtain a marketing authorization in Switzerland, a company must submit a marketing authorization application to Swissmedic, Switzerland’s national authorization and supervisory authority for medicinal products and medical devices. 23 There are no international agreements on mutual recognition of authorizations in relation to medicinal products.
We have developed a second clinical stage product candidate, PLN-1474, which is an oral, small molecule, selective inhibitor of TGF-β activation by the integrin αvß1 in development for treatment of advanced liver fibrosis associated with NASH. αvß1 serves as an activator of TGF-β and its expression has been shown to be upregulated in hepatic stellate cells in late-stage NASH-associated liver fibrosis.
PLN-1474 for Treatment of Liver Fibrosis Associated with NASH 9 We have developed a clinical stage product candidate, PLN-1474, which is an oral, small molecule, selective inhibitor of TGF-β activation by the integrin αvß1 in development for treatment of advanced liver fibrosis associated with NASH. αvß1 serves as an activator of TGF-β and its expression has been shown to be upregulated in hepatic stellate cells in late-stage NASH-associated liver fibrosis.
Patents that may issue from these company owned applications are generally expected to expire between the years 2040 to 2043, subject to possible patent term adjustment and/or extension. Trademark Protection We have two registered U.S. trademarks for use in connection with our products. We may pursue additional registrations for future products in markets of interest.
Patents that may issue from these company owned applications are generally expected to expire between the years 2040 to 2044, subject to possible patent term adjustment and/or extension. Trademark Protection We have two registered U.S. trademarks for use in connection with our products. We may pursue additional registrations for future products in markets of interest.
Falk Pharma GmbH, Eli Lilly & Company, Enanta Pharmaceuticals, Inc., Gannex Pharma Co., Ltd., Galectin Therapeutics Inc., Gilead Sciences, Inc., Genfit SA, Genentech, Inc., GlaxoSmithKline plc, Intercept Pharmaceuticals, Inc., Inventiva Pharma, Ionis Pharmaceuticals, Inc., Johnson & Johnson, Madrigal Pharmaceuticals, Inc., Merck & Co., Inc., Metacrine, Inc., NGM Biopharmaceuticals, Inc., NorthSea Therapeutics B.V., Novo Nordisk, Pfizer Inc., Roche Holding AG, Regeneron Pharmaceuticals, Inc., Sanofi S.A., Takeda Pharmaceutical Company, Terns Pharmaceuticals, Inc., Viking Therapeutics, Inc. and Zydus Therapeutics Inc.
Falk Pharma GmbH, Eli Lilly & Company, Enanta Pharmaceuticals, Inc., Gannex Pharma Co., Ltd., Galectin Therapeutics Inc., Gilead Sciences, Inc., Genfit SA, GlaxoSmithKline plc, Inventiva Pharma, Ionis Pharmaceuticals, Inc., Johnson & Johnson, Madrigal Pharmaceuticals, Inc., Merck & Co., Inc., Metacrine, Inc., NGM Biopharmaceuticals, Inc., NorthSea Therapeutics B.V., Novo Nordisk, Pfizer Inc.,Roche Holding AG, Regeneron Pharmaceuticals, Inc., Sanofi S.A., Takeda Pharmaceutical Company, Terns Pharmaceuticals, Inc., Viking Therapeutics, Inc. and Zydus Therapeutics Inc.
Companies that we are aware of that are targeting the treatment of various fibrosis indications through inhibiting various parts of the TGF-β pathway include companies with significant financial resources such as AbbVie Inc., AstraZeneca plc, Bristol Myers Squibb Co., Corbus Pharmaceutical, DiCE Therapeutics, Inc., FibroGen, Inc., Merck & Co., Inc., Morphic Therapeutics, Inc., Novartis AG, Scholar Rock and Takeda Pharmaceutical Company.
Companies that we are aware of that are targeting the treatment of various fibrosis indications through inhibiting various parts of the TGF-β pathway include companies with significant financial resources such as AbbVie Inc., AstraZeneca plc, Bristol Myers Squibb Co., Corbus Pharmaceutical, Merck & Co., Inc., Morphic Therapeutics, Inc., Novartis AG, Scholar Rock, Inc. and Takeda Pharmaceutical Company.
Further, the FDA may approve more than one product for the same orphan indication or disease as long as the products contain different active ingredients.
Further, the FDA may approve more than one 16 product for the same orphan indication or disease as long as the products contain different active ingredients.
In the United States, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private payors, and significantly affected the pharmaceutical industry.
For example, in the United States, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private payors, and significantly affected the pharmaceutical industry.
Item 1. Business Overview We are a clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis and related diseases. Our initial focus is on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.
Item 1. Business Overview We are a late stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis and related diseases. Our initial focus is on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.
Other potential consequences include, among other things: • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; 16 Table of Contents • Fines, warning letters or holds on post-approval clinical trials; • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • Product seizure or detention, or refusal to permit the import or export of products; and • Injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • Fines, warning letters or holds on post-approval clinical trials; • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • Product seizure or detention, or refusal to permit the import or export of products; and • Injunctions or the imposition of civil or criminal penalties.
The Trade and Cooperation Agreement signed between the UK and the EU allows for future deviation from the current regulatory framework and it is not known if and/or when any deviations may occur, which may have an impact on development, manufacture, marketing authorization, commercial sales and distribution of pharmaceutical products.
The Trade and Cooperation Agreement signed between the U.K. and the EU allows for future deviation from the current regulatory framework and it is not known if and/or when any deviations may occur, which may have an impact on development, manufacture, marketing authorization, commercial sales and distribution of pharmaceutical products.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drug products they will cover and pay for and establish 23 Table of Contents reimbursement levels. The availability and extent of coverage and reimbursement by governmental and private payors is essential for most patients to be able to afford a drug product.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drug products they will cover and pay for and establish reimbursement levels. The availability and extent of coverage and reimbursement by governmental and private payors is essential for most patients to be able to afford a drug product.
However, some changes to the UK legislation have been necessary, including the implementation of the Northern Ireland Protocol (NIP), pursuant to which the EU pharmaceutical legal framework continues to apply in Northern Ireland (subject to periodic consent of the Northern Ireland Legislative Assembly), and only products compliant with EU law can be placed in the Northern Ireland market.
However, some changes to the U.K. legislation have been necessary, including the implementation of the Northern Ireland Protocol (NIP), pursuant to which the EU pharmaceutical legal framework continues to apply in Northern Ireland (subject to periodic consent of the Northern Ireland Legislative Assembly), and only products compliant with EU law can be placed in the Northern Ireland market.
These agencies and other federal, state, and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of our product candidates.
These agencies and other federal, state, and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling, coverage, reimbursement, pricing, and export and import of our product candidates.
One of the primary safeguards allowing U.S. companies to import personal data from the EEA had been certification to the EU-U.S. Privacy Shield framework administered by the U.S. Department of Commerce. However, the European Court of Justice issued a decision in July 2020 which invalidated the EU-U.S.
One of the primary safeguards allowing U.S. companies to import personal data from the EEA had historically been certification to the EU-U.S. Privacy Shield framework administered by the U.S. Department of Commerce. However, the European Court of Justice, or the CJEU, issued a decision in July 2020 which invalidated the EU-U.S.
Moreover, competitors may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. 15 Table of Contents In addition, Congress is considering updates to the orphan drug provisions of the FDCA in response to a recent decision by the U.S.
Moreover, competitors may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. In addition, Congress is considering updates to the orphan drug provisions of the FDCA in response to a recent decision by the U.S.
The Regulation creates collaborative structures and procedures that allow Member States to carry out joint clinical assessments, effect joint clinical consultations and identify jointly emerging health technologies and will come into effect in 2025. 24 Table of Contents Other countries may allow companies to fix their own prices for products but monitor and control product volumes and issue guidance to physicians to limit prescriptions.
The Regulation creates collaborative structures and procedures that allow Member States to carry out joint clinical assessments, effect joint clinical consultations and identify jointly emerging health technologies and will come into effect in 2025. Other countries may allow companies to fix their own prices for products but monitor and control product volumes and issue guidance to physicians to limit prescriptions.
Government Regulation The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing, and distribution of drugs, such as those we are developing.
Government Regulation The FDA, CMS,HHS-OIG and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing, and distribution of drugs, such as those we are developing.
Since the regulatory framework in the UK covering the quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU Directives and Regulations, it continues to apply presently as “retained EU law”.
Since the regulatory framework in the U.K. covering the quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU Directives and Regulations, it continues to apply presently as “retained EU law”.
By blocking TGF-β activation by both αvß6 and αvß1, we believe bexotegrast may slow and potentially halt the progression of fibrosis in these patient populations. Bexotegrast has been granted orphan drug designation by the United States Food and Drug Administration, or 5 Table of Contents FDA and the European Medicines Agency, or EMA, for both IPF and PSC.
By blocking TGF-β activation by both 4 αvß6 and αvß1, we believe bexotegrast may slow and potentially halt the progression of fibrosis in these patient populations. Bexotegrast has been granted orphan drug designation by the United States Food and Drug Administration, or FDA and the European Medicines Agency, or EMA, for both IPF and PSC.
This dynamic adds an extra layer of regulatory complexity for companies withing to commercialize medicinal products in Great Britain (namely, England, Wales and Scotland, as EU law continues to apply in Northern Ireland), as such companies now need to comply with separate UK regulatory legal framework.
This dynamic adds an extra layer of regulatory complexity for companies withing to commercialize medicinal products in Great Britain (namely, England, Wales and Scotland, as EU law continues to apply in Northern Ireland), as such companies now need to comply with separate U.K. regulatory legal framework. The U.K.
However, as UK legislation now has the potential to diverge from EU legislation, the future regulatory regime which applies to products and the approval of product candidates in the UK may change. It remains to be seen how Brexit will impact regulatory requirements for product candidates and products in the UK in the long-term.
However, as U.K. legislation now has the potential to 24 diverge from EU legislation, the future regulatory regime which applies to products and the approval of product candidates in the U.K. may change. It remains to be seen how Brexit will impact regulatory requirements for product candidates and products in the U.K. in the long-term.
As part of our measures to attract and retain a highly skilled workforce, we offer a number of benefits to our full-time employees to help support their health and financial well-being, including medical, dental and vision insurance, life insurance, 401k retirement program with a company match, flexible spending accounts, and paid holiday and vacation time.
As part of our measures to attract and retain a highly skilled workforce, we offer a competitive suite of benefits to our full-time employees to help support their health and financial well-being, including medical, dental and vision insurance, life insurance, 401k retirement program with a company match, flexible spending accounts, paid holiday and vacation time, and flexible work arrangements.
The MHRA published detailed guidance for industry and organizations to follow which will be updated as the UK’s regulatory position on medicinal products evolves over time. ‘Retained EU law,’ which has prevented substantial divergence to the regulation of medicines.
The MHRA published detailed guidance for industry and organizations to follow which will be updated as the U.K.’s regulatory position on medicinal products evolves over time. ‘Retained EU law,’ which has prevented substantial divergence to the regulation of medicines.
Of our employees, 85 were engaged in research and development activities, and 39 were engaged in general and administrative activities. None of our employees are represented by labor unions or covered by collective bargaining agreements, and we have experienced no work stoppages. We consider our relationship with our employees to be good.
Of our employees, 109 were engaged in research and development activities, and 49 were engaged in general and administrative activities. None of our employees are represented by labor unions or covered by collective bargaining agreements, and we have experienced no work stoppages. We consider our relationship with our employees to be good.
It remains to be seen how the maximum fair prices or other drug pricing provisions imposed by the IRA will affect orphan drug development or the broader pharmaceutical industry.
It remains to be seen how the maximum fair prices or other drug pricing provisions imposed by the IRA will affect orphan drug and small molecule development or the broader pharmaceutical industry.
A transition period began on February 1, 2020, during which EU pharmaceutical law remained applicable to the UK. This transition period ended on December 31, 2020.
A transition period began on February 1, 2020, during which EU pharmaceutical law remained applicable to the U.K. This transition period ended on December 31, 2020.
Our website address is https://pliantrx.com. We file or furnish electronically with the U.S. Securities and Exchange Commission (the “SEC”) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
Our website address is https://pliantrx.com. We file or furnish electronically with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
Efforts to control prices and utilization of pharmaceutical products and medical devices will likely continue as countries attempt to manage healthcare expenditures. Human Capital Resources As of December 31, 2022, we had 124 full-time employees, including 41 with Ph.D. or M.D. degrees.
Efforts to control prices and utilization of pharmaceutical products and medical devices will likely continue as countries attempt to manage healthcare expenditures. Human Capital Resources As of December 31, 2023, we had 158 full-time employees, including 47 with Ph.D. or M.D. degrees.
We have also developed a second clinical stage product candidate, PLN-1474, an oral, small molecule selective inhibitor of αvß1 for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis, or NASH. PLN-1474 is Phase 2-ready, having shown an excellent safety and pharmacokinetic profile in Phase 1 trials. PLN-1474 was licensed to Novartis in 2019.
We have developed PLN-1474, an oral, small molecule selective inhibitor of αvß1 for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis, or NASH. PLN-1474 is Phase 2-ready, having shown an excellent safety and pharmacokinetic profile in Phase 1 trials. PLN-1474 was licensed to Novartis in 2019.
The EU GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the EU GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the EU GDPR, including as implemented by individual countries.
The GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries in the EEA or required in connection with our clinical trials.
According to Swissmedic's practice, this includes the authorization procedures of the following countries: Australia, the member states of the EU, the EFTA states in the EEA (Liechtenstein, Norway and Iceland), Japan, Canada, New Zealand, Singapore and the United States.
According to Swissmedic's practice, this includes the authorization procedures of the following countries: Australia, the member states of the EU, the EFTA states in the EEA (Liechtenstein, Norway and Iceland), Japan, Canada, New Zealand, Singapore, the United Kingdom and the United States. Now that the U.K.
In January 2023, we received FDA clearance of investigational new drug application, or IND, for our third clinical program, PLN-101095, a dual inhibitor of integrins αvß8 and αvß1 for the treatment of solid tumors that are resistant to immune checkpoint inhibitors. We expect to initiate a Phase 1 trial of PLN-101095 in the second quarter of 2023.
In January 2023, we received FDA clearance of investigational new drug application, or IND, for our third clinical program to date, PLN-101095, a dual inhibitor of integrins αvß8 and αvß1 for the treatment of solid tumors that are resistant to immune checkpoint inhibitors.
Bexotegrast at 320 mg demonstrated a statistically significant mean increase in FVC from baseline at all timepoints, surpassing all lower dose groups, and showed a strong treatment effect on FVC percent predicted, or FVCpp, QLF and profibrotic biomarkers versus placebo at 12 weeks.
Bexotegrast at 320 mg demonstrated a statistically significant mean increase in FVC from baseline at all timepoints up to 12 weeks, surpassing all lower dose groups, and showed a strong treatment effect on FVC, FVCpp, QLF, profibrotic biomarkers and cough versus placebo at 12 weeks.
Our wholly-owned lead product candidate, bexotegrast (PLN-74809), is an oral, small molecule, dual selective inhibitor of αvß6 and αvß1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF, and primary sclerosing cholangitis, or PSC. We are currently conducting three Phase 2a trials in our lead indications: two in IPF and one in PSC.
Our wholly-owned lead product candidate, bexotegrast (PLN-74809), is an oral, small molecule, dual selective inhibitor of αvß6 and αvß1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF, and primary sclerosing cholangitis, or PSC. We are currently conducting a Phase 2b trial in IPF and a Phase 2a trial in PSC.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The drug 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 drug 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 drug 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 13 Table of Contents 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.
Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their www.clinicaltrials.gov website. 14 Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The drug 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 drug 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 drug 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.
PLN-101095 for Treatment of Solid Tumors That are Resistant to Immune Checkpoint Inhibitors In December 2022, we filed an IND for our third clinical program, PLN-101095 an oral, dual inhibitor of αvß8 and αvß1 integrins for the treatment of solid tumors with a suboptimal response to immune checkpoint inhibitors, or ICIs.
PLN-101095 for Treatment of Solid Tumors That are Resistant to Immune Checkpoint Inhibitors Our third clinical program to date, PLN-101095, is an oral, dual inhibitor of αvß8 and αvß1 integrins for the treatment of solid tumors with a suboptimal response to immune checkpoint inhibitors, or ICIs.
The EU GDPR also prohibits the transfer of personal data from the EEA to the United States and other countries that are not recognized as having “adequate” data protection laws by the European Commission unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.
The EU GDPR also prohibits the international transfer of personal data from the EEA to the United States and other countries that are not recognized as having “adequate” data protection laws by the European Commission unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data or a derogation under the EU GDPR can be relied upon.
The EU GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the EU GDPR.
GDPR) or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the EU GDPR.
Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions 14 Table of Contents have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter.
Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation.
A person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation.
The ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
The ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program (which has been subsequently eliminated by the Inflation Reduction Act of 2022, or the IRA), in which manufacturers were required to provide certain point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Among other reforms, the Inflation Reduction Act of 2022 imposes inflation rebates on drug manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation; implements changes to the Medicare Part D benefit that, beginning in 2025, will cap benefit annual out-of-pocket spending at $2,000, while imposing new discount obligations for pharmaceutical manufacturers; and, beginning in 2026, establishes a “maximum fair price” for a fixed number of high spend pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services.
Among other reforms, the IRA imposes inflation rebates on drug manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation; implements changes to the Medicare Part D benefit that, beginning in 2025, will cap benefit annual out-of-pocket spending at $2,000, while imposing new discount obligations for pharmaceutical manufacturers (requiring manufacturers to pay 10% of the negotiated price of brands, biologics and biosimilar products when Medicare Part D beneficiaries are in the initial coverage phase, and 20% of the negotiated price during the catastrophic phase of Medicare Part D coverage); and, beginning in 2026, establishes a “maximum fair price” for a fixed number of high spend pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services.
Companies currently developing product candidates in IPF include Boehringer Ingelheim Pharmaceuticals, Inc., FibroGen Inc., Galecto Biotech, Inc., Amgen Inc., Bristol Myers Squibb Co., United Therapeutics Corporation, Vicore Pharma Holding, CSL Behring, and Endeavor BioMedicines, Inc. • PSC : There are currently no approved therapies for the treatment of PSC. Companies currently developing product candidates in PSC include Dr.
Companies currently developing product candidates in IPF include Boehringer Ingelheim Pharmaceuticals, Inc., Bristol Myers Squibb Co., United Therapeutics Corporation, Amgen, Roche Holding AG, Vicore Pharma Holding, CSL Behring, PureTech Health PLC, BridgeBio Pharma Inc, Syndax Pharmaceuticals Inc., Endeavor BioMedicines, Inc., and Avalyn Pharma Inc.. • PSC : There are currently no approved therapies for the treatment of PSC.
In addition, we have a library of over 70,000 compounds for non-integrin targets. We intend to leverage these tools and capabilities in a target- and modality-agnostic manner to expand our pipeline with a mission to become a world-leading fibrosis company. Competition The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.
We intend to leverage these tools and capabilities in a target- and modality-agnostic manner to expand our pipeline with a mission to become a world-leading fibrosis company. 10 Competition The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.
During the research term, we collaborate with Novartis to biologically validate certain potential Research Targets and identify and synthesize potential research compounds for each Research Target in accordance with the applicable research plan.
During the research term, we collaborate with Novartis to biologically validate certain potential Research Targets and identify and synthesize potential research compounds for each Research Target in accordance with the applicable research plan. In the second quarter of 2022 we validated one of the Research Targets and began synthesizing potential research compounds.
We are aware of several marketed and investigational products in our leading disease areas, including but not limited to: • IPF : There are currently two approved products for the treatment of IPF; Esbriet, marketed by Roche Holding AG, and Ofev, marketed by Boehringer Ingelheim GmbH.
We are aware of several marketed and investigational products in our leading disease areas, including but not limited to: • IPF : There are currently two approved products for the treatment of IPF; pirfenidone – brand name Esbriet ® , marketed by Roche Holding AG, with generics marketed by Sandoz Group AG, Teva Pharmaceutical Industries Ltd., and others, and nintedanib – brand name Ofev ® , marketed by Boehringer Ingelheim GmbH.
Compliance with the EU GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
Compliance with the GDPR is a rigorous and time-intensive process that increases our cost of doing business and increases risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
Manufacturing Our product candidates, bexotegrast and PLN-1474, are small molecule inhibitors amenable to standard formulation technologies. We have confirmed the utility of the synthetic process and manufactured multi-kilogram quantities sufficient to provide drug product for our clinical trials. The manufacturing process of the drug substance for such product candidates is robust and accessed from readily available starting materials.
We have confirmed the utility of the synthetic process and manufactured multi-kilogram quantities sufficient to provide drug product for our clinical trials. The manufacturing process of the drug substance for such product candidate is robust and accessed from readily available starting materials.
Moreover, while the MMA Part D plan policies applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policies and payment limitations in setting their own payment rates coverage guidelines. Any reduction in payment restrictions in Part D coverage that results from the MMA may result in a similar reduction in payment restrictions from non-governmental payors.
Moreover, while the MMA Part D plan policies applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policies and payment limitations in setting their own payment rates and coverage guidelines.
In the future, there may be additional legislative, regulatory, executive, or judicial actions that result in healthcare reform. It remains to be seen precisely what any new reforms will provide, when or if they will be enacted, and what impact they will have on the availability and cost of healthcare items and services, including drug products.
It remains to be seen precisely what any new reforms will provide, when or if they will be enacted, and what impact they will have on the availability and cost of healthcare items and services, including drug products.
We have established an adequate supply of the drug substance for bexotegrast from our Asian contract manufacturing organizations, or CMOs, to satisfy both our clinical and preclinical requirements and have evaluated additional suppliers in North America and Europe to mitigate supply chain risk and maximize flexibility.
We have established an adequate supply of the drug substance for bexotegrast from our Asian contract manufacturing organizations, or CMOs, to satisfy both our clinical and preclinical requirements.
In addition to our clinical programs, we are currently advancing a preclinical integrin-based program targeting muscular dystrophies. Our Pipeline Our Lead Candidate - Bexotegrast Our lead wholly-owned product candidate, bexotegrast, is an oral, small molecule, dual-selective inhibitor of αvß6 and αvß1 that we are advancing in IPF and PSC.
Our Pipeline Our Lead Candidate - Bexotegrast Our lead wholly-owned product candidate, bexotegrast, is an oral, small molecule, dual-selective inhibitor of αvß6 and αvß1 that we are advancing in IPF and PSC.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same. 10 Table of Contents As of March 5, 2023, we own, co-own or license over 250 pending patent applications worldwide in over 26 patent families, including United States and corresponding foreign patent applications.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.
Our science builds on the research of world-renowned researchers Dean Sheppard, M.D., Rik Derynck, Ph.D., Bill DeGrado, Ph.D. and Hal Chapman, M.D., all from the University of California, San Francisco, who bring broad experience in fibrosis biology and small molecule chemistry among other related disciplines. 8 Table of Contents Our Strategy Our goal is to become a world-leading fibrosis company, developing and commercializing disease- modifying therapies across a spectrum of fibrotic diseases.
Our science builds on the research of world-renowned researchers Dean Sheppard, M.D., Rik Derynck, Ph.D., Bill DeGrado, Ph.D. and Hal Chapman, M.D., all from the University of California, San Francisco, who bring broad experience in fibrosis biology and small molecule chemistry among other related disciplines.
In addition to the above, we have established expertise and development capabilities focused in the areas of preclinical research and development, manufacturing and manufacturing process development, quality control, quality assurance, regulatory affairs, and clinical trial design and implementation. We believe that our focus and expertise will help us develop products based on our proprietary intellectual property.
In addition to the above, we have established expertise and development capabilities focused in the areas of preclinical research and development, manufacturing and manufacturing process development, quality control, quality assurance, regulatory affairs, and clinical trial design and implementation.
The UK Information Commissioner’s Office has also published its version of the transfer impact assessment and revised guidance on international transfers, although companies may choose to either use the EU style or UK style transfer impact assessment.
Information Commissioner’s Office, or the ICO, has also published its own version of the TIA and revised guidance on international transfers, although companies may choose to either use the EU-style or U.K.-style TIA. Further, on September 21, 2023, the U.K.
However, draft proposals by the European Commission for a new Regulation set to replace Regulation (EC) No 726/2004 and a new Directive replacing Directive 2001/83 on the Community Code relating to medicinal products for human use were recently leaked to the press on January 31, 2023.
On April 26, 2023, the European Commission adopted a proposal for a new Regulation set to replace Regulation (EC) No 726/2004 and a new Directive replacing Directive 2001/83 on the Community Code relating to medicinal products for human use.
As far as pediatric marketing authorization applications are concerned, all applications for marketing authorization for new medicines have to include the results of studies as described in an agreed Pediatric Investigation Plan (PIP), unless the medicine is exempt because of a deferral or waiver.
As far as pediatric marketing authorization applications are concerned, all applications for marketing authorization for new medicines have to include the results of studies as described in an agreed Pediatric Investigation Plan (PIP), unless the medicine is exempt because of a deferral or waiver Through the decentralized procedure, a medicinal product that has not yet been authorized in the EEA can be simultaneously authorized in several EEA Member States.
As 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase. The 340B drug pricing program may be subject to future changes in light of ongoing litigation and attempts to reform the program.
As 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.
The general pharmaceutical legislative framework, as well as the framework applicable to orphan and pediatric medicinal products in the EU, is under review. The European Commission expects to publish its position on this in March 2023.
The general pharmaceutical legislative framework, as well as the framework applicable to orphan and pediatric medicinal products in the EU, is under review.
Roche Holding AG recently discontinued its Phase 3 trial of recombinant human pentraxin-2 monoclonal antibody. 9 Table of Contents Although our novel approach is unique from most other existing or investigational therapies across the disease areas where we are focusing our development, we will need to compete with currently approved therapies, and potentially those in currently in development if they are approved.
Although our novel approach is unique from most other existing or investigational therapies across the disease areas where we are focusing our development, we will need to compete with currently approved therapies, and potentially those currently in development if they are approved.
Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic innovation.
Furthermore, the scope of the centralized procedure, would be extended to include priority antimicrobial medicinal products and products seeking a pediatric use marketing authorization. Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic innovation.
In terms of international data transfers between the UK and US, it is understood that the UK and the US are negotiating an adequacy agreement. Current and future healthcare reform legislation In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system.
Current and future healthcare reform legislation In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system.
Our management has continued to assess and respond to the evolving needs of our workforce throughout the pandemic. Corporate and Available Information We were incorporated under the laws of the State of Delaware in June 2015. Our principal executive office is located at 260 Littlefield Avenue, South San Francisco, California 94080, and our telephone number is (650) 481-6770.
In addition, we regularly conduct an employee survey to gauge employee engagement and identify areas of focus. 26 Corporate and Available Information We were incorporated under the laws of the State of Delaware in June 2015. Our principal executive office is located at 260 Littlefield Avenue, South San Francisco, California 94080, and our telephone number is (650) 481-6770.
To achieve this, we are focused on the following key strategies: • Rapidly advance bexotegrast through clinical development and commercialization in IPF and PSC. We are developing our lead oral, small molecule inhibitor of αvß6 and αvß1 as a novel therapy for IPF and PSC, each an area of high unmet medical need.
We are developing our lead oral, small molecule inhibitor of αvß6 and αvß1 as a novel therapy for IPF and PSC, each an area of high unmet medical need.
Falk Pharma GmbH, Mirum Pharmaceuticals, Inc., Chemomab Therapeutics Ltd., HighTide Therapeutics Inc., and Escient Pharmaceuticals, Inc. • NASH : There are currently no FDA-approved therapies for the treatment of NASH.
Companies currently developing product candidates in PSC include Dr. Falk Pharma GmbH, Mirum Pharmaceuticals, Inc., Chemomab Therapeutics Ltd., Ipsen Biopharmaceuticals Inc., Curome Biosciences, NGM Biopharmaceuticals, Inc. and Escient Pharmaceuticals, Inc. • NASH : There are currently no FDA-approved therapies for the treatment of NASH.
License Agreements Novartis Collaboration and License Agreement In October 2019, we entered into a collaboration and license agreement, or the Novartis Agreement, with Novartis Institutes for Biomedical Research, Inc., or Novartis, for the research, development, and commercialization of PLN-1474.
We believe that our focus and expertise will help us develop products based on our proprietary intellectual property. 12 License Agreements Novartis Collaboration and License Agreement In October 2019, we entered into a collaboration and license agreement, or the Novartis Agreement, with Novartis Institutes for Biomedical Research, Inc., or Novartis, for the research, development, and commercialization of PLN-1474.
Now that the UK (which comprises Great Britain and Northern Ireland) has left the EU, Great Britain will no longer be covered by centralized marketing authorizations (under the Northern Irish Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland).
(which comprises Great Britain and Northern Ireland) has left the EU, Great Britain will no longer be covered by centralized marketing authorizations (under the Northern Irish Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland). All medicinal products with an existing centralized marketing authorization were automatically converted to Great Britain marketing authorizations on January 1, 2021.
We are currently conducting a Phase 2a trial of bexotegrast in PSC. The trial is a 12-week randomized, double-blind, placebo-controlled trial enrolling approximately 84 PSC patients across four treatment groups consisting of three bexotegrast doses (40 mg, 80 mg and 160 mg) and one placebo group that will evaluate safety, tolerability and PK.
The trial is a 12-week multinational, randomized, double-blind, placebo-controlled trial enrolling approximately 112 PSC patients across bexotegrast doses of 40 mg, 80 mg, 160 mg and 320 mg versus placebo that will evaluate safety, tolerability and PK.
Within 90 days of receiving the applications and assessment reports, each Member State involved must decide whether to recognize the approval. If a Member State does not recognize the marketing authorization, the disputed points are eventually referred to the European Commission, whose decision is binding.
If a Member State does not recognize the marketing authorization, the disputed points are eventually referred to the European Commission, whose decision is binding.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe CCPA has already prompted a number of proposals for new federal and state privacy legislation that, if passed, could increase our potential liability, add layers of complexity to compliance in the U.S. market, increase our compliance costs and adversely affect our business. 69 Table of Contents Additionally, the Federal Trade Commission (FTC) and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the collection, use, dissemination and security of health-related and other personal information.
Biggest changeAdditionally, the Federal Trade Commission (FTC) and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the collection, use, dissemination and security of health-related and other personal information and in particular health information.
Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete. A product candidate can fail at any stage of testing, even after observing promising signals of activity in earlier preclinical studies or clinical trials.
Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete. A product candidate can fail at any stage of testing, even after observing promising signals of activity in earlier preclinical studies or earlier stage clinical trials.
In addition, we will be subject to continued compliance with current Good Manufacturing Practice, or cGMP, and Good Clinical Practice, or GCP, requirements for any clinical trials that we conduct post-approval. Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations.
In addition, we will be subject to continued compliance with current Good Manufacturing Practice, or cGMP, and GCP requirements for any clinical trials that we conduct post-approval. Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: • preclinical studies or clinical trials may show the product candidates to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful; • failure to receive the necessary regulatory approvals; • development of competing products in the same disease state; • manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make a product candidate uneconomical; and • the proprietary rights of others and their competing products and technologies that may prevent one of our product candidates from being commercialized.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: 32 • preclinical studies or clinical trials may show the product candidates to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful; • failure to receive the necessary regulatory approvals; • development of competing products in the same disease state; • manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make a product candidate uneconomical; and • the proprietary rights of others and their competing products and technologies that may prevent one of our product candidates from being commercialized.
If any actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment, disgorgement, possible exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and the curtailment of our operations.
If any actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment, disgorgement, possible exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with 61 these laws, contractual damages, reputational harm, diminished profits and future earnings and the curtailment of our operations.
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; 57 • 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 existing collaborations and 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; • 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 58 Table of Contents 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 may 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; 58 • 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.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including: • our inability to design such product candidates with the pharmacological properties that we desire or attractive pharmacokinetics; or • potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be medicines that will receive marketing approval and achieve market acceptance.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including: 37 • our inability to design such product candidates with the pharmacological properties that we desire or attractive pharmacokinetics; or • potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be medicines that will receive marketing approval and achieve market acceptance.
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 licensed to us. In addition, if the breadth or strength of protection 50 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.
Additionally, in some instances, there can be significant variability in safety or efficacy results between different trials with the same product candidate due to numerous factors, including differences in trial protocols, size and type of the patient populations, variable adherence to the dosing regimen or other protocol requirements and the rate of dropout among clinical trial participants.
Additionally, in some instances, there can be significant variability in safety or efficacy results between different trials with the same product candidate due to numerous factors, including differences in trial protocols, size and type of the patient populations, variable adherence to the dosing regimen or other protocol requirements and the rate of dropout among 35 clinical trial participants.
Furthermore, for United States applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the United States Patent and Trademark Office, or USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications.
Furthermore, for United States applications in which all claims are entitled 46 to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the United States Patent and Trademark Office, or USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications.
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 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.
Even if bexotegrast or any other product candidate we develop receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients and third-party payors. In addition, the availability of coverage by third-party payors may be affected by existing and future health care reform measures designed to reduce the cost of health care.
Even if bexotegrast or any other product candidate we develop receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients and third-party payors. In addition, the availability of coverage by third-party payors may be affected by existing and future healthcare reform measures designed to reduce the cost of health care.
Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. OCR, pursuant to legislation passed in 2021, recently issued guidance on recognized security practices for covered entities and business associates.
Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. OCR, pursuant to legislation passed in 2021, issued guidance on recognized security practices for covered entities and business associates.
In addition, in our ongoing Phase 2a clinical trials, we are evaluating bexotegrast administered with approved IPF agents. We have completed a Phase 1a study evaluating one-way interaction of bexotegrast on nintedanib or pirfenidone, concluding that clinical safety and pharmacokinetic data indicate that no dose adjustments are needed for nintedanib or pirfenidone when combined with bexotegrast.
In addition, in our ongoing Phase 2a clinical trials, we are evaluating bexotegrast administered with approved IPF agents. We have completed a Phase 1a study evaluating one-way interaction of bexotegrast on nintedanib or pirfenidone, concluding that clinical safety and pharmacokinetic data indicate that no dose adjustments are needed for 34 nintedanib or pirfenidone when combined with bexotegrast.
Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate.
Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and 42 efficacy of the product candidate.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the U.K. despite its departure from the EU. Payments made to physicians in certain EU Member States and more generally throughout Europe (including the UK) and other countries must be publicly disclosed under applicable transparency provisions..
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the U.K. despite its departure from the EU. Payments made to physicians in certain EU Member States and more generally throughout Europe (including the U.K.) and other countries must be publicly disclosed under applicable transparency provisions.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a lower evidentiary 53 standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
If we expand our presence outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.
If we expand our presence outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from 45 developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.
Even if we are successful in our efforts to establish new strategic collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such strategic collaborations if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing.
Even if 59 we are successful in our efforts to establish new strategic collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such strategic collaborations if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing.
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 candidates. Such agreements may impose various diligence, milestone payment, royalty, insurance, or other obligations on us, subject to antitrust law restrictions.
In connection with our efforts to expand our pipeline of product candidates, we may enter into certain licenses or other collaboration agreements pertaining to the in-license of rights to additional candidates. Such agreements may impose various diligence, milestone payment, royalty, insurance, or other obligations on us, subject to antitrust law restrictions.
The successful assertion of one or more large claims that exceed available insurance coverage, or the occurrence of changes in insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including its financial condition, results of operations and reputation.
The successful assertion of one or more large claims that exceed available insurance coverage, or the 71 occurrence of changes in insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including its financial condition, results of operations and reputation.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
We cannot predict or estimate the amount or timing of additional 67 costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
For example: • others may be able to make drug candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; 54 Table of Contents • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our drug candidates, drug products or uses thereof in the United States or in other foreign countries; • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and/or infringed; • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; • other parties may independently develop the technology covered by our trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
For example: • others may be able to make drug candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that cover our drug candidates, drug products or uses thereof in the United States or in other foreign countries; 55 • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and/or infringed; • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; • other parties may independently develop the technology covered by our trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
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 funded by U.S. government grants, 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; • we may not be able to extend the patent term in some jurisdictions; • 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 or regulatory intellectual property rights such as our data protection, orphan market exclusivity and others; • 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; 46 Table of Contents • 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 funded by U.S. government grants, 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; • we may not be able to extend the patent term in some jurisdictions; • 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 or regulatory intellectual property rights such as our data protection, orphan market exclusivity and others; • 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; 47 • 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.
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 at our facility in South San Francisco, California.
The 60 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 at our facility in South San Francisco, California.
Under Section 382 of the Internal Revenue Code, 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 62 Internal Revenue Code, 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.
Further, we have limited capabilities for product development and do not yet have any capability for commercialization. Accordingly, we have and may in the future enter into collaborations with other companies to provide us with important technologies and funding for our programs and technology.
Further, we have limited capabilities for product development and do not yet have any capability for commercialization. Accordingly, we have in the past and may in the future enter into collaborations with other companies to provide us with important technologies and funding for our programs and technology.
We may be required to expend significant resources in the response, containment, mitigation of cybersecurity incidents as well as in defense against claims that our information security was unreasonable or otherwise violated applicable laws or contractual obligations.
We may be required to expend significant resources in the response, containment, mitigation of 69 cybersecurity incidents as well as in defense against claims that our information security was unreasonable or otherwise violated applicable laws or contractual obligations.
For example, we cannot be certain that such activities by any future licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.
For example, we 48 cannot be certain that such activities by any future licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.
If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.
If we are unable to successfully obtain rights to required third-party intellectual property or to 51 maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.
Among other matters, U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
Among other matters, U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, contract research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
We have incurred significant net losses since our inception and have financed our operations principally through equity and debt financing and our collaboration with Novartis. We continue to incur significant research and development and other expenses related to our ongoing operations.
We have incurred significant net losses since our inception and have financed our operations principally through equity and debt financing and our prior collaboration with Novartis. We continue to incur significant research and development and other expenses related to our ongoing operations.
In addition, if we are unable to comply with certain financial and operating restrictions in the Oxford Loan Agreement, we may be limited in our business activities and access to credit or may default under the Oxford Loan Agreement.
In addition, if we are unable to comply with certain financial and operating restrictions in the Oxford Loan Agreement, we may be limited in our business activities and access to credit or may default under the Oxford Loan 29 Agreement.
Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as an orphan medicinal product if it meets the following criteria: (1) such product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either the prevalence of such condition must not be more than five in 10,000 persons in the EU when the application is made, or without the benefits derived from orphan status, it must be unlikely that the marketing of the medicine would generate 35 Table of Contents sufficient return in the EU to justify the investment needed for its development; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.
Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as an orphan medicinal product if it meets the following criteria: (1) such product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either the prevalence of such condition must not be more than five in 10,000 persons in the EU when the application is made, or without the benefits derived from orphan status, it must be unlikely that the marketing of the medicine would generate sufficient return in the EU to justify the investment needed for its development; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.
P ursuant to our bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders; (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws; (iv) any 66 Table of Contents action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; or (v) any action asserting a claim governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein, or the Delaware forum provision.
P ursuant to our bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders; (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws; (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; or (v) any action asserting a claim governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein, or the Delaware forum provision.
A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.
A large number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.
On January 31, 2020, the U.K. ceased being a Member State of the EU. The U.K. and the EU signed a EU-UK Trade and Cooperation Agreement, or TCA, which became effective on May 1, 2021.
On January 31, 2020, the U.K. ceased being a Member State of the EU. The U.K. and the EU signed a EU-U.K. Trade and Cooperation Agreement, or TCA, which became effective on May 1, 2021.
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 difficulty of manufacture, 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; • 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 recessions or the COVID-19 pandemic; • the changing and volatile U.S. and global economic and political 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 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 difficulty of manufacture, 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; • 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 recessions or the effects of health epidemics and pandemics, such as COVID-19 pandemic; 30 • the changing and volatile U.S. and global economic and political environments; and • future accounting pronouncements or changes in our accounting policies.
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 bexotegrast and any other 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, retaining and motivating additional employees; • managing our development and commercialization efforts effectively, including the clinical and FDA review process for bexotegrast and any other 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.
If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
If these 64 additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
HIPAA establishes national privacy and security standards for the protection of individually identifiable health information, including protected health information (PHI) for certain covered entities, including healthcare providers that submit certain covered transactions electronically, as well as their ‘‘business associates.” Penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly depending on the failure and could include civil monetary or criminal penalties.
HIPAA establishes national privacy and security standards for the protection of individually identifiable health information, including protected health information (PHI) for certain covered entities, including healthcare providers that submit certain covered transactions electronically, as well as their “business associates.” Penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly depending on the failure and could include civil monetary or criminal penalties.
The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.
The CCPA gives California residents expanded rights to access and delete their 68 personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.
Changes to these current laws and state and federal healthcare reform measures that may be adopted in the future that impact coverage and reimbursement for drug or biologic products may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
Changes to current healthcare laws and state and federal healthcare reform measures that may be adopted in the future that impact coverage and reimbursement for drug or biologic products may result in additional payment reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
Among other reforms, the IRA imposes inflation rebates on drug manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation; implements changes to the Medicare Part D benefit that, beginning in 2025, will cap benefit annual out-of-pocket spending at $2,000, while imposing new discount obligations for pharmaceutical manufacturers; and, beginning in 2026, establishes a “maximum fair price” for a fixed number of high spend pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services.
Among other reforms, the IRA, imposes inflation rebates on drug manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation; implements changes to the Medicare Part D benefit that, beginning in 2025, will cap patient annual out-of-pocket spending at $2,000, while imposing new discount obligations for pharmaceutical manufacturers and payors; and, beginning in 2026, establishes a “maximum fair price” for a fixed number 43 of high spend pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services.
If any such changes were to be imposed, they could adversely affect the operation of our business. In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs, as detailed in Part I, Item 1 – Business – Government Regulation – Current and Future Healthcare Reform Legislation.
If any such changes were to be imposed, they could adversely affect the operation of our business. In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs, as detailed in Part I, Item 1 – Business – Government Regulation – Current and Future Healthcare Reform Legislation of this report.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Report, these factors include: • the commencement, enrollment or results of our current Phase 2a clinical trials of bexotegrast and any other clinical trials for our product candidates conducted by us or our collaborators; • any delay in identifying and advancing a clinical candidate for our other development programs; • any delay in our regulatory filings for bexotegrast or our other product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays in future clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of bexotegrast or any other product candidate; • changes in laws or regulations applicable to bexotegrast or any other product candidate, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of bexotegrast or any other product candidate; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; 64 Table of Contents • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Report, these factors include: • the commencement, enrollment or results of our current Phase 2a and Phase 2b clinical trials of bexotegrast and any other clinical trials for our product candidates conducted by us or our collaborators; • any delay in identifying and advancing a clinical candidate for our other development programs; • any delay in our regulatory filings for bexotegrast or our other product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays in future clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of bexotegrast or any other product candidate; • changes in laws or regulations applicable to bexotegrast or any other product candidate, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • failure to secure a positive health technology assessment recommendation ; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of bexotegrast or any other product candidate; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; 63 • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
We expect to continue to incur significant losses for the foreseeable future, and we anticipate that our expenses will increase substantially if, and as, we: • advance our lead product candidate, bexotegrast, and our other product candidates through clinical development, and, if successful, later-stage clinical trials; • discover and develop new product candidates; • advance our preclinical development programs into clinical development; • further develop manufacturing processes and manufacture our product candidates; • 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 due to the COVID-19 pandemic; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • commercialize bexotegrast, our other product candidates and any future product candidates, if approved; • increase the amount of research and development activities to identify 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; • 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; • invest in or in-license other technologies or product candidates; and • continue to build out our organization to engage in such activities.
We expect to continue to incur significant losses for the foreseeable future, and we anticipate that our expenses will increase substantially if, and as, we: • advance our lead product candidate, bexotegrast, and our other product candidates through clinical development, and, if successful, later-stage clinical trials; • discover and develop new product candidates; • advance our preclinical development programs into clinical development; • further develop manufacturing processes and manufacture our product candidates; • 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 due to the effects of health epidemics and pandemics, such as COVID-19; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • commercialize bexotegrast, our other product candidates and any future product candidates, if approved; • increase the amount of research and development activities to identify 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; 27 • 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; • invest in or in-license other technologies or product candidates; and • continue to build out our organization to engage in such activities.
A Fast Track designation by the FDA, even if granted for other current or future product candidates, may not lead to a faster development or regulatory review, licensure process and does not increase the likelihood that our product candidates will receive marketing licensure. We may seek Fast Track designation for one or more of our future product candidates.
A Fast Track designation by the FDA, even if granted for other current or future product candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval. We may seek Fast Track designation for one or more of our future product candidates.
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, 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 and have significant negative consequences on our financial and operating conditions.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. In addition, in most foreign countries, including the EEA, the proposed pricing for a drug must be approved before it may be lawfully marketed.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. In addition, in most foreign countries, including those within the EEA, the proposed pricing for a drug must be approved before it may be lawfully marketed.
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 or commercialize bexotegrast or any other product candidates, 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 clinical trials, which may delay or prevent us from initiating 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 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 the COVID-19 pandemic, we have experienced, and may continue to experience, delays and interruptions to our preclinical studies and clinical trials, 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, Data Safety Monitoring Boards, or 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 begin and complete the planned 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 or commercialize bexotegrast or any other product candidates, 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 clinical trials, which may delay or prevent us from initiating 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; • 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, Data Safety Monitoring Boards, or 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 begin and complete the planned 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.
Our internal computer systems and those of our current and any future collaborators, other contractors or consultants, and third-party suppliers (i.e. our supply chain) are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
Our information systems and those of our current and any future collaborators, other contractors or consultants, and third-party suppliers (i.e. our supply chain) are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
If any third-party patent were held by a court of competent jurisdiction to cover our product candidates, intermediates used in the manufacture of our product candidates or our materials generally, aspects of our formulations or methods of use, the 49 Table of Contents holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.
If any third-party patent were held by a court of competent jurisdiction to cover our product candidates, intermediates used in the manufacture of our product candidates or our materials generally, aspects of our formulations or methods of use, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.
Although we are initially focusing our efforts on development of small molecule drug products, we are also considering the development of biological products, including a potential candidate for muscular dystrophies, which could make us subject to additional regulatory requirements.
Although we are initially focusing our efforts on development of small molecule drug products, we are also commencing the development of biological products, including a potential candidate for muscular dystrophies, which could make us subject to additional regulatory requirements.
If any of our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, pharmacovigilance, and submission of safety, efficacy and other post-market information, including both federal 41 Table of Contents and state requirements in the United States and requirements of comparable foreign regulatory authorities.
If any of our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, pharmacovigilance, and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.
We may enter into license or other collaboration agreements in the future that may impose certain obligations on us. If we fail to comply with our obligations under such future agreements with third parties, we could lose license rights that may be important to our future business.
We may enter into license or other collaboration agreements that may impose certain obligations on us. If we fail to comply with our obligations under such agreements with third parties, we could lose license rights that may be important to our future business.
Moreover, if disputes over intellectual property that we have licensed prevent or impair 47 Table of Contents our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
We have no prior experience as a company in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales 40 Table of Contents organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
We have no prior experience as a company in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
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 52 Table of Contents 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 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.
The IRA explicitly excludes from price negotiation orphan drugs designated for only one rare disease or condition and for which the only approved indication is for such disease or condition. However, those drugs with multiple orphan designations are not explicitly excluded from drug price negotiation.
The IRA explicitly excludes from price negotiation orphan drugs designated for only one rare disease or condition and for which the only active approved indication is for such disease or condition. Those drugs with multiple orphan designations are not excluded from drug price negotiation.
Consequently, we expect our operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are 29 Table of Contents beyond our control, and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products.
Consequently, we expect our operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control, and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products.
Compliance with data protection laws in the EEA, the UK and Switzerland is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with our European activities.
Compliance with data protection laws in the EEA, the U.K. and Switzerland is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with our European activities.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or 73 Table of Contents comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.
In addition, the courts have yet to address many of these provisions and the applicability of the Act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed.
In addition, the courts have yet to address many of these provisions and the applicability of the America Invents Act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed.
Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing 26 Table of Contents operations. If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce, or eliminate one or more of our research and drug development programs or future commercialization efforts.
Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce, or eliminate one or more of our research and drug development programs or future commercialization efforts.
Additionally, the number of shares of our common stock reserved for issuance under our 2020 Stock Option and Incentive Plan will automatically increase on January 1 of each year by 5% of the total 65 Table of Contents number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors or compensation committee.
Additionally, the number of shares of our common stock reserved for issuance under our 2020 Stock Option and Incentive Plan will automatically increase on January 1 of each year by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors or compensation committee.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • the strength of marketing and distribution support; • the ability to obtain sufficient third-party coverage and adequate reimbursement and a positive recommendation by health technology bodies; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; 39 • the ability to offer our products, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • positive HTA assessment in jurisdictions where required; • the strength of marketing and distribution support; • the ability to obtain sufficient third-party coverage and adequate reimbursement and a positive recommendation by health technology bodies; and • the prevalence and severity of any side effects.
Similarly, for United States applications in which at least 45 Table of Contents one claim is not entitled to a priority date before March 16, 2013, derivation proceedings can be instituted to determine whether the subject matter of a patent claim was derived from a prior inventor’s disclosure.
Similarly, for United States applications in which at least one claim is not entitled to a priority date before March 16, 2013, derivation proceedings can be instituted to determine whether the subject matter of a patent claim was derived from a prior inventor’s disclosure.
Moreover, in the event any of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages we may suffer. 57 Table of Contents In addition, we contract with fill and finishing providers with the appropriate expertise, facilities and scale to meet our needs.
Moreover, in the event any of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages we may suffer. In addition, we contract with fill and finishing providers with the appropriate expertise, facilities and scale to meet our needs.
We are subject to foreign, federal, state, and local environmental and health and safety laws and regulations governing, among other matters, the use, manufacture, handling, storage and disposal of hazardous materials and waste 62 Table of Contents products such as human tissue samples that may have the potential to transmit diseases.
We are subject to foreign, federal, state, and local environmental and health and safety laws and regulations governing, among other matters, the use, manufacture, handling, storage and disposal of hazardous materials and waste products such as human tissue samples that may have the potential to transmit diseases.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of 67 Table of Contents 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.
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.
The CPRA, among other things, gives California residents the ability to limit use of certain sensitive personal information, further restricts the use of cross-contextual advertising, establishes restrictions on the retention of personal information, expands the types of data breaches subject to the CCPA’s private right of action, provides for increased penalties for CPRA violations concerning California residents under the age of 16, and establishes a new California Privacy Protection Agency to implement and enforce the new law.
The CPRA, among other things, gives California residents the ability to limit use of certain sensitive personal information, further restricts the use of cross-contextual advertising, establishes restrictions on the retention of personal information, expands the types of data breaches subject to the CCPA’s private right of action, provides for increased penalties for CPRA violations concerning California residents under the age of 16, and established a new California Privacy Protection Agency to implement the law through additional regulations and to enforce the law.
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 employees are at-will employees, which means that any of our employees could leave our employment at any time, with or 61 Table of Contents 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 employees are at-will employees, which means that any of our employees could leave our employment at any time, with or without notice.
Since the number of qualified clinical investigators is limited, 34 Table of Contents we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.
Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.
Our 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; • the clinical development plans we establish for these product candidates; • the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, including any increased costs due to disruptions caused by the ongoing COVID-19 pandemic or other geopolitical conditions; • the cost and capital commitments required for developing manufacturing processes for our product candidates and manufacturing our product candidates at clinical and commercial scales; • the number and characteristics of product candidates that we develop; • the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; • whether we are able to maintain our existing collaboration with Novartis and enter into additional collaboration agreements and the terms of any such agreements; • the ability to and timing of achieving a favorable pricing and reimbursement decision by the pricing authorities in the markets of interest; • the ability to secure a position recommendation following the health technology assessment by the health technology bodies in the relevant market; • 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 effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; and • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own.
Our 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; • the clinical development plans we establish for these product candidates; • the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, including any increased costs due to disruptions caused by marketplace conditions, including the effects of health epidemics and pandemics, such as COVID-19, or other geopolitical conditions; • the cost and capital commitments required for developing manufacturing processes for our product candidates and manufacturing our product candidates at clinical and commercial scales; • the number and characteristics of product candidates that we develop; • the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; • whether we are able to enter into future collaboration agreements and the terms of any such agreements; • the ability to and timing of achieving a favorable pricing and reimbursement decision by the pricing authorities in the markets of interest; 28 • the ability to secure a position recommendation following the health technology assessment by the health technology bodies in the relevant market; • 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 effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; and • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own.
Most product candidates that commence clinical trials are never approved as products and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical 31 Table of Contents development of bexotegrast or any of our other product candidates.
Most product candidates that commence clinical trials are never approved as products and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of bexotegrast or any of our other product candidates.
Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, as detailed in Part I, Item 1 - Business - Government Regulation - Other Healthcare Laws.
Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, as detailed in Part I, Item 1 - Business - Government Regulation - Other Healthcare Laws of this report.
Our current operations are located in our facilities in South San Francisco, California.
Our operations are located in our facilities in South San Francisco, California.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We lease a facility containing 32,974 square feet of laboratory and office space, which is located at 260 Littlefield Avenue, South San Francisco, California 94080. The Littlefield lease expires on February 28, 2025.
Biggest changeItem 2. Properties We lease a facility containing 32,974 square feet of laboratory and office space, which is located at 260 Littlefield Avenue, South San Francisco, California 94080. The Littlefield lease is expected to terminate in the third quarter of 2024.
We believe that our current facilities are sufficient to meet our current and near-term needs for the business of developing and commercializing novel therapies for fibrotic diseases and that, should it be needed, suitable additional space will be available.
We believe that our current facilities, including the premises under the Oyster Point Lease, are sufficient to meet our current and near-term needs for the business of developing and commercializing novel therapies for fibrotic diseases and that, should it be needed, suitable additional space will be available.
In August 2022, we entered into an additional facility lease containing 12,456 square feet of office space, which is located at 611 Gateway Boulevard, South San Francisco, California 94080. The Gateway lease expires January 31, 2024.
We have an additional facility lease containing 12,456 square feet of office space, which is located at 611 Gateway Boulevard, South San Francisco, California 94080. The Gateway lease expires March 31, 2024.
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On September 28, 2023, the Company entered into a lease agreement for a premise consisting of approximately 100,904 square feet located at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease"), which the Company intends to use as laboratory and office space.
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The lease term of approximately seven years will start upon the landlord’s substantial completion of tenant improvements.

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 Safety Disclosures Not Applicable. 74 Table of Contents 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 Safety Disclosures Not Applicable. 73 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of the close of business on March 5, 2023, there were 28 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeThe actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividends We have never declared or paid cash dividends on our common stock.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 74 Dividends We have never declared or paid cash dividends on our common stock.
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Performance Graph The comparisons in the table below are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.
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This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent we specifically incorporate it by reference into such filing.
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The following graph compares cumulative total return of our common stock with the cumulative total return of (i) The Nasdaq Composite Index, and (ii) The Nasdaq Biotechnology Index.
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The graph assumes (a) $100 was invested from June 3, 2020, the first day of trading of our common stock on the Nasdaq Global Select Market through December 31, 2023 in each of our common stock, the stocks comprising the Nasdaq Composite Index and the stocks comprising the Nasdaq Biotechnology Index, and (b) the reinvestment of dividends into shares of common stock; however, no dividends have been declared on our common stock to date. 6/3/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Pliant Therapeutics Inc. $ 100.0 $ 106.7 $ 63.4 $ 90.8 $ 85.0 Nasdaq Composite Index $ 100.0 $ 133.7 $ 163.4 $ 110.2 $ 159.4 Nasdaq Biotechnology Index $ 100.0 $ 114.6 $ 114.6 $ 159.4 $ 107.7 Holders of Record As of the close of business on February 23, 2024, there were 28 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe increase of $19.4 million was primarily due to: • $9.6 million increase in employee-related costs owing to the increase in our research and development workforce and stock-based compensation; • $9.7 million increase in outside and consulting services for preclinical studies and research and development activities by third party contract organizations for the advancement of our preclinical programs; • $3.2 million decrease in clinical trial expenses largely due to decreased expenses associated with Phase 1 clinical trials, partially offset by an increase in expenses for our Phase 2 trials of bexotegrast. • $0.1 million decrease in depreciation of lab equipment and costs of equipment and supplies; • $0.1 million increase in technology and intellectual property licenses; and 80 Table of Contents • $3.4 million increase in facilities and other allocated expenses General and Administrative Expenses General and administrative expenses was $39.9 million and $27.6 million for the years ended December 31, 2022 and 2021, respectively.
Biggest changeResearch and Development Expenses The increase in research and development expenses of $30.9 million was primarily due to: • $16.3 million increase in employee-related costs, including stock-based compensation, driven by an increase in our research and development workforce; • $9.5 million decrease in outside and consulting services for preclinical studies which is largely attributable to decreased preclinical spend related to PLN-101095 as we initiated a phase 1 clinical trial during the second quarter of 2023, and an overall decrease in research and development activities as we prioritize bexotegrast clinical development; • $23.2 million increase in clinical trial expenses largely due to continued development of bexotegrast, in particular our Phase 2b trial in patients with IPF, as well as the initiation of our phase 1 trial of PLN-101095 in solid tumors during the second quarter of 2023; • $0.3 million decrease in depreciation of lab equipment and costs of equipment and supplies; and • $1.1 million increase in facilities and other allocated expenses.
The determination as to whether such options are material rights requires significant management judgment, and management considers factors such as other similar arrangements, market data and the terms of the contractual arrangement to make such conclusion. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer.
The determination as to whether such options are material rights requires significant management judgment, and management 83 considers factors such as other similar arrangements, market data and the terms of the contractual arrangement to make such conclusion. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer.
Revenue Recognition As of December 31, 2022, all of our revenue to date has been generated from the Novartis Agreement. We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Revenue Recognition As of December 31, 2023, all of our revenue to date has been generated from the Novartis Agreement. We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, 77 Table of Contents general and administrative expenses, and capital expenditures will increase in connection with our ongoing activities, as we: • perform research and development activities to identify and develop product candidates; • advance product candidates into and through clinical development; • require the manufacture of supplies to support research and development, preclinical studies and clinical trials; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • expand our operational, financial and management systems and increase personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; • maintain, expand and protect our intellectual property portfolio; and • invest in or in-license other technologies or product candidates.
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 increase in connection with our ongoing activities, as we: 76 • perform research and development activities to identify and develop product candidates; • advance product candidates into and through clinical development; • require the manufacture of supplies to support research and development, preclinical studies and clinical trials; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • expand our operational, financial and management systems and increase personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; • maintain, expand and protect our intellectual property portfolio; and • invest in or in-license other technologies or product candidates.
The Novartis Agreement is for the development and commercialization of PLN-1474 and up to three additional integrin research targets. Under the terms of the Novartis Agreement, we received an upfront license fee payment of $50.0 million for the worldwide, exclusive license to PLN-1474 and an additional $29.0 million upon the achievement of specified research and development milestones.
The Novartis Agreement was for the development and commercialization of PLN-1474 and up to three additional integrin research targets. Under the terms of the Novartis Agreement, we received an upfront license fee payment of $50.0 million for the worldwide, exclusive license to PLN-1474 and an additional $29.0 million upon the achievement of specified research and development milestones.
As actual costs become known, we adjust our estimates. Our accrued expenses and prepaid research and development expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations, other third-party service providers and internal research and development personnel.
As actual costs become known, we adjust our estimates. Our accrued expenses and prepaid research and development expenses are dependent, in part, upon the receipt of timely and accurate reporting from contract research organizations, other third-party service providers and internal research and development personnel.
These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Overview We are a clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis and related diseases. Our initial focus is on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.
These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. 75 Overview We are a late stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis and related diseases. Our initial focus is on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.
The shares were offered at a price to the public of $30.00 per share, resulting in aggregate proceeds of approximately $269.9 million, net of underwriting discounts, commissions and offering expenses.
The shares were offered at a price to the public of $30.00 per share, resulting in aggregate proceeds of approximately $269.8 million, net of underwriting discounts, commissions and offering expenses.
Our future funding requirements will depend on many factors, including the following: • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates; • the clinical development plans we establish for these product candidates; • the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, which may be impacted by the COVID-19 pandemic; • the number and characteristics of product candidates that we develop; • the outcome, timing and cost of meeting regulatory requirements established by the U.S.
Our future funding requirements will depend on many factors, including the following: • the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates; • the clinical development plans we establish for these product candidates; • the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, which may be impacted by health epidemics and pandemics, such as COVID-19; • the number and characteristics of product candidates that we develop; • the outcome, timing and cost of meeting regulatory requirements established by the U.S.
Food and Drug Administration, or FDA, and other comparable foreign regulatory authorities including but not limited to the European Medicines Agency (EMA), the UK Medicines and Healthcare products Regulatory Agency (MHRA); • whether we enter into any collaboration agreements and the terms of 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 effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • the cost and timing of achieving favorable pricing and reimbursement agreements with the pricing authorities in each market of interest, including of securing a positive recommendation after undergoing a health technology assessment by health technology authorities; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; and • the cost of operating as a public company.
Medicines and Healthcare products Regulatory Agency (MHRA); • whether we enter into any collaboration agreements and the terms of any such agreements; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; 80 • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities; • the cost and timing of achieving favorable pricing and reimbursement agreements with the pricing authorities in each market of interest, including of securing a positive recommendation after undergoing a health technology assessment by health technology authorities; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; and • the cost of operating as a public company.
The following table summarizes our research and development expenses for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Employee-related expenses $ 30,316 $ 20,730 Outside and consulting services for preclinical studies and research and development activities by third party contract organizations 25,402 15,674 Clinical trials expenses 26,032 29,263 Depreciation of lab equipment and costs of equipment and supplies 5,859 5,968 Technology and intellectual property licenses 85 33 Facilities and other allocated expenses 9,242 5,880 Total research and development expenses $ 96,936 $ 77,548 We expense all research and development costs in the periods in which they are incurred.
The following table summarizes our research and development expenses for the years ended December 31, 2023, 2022 and 2021 (in thousands): 77 Year Ended December 31, 2023 2022 2021 Employee-related expenses $ 46,605 $ 30,316 $ 20,730 Outside and consulting services for preclinical studies and research and development activities by third party contract organizations 15,948 25,402 15,674 Clinical trials expenses 49,252 26,032 29,263 Depreciation of lab equipment and costs of equipment and supplies 5,588 5,859 5,968 Facilities and other allocated expenses 10,326 9,242 5,880 Technology and intellectual property licenses 78 85 33 Total research and development expenses $ 127,797 $ 96,936 $ 77,548 We expense all research and development costs in the periods in which they are incurred.
These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or 75 Table of Contents incomplete, and our statements should not be read to indicate we have conducted exhaustive inquiry into, or review of, all potentially available relevant information.
These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate we have conducted exhaustive inquiry into, or review of, all potentially available relevant information.
Our wholly-owned lead product candidate, bexotegrast (PLN-74809), is an oral, small molecule, dual selective inhibitor of αvß6 and αvß1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF, and primary sclerosing cholangitis, or PSC. We are currently conducting three Phase 2a trials in our lead indications: two in IPF and one in PSC.
Our wholly-owned lead product candidate, bexotegrast (PLN-74809), is an oral, small molecule, dual selective inhibitor of αvß6 and αvß1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF, and primary sclerosing cholangitis, or PSC. We are currently conducting a Phase 2b trial in IPF and a Phase 2a trial in PSC.
Operating Expenses 78 Table of Contents Research and Development Our research and development expenses consist of expenses incurred in connection with the development of our product candidates.
Operating Expenses Research and Development Our research and development expenses consist of expenses incurred in connection with the development of our product candidates.
If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. 84 Table of Contents All contingent future payments, which include research, development, regulatory, and sales-based royalty payments, have not been considered in the initial analysis, as they are contingent upon option(s) being exercised or are subject to significant risk of achievement.
If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. All contingent future payments, which include research, development, regulatory, and sales-based royalty payments, were not considered in the initial analysis, as they were contingent upon options being exercised or were subject to significant risk of achievement.
We do not allocate our internal costs by product candidates or by preclinical programs as these are in early stages of development. Additionally, although external third-party costs are allocable between product candidates and programs, we do not perform this allocation.
We do not allocate our internal costs by product candidates or by preclinical programs. Additionally, although external third-party costs are allocable between product candidates and programs, we do not perform this allocation.
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 rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. 82 Table of Contents Cash Flows The following summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2022 2021 Net cash used in operating activities $ (94,631) $ (75,443) Net cash provided by (used in) investing activities (150,204) 73,699 Net cash provided by financing activities 226,854 2,527 Net increase (decrease) in cash and cash equivalents $ (17,981) $ 783 Cash Used in Operating Activities Net cash used in operating activities was $94.6 million for the year ended December 31, 2022 compared to $75.4 million for the year ended December 31, 2021.
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 rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. 81 Cash Flows The following summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (116,361) $ (94,631) $ (75,443) Net cash (used in) provided by investing activities (127,012) (150,204) 73,699 Net cash provided by financing activities 274,405 226,854 2,527 Net increase (decrease) in cash, cash equivalents and restricted cash $ 31,032 $ (17,981) $ 783 Cash Used in Operating Activities The increase in cash used in operating activities of $21.7 million between the year ended December 31, 2023 and 2022 was primarily due to an increase in our operating expenses, notably for the continued development of bexotegrast and our other pipeline programs.
Since inception, we have had significant operating losses. Our net loss was $123.3 million, $97.3 million and $41.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, we had an accumulated deficit of $338.4 million and cash, cash equivalents and short-term investments of $331.2 million.
Since inception, we have had significant operating losses. Our net loss was $161.3 million, $123.3 million and $97.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of $499.7 million and cash, cash equivalents, restricted cash and short-term investments of $495.7 million.
In December 2022, we filed an investigational new drug (IND) application for our third clinical program, PLN-101095, a dual inhibitor of integrins αvß8 and αvß1 for the treatment of solid tumors resistant to immune checkpoint inhibitors.
In January 2023, we received FDA clearance of investigational new drug application, or IND, for our third clinical program to date, PLN-101095, a dual inhibitor of integrins αvß8 and αvß1 for the treatment of solid tumors that are resistant to immune checkpoint inhibitors.
In July 2021, we entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent, pursuant to which we may issue and sell up to $150.0 million of shares of common stock from time to time.
During the third quarter of 2021, we entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent, pursuant to which we may issue and sell shares of common stock in an "at-the-market" offering.
Government agency securities and highly rated, investment-grade corporate debt securities. In May 2022, as amended in October 2022, we entered into a Loan and Security Agreement (the “Oxford Loan Agreement”) with Oxford Finance LLC (or "Oxford").
Our cash, cash equivalents and short-term investments consist of money market funds, U.S. Treasury securities, U.S. Government Agency securities and highly rated, investment-grade corporate debt securities. In May 2022, as amended in October 2022, we entered into a Loan and Security Agreement (the “Oxford Loan Agreement”) with Oxford Finance LLC (or "Oxford").
In July 2022, we completed an underwritten public offering of 12,432,432 shares of common stock, including the exercise in full of the underwriters' option to purchase 1,621,621 additional shares of common stock.
At December 31, 2023, $25.0 million remained available to us under the Oxford Loan Agreement. In July 2022, we completed an underwritten public offering of 12,432,432 shares of common stock, including the exercise in full of the underwriters' option to purchase 1,621,621 additional shares of common stock.
If we under estimate or over-estimate the level of services performed or the costs of these services, our accrued expenses could differ from our estimates. For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses.
If we under estimate or over-estimate the level of services performed or the costs of these services, our accrued expenses could differ from our estimates.
The increase of $4.4 million was due to higher average investment balances in 2022 compared to 2021 resulting from significant financing activities occurring mid-year 2022 coupled with an increase in the yield on our short-term investment portfolio. Interest Expense Interest expense, net was $0.8 million and zero for the years ended December 31, 2022 and 2021, respectively.
Interest and Other Income (Expense), Net Interest and other income (expense), net increased $19.4 million due to higher average investment balances in 2023 compared to 2022 resulting from significant financing activities occurring mid-year 2022 and the public offering in January 2023, coupled with an increase in the yield on our short-term investment portfolio.
We have also developed a second product candidate, PLN-1474, a Phase 2-ready oral, small molecule selective inhibitor of αvß1 for the treatment of advanced liver fibrosis associated with nonalcoholic steatohepatitis, or NASH.
We have developed PLN-1474, a Phase 2-ready oral, small molecule selective inhibitor of αvß1 for the treatment of advanced liver fibrosis associated with nonalcoholic steatohepatitis, or NASH. PLN-1474 was licensed to Novartis in 2019, and as part of a broad strategic realignment, Novartis has discontinued clinical development in NASH and, as a result, discontinued development of PLN-1474.
These contracts generally provide for termination following a certain period after notice and therefore we believe that our cancellable obligations under these agreements are not material and they are not included in the table above.
We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, non-clinical studies and testing, manufacturing and other services and products. These contracts generally provide for termination following a certain period after notice and therefore we believe that our cancellable obligations under these agreements are not material.
Critical Accounting Polices and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles. 83 Table of Contents The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods.
Critical Accounting Polices and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles.
The increase of $0.8 million was due to the interest incurred from the Oxford Financing Term Loan, which was issued in the second quarter of 2022. Liquidity and Capital Resources Overview As of December 31, 2022, we had cash, cash equivalents and short-term investments of $331.2 million. Our cash, cash equivalents and short-term investments consist of U.S. Treasury securities, U.S.
Interest Expense Interest expense increased $0.5 million during the year as our Term Loan, issued in the second quarter of 2022, was outstanding the entire year of 2023 compared to eight months in the prior year. 79 Liquidity and Capital Resources Overview As of December 31, 2023, we had cash, cash equivalents, restricted cash and short-term investments of $495.7 million.
The increase in cash used by investing activities of $223.9 million between the year ended December 31, 2022 and 2021 is primarily due to the investment purchases following our July 2022 public offering plus regular variation year over year regarding the timing of investment purchases versus maturities in our short-term investment portfolio.
Cash Used in Investing Activities The decrease in cash used in investing activities of $23.2 million between the year ended December 31, 2023 and 2022 is primarily due to the timing of purchases of short-term investments compared to related maturities during each year.
We believe that our existing capital resources, together with the proceeds our January 2023 public offering, will be sufficient to meet our projected operating requirements into the second half of 2026. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned.
The increase of $12.4 million was primarily due to a $9.1 million increase in employee-related costs, including stock-based compensation, and a $3.3 million increase in legal, accounting and other professional services. Interest and other income (expense), net Interest and other income (expense), net was $4.7 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.
General and Administrative Expenses The increase in general and administrative expenses by $18.0 million was primarily due to a $16.6 million increase in employee-related costs, including a $12.6 million increase in stock-based compensation, and increases in accounting and other professional services.
Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned. Our operations have been financed primarily through the issuance and sale of convertible preferred stock, issuance of common stock and our collaboration with Novartis.
Our operations have been financed primarily through the issuance and sale of common stock and convertible preferred stock and our collaboration with Novartis. Funding Requirements Our primary use of cash is to fund operating expenses, primarily research and development expenditures.
Recent Accounting Pronouncements The information set forth under Note 2 to the financial statements under the caption “Recently Issued Accounting Pronouncements” is incorporated herein by reference. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable. 85 Table of Contents
For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses. 84 Recent Accounting Pronouncements The information set forth under Note 2 to the financial statements under the caption “Recently Issued Accounting Pronouncements” is incorporated herein by reference.
As of December 31, 2022, we estimate an additional $1.4 million of aggregate research and development funding remains available for use under the arrangement. Revenues for the years ended December 31, 2022 and 2021 were $9.7 million and $7.6 million, respectively.
Following termination of the Novartis Agreement, we were no longer eligible to receive additional milestone or royalty payments under the arrangement, however, we continued to earn research and development services revenues through the effective termination date of April 18, 2023. Revenues for the years ended December 31, 2023, 2022 and 2021 were $1.6 million, $9.7 million and $7.6 million respectively.
We have not issued any shares pursuant to any at-the-market offerings, including pursuant to the Sales Agreement, but may do so at a future date. 81 Table of Contents Funding Requirements Our primary use of cash is to fund operating expenses, primarily research and development expenditures.
In March 2023, we filed a prospectus registering the offer and sale of up to $150.0 million of shares of common stock from time to time pursuant to the Sales Agreement. We have not issued any shares pursuant to any at-the-market offerings, including pursuant to the Sales Agreement, but may do so at a future date.
We announced positive interim data from our first Phase 2a INTEGRIS-IPF trial in July 2022 and January 2023. We expect to release final data from the INTEGRIS-IPF trial in the second quarter of 2023.
We announced positive data from our Phase 2a INTEGRIS-IPF trial in May 2023. We are currently conducting BEACON-IPF, a 52-week, randomized, double-blind, placebo-controlled Phase 2b trial in patients with IPF. We announced positive interim data from our Phase 2a INTEGRIS-PSC trial in September 2023 and February 2024. We expect to release final data from the INTEGRIS-PSC trial in mid-2024.
Interest and Other Income (Expense), net 79 Table of Contents Our interest and other income (expense), net consists of interest income earned on cash and cash equivalents, money market funds and short-term investments, realized gains and losses on investments.
Interest and Other Income (Expense), net Our interest and other income (expense), net consists of interest, accretion income and amortization expense on cash, cash equivalents and short-term investments, and realized gains and losses on short-term investments. Interest Expense Our interest expense is derived from a term loan executed under the Oxford Loan Agreement that we entered into in May 2022.
Upon closing of the Oxford Loan Agreement, we drew $10.0 million and decided to forego drawing on the additional $40.0 million currently available to us. A further $50.0 million may become available to us, $25.0 million upon the achievement of a pre-determined development milestone and $25.0 million at Oxford's discretion.
Upon closing of the Oxford Loan Agreement, we drew $10.0 million and decided to forego drawing on the additional $65.0 million that became available to us over the course of 2023 as certain conditions related to the development of bexotegrast and one of our preclinical product candidates were satisfied.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report.
The following discussion and analysis is intended to provide material information around events and uncertainties known to management relevant to an assessment of the financial condition and results of operations of the Company and should therefore be read in conjunction with our audited Financial Statements and the accompanying Notes to Financial Statements and other disclosures included in this Annual Report on Form 10-K (including the disclosures under Part I, Item 1A.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 (In thousands, except percentages) Year Ended December 31, 2022 2021 $ Change % Change Revenue $ 9,685 $ 7,572 $ 2,113 27.9 % Operating expenses: Research and development (96,936) (77,549) (19,387) 25.0 % General and administrative (39,949) (27,558) (12,391) 45.0 % Total operating expenses (136,885) (105,107) (31,778) 30.2 % Loss from operations (127,200) (97,535) (29,665) 30.4 % Interest and other income (expense), net 4,670 272 4,398 1,616.9 % Interest expense (791) — (791) NM Net loss $ (123,321) $ (97,263) $ (26,058) 26.8 % _________________________ NM: Results not meaningful Revenue Revenue was $9.7 million and $7.6 million for the years ended December 31, 2022 and 2021, respectively.
Borrowings under the Oxford Loan Agreement bear interest at a rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 8.5%, subject to an agreed upon floor and cap. 78 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 (In thousands, except percentages) Year Ended December 31, 2023 2022 $ Change % Change Revenue $ 1,580 $ 9,685 $ (8,105) (83.7 %) Operating expenses: Research and development (127,797) (96,936) (30,861) 31.8 % General and administrative (57,928) (39,949) (17,979) 45.0 % Total operating expenses (185,725) (136,885) (48,840) 35.7 % Loss from operations (184,145) (127,200) (56,945) 44.8 % Interest and other income (expense), net 24,076 4,670 19,406 415.5 % Interest expense (1,267) (791) (476) 60.2 % Net loss $ (161,336) $ (123,321) $ (38,015) 30.8 % Revenue Revenue decreased by $8.1 million due to decreased research and development services resulting from the termination of the Novartis Agreement.
Bexotegrast at 320 mg was well tolerated with no drug-related severe or serious adverse events and showed dose-proportional increases in plasma concentrations, consistent with prior studies. Exploratory efficacy endpoints demonstrated strong treatment effects on FVC, Quantitative Lung Fibrosis (QLF) imaging and biomarkers over 12 weeks.
At a once-daily dose of 320 mg, bexotegrast was well tolerated over 12 weeks of treatment with no drug-related severe or serious adverse events. At the 320 mg dose, bexotegrast reduced both Enhanced Liver Fibrosis (ELF) scores and PRO-C3 levels and showed improvements in hepatocyte function and bile flow by contrast MRI imaging relative to placebo at Week 12.
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This discussion and analysis contains forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intention, beliefs and projections.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in the section titled “Risk Factors” under Part I, Item 1A and elsewhere in this Annual Report. See “Special Note Regarding Forward-Looking Statements” in this Annual Report.
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Risk Factors) where other material events and uncertainties not otherwise discussed below are disclosed. Certain amounts and percentages herein may not sum or recalculate due to rounding. The following discussion and analysis does not address certain items regarding the year ended December 31, 2021.
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In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.
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Discussion and analysis of 2021 and year-to-year comparisons between 2022 and 2021 that are not included in this Report can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2022 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC on March 9, 2023”).
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PLN-1474 was licensed to Novartis in 2019, and as part of a broad strategic realignment, Novartis has discontinued clinical development in NASH and, as a result, discontinued development of PLN-1474. In February 2023, Novartis returned global rights to PLN-1474 to Pliant.
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In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.
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In January 2023, we received FDA clearance for our IND and expect to initiate a Phase 1 trial of PLN-101095 in the second quarter of 2023. In addition to our clinical programs, we are currently advancing a preclinical integrin-based program targeting muscular dystrophies.
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We are currently dosing the third of five dose cohorts in a Phase 1 open label dose-escalation trial of PLN-101095 as monotherapy and in combination with pembrolizumab in patients with solid tumors that are resistant to immune checkpoint inhibitors. We expect to release preliminary data from the trial in late 2024.
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Recent Highlights Bexotegrast Highlights • INTEGRIS-IPF Phase 2a clinical data from bexotegrast 320 mg dose at 12-weeks showed bexotegrast was well tolerated and demonstrated statistically significant forced vital capacity (FVC) increase in patients with idiopathic pulmonary fibrosis (IPF).
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Our fourth program to date, PLN-101325, in development for treatment of muscular dystrophies, including Duchenne muscular dystrophy. PLN-101325 is a monoclonal antibody designed to act as an allosteric agonist of integrin α7ß1. We expect to file with regulators for first-in-human studies in the first quarter of 2024.
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In addition, no bexotegrast-treated patients experienced disease progression as defined by FVC percent predicted (FVCpp) decline of greater than or equal to 10%, a risk factor associated with increased mortality in IPF patients. • INTEGRIS-IPF Phase 2a trial on track for final 24-week data readout from the bexotegrast 320 mg dose group in the second quarter of 2023.
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In February 2023, Novartis returned global rights to PLN-1474 to Pliant. Recent Highlights Bexotegrast Highlights • Positive safety and efficacy data from 320 mg dose cohort of INTEGRIS-PSC Phase 2a trial in patients with primary sclerosing cholangitis (PSC).
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This randomized, double-blind, placebo-controlled trial is evaluating bexotegrast at a once-daily dose of 320 mg administered for at least six months and up to 48 weeks in approximately 28 patients with IPF. The trial will evaluate primary and secondary endpoints of safety, tolerability, and pharmacokinetics.
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Twenty-four-week data from the 320 mg dose group is expected in mid-2024. • Enrollment continues in BEACON-IPF, a Phase 2b trial of bexotegrast in patients with idiopathic pulmonary fibrosis ( IPF). BEACON-IPF is a 52-week, multinational, randomized, dose-ranging, double-blind, placebo-controlled trial evaluating bexotegrast at once-daily doses of 160 mg or 320 mg.
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Exploratory efficacy endpoints will include effect on FVC and QLF, as well as serum biomarkers. • INTEGRIS-PSC topline Phase 2a data expected in the third quarter of 2023. This 12-week randomized, dose-ranging, double-blind, placebo-controlled trial is evaluating the safety, tolerability, and pharmacokinetics of bexotegrast in primary sclerosing cholangitis (PSC) patients.
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BEACON-IPF is expected to enroll approximately 270 patients with IPF. Pipeline Programs • Phase 1 trial of PLN-101095 in solid tumors is enrolling. This is a Phase 1 open label trial of PLN-101095, an oral, small molecule, dual selective inhibitor of αvβ8 and αvβ1 integrins designed to block TGF-β activation in the tumor microenvironment.
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The trial is also evaluating exploratory efficacy endpoints including fibrosis biomarkers such as PRO-C3 and enhanced liver fibrosis (ELF), changes in alkaline phosphatase (ALP), and liver imaging. • EMA Orphan Drug designation received for bexotegrast for the treatment of IPF. European Medicines Agency’s (EMA’s) Orphan Drug designation is designed to encourage the development of new treatments for rare conditions.
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The trial is currently dosing the third of five planned dose cohorts in a Phase 1 open label dose-escalation trial of PLN-101095 as monotherapy and in combination with pembrolizumab in patients with solid tumors that are resistant to immune checkpoint inhibitors.
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The benefits of Orphan Drug 76 Table of Contents designation include trial design assistance, a centralized EU approval process, and 10 years of market exclusivity. Bexotegrast received Orphan Drug designation from the United States Food and Drug Administration (FDA) in 2018. Early-Stage Development Programs • IND open for PLN-101095 for the treatment of solid tumors resistant to immune checkpoint inhibitors.
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Preliminary data is expected in late 2024. • Muscular dystrophy program on track for regulatory filing in the first quarter of 2024. PLN-101325 is a monoclonal antibody designed to act as an allosteric agonist of integrin α7β1. Filing for first-in-human clinical studies in Duchenne muscular dystrophy (DMD) is expected in the first quarter of 2024.
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In January 2023, the U.S. Food and Drug Administration (FDA) cleared the company’s Investigational New Drug (IND) application for PLN-101095, an oral, small molecule, dual selective inhibitor of αvβ8 and αvβ1 integrins.
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We believe that our existing capital resources, together with the funds available to us under the Oxford Loan Agreement, will be sufficient to fund our anticipated operating expenses and capital expenditure requirements for the next 12 months and for the longer-term period into the second half of 2026.
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Initiation of a Phase 1 trial of PLN-101095 in patients with solid tumors that are resistant to immune checkpoint inhibitors is expected in the second quarter of 2023. • Muscular dystrophy program progressing through IND enabling activities. IND submission for this program is expected in 2023. Corporate Highlights • Closing of underwritten public offering of $287.5 million in common stock.
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Food and Drug Administration, or FDA, and other comparable foreign regulatory authorities including but not limited to the European Medicines Agency (EMA), the U..
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The Company closed a public offering in January 2023, yielding $269.9 million in net proceeds to the Company, which included the underwriter’s exercise in full of their option to purchase additional shares.
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Further, revenue related receipts decreased $6.2 million as we ceased to earn research and development services revenue following the termination of the Novartis Agreement.
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Pliant intends to use the net proceeds from the offering, together with its existing cash, cash equivalents and investments, to develop its ongoing and future preclinical and clinical programs including bexotegrast and PLN-101095, further develop its integrin targeting platform, to fund working capital, operating expenses and capital expenditures, and for other general corporate purposes. • Appointment of Lily Cheung as Chief Human Resources Officer.
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Cash Provided by Financing Activities The increase in cash provided by financing activities of $47.6 million between the year ended December 31, 2023 and 2022 is primarily due to net proceeds from the Company's January 2023 underwritten public offering. 82 Off-Balance Sheet Arrangements During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements or holdings in any variable interest entities other than the operating lease commitments described in Note 14 to our financial statements appearing elsewhere in this Annual Report.
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Ms. Cheung brings over 25 years of Human Resources experience across the technology and biopharmaceutical industries, including more than 15 years of commercial-stage experience. • Appointments of Darren Cline and Thomas McCourt to the Company’s Board of Directors. Mr. Cline and Mr. McCourt each bring over 30 years of strategic and operational experience in building commercial organizations to the Company.
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Material Cash Requirements At December 31, 2023, we had various non-cancelable operating leases for office space and equipment, which expire between December 31, 2023 and March 31, 2031. Refer to Note 13 and Note 14 to our financial statements appearing elsewhere in this Annual Report for a discussion of material obligations and commitments.
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Mr. Cline currently serves as Chief Executive Officer and President of Epygenix Therapeutics. Mr. McCourt currently serves as Chief Executive Officer of Ironwood Pharmaceuticals. • Work has completed under the Novartis collaboration.
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The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods.
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During the three-year term of the collaboration, Pliant achieved successful validation of a novel integrin receptor as a potential next generation target for treatment of fibrotic diseases and is in the process of developing candidates against the target. As part of a broad strategic realignment, Novartis has discontinued clinical development in NASH.
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As a result, Novartis has terminated development of PLN-1474, an inhibitor of αvβ1 targeting NASH-associated advanced liver fibrosis, which they licensed in 2019 and returned global rights to Pliant.
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PLN-1474 is a phase 2-ready asset, having shown a favorable safety and pharmacokinetic profile in Phase 1 trials. 2023 Anticipated Milestones • 24-week data from the 320 mg dose group of the INTEGRIS-IPF Phase 2a trial in patients with IPF is expected in the second quarter of 2023. • Initiation of a Phase 2b trial of bexotegrast in patients with IPF is expected in mid-2023. • Initiation of a Phase 1 trial of PLN-101095 in patients with solid tumors resistant to immune checkpoint inhibitors is expected in the second quarter of 2023. • Topline data from the 40, 80 and 160 mg dose groups of the INTEGRIS-PSC Phase 2a trial in patients with PSC is expected in the third quarter of 2023.
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COVID-19 Pandemic The novel coronavirus, or COVID-19, continues to spread throughout the United States and worldwide. We have been, and in the future could be, materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the outbreak of COVID-19.
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While difficult to predict or quantify the overall impact of the pandemic to our operations, among other things, our clinical trials have experienced delays, and may experience additional delays in the future, extending the timelines and increasing the overall costs to finish the clinical trials, as our fixed costs are not substantially reduced while the clinical trials are delayed.

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