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KalVista Pharmaceuticals, Inc.

KalVista Pharmaceuticals, Inc.KALV決算レポート

Nasdaq · ヘルスケア · 医薬製剤

KalVista Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the research, development and commercialization of novel oral serine protease inhibitor therapies. Its core pipeline addresses unmet medical needs for rare and inflammatory diseases including hereditary angioedema and diabetic macular edema, with primary target markets in North America and Europe.

What changed in KalVista Pharmaceuticals, Inc.'s 10-K — 2023 vs 2024

Top changes in KalVista Pharmaceuticals, Inc.'s 2024 10-K

356 paragraphs added · 281 removed · 201 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

64 edited+34 added−47 removed143 unchanged
In one outcome study of 207 HAE attacks, attack duration was 2.75-fold shorter when treatment was administered within 1 hour of attack onset (6.1 hours versus 16.8 hours ( p We believe this delay in administration is due to many factors including the inconvenience of preparation and administration as well as the discomfort of injectable therapies.
In one outcome study of 207 HAE attacks, attack duration was 2.75-fold shorter when treatment was administered within one hour of attack onset (6.1 hours versus 16.8 hours ( p We believe this delay in administration is due to many factors including the inconvenience of preparation and administration as well as the discomfort of injectable therapies.
Sebetralstat is an oral plasma kallikrein inhibitor, and is covered by U.S. patents, U.S. patent applications and U.S. provisional applications, and pending international applications covering composition of matter, methods of treatment, solid form and clinical formulations.
Sebetralstat is an oral plasma kallikrein inhibitor, and is covered by U.S. patents, U.S. patent applications, U.S. provisional applications, and pending international applications, covering composition of matter, methods of treatment, solid form and clinical formulations.
Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain advance practices nurses and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.
Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with certain exceptions) report annually to the CMS information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain advance practices nurses and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.
Violation of any of the federal and state healthcare laws described above or any other governmental regulations may result in penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, refusal to enter into government contracts, oversight monitoring, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings. 15 Coverage, pricing and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval.
Violation of any of the federal and state healthcare laws described above or any other governmental regulations may result in penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, refusal to enter into government contracts, oversight monitoring, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings. 14 Coverage, pricing and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval.
An NDA can be classified for Priority Review when the FDA determines the drug or biologic has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared to available therapies.
An NDA can be classified for Priority Review when the FDA determines the drug has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared to available therapies.
The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months from the date the notice letter is received, expiration of the patent, the date of a settlement order or consent decree signed and entered by the court stating that the patent that is the subject of the certification is invalid or not infringed, or a decision in the patent case that is favorable to the ANDA applicant. 12 The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.
The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months from the date the notice letter is received, expiration of the patent, the date of a settlement order or consent decree signed and entered by the court stating that the patent that is the subject of the certification is invalid or not infringed, or a decision in the patent case that is favorable to the ANDA applicant. 11 The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.
In addition, we also require confidentiality or service agreements from third parties that receive confidential information or materials. 8 Government Regulation and Product Approval Government authorities in the U.S., at the federal, state and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products.
In addition, we also require confidentiality or service agreements from third parties that receive confidential information or materials. 7 Government Regulation and Product Approval Government authorities in the U.S., at the federal, state and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products.
Recently we have conducted research to further understand the process that people living with HAE follow when determining what therapy to use, how they treat their attacks and how often they do so.
We have conducted research to further understand the process that people living with HAE follow when determining what therapy to use, how they treat their attacks and how often they do so.
Department of Health and Human Services (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice (“DOJ”) and individual U.S. Attorney offices within the DOJ, and state and local governments.
Department of Health and Human Services (“HHS”) (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice (“DOJ”) and individual U.S. Attorney offices within the DOJ, and state and local governments.
In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) the single trial is supported by other confirmatory evidence. 9 In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.
In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) the single trial is supported by confirmatory evidence. 8 In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.
Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov. The information posted on or accessible through these websites are not incorporated into this filing. 18
Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov. The information posted on or accessible through these websites are not incorporated into this filing. 17
Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. 14 Data privacy and security regulations by both the federal government and the states in which business is conducted may also be applicable.
Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. 13 Data privacy and security regulations by both the federal government and the states in which business is conducted may also be applicable.
For example, sales, marketing and scientific/educational grant programs, may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the federal false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act (“HIPAA”) and similar state laws, each as amended, as applicable. 13 The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, recommending or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
For example, sales, marketing and scientific/educational grant programs, may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the federal false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act (“HIPAA”) and similar state laws, each as amended, as applicable. 12 The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, recommending or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federally funded healthcare programs.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition — generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing, and making a product available in the U.S. for such disease or condition will be recovered from sales of the product. 10 Orphan drug designation must be requested before submitting an NDA.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition — generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing, and making a product available in the U.S. for such disease or condition will be recovered from sales of the product. 9 Orphan drug designation must be requested before submitting an NDA.
Federal false claims laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
Federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
Any patents issuing from the foregoing applications, or patents arising from applications claiming priority from U.S. provisional applications, in the FXIIa portfolio are expected to expire in between 2039 and 2044, absent any adjustments or extensions.
Any patents issuing from the foregoing applications, or patents arising from applications claiming priority from U.S. provisional applications, in the FXIIa portfolio are expected to expire in between 2039 and 2045, absent any adjustments or extensions.
Pharmaceutical product development for a new product or certain changes to an approved product in the U.S. typically involves nonclinical laboratory and animal tests, the submission to the FDA of an IND, which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought.
Pharmaceutical product development for a new product or certain changes to an approved product in the U.S. typically involves nonclinical laboratory and animal tests, the submission to the FDA of an investigational new drug application (“IND”), which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought.
The NDA must include the results of all nonclinical, clinical, and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee.
The NDA must include the results of all nonclinical, clinical, and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee unless a waiver applies.
The anticipated expiration dates of these European patents, European patents arising from applications, or European patents arising from applications claiming priority from U.S. provisional applications range from 2035 to 2044 absent any extensions.
The anticipated expiration dates of these European patents, European patents arising from applications, or European patents arising from applications claiming priority from U.S. provisional applications range from 2035 to 2045 absent any extensions.
The anticipated expiration dates of these patents, patents arising from those applications, or patents arising from applications claiming priority from provisional applications range from 2035 to 2044, absent any adjustments or extensions.
The anticipated expiration dates of these patents, patents arising from those applications, or patents arising from applications claiming priority from provisional applications range from 2035 to 2045, absent any adjustments or extensions.
These include Takhzyro®, marketed by Takeda Pharmaceuticals Company Limited (“Takeda”) in the U.S. and Europe for the prevention of angioedema attacks in adults and adolescents; Firazyr, marketed by Takeda in the U.S., Europe and certain other geographic territories for the treatment of acute angioedema attacks in adult patients; Kalbitor, an injectable plasma kallikrein inhibitor marketed by Takeda for the resolution of acute attacks in adolescent and adult HAE patients; Berinert, marketed by CSL Behring for treatment of acute abdominal, facial or laryngeal attacks of HAE in adults and adolescents, and Haegarda, also marketed by CSL Behring, for prophylaxis; Ruconest, marketed by Pharming Group for the treatment of acute angioedema attacks in adult patients; and Orladeyo, an oral prophylactic treatment marketed by BioCryst Pharmaceuticals, Inc.
Approved therapies include Takhzyro®, marketed by Takeda Pharmaceuticals Company Limited (“Takeda”) in the U.S. and Europe for the prevention of angioedema attacks in adults and adolescents; Firazyr, marketed by Takeda in the U.S., Europe and certain other geographic territories for the on-demand treatment of angioedema attacks in adult patients; Kalbitor, an injectable plasma kallikrein inhibitor marketed by Takeda for the on-demand treatment of attacks in adolescent and adult HAE patients; Berinert, marketed by CSL Behring for on-demand treatment of abdominal, facial or laryngeal attacks of HAE in adults and adolescents, and Haegarda, also marketed by CSL Behring, for prophylaxis; Ruconest, marketed by Pharming Group for the on-demand treatment of angioedema attacks in adult patients; and Orladeyo, an oral prophylactic treatment marketed by BioCryst Pharmaceuticals, Inc.
Any patents issuing from the foregoing U.S. patent applications, or patents arising from applications claiming priority from the foregoing U.S. provisional applications, are expected to expire between 2034 and 2044, absent any adjustments or extensions.
Any patents issuing from the foregoing U.S. patent applications, or patents arising from applications claiming priority from the foregoing U.S. provisional applications, are expected to expire between 2035 and 2045, absent any adjustments or extensions.
In the plasma kallikrein portfolio, as of April 30, 2023, we also control and intend to maintain two pending international applications that, if issued, are expected to expire between 2042 and 2043, absent any adjustments or extensions.
In the plasma kallikrein portfolio, as of April 30, 2024, we also are the owner of, and intend to maintain, two pending international applications that, if issued, are expected to expire between 2043 and 2044, absent any adjustments or extensions.
There are currently no therapies specifically approved for normal C1-INH HAE. 5 Current Treatments and Market Opportunities There are a number of marketed and development stage therapeutics for HAE, both for prophylaxis as well as on-demand use. Lanadelumab (Takhzyro ® ) is a monoclonal antibody against plasma kallikrein indicated for prophylaxis to prevent attacks of HAE.
Current Treatments and Market Opportunities There are a number of marketed and development stage therapeutics for HAE, both for prophylaxis as well as on-demand use. Lanadelumab (Takhzyro ® ) is a monoclonal antibody against plasma kallikrein indicated for prophylaxis to prevent attacks of HAE.
Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product's safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product's safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
In the FXIIa portfolio, as of April 30, 2023, we are the owner of, and intend to maintain, four pending U.S. patent applications, six pending U.S. provisional applications, two pending international applications, and 34 pending foreign applications in multiple jurisdictions.
In the FXIIa portfolio, as of April 30, 2024, we are the owner of, and intend to maintain, six pending U.S. patent applications, three pending U.S. provisional applications, three pending international applications, and approximately 110 pending foreign applications in multiple jurisdictions.
Other regulations We are subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances.
Other regulations We are subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.
Our belief that our therapies could fundamentally transform the manner in which HAE is managed is based upon extensive and continuing research we conduct with patients, physicians and payers.
Our belief that there could be a fundamental shift in the manner in which HAE is managed is based upon extensive and continuing research we conduct with patients, physicians and payers.
These provisions will take effect progressively starting in 2023, although they may be subject to legal challenges. 16 The Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
The Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
As such, plasma kallikrein is a clinically validated target for HAE and previous studies have demonstrated that plasma kallikrein inhibition can both treat and prevent HAE attacks.
As such, plasma kallikrein is a clinically validated target for HAE and previous studies have demonstrated that plasma kallikrein inhibition can both treat and prevent HAE attacks. There are currently no therapies specifically approved for normal C1-INH HAE.
Patent term extension, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. After NDA approval, owners of relevant drug patents may apply for the extension.
Patent Term Extension The Hatch Waxman Amendments permit a patent term extension as compensation for patent term lost during the FDA regulatory review process. Patent term extension, however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. After NDA approval, owners of relevant drug patents may apply for the extension.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages and consider our relations with employees to be good. We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees.
We have not experienced any work stoppages and consider our relations with employees to be good. We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees.
Our initial focus is specifically on development of oral plasma kallikrein inhibitors for HAE and Factor XIIa inhibitors for HAE and other indications; however, we believe our scientific capabilities also can be applied to other proteases to develop therapies for diseases with high unmet need. • Develop multiple HAE product candidates to provide a full set of therapeutic options for patients.
Our initial focus is specifically on development of oral plasma kallikrein inhibitors for HAE and Factor XIIa inhibitors for other indications; however, we believe our scientific capabilities also can be applied to other proteases to develop therapies for diseases with high unmet need. • Grow our capabilities internally as well as through strategic partnerships.
As a result of the lifelong nature of HAE and the challenges related to taking many of the injected therapies, patient surveys consistently indicate an overwhelming desire of patients for an oral therapy. We believe that a safe and effective oral on-demand agent has the potential to transform treatment for this disease.
As a result of the lifelong nature of HAE and the challenges related to taking many of the injected therapies, patient surveys consistently indicate an overwhelming desire of patients for an oral therapy.
An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product.
A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product's safe use (“ETASU”). An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries.
We are also aware of other companies that are engaged in the clinical development of potential HAE treatments, including Pharvaris GmbH, Intellia Therapeutics, Inc., BioMarin Pharmaceutical Inc., and Ionis Pharmaceuticals, Inc. 7 Intellectual Property Our success substantially depends on our ability to obtain and maintain patents and other forms of intellectual property rights for our product candidates, methods used to manufacture our product candidates and methods for treating patients using our product candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others.
Intellectual Property Our success substantially depends on our ability to obtain and maintain patents and other forms of intellectual property rights for our product candidates, methods used to manufacture our product candidates and methods for treating patients using our product candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others.
Strategy Key elements of our strategy include: • Apply our deep scientific expertise in the area of serine proteases to develop novel oral therapies for indications with high unmet need. Our core scientific team has decades of experience working on protease inhibitors and developing compounds with high potency, selectivity and bioavailability.
Strategy Key elements of our strategy include: • Apply our deep scientific expertise in the area of serine proteases to develop novel oral therapies for indications with high unmet need.
In addition, this study is examining the potential use of sebetralstat as short-term prophylaxis in the setting of medical and dental procedures, where HAE attacks are known to be triggered.
In August 2022, we initiated KONFIDENT-S, a two-year open-label extension trial assessing the long-term safety and tolerability of sebetralstat. In addition, this study is examining the potential use of sebetralstat as short-term prophylaxis in the setting of medical and dental procedures, where HAE attacks are known to be triggered.
Sebetralstat has received Fast Track and Orphan Drug designation from the FDA and has been granted Orphan Drug designation in the E.U. A PIP has also been approved by the EMA for sebetralstat.
MAA submissions to both EMA and MHRA are planned for Q3 2024 and JNDA submission to JPMDA are planned for Q4 2024. Sebetralstat has received fast track and orphan drug designation from the FDA, and orphan drug designation in the E.U. A PIP has also been approved by the EMA for sebetralstat.
In the plasma kallikrein portfolio, as of April 30, 2023, we are the owner of, and intend to maintain, 16 U.S. patents expiring between 2034 and 2040, absent any extensions, as well as seven pending U.S. patent applications and one pending U.S. provisional application.
Our patent portfolio includes patents and patent applications covering plasma kallikrein inhibitors (the “plasma kallikrein portfolio”), and patent applications covering FXIIa inhibitors (the “FXIIa portfolio”). 6 In the plasma kallikrein portfolio, as of April 30, 2024, we are the owner of, and intend to maintain, eight U.S. patents expiring between 2035 and 2049, absent any extensions, as well as six pending U.S. patent applications and one pending U.S. provisional application.
Patient surveys have indicated to us, in contrast, that if provided with an oral on-demand therapy, they would expect to carry it 95% of the time, would expect to treat 94% of attacks, and 93% of patients would expect to treat their attacks earlier.
Patient surveys have indicated to us that if provided with an oral on-demand therapy, most would carry treatment with them all of the time, would treat the vast majority of their attacks, and would treat their attacks far earlier.
In some instances, an ANDA applicant may receive approval prior to expiration of the three-year exclusivity if the applicant seeks, and FDA permits, the omission of such exclusivity-protected information from the ANDA package insert. Patent Term Extension The Hatch Waxman Amendments permit a patent term extension as compensation for patent term lost during the FDA regulatory review process.
In some instances, an ANDA applicant may receive approval prior to expiration of the three-year exclusivity if the applicant seeks, and FDA permits, the omission of such exclusivity-protected information from the ANDA package insert. Orphan designation may extend the period of exclusivity.
Trade Mark (a unitary right covering all twenty-seven member states of the E.U.). We also own pending trademark applications and registrations for “KALVISTA” and the K Design in the U.S. and multiple foreign countries.
As of April 30, 2024, we are the owner of, and intend to maintain, trademark registrations for “KALVISTA” and separately for the K Design in the U.S., twelve foreign countries as well as all E.U. member states via an E.U. Trade Mark (a unitary right covering all twenty-seven member states of the E.U.).
Item 1. B usiness. Overview We are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of small molecule protease inhibitors for diseases with significant unmet need.
Item 1. B usiness. Overview We are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of drug therapies for diseases with significant unmet need. We have used our capabilities to develop sebetralstat, a novel, small molecule plasma kallikrein inhibitor targeting the disease hereditary angioedema (“HAE”).
We believe that our program has the potential to be the first orally delivered Factor XIIa inhibitor to enter clinical development, initially for HAE and over time for additional indications that are supported by scientific evidence.
We believe our preclinical oral Factor XIIa inhibitor program has the potential to be the first orally delivered Factor XIIa inhibitor for indications across a wide variety of therapeutic areas that are supported by scientific evidence.
The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country in the E.U. In all cases, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
In all cases, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. 16 To obtain regulatory approval of a drug product under E.U., U.K., and Swiss regulatory systems, we must submit a MAA.
We believe a further future market opportunity may exist in treatment of normal C1-INH HAE. Estimates of the size of this patient population vary widely, but we believe that the nature of normal C1-INH HAE disease may make prophylaxis less attractive for these patients than a safe and rapidly effective, oral on-demand plasma kallikrein inhibitor therapy.
Estimates of the size of this patient population vary widely, but we believe that given the significant disease burden of normal C1-INH HAE these patients could benefit from a safe and rapidly effective, oral on-demand plasma kallikrein inhibitor therapy. There are no therapies currently approved specifically for normal C1-INH HAE.
A complete response letter generally outlines the deficiencies in the NDA submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed to the FDA's satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.
After the FDA evaluates the NDA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the NDA submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application for approval.
Applications under the BPCA are treated as priority applications. 11 Post-Approval Requirements Once an NDA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of drugs, including direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
For instance, the FDA closely regulates the post-approval marketing and promotion of drugs, including direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.
In July 2021, the Company adopted an Equity Inducement Plan in order to provide incentives to attract and motivate new employees through the grant of stock options and restricted share units. Corporate Information Our principal executive offices are located at 55 Cambridge Parkway, Suite 901 East, Cambridge, MA 02142, and our telephone number is (857) 999-0075.
In July 2021, the Company adopted an Equity Inducement Plan (the “2021 Equity Inducement Plan”) in order to provide incentives to attract and motivate new employees through the grant of stock options and restricted share units.
We consider these trademarks to be valuable because of their contribution to the brand identification of our current and future products and services and for protection against counterfeits. As of April 30, 2023, we are the owner of, and intend to maintain, trademark registrations for “KALVISTA” in six foreign countries as well as all E.U. member states via an E.U.
We consider these trademarks to be valuable because of their contribution to the brand identification of our current and future products and services and for protection against counterfeits.
The Best Pharmaceuticals for Children Act (“BPCA”), provides a six-month extension of any patent or non-patent exclusivity for a drug if certain conditions are met.
The FDA may grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA does not apply to any drug with orphan product designation. The Best Pharmaceuticals for Children Act (“BPCA”), provides a six-month extension of any patent or non-patent exclusivity for a drug if certain conditions are met.
As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the drug outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product's safe use (“ETASU”).
An approval letter authorizes commercial marketing and distribution of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the drug outweigh the potential risks to patients.
We therefore believe that a safe, oral on-demand treatment has the potential to become a preferred alternative for patients currently using injectable treatments, including both acute and prophylactic therapies. In February 2021 we announced data from a Phase 2 efficacy trial in which sebestralstat demonstrated statistical and clinically significant responses across all primary and secondary endpoints.
An oral therapy has the potential to overcome these limitations and lower the barrier for treatment for patients. We therefore believe that a safe, oral on-demand treatment has the potential to become a preferred alternative for patients currently using injectable treatments, including both acute and prophylactic therapies.
In the plasma kallikrein portfolio, as of April 30, 2023, we are the owner of, and intend to maintain, approximately 140 pending foreign applications and approximately 453 patents in foreign jurisdictions. Any issued patents, or those issuing from these foreign patent applications, are expected to expire between 2034 and 2041, absent any adjustments or extensions.
In the plasma kallikrein portfolio, as of April 30, 2024, we are the owner of, and intend to maintain, approximately 102 pending foreign applications and approximately 313 patents in foreign jurisdictions.
The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing and distribution of the drug with specific prescribing information for specific indications.
If, or when, those deficiencies have been addressed to the FDA's satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.
Our website address is www.kalvista.com. The information contained on, or that can be accessed through, our website is not a part of this report. We have included our website address in this report solely as an inactive textual reference.
We have included our website address in this report solely as an inactive textual reference.
As a result, many attacks are treated too late to prevent significant symptoms, and a large percentage aren’t treated at all, leading to needless suffering.
As a result, many attacks are treated too late to prevent significant symptoms, and a large percentage aren’t treated at all, leading to needless suffering. We anticipate that there will be strong interest in a safe and effective, orally delivered on-demand treatment, which would provide patients a new and compelling option with which to treat their disease.
Healthcare reform Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices.
Healthcare reform Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices. 15 Several healthcare reform proposals culminated in the enactment of the Inflation Reduction Act (“IRA”) in August 2022, which will eliminate, beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.
Our most advanced program for HAE is sebetralstat, for which we are currently conducting the Phase 3 KONFIDENT clinical trial to evaluate the safety and efficacy of sebetralstat as a potential oral, on-demand therapy for treatment of HAE attacks.
In February 2024, we announced positive results from the phase 3 KONFIDENT trial to evaluate the safety and efficacy of sebetralstat as the first potential oral, on-demand therapy for HAE. KONFIDENT was the largest and most representative trial ever conducted in HAE, enrolling a total of 136 patients from 66 clinical sites across 20 countries.
Recently, healthcare reform initiatives culminated in the enactment of the Inflation Reduction Act (the “IRA”), in August 2022, which will, among other things, permit the Department of Health and Human Service (“HHS”) to negotiate the selling price of certain drugs that CMS reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Only high-expenditure single-source drugs that have been approved for at least seven years (11 years for biologics) are eligible to be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Firazyr became available as a generic drug in 2019 and is sold by multiple companies as generic icatibant for acute usage.
Firazyr became available as a generic drug in 2019 and is sold by multiple companies as generic icatibant for on-demand usage. We are also aware of other companies that are engaged in the clinical development of potential HAE treatments, including Pharvaris GmbH, Intellia Therapeutics, Inc., BioMarin Pharmaceutical Inc., and Ionis Pharmaceuticals, Inc.
We may incur significant costs to comply with such laws and regulations now or in the future. 17 Human Capital Resources As of April 30, 2023, we had a total of 118 full-time employees, of whom 53 were located in the U.S., 61 were located in the U.K., 3 were located in Switzerland, and 1 located in Portugal.
Human Capital Resources As of April 30, 2024, we had a total of 150 full-time employees, of whom 81 were located in the U.S., 55 were located in the U.K., and 14 were located in the rest of the world. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
A positive Phase 2 clinical trial for sebetralstat as a potential on-demand treatment for HAE attacks was completed in February 2021, and we are currently conducting the Phase 3 KONFIDENT clinical trial.
In February 2024, we announced positive results from the phase 3 KONFIDENT trial to evaluate the safety and efficacy of sebetralstat as the first potential oral, on-demand therapy for HAE. KONFIDENT was the largest and most representative trial ever conducted in HAE, enrolling a total of 136 patients from 66 clinical sites across 20 countries.
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We apply our insights into the chemistry and biology of proteases to develop orally delivered therapeutics with high selectivity, potency and bioavailability that we believe will make them successful treatments for diseases. We have used these capabilities to develop novel, small molecule plasma kallikrein inhibitors targeting the disease hereditary angioedema (“HAE”).
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In June 2024, we announced that we have filed a New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) seeking marketing approval of sebetralstat as the first oral, on-demand therapy for HAE. We also are conducting preclinical development on a novel, oral, Factor XIIa inhibitor program.
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We also are conducting preclinical development on a novel, oral Factor XIIa (“Factor XIIa”) inhibitor program, which we are initially advancing to provide a next generation of HAE therapeutics and which also offers the opportunity for expansion into other high unmet need indications in the future.
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Notably, we have discovered that although people living with HAE understand that treating attacks early will reduce severity and duration, they routinely delay treatment of attacks, often waiting for them to become severe, to avoid the pain and inconvenience of injectable on-demand treatments. Compounding this delay, patients carry their on-demand treatment only one-third of the time when leaving home.
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We anticipate that there will be strong interest in safe and effective, orally delivered treatments, and our strategy is to develop oral drug candidates for both on-demand and prophylactic use with the goal of providing patients with a complete set of oral options to treat their disease.
Added
We have also learned from many physicians that the challenges associated with injectables often lead to the use of prophylaxis as an alternative, even among patients with a low frequency of attacks..
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In our research, which we refer to as the HAE Attack Journey, we have discovered that people living with HAE carry their on-demand treatment only approximately 33% of the time and, for this reason and others, treat only about 50% of attacks.
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Eligible participants included adults and adolescents 12 years of age and older, with or without using long-term prophylaxis, and with all attack severities and locations. The clinical trial met all primary and key secondary endpoints and demonstrated a safety profile similar to placebo.
Removed
When patients do treat, we believe they tend to delay that treatment excessively for reasons including not having their treatment with them, injection-associated pain, and lack of a private area for treatment. As a result, our data indicate that a significant majority of patients experience attacks that are more severe and last longer than if they treated earlier.
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Based upon these clinical trial results, we submitted a NDA for sebetralstat to the FDA in June 2024. This application seeks approval for sebetralstat as the first oral, on-demand HAE therapy for adults as well as adolescents ages 12 and above with HAE.
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This is the reason we believe that an oral on-demand therapy could represent such a significant advance. We have advanced our candidate sebetralstat into Phase 3 clinical development as a potential oral, on-demand therapy for HAE attacks.
Added
We believe the adolescent population has a particularly high unmet need, as patients in this age group frequently experience an increase in attacks yet currently only have approved access to intravenously delivered therapies.
Removed
In February 2021 we announced data from a Phase 2 efficacy trial in which sebetralstat demonstrated statistically and clinically significant responses across all primary and secondary endpoints.
Added
Market Authorization Application (“MAA”) submissions to both the European Medicines Agency (“EMA”) and United Kingdom (“U.K.”) Medicines and Healthcare products Regulatory Agency (“MHRA”) are planned for Q3 2024 and a Japanese New Drug Application (“JNDA”) submission to the Japanese Pharmaceuticals and Medical Devices Agency (“JPMDA”) is planned for Q4 2024.
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Based upon these data, we completed an end-of-Phase 2 meeting with the United States (“U.S.”) Food and Drug Administration (“FDA”) in the fall of 2021 and initiated the Phase 3 KONFIDENT clinical trial in early 2022 that is intended to support submission of a New Drug Application (“NDA”).
Added
Regulatory review timelines enable potential launches of sebetralstat in these territories in calendar 2025 and early 2026. To enable the broadest possible global availability of sebetralstat, if approved, we intend to engage commercial partners in other international markets, targeting select initial partners over the course of 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

89 edited+90 added−23 removed246 unchanged
We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing and we do not have backup sources of supply established for our candidates.
We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing and commercial supply and we do not have backup sources of supply established for our candidates.
The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. We maintain a large quantity of sensitive information, including confidential business and patient health information in connection with our clinical development regarding the patients enrolled in our clinical trials.
The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. We maintain a large quantity of sensitive information, including confidential business information and patient health information in connection with our clinical development regarding the patients enrolled in our clinical trials.
Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as: • delay or failure in reaching agreement with the FDA, MHRA, EMA or a comparable foreign regulatory authority on a trial design that we want to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical study; • delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; 23 • delay or failure in having subjects complete a trial or return for post-treatment follow-up; • delay or failure in data collections in connection with a clinical trial; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional clinical studies and increased expenses associated with the services of its clinical research organizations (“CROs”) and other third parties; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • we may experience delays or difficulties in the enrollment of patients that our product candidates are designed to target; • our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have difficulty partnering with experienced CROs that can identify patients that our product candidates are designed to target and run our clinical trials effectively; • the cost of clinical trials of our product candidates may be greater than we anticipate; • there may be political factors surrounding the approval process, such as government shutdowns or political instability; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; or • there may be changes in governmental regulations or administrative actions.
Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as: • delay or failure in reaching agreement with the FDA, MHRA, EMA or a comparable foreign regulatory authority on a trial design that we want to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical study; • delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; 22 • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; • delay or failure in having subjects complete a trial or return for post-treatment follow-up; • delay or failure in data collections in connection with a clinical trial; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional clinical studies and increased expenses associated with the services of its clinical research organizations (“CROs”) and other third parties; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • we may experience delays or difficulties in the enrollment of patients that our product candidates are designed to target; • our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have difficulty partnering with experienced CROs that can identify patients that our product candidates are designed to target and run our clinical trials effectively; • the cost of clinical trials of our product candidates may be greater than we anticipate; • there may be political factors surrounding the approval process, such as government shutdowns or political instability; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; or • there may be changes in governmental regulations or administrative actions.
Factors affecting the market price of our common stock include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: • announcement of a strategic transaction or other significant events for us or our competitors; 41 • our decision to initiate a clinical trial or not to initiate a clinical trial; • announcements of significant changes in our business or operations, including the decision not to pursue drug development programs; • additions or departures of key personnel; • adverse results or delays in clinical trials; • changes in reimbursement or third party coverage of treatments, or changes to treatment recommendations or guidelines applicable to treatment; • announcements relating to collaboration partnerships or other strategic transactions undertaken by us; • announcements of therapeutic innovations or new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; • changes or developments in laws or regulations applicable to any of our product candidates; • any adverse changes to our relationship with any manufacturers or suppliers; • the success of our testing and clinical trials; • the success of our efforts to acquire or license or discover additional product candidates; • any intellectual property infringement actions in which we may become involved; • announcements concerning our competitors or the pharmaceutical industry in general; • achievement of expected product sales and profitability; • manufacture, supply or distribution shortages; • actual or anticipated fluctuations in our operating results; • FDA or other regulatory actions affecting us or our industry or other healthcare reform measures in the U.S., the U.K. or the E.U.; • changes in financial estimates or recommendations by securities analysts; • trading volume of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; • general economic and market conditions and overall fluctuations in the U.S. equity markets, including due to rising inflation and interest rates, labor shortages, supply chain issues, and global conflicts such as the war in Ukraine; and • other events or factors, many of which are beyond our control.
Factors affecting the market price of our common stock include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: • announcement of a strategic transaction or other significant events for us or our competitors; • our decision to initiate a clinical trial or not to initiate a clinical trial; • announcements of significant changes in our business or operations, including the decision not to pursue drug development programs; • additions or departures of key personnel; • adverse results or delays in clinical trials; • changes in reimbursement or third party coverage of treatments, or changes to treatment recommendations or guidelines applicable to treatment; • announcements relating to collaboration partnerships or other strategic transactions undertaken by us; • announcements of therapeutic innovations or new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; • changes or developments in laws or regulations applicable to any of our product candidates; • any adverse changes to our relationship with any manufacturers or suppliers; • the success of our testing and clinical trials; 44 • the success of our efforts to acquire or license or discover additional product candidates; • any intellectual property infringement actions in which we may become involved; • announcements concerning our competitors or the pharmaceutical industry in general; • achievement of expected product sales and profitability; • manufacture, supply or distribution shortages; • actual or anticipated fluctuations in our operating results; • FDA or other regulatory actions affecting us or our industry or other healthcare reform measures in the U.S., the U.K. or the E.U.; • changes in financial estimates or recommendations by securities analysts; • trading volume of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; • general economic and market conditions and overall fluctuations in the U.S. equity markets, including due to rising inflation and interest rates, labor shortages, supply chain issues, and global conflicts such as the war in Ukraine; and • other events or factors, many of which are beyond our control.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; or • injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; 28 • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; or • injunctions or the imposition of civil or criminal penalties.
The costs to us or our CROs or other contractors or consultants we may utilize to mitigate network security problems, bugs, viruses, worms, phishing attempts, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position.
The costs to us or our CROs or other contractors or consultants we may utilize to mitigate network security problems, bugs, viruses, worms, cyberattacks, phishing attempts, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products at an acceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts. 19 • If we are unable to obtain and maintain intellectual property protection for our technology and products or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. • Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. • Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. • We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. • Our stock price is volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid. • Shareholder activism could cause material disruption to our business. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • Unstable or unfavorable global market and economic conditions may have adverse consequences on our business, financial condition and stock price. 20 Risk Factors Investing in our common stock involves a high degree of risk.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products at an acceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts. • If we are unable to obtain and maintain intellectual property protection for our technology and products or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. • Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. • Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. • We expect to expand our development, regulatory, sales, marketing and distribution capabilities, and as a result may encounter difficulties in managing our growth, which could disrupt our operations. • Our stock price is volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid. • Shareholder activism could cause material disruption to our business. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • Unstable or unfavorable global market and economic conditions may have adverse consequences on our business, financial condition and stock price. 19 Risk Factors Investing in our common stock involves a high degree of risk.
Our failure, or the failure of our third party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.
Moreover, our failure, or the failure of our third party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.
The FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received fast track designation have failed to obtain drug approval. Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
The FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received fast track designation have failed to obtain drug approval. 27 Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. The insurance coverage and reimbursement status of newly approved products is uncertain.
These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. 32 The insurance coverage and reimbursement status of newly approved products is uncertain.
Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. 37 The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the U.S. and abroad.
Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the U.S. and abroad.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. 39 We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the 42 attention of our management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination in litigation could also subject us to significant liabilities.
If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination in litigation could also subject us to significant liabilities.
Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming, disrupt our operations and divert the attention of our 43 board of directors and senior management from the pursuit of our business strategies, which could adversely affect our results of operations and financial condition.
Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming, disrupt our operations and divert the attention of our board of directors and senior management from the pursuit of our business strategies, which could adversely affect our results of operations and financial condition.
We are a clinical stage company and our operations to date have been limited to organizing and staffing, business planning, raising capital, acquiring and developing the technology, identifying potential product candidates, and undertaking up to Phase 3 clinical studies of our most advanced product candidates.
We are a clinical stage company and our operations to date have been limited to organizing and staffing, business planning, raising capital, acquiring and developing the technology, identifying potential product candidates, and undertaking up to Phase 3 clinical studies of our most advanced product candidate.
Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. 24 If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented and expenses for development of our product candidates could increase.
Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. 23 If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented and expenses for development of our product candidates could increase.
Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks that would have a material and adverse effect on our business, financial condition, results of operations and prospects. 35 We have entered, and may in the future seek to enter, into collaborations with third parties for the development and commercialization of our product candidates.
Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks that would have a material and adverse effect on our business, financial condition, results of operations and prospects. 36 We have entered, and may in the future seek to enter, into collaborations with third parties for the development and commercialization of our product candidates.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. 44 In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that: • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. 47 In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that: • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
If we do not meet these milestones as publicly announced, or at all, the commercialization of our products may be delayed or never achieved and, as a result, our stock price may decline. 25 If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit the development of some of our product candidates.
If we do not meet these milestones as publicly announced, or at all, the commercialization of our products may be delayed or never achieved and, as a result, our stock price may decline. 24 If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit the development of some of our product candidates.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and the perception of us in the business and financial communities could be adversely affected. 36 If our collaborations do not result in the successful development of products or product candidates, product candidates could be delayed and we may need additional resources to develop product candidates.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and the perception of us in the business and financial communities could be adversely affected. 37 If our collaborations do not result in the successful development of products or product candidates, product candidates could be delayed and we may need additional resources to develop product candidates.
These current or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 29 Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
These current or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 30 Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
To date, we have financed our operations primarily through sales of our stock and a previous option agreement with Merck and associated private placement. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
To date, we have financed our operations primarily through sales of our common stock and warrants and a previous option agreement with Merck and associated private placement. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, the IRA or any newly enacted federal tax legislation. The issuance of additional regulatory or accounting guidance related to the Tax Act could materially affect our tax obligations and effective tax rate in the period issued.
In addition, it is uncertain if and to what extent various states will conform to the TCJA, the IRA or any newly enacted federal tax legislation. The issuance of additional regulatory or accounting guidance related to the TCJA could materially affect our tax obligations and effective tax rate in the period issued.
We expect to incur losses over the next several years and may never achieve or maintain profitability. Since inception, we have incurred significant operating losses as we focused on our discovery efforts and developing our product candidates. We expect that it will be several years, if ever, before we have a product candidate ready for commercialization.
We expect to incur losses over the next several years and may never achieve or maintain profitability. Since inception, we have incurred significant operating losses as we focused on our discovery efforts and developing our product candidates. We expect that it could be as much as a year, if ever, before we have a product candidate ready for commercialization.
We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.
We expect that other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.
We determined that our Company does not meet the accelerated or large accelerated filer definitions as of April 30, 2023.
We determined that our Company does not meet the accelerated or large accelerated filer definitions as of April 30, 2024.
If current suppliers cannot supply us with our Phase 2 requirements as agreed, we may be required to identify alternative manufacturers, which would lead us to incur added costs and delays in identifying and qualifying any such replacement. Even if we choose to self-manufacture, the formulation used in early studies frequently is not a final formulation for commercialization.
If current suppliers cannot supply us with our clinical trial or commercial requirements as agreed, we may be required to identify alternative manufacturers, which would lead us to incur added costs and delays in identifying and qualifying any such replacement. Even if we choose to self-manufacture, the formulation used in early studies frequently is not a final formulation for commercialization.
Changes in tax laws or tax rulings could materially affect our financial position, results of operations and cash flows. The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change.
The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect our financial position and results of operations.
We have not yet demonstrated our ability to successfully complete large-scale, pivotal clinical trials, obtain marketing approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
We have not yet demonstrated our ability to obtain marketing approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS.
Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS.
Future guidance from the IRS with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation. The CARES Act has already modified certain provisions of the Tax Act.
Future guidance from the IRS with respect to the Tax Act may affect us, and certain aspects of the TCJA could be repealed or modified in future legislation.
Our operations, and those of our CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, such as the COVID-19 pandemic, and other natural or man-made disasters or business interruptions, for which we may not have insurance coverage.
Our operations, and those of our CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics and pandemics, and other natural or man-made disasters or business interruptions, for which we may not have insurance coverage.
We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market. 27 Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.
Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of our marketing and distribution support; • the availability of third party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles; • the ability to develop or partner with third-party collaborators to develop companion diagnostics; • FDA-approved labeling which may include restrictive safety and efficacy data, or may not include aspects of safety and efficacy that we believe are important; • the prevalence and severity of any side effects; and • any restrictions on the use of our products together with other medications. 30 In addition, in order to commercialize any product candidates, we must build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; 31 • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of our marketing and distribution support; • the availability of third party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles; • the ability to develop or partner with third-party collaborators to develop companion diagnostics; • FDA-approved labeling which may include restrictive safety and efficacy data, or may not include aspects of safety and efficacy that we believe are important; • the prevalence and severity of any side effects; and • any restrictions on the use of our products together with other medications.
It is unclear whether such litigation or other litigation, if brought, will be successful. 32 If government spending is reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA or the National Institutes of Health to continue to function at current levels. Amounts allocated to federal grants and contracts may be reduced or eliminated.
If government spending is reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA or the National Institutes of Health to continue to function at current levels. Amounts allocated to federal grants and contracts may be reduced or eliminated.
We expect to incur losses over the next several years and may never achieve or maintain profitability. • Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability. • We will need substantial additional funding.
We expect to incur losses over the next several years and may never achieve or maintain profitability. • We are a clinical stage company which may make it difficult to evaluate the success of our business to date and to assess our future viability. • We will need substantial additional funding.
Despite the drug substance and product risk management, this reliance on third parties presents a risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts. 33 Any performance failure on the part of our existing or future manufacturers of drug substance or drug products could delay clinical development or marketing approval.
Despite the drug substance and product risk management, this reliance on third parties presents a risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
For example, to execute our business plan, we will need to successfully: • execute ongoing clinical development activities; • complete any clinical trials beyond Phase 2; • move other product candidates into late-stage development; 22 • obtain required regulatory approvals for the development and commercialization of one or more of our product candidates; • maintain, leverage and expand our intellectual property portfolio; • manufacture a commercial scale product or arrange for a third party to do so on our behalf; • build and maintain robust sales, distribution and marketing capabilities for successful product commercialization, either on our own or in collaboration with strategic partners; • gain market acceptance for one or more of our product candidates; • develop and maintain any strategic relationships we elect to enter into; and • manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals and commercialization.
For example, to execute our business plan, we will need to successfully: • execute ongoing clinical development activities; • move other product candidates into late-stage development; 21 • obtain required regulatory approvals for the development and commercialization of one or more of our product candidates such as approval by the FDA of the NDA we submitted in June 2024 for the on-demand treatment of HAE attacks in adults and pediatric patients aged 12 years and older; • maintain, leverage and expand our intellectual property portfolio; • manufacture a commercial scale product or arrange for a third party to do so on our behalf; • build and maintain robust sales, distribution and marketing capabilities for successful product commercialization, either on our own or in collaboration with strategic partners; • gain market acceptance for one or more of our product candidates; • develop and maintain any strategic relationships we elect to enter into; and • manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals and commercialization.
For example, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of future net operating loss (“NOL”) carryforwards, allowing for the expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a more territorial system.
For example, the TCJA made broad and complex changes to the Code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of NOL carryforwards, allowing for the expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a more territorial system.
However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product.
Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. • If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented and expenses for development of our product candidates could increase. • If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired. • We may seek orphan drug exclusivity for some of our product candidates, and we may be unsuccessful. • A Fast Track designation by the FDA may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval. • Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad. • Even if any of our product candidates receives marketing approval, we may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success. • We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do. • The insurance coverage and reimbursement status of newly approved products is uncertain.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. • If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented and expenses for development of our product candidates could increase. • If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired. • Our operations and relationships with healthcare providers, healthcare organizations, customers and third- party payors will be subject to applicable anti-bribery, anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to, among other things, enforcement actions, criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings. • We may seek orphan drug exclusivity for some of our product candidates, and we may be unsuccessful. • A fast track designation by the FDA may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval. • Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad. • Even if any of our product candidates receives marketing approval, we may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success. • We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do. 18 • The insurance coverage and reimbursement status of newly approved products is uncertain.
Additional changes may be required by the FDA or other regulatory authorities on specifications and storage conditions. These may require additional studies and may delay our clinical trials. We expect to rely on third party manufacturers or third party collaborators for the manufacture of commercial supply of any other product candidates for which our collaborators or we obtain marketing approval.
These may require additional studies and may delay our clinical trials. 34 We expect to rely on third party manufacturers or third party collaborators for the manufacture of commercial supply of any other product candidates for which our collaborators or we obtain marketing approval.
We cannot provide assurance that current or future legislation will not prevent us from generating or maintaining personal data or that patients will consent to the use of their personal data (as necessary); either of these circumstances may prevent us from undertaking or publishing essential research and development, manufacturing, and commercialization, which could have a material adverse effect on our business, results of operations, financial condition, and prospects.
We cannot provide assurance that current or future legislation will not prevent us from generating or maintaining personal data or that patients will consent to the use of their personal data (as necessary); either of these circumstances may prevent us from undertaking or publishing essential research and development, manufacturing, and commercialization, which could have a material adverse effect on our business, results of operations, financial condition, and prospects. 42 The myriad international and U.S. privacy and data breach laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly.
Non-compliance with U.K. and E.U. requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties.
Non-compliance with U.S., U.K. and E.U. requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the U.K. and E.U.’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.
In addition, such requirements may require us to modify our data processing practices and policies, distract management or divert resources from other initiatives and projects, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. 40 Enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.
In addition, such requirements may require us to modify our data processing practices and policies, distract management or divert resources from other initiatives and projects, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the U.S. generally includes all of the risks associated with obtaining FDA approval.
The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the U.S. generally includes all of the risks associated with obtaining FDA approval.
A decline in the value of our business could also cause stockholders to lose all or part of their investment. 21 Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.
A decline in the value of our business could also cause stockholders to lose all or part of their investment. 20 We are a clinical stage company which may make it difficult to evaluate the success of our business to date and to assess our future viability.
Challenging or uncertain economic conditions including those related to global epidemics, pandemic, or contagious diseases, geopolitical turmoil, inflation, fluctuation in interest rates and foreign exchange rates, instability in the global banking system, disruptions in supply chains may adversely affect our general business strategy and stock price.
Challenging or uncertain economic conditions including those related to global epidemics, pandemic, or contagious diseases, regional geopolitical conflicts, inflation, fluctuation in interest rates and foreign exchange rates, uncertainty with respect to the federal debt ceiling and budget and government shutdowns related thereto, actual or perceived instability in the global banking system, disruptions in supply chains may adversely affect our general business strategy and stock price.
If we undergo additional ownership changes (some of which changes may be outside our control), our ability to utilize our NOLs could be further limited by Section 382 of the Code. Our NOLs may also be impaired under state law. Accordingly, we may not be able to utilize a material portion of our NOLs.
If we undergo additional ownership changes (some of which changes may be outside our control), our ability to utilize our NOLs could be further limited by Section 382 of the Code. Our NOLs may also be impaired under state law and there may be periods in which certain states suspend our ability to use our NOLs.
In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
If any disruption or security breach resulted in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and/or the further development of our product candidates could be delayed or impaired. 43 In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
Regulatory authorities have substantial discretion in the approval process and may refuse to accept an application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.
Regulatory authorities have substantial discretion in the approval process and may refuse to accept an application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.
In addition, many countries in Europe and a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in the countries where we do or intend to do business or require us to change the manner in which we operate our business. 46 If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding our stock, our stock price and trading volume could decline.
In addition, many countries in Europe and a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in the countries where we do or intend to do business or require us to change the manner in which we operate our business.
Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
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 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. 45 We are subject to Section 404 of The Sarbanes-Oxley Act of 2002 (“Section 404”), and the related rules of the SEC which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting.
Any reductions in government spending in countries outside the U.S. may also impact us negatively, such as by limiting the functioning of international regulatory agencies in countries outside the U.S. or by eliminating programs on which we may rely.
Any reductions in government spending in countries outside the U.S. may also impact us negatively, such as by limiting the functioning of international regulatory agencies in countries outside the U.S. or by eliminating programs on which we may rely. 33 Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.
We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including interference or derivation proceedings before the USPTO.
We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including interference or derivation proceedings before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future.
Under the TCJA, net operating loss carryforwards generated in years after 2017 will only be available to offset 80% of future taxable income in any single year but will not expire.
Under the Tax Cuts and Jobs Act of 2017, (“TCJA”), net operating loss carryforwards generated in years after 2017 will only be available to offset up to 80% of our taxable income in any single year (before taking into certain deductions) but will not expire.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding our stock, our stock price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
We also depend on our information technology infrastructure for communications among our personnel, contractors, consultants and vendors. System failures or outages could also compromise our ability to perform these functions in a timely manner, which could harm our ability to conduct business or delay our financial reporting.
System failures or outages could also compromise our ability to perform these functions in a timely manner, which could harm our ability to conduct business or delay our financial reporting.
In the U.S., the principal decisions about reimbursement for new medicines are typically made by the CMS, an agency within the U.S. Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the U.S., the principal decisions about reimbursement for new medicines are typically made by the CMS, an agency within HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare.
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. 40 Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in Patient Protection and Affordable Care Act (“ACA”) marketplaces through plan year 2025. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates. 39 Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage.
We have experienced ownership changes that substantially limit our use of the NOLs available to us for U.S. federal income tax purposes.
We have experienced ownership changes in the past that substantially limit our use of the NOLs available to us for U.S. federal income tax purposes and as a result we currently expect that approximately $76.7 million of our NOLs will go unutilized.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. We have not yet commercialized our product candidates and the historical failure rate in clinical drug development of product candidates in our industry is high.
We have not yet commercialized our product candidates and the historical failure rate in clinical drug development of product candidates in our industry is high.
Furthermore, our ability to utilize our NOLs is conditioned upon our attaining profitability and generating U.S. federal taxable income.
Accordingly, we may not be able to utilize a material portion of our NOLs against future taxable income. Furthermore, our ability to utilize our NOLs is conditioned upon our attaining profitability and generating U.S. federal taxable income.
In order to market and sell our products in the U.K., E.U. and many other jurisdictions, we or our third party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing.
For example, even if the FDA grants marketing approval of a product candidate, in order to market and sell our product candidates in the U.K., E.U. and many other jurisdictions outside of the U.S., we or our third party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. 31 There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.
If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.
The terms of any collaborations may also have impacts on other aspects of our business. From time to time, we may consider strategic transactions, such as collaborations, acquisitions of companies, asset purchases and out- or in-licensing of product candidates or technologies that we believe will complement or augment our existing business.
From time to time, we may consider strategic transactions, such as collaborations, acquisitions of companies, asset purchases and out- or in-licensing of product candidates or technologies that we believe will complement or augment our existing business. In particular, we will evaluate and, if strategically attractive, seek to enter into additional collaborations, including with major biotechnology or biopharmaceutical companies.
Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. 34 We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop and commercialize product candidates, impact our cash position, increase our expenses and present significant distractions to our management.
We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop and commercialize product candidates, impact our cash position, increase our expenses and present significant distractions to our management. The terms of any collaborations may also have impacts on other aspects of our business.
In addition, regarding the current conflict in Ukraine, we do not have any clinical trial sites or operations in Ukraine or Russia. However, if the current conflict in the region continues, there is the potential for trial sites in other eastern European countries to slow or stop enrollment, or to be unable to administer our clinical trials.
However, if the current conflict in the region continues, there is the potential for trial sites in other eastern European countries to slow or stop enrollment, or to be unable to administer our clinical trials. Changes in tax laws or tax rulings could materially affect our financial position, results of operations and cash flows.
All of the risks relating to product development, regulatory approval and commercialization described in this proxy statement also apply to the activities of our collaborators.
All of the risks relating to product development, regulatory approval and commercialization described in this proxy statement also apply to the activities of our collaborators. We rely, and intend to continue to rely, on third parties to support or conduct our clinical trials and perform some of our research and preclinical studies.
We may never succeed in these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. 38 If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our products and technology.
If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all.
Our product candidates must be approved by the FDA pursuant to an NDA in the U.S. and by the EMA and similar regulatory authorities outside the U.S. prior to commercialization.
Our product candidates must be approved by the FDA pursuant to an NDA in the U.S. and by the EMA and similar regulatory authorities outside the U.S. prior to commercialization. We initiated an NDA submission in June 2024 for sebetralstat for the on-demand treatment of HAE attacks in adults and pediatric patients aged 12 years and older.
Similarly, failure to comply with the U.K. and E.U.’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions. 28 Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.
We do not maintain “key person” insurance for any of our executives or other employees. The loss of the services of any of our management team, other key employees and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business.
The loss of the services of any of our management team, other key employees and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business. 41 Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to our success.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
General Risk Factors Unstable or unfavorable global market and economic conditions may have adverse consequences on our business, financial condition and stock price. Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
The IRA, which was enacted in August 2022, will, among other things, allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Only high-expenditure single-source drugs that have been approved for at least seven years (11 years for single-source biologics) are eligible to be selected for negotiation by CMS, with the negotiated price taking effect two years after the selection year.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Pr operties. Our corporate headquarters is located in Cambridge, Massachusetts where we occupy approximately 8,300 square feet of office space under a lease agreement that runs through September 2028. We maintain approximately 13,400 square feet of office and research laboratory space in Porton Down, United Kingdom, under a lease agreement that runs through April 2028.
Item 2. Pr operties. Our corporate headquarters is located in Cambridge, Massachusetts where we occupy approximately 8,300 square feet of office space under a lease agreement that runs through September 2028. We maintain approximately 6,200 square feet of office space in Salt Lake City, Utah under a lease agreement that runs through February 2032.
We maintain approximately 6,200 square feet of office space in Salt Lake City, Utah that runs through February 2032. We also maintain approximately 500 square feet of leased research laboratory space in Boston, Massachusetts.
We also maintain approximately 500 square feet of leased research laboratory space in Cambridge, Massachusetts. Internationally, we maintain approximately 13,400 square feet of office and research laboratory space in Porton Down, United Kingdom, under a lease agreement that runs through April 2028.
Added
We also maintain office space in Tokyo, Japan that runs through April 2026 and office space in Zug, Switzerland that runs through October 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Mine Saf ety Disclosures. Not Applicable. 47 PART II
Mine Saf ety Disclosures. Not Applicable. 51 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Res erved. 48
Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Res erved. 52
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the NASDAQ Global Market under the symbol “KALV.” Holders As of June 28, 2023, there were 21 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the NASDAQ Global Market under the symbol “KALV.” Holders As of June 25, 2024, there were 20 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

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Net cash provided by investing activities Net cash provided by investing activities was $41.4 million for the year ended April 30, 2023 and consisted of sales and maturities of marketable securities of $140.9 million offset by purchases of marketable securities of $98.3 million and acquisitions of property and equipment of $1.2 million.
Net cash provided by investing activities was $41.4 million for the year ended April 30, 2023 and consisted of sales and maturities of marketable securities of $140.9 million offset by purchases of marketable securities of $98.3 million and acquisitions of property and equipment of $1.2 million.
Net cash provided by financing activities Net cash provided by financing activities was $58.1 million for the year ended April 30, 2023 and primarily consisted of the $57.7 million in net proceeds from the December 2022 registered direct offering of common stock and pre-funded warrants.
Net cash provided by financing activities was $58.1 million for the year ended April 30, 2023 and primarily consisted of the $57.7 million in net proceeds from the December 2022 registered direct offering of common stock and pre-funded warrants.
We do not expect to generate product revenue unless and until we obtain regulatory approval for, and commercialize, one of our current or future product candidates. Research and Development Expenses Research and development expenses primarily consist of costs associated with our research activities, including the preclinical and clinical development of product candidates.
We do not expect to generate product revenue unless and until we obtain regulatory approval for, and commercialize, one of our current or future product candidates. 54 Research and Development Expenses Research and development expenses primarily consist of costs associated with our research activities, including the preclinical and clinical development of product candidates.
Discussions of fiscal year 2022 items and year-to-year comparisons between fiscal years 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended April 30, 2022, which was filed with the SEC on July 7, 2022.
Discussions of fiscal year 2023 items and year-to-year comparisons between fiscal years 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended April 30, 2023, which was filed with the SEC on July 10, 2023.
In December 2022, we entered into subscription agreements with institutional investors to sell, in a registered direct offering, an aggregate of 9,484,199 shares of our common stock at a price of $6.00 per share and pre-funded warrants to purchase up to 182,470 shares of common stock at a price of $5.999 per pre-funded warrant (the “Offering”).
In December 2022, we entered into subscription agreements with institutional investors to sell, in a registered direct offering, an aggregate of 9,484,199 shares of our common stock at a price of $6.00 per share and pre-funded warrants to purchase up to 182,470 shares of common stock at a price of $5.999 per pre-funded warrant (the “December 2022 Offering”).
Our fiscal year end is April 30, and references throughout this Annual Report to a given fiscal year are to the twelve months ended on that date. Management Overview We are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of small molecule protease inhibitors for diseases with significant unmet need.
Our fiscal year end is April 30, and references throughout this Annual Report to a given fiscal year are to the twelve months ended on that date. Management Overview We are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of drug therapies for diseases with significant unmet need.
No revenue was recognized in the years ended April 30, 2023 or 2022. Research and Development Expenses . Research and development expenses were $80.3 million in the year ended April 30, 2023 compared to $70.2 million in the prior year.
No revenue was recognized in the years ended April 30, 2024 or 2023. Research and Development Expenses . Research and development expenses were $86.2 million in the year ended April 30, 2024 compared to $80.3 million in the prior year.
We anticipate that expenses will continue at or above current levels as we continue to support the growth of the Company. Other Income . Other income was $18.0 million for the year ended April 30, 2023 compared to $14.3 million in the prior fiscal year.
We anticipate that expenses will continue at or above current levels as we continue to support the growth of the Company. Other Income . Other income was $13.8 million for the year ended April 30, 2024 compared to $18.0 million in the prior fiscal year.
Liquidity and Capital Resources Since inception, we have not generated any revenue from product sales and have incurred losses since inception and cash outflows from operating activities for the years ended April 30, 2023 and 2022. As of April 30, 2023, we had an accumulated deficit of $343.1 million and cash, cash equivalents and marketable securities totaling $149.4 million.
Liquidity and Capital Resources Since inception, we have not generated any revenue from product sales and have incurred losses since inception and cash outflows from operating activities for the years ended April 30, 2024 and 2023. As of April 30, 2024, we had an accumulated deficit of $469.7 million and cash, cash equivalents and marketable securities totaling $210.4 million.
We anticipate that these expenses will remain at or above current levels as this clinical trial progresses. Expenses for the KVD824 program decreased primarily due to the termination of the Phase 2 KOMPLETE clinical trial in October 2022. We anticipate that these expenses will cease in the near term as we do not anticipate any further development of KVD824.
Expenses for the KVD824 program decreased primarily due to the termination of the Phase 2 KOMPLETE clinical trial in October 2022. We anticipate that these expenses will cease in the near term as we do not anticipate any further development of KVD824.
We have devoted substantially all our efforts to research and development, including clinical trials of our product candidates. We have not completed the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by us, require approvals from the FDA or foreign regulatory agencies prior to commercial sales.
We have not completed the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by us, require approvals from the FDA or foreign regulatory agencies prior to commercial sales.
Net cash used in operating activities was $78.1 million for the year ended April 30, 2022 and primarily consisted of a net loss of $82.4 million adjusted for stock-based compensation of $11.1 million, an increase in the research and development tax credit receivable of $5.2 million, and other changes in net working capital.
Net cash used in operating activities was $75.3 million for the year ended April 30, 2023 and primarily consisted of a net loss of $92.9 million adjusted for stock-based compensation of $9.9 million, an increase in the research and development tax credit receivable of $2.3 million, and other changes in net working capital.
Financial Overview Revenue We have not generated any revenue in the current fiscal year. To date, we have not generated any revenues from the sale of products, and we do not have any products that have been approved for commercialization.
To date, we have not generated any revenues from the sale of products, and we do not have any products that have been approved for commercialization.
Cash Flows The following table shows a summary of the net cash flow activity for the years ended April 30, 2023 and 2022: Years Ended April 30, 2023 2022 (in thousands) Cash flows used in operating activities $ (75,261 ) $ (78,134 ) Cash flows provided by investing activities 41,415 57,860 Cash flows provided by financing activities 58,116 1,581 Effect of exchange rate changes on cash 1,236 (1,167 ) Net (decrease) increase in cash and cash equivalents $ 25,506 $ (19,860 ) 53 Net cash used in operating activities Net cash used in operating activities was $75.3 million for the year ended April 30, 2023 and primarily consisted of a net loss of $92.9 million adjusted for stock-based compensation of $9.9 million, an increase in the research and development tax credit receivable of $2.3 million, and other changes in net working capital.
Cash Flows The following table shows a summary of the net cash flow activity for the years ended April 30, 2024 and 2023: Years Ended April 30, 2024 2023 (in thousands) Cash flows used in operating activities $ (89,231 ) $ (75,261 ) Cash flows (used in) provided by investing activities (84,719 ) 41,415 Cash flows provided by financing activities 150,714 58,116 Effect of exchange rate changes on cash (1,213 ) 1,236 Net (decrease) increase in cash and cash equivalents $ (24,449 ) $ 25,506 Net cash used in operating activities Net cash used in operating activities was $89.2 million for the year ended April 30, 2024 and primarily consisted of a net loss of $126.6 million adjusted for stock-based compensation of $21.9 million, a decrease in the research and development tax credit receivable of $8.2 million, and other changes in net working capital.
Under the U.K. government’s research and development tax incentive scheme, we have incurred qualifying research and development expenses and filed claims for research and development tax credits in accordance with the relevant tax legislation. The research and development tax credits are paid out to us in cash and reported as other income.
Under the U.K. government’s research and development tax incentive scheme, we have incurred qualifying research and development expenses and filed claims for research and development tax credits in accordance with the relevant tax legislation.
The increase of $10.1 million was primarily due to increases in spending on sebetralstat of $3.5 million, personnel costs of $3.5 million, and preclinical activities of $4.3 million. These increases were offset by a decrease in spending on KVD824 of $1.2 million.
The increase of $5.9 million was primarily due to increases in spending on sebetralstat of $9.5 million, personnel costs of $7.4 million and preclinical and other activities of $0.2 million. These increases were offset by decreases in spending on KVD824 of $11.2 million.
The net proceeds from the Offering, after deducting estimated expenses, were approximately $57.7 million. As of April 30, 2023, no pre-funded warrants were exercised.
The net proceeds from the February 2024 Offering, after deducting estimated expenses, were approximately $150.1 million. As of April 30, 2024 no pre-funded warrants from the February 2024 Offering have been exercised.
Year Ended April 30, 2023 Compared to Year Ended April 30, 2022 The following table sets forth the key components of our results of operations for the years ended April 30, 2023 and 2022: Years Ended April 30, Increase 2023 2022 (Decrease) (in thousands) Income Revenue $ — $ — $ — Operating Expenses Research and development expenses 80,276 70,167 10,109 General and administrative expenses 30,595 26,446 4,149 Other income Interest, exchange rate gain and other income 17,964 14,274 3,690 Revenue .
Year Ended April 30, 2024 Compared to Year Ended April 30, 2023 The following table sets forth the key components of our results of operations for the years ended April 30, 2024 and 2023: Years Ended April 30, Increase 2024 2023 (Decrease) (in thousands) Income Revenue $ — $ — $ — Operating Expenses Research and development expenses 86,167 80,276 5,891 General and administrative expenses 54,278 30,595 23,683 Other income Interest, exchange rate gain and other income 13,801 17,964 (4,163 ) Revenue .
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”).
The research and development tax credits are paid out to us in cash and reported as other income. 55 Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with generally accepted accounting principles in the U.S.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements and the reported revenue and expenses during the reported periods. We evaluate these estimates and judgments, including those described below, on an ongoing basis.
(“U.S. GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements and the reported revenue and expenses during the reported periods.
We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for the foreseeable future, and will continue to incur net losses as we continue the research and development efforts on our product candidates, hire additional staff, including clinical, scientific, operational, and financial and management personnel.
We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for the foreseeable future, and will continue to incur net losses as we continue the research and development efforts on our product candidates, hire additional staff, including clinical, scientific, operational, and financial and management personnel. 57 Sources of Liquidity On May 21, 2021, we filed a shelf registration statement on Form S-3 pursuant to which the Company may offer and sell securities having an aggregate public offering price of up to $300 million.
These potential increases will likely include management costs, legal fees, accounting fees, directors’ and officers’ liability insurance premiums and expenses associated with investor relations, among others. 50 Other Income Other income consists of bank and investment interest, research and development tax credits from the U.K. government’s tax incentive programs set up to encourage research and development in the U.K., realized and unrealized exchange rate gains/losses on cash held in foreign currencies and transactions settled in foreign currencies, and realized gains and losses from sales of marketable securities.
Other Income Other income consists of bank and investment interest, research and development tax credits from the U.K. government’s tax incentive programs set up to encourage research and development in the U.K., realized and unrealized exchange rate gains/losses on cash held in foreign currencies and transactions settled in foreign currencies, and realized gains and losses from sales of marketable securities.
Personnel expenses increased primarily due to higher research and development and medical headcount compared to the prior year. We anticipate that these expenses will continue to increase to support the growth of the ongoing clinical trials and preclinical activities. 52 Expenses for preclinical activities increased primarily due to additional projects compared to the prior year.
Personnel expenses increased primarily due to higher research and development and medical headcount compared to the same period in the prior year. We anticipate that these expenses will continue to increase for the medical team as we support ongoing development activities and prepare for the planned eventual commercialization of sebetralstat.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC. Recent Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements. 54
Recent Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements.
We do not expect to generate significant product revenue unless and until we obtain regulatory approval for, and commercialize, one of our current or future product candidates.
Operating Capital Requirements 58 To date, we have not generated any revenues from the sale of products, and we do not have any products that have been approved for commercialization. We do not expect to generate significant product revenue unless and until we obtain regulatory approval for, and commercialize, one of our current or future product candidates.
Net cash used in investing activities was $57.9 million for the year ended April 30, 2022 and consisted of sales and maturities of marketable securities of $195.7 million offset by purchases of marketable securities of $136.9 million and acquisitions of property and equipment of $0.9 million.
Net cash (used in) provided by investing activities Net cash used in investing activities was $84.7 million for the year ended April 30, 2024 and primarily consisted of purchases of marketable securities of $189.2 and spend on website development costs of $0.4 million offset by sales and maturities of marketable securities of $105.0 million .
If we do not identify costs that we have begun to incur, or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. 51 Results of Operations This section of this Annual Report on Form 10-K generally discusses fiscal years 2023 and 2022 items and year-to-year comparisons between fiscal years 2023 and 2022.
If we do not identify costs that we have begun to incur, or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates.
The increase of $3.7 million was primarily due to an increase of $0.5 million in income from research and development tax credit, an increase of $1.1 million in interest income, an increase in foreign currency exchange rate gains of $1.6 million from transactions denominated in foreign currencies in our U.K. subsidiary, and a decrease in realized loss from available for sale securities of $0.4 million, compared to the prior year.
This decrease was offset by an increase of $1.7 million in interest income, an increase in realized gain from available for sale securities of $1.5 million, and foreign currency exchange rate gains of $0.1 million from transactions denominated in foreign currencies in our foreign subsidiaries.
(the “2021 Sales Agreement”), through which we may offer and sell shares of our common stock under an at-the-market offering program having an aggregate offering of up to $100.0 million through Cantor Fitzgerald & Co., as our sales agent.
Effective February 14, 2024, we terminated our “at-the-market” program and sales agreement with Cantor Fitzgerald & Co., under which we could, from time to time, offer and sell shares of our common stock having an aggregate offering value of up to $100 million.
We also are conducting preclinical development of a novel, oral Factor XIIa (“Factor XIIa”) inhibitor program, which initially is being advanced to provide a next generation of HAE therapeutics and which also offers the opportunity for expansion into other high unmet need indications in the future.
In addition, we are conducting preclinical development of novel, oral Factor XIIa inhibitors, which offer the opportunity for future expansion into other high unmet need indications in therapeutic areas.
The increase of $4.2 million was primarily due to increases of $3.9 million in commercial strategy expenses, $0.8 million in investor and public relations expenses, and $0.7 million in insurance and other administrative expenses. These increases were offset by decreases in professional fees of $0.6 million and employee-related expenses of $0.6 million compared to the prior year.
The increase of $23.7 million was primarily due to increases of $17.2 million in employee-related expenses, $5.0 million in commercial expenses, $0.5 million in professional fees, $0.3 million in travel expenses, $0.2 million in supply chain expenses, $0.2 million in facilities expenses, and $0.3 million in other administrative expenses.
Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2023 2022 (Decrease) (in thousands) Program-specific costs Sebetralstat $ 27,037 $ 23,493 3,544 15% KVD824 11,651 12,879 (1,228 ) -10% Unallocated costs Personnel 23,452 19,925 3,527 18% Preclinical activities 18,136 13,870 4,266 31% Total $ 80,276 $ 70,167 $ 10,109 14% Expenses for the sebetralstat program increased primarily due to activities related to the ongoing Phase 3 KONFIDENT trial.
The impact of exchange rates on research and development expenses was an increase of approximately $2.6 million compared to the prior year, which is reflected in the figures above. 56 Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2024 2023 (Decrease) (in thousands) Program-specific costs Sebetralstat $ 36,544 $ 27,037 9,507 35% KVD824 411 11,651 (11,240 ) -96% Unallocated costs Personnel 30,878 23,452 7,426 32% Preclinical and other activities 18,334 18,136 198 1% Total $ 86,167 $ 80,276 $ 5,891 7% Expenses for the sebetralstat program increased primarily due to the Phase 3 KONFIDENT and KONFIDENT-S trials.
Our most advanced program for HAE is sebetralstat, which is being developed as a potential on-demand oral therapy for treatment of HAE attacks. In March 2022 we initiated the KONFIDENT trial, a Phase 3 clinical study to evaluate the safety and efficacy of sebetralstat as a potential on-demand therapy for HAE attacks.
In February 2024 we announced positive results from the phase 3 KONFIDENT trial to evaluate the safety and efficacy of sebetralstat as the first potential oral, on-demand therapy for HAE. KONFIDENT was the largest and most representative trial ever conducted in HAE, enrolling a total of 136 patients from 66 clinical sites across 20 countries.
As of April 30, 2023, we had an accumulated deficit of $343.1 million and hold $149.4 million of cash, cash equivalents and available for sale securities. Our working capital is anticipated to fund our operations for at least the next twelve months from the date the audited consolidated financial statements are issued.
Our working capital is anticipated to fund our operations for at least the next twelve months from the date the audited consolidated financial statements are issued. Leadership Transition In March 2024, we announced the departure of T. Andrew Crockett as Chief Executive Officer and a member of the Board and the promotion of Benjamin L.
The research and development tax credit receivable increased due to higher eligible spending compared to the prior year.
The research and development tax credit receivable decreased due to the tax credit rate change in April 2023.
We anticipate that these expenses will continue to increase as we continue to progress our oral Factor XIIa inhibitor program and conduct other preclinical activities General and Administrative Expenses . General and administrative expenses were $30.6 million in the year ended April 30, 2023 compared to $26.4 million in the prior fiscal year.
General and administrative expenses were $54.3 million in the year ended April 30, 2024 compared to $30.6 million in the prior fiscal year.
The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $0.001 per share exercise price of each pre-funded warrant. The net proceeds from the registered direct offering, after deducting estimated expenses, were approximately $57.7 million. 49 We have funded operations primarily through the issuance of capital stock.
The net proceeds from the offering, after deducting estimated expenses, were approximately $150.1 million. We have funded operations primarily through the issuance of capital stock. As of April 30, 2024, we had an accumulated deficit of $469.7 million and hold $210.4 million of cash, cash equivalents and available for sale securities.
Net cash provided by financing activities was $1.6 million for the year ended April 30, 2022 and primarily consisted of the issuance of common stock from equity incentive plans. Operating Capital Requirements To date, we have not generated any revenues from the sale of products, and we do not have any products that have been approved for commercialization.
Net cash provided by financing activities Net cash provided by financing activities was $150.7 million for the year ended April 30, 2024 and primarily consisted of the $150.1 million in net proceeds from the February 2024 Underwritten Offering of common stock and pre-funded warrants.
Removed
We apply our insights into the chemistry and biology of proteases to develop orally delivered, small molecule inhibitors with high selectivity, potency and bioavailability that we believe will make them successful treatments for diseases. We have used these capabilities to develop small molecule plasma kallikrein inhibitors targeting the disease hereditary angioedema (“HAE”).
Added
We have used our capabilities to develop sebetralstat, a novel, small molecule plasma kallikrein inhibitor targeting the disease hereditary angioedema (“HAE”). We also are conducting preclinical development on a novel, oral Factor XIIa inhibitor program. HAE is a rare and potentially life-threatening, genetically-driven disease that features episodes of debilitating and often painful swelling in the skin, gastrointestinal tract or airways.
Removed
In July 2023, we announced that we had reached our targeted enrollment of 114 patients, and data from this study is anticipated in the fourth quarter of 2023. If the trial is successful, we anticipate submitting an NDA to the FDA in the first half of 2024.
Added
Although multiple therapies have been approved for the disease, we believe people living with HAE are in need of alternatives that better meet their objectives for quality of life and ease of disease control.
Removed
In October 2022, we announced the termination of the Phase 2 KOMPLETE study for our potential HAE prophylactic treatment KVD824, due to elevations in liver enzymes observed in several patients during the trial. We remain uncertain as to the cause and the potential contribution of KVD824 to these elevations, but we do not anticipate further development of KVD824.
Added
Other than one oral therapy approved for prophylaxis, currently marketed therapies are all administered by injection, which patients can find challenging despite their efficacy because they can be painful, time consuming to deliver and difficult to store.
Removed
On May 21, 2021, we entered into a Controlled Equity Offering SM Sales Agreement with Cantor Fitzgerald & Co. (the “Sales Agreement”), which established an at-the-market (“ATM”) offering program pursuant to which we may offer and sell shares of our common stock from time to time.
Added
As a result, many attacks are treated too late to prevent significant symptoms, and a large percentage are not treated at all, which can lead to needless suffering.
Removed
The Sales Agreement provides for the sale of shares of our common stock having an aggregate offering price of up to $100.0 million. We have conducted no sales through the ATM.
Added
We anticipate that there will be strong interest in safe and effective, orally delivered, small molecule treatments, and our strategy is to develop oral drug candidates for both on-demand and prophylactic use with the goal of providing patients with a complete set of oral options to treat their disease.
Removed
On December 23, 2022, we entered into subscription agreements with institutional investors to sell, in a registered direct offering, an aggregate of 9,484,199 shares of our common stock at a price of $6.00 per share and pre-funded warrants to purchase up to 182,470 shares of common stock at a price of $5.999 per pre-funded warrant.
Added
Eligible participants included adults and adolescents 12 years of age and older, with or without using long-term prophylaxis, and with all attack severities and locations. The clinical trial met all primary and key secondary endpoints and demonstrated a safety profile similar to placebo.
Removed
The impact of exchange rates on research and development expenses was a decrease of approximately $7.7 million compared to the prior year, which is reflected in the figures above.
Added
Based upon these clinical trial results, we submitted a New Drug Application (“NDA”) for sebetralstat to the U.S. Food and Drug Administration (“FDA”)in June 2024. We anticipate receiving notification from the FDA on the status of this submission in September 2024.
Removed
Sources of Liquidity On May 21, 2021, we filed a shelf registration statement on Form S-3 pursuant to which the Company may offer and sell securities having an aggregate public offering price of up to $300 million.
Added
This application seeks approval for sebetralstat as an on-demand HAE therapy for adults as well as adolescents age 12 and above with HAE. We believe the adolescent population has a particularly high unmet need, as patients in this age group frequently experience an increase in attacks yet currently only have approved access to intravenously delivered therapies.
Removed
In connection with the filing of the Registration Statement, we also entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co.
Added
Market Authorization Application (“MAA”) submissions to both the European Medicines Agency (“EMA”) and United Kingdom (“U.K.”) Medicines and Healthcare products Regulatory Agency (“MHRA”) are planned for Q3 2024 and a Japanese New Drug Application submission to the Japanese Pharmaceuticals and Medical Devices Agency is planned for Q4 2024.
Removed
We will pay the sales agents a commission of up to 3% of the gross proceeds of sales made through the 2021 Sales Agreement. During the twelve months ended April 30, 2023, we did not offer or sell any shares under the 2021 Sales Agreement.
Added
Regulatory review timelines enable potential launches of sebetralstat in these territories in calendar 2025 and early 2026. To enable the broadest possible global availability of sebetralstat, if approved, we intend to engage commercial partners in other international markets, targeting select initial partners over the course of 2024.
Added
In August 2022, we initiated KONFIDENT-S, a two-year open-label extension trial assessing the long-term safety and tolerability of sebetralstat. In addition, this study is examining the potential use of sebetralstat as short-term prophylaxis in the setting of medical and dental procedures, where HAE attacks are known to be triggered.
Added
In total, more than 800 attacks have been treated across KONFIDENT and KONFIDENT-S to date, and KONFIDENT-S includes numerous patients who have taken multiple doses for treatment. 53 In June 2024 we initiated a pediatric clinical trial (KONFIDENT-KID) using an orally disintegrating tablet (“ODT”) formulation of sebetralstat developed specifically for pediatric use.
Added
If approved, sebetralstat ODT would be the first oral therapy for pediatric patients under age 12. In addition, sebetralstat would be only the second FDA-approved on-demand therapy of any type in this population.
Added
We also intend to begin conversion of adolescent and adult participants in the ongoing KONFIDENT-S study to an ODT formulation in Q4 2024, enabling a potential 2026 sNDA approval by the FDA. If approved, the ODT formulation would provide people living with HAE with an additional novel option for oral on-demand treatment.
Added
Sebetralstat has received fast track and orphan drug designations from the FDA, as well as orphan drug designation and an approved Pediatric Investigational Plan from the EMA. In November 2023, sebetralstat was granted orphan drug status in Switzerland. In February 2024, the MHRA awarded the Innovation Passport for sebetralstat.
Added
We recently announced an ongoing review of this program, to evaluate the potential for further progress and indications for future development, and we intend to make further decisions on this program following completion of this process We have devoted substantially all our efforts to research and development, including clinical trials of our product candidates.
Added
Prior to delivering the written notice, no shares of our common stock were offered or sold pursuant to this “at-the-market” offering with Cantor Fitzgerald & Co.
Added
On February 14 2024, we entered into an underwriting agreement with Jefferies LLC, Leerink Partners LLC, Stifel, Nicolaus & Company, Incorporated, and Cantor Fitzgerald & Co., as the representatives of several underwriters to sell an aggregate of 7,016,312 shares of our common stock at price of $15.25 per share and pre-funded warrants to purchase up to 3,483,688 shares of common stock at a price of $15.249 per pre-funded warrant.
Added
Palleiko, our then President, Chief Business Officer and Chief Financial Officer, to Chief Executive Officer and his appointment as member of the Board. Financial Overview Revenue We have not generated any revenue in the current fiscal year.
Added
These potential increases will likely include management costs, legal fees, accounting fees, directors’ and officers’ liability insurance premiums and expenses associated with investor relations, among others.
Added
We evaluate these estimates and judgments, including those described below, on an ongoing basis.
Added
Results of Operations This section of this Annual Report on Form 10-K generally discusses fiscal years 2024 and 2023 items and year-to-year comparisons between fiscal years 2024 and 2023.
Added
We anticipate that these expenses will remain at or slightly below current levels due to the completion of the Phase 3 KONFIDENT trial in February 2024, while the KONFIDENT-S trial continues to enroll participants and we initiate other clinical studies to support the expansion of the sebetralstat commercial opportunity.
Added
Expenses for preclinical and other activities increased primarily due to spending in support of HAE awareness within the medical community. We anticipate that these expenses will continue at or above current levels as we continue development on other preclinical activities. General and Administrative Expenses .
Added
The decrease of $4.2 million was primarily due to a decrease of $7.3 million in income from research and development tax credit as a result of the tax credit rate change in April 2023.
Added
The net proceeds from the December 2022 Offering, after deducting estimated expenses, were approximately $57.7 million. In April 2024 all pre-funded warrants from the December 2022 Offering were exercised in a cashless exercise, resulting in an issuance of 182,453 shares of common stock.
Added
In February 2024, we entered into an underwriting agreement with Jefferies LLC, Leerink Partners LLC, Stifel, Nicolaus & Company, Incorporated, and Cantor Fitzgerald & Co., as the representatives of several underwriters to sell an aggregate of 7,016,312 shares of our common stock at price of $15.25 per share and pre-funded warrants to purchase up to 3,483,688 shares of common stock at a price of $15.249 per pre-funded warrant (the “February 2024 Offering”).

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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To minimize this risk, we schedule our investments to have maturities that coincide with our expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, we do not believe that we have material exposure to interest rate risk arising from our investments. We have not realized any significant losses from our investments.
To minimize this risk, we schedule our investments to have maturities that coincide with our expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, we do not 59 believe that we have material exposure to interest rate risk arising from our investments.
As of April 30, 2023, 83% of cash and cash equivalents were held in USD and 17% in GBP. We currently incur significant expense denominated in foreign currencies, primarily in GBP. We do not currently engage in exchange rate hedging or other similar activities to address our exchange rate risk.
As of April 30, 2024, 60% of cash and cash equivalents were held in USD and 39% in GBP. We currently incur significant expense denominated in foreign currencies, primarily in GBP. We do not currently engage in exchange rate hedging or other similar activities to address our exchange rate risk.
Foreign Exchange Rate Risk We maintain cash balances primarily in both U.S. Dollars (“USD”) and British Pound Sterling (“GBP”) to fund ongoing operations and manage foreign exchange risk.
We have not realized any significant losses from our investments. Foreign Exchange Rate Risk We maintain cash balances primarily in both U.S. Dollars (“USD”) and British Pound Sterling (“GBP”) to fund ongoing operations and manage foreign exchange risk.
Cash, cash equivalents and marketable securities as of April 30, 2023 was composed of $56.2 million in cash and cash equivalents which consisted of readily available checking and bank deposit accounts held primarily in both USD and GBP and $93.1 million of USD denominated marketable securities.
Cash, cash equivalents and marketable securities as of April 30, 2024 was composed of $31.8 million in cash and cash equivalents which consisted of readily available checking and bank deposit accounts held primarily in both USD and GBP and $178.6 million of USD denominated marketable securities.
A 10% change in the exchange rate would result in an immaterial net gain or loss. Effects of Inflation We do not believe that inflation and changing prices had a significant impact on the results of operations for any periods presented herein. 55
Effects of Inflation We do not believe that inflation and changing prices had a significant impact on the results of operations for any periods presented herein.
Added
A 10% change in the exchange rate would result in an immaterial net gain or loss. During the three months ended April 30, 2024, the Company formed entities in Switzerland and Japan. The Switzerland entity will serve as a subsidiary of the Company’s United Kingdom entity and will use the Swiss Franc ("CHF") as the functional currency for operations.
Added
The Japan entity will serve as a subsidiary of the Company’s United States headquarters and will use the Japanese Yen ("JPY") as the functional currency for operations.
Added
Both Swiss and Japanese entities do not have any material assets or liabilities as of April 30, 2024, did not generate any revenue, and incurred only de minimis expenses during the three months ended April 30, 2024, as such there in no impact of changes in the foreign currency to USD dollar exchange rate in the financial statements of Company as of and for the three months ended April 30, 2024.