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What changed in 4D Molecular Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of 4D Molecular Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+519 added−576 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-15)

Top changes in 4D Molecular Therapeutics, Inc.'s 2023 10-K

519 paragraphs added · 576 removed · 409 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

166 edited+46 added−134 removed178 unchanged
Biggest changeWe consider our most direct competitors with respect to 4D-150 for the treatment of wet AMD and DME to be Eylea (aflibercept) from Regeneron Pharmaceuticals Inc., which is the current wet AMD standard of care, and a combination of antibody-based programs including, but not limited to, Lucentis, Susvimo, and Vabysmo from Roche, KSI-301 from Kodiak Sciences Inc., and OPT-302 from Opthea Limited, and AAV-based gene therapy based programs including RGX-314 from REGENXBIO (Phase 3 subretinal, Phase 2 suprachoroidal), ADVM-022 from Adverum Biotechnologies (Phase 2, discontinued in diabetic populations), and EXG102-031 from Exegenesis Bio (Phase 1).
Biggest changeCurrently marketed products include Eylea (aflibercept) from Regeneron, which is the current wet AMD standard of care, and a combination of antibody-based programs including, but not limited to, Lucentis, Susvimo, Vabysmo from Roche, and Eylea HD from Regeneron. 17 We consider our most direct competitors with respect to 4D-175 for the treatment of geographic atrophy to be Apellis’s C3 inhibitor Syfovre (approved by FDA in 2023, filed for approval with EMA) and Astellas’s C5 inhibitor Izervay (approved by FDA in 2023).
Sustained expression of 4D-150 transgenes in the retina has the potential to reduce the treatment burden of repeated visits for anti-VEGF injections required to maintain optimal visual outcomes. 4D-150 may also lead to better long term visual outcomes than therapies that target fewer angiogenic factors and reduce undertreatment resulting from the challenges of complying with a regimen of frequent visits to receive injections.
Sustained expression of 4D-150 transgenes in the retina has the potential to reduce the treatment burden of repeated visits for anti-VEGF injections required to maintain optimal visual outcomes. 4D-150 may also lead to better long term visual outcomes than therapies that target fewer angiogenic factors and may reduce undertreatment resulting from the challenges of complying with a regimen of frequent visits to receive injections.
We expect to explore single agent therapy with 4D-710 initially in patients whose disease is not amenable to CFTR modulators (estimated to include approximately 15% of people with cystic fibrosis who have null mutations or are unable to tolerate modulators), and to explore single agent or combination therapy with CFTR modulators for the remaining approximately 85% of patients with cystic fibrosis.
We expect to explore single agent therapy with 4D-710 initially in patients whose disease is not amenable to CFTR modulators (estimated to include approximately 15% of people with cystic fibrosis who have null mutations or are unable to tolerate modulators), and to explore single agent or combination therapy with CFTR modulators for the remaining approximately 85% of people with cystic fibrosis.
We believe that this approach will help inform the clinical development of subsequent product candidates using the same vector. 4D-310 for Fabry Disease Cardiomyopathy Disease Background, Unmet Medical Need, and Target Patient Population Fabry disease is a monogenic disease caused by mutations in the GLA gene which encodes for the alpha-galactosidase A (“AGA”) enzyme, that result in the body’s inability to produce sufficient AGA enzyme activity, causing the accumulation of toxic levels of sphingolipids, such as the substrate globotriaosylceramide-3 (“lyso-Gb3”), in critical organs, including the heart, kidney and blood vessels.
We believe that this approach will help inform the clinical development of subsequent product candidates using the same vector. 14 4D-310 for Fabry Disease Cardiomyopathy Disease Background, Unmet Medical Need, and Target Patient Population Fabry disease is a monogenic disease caused by mutations in the GLA gene which encodes for the alpha-galactosidase A (“AGA”) enzyme, that result in the body’s inability to produce sufficient AGA enzyme activity, causing the accumulation of toxic levels of sphingolipids, such as the substrate globotriaosylceramide-3 (“lyso-Gb3”), in critical organs, including the heart, kidney and blood vessels.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects 23 or other grounds, such as no demonstration of efficacy.
Cells within the kidney, blood vessels and small intestine also produce intracellular AGA after 4D-310 treatment, albeit at significantly lower levels than in the heart. 2. One-time therapy : Unlike AGA chaperones that require dosing every other day for a patient’s life, or IV ERT every two weeks for life, 4D-310 is designed as a single dose therapy. 19 3.
Cells within the kidney, blood vessels and small intestine also produce intracellular AGA after 4D-310 treatment, albeit at significantly lower levels than in the heart. 2. One-time therapy : Unlike AGA chaperones that require dosing every other day for a patient’s life, or IV ERT every two weeks for life, 4D-310 is designed as a single dose therapy. 3.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or 35 condition.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
AGA is normally produced within target cells themselves, but ERTs reportedly lack efficient uptake by parenchymal cells including cardiomyocytes. As a result, patients remain at risk of cardiac complications 18 including death. Finally, antibodies develop to AGA in the majority of Classic Fabry disease patients after ERT and can further worsen clinical outcomes.
AGA is normally produced within target cells themselves, but ERTs reportedly lack efficient uptake by parenchymal cells including cardiomyocytes. As a result, patients remain at risk of cardiac complications including death. Finally, antibodies develop to AGA in the majority of Classic Fabry disease patients after ERT and can further worsen clinical outcomes.
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 revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions 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 revisions to the 28 approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
We believe that our facilities are 40 adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms, if required. Corporate Information We were formed on September 12, 2013 as a Delaware limited liability corporation under the name 4D Molecular Therapeutics, LLC.
We believe that our facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms, if required. Corporate Information We were formed on September 12, 2013 as a Delaware limited liability corporation under the name 4D Molecular Therapeutics, LLC.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by 25 managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products 36 for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Seventy percent of cases are caused by mutations in the retinitis pigmentosa GTPase regulator (“ RPGR” ) gene. The estimated worldwide 11 prevalence of XLRP due to RPGR variants is approximately one in 25,600 people, which represents approximately 24,000 patients in the United States, and France, Germany, Italy, Spain, and the United Kingdom.
Seventy percent of cases are caused by mutations in the retinitis pigmentosa GTPase regulator (“ RPGR” ) gene. The estimated worldwide prevalence of XLRP due to RPGR variants is approximately one in 25,600 people, which represents approximately 24,000 patients in the United States, and France, Germany, Italy, Spain, and the United Kingdom.
We consider our most direct competitors with respect to 4D-310 for the treatment of Fabry disease to be Amicus Therapeutics, which has Galafold (migalastat) approved as a small molecule chaperone for specific mutations, and Sangamo, which is in Phase 1/2 development of AAV2/6-based isaralgagene civaparvovec.
We consider our most direct competitors with respect to 4D-310 for the treatment of Fabry disease to be Amicus, which has Galafold (migalastat) approved as a small molecule chaperone for specific mutations, and Sangamo, which is in Phase 1/2 development of AAV2/6-based isaralgagene civaparvovec.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical 29 trials to demonstrate the safety, purity and potency of its product.
A CRL will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
A CRL will generally describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
Specifically, new biological product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied.
Specifically, biological product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied.
Enrollment in the Dose Expansion portion of the Phase 1/2 clinical trial for 4D-125 was completed in the first quarter of 2023 with 9 patients enrolled (for a total of 15 patients enrolled in both parts of the 12 study). The safety and tolerability profile remains unchanged from prior data releases.
Enrollment in the Dose Expansion portion of the Phase 1/2 clinical trial for 4D-125 was completed in the first quarter of 2023 with 9 patients enrolled (for a total of 15 patients enrolled in both parts of the study). The safety and tolerability profile remains unchanged from prior data releases.
Preclinical Proof-of-Concept Study with Evolved AAV for Aerosol Delivery in the Cystic Fibrosis Pig Model Academic investigators conducted preclinical proof-of-concept studies for utilizing directed evolution to discover vectors for delivering a corrective CFTR gene construct to cystic fibrosis lung tissue in a large animal model of cystic fibrosis, and in a human cystic fibrosis patient lung tissue model.
Preclinical Proof-of-Concept Study with Evolved AAV for Aerosol Delivery in the CF Pig Model Academic investigators conducted preclinical proof-of-concept studies for utilizing directed evolution to discover vectors for delivering a corrective CFTR gene construct to cystic fibrosis lung tissue in a large animal model of CF, and in a human CF patient lung tissue model.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”), to ensure the benefits 33 of the product outweigh its risks.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”), to ensure the benefits of the product outweigh its risks.
As a result, the coverage determination process can require manufacturers to provide scientific and clinical support for the use of a product to each payor separately and can be a time-consuming process, with no assurance 38 that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
As a result, the coverage determination process can require manufacturers to provide scientific and clinical support for the use of a product to each payor separately and can be a time-consuming process, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLPs; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an Institutional Review Board (IRB) or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLPs; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an Institutional Review Board (IRB) or ethics committee at each clinical site before the trial is commenced; 22 • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current GMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
We believe that these results demonstrate that a customized and evolved vector can penetrate the mucus layer of diseased cystic fibrosis lungs and deliver functional CFTR protein in a well-validated large animal model of the disease, as well as in human cystic fibrosis patient-derived organotypic lung models.
We believe that these results demonstrate that a customized and evolved vector can penetrate the mucus layer of diseased CF lungs and deliver functional CFTR protein in a well-validated large animal model of the disease, as well as in human cystic fibrosis patient-derived organotypic lung models.
The actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the 25 scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.
The actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.
Manufacturing Facilities Our manufacturing facilities are on site at company headquarters in Emeryville, California and include process development labs, an analytical development lab, and a cGMP manufacturing facility. These manufacturing facilities are also designed for production of material for GLP toxicology and biodistribution studies.
Manufacturing Facilities Our manufacturing facilities are on site at company headquarters in Emeryville, California and include process development labs, an analytical development lab, QC lab, and a cGMP manufacturing facility. These manufacturing facilities are also designed for production of material for GLP toxicology and biodistribution studies.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can proceed. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites. 34 Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation, RMAT designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites. 26 Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation, RMAT designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.
Targeting Four Angiogenic Growth Factors : An intravitreal dose of 4D-150 should result in more complete and sustained anti-angiogenic effects through inhibition of four different angiogenic growth factors compared to up to three for approved and development-stage products. 2.
Targeting Four Angiogenic Growth Factors : An intravitreal dose of 4D-150 should result in more complete and sustained anti-angiogenic effects through inhibition of four different angiogenic growth factors compared to up to three for approved and development-stage products. 6 2.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP, which include the requirement that all 31 research subjects provide their informed consent for their participation in any clinical study.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study.
The submission of a BLA requires payment of a substantial user fee to FDA, and the sponsor of an approved BLA is also subject to an annual program fee. A waiver of user fees may be obtained under certain limited circumstances.
The submission of a BLA requires payment of a substantial user fee to FDA, and the sponsor of an approved 24 BLA is also subject to an annual program fee. A waiver of user fees may be obtained under certain limited circumstances.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 41
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 33
Biologics Regulation In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and other federal, state, local and foreign statutes and regulations.
Biologics Regulation In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Service Act, and other federal, state, local and foreign statutes and regulations.
Expedited Development and Review Programs A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of new drugs and biological products that meet certain criteria.
Expedited Development and Review Programs A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of drugs and biological products that meet certain criteria.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. 30 U.S.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. U.S.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final product.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, sponsors must develop methods for testing the identity, strength, quality, and purity of the final product.
Our Solution We are developing 4D-710 for the treatment of a broad range of patients with cystic fibrosis independent of their specific CFTR mutation. 4D-710 is designed for efficient single dose aerosol delivery to the proximal and distal airways and alveoli, subsequent mucus barrier penetration, lung epithelial cell transduction, and resistance to pre-existing antibodies in humans.
Our Solution We are developing 4D-710 for the treatment of a broad range of people with cystic fibrosis independent of their specific CFTR mutation. 4D-710 is designed for efficient single dose aerosol delivery to the proximal and distal airways and alveoli, subsequent mucus barrier penetration, lung epithelial cell transduction, and resistance to pre-existing antibodies in humans.
Our Solution We are developing 4D-310 for the treatment of Fabry disease cardiomyopathy. 4D-310 is designed for an efficient, single low dose IV administration to patients with classic and late-onset disease, including those who have previously received ERT. 4D-310 is comprised of C102 and a codon-optimized GLA transgene under control of a ubiquitous promoter. 4D-310 is designed to generate AGA activity via intracellular production within diseased cells including cardiomyocytes and to generate plasma AGA activity, potentially resulting in cross correction of a broad range of organs.
Our Solution We are developing 4D-310 for the treatment of Fabry disease cardiomyopathy. 4D-310 is designed for an efficient, single low dose intravenous (“IV”) administration to patients with classic and late-onset disease, including those who have previously received ERT. 4D-310 is comprised of C102 and a codon-optimized GLA transgene under control of a ubiquitous promoter. 4D-310 is designed to generate AGA activity via intracellular production within diseased cells including cardiomyocytes and to generate plasma AGA activity, potentially resulting in cross correction of a broad range of organs.
We therefore expect to eventually develop 4D-710 in this patient population, as a single agent and/or in combination with these CFTR modulator small molecule medicines. Competition and Differentiation: AAV Genetic Medicines for Cystic Fibrosis Lung Disease A number of biotechnology companies have pursued genetic medicine solutions to treat cystic fibrosis.
We therefore expect to eventually develop 4D-710 in this patient population, as a single agent and/or in combination with these CFTR modulator small molecule medicines. 4DMT Differentiation: AAV Genetic Medicines for Cystic Fibrosis Lung Disease A number of biotechnology companies have pursued genetic medicine solutions to treat cystic fibrosis.
Capsids with the best fitness for the Target Vector Profile are enriched within each round and are designated lead vectors. 4 Since the company’s founding in 2013, we have developed and industrialized our Therapeutic Vector Evolution Platform to invent customized and evolved vectors for use in human therapeutic products.
Capsids with the best fitness for the Target Vector Profile are enriched within each round and are designated lead vectors. 3 Since the company’s founding in 2013, we have developed and industrialized our Therapeutic Vector Evolution Platform to invent customized and evolved vectors for use in human therapeutic products.
Wet AMD is a type of macular degeneration where abnormal blood vessels (choroidal neovascularization or CNV) grow into the macula, the central area of the retina. As a consequence, CNV causes swelling and edema of the retina, bleeding and scarring, which can result in visual distortion and reduced acuity.
Wet AMD is a type of macular degeneration where abnormal blood vessels (choroidal neovascularization or CNV) grow into the macula, the central area of the retina. CNV causes swelling and edema of the retina, bleeding and scarring, which can result in visual distortion and reduced acuity.
We anticipate that development and manufacturing activities will benefit from prior clinical experience and GMP manufacturing of three other R100-based ophthalmology product candidates that have been dosed in ophthalmology patients with wet AMD, X-Linked Retinitis Pigmentosa (XLRP) and choroideremia.
We anticipate that development and manufacturing activities will benefit from prior clinical experience and GMP manufacturing of three other R100-based ophthalmology product candidates that have been dosed in ophthalmology patients with wet AMD, X-Linked Retinitis Pigmentosa (“XLRP”) and choroideremia.
In 2019, the FDA approved triple drug therapy with Trikafta (elexacaftor/ivacaftor/tezacaftor), which Vertex believes would be applicable for up to 90% of patients with cystic fibrosis, leaving at least 10% with no CFTR-targeted options.
In 2019, the FDA approved triple drug therapy with Trikafta (elexacaftor/ivacaftor/tezacaftor), which Vertex believes would be applicable for up to 90% of people with cystic fibrosis, leaving at least 10% with no CFTR-targeted options.
Building on these previous proof-of-concept studies, our product candidate 4D-710 utilizes a vector, A101, which we in-licensed with exclusive worldwide rights. A101 was evolved and selected in primates, which we believe is more relevant for human use. The product was designed to package the same microCFTR transgene payload in this vector that was customized for use in humans.
Building on these previous proof-of-concept studies, our product candidate 4D-710 utilizes a vector, A101, which we in-licensed with exclusive worldwide rights. A101 was evolved and selected in primates, which we believe is more relevant for human use. The product was designed to package the same CFTR∆R transgene payload in this vector that was customized for use in humans.
Our second pulmonology product candidate is 4D-725 for alpha-1 antitrypsin deficiency lung disease, currently in preclinical development. 4D-710 for Cystic Fibrosis Lung Disease Disease Background, Unmet Medical Need, and Target Patient Population Cystic fibrosis is the most common fatal inherited disease in the United States and results from mutations in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene.
Our second pulmonology product candidate is 4D-725 for alpha-1 antitrypsin deficiency lung disease; 4D-725 is currently in preclinical development. 4D-710 for Cystic Fibrosis Lung Disease Disease Background, Unmet Medical Need, and Target Patient Population Cystic fibrosis is the most common fatal inherited disease in the United States and results from mutations in the cystic fibrosis transmembrane conductance regulator (“ CFTR ”) gene.
Directed evolution is a high-throughput platform approach that harnesses the power of evolution in order to create biologics with new and desirable characteristics. 3 The first step in directed evolution is to generate massive genetic diversity.
Directed evolution is a high-throughput platform approach that harnesses the power of evolution in order to create biologics with new and desirable characteristics. 2 The first step in directed evolution is to generate massive genetic diversity.
We have obtained orphan drug designation for 4D-110 for the treatment of Choroideremia and for 4D-310 for the treatment of Fabry disease, and we plan to seek additional orphan drug designations for some or all of our product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products.
We have obtained orphan drug designation for 4D-710 for the treatment of cystic fibrosis, 4D-110 for the treatment of choroideremia, and for 4D-310 for the treatment of Fabry disease, and we plan to seek additional orphan drug designations for some or all of our product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products.
We have built a deep portfolio of genetic medicine product candidates, with five product candidates in clinical trials: 4D-150 for the treatment of wet age-related macular degeneration (“wet AMD”) and diabetic macular edema (“DME”), 4D-710 for the treatment of cystic fibrosis lung disease (both in modulator ineligible and eligible populations), 4D-310 for the treatment of Fabry disease cardiomyopathy, 4D-125 for the treatment of X-linked retinitis pigmentosa (“XLRP”), and 4D-110 for the treatment of choroideremia.
As a result, we have built a deep portfolio of genetic medicine product candidates, with five product candidates in clinical trials in seven patient populations: 4D-150 for the treatment of wet age-related macular degeneration (“wet AMD”) and diabetic macular edema (“DME”), 4D-710 for the treatment of cystic fibrosis lung disease (both in modulator ineligible and eligible populations), 4D-310 for the treatment of Fabry disease cardiomyopathy, 4D-125 for the treatment of X-linked retinitis pigmentosa (“XLRP”), and 4D-110 for the treatment of choroideremia.
In other jurisdictions (currently, Australia, Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, Egypt, India, Indonesia, Iran, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, New Zealand, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, United Arab Emirates, Ukraine, and Vietnam), patents, if issued on pending applications in our solely owned patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter, dosage unit form, method of treatment and medical use, are expected to expire between May 2037 and August 2041, if the appropriate maintenance, renewal, annuity, and other government fees are paid.
In other jurisdictions (currently, Argentina, Australia, Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, Egypt, Hong Kong, India, Indonesia, Iran, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, New Zealand, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, United Arab Emirates, Ukraine, and Vietnam), patents, if issued on pending applications in our solely owned patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter, dosage unit form, method of treatment and medical use, are expected to expire between May 2037 and April 2042, if the appropriate maintenance, renewal, annuity, and other government fees are paid.
This product candidate has completed non-GLP dose-ranging and GLP toxicology and biodistribution studies in primates by aerosol delivery. No notable adverse effects were reported, and widespread biodistribution and transgene expression were observed throughout all lung segments tested in all NHPs. We are currently enrolling a Phase 1/2 clinical trial in patients with cystic fibrosis.
This product candidate has completed non-GLP dose-ranging and GLP toxicology and biodistribution studies in primates by aerosol delivery. No notable adverse effects were reported, and widespread biodistribution and transgene expression were observed throughout all lung segments tested in all NHPs. We are currently enrolling the AEROW Phase 1/2 clinical trial in patients with cystic fibrosis (“CF”).
Cystic fibrosis causes impaired lung function, inflammation, and bronchiectasis and is commonly associated with repeat and persistent lung infections due to the inability to clear thickened mucus from the lung, often resulting in frequent exacerbations and hospitalizations and eventual end-stage respiratory failure.
CF causes impaired lung function, inflammation, and bronchiectasis and is commonly associated with repeat and persistent lung infections due to the inability to clear thickened mucus from the lung, often resulting in frequent exacerbations and hospitalizations and eventual end-stage respiratory failure.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product labeling. In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product within the approved indication.
CFTR mutation-independent efficacy : Unlike CFTR-targeted small molecules that are only effective against specific mutations, 4D-710 is designed to be used in patients with cystic fibrosis with any mutation, including in the approximately 15% of patients whose disease is not amenable to standard medical therapy. 4.
CFTR mutation-independent efficacy : Unlike CFTR-targeted small molecules that are only effective against specific mutations, 4D-710 is designed to be used in people with CF with any mutation, including in the approximately 15% of patients whose disease is not amenable to standard medical therapy. 4.
Our Solution 4D-150 is a dual-transgene, intravitreal genetic medicine, designed to inhibit four distinct angiogenic factors to prevent angiogenesis and reduce vascular permeability, for the treatment of angiogenic diseases of the retina.
Our Solution 4D-150 is a dual-transgene, intravitreal genetic medicine, designed to inhibit four distinct VEGF members to prevent angiogenesis and reduce vascular permeability, for the treatment of angiogenic diseases of the retina.
We expect that United States and European patents, if issued from pending applications in our solely owned portfolio, would expire between May 2037 and August 2041, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
We expect that United States and European patents, if issued from pending applications in our solely owned portfolio, would expire between May 2037 and April 2042. excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
The Phase 1/2 clinical trial is a multicenter, open-label, dose-escalation and dose-expansion trial of 4D-710 in patients (n= up to ~18) with cystic fibrosis who are ineligible for CFTR modulator therapy or who have discontinued therapy due to adverse effects. The primary endpoint of the study is safety and tolerability.
The Phase 1/2 clinical trial is a multicenter, open-label, dose-escalation and dose-expansion trial of 4D-710 in people with cystic fibrosis who are ineligible for CFTR modulator therapy or who have discontinued therapy due to adverse effects. The primary endpoint of the study is safety and tolerability.
Clinical Development: Phase 1/2 Clinical Trial 4D-125 is currently being evaluated in a first-in-human Phase 1/2 dose escalation and dose expansion clinical trial. The primary objectives of this trial are to evaluate the safety and maximum tolerated dose of 4D-125. Secondary endpoints include assessments of biologic activity, including both visual field function and anatomical endpoints.
Clinical Development: EXCEL Phase 1/2 Clinical Trial 4D-125 is currently being evaluated in the EXCEL Phase 1/2 dose escalation and dose expansion clinical trial. The primary objectives of this trial are to evaluate the safety and maximum tolerated dose of 9 4D-125. Secondary endpoints include assessments of biologic activity, including both visual field function and anatomical endpoints.
Starting with our distinct libraries comprising approximately one billion synthetic capsid sequences, we conduct Therapeutic Vector Evolution, including competitive selection in primates, to identify customized and evolved vectors that fit our desired Target Vector Profile for any disease or set of diseases we want to treat.
Leveraging our proprietary libraries comprising approximately one billion synthetic capsid sequences, we conduct Therapeutic Vector Evolution, including competitive selection in primates, to identify customized and evolved vectors that fit our desired Target Vector Profile for any disease or set of diseases we want to treat.
As of January 11, 2023, our in-licensed patent portfolio includes five granted U.S. patents and twenty-one granted foreign patents; each of these patents is expected to expire between June 2024 and May 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
As of February 16, 2024, our in-licensed patent portfolio includes six granted U.S. patents and twenty-one granted foreign patents; each of these patents is expected to expire between June 2024 and May 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin.
The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must be allowed to proceed by the FDA before human clinical trials may begin.
Secondary endpoints include the number of supplemental aflibercept injections received and change from baseline in best corrected visual acuity (“BCVA”) over time. 10 In January 2022, we announced we had dosed our first patient in the PRISM study.
Secondary endpoints include the number of supplemental aflibercept injections received, change from baseline in best corrected visual acuity (“BCVA”) and retinal central subfield thickness (“CST”) over time. In January 2022, we announced we had dosed our first patient in the PRISM study.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees and Human Capital As of December 31, 2022, we had 140 full-time employees. Of these employees, 104 are engaged in research and development and 39 hold M.D. or Ph.D. degrees.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees and Human Capital As of December 31, 2023, we had 147 full-time employees. Of these employees, 105 are engaged in research and development and 37 hold M.D. or Ph.D. degrees.
We believe these prior attempts to deliver AAV genetic medicine to the lungs of cystic fibrosis patients have failed due to an inability of conventional AAV vectors to penetrate through the lung mucus barrier and transduce lung cells efficiently.
We believe these prior attempts to deliver AAV genetic medicine to the lungs of people with CF have failed due to an inability of conventional AAV vectors to penetrate through the lung mucus barrier and transduce lung cells efficiently.
We consider our most direct competitors with respect to 4D-725 for the treatment of alpha-1 antitrypsin deficiency lung disease to be Vertex (AAT correctors in Phase 2 and Phase 1), Krystal Biotech (lung directed gene therapy in preclinical development), Beam (base editing in preclinical development), and Wave Life Sciences/GSK (RNA editing in preclinical development).
We consider our most direct competitors with respect to 4D-725 for the treatment of alpha-1 antitrypsin deficiency lung disease to be Vertex (AAT correctors in Phase 2 and Phase 1), Krystal (lung directed gene therapy in preclinical development), Beam (base editing in preclinical development), Intellia, and Korro.
The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.
The IND automatically goes into effect within 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.
We reported initial clinical data on this program in October 2021. As of the data cutoff date of September 1, 2021, eight patients with clinically advanced XLRP due to RPGR gene mutation had been treated. A standard 3+3 dose escalation was used.
We reported initial clinical data on this program in October 2021. As of the data cutoff date of September 1, 2021, eight patients with clinically advanced XLRP due to RPGR gene mutation had been treated.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
The rebate was previously capped at 100% of a drug’s average manufacturer price. 31 Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
Our in-licensed patent portfolio also includes five pending U.S. non-provisional patent applications and fourteen pending foreign patent applications.
Our in-licensed patent portfolio also includes six pending U.S. non-provisional patent applications and twelve pending foreign patent applications.
In addition, we have developed significant experience in performing Therapeutic Vector Evolution programs in NHPs, with over 15 capsid selections completed to date. We have patent applications and issued patents covering hundreds of proprietary, unique AAV capsid vectors.
In addition, we have developed significant experience in performing Therapeutic Vector Evolution programs in NHPs. We have patent applications and issued patents covering hundreds of proprietary, unique AAV capsid vectors.
Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
With respect to 4D-125 for the treatment of XLRP, we consider our most direct AAV gene therapy competitors to be as follows: Applied Genetic Technologies Corporation (AGTC-501 administered by subretinal surgery in a Phase 2 clinical trial) and Janssen Pharmaceuticals / MeiraGTx (botaretigene sparoparvovec administered by subretinal surgery enrolling a Phase 3 clinical trial).
With respect to 4D-125 for the treatment of XLRP, we consider our most direct AAV gene therapy competitors to be as follows: Janssen (bota-vec administered by subretinal surgery enrolling a Phase 3 clinical trial) and Beacon (AGTC-501 administered by subretinal surgery in a Phase 2/3 clinical trial).
Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten months after the filing date, or, if the application qualifies for priority review, six months after the filing date.
In this event, the BLA must be resubmitted with the additional information. Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten months after the filing date, or, if the application qualifies for priority review, six months after the filing date.
In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price beginning January 1, 2024.
In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, beginning January 1, 2024.
In other jurisdictions (currently, Australia, Brazil, Canada, China, Hong Kong, India, Japan, Korea and Mexico), patents, if issued on pending applications in our in-licensed patent portfolio, where applicable, relating to our product candidates, including composition of matter and various other patents, including dosage unit form, method-of-treatment and medical use patents are expected to expire between June 2024 and June 2038, if the appropriate maintenance, renewal, annuity, and other government fees are paid.
Berkeley patent portfolio, Australia, Brazil, Canada, China, Hong Kong, India, Japan, Korea and Mexico, and for our in-licensed University of Pennsylvania patent portfolio, Australia, Brazil, Canada, China, Israel, Japan, Korea and Hong Kong), patents, if issued on pending applications in our in-licensed patent portfolio, where applicable, relating to our product candidates, including composition of matter and various other patents, including dosage unit form, method-of-treatment and medical use patents are expected to expire between June 2024 and June 2038 for our in-licensed U.C.
These angiogenic diseases of the retina, including wet AMD and DME, represent therapeutic markets of over $12.3 billion in annual global sales. 4D-150is engineered for efficient intravitreal delivery to the retina of a payload expressing two transgenes.
These angiogenic diseases of the retina, including wet AMD and DME, represent therapeutic markets of over $18 billion. 4D-150 is engineered for efficient intravitreal delivery to the retina of a payload expressing two transgenes.
Using internally developed manufacturing processes and testing, we characterize our novel capsids and payloads. In addition, leveraging internal expertise and capabilities, we package and test our novel vectors with payloads using internally developed manufacturing processes, including both adherent and suspension processes.
The downstream purification columns used in our process are from stable sources. Using internally developed manufacturing processes and testing, we characterize our novel capsids and payloads. In addition, leveraging internal expertise and capabilities, we package and test our novel vectors with payloads using internally developed manufacturing processes, including both adherent and suspension processes.
Based on current clinical experience, after several years of treatment, the early vision gains are frequently lost, and visual acuity declines may result at least in part from poor patient compliance and undertreatment. We believe these major retinal diseases are ideal candidate applications for genetic medicines.
Based on current clinical experience, after several years of treatment, the early vision gains are frequently lost, and visual acuity declines may result at least in part from poor patient compliance and undertreatment.
These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our product or lead optimization candidates is obtained in those countries. For example, in Japan, the term of a patent may be extended by a maximum of five years in certain circumstances.
These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our 20 product or lead optimization candidates is obtained in those countries.
Our solely owned patent portfolio also includes ten pending U.S. non-provisional applications and ninety pending foreign applications.
Our solely owned patent portfolio also includes eight pending U.S. non-provisional applications and one hundred and nineteen pending foreign applications.
We will continue to follow these patients for 24 months to assess the magnitude and durability of key imaging endpoint changes in evaluable patients. We anticipate providing program and clinical data updates in 2024. Pulmonology Therapeutic Area Introduction We are developing product candidates to treat lung diseases.
The safety and tolerability profile remains unchanged from prior data releases. We will continue to follow these patients for 24 months to assess the magnitude and durability of key imaging endpoint changes in evaluable patients. Pulmonology Therapeutic Area Introduction We are developing product candidates to treat lung diseases.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur ability to generate revenue and achieve profitability depends significantly on many factors, including: • successfully completing research and preclinical and clinical development of our product candidates; • the COVID-19 pandemic, which has resulted in, and in the future may continue to result in delays to patient enrollment, patients discontinuing their treatment or follow up visits or changes to trial protocols; • obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and any commercial demand for our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • launching and successfully commercializing product candidates for which we obtain marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates, both in the United States and in foreign countries where our product candidates are commercialized; • obtaining adequate reimbursement for our product candidates or procedures using our product candidates from payors; • the convenience and durability of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates, or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for any of our product candidates that may be approved; • addressing any competing technological and market developments; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Biggest changeOur ability to generate revenue and achieve profitability depends significantly on many factors, including: • successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and any commercial demand for our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • launching and successfully commercializing product candidates for which we obtain marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates, both in the United States and in foreign countries where our product candidates are commercialized; • obtaining adequate reimbursement for our product candidates or procedures using our product candidates from payors; • the convenience and durability of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates, or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for any of our product candidates that may be approved; • addressing any competing technological and market developments; • the effects of any public health emergencies, including the COVID-19 pandemic, which may result in delays to patient enrollment, patients discontinuing their treatment or follow up visits or changes to trial protocols; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
If any such collaborations are not successful, we may not be able to realize the market potential of those product candidates. We have sought, and may in the future seek third-party collaborators for the research, development and commercialization of certain of the product candidates we may develop.
If any such collaborations are not successful, we may not be able to realize the market potential of those product candidates. We have sought, and may in the future seek, third-party collaborators for the research, development and commercialization of certain product candidates we may develop.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products and product candidates that compete directly or indirectly with our product candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products and product candidates may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may adversely affect the price of our common stock and may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; • collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products and product candidates that compete directly or indirectly with our product candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products and product candidates may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may adversely affect the price of our common stock and may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; • collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and 77 • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications or those of our licensors may issue as patents; • others will not or may not be able to make, use, offer to sell, or sell products that are the same as or similar to our own but that are not covered by the claims of the patents that we own or license; 80 • we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • we or our licensors were the first to make the inventions covered by each of the patents and pending patent applications that we own or license; • we or our licensors were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe the patents we own or license; • any of the patents we own or license will be found to ultimately be valid and enforceable; • any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable products or will provide us with any competitive advantages; • a third party may not challenge the patents we own or license and, if challenged, a court would hold that such patents are valid, enforceable and infringed; • we may develop or in-license additional proprietary technologies that are patentable; • the patents of others will not have an adverse effect on our business; • our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications or those of our licensors may issue as patents; • others will not or may not be able to make, use, offer to sell, or sell products that are the same as or similar to our own but that are not covered by the claims of the patents that we own or license; • we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • we or our licensors were the first to make the inventions covered by each of the patents and pending patent applications that we own or license; • we or our licensors were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe the patents we own or license; • any of the patents we own or license will be found to ultimately be valid and enforceable; • any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable products or will provide us with any competitive advantages; • a third party may not challenge the patents we own or license and, if challenged, a court would hold that such patents are valid, enforceable and infringed; • we may develop or in-license additional proprietary technologies that are patentable; • the patents of others will not have an adverse effect on our business; • our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
These provisions, among other things: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • provide that our directors may be removed only for cause; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • provide for a staggered board, which will result in only a few directors being up for re-election in each calendar year; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of our common stock to amend many of the provisions described above; and • limit the liability of, and provide indemnification to, our directors and officers.
These provisions, among other things: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • provide that our directors may be removed only for cause; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • provide for a staggered board, which will result in only a few directors being up for re-election in each calendar year; 87 • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of our common stock to amend many of the provisions described above; and • limit the liability of, and provide indemnification to, our directors and officers.
Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limited to the following: • the FDA or comparable foreign regulatory authorities may disagree with the design, implementation or results of our or our collaborators’ clinical trials; • the FDA or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use of our products; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • we or our collaborators may be unable to demonstrate to the FDA, or comparable foreign regulatory authorities that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with our or our collaborators’ interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our or our collaborators’ clinical data insufficient for approval.
Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limited to the following: • the FDA or comparable foreign regulatory authorities may disagree with the design, implementation or results of our or our collaborators’ clinical trials; • the FDA or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use of our products; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; 55 • we or our collaborators may be unable to demonstrate to the FDA, or comparable foreign regulatory authorities that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with our or our collaborators’ interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our or our collaborators’ clinical data insufficient for approval.
Patient enrollment, a determinative factor in the timing of clinical trials, is affected by many factors including the severity of and difficulty of diagnosing the disease under investigation, knowledge of the disease in the medical community and availability of effective diagnostic methods, size and distribution of the patient population and process for identifying subjects, access of patients to medical professionals experienced in their disease, our ability to effectively disseminate information about our clinical trials to the patient population and access of patients to such information, eligibility and exclusion criteria for the trial in question, design of the trial protocol, availability, efficacy of, and our ability to compete with approved and standard of care therapies or other clinical trials for the disease or condition under investigation, perceived risks and benefits of the product candidate under trial or testing, availability of genetic testing for potential patients, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, ability to obtain and maintain subject consent, the risk that enrolled subjects will drop out before completion of the trial, the ability to monitor patients adequately during and after treatment, the time and financial commitments required of patients to enroll in our trials beyond the costs covered by the company, and the proximity and availability of and access to clinical trial sites for prospective patients.
Patient enrollment, a determinative factor in the timing of clinical trials, is affected by many factors including the severity of and difficulty of diagnosing the disease under investigation, knowledge of the disease in the medical community and availability of effective diagnostic methods, size and distribution of the patient population and process for identifying subjects, access of patients to medical professionals experienced in their disease, our ability to effectively disseminate information about our clinical trials to the patient population and access of patients to such information, eligibility and exclusion criteria for the trial in question, design of the trial protocol, availability, efficacy of, and our ability to compete with approved and standard of care therapies or other clinical trials for the disease or condition under investigation, perceived risks and benefits of the product candidate under trial or testing, availability of genetic testing for potential patients, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, ability to obtain and maintain subject consent, the risk that enrolled subjects will drop out before completion of the trial, the ability to monitor patients adequately during and after treatment, the time and financial 44 commitments required of patients to enroll in our trials beyond the costs covered by the company, and the proximity and availability of and access to clinical trial sites for prospective patients.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; • the ability to offer appropriate patient access programs, such as co-pay assistance; • sufficient third-party coverage or reimbursement; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by FDA, EMA or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; 51 • the ability to offer appropriate patient access programs, such as co-pay assistance; • sufficient third-party coverage or reimbursement; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by FDA, EMA or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and • the prevalence and severity of any side effects.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our licensors' patent applications for any patent application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and 79 • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file 71 any patent application related to our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our licensors' patent applications for any patent application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; 101 • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
These agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our proprietary technology and product candidates infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or jointly; • the scope and duration of our payment obligations; • rights upon termination of such agreement; and • the scope and duration of exclusivity obligations of each party to the agreement.
These agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our proprietary technology and product candidates infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; 92 • diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or jointly; • the scope and duration of our payment obligations; • rights upon termination of such agreement; and • the scope and duration of exclusivity obligations of each party to the agreement.
Collaborations involving our product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; 76 • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates that result from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates; • disputes may arise with respect to the ownership of intellectual property developed pursuant to collaborations; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide not to pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, 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 product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may undergo a change of control and the new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become party to a business combination transaction and the continued pursuit and emphasis on our development or commercialization program by the resulting entity under our existing collaboration could be delayed, diminished or terminated; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, devices, materials, know-how or intellectual property of the collaborator relating to our products and product candidates; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; 77 • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or our Therapeutic Vector Evolution platform technology; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates that result from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates; • disputes may arise with respect to the ownership of intellectual property developed pursuant to collaborations; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide not to pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, 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 product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may undergo a change of control and the new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become party to a business combination transaction and the continued pursuit and emphasis on our development or commercialization program by the resulting entity under our existing collaboration could be delayed, diminished or terminated; 69 • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, devices, materials, know-how or intellectual property of the collaborator relating to our products and product candidates; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or our Therapeutic Vector Evolution platform technology; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate program to individuals enrolled in Medicaid managed care organizations; 69 • 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; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • a licensure framework for follow-on biologic products; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services (“CMS”) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate program to individuals enrolled in Medicaid managed care organizations; • 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; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • a licensure framework for follow-on biologic products; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare & Medicaid Innovation (“CMMI”) at the Centers for Medicare & Medicaid Services (“CMS”) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Such laws include: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under any U.S. federal healthcare program, such as Medicare and Medicaid.
Such laws include: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under any U.S. federal healthcare program, such 65 as Medicare and Medicaid.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased or interrupted demand for our products; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • injury to our reputation; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; • costs to defend the related litigation; • a diversion of management’s time and our resources; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased or interrupted demand for our products; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • injury to our reputation; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; 90 • costs to defend the related litigation; • a diversion of management’s time and our resources; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
We have received Fast Track designation for 4D-310 for the treatment of Fabry disease, and for 4D-125 for the treatment of patients with inherited retinal dystrophies due to defects in the 67 RPGR gene, including XLRP and we may receive Fast Track designation for other product candidates in the future; however, we may not experience a faster development, review or approval process, and receipt of the designation does not increase the likelihood that the FDA will approve 4D-310 or 4D-125 for any indication.
We have received Fast Track designation for 4D-310 for the treatment of Fabry disease, and for 4D-125 for the treatment of patients with inherited retinal dystrophies due to defects in the RPGR gene, including XLRP and we may receive Fast Track designation for other product candidates in the future; however, we may not experience a faster development, review or approval process, and receipt of the designation does not increase the likelihood that the FDA will approve 4D-310 or 4D-125 for any indication.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
These reporting requirements, rules and regulations, coupled with the 86 increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 62 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
In the future, we may choose to build a focused sales, marketing and commercial support infrastructure to sell, or participate in sales activities with our collaborators for some of our product candidates if and when they are approved. There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services.
In the future, we may choose to build a focused sales, marketing and commercial support infrastructure to sell, or participate in sales activities with our collaborators for some of our product candidates if and when they are approved. 50 There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services.
It is possible that governmental authorities will conclude that our business practices, including certain of our advisory board 74 arrangements with physicians, some of whom are compensated in the form of stock or stock options, do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.
It is possible that governmental authorities will conclude that our business practices, including certain of our advisory board arrangements with physicians, some of whom are compensated in the form of stock or stock options, do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.
In addition, we rely on our third-party research institution collaborators for conducting research and development of our product candidates, and 88 they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions could seriously harm our business. All of our operations including our corporate headquarters are located in multiple facilities in Emeryville, California.
In addition, we rely on our third-party research institution collaborators for conducting research and development of our product candidates, and they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions could seriously harm our business. All of our operations including our corporate headquarters are located in multiple facilities in Emeryville, California.
We and any collaborators must complete additional preclinical or nonclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans to the satisfaction of the regulatory authorities before we will be able to obtain these approvals, and it is possible that none of 64 our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.
We and any collaborators must complete additional preclinical or nonclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans to the satisfaction of the regulatory authorities before we will be able to obtain these approvals, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.
The ability of the FDA to review and/or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
The ability of the FDA to review and/or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability 47 to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.
A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
A BLA for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient 70 reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual 75 obligations. If we need to enter into alternative arrangements, it would delay our product development activities. Our reliance on these third parties for research and development activities reduces our control over these activities, but does not relieve us of our responsibilities.
Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual obligations. If we need to enter into alternative arrangements, it would delay our product development activities. Our reliance on these third parties for research and development activities reduces our control over these activities, but does not relieve us of our responsibilities.
We and any contract manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety.
We and any contract manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment and disposal of 91 hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety.
Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. 57 We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. We cannot be certain that our ongoing and planned clinical trials or any other future clinical trials will be successful.
Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. We cannot be certain that our ongoing and planned clinical trials or any other future clinical trials will be successful.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business.
In addition, if 78 we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business.
Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.
Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in 89 the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.
Any of these events could lead to clinical trial delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future product candidates. Some of these events could be 63 the basis for FDA or European Union Member State regulatory authority action, including injunction, recall, seizure or total or partial suspension of product manufacture.
Any of these events could lead to clinical trial delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future product candidates. Some of these events could be the basis for FDA or European Union Member State regulatory authority action, including injunction, recall, seizure or total or partial suspension of product manufacture.
Even if such licenses are available, we could incur substantial costs related to royalty payments for licenses obtained from third parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us.
Even if such licenses are available, we could incur substantial costs related to royalty payments for licenses obtained from third 94 parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us.
Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that we, our employees or a consultant inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.
Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that we, our employees or a consultant inadvertently or otherwise 96 used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.
There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, reexaminations, inter partes review 100 proceedings and post-grant review proceedings before the USPTO and/or corresponding foreign patent offices.
There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, reexaminations, inter partes review proceedings and post-grant review proceedings before the USPTO and/or corresponding foreign patent offices.
The outcome following legal assertions of invalidity and unenforceability is unpredictable, and prior art could render our patents or those of our licensors invalid. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we could lose at least part, and perhaps 102 all, of the patent protection on an affected product candidate.
The outcome following legal assertions of invalidity and unenforceability is unpredictable, and prior art could render our patents or those of our licensors invalid. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we could lose at least part, and perhaps all, of the patent protection on an affected product candidate.
Under the accelerated approval program, the FDA may grant accelerated approval to a product candidate 65 designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.
Under the accelerated approval program, the FDA may grant accelerated approval to a product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.
The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. As we continue to expand into other foreign countries 82 and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our product candidates may not successfully complete preclinical studies or clinical trials; • delays in our clinical development plans due to the COVID-19 pandemic; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it does not meet applicable regulatory criteria; • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop platform technologies that render our Therapeutic Vector Evolution platform technology obsolete or less attractive; • the product candidates and Therapeutic Vector Evolution platform technology that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights or may be covered by third-party patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our product candidates may not successfully complete preclinical studies or clinical trials; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it does not meet applicable regulatory criteria; • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop platform technologies that render our Therapeutic Vector Evolution platform technology obsolete or less attractive; • the product candidates and Therapeutic Vector Evolution platform technology that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights or may be covered by third-party patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate; • delays in our clinical development plans due to public health emergencies, such as the COVID-19 pandemic; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
Failure of a product 55 candidate may occur at any stage of preclinical or clinical development, and, because our product candidates and our Therapeutic Vector Evolution platform technology are in an early stage of development, there is a relatively higher risk of failure, and we may never succeed in developing marketable products or generating product revenue.
Failure of a product candidate may occur at any stage of preclinical or clinical development, and, because our product candidates and our Therapeutic Vector Evolution platform technology are in an early stage of development, there is a relatively higher risk of failure, and we may never succeed in developing marketable products or generating product revenue.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could seriously harm our business.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could seriously harm our business.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures and could seriously harm our business.
We also expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures and could seriously harm our business.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial 63 launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country.
In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could seriously harm our business. 81 The lives of our patents may not be sufficient to effectively protect our product candidates and business. Patents have a limited lifespan.
In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could seriously harm our business. The lives of our patents may not be sufficient to effectively protect our product candidates and business. Patents have a limited lifespan.
In addition, while we cannot currently determine the amount of royalty obligations we would be required to pay on the sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and 83 intellectual property we use in product candidates that we successfully develop and commercialize, if any.
In addition, while we cannot currently determine the amount of royalty obligations we would be required to pay on the sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in product candidates that we successfully develop and commercialize, if any.
If the top-line data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, product candidates may be harmed, which could seriously harm our business.
If the top-line or interim data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, product candidates may be harmed, which could seriously harm our business.
There can be no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
There can be no assurance that our patent applications or those of our licensors will result 70 in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes.
As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting 73 patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes.
Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable 103 to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, 98 if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be 48 required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
Pharmaceutical manufacturers can cause false claims to be presented to the 73 U.S. federal government by engaging in impermissible marketing practices, such as the off-label promotion of a product for an indication for which it has not received FDA approval.
Pharmaceutical manufacturers can cause false claims to be presented to the U.S. federal government by engaging in impermissible marketing practices, such as the off-label promotion of a product for an indication for which it has not received FDA approval.
Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in 82 violation of these agreements.
Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
We currently are reliant upon licenses of certain patent rights and proprietary technology from third parties that are important or necessary to the development of our technology, including technology related to our product candidates. For example, we rely on our exclusive license agreements with U.C.
We currently are reliant upon licenses of certain patent rights and proprietary technology from third parties that are important or necessary to the development of our technology, including technology related to our product candidates. For example, we rely on our exclusive license agreements with i) U.C.
In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information of 87 customers and our employees and contractors. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.
In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information of customers and our employees and contractors. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.
Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary 71 trend in the U.S. healthcare industry and elsewhere is cost containment.
Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed. 42 • Our employees, independent contractors, consultants, research or commercial partners or collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. • Our success depends on our ability to protect our intellectual property and our proprietary technologies. • Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.
If we are 34 ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed. • Our employees, independent contractors, consultants, research or commercial partners or collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. • Our success depends on our ability to protect our intellectual property and our proprietary technologies. • Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.
If our revenue or operating results fall below or if operating expenses 46 or other costs are higher than the expectations of analysts or investors or below or above, as the case may be, 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 or if operating expenses or other costs are higher than the expectations of analysts or investors or below or above, as the case may be, 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 90 finalized, Treasury Regulations currently proposed under Section 382 of the Code may further limit our ability to utilize our pre-change NOLs or other pre-change tax attributes if we undergo a future ownership change. We have experienced ownership changes in the past.
If finalized, Treasury Regulations currently proposed under Section 382 of the Code may further limit our ability to utilize our pre-change NOLs or other pre-change tax attributes if we undergo a future ownership change. We have experienced ownership changes in the past.
Even after an orphan drug is approved, the FDA can subsequently approve the same drug with 68 for the same condition if the FDA concludes that the later drug is clinically superior in that it is safer, more effective, or makes a major contribution to patient care.
Even after an orphan drug is approved, the FDA can subsequently approve the same drug with for the same condition if the FDA concludes that the later drug is clinically superior in that it is safer, more effective, or makes a major contribution to patient care.
Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.
Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and 64 regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.
While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. 47 We are subject to significant regulatory oversight by the FDA, and, in addition, the applicable IBC and Institutional Review Board (“IRB”), of each institution at which we or our collaborators conduct clinical trials of our product candidates, or a central IRB if appropriate, need to review and approve the proposed clinical trial.
While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. 39 We are subject to significant regulatory oversight by the FDA, and, in addition, the applicable IBC and Institutional Review Board (“IRB”), of each institution at which we or our collaborators conduct clinical trials of our product candidates, or a central IRB if appropriate, need to review and approve the proposed clinical trial.
Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing 61 failures that result in lot failures, product recalls, product liability claims or insufficient inventory, which could delay or prevent the initiation of clinical trials or receipt of regulatory approvals.
Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory, which could delay or prevent the initiation of clinical trials or receipt of regulatory approvals.
Any such product liability claims may 97 include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts.
The Hatch-Waxman Amendments permit a patent restoration term of up to five years as 104 compensation for patent term lost during product development and the FDA regulatory review process. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process.
The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing 105 products to territories where we have patent protection but enforcement is not as strong as that in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but enforcement is not as strong as that in the United States.
For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental and private payors.
For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental 61 and private payors.
Our ability to generate revenue from these arrangements with commercial entities will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.
Our ability to generate 68 revenue from these arrangements with commercial entities will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.
Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management 95 personnel from their normal responsibilities.
A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could seriously harm our business.
A material shortage, contamination, recall or restriction on the use of biologically derived substances 54 in the manufacture of our product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could seriously harm our business.
Even if we obtain FDA approval of any of our product candidates, we may never obtain approval or commercialize such products outside of the United States, which would limit our ability to realize their full market potential.
Even if we obtain FDA approval for any of our product candidates, we may never obtain approval or commercialize such products outside of the United States, which would limit our ability to realize their full market potential.
The loss of the services provided by any of our executive officers, other key employees, and 85 other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in the development of our product candidates and harm our business.
The loss of the services provided by 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 the development of our product candidates and harm our business.
Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our 98 reputation.
Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results from, and any delays in, our clinical trials for our clinical-stage product candidates or any other future clinical development programs, including any delays related to the COVID-19 pandemic; • the success of existing or new competitive products or technologies; • commencement or termination of collaborations for our product candidates; • failure or discontinuation of any of our product candidates; • failure to develop our Therapeutic Vector Evolution platform technology; • results of preclinical studies, clinical trials or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; • regulatory or legal developments in the United States and other countries, including sanctions imposed by either the U.S. or foreign governments; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the commencement of litigation; • the level of expenses related to any of the research programs or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders; 91 • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • the impact of political instability, natural disasters, war and/or events of terrorism, such as the war between Ukraine and Russia, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results from, and any delays in, our clinical trials for our clinical-stage product candidates or any other future clinical development programs; 83 • the success of existing or new competitive products or technologies; • commencement or termination of collaborations for our product candidates; • failure or discontinuation of any of our product candidates; • failure to develop our Therapeutic Vector Evolution platform technology; • results of preclinical studies, clinical trials or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; • regulatory or legal developments in the United States and other countries, including sanctions imposed by either the U.S. or foreign governments; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the commencement of litigation; • the level of expenses related to any of the research programs or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • the impact of political instability, natural disasters, war and/or events of terrorism, such as the war between Ukraine and Russia, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
Negative public perception about the use of AAV technology in human therapeutics, whether related to our technology or a competitor’s technology, could result in increased governmental regulation, delays in the development and commercialization of product candidates or decreased demand for the resulting products, any of which may seriously harm our business. 48 Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.
Negative public perception about the use of AAV technology in human therapeutics, whether related to our technology or a competitor’s technology, could result in increased governmental regulation, delays in the development and commercialization of product candidates or decreased demand for the resulting products, any of which may seriously harm our business. 40 Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.
The sponsor of a Fast Track product has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the product candidate may be eligible for priority review.
The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the application may be eligible for priority review.
The facilities used by us and our contract manufacturers to manufacture certain of our product candidates must be reviewed by the FDA pursuant to inspections that will be conducted after we submit our BLA to the FDA.
The facilities used by us and our contract manufacturers to manufacture certain of our product candidates must be reviewed by the FDA pursuant to inspections that will be conducted after we submit a BLA to the FDA.
If we initiate lawsuits to protect or enforce our patents, or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.
If we initiate lawsuits to protect or enforce our patents, 72 or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures, and lead to regulatory scrutiny.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security 80 measures, and lead to regulatory scrutiny.
We will remain an emerging growth company until the earlier of (1) December 31, 2025, (2) the last day of the year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of 93 the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We will remain an emerging growth company until the earlier of (1) December 31, 2025, (2) the last day of the year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, l confirmatory studies to verify and describe the drug’s clinical benefit.
If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, confirmatory studies to verify and describe the drug’s clinical benefit.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Ite m 4. Mine Safety Disclosures. None. 107 PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Ite m 4. Mine Safety Disclosures. None. 101 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 107 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 108 Item 6. [Reserved] 109 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 110 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 121 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 101 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 102 Item 6. [Reserved] 103 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 104 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 116 Item 8.
Financial Statements and Supplementary Data 122 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 122
Financial Statements and Supplementary Data 117 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 117

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Common Stock As of March 13, 2023, there were approximately 17 holders of record of our common stock.
Biggest changeHolders of Common Stock As of February 23, 2024, there were approximately 13 holders of record of our common stock.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus dated December 11, 2020, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act. 108 Purchases of Equity Securities by the Issuer and Affiliated Purchases None.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus dated December 11, 2020, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act. 102 Purchases of Equity Securities by the Issuer and Affiliated Purchases None.

Item 7. Management's Discussion & Analysis

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

44 edited+17 added−5 removed74 unchanged
Biggest changeThe increase was due to: • a $3.0 million increase in personnel costs due to increased headcount of general and administrative personnel, including a $0.9 million increase in employee stock-based compensation expense; • a $0.6 million increase in professional services, including legal, accounting and other advisory services; and • a $1.3 million increase in other costs mainly consulting services and facilities-related expenses.
Biggest changeThe increase was due to: • a $2.5 million increase in personnel costs mainly due to a $2.0 million increase in employee stock-based compensation expense and a $0.7 million increase in employee bonus, offset by a $0.8 million decrease in employee recruiting expense; • a $1.1 million increase in outside services; and • a $1.0 million decrease in business insurance and $0.4 million decrease in consulting services, offset by $0.7 million increase in consultant and professional fees and $0.7 million increase in facility-related expenses. 108 Other Income (Expense), Net Other income (expense), net increased by $9.5 million, or 374%, from the year ended December 31, 2022 to the year ended December 31, 2023.
Net Cash Used in Investing Activities Net cash used in investing activities was $17.0 million for the year ended December 31, 2022, consisting of purchases of marketable securities of $153.3 million, as well as purchases of property and equipment of $11.5 million, offset by the maturities of marketable securities of $147.8 million.
Net cash used in investing activities was $17.0 million for the year ended December 31, 2022, consisting of purchases of marketable securities of $153.3 million, as well as purchases of property and equipment of $11.5 million, offset by the maturities of marketable securities of $147.8 million.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $3.1 million for the year ended December 31, 2022, which was due to proceeds received from the issuance of common stock upon exercise of stock options of $2.7 million and from ESPP purchases of $0.8 million, offset by payment of offering costs of $0.5 million.
Net cash provided by financing activities was $3.1 million for the year ended December 31, 2022, which was due to proceeds received from the issuance of common stock upon exercise of stock options of $2.7 million and from ESPP purchases of $0.8 million, offset by payment of offering costs of $0.5 million.
Our future capital requirements will depend on many factors, including: • the progress of our current and future product candidates through preclinical and clinical development; • potential delays in our preclinical studies and clinical trials, whether current or planned, due to the COVID-19 pandemic, or other factors; • expanding our manufacturing facilities and working with our contract manufacturers to scale up the manufacturing processes for our product candidates; • continuing our research and discovery activities; • continuing the development of our Therapeutic Vector Evolution platform; • initiating and conducting additional preclinical, clinical or other studies for our product candidates; • changing or adding additional contract manufacturers or suppliers; • seeking regulatory approvals and marketing authorizations for our product candidates; • establishing sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval; • acquiring or in-licensing product candidates, intellectual property and technologies; • making milestone, royalty or other payments due under any current or future collaboration or license agreements; • obtaining, maintaining, expanding, protecting and enforcing our intellectual property portfolio; • attracting, hiring and retaining qualified personnel; • potential delays or other issues related to our operations; • meeting the requirements and demands of being a public company; • defending against any product liability claims or other lawsuits related to our products; and 115 • the impact of the COVID-19 pandemic and adverse macroeconomic conditions such as, but not limited to, higher inflation and increased interest rates, each of which may exacerbate the magnitude of the factors discussed above.
Our future capital requirements will depend on many factors, including: • the progress of our current and future product candidates through preclinical and clinical development; • potential delays in our preclinical studies and clinical trials, whether current or planned; • expanding our manufacturing facilities and working with our contract manufacturers to scale up the manufacturing processes for our product candidates; • continuing our research and discovery activities; • continuing the development of our Therapeutic Vector Evolution platform; • initiating and conducting additional preclinical, clinical or other studies for our product candidates; • changing or adding additional contract manufacturers or suppliers; • seeking regulatory approvals and marketing authorizations for our product candidates; • establishing sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval; • acquiring or in-licensing product candidates, intellectual property and technologies; • making milestone, royalty or other payments due under any current or future collaboration or license agreements; • obtaining, maintaining, expanding, protecting and enforcing our intellectual property portfolio; • attracting, hiring and retaining qualified personnel; • potential delays or other issues related to our operations; • meeting the requirements and demands of being a public company; • defending against any product liability claims or other lawsuits related to our products; and 110 • the impact of the COVID-19 pandemic and adverse macroeconomic conditions such as, but not limited to, higher inflation and increased interest rates, each of which may exacerbate the magnitude of the factors discussed above.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships, or other 110 strategic arrangements, for the foreseeable future.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships, or other strategic arrangements, for the foreseeable future.
We will remain an emerging growth company until the earlier of (i) December 31, 2025, (ii) the last day of the year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We will remain an emerging growth company until the earlier of (i) December 31, 2025, (ii) the last day of the year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Common Stock Valuations Prior to our IPO in December 2020, the estimated fair value of the common stock underlying our stock options and stock awards was determined at each grant date by our board of directors, with assistance from management and external appraisers.
Prior to our IPO in December 2020, the estimated fair value of the common stock underlying our stock options and stock awards was determined at each grant date by our board of directors, with assistance from management and external appraisers.
See Note 7 to our financial statements included elsewhere in this report for further discussion regarding the accounting treatment of this agreement. Future collaboration and license revenue is highly dependent on the successful development and commercialization of products by our collaboration partners, which is uncertain, and revenue may fluctuate significantly from period to period.
See Note 7, Research and Collaboration Agreements, to our financial statements included elsewhere in this report for further discussion regarding the accounting treatment of this agreement. Future collaboration and license revenue is highly dependent on the successful development and commercialization of products by our collaboration partners, which is uncertain, and revenue may fluctuate significantly from period to period.
Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option. 119 • Expected Dividend Yield —We have not paid and do not currently anticipate paying any dividends on our common stock. Accordingly, we have estimated the dividend yield to be zero.
Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option. 114 • Expected Dividend Yield —We have not paid and do not currently anticipate paying any dividends on our common stock. Accordingly, we have estimated the dividend yield to be zero.
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 120 JOBS Act We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 115 JOBS Act We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
We expect to continue to incur losses for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase for the foreseeable future. Additionally, we expect our capital expenditures will increase significantly in the future for costs associated with building commercial manufacturing capacity.
We expect that our research and development and general and administrative expenses will continue to increase for the foreseeable future. Additionally, we expect our capital expenditures will increase significantly in the future for costs associated with building commercial manufacturing capacity.
Changes in these estimates can have a material effect on revenue recognized. 118 Accrued Research and Development Expenses We estimate our accrued research and development expenses as of each balance sheet date.
Changes in these estimates can have a material effect on revenue recognized. 113 Accrued Research and Development Expenses We estimate our accrued research and development expenses as of each balance sheet date.
In November 2021, we completed our Follow-on Offering in which 4,750,000 shares of our common stock were sold at an offering price of $25.00 per share. The net proceeds from the Follow-on Offering were $111.1 million after deducting underwriting discounts and commissions and offering expenses.
In November 2021, we completed an underwritten public offering ("2021 Offering") in which 4,750,000 shares of our common stock were sold at an offering price of $25.00 per share. The net proceeds from the 2021 Offering were $111.1 million after deducting underwriting discounts and commissions and offering expenses.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic and the war in Ukraine.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, the war in Ukraine, rising interest rates and inflation.
As of December 31, 2022, the unrecognized stock-based compensation expense related to stock options was $37.1 million and is expected to be recognized as expense over a weighted-average period of approximately 2.2 years.
As of December 31, 2023, the unrecognized stock-based compensation expense related to stock options was $55.0 million and is expected to be recognized as expense over a weighted-average period of approximately 2.1 years.
Our net losses were $107.5 million and $71.3 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $314.5 million. We do not expect positive cash flows from operations in the foreseeable future.
Our net losses were $100.8 million and $107.5 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $415.3 million. We do not expect positive cash flows from operations in the foreseeable future.
We have built a deep portfolio of genetic medicine product candidates, with five product candidates in clinical trials: 4D-150 for the treatment of wet age-related macular degeneration ("wet AMD") and diabetic macular edema (“DME”), 4D-125 for the treatment of X-linked retinitis pigmentosa ("XLRP"), 4D-110 for the treatment of choroideremia, 4D-710 for the treatment of cystic fibrosis lung disease, and 4D-310 for the treatment of Fabry disease cardiomyopathy.
This portfolio includes five product candidates in clinical trials: 4D-150 for the treatment of wet age-related macular degeneration ("wet AMD") and diabetic macular edema (“DME”), 4D-710 for the treatment of cystic fibrosis lung disease, 4D-310 for the treatment of Fabry disease cardiomyopathy , 4D-125 for the treatment of X-linked retinitis pigmentosa ("XLRP") and 4D-110 for the treatment of choroideremia.
Net cash used in operating activities was $69.1 million for the year ended December 31, 2021. This was primarily due to the net loss of $71.3 million partially offset by a change of $17.7 million in noncash charges and by a net change of $15.5 million in our operating assets and liabilities.
Net cash used in operating activities was $86.7 million for the year ended December 31, 2022. This was primarily due to the net loss of $107.5 million partially offset by a change of $22.1 million in noncash charges and by a net change of $1.3 million in our operating assets and liabilities.
The change in operating assets and liabilities was primarily due to a $14.7 million decrease in deferred revenue and a $4.2 million increase in prepaid expenses and other current assets primarily offset by a $2.3 million increase in accounts payable.
The change in operating assets and liabilities was primarily due to a $3.4 million increase in accrued and other liabilities and a $0.9 million increase in accounts payable, offset by a $0.7 million decrease in deferred revenue, $1.5 million decrease in operating lease liabilities and a $1.4 million increase in prepaid expenses and other current assets.
We believe that our existing cash and cash equivalents will allow us to fund our planned operations for at least one year from the date of the issuance of the financial statements for the year ended December 31, 2022.
We believe that our existing cash and cash equivalents will allow us to fund our planned operations for at least one year from the date of the issuance of this report.
We have incurred significant operating losses and expect that our operating losses will increase significantly as we, among other things, continue to advance our product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; broaden and improve our platform; acquire, discover, validate and develop additional product candidates; maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.
We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering. 104 We have incurred significant operating losses and expect that our operating losses will increase significantly as we, among other things, continue to advance our product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; broaden and improve our platform; acquire, discover, validate and develop additional product candidates; maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. See the section titled “Risk Factors” for additional risks regarding regulatory development and approval.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled “Risk Factors” and elsewhere in this report. Overview We are a clinical-stage biotherapeutics company harnessing the power of directed evolution for targeted genetic medicines.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled “Risk Factors” and elsewhere in this report.
General and Administrative Our general and administrative expenses consist primarily of personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense for our personnel in executive, finance and accounting, human resources, business development, and other administrative functions.
See the section titled “Risk Factors” for additional risks regarding regulatory development and approval. 106 General and Administrative Our general and administrative expenses consist primarily of personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense for our personnel in executive, finance and accounting, legal, human resources, business development, and other administrative functions.
The increase was due to the following: • a $4.6 million increase in research and development trials and consumables expense primarily due to higher clinical trial costs of $5.1 million and consumables of $4.3 million, offset by lower preclinical costs of $3.7 million and lower other outside service costs of $1.1 million; • an $11.6 million increase in payroll and personnel expenses due to increased headcount of research and development personnel, including a $2.4 million increase in employee stock-based compensation expense; and • a $2.7 million increase in facilities and other research and development expenses primarily for allocated overhead, including rent, equipment, depreciation, information technology costs and utilities.
The increase was due to the following: • an $8.7 million increase in research and development trials and consumables expense primarily due to higher clinical trial costs of $6.6 million, higher selection and validation costs of $1.9 million and higher other outside service costs of $1.2 million, offset by lower consumables of $1.0 million; • a $4.8 million increase in payroll and personnel expenses due to increased headcount of research and development personnel, including a $1.5 million increase in employee bonus and $0.5 million increase in employee stock-based compensation expense; and • a $3.3 million increase in facilities and other research and development expenses mainly due to higher fixed assets depreciation and facility maintenance expenses.
The intrinsic value of all outstanding stock options as of December 31, 2022 was approximately $48.0 million, of which approximately $20.2 million related to vested options and approximately $27.8 million related to unvested options.
The intrinsic value of all outstanding stock options as of December 31, 2023 was approximately $46.9 million, of which approximately $19.2 million related to vested options and approximately $27.7 million related to unvested options.
This was primarily due to the net loss of $107.5 million partially offset by a change of $22.1 million in noncash charges and by a net change of $1.3 million in our operating assets and liabilities.
This was primarily due to the net loss of $100.8 million partially offset by a change of $24.4 million in noncash charges and by a net change of $0.6 million in our operating assets and liabilities.
Our collaboration and license revenue in 2022 was primarily from uniQure. 111 Operating Expenses Research and Development Our research and development expenses primarily consist of costs incurred for the discovery and preclinical and clinical development of our product candidates.
Operating Expenses Research and Development Our research and development expenses primarily consist of costs incurred for the discovery and preclinical and clinical development of our product candidates.
Summary Statement of Cash Flows The following is a summary of cash flows for the periods indicated below (in thousands): Year Ended December 31, 2022 2021 Net cash used in operating activities $ (86,685 ) $ (69,134 ) Net cash used in investing activities (17,050 ) (172,680 ) Net cash provided by financing activities 3,085 118,089 Net decrease in cash and cash equivalents $ (100,650 ) $ (123,725 ) Net Cash Used in Operating Activities 116 Net cash used in operating activities was $86.7 million for the year ended December 31, 2022.
Summary Statement of Cash Flows The following is a summary of cash flows for the periods indicated below (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (75,792 ) $ (86,685 ) Net cash provided by (used in) investing activities 115,717 (17,050 ) Net cash provided by financing activities 156,832 3,085 Net increase (decrease) in cash and cash equivalents $ 196,757 $ (100,650 ) Net Cash Used in Operating Activities Net cash used in operating activities was $75.8 million for the year ended December 31, 2023.
Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic and otherwise.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, the war in Ukraine, rising interest rates, inflation and otherwise.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2022 increased $4.9 million, or 17%, from the year ended December 31, 2021.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 increased by $3.6 million, or 11%, from the year ended December 31, 2022.
We expect our general and administrative expenses to increase as a result of increased personnel-related costs, patent costs for our product candidates, consulting, legal and accounting services associated with maintaining compliance with stock exchange listing and requirements of the SEC, investor relations costs, director and officer insurance premiums, and other costs associated with being a public company. 112 Other Income (Expense), Net Our other income (expense) primarily consists of interest income earned on our cash equivalents, and marketable securities and adjustments for the change in the fair value of our derivative liability which must be remeasured at each reporting period.
We expect our general and administrative expenses to increase as a result of increased personnel-related costs, patent costs for our product candidates, consulting, legal and accounting services associated with maintaining compliance with stock exchange listing and requirements of the SEC, investor relations costs, director and officer insurance premiums, and other costs associated with being a public company.
Please see Note 9 to our financial statements included elsewhere in this Annual Report on Form 10-K. 117 Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States.
As of December 31, 2023, our principal commitments consisted of obligations under our operating lease for our headquarters. Please see Note 9 to our financial statements included elsewhere in this report. 112 Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States.
Net cash used in investing activities was $172.7 million for the year ended December 31, 2021, consisting of purchases of marketable securities of $168.6 million, as well as purchases of property and equipment of $9.1 million, offset by the maturities of marketable securities of $5.0 million.
Net Cash Provided by (Used in) Investing Activities Net cash provided by investing activities was $115.7 million for the year ended December 31, 2023, consisting of maturities of marketable securities of $173.3 million offset by purchases of marketable securities of $54.8 million and purchases of property and equipment of $2.8 million.
Future Funding Requirements We have experienced recurring net losses and had an accumulated deficit of $314.5 million at December 31, 2022. Our transition to profitability is dependent upon the successful development, approval and commercialization of our product candidates and those of our collaboration partners and achieving a level of revenue adequate to support our cost structure.
Our transition to profitability is dependent upon the successful development, approval and commercialization of our product candidates and those of our collaboration partners and achieving a level of revenue adequate to support our cost structure. We expect to continue to incur losses for the foreseeable future.
We determined the incremental transaction price of the amendment and new agreement to be $5.1 million and recorded the amount as deferred revenue in August 2019. We began recognizing revenue related to uniQure in 2020 and expect to recognize the remaining revenue under the agreement in 2023.
Neither party was required to pay monetary consideration in connection with the amendment or new agreement. We determined the incremental transaction price of the amendment and new agreement to be $5.1 million and recorded the amount as deferred revenue in August 2019.
Research and Development Expenses The following table provides a breakout of research and development expenses for the periods indicated (dollars in thousands): Year Ended December 31, 2022 2021 $ Change % Change Research and development trials and consumables expenses $ 30,886 $ 26,335 $ 4,551 17 % Payroll and personnel expenses 38,037 26,448 11,589 44 % Facilities and other research and development expenses 11,330 8,577 2,753 32 % Total research and development expenses $ 80,253 $ 61,360 $ 18,893 31 % 113 Research and development expenses for the year ended December 31, 2022 increased $18.9 million, or 31%, from the year ended December 31, 2021.
Research and Development Expenses The following table provides a breakout of research and development expenses for the periods indicated (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Research and development trials and consumables expenses $ 39,550 $ 30,886 $ 8,664 28 % Payroll and personnel expenses 42,848 38,037 4,811 13 % Facilities and other research and development expenses 14,698 11,330 3,368 30 % Total research and development expenses $ 97,096 $ 80,253 $ 16,843 21 % Research and development expenses for the year ended December 31, 2023 increased by $16.8 million, or 21%, from the year ended December 31, 2022.
Net cash provided by financing activities was $118.1 million for the year ended December 31, 2021, primarily comprised of $114.3 million in net proceeds from offerings, as well as proceeds received from the issuance of common stock upon exercise of stock options and warrants of $3.4 million and from ESPP purchases of $0.4 million.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $156.8 million for the year ended December 31, 2023, which was due to proceeds from the issuance of common stock pursuant to public offerings of $129.2 million, proceeds from the issuance of common stock from the ATM offering program of $19.1 million, proceeds from the issuance of common stock upon exercise of stock options of $7.3 million and proceeds from ESPP purchases of $1.2 million.
The noncash charges primarily consisted of stock-based compensation expense of $13.8 million, depreciation and amortization of $1.5 million and the amortization of operating lease right-of-use assets of $1.5 million.
The noncash charges 111 primarily consisted of stock-based compensation expense of $19.7 million, depreciation and amortization of $4.2 million, amortization of operating lease right-of-use assets of $1.5 million and change in fair value of derivative liability of $0.2 million, partially offset by accretion of discount on marketable securities of $1.2 million.
As of December 31, 2022, no shares of the Company's common stock were sold pursuant to the Sales Agreement. As of March 3, 2023, $90.1 million of common stock remained available for sale under the Sales Agreement. 114 As of December 31, 2022, we had cash, cash equivalents and marketable securities of $218.5 million.
As of December 31, 2023, 1.1 million shares of the Company's common stock had been sold pursuant to the Sales Agreement for net proceeds to the Company of $19.1 million, after deducting issuance costs. As of December 31, 2023, $80.1 million of common stock remained available for sale under the Sales Agreement.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the periods indicated (dollars in thousands): Year Ended December 31, 2022 2021 $ Change % Change Revenue: Collaboration and license revenue $ 3,129 $ 18,038 $ (14,909 ) -83 % Operating expenses: Research and development 80,253 61,360 18,893 31 % General and administrative 32,908 28,011 4,897 17 % Total operating expenses 113,161 89,371 23,790 27 % Loss from operations (110,032 ) (71,333 ) (38,699 ) 54 % Other income (expense), net 2,538 16 2,522 15763 % Net loss $ (107,494 ) $ (71,317 ) $ (36,177 ) 51 % Revenue Revenue for the year ended December 31, 2022 decreased by $14.9 million, or 83%, from the year ended December 31, 2021 primarily as a result of a $17.2 million decrease in revenue recognized under our collaboration and license agreement with Roche due to its termination in September 2021, partially offset by a $2.3 million increase in revenue recognized under our collaboration and license agreement with uniQure.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the periods indicated (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Revenue: Collaboration and license revenue $ 20,723 $ 3,129 $ 17,594 562 % Operating expenses: Research and development 97,096 80,253 16,843 21 % General and administrative 36,494 32,908 3,586 11 % Total operating expenses 133,590 113,161 20,429 18 % Loss from operations (112,867 ) (110,032 ) (2,835 ) 3 % Other income, net 12,030 2,538 9,492 374 % Net loss $ (100,837 ) $ (107,494 ) $ 6,657 -6 % 107 Revenue Revenue for the year ended December 31, 2023 increased by $17.6 million, or 562%, from the year ended December 31, 2022 mainly due to the upfront fees received from the License Agreement with Astellas which was partially offset by lower revenue from uniQure in 2023.
We seek to unlock the full potential of genetic medicines using our platform, Therapeutic Vector Evolution, which combines the power of directed evolution with our approximately one billion synthetic AAV capsid-derived sequences to invent evolved vectors for use in our products.
Overview We are a leading clinical-stage biopharma company focused on unlocking the full potential of genetic medicines through proprietary customized vectors that are optimized for the specific diseases we treat. 4DMT’s proprietary invention platform, Therapeutic Vector Evolution, combines the power of the Nobel Prize-winning technology, directed evolution, with approximately one billion synthetic AAV capsid-derived sequences to invent customized and evolved vectors for use in our wholly owned and partnered product candidates.
The primary drivers for revenue consist of the following: • uniQure: In August 2019, we amended our agreement with uniQure and entered into a separate new collaboration and license agreement with uniQure. Neither party was required to pay monetary consideration in connection with the amendment or new agreement.
As partial consideration for the rights and licenses granted to AGT under License Agreement, we received an upfront payment of $20.0 million which we recognized as revenue during the third quarter of 2023. 105 In August 2019, we amended our agreement with uniQure and entered into a separate new collaboration and license agreement with uniQure.
We recognized revenue of $3.1 million during the year ended December 31, 2022 related to this agreement. See Note 7 to our financial statements included elsewhere in this report for further discussion regarding the accounting treatment of this agreement. • Roche: In November 2017, we entered into a collaboration and license agreement with F.
We began recognizing revenue related to uniQure in 2020 and recognized the remaining revenue under the agreement during the third quarter of 2023. We recognized immaterial revenue during the year ended December 31, 2023, and $3.1 million during the year ended December 31, 2022 related to this agreement.
Removed
The extent of the impact of the continuing COVID-19 pandemic on our business, operations and clinical development timelines and plans remains uncertain, and will depend on certain developments, including the duration and spread of the outbreak and its impact on our clinical trial enrollment, trial sites, CROs, third-party manufacturers, and other third parties with whom we do business, as well as its impact on our key scientific and management personnel.
Added
Our product design, development, and manufacturing engine helps us efficiently create and advance our diverse product pipeline with the goal of revolutionizing medicine with potential curative therapies for millions of patients. We have built a deep portfolio of genetic medicine product candidates, with three novel, highly targeted next generation AAV vectors currently in the clinic.
Removed
Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (together, “Roche”). We received an upfront payment of $21.0 million in 2017, were reimbursed for our internal and third-party costs and were entitled to contingent payments, including milestone payments.
Added
In May 2023, we completed an underwritten public offering (the "2023 Offering") in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share pursuant to our effective shelf registration statement on Form S-3. The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses.
Removed
In 2020, we received milestone payments totaling $10.0 million, which were comprised of a $5.0 million milestone payment upon the release of clinical trial material for our Phase 1 clinical trial for 4D-110 to treat choroideremia in the second quarter of 2020 and an additional $5.0 million milestone payment upon dosing our first patient in the trial in the third quarter of 2020.
Added
In July 2023, we entered into a licensing agreement (the “License Agreement”) with Astellas Gene Therapies, Inc. (“AGT”) for our intravitreal R100 vector to develop and commercialize products for genetic targets implicated in rare monogenic ophthalmic disease.
Removed
We began recognizing revenue related to this agreement in 2017. In June 2021, we received notice of termination of the collaboration and license agreement from Roche. The termination became effective on September 16, 2021. There was no revenue from Roche in 2022.
Added
AGT paid the Company an upfront amount of $20.0 million and may receive potential future option fees and milestones of up to $942.5 million including potential near-term development milestones of $15.0 million for the initial target.
Removed
As of December 31, 2022, our principal commitments consisted of obligations under our operating lease for our headquarters.
Added
In February 2024, we completed an underwritten public offering (the “2024 Offering”) in which 6,586,015 shares of our common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of our common stock at an offering price of $29.4999 per underlying share pursuant to our effective registration statement on Form S-3.
Added
The net proceeds from the 2024 Offering were $281.4 million, after deducting underwriting discounts and commissions and other offering expenses.
Added
Adequate funding may not be available when needed or on terms acceptable to us, or at all.
Added
Recent Changes to Management / Leadership Team Effective as of January 2, 2024, our Board of Directors (the “Board”) appointed Noriyuki Kasahara, M.D., Ph.D., as Chief Scientific Officer. On January 1, 2024, Dr.
Added
Kasahara delivered notice of his resignation from our Board, including his role as a member and the Chair of the Science and Technology Committee of the Board, effective on January 1, 2024.
Added
In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases.
Added
Other Income (Expense), Net Our other income (expense), net primarily consists of interest income earned on our cash equivalents and marketable securities and adjustments for the change in the fair value of our derivative liability which must be remeasured at each reporting date.
Added
The increase is primarily attributable to higher market yields on our cash equivalents and marketable securities.
Added
In May 2023, we completed the 2023 Offering in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share. The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses.
Added
In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases. As partial consideration for the rights and licenses granted to AGT under the License Agreement, we received an upfront payment of $20.0 million.
Added
In February 2024, we completed the 2024 Offering in which 6,586,015 shares of our common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of our common stock at an offering price of $29.4999 per underlying share.
Added
The net proceeds from the 2024 Offering were $281.4 million, after deducting underwriting discounts and commissions and other offering expenses. We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering.
Added
As of December 31, 2023, we had cash, cash equivalents and marketable securities of $299.2 million. 109 Future Funding Requirements We have experienced recurring net losses and had an accumulated deficit of $415.3 million at December 31, 2023.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed2 unchanged
Biggest changeAs of December 31, 2022, we had cash, cash equivalents and marketable securities of $218.5 million, consisting of bank deposits, interest-bearing money market funds, and marketable securities, for which the fair value would be affected by changes in the general level of U.S. interest rates.
Biggest changeAs of December 31, 2023, we had cash, cash equivalents and marketable securities of $299.2 million, consisting of bank deposits, interest-bearing money market funds, and marketable securities, for which the fair value would be affected by changes in the general level of U.S. interest rates.
We do not believe that inflation or interest rate changes have had a significant impact on our results of operations for any periods presented herein. 121
We do not believe that inflation or interest rate changes have had a significant impact on our results of operations for any periods presented herein. 116

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