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What changed in PLIANT THERAPEUTICS, INC.'s 10-K — 2023 vs 2024

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

+380 added−367 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-27)

Top changes in PLIANT THERAPEUTICS, INC.'s 2024 10-K

380 paragraphs added · 367 removed · 295 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

94 edited+21 added−35 removed184 unchanged
Biggest changeChange in FVC from Baseline of Bexotegrast 320 mg Over 12 Weeks in INTEGRIS-IPF; Mixed Model Repeat Measures Analysis – Modified Intent to Treat Population 5 Proportion of Participants with FVCpp Decline ≥10% - Intent to Treat Population Circulating PRO-C3 and Integrin beta-6 Biomarker Levels– Change from Baseline at 4- and 12-Weeks vs Placebo The bexotegrast 320 mg group at 24 weeks met its primary and secondary endpoints demonstrating that bexotegrast was well tolerated over the 24-week treatment period and displayed a favorable pharmacokinetic profile.
Biggest changeThe bexotegrast 320 mg group also met its primary and secondary endpoints at 24 weeks, demonstrating that bexotegrast was well tolerated over the 24-week treatment period and displayed a favorable pharmacokinetic profile. At Week 24, bexotegrast at 320 mg, in combination with standard of care, reduced FVC decline by 80% relative to standard of care alone.
Bexotegrast for Treatment of Primary Sclerosing Cholangitis PSC is a progressive liver disorder affecting approximately 30,000 to 45,000 patients in the United States. The disease is characterized by fibrosis originating in the bile ducts that ultimately results in bile flow obstruction or cholestasis, causing liver inflammation and progressive fibrosis of the liver.
Bexotegrast for Treatment of Primary Sclerosing Cholangitis Primary Sclerosing Cholangitis, or PSC is a progressive liver disorder affecting approximately 30,000 to 45,000 patients in the United States. The disease is characterized by fibrosis originating in the bile ducts that ultimately results in bile flow obstruction or cholestasis, causing liver inflammation and progressive fibrosis of the liver.
Personal data may now be transferred 20 from the U.K. under the U.K.-U.S. data bridge through the U.K. extension to the DPF to organizations self-certified under the U.K. extension to DPF. The GDPR permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million (£17.5 million under the U.K.
Personal data may now be transferred from the U.K. under the U.K.-U.S. data bridge through the U.K. extension to the DPF to organizations self-certified under the U.K. extension to DPF. The GDPR permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million (£17.5 million under the U.K.
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.
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; 9 • 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.
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.
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 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 certain manufacturers of drugs, devices, biological products and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health 14 Insurance Program to report annually to the 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 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.
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.
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.
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.
The centralized procedure is compulsory for certain medicines, including those produced by biotechnology, products designated as orphan medicinal products, advanced therapy medicinal products (gene therapy, somatic cell therapy and tissue-engineered products) and those with a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, autoimmune and other immune dysfunctions, viral diseases, or diabetes.
The centralized procedure is compulsory for certain medicines, including those produced by biotechnology, products designated as orphan medicinal products, advanced therapy medicinal products (gene therapy, somatic cell therapy and tissue-engineered products) and those with a 18 new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, autoimmune and other immune dysfunctions, viral diseases, or diabetes.
The FDCA also provides three years of marketing exclusivity for a NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug.
The FDCA also provides 12 three years of marketing exclusivity for a NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug.
On January 1, 2024, the MHRA launched a new International Recognition Procedure for Great Britain (England, Scotland and Wales) marketing authorization applications whereby the MHRA will, when considering such applications, recognize the approval of medicines by Australia, Canada, Switzerland, Singapore, Japan, United States and the EU following its own abbreviated assessment.
On January 1, 2024, the MHRA launched a new International Recognition Procedure for Great Britain (England, Scotland and Wales) marketing authorization applications whereby the MHRA will, when considering such 19 applications, recognize the approval of medicines by Australia, Canada, Switzerland, Singapore, Japan, United States and the EU following its own abbreviated assessment.
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.
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.
Our Strategy Our goal is to become a world-leading fibrosis company, developing and commercializing disease- modifying therapies across a spectrum of fibrotic diseases. To achieve this, we are focused on the following key strategies: • Rapidly advance bexotegrast through clinical development and commercialization in IPF and PSC.
Our Strategy Our goal is to become a world-leading fibrosis company, developing and commercializing disease- modifying therapies across a spectrum of fibrotic diseases. To achieve this, we are focused on the following key strategies: • Rapidly advance bexotegrast through clinical development and commercialization in IPF.
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.
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.
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.
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 FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.
The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding 11 new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.
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.
However, as U.K. 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 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.
For example, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018, or the CCPA, which came into effect on January 1, 2020 and provides new data privacy rights for consumers and new operational requirements for companies, which may increase our compliance costs and potential liability.
For example, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018, or the CCPA, which came into effect on January 1, 2020 and provides data privacy rights for consumers and operational requirements for companies, which may increase our compliance costs and potential liability.
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.
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,’ generally has prevented substantial divergence to the regulation of medicines.
Our focus is to commercialize our assets in orphan fibrosis indications and to selectively work with partners in larger indications and in geographies outside of North America. Furthermore, we will evaluate and potentially choose to partner our unpartnered product candidates in indications outside of fibrosis. • Explore opportunities for our pipeline assets in additional fibrotic indications.
Our focus is to commercialize our assets in orphan fibrosis indications and to selectively work with partners in larger indications and in geographies outside of North America. Furthermore, we will evaluate and potentially choose to partner our unpartnered product candidates in indications outside of fibrosis. 6 • Explore opportunities for our pipeline assets in additional fibrotic indications.
Arrangements with third party payors, healthcare providers and physicians, in connection with the clinical research, sales, marketing and promotion of products, once approved, and related activities, may expose a pharmaceutical manufacturer to broadly applicable fraud and abuse and other healthcare laws and regulations.
Arrangements with third party payors, healthcare providers and 13 physicians, in connection with the clinical research, sales, marketing and promotion of products, once approved, and related activities, may expose a pharmaceutical manufacturer to broadly applicable fraud and abuse and other healthcare laws and regulations.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.
Similarly, 10 an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.
As of 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although under the current state of the law these newly eligible entities (with the exception of children’s hospitals) will not be eligible to receive discounted 340B pricing on orphan drugs.
As of 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although 21 under the current state of the law these newly eligible entities (with the exception of children’s hospitals) will not be eligible to receive discounted 340B pricing on orphan drugs.
Several pharmaceutical manufacturers and other industry stakeholders have challenged the law, including through lawsuits brought against the HHS, the Secretary of HHS, CMS, and the CMS Administrator challenging the constitutionality and 21 administrative implementation of the IRA’s drug price negotiation provisions.
Several pharmaceutical manufacturers and other industry stakeholders have challenged the law, including through lawsuits brought against the HHS, the Secretary of HHS, CMS, and the CMS Administrator challenging the constitutionality and administrative implementation of the IRA’s drug price negotiation provisions.
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.
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.
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.
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., Novartis AG, Scholar Rock, Inc. and Takeda Pharmaceutical Company.
Any reduction in payment restrictions in Part D 25 coverage that results from the MMA may result in a similar reduction in payment restrictions from non-governmental payors.
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.
Our patents and any patents that may issue from our pending patent applications are generally expected to expire between the years 2037 to 2044, subject to possible patent term adjustment and/or extension. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business.
Our patents and any patents that may issue from our pending patent applications are generally expected to expire between the years 2037 to 2046, subject to possible patent term adjustment and/or extension. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business.
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.
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 17 reduction in coverage or payment from private payors, 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.
Some states have also established prescription drug affordability boards tasked with identifying certain high-cost prescription products that may pose affordability challenges for consumers and payers, conducting cost reviews on such products, and, in some circumstances, imposing upper payment limits on such products.
Some states have also established prescription drug affordability boards tasked with identifying certain high-cost prescription products that may pose affordability challenges for consumers and payors, conducting cost reviews on such products, and, in some circumstances, imposing upper payment limits on such products.
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.
These antibody patents and patents that may issue from company owned antibody applications are generally expected to expire between the years 2040 to 2045, 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.
We are evaluating the potential benefit of our product candidates outside of their lead indications. Our product candidates have shown anti-fibrotic activity in multiple animal models as well as human tissue in indications outside of IPF, PSC and NASH.
We are evaluating the potential benefit of our product candidates outside of their lead indications. Our product candidates have shown anti-fibrotic activity in multiple animal models as well as human tissue in indications outside of IPF, PSC and MASH.
He previously served as head of clinical research and development for the NASH program at Allergan. Prior to Allergan, Dr. Lefebvre led HIV and HCV development at Janssen and later served as Chief Medical Officer at Tobira.
He previously served as head of clinical research and development for the MASH program at Allergan. Prior to Allergan, Dr. Lefebvre led HIV and HCV development at Janssen and later served as Chief Medical Officer at Tobira.
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, an area of high unmet medical need.
In the European Union, the collection, use, storage, disclosure, transfer, or other processing of personal data including special categories of personal data such as health data, is subject to the EU General Data Protection Regulation, or EU GDPR. The U.K. has implemented the EU GDPR as the U.K. GDPR which sits alongside the U.K.
In the European Union, the collection, use, storage, disclosure, transfer, or other processing of personal data including special categories of personal data such as health data, is subject to the EU General Data Protection Regulation, or EU GDPR. The U.K. has implemented the EU GDPR as the U.K.
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.
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. Since the U.K.
We focus on recruiting, retaining, and developing employees from a diverse range of backgrounds to conduct our research, development, and clinical activities.
We focus on recruiting, retaining, and developing employees from a wide range of backgrounds to conduct our research, development, and clinical activities.
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.
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, GlaxoSmithKline, InSilico Medicines, Tvardi Therapeutics, BridgeBio Therapeutics Inc., Syndax Pharmaceuticals Inc., Endeavor BioMedicines, Inc., Contineum Therapeutics, Inc.and Avalyn Pharma Inc. • PSC : There are currently no approved therapies for the treatment of PSC.
Our agreements with third-party manufacturers include confidentiality and intellectual property provisions as well as routine quality audits. We also rely on internal personnel with extensive cGMP manufacturing experience in order to ensure effective technology transfer and to manage the manufacturing and development processes conducted by third-party manufacturers.
All of our clinical manufacturing is outsourced to third-party manufacturers. Our agreements with third-party manufacturers include confidentiality and intellectual property provisions as well as routine quality audits. We also rely on internal personnel with extensive cGMP manufacturing experience in order to ensure effective technology transfer and to manage the manufacturing and development processes conducted by third-party manufacturers.
Since its enactment, the CMS has taken steps to implement various drug pricing provisions of the IRA.
Since its enactment, CMS has taken a number of steps to implement various drug pricing provisions of the IRA.
Government and the European Union recently adopted a new agreement, the “Windsor Framework,” which will replace the Northern Ireland Protocol. According to the Windsor Framework, medicinal products intended for the U.K. market, including Northern Ireland, will be authorized by the MHRA and will bear a “U.K. only” label. These new measures will be implemented from January 1, 2025.
The U.K. Government and the European Union recently adopted a new agreement, the “Windsor Framework,” which modifies the Northern Ireland Protocol. According to the Windsor Framework, medicinal products intended for the U.K. market, including Northern Ireland, will be authorized by the MHRA and will bear a “U.K. only” label. These new measures became effective January 1, 2025.
Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. On June 28, 2024, the U.S.
Patients have a median survival of 10 to 12 years without intervention and carry high lifetime risk of developing gastrointestinal malignancies. There are currently no FDA-approved therapies for PSC. We are currently conducting INTEGRIS-PSC, a Phase 2a trial of bexotegrast in PSC.
Patients have a median 5 survival of 10 to 12 years without intervention and carry high lifetime risk of developing gastrointestinal malignancies. There are currently no FDA-approved therapies for PSC. We conducted and have announced results from INTEGRIS-PSC, a Phase 2a trial of bexotegrast in PSC.
The 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.
The GDPR is wide-ranging in scope and imposes numerous requirements on controllers (and in more limited cases, processors) that process personal data (i.e., data relating to identified or identifiable individuals), including requirements around (among others): (i) accountability and transparency, (ii) processing personal data lawfully, including specific 15 requirements for obtaining valid consent where consent is the legal basis for processing, (iii) responding to individuals’ requests to exercise their rights in respect of their personal data, (iv) implementing safeguards to protect the security and confidentiality of personal data and to provide notification of personal data breaches to data protection authorities and affected individuals in certain circumstances, (v) having data processing agreements with third parties who process personal data on our behalf, and undertaking due diligence in relation to such third-party processors, and (vi) considering data protection when any new products or services are developed and designed, as well as obligations for data protection impact assessments.
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.
As 340B drug pricing is determined based on AMP and Medicaid rebate data, any revisions to the Medicaid rebate formula or AMP definition could cause the required 340B discount to increase.
For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program.
For a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government agencies, the manufacturer must participate in certain other Federal health care programs and also extend discounts to entities eligible to participate in the 340B drug pricing program.
Both IPF and PSC are orphan indications that we believe we can commercialize on our own in key geographies using targeted sales forces. • Selectively evaluate additional partnerships in indications and geographies where we believe partners can add significant commercial and/or development capabilities. Fibrotic diseases represent a broad set of disease indications to pursue.
IPF is an orphan indication that we believe we can commercialize on our own in key geographies using a targeted sales force. • Selectively evaluate additional partnerships in indications and geographies where we believe partners can add significant commercial and/or development capabilities. Fibrotic diseases represent a broad set of disease indications to pursue.
Secretary of State for Science, Innovation and Technology established a U.K.-U.S. data bridge (i.e., a U.K. equivalent of the Adequacy Decision) and adopted U.K. regulations to implement the U.K.-U.S. data bridge.
Further, on September 21, 2023, the U.K. Secretary of State for Science, Innovation and Technology established a U.K.-U.S. data bridge (i.e., a U.K. equivalent of the Adequacy Decision) and adopted U.K. regulations to implement the U.K.-U.S. data bridge.
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.
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.
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.
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.
We are currently dosing the third of five planned dose cohorts in a Phase 1 open label dose-escalation trial of PLN-101095 as monotherapy for 14 days, followed by combination therapy 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.
We are currently dosing the fourth of five planned dose cohorts in a Phase 1 open label dose-escalation trial of PLN-101095 as monotherapy for 14 days, followed by combination therapy with pembrolizumab in patients with solid tumors that are resistant to immune checkpoint inhibitors.
As of February 13, 2024, we own or co-own over 300 pending patent applications worldwide in over 30 patent families, including United States and corresponding foreign patent applications. As of February 13, 2024, twelve U.S. patents and seventeen foreign patents have been issued, granted or allowed.
As of February 26, 2025, we own or co-own over 300 pending patent applications worldwide in over 30 patent families, including United States and corresponding foreign patent applications. As of February 26, 2025, thirteen U.S. patents and thirty-nine foreign patents have been issued, granted or allowed.
In addition, bexotegrast has been granted Fast Track designation by the FDA for IPF and PSC. Bexotegrast for Treatment of IPF IPF is the most common and severe form of progressive pulmonary fibrosis, affecting approximately 140,000 patients in the United States and over 3 million patients around the world.
Bexotegrast has been granted orphan drug designation by the FDA, and the European Medicines Agency, or EMA, and Fast Track designation by the FDA for IPF. Bexotegrast for Treatment of IPF IPF is the most common and severe form of progressive pulmonary fibrosis, affecting approximately 150,000 patients in the United States and over 3 million patients around the world.
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.
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.
As our development programs expand and we build new process efficiencies, we expect to continually evaluate this strategy with the objective of satisfying demand for our clinical trials and, if approved, the manufacture, sale, and distribution of commercial products.
As our development programs expand and we build new process efficiencies, we expect to continually evaluate this strategy with the objective of satisfying demand for our clinical trials and, if approved, the manufacture, sale, and distribution of commercial products. Government Regulation The FDA, Centers for Medicare and Medicaid Services, or CMS,U.S.
Both have shown modest slowing of disease progression. However, both therapies have raised significant safety and tolerability concerns. Bexotegrast is an oral small molecule that selectively inhibits both αvß6 and αvß1 integrins that we are developing as a potential therapy for IPF and PSC.
Both have shown modest slowing of disease progression. However, both therapies have safety and tolerability challenges that lead to treatment interruption, dose adjustment, and permanent discontinuation. 4 Bexotegrast is an oral small molecule that selectively inhibits both αvß6 and αvß1 integrins that we are developing as a potential therapy for IPF and PSC.
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.
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.
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.
Department of Health and Human Services Office of the Inspector General, or 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, sale and distribution of drugs, such as those we are developing.
Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. 22 Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
Data Protection Act 2018, or the U.K. GDPR, and together with the EU GDPR, the GDPR.
GDPR (together with the EU GDPR, the GDPR) which sits alongside the U.K. Data Protection Act 2018.
We are 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. We expect to release preliminary data from the trial in late 2024.
We are currently enrolling the fourth 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. Preliminary data from cohorts one through three is expected in the first quarter of 2025.
The synthetic route is amenable to large-scale production and does not require unusual equipment or handling during the manufacturing process. We do not own or operate facilities for clinical drug manufacturing, storage, distribution, or quality testing. All of our clinical manufacturing is outsourced to third-party manufacturers.
The manufacturing process of the drug substance for such product candidate is robust and accessed from readily available starting materials. The synthetic route is amenable to large-scale production and does not require unusual equipment or handling during the manufacturing process. We do not own or operate facilities for clinical drug manufacturing, storage, distribution, or quality testing.
We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, development opportunities that enable continued learning and growth and a robust recognition program that recognizes and celebrates their accomplishments.
We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, development opportunities that enable continued learning and growth and a robust recognition program that recognizes and celebrates their accomplishments. In addition, we regularly conduct an employee survey to gauge employee engagement and identify areas of focus.
Other legislative and regulatory changes have been proposed or adopted in the United States since the ACA was enacted, including several legislative and regulatory changes that are focused on capping or reducing healthcare costs, as well as measures that would address healthcare fraud and abuse, value-based care, drug pricing and other reforms.
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. 16 Other legislative and regulatory changes have been proposed or adopted in the United States since the ACA was enacted, including several legislative and regulatory changes that are focused on capping or reducing healthcare costs, as well as measures that would address healthcare fraud and abuse, value-based care, drug pricing and other reforms.
We have applied our deep understanding of fibrosis biology, along with our medicinal chemistry and translational medicine expertise to develop a set of proprietary tools designed to discover and de-risk product candidates quickly and efficiently.
We have applied our deep understanding of fibrosis biology, along with our medicinal chemistry and translational medicine expertise to develop a set of proprietary tools designed to discover and de-risk product candidates quickly and efficiently. Our wholly owned lead product candidate, bexotegrast, is an oral, small molecule, dual selective inhibitor of αvβ6 and αvβ1 integrins.
We are also pursuing innovative ways to modulate integrin function using antibodies and have 36 pending patent applications to that technology in the United States and foreign jurisdictions, and one issued foreign patent.
We are also pursuing innovative ways to modulate integrin function using antibodies, and as of February 26, 2025 we have 35 pending patent applications to that technology in the United States and foreign jurisdictions. As of February 26, 2025, we have one U.S. patent and two foreign patents that have been issued, granted, or allowed.
Bexotegrast was well tolerated up to 40 weeks of treatment at 320 mg with no drug-related serious adverse events. 6 Change in FVC from Baseline of Bexotegrast 320 mg Over 24 Weeks Proportion of Patients with FVC Change from Baseline of Bexotegrast 320 mg Over 12 and 24 Weeks versus Placebo - Intent to Treat Population 7 QLF Mean Percent Change from Baseline at Weeks 12 and 24 versus Placebo – Per CT Protocol Population In August 2023, we initiated BEACON-IPF, a 52-week, multinational, randomized, dose-ranging, double-blind, placebo-controlled Phase 2b trial evaluating bexotegrast at doses of 160 mg or 320 mg.
Bexotegrast was well tolerated up to 40 weeks of treatment at 320 mg with no drug-related serious adverse events. In August 2023, we initiated BEACON-IPF, a 52-week, multinational, randomized, dose-ranging, double-blind, placebo-controlled Phase 2b trial evaluating bexotegrast at doses of 160 mg or 320 mg at sites in the United States.
We make copies of these reports available free of charge through our investor relations website as soon as reasonably practicable after we file or furnish them with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov.
We make copies of these reports available free of charge through our investor relations website as soon as reasonably practicable after we file or furnish them with the SEC.
BEACON-IPF is a multinational trial enrolling approximately 270 patients with IPF. The primary endpoint is an assessment of the change from baseline in absolute mL of forced vital capacity (FVC) at Week 52.
In March 2024, we initiated the Phase 2b/3 adaptive portion of the BEACON-IPF trial at global sites outside of the U.S. The BEACON-IPF Phase 2b portion of this multinational trial is enrolling approximately 360 patients with IPF. The primary endpoint is an assessment of the change from baseline in absolute mL of forced vital capacity (FVC) at Week 52.
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. While expressed at very low levels in normal tissues, αvß6 and αvß1 are upregulated in the pulmonary tissues of IPF patients.
While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA impacts certain of our business activities. The CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.
While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA impacts certain of our business activities. Many states have followed California in implementing comprehensive state privacy laws, and the various compliance requirements affiliated with these laws could increase our potential liability and adversely affect our business.
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 also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. 8 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.
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.
Government has published its own form of EU SCCs, known as the International Data Transfer Agreement and an International Data Transfer Addendum to the new EU SCCs. The U.K. Information Commissioner’s Office, or the ICO, has also published its own version of the TIA although companies may choose to either use the EU-style or U.K.-style TIA.
PLN-101325 for Treatment of Muscular Dystrophies We are developing PLN-101325, a monoclonal antibody targeting α7β1 for treatment of muscular dystrophies, including Duchenne Muscular Dystrophy, or DMD. The α7β1 integrin is upregulated on muscle cells in several muscular dystrophy indications. It partially compensates for the lack of dystrophin by helping to anchor muscle cells to the extracellular matrix.
Preliminary data from first three cohorts of the Phase 1 trial are expected in the first quarter of 2025. PLN-101325 for Treatment of Muscular Dystrophies We are developing PLN-101325, a monoclonal antibody targeting α7β1 for treatment of muscular dystrophies, including Duchenne Muscular Dystrophy, or DMD. The α7β1 integrin is upregulated on muscle cells in several muscular dystrophy indications.
Bexotegrast at 320 mg showed a strong treatment effect with stabilization of fibrosis as measured by QLF imaging at Week 24.
Eighty-nine percent of bexotegrast-treated patients who experienced an increase in FVC from baseline at Week 12 maintained an increase at Week 24. Bexotegrast at 320 mg showed a strong treatment effect with stabilization of fibrosis as measured by QLF imaging at Week 24.
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.
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 331 Oyster Point Boulevard, South San Francisco, California 94080, and our telephone number is (650) 481-6770. Our website address is https://pliantrx.com.
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.
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 and established annual fees and taxes on manufacturers of certain branded prescription drugs.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we do, which could result in our competitors establishing a strong market position before we are able to enter the market. 11 Intellectual Property Overview We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
Intellectual Property Overview We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
In addition, commercialization of any drug product outside the United States will also likely be subject to foreign equivalents of the healthcare laws mentioned above, among other foreign laws. 19 In the U.S., numerous federal and state laws, and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.
In the U.S., numerous federal and state laws, and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.
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.
Our Phase 1-ready program PLN-101325, is 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 α7β1. PLN-101325 has received a clinical trial approval (CTA) in Australia.
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. 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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough we have received U.S. orphan drug designation for bexotegrast for IPF and PSC and EEA orphan drug designation for bexotegrast for IPF and for PSC, the designation of any of our product candidates as an orphan drug does not mean that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates of other companies that treat the same indications as our product candidates.
Biggest changeAlthough we have received U.S. orphan drug designation for bexotegrast for IPF and PSC and EEA orphan drug designation for bexotegrast for IPF and for PSC, we may be unable to obtain and maintain orphan drug designation for our other product candidates, and even if we obtain such designation, the designation of any of our product candidates as an orphan drug does not mean that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates of other companies that treat the same indications as our product candidates. 32 Generally, if a product candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or foreign regulatory authorities from approving another marketing application for a product that constitutes a similar medicinal product treating the same indication for that marketing exclusivity period, except in limited circumstances.
Our suppliers and any future collaborators may need assurances that our financial resources and stability on a stand-alone basis are sufficient to satisfy their requirements for doing or continuing to do business with us.
Our suppliers and any future collaborators may need assurances that our financial resources and stability on a stand-alone basis are sufficient to satisfy their requirements for doing or continuing to do business with us.
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 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; • 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; 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.
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; • 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.
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 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 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.
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.
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; • 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; 55 • 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.
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.
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; • 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.
We may experience setbacks that could delay or prevent regulatory approval of, or the extent of regulatory protection or our ability to commercialize, our product candidates, including: • negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • product-related side effects experienced by subjects in our clinical trials or by individuals using drugs or therapeutics similar to our product candidates; • delays in submitting investigational new drug (IND) applications or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; 31 • delays in enrolling subjects in clinical trials, including due to operational challenges, competition with other clinical trials or the effects of health epidemics and pandemics, such as the COVID-19 pandemic; • high drop-out rates or screening failures of subjects from clinical trials; • inadequate supply or quality of product candidates or other materials necessary for the conduct of our clinical trials; • challenges manufacturing our product candidates to regulatory requirements in a cost effective manner; • greater than anticipated clinical trial costs; • inability to compete with other therapies; • failure to secure or maintain orphan designation in some jurisdictions; • poor efficacy of our product candidates during clinical trials; • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and similar foreign regulatory agencies.
We may experience setbacks that could delay or prevent regulatory approval of, or the extent of regulatory protection or our ability to commercialize, our product candidates, including: • negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • product-related side effects experienced by subjects in our clinical trials or by individuals using drugs or therapeutics similar to our product candidates; • delays in submitting investigational new drug (IND) applications or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; • delays in enrolling subjects in clinical trials, including due to operational challenges, competition with other clinical trials or the effects of health epidemics and pandemics, such as the COVID-19 pandemic; • high drop-out rates or screening failures of subjects from clinical trials; 27 • inadequate supply or quality of product candidates or other materials necessary for the conduct of our clinical trials; • challenges manufacturing our product candidates to regulatory requirements in a cost effective manner; • greater than anticipated clinical trial costs; • inability to compete with other therapies; • failure to secure or maintain orphan designation in some jurisdictions; • poor efficacy of our product candidates during clinical trials; • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and similar foreign regulatory agencies.
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.
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; • 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 24 • 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.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as 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.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our 38 rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as 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.
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.
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.
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 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 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.
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.
While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our information systems or those of our collaborators, vendors, contractors or consultants, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions, as well as reputational harm and adverse legal and regulatory consequences.
While we have 67 not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our information systems or those of our collaborators, vendors, contractors or consultants, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions, as well as reputational harm and adverse legal and regulatory consequences.
Additionally, the FTC published an advance notice of proposed rulemaking in 2022 on commercial surveillance and data security, and may implement new trade regulation rules or other regulatory alternatives concerning the ways in which companies (1) collect, aggregate, protect, use, analyze, and retain consumer data, as well as (2) transfer, share, sell, or otherwise monetize that data in ways that are unfair or deceptive in the coming years.
Additionally, the FTC published an advance notice of proposed rulemaking in 2022 on commercial surveillance and data security, and may implement new trade regulation rules or other regulatory alternatives concerning the ways in which companies (1) collect, aggregate, protect, use, analyze, and retain consumer data, as well as (2) transfer, share, sell, or otherwise monetize that data in ways that the FTC asserts are unfair or deceptive in the coming years.
Such collaborators may develop adjacent or competing products to ours that are outside the scope of our patents; • we may not develop additional proprietary technologies for which we can obtain patent protection; • it is possible that product candidates or diagnostic tests we develop may be covered by third parties’ patents or other exclusive rights; or • the patents of others may have an adverse effect on our business.
Such collaborators may develop adjacent or competing products to ours that are outside the scope of our patents; • we may not develop additional proprietary technologies for which we can obtain patent protection; • it is possible that product candidates or diagnostic tests we develop may be covered by third parties’ patents or other exclusive rights; or 44 • the patents of others may have an adverse effect on our business.
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.
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.
To become and remain profitable, we must develop and eventually commercialize products with significant market potential. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials, obtaining marketing approval for product candidates, manufacturing, marketing, and selling products for which we may obtain marketing approval and satisfying any post-marketing requirements.
To become and remain profitable, we must develop and eventually commercialize products with significant market potential. This will require us to be successful in a range of challenging activities, including completing preclinical studies 23 and clinical trials, obtaining marketing approval for product candidates, manufacturing, marketing, and selling products for which we may obtain marketing approval and satisfying any post-marketing requirements.
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.
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.
These anti-takeover provisions and other provisions in our certificate of incorporation and bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer or proxy contest involving our company.
These anti-takeover provisions and other provisions in our certificate of incorporation and bylaws could make it more difficult for stockholders or potential acquirers to obtain 61 control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer or proxy contest involving our company.
Even if we obtain marketing approval for any of our product candidates, there is no assurance that our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential future demand.
Even if we obtain marketing approval for any of our product candidates, there is no assurance that our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential 33 future demand.
Such mechanisms include re-examination, inter partes review, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Such mechanisms include re-examination, inter partes review, post grant 49 review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
We may also experience hesitancy, reluctance, or refusal by European or multi-national clients or biopharmaceutical partners to continue to use our products and solutions due to the potential risk exposure as a result of the current (and, in particular, future) data protection obligations imposed on them by certain data protection authorities in interpretation of current law.
We may also experience hesitancy, reluctance, or refusal by European or multi-national clients or biopharmaceutical partners to continue to use our 66 products and solutions due to the potential risk exposure as a result of the current (and, in particular, future) data protection obligations imposed on them by certain data protection authorities in interpretation of current law.
Seeking foreign regulatory approvals could result in significant delays, difficulties, and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
Seeking foreign regulatory 37 approvals could result in significant delays, difficulties, and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
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.
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.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other 42 organizations.
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.
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.
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.
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 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; • 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.
Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors are critical to new product acceptance.
Patients who are provided medical treatment for their 36 conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors are critical to new product acceptance.
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.
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.
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.
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.
A primary trend in the United States and European health care industries is toward cost containment, as legislative bodies, government authorities, third-party payors, and others have attempted to control costs by limiting coverage, pricing 40 and the amount of reimbursement available for certain treatments.
A primary trend in the United States and European health care industries is toward cost containment, as legislative bodies, government authorities, third-party payors, and others have attempted to control costs by limiting coverage, pricing and the amount of reimbursement available for certain treatments.
At the EU level, the CJEU, has recently narrowed the availability of patent term extension for second medical use therefore affecting the scope of patent protection available. 54 If we do not obtain patent term extension, data exclusivity and orphan exclusivity for any product candidates we may develop, our business may be materially harmed.
At the EU level, the CJEU, has recently narrowed the availability of patent term extension for second medical use therefore affecting the scope of patent protection available. If we do not obtain patent term extension, data exclusivity and orphan exclusivity for any product candidates we may develop, our business may be materially harmed.
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.
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.
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.
Failure 41 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.
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.
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. 54 In addition, we contract with fill and finishing providers with the appropriate expertise, facilities and scale to meet our needs.
If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed. In addition, courts outside the United States are sometimes less willing to protect trade secrets.
If any of our confidential or proprietary 45 information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed. In addition, courts outside the United States are sometimes less willing to protect trade secrets.
Changes in U.S. tax law could adversely affect our financial condition and results of operations. 70 The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the U.S. Internal Revenue Service and the U.S. Treasury Department.
Changes in U.S. tax law could adversely affect our financial condition and results of operations. The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the U.S. Internal Revenue Service and the U.S. Treasury Department.
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.
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.
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.
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.
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.
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, 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, 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.
However, if significant adverse events or other side effects are observed in any of our ongoing or future clinical trials, we may have difficulty recruiting patients to our clinical trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts altogether.
If significant adverse events or other side effects are observed in any of our ongoing or future clinical trials, we may have difficulty recruiting patients to our clinical trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts altogether.
The possibility exists that others will develop products which have the same effect as our products on an independent basis which do not infringe our patents or other intellectual property rights or will design around the claims of patents that may issue that cover our products.
The possibility exists that others will develop products which have the same effect as our products on an independent basis which do not infringe our 43 patents or other intellectual property rights or will design around the claims of patents that may issue that cover our products.
Should any of these events occur, they could significantly harm our business, financial condition, results of operations, and prospects. Risks Related to Our Reliance on Third Parties We rely on third parties to conduct certain aspects of our preclinical studies and clinical trials.
Should any of these events occur, they could significantly harm our business, financial condition, results of operations, and prospects. Risks Related to Our Reliance on Third Parties 52 We rely on third parties to conduct certain aspects of our preclinical studies and clinical trials.
If an event of default occurs under the Oxford Loan Agreement, Oxford may foreclose on its security interest and liquidate some or all of these assets, which would harm our business, financial condition and results of operations.
If an event of default occurs under the Amended Loan Agreement, Oxford may foreclose on its security interest and liquidate some or all of these assets, which would harm our business, financial condition and results of operations.
However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
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.
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.
If we were unable to maintain or renew such agreements, we would be forced to seek new arrangements with new hospitals, clinics or health institutions. If so, we may not be able to reach agreements with alternative partners or do so on terms acceptable to us.
If we were unable to maintain or renew such agreements, we would be forced to seek new arrangements with new hospitals, clinics or health institutions. If so, we may 53 not be able to reach agreements with alternative partners or do so on terms acceptable to us.
While these new laws generally include exemptions for HIPAA-covered and clinical trial data, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business.
While these proposals and new laws generally include exemptions for HIPAA-covered and clinical trial data, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business.
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 36 medicinal products for human use.
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.
These proceedings are expensive and may consume our time or other resources. We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office, or EPO, or other foreign patent office. The costs of these opposition proceedings could be substantial and may consume our time or other resources.
These 48 proceedings are expensive and may consume our time or other resources. We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office, or EPO, or other foreign patent office. The costs of these opposition proceedings could be substantial and may consume our time or other resources.
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.
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.
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.
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 preclinical and 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; 59 • 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; • 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.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public 66 accounting firm is unable to express an opinion on the effectiveness of our internal control, including as a result of any identified material weakness, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control, including as a result of any identified material weakness, we could lose investor confidence in the accuracy and completeness of our financial reports, 62 which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.
Our failure to repay our obligations under the Oxford Loan Agreement would result in Oxford foreclosing on all or a portion of our assets, which could force us to curtail or cease our operations.
Our failure to repay our obligations under the Amended Loan Agreement would result in Oxford foreclosing on all or a portion of our assets, which could force us to curtail or cease our operations.
We do not carry specific biological waste or hazardous waste insurance coverage, workers’ compensation or property and casualty and general liability insurance policies that include coverage for damages and fines arising from biological or hazardous waste exposure or contamination.
We do not carry specific biological waste or hazardous waste 58 insurance coverage, workers’ compensation or property and casualty and general liability insurance policies that include coverage for damages and fines arising from biological or hazardous waste exposure or contamination.
Any such investigation or charges by European data protection authorities could have a negative effect on our existing business and on our ability to attract and retain new clients or biopharmaceutical partners.
Any such investigation or charges by European or Swiss data protection authorities could have a negative effect on our existing business and on our ability to attract and retain new clients or biopharmaceutical partners.
If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.
If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of 26 analysts or investors, the price of our common stock could decline substantially.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying 47 monetary damages, we may lose valuable intellectual property rights or personnel.
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.
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 we are unable to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payers for any approved products that we develop, or if net prices are reduced by mandatory discounts or rebates, there could be a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
If we are unable to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop, or if net prices are reduced by mandatory discounts or rebates, there could be a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
We own pending patent applications covering our proprietary technologies or our product candidates that if issued as patents are expected to expire from 2037 through 2044, without taking into account any possible patent term adjustments or extensions. However, we cannot be assured that the USPTO, EPO or other relevant foreign patent offices will grant any of these patent applications.
We own pending patent applications covering our proprietary technologies or our product candidates that if issued as patents are expected to expire from 2037 through 2045, without taking into account any possible patent term adjustments or extensions. However, we cannot be assured that the USPTO, EPO or other relevant foreign patent offices will grant any of these patent applications.
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.
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 31 patient populations, variable adherence to the dosing regimen or other protocol requirements and the rate of dropout among clinical trial participants.
If bexotegrast or any of our other product candidates encounter safety or efficacy problems, development delays, regulatory issues or other problems, our development plans and business would be significantly harmed.
If any of our product candidates encounter safety or efficacy problems, development delays, regulatory issues or other problems, our development plans and business would be significantly harmed.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the 50 United States.
In addition, we seek to accelerate our development timelines, including by initiating certain clinical trials of our product candidates before earlier-stage studies have been completed. This approach may cause us to commit significant resources to prepare for and conduct later-stage trials for one or more product candidates that subsequently fail earlier-stage clinical testing.
In addition, we seek to accelerate our development timelines, including by initiating certain clinical trials of our product candidates, including our adaptive trial, before earlier-stage studies have been completed. This approach may cause us to commit significant resources to prepare for and conduct later-stage trials for one or more product candidates that subsequently fail earlier-stage clinical testing.
Provisions in the Oxford Loan Agreement impose restrictions or require prior approval on our ability, and the ability of certain of our subsidiaries to, among other things: • Incur additional debt; • Make certain investments and acquisitions; • Guarantee the indebtedness of others or our subsidiaries; • Create liens or encumbrances; • Engage in new lines of business; • Enter into transactions with affiliates; • Pay cash dividends and make distributions; • Redeem or repurchase capital shares; • Sell, lease or transfer certain parts of our business or property, including equity interests of our subsidiaries; • Prepay other indebtedness; and • Acquire new companies and merge or consolidate.
Provisions in the Amended Loan Agreement impose certain restrictions or require prior approval on our ability, and the ability of certain of our subsidiaries to, among other things: • Incur additional debt; • Make certain investments and acquisitions; • Guarantee the indebtedness of others or our subsidiaries; • Create liens or encumbrances; 25 • Engage in new lines of business; • Enter into transactions with affiliates; • Pay cash dividends and make distributions; • Redeem or repurchase capital shares; • Sell, lease or transfer certain parts of our business or property, including equity interests of our subsidiaries; • Prepay other indebtedness; and • Acquire new companies and merge or consolidate.
Covenants and other provisions in the Oxford Loan Agreement restrict our business and operations in many ways, and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected. In addition, our operations may not provide sufficient cash to meet the repayment obligations of our debt incurred under the Oxford Loan Agreement.
Covenants and other provisions in the Amended Loan Agreement restrict our business and operations in many ways, and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected. In addition, our operations may not provide sufficient cash to meet the repayment obligations of our debt incurred under the Amended Loan Agreement.
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.
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 63 for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
This analysis concluded that we have experienced one or more such ownership changes prior to December 31, 2023, and the Company’s net operating losses and tax credit carryforwards generated prior to the identified ownership changes are subject to no permanent limitation under Sections 382 or 383.
This analysis concluded that we have experienced one or more such ownership changes prior to December 31, 2024, and the Company’s net operating losses and tax credit carryforwards generated prior to the identified ownership changes are subject to no permanent limitation under Sections 382 or 383.
Our failure to comply with these covenants may result in the declaration of an event of default, which, if not cured or waived, may result in the acceleration of the maturity of indebtedness outstanding under the Oxford Loan Agreement and would require us to pay all amounts outstanding.
Our failure to comply with these covenants may result in the declaration of an event of default, which, if not cured or waived, may result in the acceleration of the maturity of indebtedness outstanding under the Amended Loan Agreement and would require us to pay all amounts outstanding.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct our planned clinical trials of bexotegrast and any future product candidates that we may develop, seek regulatory approvals for our product candidates and to launch and commercialize any products for which we receive regulatory approval.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of our product candidates and any future product candidates that we may develop, seek regulatory approvals for our product candidates and to launch and commercialize any products for which we receive regulatory approval.
Because substantially all of our assets are pledged to secure the Oxford Loan Agreement obligations, our ability to incur additional indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on our financial flexibility.
Because substantially all of our assets are pledged to secure the Amended Loan Agreement obligations, our ability to incur additional indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on our financial flexibility.
For instance, Washington State recently passed the “My Health My Data Act” which will regulate “consumer health data” which is defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data Act” provides exemptions for personal data used or shared in research, including data subject to 45 C.F.R.
For instance, Washington State recently passed the “My Health My Data Act” which regulates “consumer health data” which is defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data Act” provides exemptions for personal data used or shared in research, including data subject to 45 C.F.R.
Parts 46, 50, and 56. Nevada also recently enacted a consumer health data privacy bill, and additional states may adopt health-specific privacy laws that could impact our business activities depending on how they are interpreted.
Parts 46, 50, and 56. Nevada has also enacted a consumer health data privacy bill, and additional states may adopt health-specific privacy laws that could impact our business activities depending on how they are interpreted.
For example, we are initially developing bexotegrast for the treatment of IPF and PSC, each of which is an orphan indication. In the United States, IPF is estimated to affect approximately 140,000 patients, while PSC is estimated to affect approximately 30,000 to 45,000 patients.
For example, we are initially developing bexotegrast for the treatment of IPF and PSC, each of which is an orphan indication. In the United States, IPF is estimated to affect approximately 150,000 patients, while PSC is estimated to affect approximately 30,000 to 45,000 patients.
Before we can generate any revenue from sales of our lead product candidate, bexotegrast, or any of our other product candidates, we must undergo additional preclinical and clinical development, regulatory review, and approval in one or more jurisdictions.
Before we can generate any revenue from sales of bexotegrast or any of our other product candidates, we must undergo additional preclinical and clinical development, regulatory review, and approval in one or more jurisdictions.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of bexotegrast or any other product candidates. 33 We may experience delays in initiating or completing clinical trials.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of bexotegrast or any other product candidates. 29 We may experience delays in initiating or completing clinical trials.
Such third-party payers, including Medicare, may question the coverage of, and challenge or seek to lower the prices charged for medical products, and many third-party payers limit coverage and reimbursement for newly approved health care products.
Such third-party payors, including Medicare, may question the coverage of, and challenge or seek to lower the prices charged for medical products, and many third-party payors limit coverage and reimbursement for newly approved health care products.
In addition, the stock market in general, and the market for biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, including as a result of effects of health epidemics and pandemics, such as COVID-19, geopolitical events, such as the Russian invasion of Ukraine, the Israel-Hamas conflict and related global escalation of geopolitical tensions, and rising inflationary pressures.
In addition, the stock market in general, and the market for biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, including as a result of effects of health epidemics and pandemics, such as COVID-19, geopolitical events, such as the Russian invasion of Ukraine, the Israel-Hamas conflict and related global escalation of geopolitical tensions, domestic or international trade policies and rising inflationary pressures.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed8 unchanged
Biggest changeThe Response Plan addresses (1) detection, (2) analysis, (3) communication, (4) containment, (5) eradication, (6) recovery and (7) post-incident review. As of the date of this report, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition.
Biggest changeThe Response Plan addresses (1) detection, (2) analysis, (3) communication, (4) containment, (5) eradication, (6) recovery and (7) post-incident review. 69 As of the date of this report, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition.
The Audit Committee provides updates about the Company's Cybersecurity Program to the Board of Directors at least annually. 72 The CSGC leads the enterprise-wide cybersecurity strategy and policy development to ensure alignment and best practices informed by industry established frameworks.
The Audit Committee provides updates about the Company's Cybersecurity Program to the Board of Directors at least annually. The CSGC leads the enterprise-wide cybersecurity strategy and policy development to ensure alignment and best practices informed by industry established frameworks.

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 is expected to terminate in the third quarter of 2024.
Biggest changeWe previously leased (i) a facility containing 32,974 square feet of laboratory and office space located at 260 Littlefield Avenue, South San Francisco, California 94080, which lease terminated in the third quarter of 2024 and (ii) a facility lease containing 12,456 square feet of office space at 611 Gateway Boulevard, South San Francisco, California 94080, which lease expired March 31, 2024.
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.
The lease term of approximately seven years started in the second 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.
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.
Item 2. Properties We lease premises consisting of approximately 100,904 square feet of office and laboratory space located at Oyster Point Blvd, South San Francisco, California pursuant to a lease agreement entered into on September 28, 2023 (the "Oyster Point Lease"), which is being used as a single unified Company headquarters.
Removed
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.
Removed
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. 73 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. 70 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
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.
Securities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved]
Securities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved] Not Applicable.
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.
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, 2024 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 12/31/2024 Pliant Therapeutics Inc. $ 100.0 $ 106.7 $ 63.4 $ 90.8 $ 85.0 $ 61.8 Nasdaq Composite Index $ 100.0 $ 133.7 $ 163.4 $ 110.2 $ 159.4 $ 206.5 Nasdaq Biotechnology Index $ 100.0 $ 114.6 $ 114.6 $ 103.0 $ 107.7 $ 107.1 71 Holders of Record As of the close of business on February 21, 2025, there were 36 stockholders of record of our common stock.
We currently intend to retain all available funds and future earnings, if any, for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
Dividends We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and future earnings, if any, for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
Removed
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.

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changeResearch and Development Expenses The following table summarizes the results of our research and development expenses for the years ended December 31, 2024 and 2023 (in thousands): 2024 2023 Program-specific external expenses: Bexotegrast - clinical trial and outside service third party contracting costs 86,365 51,446 Other pipeline programs - clinical trial and outside service third party contracting costs 10,760 13,754 Total program-specific external expenses 97,125 65,200 Unallocated internal expenses Employee-related expenses 49,597 46,658 Depreciation of lab equipment and costs of equipment and supplies 6,717 5,588 Facilities expenses 7,776 4,288 Other expenses and other allocations 8,095 6,063 Total unallocated internal expenses 72,185 62,597 Total research and development expenses 169,310 127,797 The increase in research and development expenses of $41.5 million was primarily due to: • $34.9 million increase related to bexotegrast development primarily driven by BEACON-IPF, a Phase 2b/3 study of bexotegrast in patients with IPF, and related manufacturing activities; • $3.0 million decrease in others pipeline programs as we prioritized BEACON-IPF; • $2.9 million increase in employee-related costs, including stock-based compensation, driven by an increase in our research and development workforce; and • $5.5 million increase in facilities and other allocated expenses, resulting from the move to our new office and laboratory space.
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.
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: • 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.
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.
Medicines and Healthcare products Regulatory Agency (MHRA); • whether we enter into any collaboration agreements and the terms of any such agreements; 78 • 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.
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.
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.
Options are considered to be marketing offers and are to be accounted for as separate contracts when the customer elects such options, unless we determine the option provides a material right which would not be provided without entering into the contract.
Options are considered 81 to be marketing offers and are to be accounted for as separate contracts when the customer elects such options, unless we determine the option provides a material right which would not be provided without entering into the contract.
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.
These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. 72 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.
Food and Drug Administration, or FDA, and other comparable foreign regulatory authorities including but not limited to the European Medicines Agency (EMA), the U..
Food and Drug Administration, or FDA, and other comparable foreign regulatory authorities including but not limited to the European Medicines Agency (EMA) and the U.K.
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.
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, 2022.
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.
For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses. 82 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.
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.
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, 2024, 2023 and 2022 were nil, $1.6 million and $9.7 million respectively.
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”).
Discussion and analysis of 2022 and year-to-year comparisons between 2023 and 2022 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 202 3 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC" on February 27, 2024).
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 issued a termination notice for the collaboration and license agreement, and returned global rights to Pliant for PLN-1474.
Novartis discontinued clinical development in MASH and, as a result, discontinued development of PLN-1474. In February 2023, Novartis issued a termination notice for the collaboration and license agreement, and returned global rights to Pliant for PLN-1474.
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.
The trial is currently dosing the fourth 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. Interim data from the first three cohorts is expected in the first quarter of 2025.
General and Administrative Our general and administrative expenses consist primarily of salaries, benefits and stock-based compensation for our general and administrative personnel, allocated facilities costs, insurance and other expenses for outside professional services, including legal, marketing, investor relations, human resource and accounting services.
General and Administrative Our general and administrative expenses consist primarily of salaries, benefits and stock-based compensation for our general and administrative personnel, allocated facilities costs, insurance and other expenses for outside professional services, including legal, marketing, investor relations, human resource and accounting services. We expect general and administrative expenses to remain relatively consistent for the foreseeable future.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
Funding Requirements Our primary use of cash is to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
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 January 2023, we received United States Food and Drug Administration, or FDA, clearance of an investigational new drug application, or IND, for PLN-101095, a small molecule, dual selective inhibitor of integrins αvβ8 and αvβ1 for the treatment of solid tumors that are resistant to immune checkpoint inhibitors.
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.
We are currently dosing the fourth 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. Preliminary data from cohorts one through three is expected in the first quarter of 2025.
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.
Our wholly owned lead product candidate, bexotegrast, is an oral, small molecule, dual selective inhibitor of αvβ6 and αvβ1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF. We have recently discontinued BEACON-IPF trial, a global Phase 2b trial in patients with idiopathic pulmonary fibrosis (IPF).
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.
Oncology Program • Phase 1 trial of PLN-101095 in solid tumors continues to enroll, with interim data expected in the first quarter 2025. 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.
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 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.
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.
Material Cash Requirements At December 31, 2024, we have a non-cancelable operating lease for office and laboratory space for a period of seven years through March 31, 2031. Refer to Note 14 and Note 15 to our financial statements appearing elsewhere in this Annual Report for a discussion of material obligations and commitments.
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.
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. 79 Cash Flows The following summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net cash used in operating activities $ (155,503) $ (116,361) $ (94,631) Net cash provided by (used in) investing activities 140,340 (127,012) (150,204) Net cash provided by financing activities 23,117 274,405 226,854 Net increase (decrease) in cash, cash equivalents and restricted cash $ 7,954 $ 31,032 $ (17,981) Cash Used in Operating Activities Net cash used in operating activities increased due to higher spending related to third-party vendors to support research and development and general and administrative operations: approximately $27.0 million paid to outside service vendors in support of BEACON-IPF and an increase of $9.5 million in payroll and related employee costs.
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.
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.
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.
Cash Provided by Financing Activities Net cash provided by financing activities decreased by $251.3 million primarily due to net proceeds of $270.3 million from the Company's January 2023 underwritten public offering, which was partially offset by additional Term Loans entered into during the twelve months ended December 31, 2024 associated with the Amended Loan Agreement. 80 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 15 to our financial statements appearing elsewhere in this Annual Report.
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.
Our net loss was $210.3 million, $161.3 million and $123.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had an 73 accumulated deficit of $710.1 million and cash, cash equivalents, restricted cash and short-term investments of $357.2 million.
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.
The Company plans to analyze the complete data from the BEACON-IPF trial and evaluate next steps for bexotegrast’s development. 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 in patients with idiopathic pulmonary fibrosis (IPF).
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.
Borrowings under the Amended Loan Agreement bear interest at a rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 5.25%, subject to an agreed upon floor of 8.75%. 75 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 (In thousands, except percentages) Year Ended December 31, 2024 2023 $ Change % Change Revenue $ — $ 1,580 $ (1,580) (100.0 %) Operating expenses: Research and development (169,310) (127,797) (41,513) 32.5 % General and administrative (59,055) (57,928) (1,127) 1.9 % Total operating expenses (228,365) (185,725) (42,640) 23.0 % Loss from operations (228,365) (184,145) (44,220) 24.0 % Interest and other income (expense), net 21,085 24,076 (2,991) (12.4) % Interest expense (3,024) (1,267) (1,757) 138.7 % Net loss $ (210,304) $ (161,336) $ (48,968) 30.4 % Revenue Revenue decreased by $1.6 million due to decreased research and development services resulting from the termination of the Novartis Agreement.
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.
Our Phase 1-ready program PLN-101325, is 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 α7β1. PLN-101325 has received a clinical trial approval (CTA) in Australia.
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.
Interest Expense Our interest expense is derived from a term loan executed under the Oxford Loan Agreement that we entered into in May 2022 and amended in March 2024 (the "Amended Loan Agreement").
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.
We believe that our existing capital resources will be sufficient to fund our anticipated operating expenses and capital expenditure requirements for the next 12 months and beyond. 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.
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.
Research and development expenses include: • employee-related expenses, which include salaries, benefits and stock-based compensation for our research and development personnel; • expenses incurred under agreements with third-party contract organizations for pre-clinical studies, clinical trials and consultants that conduct research and development activities on our behalf; • costs associated with the manufacture of supplies to support research and development, preclinical studies and clinical trials; • depreciation of laboratory equipment and costs of equipment and supplies; • facilities expenses, which include expenses for rent and other facility related costs; and • other expenses and other allocations associated with research and development The following table summarizes our research and development expenses for the years ended December 31, 2024, 2023 and 2022 (in thousands): 74 Year Ended December 31, 2024 2023 2022 Employee-related expenses $ 49,597 $ 46,658 $ 30,457 Outside and consulting services for preclinical studies and research and development activities by third party contract organizations 16,529 15,948 25,402 Clinical trials expenses 80,596 49,252 26,032 Depreciation of lab equipment and costs of equipment and supplies 6,717 5,588 5,854 Facilities expenses 7,776 4,288 3,757 Other expenses and other allocations 8,095 6,063 5,434 Total research and development expenses $ 169,310 $ 127,797 $ 96,936 We expense all research and development costs in the periods in which they are incurred.
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.
We have also developed PLN-1474, an oral, small molecule selective inhibitor of αvß1 for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis, or MASH. Global rights to PLN-1474, licensed to Novartis in 2019, were returned to Pliant in 2023 upon termination of our collaboration and license agreement.
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.
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 common stock and convertible preferred stock and our prior collaboration with Novartis.
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").
Government Agency securities and highly rated, investment-grade corporate debt securities. In March 2024, we entered into an Amended Loan Agreement with Oxford Finance LLC (or the “Lender” or “Oxford”) which upsized our existing Term Loan facility to a total size of $150.0 million of non-dilutive capital.
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.
Interest Expense Interest expense increased $1.8 million due to additional borrowings under the Amended Loan Agreement executed March 11, 2024. 77 Liquidity and Capital Resources Overview As of December 31, 2024, we had cash, cash equivalents, restricted cash and short-term investments of $357.2 million. Our cash, cash equivalents, and short-term investments consist of money market funds, U.S. Treasury securities, U.S.
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.
We do not allocate our internal costs by product candidates or by preclinical programs as these are in early stages of clinical trials or development, and any such allocation would involve significant estimates and judgments and, accordingly, would be imprecise. Where appropriate, we allocate our third-party research and development expense by product candidate or preclinical program.
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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.
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While an imbalance in unadjudicated IPF-related adverse events between the treatment and placebo groups led to the discontinuation of the trial, early evidence of efficacy on the forced vital capacity (FVC) endpoint was also observed. The Company plans to analyze the complete data from the BEACON-IPF trial and evaluate next steps for bexotegrast’s development.
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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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Recent Events Bexotegrast Highlights • BEACON-IPF discontinued following recommendation from expanded data safety monitoring board (DSMB).
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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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Following a prespecified data review and recommendation by the trial’s independent DSMB, as well as a secondary review and recommendation by an outside expert panel, Pliant has discontinued the BEACON-IPF Phase 2b trial.While an imbalance in unadjudicated IPF-related adverse events between the treatment and placebo groups led to the discontinuation of the trial, early evidence of efficacy on the forced vital capacity (FVC) endpoint was also observed.
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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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Neuromuscular Program • PLN-101325 for treatment of muscular dystrophies. PLN-101325 is a monoclonal antibody that acts as an allosteric agonist of integrin α7β1, currently in development for treatment of muscular dystrophies. PLN-101325 is Phase 1 ready with clinical trial approval (CTA) open in Australia. Corporate Highlights • Appointment of Delphine Imbert, Ph.D. as Chief Technical Officer. Dr.
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Research and development expenses include: • employee-related expenses, which include salaries, benefits and stock-based compensation for our research and development personnel; • expenses incurred under agreements with third-party contract organizations for pre-clinical studies, clinical trials and consultants that conduct research and development activities on our behalf; • costs associated with the manufacture of supplies to support research and development, preclinical studies and clinical trials; • depreciation of laboratory equipment and costs of equipment and supplies; • costs associated with technology and intellectual property licenses; and • facilities and other allocated expenses, which include expenses for rent and other facility related costs and other supplies.
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Imbert brings 25 years of product development, process optimization and manufacturing experience across multiple drug modalities. Most recently, Dr. Imbert served as Senior Vice President of CMC and Technical Operations at Chinook Therapeutics. Since inception, we have had significant operating losses.
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We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates and our preclinical programs and as they advance into later stages of development.
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These expenses primarily relate to outside consultants, clinical research organizations, contract manufacturing organization. When we refer to the research and development expenses associated with a specific product candidate or preclinical program, these refer exclusively to the allocated third-party expenses associated with that product candidate.
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We expect general and administrative expenses to increase for the foreseeable future as does the size of our administrative function to support the growth of our business.
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Due to the discontinuation of the BEACON-IPF Phase 2b/3 trial in IPF, we expect research and development expenses to decrease in the near term as we curtail spending on the BEACON-IPF trial.
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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.
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While we plan to analyze data from the BEACON-IPF trial and evaluate next steps for bexotegrast's development, in the near term we will re-prioritize our development of product candidates that are in earlier, less capital intensive stages of development.
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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.
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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.
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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.
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General and Administrative Expenses General and administrative expenses increased by $1.1 million primarily due to an increase in employee-related costs driven by increased headcount. 76 Interest and Other Income (Expense), Net Interest and other income (expense), net decreased $3.0 million due to lower average investment balances in 2024 compared to 2023 due to continued funding of operating activities.
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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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Pursuant to the Amended Loan Agreement, we drew an additional Term Loan of $20.0 million.
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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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The agreement allowed for borrowing up to $70.0 million at our option, $35.0 million being available commencing October 1, 2025 contingent upon the continued operation of the BEACON-IPF study and a further $35.0 million being available upon demonstrating that BEACON-IPF had achieved positive Phase 2b data sufficient to support continued development, in the sole discretion of Oxford.
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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.
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An additional $50.0 million could be made available to us at the sole discretion of Lender. Given the discontinuation of the BEACON-IPF trial, we do not expect to have access to additional borrowing under the Oxford Agreement. See Note 7 to the Notes to our financial statements of this Report for more information.
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Cash Provided (Used in) Investing Activities Net cash provided by investing activities increased over the same period of prior year as maturities of marketable securities exceeded related purchases during the twelve months ended December 31, 2024, while purchases exceeded maturities during the twelve months ended December 31, 2023 as a result of the public offering of common stock in January 2023.
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Revenue Recognition As of December 31, 2024, all of our revenue to date has been generated from the Novartis Agreement. 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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeUnder the Oxford Loan Agreement, we had a $10.0 million term loan outstanding as of December 31, 2023 which is subject to the movement in interest rates, however the exposure to increased rates is capped at 2.0%.
Biggest changeUnder the Amended Loan Agreement, we had a $30.0 million term loan outstanding as of December 31, 2024 which is subject to the movement in interest rates.
However, if current inflationary pressures are sustained for a prolonged period of time, the cost projections associated with our development plans may be impacted as well as the success of businesses from which we procure services, which could harm our business, results of operations, financial condition or future prospects. 85
However, if current inflationary pressures are sustained for a prolonged period of time, the cost projections associated with our development plans may be impacted as well as the success of businesses from which we procure services, which could harm our business, results of operations, financial condition or future prospects. 83
At December 31, 2023 and 2022, we had cash and cash equivalents, restricted cash and short-term investments of $495.7 million and $331.2 million, respectively, which consisted of cash, money market funds, U.S. Treasury securities, U.S. Government Agency securities, and highly rated investment grade corporate debt securities.
At December 31, 2024 and 2023, we had cash and cash equivalents, restricted cash and short-term investments of $357.2 million and $495.7 million, respectively, which consisted of cash, money market funds, U.S. Treasury securities, U.S. Government Agency securities, and highly rated investment grade corporate debt securities.
Due to the short-term maturities of our cash equivalents and short-term investments and the cap on the interest rate associated with the Oxford Loan Agreement, an immediate 100 basis point change in interest rates would not have a material effect on our financial condition.
Due to the short-term maturities of our cash equivalents and short-term investments, and the amount of principle outstanding under the Amended Loan Agreement with Oxford, an immediate 100 basis point change in interest rates would not have a material effect on our financial condition.
Foreign currency exchange risk Most of our operating expenses are denominated in U.S. dollars and, as a result, we have not experienced significant foreign currency transaction gains and losses to date. We have limited foreign currency exposure associated with our operating expenses. Our exposures are primarily limited to fluctuations in the Swiss Franc, Canadian dollar and Euro.
Foreign currency exchange risk Most of our operating expenses are denominated in U.S. dollars and, as a result, we have not experienced significant foreign currency transaction gains and losses to date. We have limited foreign currency exposure associated with our operating expenses. Our exposures are primarily limited to fluctuations in the Euro, Great British Pound and Japanese Yen.
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The principal amount outstanding under the Term Loans will accrue interest at a floating per annum rate equal to (i) the greater of (a) 1-month term Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) on the last business day of the month that immediately precedes the month in which the interest will accrue and (b) three and one-half percent (3.50%) plus (ii) five and one-quarter percent (5.25%), subject to an agreed upon floor of 8.75%.

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