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

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

+391 added−450 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-01)

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

391 paragraphs added · 450 removed · 315 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

99 edited+29 added−80 removed201 unchanged
Biggest changeThese scenarios could limit our ability to stop competitors from marketing-related products or could limit the term of patent protection that otherwise may exist for our product candidates. In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.
Biggest changeThe issuance of a patent is not conclusive as to its scope, validity or enforceability and our issued patents may be challenged, invalidated, deemed unenforceable or circumvented. These scenarios could limit our ability to stop competitors from marketing-related products or could limit the term of patent protection that otherwise may exist for our product candidates.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an 12 unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
We believe we are well positioned to leverage our deep experience in p53 biology, precision oncology platform and foundational knowledge acquired through our lead program to bring these therapies to patients. The critical components of our strategy include: • Advancing our lead product candidate, PC14586, as a tumor-agnostic, oral small molecule therapy for cancer patients .
We believe we are well positioned to leverage our deep experience in p53 biology, precision oncology platform and foundational knowledge acquired through our lead program to bring these therapies to patients. The critical components of our strategy include: • Advancing our lead product candidate, PC14586 (rezatapopt), as a tumor-agnostic, oral small molecule therapy for cancer patients .
In July 2022, we announced a clinical collaboration agreement with Merck to evaluate the combination of PC14586 and Merck’s anti-PD1 antibody, KEYTRUDA (pembrolizumab), in patients with advanced solid tumors in patients with a p53 Y220C mutation. This study is being conducted as a separate arm of our ongoing Phase 1/2 PYNNACLE trial in patients with advanced solid tumors.
In July 2022, we announced a clinical collaboration agreement with Merck to evaluate the combination of PC14586 and Merck’s anti-PD1 antibody, KEYTRUDA (pembrolizumab), in patients with advanced solid tumors in patients with a p53 Y220C mutation. This study is being conducted as a separate Phase 1b arm of our ongoing Phase 1/2 PYNNACLE trial in patients with advanced solid tumors.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. 26 In Catalyst Pharms., Inc. v.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. In Catalyst Pharms., Inc. v.
Intellectual property rights may not address all potential threats to our competitive advantage. 17 With respect to our existing and future product candidates and processes we intend to develop and commercialize in the normal course of business, we intend to pursue further patent protection covering, when possible, compositions, methods of use, dosing and formulations.
Intellectual property rights may not address all potential threats to our competitive advantage. With respect to our existing and future product candidates and processes we intend to develop and commercialize in the normal course of business, we intend to pursue further patent protection covering, when possible, compositions, methods of use, dosing and formulations.
We expect this strategy, which we also plan to replicate for our other future product candidates, will enable a rapid determination of target engagement and has potential to serve as a predictive marker of efficacy, thereby providing clear decision points for clinical development and efficient advancement of our product candidates towards approval.
We expect this strategy, which we also plan to replicate for our other future product candidates, will enable a rapid determination of target engagement and has the potential to serve as a predictive marker of efficacy, thereby providing clear decision points for clinical development and efficient advancement of our product candidates towards approval.
The vast majority of these mutations occur as a result of missense mutations that are found in the DNA binding domain. p53 Y220C mutations are found in approximately 1.0-1.5% of all cancers. This particular mutation is expressed in a large variety of solid tumors, including breast, NSCLC, colorectal, pancreatic and ovarian cancers.
The vast majority of these mutations occur as a result of missense mutations that are found in the DNA binding domain. p53 Y220C mutations are found in approximately 1.0% of all cancers. This particular mutation is expressed in a large variety of solid tumors, including breast, NSCLC, colorectal, pancreatic and ovarian cancers.
The widespread recognition that cancer is a genetic disease, as much as it is a disease defined by histology or anatomical location, has driven the increased use of genetic sequencing, which is now employed by approximately 75% of oncologists in the United States. As DNA sequencing technology advances, the availability of well-defined genetic sequencing tests increases.
The widespread recognition that cancer is a genetic disease, as much as it is a disease defined by histology or anatomical location, has driven the increased use of genetic sequencing, which is now employed by approximately 75% of oncologists in the United States. As DNA sequencing technology advances, the availability of well-defined genomic sequencing tests increases.
As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. In addition, the FDA currently requires pre-approval of promotional materials as a condition for accelerated approval, which could adversely impact the timing of the commercial launch of the product.
As a condition of approval, the FDA may require 15 that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. In addition, the FDA currently requires pre-approval of promotional materials as a condition for accelerated approval, which could adversely impact the timing of the commercial launch of the product.
It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. 29 Other legislative changes have been proposed and adopted since the ACA was enacted.
It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. Other legislative changes have been proposed and adopted since the ACA was enacted.
We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity. 32 Available Information Our Internet address is www.pmvpharma.com.
We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity. Available Information Our Internet address is www.pmvpharma.com.
We also may pursue patent protection with respect to manufacturing and drug development processes and technologies. Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies.
We also may pursue patent protection with respect 9 to manufacturing and drug development processes and technologies. Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies.
If PC14586 or our future product candidates do not offer sustainable advantages over competing products, we may otherwise not be able to successfully compete against current and future competitors.
If PC14586 (rezatapopt) or our future product candidates do not offer sustainable advantages over competing products, we may otherwise not be able to successfully compete against current and future competitors.
PC14586 in a Clinical Collaboration with Merck As a result of the preclinical combination data with PC14586 and an anti-PD1 antibody, we are evaluating this combination in patients.
PC14586 in a Clinical Collaboration with Merck As a result of the preclinical combination data with PC14586 (rezatapopt) and an anti-PD1 antibody, we are evaluating this combination in patients.
In addition, orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances. 27 Other Healthcare Laws Pharmaceutical manufacturers are subject to additional healthcare fraud and abuse laws, regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
In addition, orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances. 18 Other Healthcare Laws Pharmaceutical manufacturers are subject to additional healthcare fraud and abuse laws, regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical products, will apply to companion diagnostics. 28 Moreover, third-party payors are increasingly reducing coverage and reimbursement for pharmaceutical products and related services. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.
Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical products, will apply to companion diagnostics. 19 Moreover, third-party payors are increasingly reducing coverage and reimbursement for pharmaceutical products and related services. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.
Corporate Information We were incorporated in Delaware in March 2013 under the name “PJ Pharmaceuticals, Inc.” In July 2013, we changed our name to “PMV Pharmaceuticals, Inc.” Our principal executive offices are located at 1 Research Way, Princeton, New Jersey 08536. Our telephone number is (609) 642-6670. Our website address is www.pmvpharma.com.
Corporate Information We were incorporated in Delaware in March 2013 under the name “PJ Pharmaceuticals, Inc.” In July 2013, we changed our name to “PMV Pharmaceuticals, Inc.” Our principal executive offices are located at 1 Research Way, Princeton, New Jersey 08540. Our telephone number is (609) 642-6670. Our website address is www.pmvpharma.com.
With the increasing number of approved targeted therapies, we believe that physicians will seek a better understanding of the underlying genetic and protein abnormalities associated with a specific type of cancer in order to determine the optimal course of treatment. Advances in genetic sequencing are leading to transformations in the discovery and development of new targeted oncology drugs.
With the increasing number of approved targeted therapies, we believe that 4 physicians will seek a better understanding of the underlying genetic and protein abnormalities associated with a specific type of cancer in order to determine the optimal course of treatment. Advances in genomic sequencing are leading to transformations in the discovery and development of new targeted oncology drugs.
This time period is significantly reduced compared to conventional drug development timelines. Despite this progress, a recent analysis found that only 8% of patients with metastatic cancer have tumors with genetic profiles eligible for treatment with an approved targeted agent, which leaves a large opportunity for precision oncology.
This time period is significantly reduced compared to conventional drug development timelines. Despite this progress, a recent analysis found that only 16% of patients with metastatic cancer have tumors with genetic profiles eligible for treatment with an approved targeted agent, which leaves a large opportunity for precision oncology.
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 33
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 24
Third line therapies can include chemotherapy, antibody drugs and small molecule tumor-targeted therapies, more invasive forms of surgery and new technologies. PC14586: A Selective Structural Corrector of p53 Y220C Mutations p53 is the most widely mutated gene in human cancers.
Third line therapies can include chemotherapy, antibody drugs and small molecule tumor-targeted therapies, more invasive forms of surgery and new technologies. 5 PC14586 (rezatapopt): A Selective Structural Corrector of p53 Y220C Mutations p53 is the most widely mutated gene in human cancers.
Generally, before a new drug can be marketed, considerable data must be generated, which demonstrates the drug’s quality, safety and efficacy. Such data must then be organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority. 19 U.S.
Generally, before a new drug can be marketed, considerable data must be generated, which demonstrates the drug’s quality, safety and efficacy. Such data must then be organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority. 11 U.S.
In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development. 16 Manufacturing We do not have any manufacturing facilities or personnel.
In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development. 8 Manufacturing We do not have any manufacturing facilities or personnel.
Our lead product candidate, PC14586, is designed to be an orally available small molecule that structurally corrects the mutant p53 protein with the Y220C mutation. The Y220C mutation results from tyrosine being substituted by a cysteine at amino acid position 220 and is associated with 1.0-1.5% of all cancers, including breast, NSCLC, colorectal, pancreatic and ovarian cancers.
Our lead product candidate, PC14586 (rezatapopt), is designed to be an orally available small molecule that structurally corrects the mutant p53 protein with the Y220C mutation. The p53 Y220C mutation results from tyrosine being substituted by a cysteine at amino acid position 220 and is associated with approximately 1.0% of all cancers, including breast, NSCLC, colorectal, pancreatic and ovarian cancers.
Our lead product candidate, PC14586, is an orally available small molecule designed to potently and selectively correct p53 misfolding caused by a specific p53 mutation, Y220C, while sparing wild-type p53. The Y220C mutation is associated with 1.0-1.5% of all cancers, including breast, non-small cell lung cancer, or NSCLC, colorectal, pancreatic and ovarian cancers.
Our lead product candidate, PC14586 (rezatapopt), is an orally available small molecule designed to potently and selectively correct p53 misfolding caused by a specific p53 mutation, Y220C, while sparing wild-type p53. The p53 Y220C mutation is associated with approximately 1.0% of all cancers, including breast, non-small cell lung cancer, or NSCLC, colorectal, pancreatic and ovarian cancers.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties. 25 The FDA closely regulates the marketing, labeling, advertising and promotion of drug products.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or untitled letters; • clinical holds on clinical studies; 16 • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
We are aware of molecules in development that also are being explored for p53 upregulation/activation in various stages of preclinical or clinical development being tested by Aprea Therapeutics and Jacobio Pharmaceuticals, among others.
We are aware of molecules in development that also are being explored for p53 upregulation/activation in various stages of preclinical or clinical development being tested by Jacobio Pharmaceuticals, among others.
Our strategy is to seek approval under an accelerated pathway, and we believe our Phase 1/2 clinical trial has the potential to serve as a pivotal study. In October 2020, we were granted U.S.
Our strategy is to seek approval under an accelerated pathway, and we believe our PYNNACLE clinical trial has the potential to serve as a pivotal study. In October 2020, we were granted U.S.
By leveraging our team’s depth of expertise around p53, we are positioned to accelerate our efforts to expand the pipeline of therapies that selectively target p53 hotspot mutations and other p53-related cancers. 15 Competition Our industry is intensely competitive and subject to rapid and significant technological change, as well as strong defense of intellectual property.
By leveraging our team’s depth of expertise around p53, we are positioned to accelerate our efforts to expand the pipeline of therapies that target p53 or other p53-related cancers. 7 Competition Our industry is intensely competitive and subject to rapid and significant technological change, as well as strong defense of intellectual property.
FDORA made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.
The Food and Drug Omnibus Reform Act made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business.
For our lead product candidate, PC14586, we are actively working with physicians and leading academic centers to enroll patients with the p53 Y220C mutation identified through NGS in our Phase 1/2 clinical trial.
For our lead product candidate, PC14586, we are actively working with physicians and leading clinical trial institutions to enroll patients with the p53 Y220C mutation identified via NGS in our Phase 1/2 clinical trial.
Patients in the study had a median age of 62 (range of 32-74 years of age) with a range of tumor types and were heavily pretreated with a median of three prior lines of therapy.
Patients in the study had a median age of 63 (range of 32-84 years of age) with a range of tumor types and were heavily pretreated with a median of three prior lines of therapy.
We have leveraged more than four decades of research experience and developed unique insights into p53 to create a precision oncology platform designed to generate selective, small molecule, tumor-agnostic therapies that structurally correct specific mutant p53 proteins to restore their wild-type function.
We have leveraged more than four decades of research experience and developed unique insights into p53 to create a precision oncology platform designed to generate selective, small molecule, tumor-agnostic therapies that structurally correct specific mutant p53 proteins to restore their wild-type function. We are deploying our precision oncology platform to target p53 mutations and other p53-related cancers.
A company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance with the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
The FDA closely regulates the marketing, labeling, advertising and promotion of drug products. A company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance with the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
Using our extensive in-house expertise, deep understanding of chemistry and decades of experience researching the p53 protein, we believe that we will be able to leverage and apply foundational knowledge from the advancement of PC14586 to the discovery and development of small molecules targeting other p53 mutations.
Using our extensive in-house expertise, deep understanding of chemistry and decades of experience researching the p53 protein, we believe that we will be able to leverage and apply foundational knowledge from the advancement of PC14586 to the discovery and development of additional product candidates.
Of these patients, 25 patients with measurable disease were treated in the efficacious dose range, which was defined as a dose from 1150mg QD to 1500mg BID.
Of these patients, 38 patients with measurable disease and were KRAS wild type, were treated in the efficacious dose range, which was defined as a dose from 1150mg QD to 1500mg BID.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.
In preclinical studies, PC14586 has shown selective on-target activity ( i.e. , primarily functions in cells with the p53 Y220C mutation) and exhibited robust anti-tumor activity evidenced by potent tumor growth inhibition, or TGI, and strong tumor regression as a single agent.
In preclinical studies, PC14586 has shown selective on-target activity ( i.e. , primarily functions in cells with the p53 Y220C mutation) and exhibited robust anti-tumor activity evidenced by potent tumor growth inhibition, or TGI, and strong tumor regression as a single agent. Further, preclinical studies have demonstrated significant synergistic effects in combination with anti-PD-1 therapy.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
The FDA also may inspect foreign facilities that export products to the United States. 31 Employees and Human Capital Resources As of February 28, 2023, we had 62 full-time employees, including 22 employees with Ph.D., M.D. or Pharm.D. degrees. Of these full-time employees, 45 employees are engaged in research and development activities.
The FDA also may inspect foreign facilities that export products to the United States. Employees and Human Capital Resources As of February 29, 2024, we had 63 full-time employees, including 24 employees with Ph.D., M.D. or Pharm.D. degrees. Of these full-time employees, 50 employees are engaged in research and development activities.
While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. 13 While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
The three issued US patents are expected to expire in 2037, without taking into account any possible patent term adjustment or extensions.
The six issued US patents are expected to expire between 2037 and 2041, without taking into account any possible patent term adjustment or extensions.
Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA approval.
Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance (or decision to grant a De Novo classification request if there is no predicate device), and premarket approval, or PMA approval.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
We may explore some of these opportunities for our product candidates as appropriate. 24 Post-approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution and advertising and promotion of the product.
Post-approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution and advertising and promotion of the product.
As of January 31, 2023, we owned three issued US patents and five granted foreign patents relating to methods of use and composition of matter of PMV compounds, including PC14586, at least 20 pending US patent applications, and at least 40 pending foreign patent applications, each of which relates to methods of use and composition of matter of PMV compounds.
As of January 31, 2024, we owned six issued US patents and seven granted foreign patents relating to methods of use and composition of matter of PMV compounds, including PC14586, at least 15 pending US patent applications, and at least 30 pending foreign patent applications, each of which relates to methods of use and composition of matter of PMV compounds.
(3) In IND-Enabling Studies, we conduct preclinical studies, in accordance with GLP required for an IND submission to the FDA. We expect to initially seek approval of our product candidates in most instances, including with PC14586, at least as a second line therapy or for patients with no satisfactory alternative treatments or where the cancer has progressed following other treatment.
We expect to initially seek approval of our product candidates in most instances, including with PC14586 (rezatapopt), at least as a second line therapy or for patients with no satisfactory alternative treatments or where the cancer has progressed following other treatment.
Clinical Development Plan of PC14586 We initiated a Phase 1/2 clinical trial, PYNNACLE, for PC14586 in October 2020. In addition, we were granted FDA Fast Track designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors with a p53 Y220C mutation in October 2020.
We initiated a Phase 1/2 clinical trial for PC14586 in October 2020. In addition, we were granted FDA Fast Track designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation in October 2020. We dosed our first patient in this clinical trial in the fourth quarter of 2020.
Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. 20 Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study.
A total of 41 patients with the p53 Y220C mutation were enrolled, including 25 patients with measurable disease who were treated in the efficacious dose range, which was defined as a dose from 1150mg QD to 1500mg BID.
A total of 67 patients with the p53 Y220C mutation were enrolled, including 51 patients with measurable disease who were treated in the efficacious dose range, which was defined as a dose from 1150mg QD to 1500mg BID. Within the patients with measurable disease, we evaluated 38 patients that were also KRAS wild type.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
We are able to utilize the same general principles and similar drug discovery methods developed from our PC14586 Y220C program across other p53 hotspot mutations to facilitate the discovery of additional new product candidates. We study the structural and functional properties of the target.
These programs have been developed using our precision oncology platform and expertise. We are able to utilize the same general principles and similar drug discovery methods developed from our PC14586 (p53 Y220C) program to facilitate the development of additional new product candidates. We study the structural and functional properties of the target.
The availability of an oral small molecule selective for the p53 Y220C mutation may offer a novel precision therapy for this population, which we believe could potentially change the treatment paradigm for such patients.
The availability of an oral small molecule selective for the p53 Y220C mutation may offer a novel precision therapy for this population, which we believe could potentially change the treatment paradigm for such patients. Clinical Development Plan of PC14586 (rezatapopt) We initiated a Phase 1/2 clinical trial, PYNNACLE, for PC14586 in October 2020.
Also, if a competitor developed the technology protected by the patents no longer under license, we would not be able to block the competitor’s progress.
Also, if a competitor developed the technology protected by the patents no longer under license, we would not be able to block the competitor’s progress. If the competitor’s product was competitive with ours, then we may suffer economic harm from the competitive product.
Though PC14586 has demonstrated clear and robust tumor regression as a single agent in preclinical animal models, we believe that the mechanism of correcting the structure of mutant p53 can be complementary to other oncology therapies. Leveraging our expertise in p53 biology, chemistry and cancer pharmacology, we plan to identify and explore combination strategies with multiple cancer therapies.
Though PC14586 has demonstrated clear and robust tumor regression as a single agent in preclinical animal models and clinical proof of concept, we believe that the mechanism of correcting the structure of mutant 3 p53 can be complementary to other oncology therapies.
Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of approved products, which could have a material impact on our business.
For example, the American Rescue Plan Act of 2021 eliminated the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of approved products, which could have a material impact on our business.
The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation. 23 Expedited Development and Review Programs The FDA has various programs, including Fast Track designation, breakthrough therapy designation, accelerated approval and priority review, that are intended to expedite the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions.
Expedited Development and Review Programs The FDA has various programs, including Fast Track designation, breakthrough therapy designation, accelerated approval and priority review, that are intended to expedite the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year, effective April 1, 2013, which will remain in effect through 2032, unless additional Congressional action is taken. 20 Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
Targeted therapies have the potential to transform treatment of some cancers by providing robust clinical benefit to patients. In notable cases, the clinical outcomes have been dramatic enough to support expedited regulatory approval of these therapies.
In notable cases, the clinical outcomes have been dramatic enough to support expedited regulatory approval of these therapies.
We may also be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these claims.
We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or other intellectual property. We may also be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates.
The content provided in our 2022 ESG Highlights Report or accessible through our website is not incorporated by reference as part of this Annual Report on Form 10-K.
Our ESG Work Group oversees our sustainability efforts, and we have documented our initiatives in our inaugural 2022 ESG Highlights Report, which is available on our website at ir.pmvpharma.com. The content provided in our 2022 ESG Highlights Report or accessible through our website is not incorporated by reference as part of this Annual Report on Form 10-K.
PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data that may be expensive and time-consuming to generate and that can substantially delay approval.
As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation, or QSR, which imposes elaborate testing, control, documentation and other quality assurance requirements. 22 PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data that may be expensive and time-consuming to generate and that can substantially delay approval.
PC14586 was observed to be generally well-tolerated (across 41 patients treated with PC14586 monotherapy as of May 10, 2022). The majority of adverse events were mild or moderate (Grade 1 or 2) in severity with the most frequent adverse events being nausea, vomiting, aspartate transaminase (AST)/alanine transaminase (ALT) increase, anemia, blood creatine increase and fatigue.
The majority of adverse events were mild or moderate (Grade 1 or 2) in severity with the most frequent adverse events being nausea, vomiting, aspartate transaminase (AST)/alanine transaminase (ALT) increase, anemia, blood creatinine increase and fatigue.
Our lead product candidate, PC14586, is designed to be an orally available small molecule that structurally corrects a p53 protein containing the Y220C mutation and restores wild-type p53 function. 8 Wild-type p53 in a normal cell is at low to undetectable levels, but an external insult such as UV radiation or exposure to a carcinogen results in activation and upregulation of the protein.
Wild-type p53 in a normal cell is at low to undetectable levels, but an external insult such as UV radiation or exposure to a carcinogen results in activation and upregulation of the protein.
A better understanding of mutations that drive cancers have facilitated the development of precise, gene- and protein-specific drugs known as targeted therapies. Targeted therapies have the potential to transform treatment of some cancers by providing robust clinical benefit to patients. In many cases, clinical responses can be dramatic enough to support expedited regulatory approval of these therapies.
Recent advances in genomic sequencing and a better understanding of the genomic alterations that drive tumor development and growth have facilitated precise, gene and protein-specific drug development, known as targeted therapies. Targeted therapies have the potential to transform treatment of some cancers by providing robust clinical benefit to patients.
We plan to conduct our clinical trials in this genetically-defined patient population and leverage learnings from recently approved tumor-agnostic drugs to inform the clinical and regulatory pathways for PC14586. In June 2022, we presented our initial Phase 1 clinical data for PC14586 and observed partial responses across six different tumor types.
We are conducting our clinical trials in this genetically-defined patient population and leverage learnings from recently approved tumor-agnostic drugs to inform the clinical and regulatory pathways for PC14586.
Sponsors typically use the meetings at the end of the Phase 2 trial to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug. 21 Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received ODD.
Among the other benefits of ODD are tax credits for certain research and a waiver of the NDA application user fee. 17 A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received ODD.
In addition, we are expanding the utilization of our platform to target other p53-related cancers. An overview of our development pipeline is shown in the table below. (1) In Discovery, we screen compounds against biological assays to identify lead compounds.
PC14586 and Pipeline We are leveraging our precision oncology platform to develop a pipeline of orally available, potent and highly selective small molecule product candidates that target p53 mutations or other p53-related cancers. 1 An overview of our development pipeline is shown in the table below. (1) In Discovery, we screen compounds against biological assays to identify lead compounds.
In June 2022, we presented initial Phase 1 data, as of a May 10, 2022 efficacy data cutoff date, from our Phase 1/2 clinical trial at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting: PC14586 was generally well-tolerated and the MTD was determined to be 1500mg BID.
In June 2022, we presented initial Phase 1 data from our Phase 1/2 clinical trial at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting: PC14586 was generally well-tolerated and the MTD was determined to be 1500mg twice daily (BID). 2 In July 2023, we conducted our End of Phase 1 meeting with the FDA where the recommended Phase 2 dose of 2000 mg once daily (QD) and our proposed Phase 2 study design were discussed.
If a Complete Response Letter is issued, the sponsor must resubmit the NDA to address all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.
If a Complete Response Letter is issued, the sponsor must resubmit the NDA to address all of the deficiencies identified in the letter, or withdraw the application.
Safety, tolerability and effects on biomarkers such as macrophage inhibitory cytokine-1, or MIC-1, will also be assessed. The Phase 1 portion is also designed to assess preliminary anti-tumor efficacy in patients with advanced solid tumors that have the p53 Y220C mutation.
The Phase 1 portion was also designed to assess preliminary anti-tumor efficacy in patients with advanced solid tumors that have the p53 Y220C mutation.
In December 2022, we opened a separate arm within the existing Phase 1/2 clinical trial, to evaluate the combination of PC14586 with Merck’s KEYTRUDA (pembrolizumab), in patients with advanced solid tumors harboring a p53 Y220C mutation. 3 • Harnessing the power of our precision oncology platform to discover and develop additional differentiated product candidates that are designed to precisely target p53 mutant protein and inhibitors of wild-type p53 in cancer .
In December 2022, we opened a separate Phase 1b arm within the existing Phase 1/2 clinical trial, to evaluate the combination of PC14586 with Merck’s KEYTRUDA (pembrolizumab), in patients with advanced solid tumors harboring a p53 Y220C mutation.
After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete, and the application will not be approved in its present form.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications.
Further, preclinical studies have demonstrated significant synergistic effects in combination with anti-PD-1 therapy. 2 We initiated a Phase 1/2 clinical trial for PC14586 in October 2020. In addition, we were granted FDA Fast Track designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation in October 2020.
In addition, we were granted FDA Fast Track designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors with a p53 Y220C mutation in October 2020. We dosed our first patient in this clinical trial in the fourth quarter of 2020.
We believe p53 mutations are particularly well-suited for the evolving precision oncology paradigm, as a single mutation can cause p53 malfunction, and p53 is one of the genes commonly sequenced, to our knowledge, in NGS panels. We believe that our precision oncology platform offers a substantial opportunity to expand the number of patients who will benefit from targeted therapies.
A recent study found that 75% of oncologists in the United States employ genetic sequencing. We believe p53 mutations are particularly well-suited for the evolving precision oncology paradigm, as a single mutation can cause p53 malfunction, and p53 is one of the genes commonly sequenced in NGS panels.
We believe integrating responsible environmental, social, and governance principles into our corporate strategy will drive sustainable value creation for our shareholders, employees, patients, and caregivers over the long term.
We believe integrating responsible environmental, social, and governance principles into our corporate strategy will drive sustainable value creation for our shareholders, employees, patients, and caregivers over the long term. We have formed an internal ESG Working Group with cross-functional senior leadership that meets periodically, with oversight by the nominating and corporate governance committee of our board of directors.
Therefore, immune checkpoint inhibitors, such as anti-PD-1 and anti-CTLA-4 agents, could also be considered as potential combination agents for use with our product candidates. We believe that our unique expertise will enable us to prioritize therapeutic strategies and optimize outcomes for clinical studies.
In addition, we believe that p53 plays a role in influencing the tumor microenvironment. Therefore, immune checkpoint inhibitors, such as anti-PD-1 and anti-CTLA-4 agents, could also be considered as potential combination agents for use with our product candidates.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAccordingly, our future results could be harmed directly or indirectly by a variety of factors, including: • differing regulatory requirements in foreign countries, changes in existing regulatory requirements, or implementation of new regulatory requirements or policies that impact our clinical development and business operations in foreign countries; • foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials or our interpretation of data from preclinical studies or clinical trials; • approval policies or regulations of foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; • impact of the COVID-19 pandemic on our ability to produce our product candidates and conduct clinical trials in foreign countries; • sociopolitical instability in particular foreign economies and markets; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; 47 • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; production or supply shortages resulting directly or indirectly from any events affecting raw material supply or manufacturing capabilities abroad, including, but not limited to, impacts due to the ongoing Ukraine-Russia war, addition of certain suppliers or companies to the Unverified List under the Export Administration Regulations, implementation of other export controls, restrictions or sanctions that can impact the supply chain, our business, or business operations of our suppliers, contractors or partners; • business interruptions resulting directly or indirectly from geo-political actions, including the ongoing Ukraine-Russian war, other regional or geo-political conflicts, and terrorism; and supply and other disruptions resulting from the impact of public health epidemics, including the COVID-19 pandemic, on our strategic partners, third-party manufacturers, suppliers and other third parties upon which we rely.
Biggest changeAccordingly, our future results could be harmed directly or indirectly by a variety of factors, including: • differing regulatory requirements in foreign countries, changes in existing regulatory requirements, or implementation of new regulatory requirements or policies that impact our clinical development and business operations in foreign countries; • foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials or our interpretation of data from preclinical studies or clinical trials; • approval policies or regulations of foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; • impact of a global pandemic or other public health emergencies on our ability to produce our product candidates and conduct clinical trials in foreign countries; • sociopolitical instability in particular foreign economies and markets; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • legislation or other measures that restrict business, trade, or use of government fundings for any product or service rendered by certain companies based in China due to national security concerns or geopolitical issues, and our reliance on such Chinese companies, including CROs, CMOs, suppliers, and other vendors or contractors based in China; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; production or supply shortages resulting directly or indirectly from any events affecting raw material supply or manufacturing capabilities abroad, including, but not limited to, impacts due to the ongoing Ukraine-Russia war or the ongoing conflict between Israel and Hamas, addition of certain suppliers or companies to the Unverified List under the Export Administration Regulations, implementation of other export controls, restrictions or sanctions that can impact the supply chain, our business, or business operations of our suppliers, contractors or partners; • business interruptions resulting directly or indirectly from geo-political actions, including the ongoing Ukraine-Russia war, other regional or geo-political conflicts, including the conflict between Israel and Hamas, and terrorism; and supply and other disruptions resulting from the impact of public health epidemics on our strategic partners, third-party manufacturers, suppliers and other third parties upon which we rely. 37 These and other risks associated with international operations may materially adversely affect our business, financial condition, and results of operations.
Similar rules may apply under state tax laws. We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of shifts in our stock ownership, some of which are outside our control.
Similar rules may apply under state tax laws. We have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of shifts in our stock ownership, some of which are outside our control.
Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to: • the availability of financial resources to commence and complete clinical trials; • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; • the FDA or comparable foreign regulatory authorities disagreeing with our tumor-agnostic development strategy; • delays in obtaining regulatory approval or authorization to commence a clinical trial, including delays or issues relating to any future companion diagnostics which we may develop; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee approval at each clinical trial site; • recruiting an adequate number of suitable patients to participate in a clinical trial; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate; • the cost of clinical trials of our product candidates may be greater than we anticipate, for example, if we experience delays or challenges in identifying patients with the mutations required for our clinical trials, we may have to reimburse sites for genetic sequencing costs in order to encourage sequencing of additional patients; • having subjects complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from clinical trial protocol or dropping out of a clinical trial; • having third-party contractors fail to complete their obligations in a timely manner or failing to comply with applicable regulatory requirements; • addressing subject safety concerns that arise during the course of a clinical trial; • adding a sufficient number of clinical trial sites; or • obtaining sufficient product supply of product candidate for use in preclinical studies or clinical trials from third-party suppliers.
Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to: • the availability of financial resources to commence and complete clinical trials; • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; • the FDA or comparable foreign regulatory authorities disagreeing with our tumor-agnostic development strategy; • delays in obtaining regulatory approval or authorization to commence a clinical trial, including delays or issues relating to any future companion diagnostics which we may develop; 50 • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee approval at each clinical trial site; • recruiting an adequate number of suitable patients to participate in a clinical trial; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate; • the cost of clinical trials of our product candidates may be greater than we anticipate, for example, if we experience delays or challenges in identifying patients with the mutations required for our clinical trials, we may have to reimburse sites for genetic sequencing costs in order to encourage sequencing of additional patients; • having subjects complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from clinical trial protocol or dropping out of a clinical trial; • having third-party contractors fail to complete their obligations in a timely manner or failing to comply with applicable regulatory requirements; • addressing subject safety concerns that arise during the course of a clinical trial; • adding a sufficient number of clinical trial sites; or • obtaining sufficient product supply of product candidate for use in preclinical studies or clinical trials from third-party suppliers.
Our ability to generate revenue depends on a number of factors, including, but not limited to: • successful enrollment and timely completion of our clinical trials for our lead product candidate, PC14586, and timely initiation and completion of our preclinical studies for our future product candidates, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • establishing and maintaining relationships with contract research organizations, or CROs, and clinical sites for the clinical development of PC14586 and our future product candidates; • our ability to complete IND-enabling studies and successfully submit and receive authorization to proceed under INDs or comparable applications; • whether we are required by the FDA or other comparable foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates; • our ability to demonstrate to the satisfaction of the FDA and comparable foreign regulatory authorities the safety, efficacy, consistent manufacturing quality and acceptable risk-benefit profile of our small molecule product candidates or any future product candidates, and such regulatory authorities’ acceptance of our tumor-agnostic development strategy; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future product candidates, if any; • the timely receipt of necessary marketing approvals from the FDA and comparable foreign regulatory authorities; • the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or future product candidates over alternative or more conventional therapies, such as chemotherapy, to treat solid tumors; • the actual and perceived availability, cost, risk profile and side effects and efficacy of our product candidates, if approved, relative to existing and future alternative cancer therapies and competitive product candidates and technologies; • our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory authorities and develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP requirements; 37 • our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others; • patient demand for our product candidates and any future product candidates, if approved; • our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates; • obtaining coverage and adequate reimbursement by third-party payors for our product candidates; • addressing any competing therapies and technological and market developments; and • attracting, hiring and retaining qualified personnel.
Our ability to generate revenue depends on a number of factors, including, but not limited to: • successful enrollment and timely completion of our clinical trials for our lead product candidate, PC14586, and timely initiation and completion of our preclinical studies for our future product candidates, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors; • establishing and maintaining relationships with contract research organizations, or CROs, and clinical sites for the clinical development of PC14586 and our future product candidates; • our ability to complete IND-enabling studies and successfully submit and receive authorization to proceed under INDs or comparable applications; • whether we are required by the FDA or other comparable foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates; • our ability to demonstrate to the satisfaction of the FDA and comparable foreign regulatory authorities the safety, efficacy, consistent manufacturing quality and acceptable risk-benefit profile of our small molecule product candidates or any future product candidates, and such regulatory authorities’ acceptance of our tumor-agnostic development strategy; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future product candidates, if any; • the timely receipt of necessary marketing approvals from the FDA and comparable foreign regulatory authorities; • the willingness of physicians, operators of clinics and patients to utilize or adopt any of our product candidates or future product candidates over alternative or more conventional therapies, such as chemotherapy, to treat solid tumors; • the actual and perceived availability, cost, risk profile and side effects and efficacy of our product candidates, if approved, relative to existing and future alternative cancer therapies and competitive product candidates and technologies; • our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory authorities and develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP requirements; 28 • our ability to successfully develop a commercial strategy and thereafter commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others; • patient demand for our product candidates and any future product candidates, if approved; • our ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates; • obtaining coverage and adequate reimbursement by third-party payors for our product candidates; • addressing any competing therapies and technological and market developments; and • attracting, hiring and retaining qualified personnel.
Various factors will influence whether our product candidates are accepted in the market, including: • the clinical indications for which our product candidates are approved; • physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe and effective treatment; • the potential and perceived advantages of our product candidates over alternative treatments; • our ability to demonstrate the advantages of our product candidates over other cancer medicines; • the prevalence and severity of any side effects; • the prevalence and severity of any side effects for other precision medicines and public perception of other precision medicines; • product labeling or product insert requirements of the FDA or other regulatory authorities; • limitations or warnings contained in the labeling approved by the FDA; • the timing of market introduction of our product candidates as well as competitive products; • the cost of treatment in relation to alternative treatments; • the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and • the effectiveness of our sales and marketing efforts.
Various factors will influence whether our product candidates are accepted in the market, including: • the clinical indications for which our product candidates are approved; • physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe and effective treatment; • the potential and perceived advantages of our product candidates over alternative treatments; • our ability to demonstrate the advantages of our product candidates over other cancer medicines; • the prevalence and severity of any side effects; 41 • the prevalence and severity of any side effects for other precision medicines and public perception of other precision medicines; • product labeling or product insert requirements of the FDA or other regulatory authorities; • limitations or warnings contained in the labeling approved by the FDA; • the timing of market introduction of our product candidates as well as competitive products; • the cost of treatment in relation to alternative treatments; • the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and • the effectiveness of our sales and marketing efforts.
Any potential acquisition or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • the assumption of additional indebtedness or contingent liabilities; • the issuance of our equity securities; • assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; • the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition; • retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and • our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Any potential acquisition or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • the assumption of additional indebtedness or contingent liabilities; • the issuance of our equity securities; • assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; • the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition; 69 • retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and • our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials, including our Phase 1/2 clinical trial design for PC14586, or require us to modify the design of our clinical trials, including additional procedures and contingency measures in response to the COVID-19 pandemic or as required by clinical sites, IRBs, FDA or other regulatory authorities; • the FDA or comparable foreign regulatory authorities may disagree with our tumor-agnostic development strategy; • the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication, or a related companion diagnostic is suitable to identify appropriate patient populations; • the FDA or other comparable regulatory authorities may fail to approve companion diagnostic tests that may be required for our product candidates; 57 • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks, or that a product candidate has an acceptable benefit-risk ratio for its proposed indication; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures, specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; • our third-party contractors may fail to comply with regulatory requirements or otherwise fail or be unable to adequately perform their obligations to allow for the conduct of our planned or future clinical studies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials, including our Phase 1/2 clinical trial design for PC14586, or require us to modify the design of our clinical trials, including additional procedures and contingency measures in response to the COVID-19 pandemic or as required by clinical sites, IRBs, FDA or other regulatory authorities; • the FDA or comparable foreign regulatory authorities may disagree with our tumor-agnostic development strategy; • the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication, or a related companion diagnostic is suitable to identify appropriate patient populations; • the FDA or other comparable regulatory authorities may fail to approve companion diagnostic tests that may be required for our product candidates; 46 • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks, or that a product candidate has an acceptable benefit-risk ratio for its proposed indication; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures, specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; • our third-party contractors may fail to comply with regulatory requirements or otherwise fail or be unable to adequately perform their obligations to allow for the conduct of our planned or future clinical studies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.
In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, 54 including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our product candidates or products that we may develop; • injury to our reputation; • withdrawal of clinical trial participants • initiation of investigations by regulators; • costs to defend the related litigation; • diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our product candidates or products that we may develop; • injury to our reputation; • withdrawal of clinical trial participants • initiation of investigations by regulators; • costs to defend the related litigation; • diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; 44 • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
If a prolonged government shutdown or other disruption occurs, including delays or disruptions due to travel restrictions, foreign COVID-19-related policies, staffing shortages or public health reasons, or if global health or other concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities in a timely manner, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown, furlough or other disruption occurs, including delays or disruptions due to travel restrictions, foreign COVID-19-related policies, staffing shortages or public health reasons, or if global health or other concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities in a timely manner, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: 66 • the demand for our product candidates, if we obtain regulatory approval; • our ability to set a price that we believe is fair for our products; • our ability to obtain coverage and reimbursement approval for a product; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: • the demand for our product candidates, if we obtain regulatory approval; • our ability to set a price that we believe is fair for our products; • our ability to obtain coverage and reimbursement approval for a product; • our ability to generate revenue and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our product candidates and/or proprietary technologies infringe their intellectual property rights. 91 If a third party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party licenses its product rights to us; however, the third party is not required to grant the license; if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our products; and redesigning our product candidates or processes so they do not infringe; redesign may not be possible or may require substantial monetary expenditures and time.
We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our product candidates and/or proprietary technologies infringe their intellectual property rights. 78 If a third party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party licenses its product rights to us; however, the third party is not required to grant the license; if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our products; and redesigning our product candidates or processes so they do not infringe; redesign may not be possible or may require substantial monetary expenditures and time.
In addition, we have not yet conducted market research to determine how treating physicians would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for each such tumor type. Our business may become subject to economic, political, regulatory, and other risks associated with international operations directly or indirectly.
In addition, we have not yet conducted market research to determine how treating physicians would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for each such tumor type. 36 Our business may become subject to economic, political, regulatory, and other risks associated with international operations directly or indirectly.
Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. 55 Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition.
Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition.
Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. 48 Furthermore, we also face competition more broadly across the market for cost-effective and reimbursable cancer treatments.
Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Furthermore, we also face competition more broadly across the market for cost-effective and reimbursable cancer treatments.
Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. 69 Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment and exclusion from government healthcare programs.
A person or entity does not need to have actual knowledge of the 56 statute or specific intent to violate it in order to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment and exclusion from government healthcare programs.
As a result, increasingly high barriers are being erected to the entry of new products. 54 Additionally, we may develop companion diagnostic tests for use with our product candidates. We, or our collaborators, may be required to obtain coverage and reimbursement for these tests separate and apart from the coverage and reimbursement we seek for our product candidates, once approved.
As a result, increasingly high barriers are being erected to the entry of new products. Additionally, we may develop companion diagnostic tests for use with our product candidates. We, or our collaborators, may be required to obtain coverage and reimbursement for these tests separate and apart from the coverage and reimbursement we seek for our product candidates, once approved.
The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new. The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited.
The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new. The scientific evidence to support the feasibility of developing product candidates 30 based on these discoveries is both preliminary and limited.
It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. 65 In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
If we are not able to effectively expand our organization by hiring new employees and/or engaging additional third-party service providers, we may not be able to successfully implement the tasks necessary to further develop and commercialize PC14586 and future product candidates and, accordingly, may not achieve our research, development and commercialization goals. 73 Our internal computer systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.
If we are not able to effectively expand our organization by hiring new employees and/or engaging additional third-party service providers, we may not be able to successfully implement the tasks necessary to further develop and commercialize PC14586 and future product candidates and, accordingly, may not achieve our research, development and commercialization goals. 61 Our internal computer systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.
Even when HIPAA does not apply, according to the Federal Trade Commission, or FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C § 45(a).
Even when HIPAA does not apply, according to the Federal Trade Commission, or FTC, failing to take 58 appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C § 45(a).
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. 60 We may also submit marketing applications in other countries.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. We may also submit marketing applications in other countries.
You should carefully consider the risks described below, as well as the other information in this Annual Report on Form 10-K, including our financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K and in our other filings with the SEC, before deciding whether to invest in our common stock.
You should carefully consider the risks described below, as well as the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K and in our other filings with the SEC, before deciding whether to invest in our common stock.
We announced preliminary results from the Phase 1/2 clinical trial of PC14586 in June 2022, and have entered into a clinical trial collaboration with Merck to evaluate PC14586 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA, in patients with advanced solid tumors harboring a p53 Y220C mutation.
We announced preliminary results from the Phase 1/2 clinical trial of PC14586 in June 2022, and entered into a clinical trial collaboration with Merck to evaluate PC14586 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA, in patients with advanced solid tumors harboring a p53 Y220C mutation.
Our inability to promptly obtain coverage and profitable reimbursement rates third-party payors for any approved products that we develop could have a material adverse effect on our business, financial condition and results of operations, our ability to raise capital needed to commercialize products and our overall financial condition.
Our inability to promptly obtain coverage and profitable reimbursement rates from third-party payors for any approved products that we develop could have a material adverse effect on our business, financial condition and results of operations, our ability to raise capital needed to commercialize products and our overall financial condition.
If we are not able to obtain required regulatory approvals for our product candidates, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired; 34 • we currently rely, and plan to rely in the future, on third parties to conduct and support preclinical and clinical development, and these third parties may not meet expectations; • if we are unable to obtain and maintain sufficient patent and other intellectual property protection for our product candidates and technology, our competitors could develop and commercialize products and technology similar or identical to ours; • our success depends in part on our ability to protect our intellectual property; and • our ability to develop companion diagnostics with third party collaborators, which must also separately be approved as medical devices by the FDA.
If we are not able to obtain required regulatory approvals for our product candidates, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired; 25 • we currently rely, and plan to rely in the future, on third parties to conduct and support preclinical and clinical development, and these third parties may not meet expectations; • if we are unable to obtain and maintain sufficient patent and other intellectual property protection for our product candidates and technology, our competitors could develop and commercialize products and technology similar or identical to ours; • our success depends in part on our ability to protect our intellectual property; and • our ability to develop companion diagnostics with third party collaborators, which must also separately be approved as medical devices by the FDA.
The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates, if approved, and generate revenue. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.
The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates, if approved, and generate revenue. 53 Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability. The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability. 55 The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
To the extent that any disruption or security incident were to result in a loss, destruction or alteration of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws. 74 Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach of our systems or third-party systems where information important to our business operations or commercial development is stored.
To the extent that any disruption or security incident were to result in a loss, destruction or alteration of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws. 62 Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach of our systems or third-party systems where information important to our business operations or commercial development is stored.
Our lead product candidate, PC14586, is in early clinical development and all of our other product candidates are in discovery or preclinical development and their risk of failure is high. It is impossible to predict when or if any of our product candidates will prove effective and safe in humans or will receive regulatory approval.
Our lead product candidate, PC14586, is in clinical development and all of our other product candidates are in discovery or preclinical development and their risk of failure is high. It is impossible to predict when or if any of our product candidates will prove effective and safe in humans or will receive regulatory approval.
Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock. 97 Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock. 84 Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage 42 and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be expected, and our competitive position, business, financial condition, results of operations and prospects could be materially adversely affected. 89 Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.
Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be expected, and our competitive position, business, financial condition, results of operations and prospects could be materially adversely affected. 76 Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.
We may choose to challenge a third party’s patent in patent opposition proceedings in the EPO, or other foreign patent office. The costs of these opposition proceedings could be substantial, and may consume our time or other resources.
We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office, or EPO, or other foreign patent office. The costs of these opposition proceedings could be substantial, and may consume our time or other resources.
This will require us to be cognizant of the time from invention to filing of a patent application. 83 In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
This will require us to be cognizant of the time from invention to filing of a patent application. 70 In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
These upfront and milestone payments may vary significantly from period to period and any such variance could cause a significant fluctuation in our operating results from one period to the next. 99 In addition, we measure compensation cost for stock-based awards made to employees at the grant date of the award, based on the fair value of the award as determined by our board of directors, and recognize the cost as an expense over the employee’s requisite service period.
These upfront and milestone payments may vary significantly from period to period and any such variance could cause a significant fluctuation in our operating results from one period to the next. 86 In addition, we measure compensation cost for stock-based awards made to employees at the grant date of the award, based on the fair value of the award as determined by our board of directors, and recognize the cost as an expense over the employee’s requisite service period.
If it is later determined that our activities or product candidates infringe this intellectual property we may be liable for damages, enhanced damages or subjected to an injunction, any of which could have a material adverse effect on our business. 85 The patent position of pharmaceutical and biotechnology companies generally is highly uncertain and involves complex legal and factual questions for which many legal principles remain unresolved.
If it is later determined that our activities or product candidates infringe this intellectual property we may be liable for damages, enhanced damages or subjected to an injunction, any of which could have a material adverse effect on our business. 72 The patent position of pharmaceutical and biotechnology companies generally is highly uncertain and involves complex legal and factual questions for which many legal principles remain unresolved.
The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock. 96 We do not intend to pay dividends on our capital stock, so any returns will be limited to the value of our stock.
The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock. 83 We do not intend to pay dividends on our capital stock, so any returns will be limited to the value of our stock.
The expiration of these patents could also have a similar material adverse effect on our business, results of operations, financial condition and prospects. 86 Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
The expiration of these patents could also have a similar material adverse effect on our business, results of operations, financial condition and prospects. 73 Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. 87 Any issued patents we may own covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad, including the USPTO.
In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. 74 Any issued patents we may own covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad, including the USPTO.
Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace. 92 If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace. 79 If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 95 Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 82 Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
For example, we may in the future enter into license agreements that are not assignable or transferable, or that require the licensor’s express consent in order for an assignment or transfer to take place. 93 Risks Related to Ownership of Our Common Stock The price of our stock may be volatile, and you could lose all or part of your investment.
For example, we may in the future enter into license agreements that are not assignable or transferable, or that require the licensor’s express consent in order for an assignment or transfer to take place. 80 Risks Related to Ownership of Our Common Stock The price of our stock may be volatile, and you could lose all or part of your investment.
Such a loss of patent protection would have a material adverse impact on our business. 88 Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
Such a loss of patent protection would have a material adverse impact on our business. 75 Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
However, there can be no assurances that we will be able to obtain orphan designations for our product candidates. 58 In the United States, ODD entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.
However, there can be no assurances that we will be able to obtain orphan designations for our product candidates. 47 In the United States, ODD entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.
The principal factors and uncertainties that make investing in our common stock risky include, among others: • we have a limited operating history, have not completed any clinical trials, and have no products approved for commercial sale; • we have incurred significant losses since our inception, and we expect to incur significant net losses for the foreseeable future and may not be able to achieve or sustain revenue or profitability in the future; • we have not generated any revenue from our product candidates and may never generate revenue or be profitable and our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery, development and commercialization of our product candidates; • we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success; • we will require substantial additional capital to finance our operations; • our discovery and preclinical and clinical development is focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs targeting p53 hotspot mutations and other p53-related cancers is novel, may never lead to marketable products and may not ultimately represent a significant market; • we are very early in our development efforts and are substantially dependent on our lead product candidate, PC14586.
The principal factors and uncertainties that make investing in our common stock risky include, among others: • we have a limited operating history, have not completed any clinical trials, and have no products approved for commercial sale; • we have incurred significant losses since our inception, and we expect to incur significant net losses for the foreseeable future and may not be able to achieve or sustain revenue or profitability in the future; • we have not generated any revenue from our product candidates and may never generate revenue or be profitable and our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery, development and commercialization of our product candidates; • we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success; • we will require substantial additional capital to finance our operations; • our discovery and preclinical and clinical development is focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs targeting p53 hotspot mutations and other p53-related cancers is novel, may never lead to marketable products and may not ultimately represent a significant market; • while we continue to expand our development efforts, we are substantially dependent on our lead product candidate, PC14586 (rezatapopt).
In September 2020, our lead product candidate, PC14586, received authorization to proceed under an investigational new drug application, or IND, with the FDA. Then, in October 2020, we received Fast Track designation for PC14586, from the FDA, and in the fourth quarter of 2020, we initiated patient dosing in our Phase 1/2 clinical trial of PC14586.
Our lead product candidate, PC14586, received authorization to proceed under an investigational new drug application, or IND, with the FDA in September 2020 and then received Fast Track designation in October 2020. In the fourth quarter of 2020, we initiated patient dosing in our Phase 1/2 clinical trial of PC14586.
If the competitor files a patent application on such an advance before we do, then we may no longer be able to protect the technology, we may require a license from the competitor, and if the license is not available on commercially-viable terms, then we may not be able to launch our product. 84 In the future we may in-license intellectual property from licensors.
If the competitor files a patent application on such an advance before we do, then we may no longer be able to protect the technology, we may require a license from the competitor, and if the license is not available on commercially-viable terms, then we may not be able to launch our product. 71 In the future we may in-license intellectual property from licensors.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 90 If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 77 If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, these factors include: • the results of our ongoing, planned or any future preclinical studies, clinical trials or clinical development programs; • the commencement, enrollment, or results of clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • adverse results or delays in preclinical studies and clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial, including due to the suspension of a clinical trial by the FDA or other regulatory authorities; • any delay in our regulatory filings or any adverse regulatory decisions, including failure to receive regulatory approval of our product candidates; • changes in laws or regulations applicable to our products, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers or our manufacturing plans; • our inability to obtain adequate product supply for any licensed product or inability to do so at acceptable prices; • our inability to establish collaborations if needed; • our failure to commercialize our product candidates; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • the size and growth of our initial cancer target markets; • our ability to successfully treat additional types of cancers or at different stages; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or immunotherapy in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; 94 • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to intellectual property or proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including intellectual property or stockholder litigation; • the impact of any natural disasters or public health emergencies, such as the COVID-19 pandemic; • general economic, political, industry and market conditions, including the rising rate of inflation and the Ukraine-Russia war; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, these factors include: • the results of our ongoing, planned or any future preclinical studies, clinical trials or clinical development programs; • the commencement, enrollment, or results of clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • adverse results or delays in preclinical studies and clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial, including due to the suspension of a clinical trial by the FDA or other regulatory authorities; • any delay in our regulatory filings or any adverse regulatory decisions, including failure to receive regulatory approval of our product candidates; • changes in laws or regulations applicable to our products, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers or our manufacturing plans; • our inability to obtain adequate product supply for any licensed product or inability to do so at acceptable prices; • our inability to establish collaborations if needed; • our failure to commercialize our product candidates; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • the size and growth of our initial cancer target markets; • our ability to successfully treat additional types of cancers or at different stages; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or immunotherapy in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; 81 • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to intellectual property or proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including intellectual property or stockholder litigation; • the impact of any natural disasters or public health emergencies; • general economic, political, industry and market conditions, including the rising rate of inflation, the Ukraine-Russia war and the ongoing conflict between Israel and Hamas; and • other events or factors, many of which are beyond our control.
These current or future laws and regulations may impair our research, development or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 71 We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations.
These current or future laws and regulations may impair our research, development or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 59 We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations.
HIPAA impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization.
HIPAA imposes requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization.
We are also required to disclose changes made in our internal controls and procedures on a quarterly basis. 98 The requirements of these rules and regulations are difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources.
We are also required to disclose changes made in our internal controls and procedures on a quarterly basis. 85 The requirements of these rules and regulations are difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources.
Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital. 36 We have not generated any revenue from our product candidates and may never generate revenue or be profitable.
Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital. 27 We have not generated any revenue from our product candidates and may never generate revenue or be profitable.
There is also a risk that due to federal or state regulatory changes, such as suspensions on the use of NOLs, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. 75 Changes in tax laws or regulations that are applied adversely to could have a material adverse effect on our business, financial condition and results of operations.
There is also a risk that due to federal or state regulatory changes, such as suspensions on the use of NOLs, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. 63 Changes in tax laws or regulations that are applied adversely to us could have a material adverse effect on our business, financial condition and results of operations.
The FDA may rescind the Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. 59 We may also seek breakthrough therapy designation for any product candidate that we develop.
The FDA may rescind the Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. 48 We may also seek breakthrough therapy designation for any product candidate that we develop.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which require applicable manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other non-physician healthcare providers (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as ownership and investment interests held by physicians, as defined by law, and their immediate family members; 68 • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws requiring the registration of pharmaceutical sales representatives.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which require applicable manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other non-physician healthcare providers (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as ownership and investment interests held by physicians, as defined by law, and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws requiring the registration of pharmaceutical sales representatives. 57 Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs.
The results of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or other comparable foreign regulatory authorities. Successful preclinical studies and clinical trials cannot provide assurance of successful commercialization.
The results of preclinical testing and earlier clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or other comparable foreign regulatory authorities. Successful preclinical studies and clinical trials cannot provide assurance of successful commercialization.
If we are unable to advance PC14586 or any of our future product candidates through clinical development, obtain regulatory approval and ultimately commercialize PC14586 or any of our future product candidates, or experience significant delays in doing so, our business, financial condition and results of operations will be materially adversely affected. We are very early in our development efforts.
If we are unable to advance PC14586 or any of our future product candidates through clinical development, obtain regulatory approval and ultimately commercialize PC14586 or any of our future product candidates, or experience significant delays in doing so, our business, financial condition and results of operations will be materially adversely affected.
Any disruption in production or inability of our manufacturers in China to produce adequate quantities to meet our needs, whether as a result of a natural disaster or other causes, including COVID-19, could impair our ability to operate our business on a day-to-day basis and to continue our development of our product candidates.
Any disruption in production or inability of our manufacturers in China to produce adequate quantities to meet our needs, whether as a result of a natural disaster or other causes could impair our ability to operate our business on a day-to-day basis and to continue our development of our product candidates.
We recently opened a separate arm within the existing Phase 1/2 clinical trial to evaluate the combination of PC14586 with Merck’s anti-PD1 therapy, KEYTRUDA, in patients with advanced solid tumors harboring a p53 Y220C mutation. We also intend to develop our current or future product candidates in combination with one or more other approved cancer therapies or therapies in development.
We are conducting a separate arm within the existing Phase 1/2 clinical trial to evaluate the combination of PC14586 with Merck’s anti-PD1 therapy, KEYTRUDA, in patients with advanced solid tumors harboring a p53 Y220C mutation. We also intend to develop our current or future product candidates in combination with one or more other approved cancer therapies or therapies in development.
As a result of the COVID-19 pandemic, we may experience disruptions that could severely impact our business, preclinical studies and clinical trials, including: • delays or difficulties in enrolling and retaining patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; • interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines; • interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; • interruptions in preclinical studies due to restricted or limited operations at our laboratory facility; • limitations on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • interruption or delays to our sourced discovery and clinical activities; and • changes in clinical site procedures and requirements as well as regulatory requirements for conducting clinical trials during the pandemic.
We may experience disruptions that could severely impact our business and clinical trials due to global pandemics, public health concerns or other public emergencies, including: • delays or difficulties in enrolling and retaining patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; 34 • interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines; • interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; • interruptions in preclinical studies due to restricted or limited operations at our laboratory facility; • limitations on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • interruption or delays to our sourced discovery and clinical activities; and • changes in clinical site procedures and requirements as well as regulatory requirements for conducting clinical trials during the pandemic.
Investment in biopharmaceutical product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We are still in the early stages of development of our product candidates.
Investment in biopharmaceutical product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We are still in the process of developing our product candidates.
Our federal NOL carryforwards will begin to expire in 2033, and our federal credit carryforwards will begin to expire in 2034, if not fully utilized. Some of our state NOL carryforwards and state credit carryforwards may also expire unused.
Our federal NOL carryforwards will begin to expire in 2033, and our federal research and development credit carryforwards will begin to expire in 2034, if not fully utilized. Some of our state NOL carryforwards and state credit carryforwards may also expire unused.
Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities outside the United States as medical devices and require separate regulatory approval or clearance prior to commercialization. Moreover, the FDA generally requires the contemporaneous approval of companion diagnostics and the associated therapeutic.
Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities outside the United States as medical devices (or in vitro diagnostic devices) and require separate regulatory approval or clearance prior to commercialization. Moreover, the FDA generally requires the contemporaneous approval of companion diagnostics and the associated therapeutic.
Patient enrollment for our current or any future clinical trials may be affected by other factors, including: • size and nature of the patient population; • severity of the disease under investigation; • availability and efficacy of approved drugs for the disease under investigation; • patient eligibility criteria for the trial in question as defined in the protocol; • perceived risks and benefits of the product candidate under study; 45 • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved or future product candidates being investigated for the indications we are investigating; • clinicians’ willingness to screen their patients for biomarkers to indicate which patients may be eligible for enrollment in our clinical trials; • delays in or temporary suspension of the enrollment of patients in our clinical trials due to the COVID-19 pandemic; • ability to obtain and maintain patient consents; • patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • proximity and availability of clinical trial sites for prospective patients; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion, including as a result of contracting COVID-19 or other health conditions or being forced to quarantine, or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials.
Patient enrollment for our current or any future clinical trials may be affected by other factors, including: • size and nature of the patient population; • severity of the disease under investigation; • availability and efficacy of approved drugs for the disease under investigation; • patient eligibility criteria for the trial in question as defined in the protocol; • perceived risks and benefits of the product candidate under study; 35 • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved or future product candidates being investigated for the indications we are investigating; • clinicians’ willingness to screen their patients for biomarkers to indicate which patients may be eligible for enrollment in our clinical trials; • delays in or temporary suspension of the enrollment of patients in our clinical trials due to a global pandemic or other public health emergencies; • ability to obtain and maintain patient consents; • patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • proximity and availability of clinical trial sites for prospective patients; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion, including as a result of other health conditions, or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials.
Our anticipated reliance on a limited number of third-party manufacturers exposes us to a number of risks, including the following: • we may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must inspect any manufacturers for cGMP compliance as part of our marketing application; • a new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our product candidates; • our third-party manufacturers might be unable to timely manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any; • contract manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately; • our future contract manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products, if any; • manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards and we have no control over third-party manufacturers’ compliance with these regulations and standards; • we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates; • our third-party manufacturers could breach or terminate their agreements with us; 78 • raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects; • our contract manufacturers and critical reagent suppliers may be subject to inclement weather, as well as natural or man-made disasters; and • our contract manufacturers may have unacceptable or inconsistent product quality success rates and yields, and we have no direct control over our contract manufacturers’ ability to maintain adequate quality control, quality assurance and qualified personnel.
Our anticipated reliance on a limited number of third-party manufacturers exposes us to a number of risks, including the following: • we may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must inspect any manufacturers for cGMP compliance as part of our marketing application; • a new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our product candidates; • our third-party manufacturers might be unable to timely manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any; • contract manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately; • our future contract manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products, if any; • manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards and we have no control over third-party manufacturers’ compliance with these regulations and standards; • we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates; • our third-party manufacturers could breach or terminate their agreements with us; • raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects; • our contract manufacturers and critical reagent suppliers may be subject to inclement weather, as well as natural or man-made disasters; and • our contract manufacturers may have unacceptable or inconsistent product quality success rates and yields, and we have no direct control over our contract manufacturers’ ability to maintain adequate quality control, quality assurance and qualified personnel. 66 Our business could be materially adversely affected by business disruptions to our third-party providers that could materially adversely affect our potential future revenue and financial condition and increase our costs and expenses.
While our lead product candidate, PC14586, is still in early clinical development and although it has been generally well-tolerated per our preliminary data release, as is the case with all oncology drugs, it is likely that there may be significant side effects associated with its use.
While our lead product candidate, PC14586, is still in clinical development and although it has been generally well-tolerated per our preliminary and updated data releases, as is the case with all oncology drugs, it is likely that there may be significant side effects associated with its use.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval. As of December 31, 2022, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 83% of our voting stock.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval. As of December 31, 2023, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 21% of our voting stock.
We announced preliminary results for our Phase 1/2 clinical trial of our lead product candidate, PC14586, in June 2022. We are continuing to transition from a company with a research focus to a company capable of supporting clinical development and commercial activities.
We announced preliminary results for our Phase 1/2 clinical trial of our lead product candidate, PC14586 (rezatapopt), in June 2022, and announced updated Phase 1 results in October 2023. We are continuing to transition from a company with a research focus to a company capable of supporting clinical development and commercial activities.
As of December 31, 2022, we had an accumulated deficit of $241.0 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
As of December 31, 2023, we had an accumulated deficit of $310.0 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
Companion diagnostics are subject to regulation as medical devices and must themselves be approved for marketing by the FDA and comparable foreign regulatory agencies before we may commercialize such companion diagnostics with our product candidates.
Companion diagnostics are subject to regulation as medical devices (or in vitro diagnostic devices) and must themselves be approved for marketing by the FDA and comparable foreign regulatory agencies before we may commercialize such companion diagnostics with our product candidates.
Further, even if our Phase 1/2 trial for PC14586 is successful, the FDA may not agree that such study can serve as a pivotal study, which would require us to conduct additional clinical trials prior to approval. We are very early in our development efforts and are substantially dependent on our lead product candidate, PC14586.
Further, even if our Phase 1/2 trial for PC14586 is successful, the FDA may not agree that such study can serve as a pivotal study, which would require us to conduct additional clinical trials prior to approval. We are substantially dependent on our lead product candidate, PC14586.
In addition, we recently opened a separate arm within the existing Phase 1/2 clinical trial to evaluate the combination of PC14586 with Merck’s anti-PD1 therapy, KEYTRUDA, and we may study PC14586 in combination with other additional therapies, which may exacerbate adverse events associated with the therapy.
In addition, we are conducting a separate arm within the existing Phase 1/2 clinical trial to evaluate the combination of PC14586 with 39 Merck’s anti-PD1 therapy, KEYTRUDA, and we may study PC14586 in combination with other additional therapies, which may exacerbate adverse events associated with the therapy.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls; • manufacturing delays and supply disruptions where regulatory inspections identify observations of noncompliance requiring remediation; • revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings; • imposition of a REMS, which may include distribution or use restrictions; • requirements to conduct additional post-market clinical trials to assess the safety of the product; • fines, warning or untitled letters or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of our product candidates; and • injunctions or the imposition of civil or criminal penalties. 64 The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls; • manufacturing delays and supply disruptions where regulatory inspections identify observations of noncompliance requiring remediation; • revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings; • imposition of a REMS, which may include distribution or use restrictions; • requirements to conduct additional post-market clinical trials to assess the safety of the product; • fines, warning or untitled letters or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of our product candidates; and • injunctions or the imposition of civil or criminal penalties.
Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy and obtain marketing approval. 80 Further, collaborations involving our product candidates are subject to numerous risks, which may include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization of our product candidates based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
Further, collaborations involving our product candidates are subject to numerous risks, which may include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization of our product candidates based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution; 68 • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
In addition, patients may not be able to visit clinical trial sites for dosing or data collection purposes due to limitations on travel and physical distancing imposed or recommended by federal or state governments or patients’ reluctance to visit the clinical trial sites during the pandemic. The drop-out rates in our clinical trials may be increased during the pandemic.
In addition, patients may not be able to visit clinical trial sites for dosing or data collection purposes due to limitations on travel and physical distancing imposed or recommended by federal or state governments or patients’ reluctance to visit the clinical trial sites during the pandemic.
The success of our product candidates will depend on several factors, including the following: • our ability to continue our business operations and product candidate research and development, and adapt to any changes in the regulatory approval process, manufacturing supply or clinical trial requirements and timing due to the ongoing COVID-19 pandemic and otherwise, including complying with new regulatory guidance or requirements on conducting clinical trials during the COVID-19 pandemic; 40 • timely and successful completion of preclinical studies and clinical trials; • receipt of authorization to proceed under INDs for our planned clinical trials or future clinical trials; • FDA acceptance of our tumor-agnostic development strategy; • successful patient enrollment in and completion of clinical trials, which may be impacted by the COVID-19 pandemic; • successful development with third party collaborators of companion diagnostics for use with our product candidates; • safety, tolerability and efficacy profiles for our product candidates that are satisfactory to the FDA or any foreign regulatory authority for marketing approval; • receipt of marketing approvals for our product candidates and any companion diagnostics from applicable regulatory authorities, which must be approved contemporaneously; • completion of any required post-marketing approval commitments to applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates, if any product candidates are approved; • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other cancer therapies; • obtaining and maintaining third-party coverage and adequate reimbursement; and • maintaining a continued acceptable safety profile of our products following approval.
The success of our product candidates will depend on several factors, including the following: • timely and successful completion of our ongoing clinical trials; • our ability to continue our business operations and product candidate research and development, and adapt to any changes in the regulatory approval process, manufacturing supply or clinical trial requirements and timing stemming from a global pandemic or other public health emergencies; • receipt of authorization to proceed under INDs for our planned clinical trials or future clinical trials; • FDA acceptance of our tumor-agnostic development strategy; • the initiation and successful patient enrollment in and completion of additional preclinical and clinical trials of our product candidates on a timely basis; • successful development with third party collaborators of companion diagnostics for use with our product candidates; • safety, tolerability and efficacy profiles for our product candidates that are satisfactory to the FDA or any foreign regulatory authority for marketing approval; 31 • receipt of marketing approvals for our product candidates and any companion diagnostics from applicable regulatory authorities, which must be approved contemporaneously; • completion of any required post-marketing approval commitments to applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates, if any product candidates are approved; • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other cancer therapies; • obtaining and maintaining third-party coverage and adequate reimbursement; and • maintaining a continued acceptable safety profile of our products following approval.
Prior to the closing of our initial public offering in September 2020, there was no public trading market for our common stock. Although our common stock is listed on the Nasdaq Global Select Market, the market for our shares has demonstrated varying levels of trading activity.
An active trading market for our common stock may not be sustained. Prior to the closing of our initial public offering in September 2020, there was no public trading market for our common stock. Although our common stock is listed on the Nasdaq Global Select Market, the market for our shares has demonstrated varying levels of trading activity.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our current facilities are suitable and adequate for our current and near term conduct of our business operations and that suitable additional or substitute space at commercially reasonable terms will be available as needed to accommodate any future expansion of our operations.
Biggest changeWe believe that our current facility is suitable and adequate for our current and near term conduct of our business operations and that suitable additional or substitute space at commercially reasonable terms will be available as needed to accommodate any future expansion of our operations.
Removed
The Company leases a facility at 8 Clarke Drive, Cranbury, New Jersey 08512, containing 18,446 square feet of office and laboratory space pursuant to a lease agreement that expires in June 2022 with an option to renew on a month-to-month basis for up to one year.
Removed
We also lease 6,297 square feet of laboratory space at 3000 Eastpark, South Brunswick, New Jersey 08512 pursuant to a lease that expires in July 2022 with an option to renew on a month-to-month basis for up to one year.
Removed
In January 2022, the Company signed lease extensions for both leases through June 2023 and July 2023, respectively, with the option to terminate upon 120 days of written notice, with an increase in base rent as per the lease extension.
Removed
Additionally, we lease 3,292 square feet of office space at 420 Bedford Drive, Lexington, Massachusetts 02420 pursuant to a lease that expires in August 2023, with an option to extend for an additional three years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of February 28, 2023, we were not a party to any legal matters or claims that, in the opinion of management, are likely to have a material effect on our business.
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of February 29, 2024, we were not a party to any legal matters or claims that, in the opinion of management, are likely to have a material effect on our business.
Regardless of outcome, litigation, or other legal proceedings can have an adverse impact on us because of legal fees and settlement costs, diversion of management resources, and other factors. Item 4. Reserved. 101 PART II
Regardless of outcome, litigation, or other legal proceedings can have an adverse impact on us because of legal fees and settlement costs, diversion of management resources, and other factors. Item 4. Reserved. 89 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn October 4, 2021, our shelf registration statement on Form S-3 (File No. 333-260012) was automatically declared effective by the SEC for our future follow-on offering. The potential gross proceeds from this future offering are approximately $150.0 million. The company has not issued any shares of common stock pursuant to the offering.
Biggest changeWe have a shelf registration statement on Form S-3 (File No. 333-260012), which was declared effective by the SEC on April 28, 2022, pursuant to which we may offer and sell, from time to time, up to $200 million of common stock, preferred stock, various series of debt securities and warrants to purchase any of such securities in one or more registered offerings, and up to $150 million of common stock pursuant to our at-the-market equity offering program, dated October 4, 2021, or the ATM Program.
Recent Sales of Unregistered Securities There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2022. Use of Proceeds On September 24, 2020, our registration statement on Form S-1 (File No. 333-248627) relating to our IPO of common stock was declared effective by the SEC.
Recent Sales of Unregistered Securities There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2023. Use of Proceeds On September 24, 2020, our registration statement on Form S-1 (File No. 333-248627) relating to our IPO of common stock was declared effective by the SEC.
Holders As of February 28, 2023, there were approximately six holders of record of our common stock. We believe actual number of stockholders is greater than this number of record holders. The approximate number of holders includes holders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders As of February 29, 2024, there were approximately 7 holders of record of our common stock. We believe actual number of stockholders is greater than this number of record holders. The approximate number of holders includes holders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
There has been no material change in the planned use of proceeds from the follow-on offering as described in the Form S-3 Registration Statement. None of the expenses associated with the follow-on offering were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to our affiliates.
There has been no material change in the planned use of proceeds as described in the shelf registration statement. None of the expenses associated with the follow-on offering were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to our affiliates. 90 Purchases of Equity Securities by the Issuer and Affiliated Purchases None.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchases None. Item 6. R eserved. 102
Added
During the year ended December 31, 2023, we sold 5,149,446 shares of common stock under the ATM Program at a weighted average price of $6.97 per share for $35.1 million in proceeds, net of fees. As of December 31, 2023, we have approximately $113.8 million remaining in gross proceeds available for future issuances of common stock under the ATM Program.

Item 7. Management's Discussion & Analysis

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

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Biggest changeComparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations (in thousands): Year Ended December 31, Statement of operations data: 2022 2021 Change Operating expenses: Research and development $ 51,988 $ 36,493 $ 15,495 General and administrative 25,052 21,800 3,252 Total operating expenses 77,040 58,293 18,747 Loss from operations (77,040 ) (58,293 ) (18,747 ) Other income (expense): Interest income, net 3,627 449 3,178 Other income (expense), net 87 21 66 Total other income (expense) 3,714 470 3,244 Loss before (benefit) provision for income taxes (73,326 ) (57,823 ) (15,503 ) (Benefit) provision for income taxes (9 ) 23 (32 ) Net loss $ (73,317 ) $ (57,846 ) $ (15,471 ) Research and Development Expenses The following table summarizes our research and development expenses incurred during the periods indicated (in thousands): Year Ended December 31, Statement of operations data: 2022 2021 Change Research $ 6,712 $ 8,296 $ (1,584 ) Development 32,470 19,436 13,034 Personnel related 9,340 7,321 2,019 Stock-based compensation 3,466 1,440 2,026 Total $ 51,988 $ 36,493 $ 15,495 105 Research and development expenses were $52.0 million for the year ended December 31, 2022, compared to $36.5 million for the year ended December 31, 2021.
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations (in thousands): Year Ended December 31, Statement of operations data: 2023 2022 Change Operating expenses: Research and development $ 55,885 $ 51,988 $ 3,897 General and administrative 24,247 25,052 (805 ) Total operating expenses 80,132 77,040 3,092 Loss from operations (80,132 ) (77,040 ) (3,092 ) Other income (expense): Interest income, net 11,171 3,627 7,544 Other income (expense), net 3 87 (84 ) Total other income (expense) 11,174 3,714 7,460 Loss before (benefit) provision for income taxes (68,958 ) (73,326 ) 4,368 (Benefit) provision for income taxes 2 (9 ) 11 Net loss $ (68,960 ) $ (73,317 ) $ 4,357 Research and Development Expenses The following table summarizes our research and development expenses incurred during the periods indicated (in thousands): Year Ended December 31, Statement of operations data: 2023 2022 Change Research $ 5,307 $ 6,712 $ (1,405 ) Development 31,740 32,470 (730 ) Personnel related 13,320 9,340 3,980 Stock-based compensation 5,518 3,466 2,052 Total $ 55,885 $ 51,988 $ 3,897 94 Research and development expenses were $55.9 million for the year ended December 31, 2023, compared to $52.0 million for the year ended December 31, 2022.
The change in our net operating assets and liabilities was primarily due to a decrease in prepaid expenses and other assets, an increase in accrued expenses, and an increase in outstanding payables.
The change in our net operating assets and liabilities was primarily due to an increase in prepaid expenses and other assets, an decrease in accrued expenses, and a decrease in outstanding payables.
Investing Activities Our investing activities used $1.4 million of cash during the year ended December 31, 2022, which consisted primarily of purchases of marketable securities of $229.2 million, along with purchase of property and equipment of $8.0 million, partially offset by maturities of marketable securities of $235.8 million.
Our investing activities used $1.4 million of cash during the year ended December 31, 2022, which consisted primarily of purchases of marketable securities of $229.2 million, along with purchase of property and equipment of $8.0 million, partially offset by maturities of marketable securities of $235.8 million.
Financing Activities Our financing activities provided $1.0 million of cash during the year ended December 31, 2022, which consisted primarily of common stock issued under the employee stock purchase plan and proceeds from the exercise of stock options.
Our financing activities provided $1.0 million of cash during the year ended December 31, 2022, which consisted primarily of common stock issued under the employee stock purchase plan and proceeds from the exercise of stock options.
The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time.
The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time.
We initiated a Phase 1/2 clinical trial in October 2020 for our lead product candidate, PC14586. In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation.
We initiated a Phase 1/2 clinical trial, PYNNACLE, in October 2020 for our lead product candidate, PC14586. In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation.
A discussion of our financial performance for the year ended December 31, 2022 as compared to the year ended December 31, 2021 appears below under the captions “Results of Operations” and “Liquidity and Capital Resources.” A discussion of our financial performance for the year ended December 31, 2021 compared to the year ended December 31, 2020 can be found in our Annual Report filed on Form 10-K, in the “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations”, under the same captions, filed with the SEC on March 1, 2022, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at ir.pmvpharma.com/financial-information/sec-filings .
A discussion of our financial performance for the year ended December 31, 2023 as compared to the year ended December 31, 2022 appears below under the captions “Results of Operations” and “Liquidity and Capital Resources.” A discussion of our financial performance for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found in our Annual Report filed on Form 10-K, in the “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations”, under the same captions, filed with the SEC on March 1, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at ir.pmvpharma.com/financial-information/sec-filings .
In particular, with respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. Substantially all of our research and development costs are associated with our lead product candidate, PC14586.
In particular, with respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. Substantially all of our research and development costs are associated with our lead product candidate, PC14586 (rezatapopt).
We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects. 104 General and Administrative Expenses General and administrative expenses include personnel costs, expenses for outside professional services and other allocated expenses.
We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects. 93 General and Administrative Expenses General and administrative expenses include personnel costs, expenses for outside professional services and other allocated expenses.
Interest Income, Net Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and marketable securities and interest costs related to amortization of premiums and discounts on marketable securities.
Interest Income, Net Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and marketable securities and interest costs related to accretion of premiums and amortization of discounts on marketable securities.
We do not currently have any product candidates approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. We initiated a Phase 1/2 clinical trial in October 2020 for our lead product candidate, PC14586.
We do not currently have any product candidates approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. We initiated a Phase 1/2 clinical trial, PYNNACLE, in October 2020 for our lead product candidate, PC14586 (rezatapopt).
Non-refundable research and development advance payments are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or services are performed. 109 As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses.
Non-refundable research and development advance payments are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or services are performed. As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
We expect to continue to incur significant losses for the foreseeable future. 103 Our ability to generate product revenue will depend on the successful development, regulatory approval, and eventual commercialization of one or more of our product candidates.
We expect to continue to incur significant losses for the foreseeable future. 92 Our ability to generate product revenue will depend on the successful development, regulatory approval, and eventual commercialization of one or more of our product candidates.
Critical Accounting and Estimates The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes.
At this time, due to the inherently unpredictable nature of preclinical and clinical development and given the early stage of our product candidates, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval and commercialize our current product candidates or any future product candidates, if at all.
At this time, due to the inherently unpredictable nature of preclinical and clinical development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval and commercialize our current product candidates or any future product candidates, if at all.
As we are at a very early stage of development, we do not allocate our costs by product candidate or development program, as a significant amount of research and development expenses include compensation costs, materials, supplies, depreciation on and maintenance of research equipment, and the cost of services provided by outside contractors, which are not tracked by product candidate or development program.
We do not allocate our costs by product candidate or development program, as a significant amount of research and development expenses include compensation costs, materials, supplies, depreciation on and maintenance of research equipment, and the cost of services provided by outside contractors, which are not tracked by product candidate or development program.
Revenue To date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future.
Components of Results of Operations Revenue To date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future.
Interest Income, Net Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and marketable securities and interest costs related to amortization of premiums and discounts on marketable securities. Interest income, net was $3.7 million for the year ended December 31, 2022, compared to $0.5 million for the year ended December 31, 2021.
Interest Income, Net Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and marketable securities and interest costs related to amortization of premiums and discounts on marketable securities. Interest income, net was $11.2 million for the year ended December 31, 2023, compared to $3.7 million for the year ended December 31, 2022.
In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation. We dosed our first patient in this clinical trial in the fourth quarter of 2020. In June 2022, we presented our initial Phase 1 clinical data for PC14586.
In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation. We dosed our first patient in this clinical trial in the fourth quarter of 2020.
We have leveraged more than four decades of research experience and developed unique insights into p53 to create a precision oncology platform designed to generate selective, small molecule, tumor-agnostic therapies that structurally correct specific mutant p53 proteins to restore their wild-type function.
We have leveraged more than four decades of research experience and developed unique insights into p53 to create a precision oncology platform designed to generate selective, small molecule, tumor-agnostic therapies that structurally correct specific mutant p53 proteins to restore their wild-type function. We are deploying our precision oncology platform to target p53 mutations and other p53-related cancers.
We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. As of December 31, 2022, we had cash, cash equivalents, and marketable securities of $243.5 million and an accumulated deficit of $241.0 million.
We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $228.6 million and an accumulated deficit of $310.0 million.
These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments. In January 2021, we signed a lease for 50,581 square feet of office and laboratory space at 1 Research Way in Princeton, New Jersey.
These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments. In January 2021, we signed a lease for 50,581 square feet of office and laboratory space at 1 Research Way in Princeton, New Jersey. That lease term extends through 2032, has a five-year extension option.
Our net losses were $73.3 million, $57.8 million, and $34.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, we had an accumulated deficit of $241.0 million.
Our net losses were $69.0 million, $73.3 million, and $57.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of $310.0 million.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Part I, Item 1A. Risk Factors” and in other parts of this Annual Report on Form 10-K.
This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Part I, Item 1A. Risk Factors” and in other parts of this Annual Report on Form 10-K.
We have incurred an accumulated deficit of $241.0 million through December 31, 2022. We expect to incur substantial additional losses in the future as we expand our research and development activities. Our cash operating expenditures were $63.8 million in 2022 and $46.6 million in 2021, and we expect to increase our investment in operations in 2023.
We have incurred an accumulated deficit of $310.0 million through December 31, 2023. We expect to incur substantial additional losses in the future as we expand our research and development activities. 96 Our cash operating expenditures were $55.7 million in 2023 and $63.8 million in 2022.
General and Administrative Expenses General and administrative expenses were $25.1 million for the year ended December 31, 2022, compared to $21.8 million for the year ended December 31, 2021.
General and Administrative Expenses General and administrative expenses were $24.2 million for the year ended December 31, 2023, compared to $25.1 million for the year ended December 31, 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with the financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
We have based this estimate on assumptions that may prove to be wrong, however, and we could use our capital resources sooner than we expect. 107 The timing and amount of our operating expenditures will depend largely on: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • the timing and amount of milestone payments we may receive under any future collaboration agreements; • our ability to maintain future licenses and research and development programs and to establish new collaboration and/or in-licensing arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims; • the cost and timing of regulatory approvals; and • our efforts to build out our new office and laboratory headquarters, enhance operational systems and hire additional personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company.
The timing and amount of our operating expenditures will depend largely on: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • the timing and amount of milestone payments we may receive under any future collaboration agreements; • our ability to maintain future licenses and research and development programs and to establish new collaboration and/or in-licensing arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims; • the cost and timing of regulatory approvals; • the costs involved in implementing our announced reduction in force and related reorganization; and • our efforts to manage our office and laboratory headquarters, enhance operational systems and hire additional personnel to support development of our product candidates and satisfy our obligations as a public company.
Our investing activities used $143.6 million of cash during the year ended December 31, 2021, which consisted primarily of purchases of marketable securities of $256.8 million, along with purchase of property and equipment of $1.3 million partially offset by maturities of marketable securities of $114.6 million.
Investing Activities Our investing activities used $50.5 million of cash during the year ended December 31, 2023, which consisted primarily of purchases of marketable securities of $220.5 million, along with purchase of property and equipment of $1.0 million, partially offset by maturities of marketable securities of $171.0 million.
The non-cash charges primarily consisted of stock-based compensation of $5.3 million, amortization of premiums on marketable securities and depreciation of $0.9 million, and non-cash lease expense of $1.0 million.
The non-cash charges primarily consisted of stock-based compensation of $12.4 million and depreciation of $1.3 million, partially offset by non-cash lease income of $0.4 million and accretion of premiums on marketable securities of $5.4 million.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of our operations. Research and Development Costs, Accrued Research and Development Costs and Related Prepaid Expenses Research and development costs are expensed as incurred.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of our operations.
Cash Flows The following table summarizes our cash flows for the period indicated (in thousands): Year Ended December 31, 2022 2021 2020 Cash used in operating activities $ (63,760 ) $ (46,571 ) $ (32,739 ) Cash (used in) provided by investing activities (1,368 ) (143,584 ) 27,911 Cash provided by financing activities 958 2,022 292,972 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (64,170 ) $ (188,133 ) $ 288,144 Operating Activities Net cash used in operating activities for the year ended December 31, 2022, was $63.8 million, which consisted primarily of net loss of $73.3 million decreased by non-cash charges of $10.1 million and a net change of $0.6 million in our net operating assets.
Cash Flows The following table summarizes our cash flows for the period indicated (in thousands): Year Ended December 31, 2023 2022 2021 Cash used in operating activities $ (55,657 ) $ (63,760 ) $ (46,571 ) Cash used in investing activities (50,545 ) (1,368 ) (143,584 ) Cash provided by financing activities 35,577 958 2,022 Impact of exchange rates on cash, cash equivalents, and restricted cash 34 — — Net (decrease) increase in cash, cash equivalents, and restricted cash $ (70,591 ) $ (64,170 ) $ (188,133 ) 97 Operating Activities Net cash used in operating activities for the year ended December 31, 2023, was $55.7 million, which consisted primarily of net loss of $69.0 million decreased by non-cash charges of $7.9 million and a net change of $5.4 million in our net operating assets and liabilities.
The increase of $3.2 million in 2022 is driven by increased interest rates from cash investments in marketable securities and U.S. treasuries and was partially offset by lower average balances in cash and investments in marketable securities.
The increase of $7.5 million in 2023 is driven by increased interest rates from cash investments in marketable securities and U.S. treasuries.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, see Note 2 of the notes to our audited financial statements for the year ended December 31, 2022 included elsewhere in this Annual Report on Form 10-K. Item 7A. R eserved. 111
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. Recent Accounting Pronouncements For a description of recent accounting pronouncements, see Note 2 of the notes to our audited consolidated financial statements for the year ended December 31, 2023 included elsewhere in this Annual Report on Form 10-K. Item 7A.
The increase of $15.5 million was primarily due to the following: • $1.6 million decrease in research expenses, largely driven by decreased contractual research organization costs focused on discovery research; • $13.0 million increase in development expenses, primarily associated with increased effort advancing our lead compound PC14586 through the Phase 1/2 clinical trial; and • $4.0 million increase in expenses for personnel related costs and stock-based compensation, primarily driven by increased headcount.
The increase of $3.9 million was primarily due to the following: • $6.0 million increase in expenses for personnel related costs and stock-based compensation, primarily driven by increased headcount; offset by • $2.1 million decrease in research and development expenses largely driven by decreased contractual research organization costs.
The change in our net operating assets and liabilities was primarily due to an increase in prepaid expenses and other assets, an decrease in accrued expenses, and a decrease in outstanding payables. 108 Net cash used in operating activities for the year ended December 31, 2021, was $46.6 million, which consisted primarily of net loss of $57.8 million decreased by non-cash charges of $7.2 million and a net change of $4.1 million in our net operating assets.
Net cash used in operating activities for the year ended December 31, 2022, was $63.8 million, which consisted primarily of net loss of $73.3 million decreased by non-cash charges of $10.1 million and a net change of $0.6 million in our net operating assets.
Our financing activities provided $2.0 million of cash during the year ended December 31, 2021, which consisted primarily of common stock issued under the employee stock purchase plan and proceeds from the exercise of stock options.
Financing Activities Our financing activities provided $35.6 million of cash during the year ended December 31, 2023. This consisted of $35.1 million of common stock issued under our ATM Program, net of issuance costs, and $0.5 million of proceeds from the exercise of stock options and issuance of common stock under the 2020 ESPP.
We dosed our first patient in this clinical trial in the fourth quarter of 2020. In June 2022, we presented our initial Phase 1 clinical data for PC14586 at the 2022 ASCO Annual Meeting.
We dosed our first patient in this clinical trial in the fourth quarter of 2020. In October 2023, we presented our updated Phase 1 clinical data for PC14586 at the 2023 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics Meeting.
Liquidity and Capital Resources Our financial condition is summarized as follows: As of December 31, 2022 2021 Change Financial assets: Cash and cash equivalents $ 108,297 $ 172,467 $ (64,170 ) Marketable securities – current 132,757 124,696 8,061 Marketable securities – noncurrent 2,495 16,911 (14,416 ) Total financial assets $ 243,549 $ 314,074 $ (70,525 ) Working capital: Current assets $ 247,006 $ 301,286 $ (54,280 ) Current liabilities 10,832 12,219 (1,387 ) Total working capital $ 236,174 $ 289,067 $ (52,893 ) 106 Sources of Liquidity Since our inception, we have not generated any revenue from any product sales or any other sources and have incurred significant operating losses and negative cash flows from our operations.
Liquidity and Capital Resources Our financial condition is summarized as follows (in thousands): As of December 31, 2023 2022 Change Financial assets: Cash and cash equivalents $ 37,706 $ 108,297 $ (70,591 ) Marketable securities – current 165,351 132,757 32,594 Marketable securities – noncurrent 25,505 2,495 23,010 Total financial assets $ 228,562 $ 243,549 $ (14,987 ) Working capital: Current assets $ 207,409 $ 247,006 $ (39,597 ) Current liabilities 14,029 10,832 3,197 Total working capital $ 193,380 $ 236,174 $ (42,794 ) 95 Sources of Liquidity Since our inception, we have not generated any revenue from any product sales or any other sources and have incurred significant operating losses and negative cash flows from our operations.
Based on our research and development plans, we expect that our cash balances as of December 31, 2022 will be sufficient to fund our operations at least through 2024.
Based on our research and development plans, we expect that our cash balances as of December 31, 2023 will be sufficient to fund our operations at least into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, however, and we could use our capital resources sooner than we expect.
We received $223.2 million in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by us. In October 2021, we filed a shelf registration statement on Form S-3, which may result in aggregate gross process of up to $150.0 million.
We received $223.2 million in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by us.
Amounts related to future lease payments under the 1 Research Way lease as of December 31, 2022, totaled $19.4 million, with $2.3 million to be paid within the next 12 months. Plan of Operation and Future Funding Requirements We use our capital resources primarily to fund operating expenses, mainly research and development expenditures.
Payments under this lease will total $19.9 million through May 2032. Amounts related to future lease payments under the 1 Research Way lease as of December 31, 2023, totaled $15.5 million, with $1.6 million to be paid within the next 12 months.
The increase of $3.3 million was primarily due to the following: • $2.4 million increase in personnel related expenses due to increased headcount to build out general and administrative infrastructure; and • $0.2 million decrease in finance and legal support, $0.3 million decrease for directors and officers insurance, and a $1.4 million increase due to facility and equipment related costs for our new headquarters in Princeton, New Jersey.
The decrease of $0.9 million was primarily due to the following: • $1.0 million decrease in director and officer insurance fees and a $0.8 million decrease in facility related costs due to the expiration of three leases; offset by • $0.3 million increase in personnel costs driven by an increase in stock compensation and a $0.6 million increase in general and administrative consulting costs.
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We are deploying our precision oncology platform to target the top ten most frequent, or hotspot, p53 mutations that are collectively associated with approximately 10-15% of all cancers. In addition, we are expanding the utilization of our platform to target other p53-related cancers.
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In July 2023, we concluded our End of Phase 1 meeting with the FDA with alignment on the recommended Phase 2 dose and key elements of the single arm, Phase 2 registrational portion of the PYNNACLE study.
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We did not sell any shares pursuant to the shelf registration statement and did not receive any gross proceeds in fiscal year 2022.
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In October 2023, we presented our updated Phase 1 clinical data for PC14586 at the 2023 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics Meeting. The pivotal Phase 2 monotherapy portion of our PYNNACLE trial is planned to be initiated in 1Q of 2024.
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That lease term extends through 2032, has a five-year extension option, and is intended to replace our two existing facilities. Payments under this lease will total $19.9 million through May 2032.
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In addition, in December 2022, we opened a separate Phase 1b arm within the existing Phase 1/2 PYNNACLE trial combining PC14586 with KEYTRUDA® (pembrolizumab) in collaboration with Merck and Co.
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We plan to increase our research and development expenses for the foreseeable future as we continue the preclinical and clinical development of our product candidates.
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In addition, in December 2022, we opened a separate Phase 1b arm within the existing Phase 1/2 clinical trial combining PC14586 with KEYTRUDA® (pembrolizumab) in collaboration with Merck and Co.
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To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. Stock-Based Compensation We measure all stock options and other stock-based awards granted to our employees, directors, consultants, and other non-employee service providers based on the fair value on the date of the grant.
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We have a shelf registration statement on Form S-3 on file with the SEC, which registers the offering, issuance, and sale of up to $200 million of various equity and debt securities and up to $150 million of common stock pursuant to our ATM Program.
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Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is typically the vesting term.
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During the year ended December 31, 2023, we sold 5,149,446 shares of common stock under the ATM Program at a weighted average price of $6.97 per share for $35.1 million in proceeds, net of fees. As of December 31, 2023, we have approximately $113.8 million remaining in gross proceeds available for future issuances of common stock under the ATM Program.
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We classify stock-based compensation expense in our statement of operations in the same way the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. We use the Black-Scholes option pricing model to estimate the fair value of stock options on the date of grant.
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Plan of Operation and Future Funding Requirements We use our capital resources primarily to fund operating expenses, mainly research and development expenditures. On January 18, 2024, we announced a restructuring plan involving the reduction of our workforce by approximately 30% of our employees.
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Using the Black-Scholes option pricing model requires management to make significant assumptions and judgments. We determined these assumptions for the Black-Scholes option-pricing model as discussed below. • Expected Term —The expected term represents the period that the stock-based awards are expected to be outstanding.
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We expect the reduction in workforce to be substantially completed by June 30, 2024, and fully completed by the end of the third quarter of 2024. As announced, we are taking these steps in order to streamline operations, reduce costs and preserve capital as we advance our lead candidate, PC14586, into late-stage development.
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As we do not have sufficient historical experience for determining the expected term of the stock option awards granted, we based our expected term for awards issued to employees and non-employees using the simplified method which is presumed to be the midpoint between the vesting date and the end of the contracted term. • Risk-Free Interest Rate —The risk-free interest rate is based on the U.S.
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The change in our net operating assets and liabilities was primarily due to an increase in operating lease liabilities and other assets and an increase in accrued expenses.
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Treasury yield curve in effect at the date of grant for zero-coupon U.S.
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The following summary should be read in conjunction with Note 2 of the notes to our audited consolidated financial statements for the year ended December 31, 2023 included elsewhere in this Annual Report on Form 10-K. 98 Research and Development Costs, Accrued Research and Development Costs and Related Prepaid Expenses Research and development costs are expensed as incurred.
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Treasury constant maturity notes with terms approximately equal to the stock-based awards’ expected term. 110 • Expected Volatility —Since we do not have adequate trading history of our common stock, the expected volatility was derived from the average historical stock volatilities of the common stock of several public companies within the industry that we consider to be comparable to our business over a period equivalent to the expected term of the stock-based awards. • Dividend Rate —The expected dividend rate is zero as we have not paid and do not anticipate paying any dividends in the foreseeable future. • Fair Value of Common Stock —Since our IPO, the fair value of shares of our common stock are measured by the stock price on the date of grant.

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