10q10k10q10k.net
ALUMIS INC.

ALUMIS INC.ALMS财报

Nasdaq · 医疗保健 · 药物制剂

ALUMIS INC. is a clinical-stage biopharmaceutical company focused on developing innovative targeted therapies for patients suffering from autoimmune and inflammatory disorders. It advances multiple product candidates through clinical trials, aiming to address unmet medical needs for patient populations across global markets.

What changed in ALUMIS INC.'s 10-K — 2024 vs 2025

Top changes in ALUMIS INC.'s 2025 10-K

707 paragraphs added · 736 removed · 484 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

143 edited+38 added−63 removed172 unchanged
FDA Expedited Development and Review Programs The FDA has a number of programs intended to expedite the development or review of a marketing application for an investigational drug product. For example, the Fast Track designation program is intended to expedite or facilitate the process for developing and reviewing drug products that meet certain criteria.
FDA Expedited Development and Review Programs The FDA has a number of programs intended to expedite the development or review of a marketing application for an investigational product. For example, the Fast Track designation program is intended to expedite or facilitate the process for developing and reviewing drug products that meet certain criteria.
U.S. Healthcare Reform The U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price-controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs.
Healthcare Reform The U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price-controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs.
Similar to the federal Anti-Kickback Statute, 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; ● the FDCA, which among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products prior to approval or for off-label use and regulates the distribution of samples; 31 Table of Contents ● federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics 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 the CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● state law equivalents of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including private insurers, state transparency laws, and state laws limiting interactions between pharmaceutical manufacturers and members of the healthcare industry, many of which differ from each other in significant ways and may not have the same effect, and often are not preempted by HIPAA.
Similar to the federal Anti-Kickback Statute, 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; 29 Table of Contents ● the FDCA, which among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products prior to approval or for off-label use and regulates the distribution of samples; ● federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics 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 the CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● state law equivalents of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including private insurers, state transparency laws, and state laws limiting interactions between pharmaceutical manufacturers and members of the healthcare industry, many of which differ from each other in significant ways and may not have the same effect, and often are not preempted by HIPAA.
Role of TYK2 in Neuroinflammatory and Neurodegenerative Diseases TYK2 pathways are active in CNS-resident immune cells and may play a localized role in the CNS contributing to the pathology of several CNS inflammatory disorders, including MS. Genome-wide association studies have shown the loss-of-function TYK2 genetic variant, P1104A, has a protective effect for the development of MS.
Role of TYK2 in Neuroinflammatory and Neurodegenerative Diseases TYK2 pathways are active in CNS-resident immune cells and may play a localized role in the CNS contributing to the pathology of several CNS inflammatory disorders, including MS. Genome-wide association studies (“GWAS”) have shown the loss-of-function TYK2 genetic variant, P1104A, has a protective effect for the development of MS.
After approval, many changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies.
After approval, many changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug and biologic manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies.
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 cGMPs.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMPs.
The manufacture of medicinal products in the EU requires a manufacturing authorization. Moreover, import of medicinal products into the EU requires a manufacturing authorization allowing for import. The holder of a manufacturing authorization must comply with various requirements set out in the applicable EU laws, regulations and guidance, including GMP standards.
Moreover, import of medicinal products into the EU requires a manufacturing authorization allowing for import. The holder of a manufacturing authorization must comply with various requirements set out in the applicable EU laws, regulations and guidance, including GMP standards.
Specifically, investigational drugs are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.
Specifically, investigational drugs and biologics are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.
A drug intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review.
A drug biologic intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review.
The FDA may grant full or partial waivers or deferrals for submission of data. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.
The FDA may grant full or partial waivers or deferrals for submission of data. A deferral may be granted for several reasons, including a finding that the product is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.
A complete response letter generally outlines the deficiencies in the NDA and may require substantial additional testing or information that must be provided in order for the FDA to reconsider the NDA for approval. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.
A complete response letter generally outlines the deficiencies in the application and may require substantial additional testing or information that must be provided in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the application, the FDA will issue an approval letter.
The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met: (i) the benefit-risk balance of the medicinal product is positive; (ii) it is likely that the applicant will be able to provide comprehensive data post-authorization; (iii) the medicinal product fulfils an unmet medical need; and (iv) the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the 24 Table of Contents fact that additional data are still required.
The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met: (i) the benefit-risk balance of the medicinal product is positive; (ii) it is likely that the applicant will be able to provide comprehensive data post-authorization; (iii) the medicinal product fulfils an unmet medical need; and (iv) the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the fact that additional data are still required.
The FDA has 60 days from its receipt of an NDA to determine whether the application will be filed based on the FDA’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins an in-depth review.
The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be filed based on the FDA’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins an in-depth review.
A single Phase 3 trial may be sufficient in rare instances, including (1) where the study is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) when the single trial is supported by confirmatory evidence.
A single Phase 3 trial may be sufficient (1) where the study is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) when the single trial is supported by confirmatory evidence.
ESK-001 demonstrated a robust and predictable PK/PD relationship in Phase 1 studies, enabling the identification of a dose level that achieved maximal TYK2 inhibition for 24 hours a day to take into Phase 2 clinical trials. We define maximal inhibition as reaching the plateau of biological inhibition in the assay readout with no further impact seen with higher drug concentrations.
Envu demonstrated a robust and predictable PK/PD relationship in Phase 1 studies, enabling the identification of a dose level that achieved maximal TYK2 inhibition for 24 hours a day to take into Phase 2 clinical trials. We define maximal inhibition as reaching the plateau of biological inhibition in the assay readout with no further impact seen with higher drug concentrations.
We are currently developing ESK-001 for the treatment of PsO and SLE, with multiple other potential indications to follow. Other emerging and established life sciences companies have been focused on similar therapeutics. If approved, ESK-001 would compete with several currently approved or late-stage oral clinical therapeutics in each such indication as well as other drugs used to treat such patients.
We are currently developing envu for the treatment of PsO and SLE, with multiple other potential indications to follow. Other emerging and established life sciences companies have been focused on similar therapeutics. If approved, envu would compete with several currently approved or late-stage oral clinical therapeutics in each such indication as well as other drugs used to treat such patients.
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.
An approval letter authorizes commercial marketing of the product 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.
ESK-001 can be manufactured in reliable and reproducible processes from readily available starting materials. A-005 has been produced in small quantities to support our preclinical studies and is currently being manufactured at larger quantities for clinical testing. The chemistries for ESK-001 and A-005 are amenable to scale-up and do not require unusual equipment in the manufacturing process.
Envu can be manufactured in reliable and reproducible processes from readily available starting materials. A-005 has been produced in small quantities to support our preclinical studies and is currently being manufactured at larger quantities for clinical testing. The chemistries for envu and A-005 are amenable to scale-up and do not require unusual equipment in the manufacturing process.
Because of the complexity, overlap and redundancy of inflammatory pathways, combination approaches targeting complementary pathways may be needed to achieve high-hurdle endpoints such as remission. We believe that ESK-001’s pharmacological properties, including its lack of drug-drug interaction potential and its clinical profile, positions it well as a partner for future combination therapies.
Because of the complexity, overlap and redundancy of inflammatory pathways, combination approaches targeting complementary pathways may be needed to achieve high-hurdle endpoints such as remission. We believe that envu’s pharmacological properties, including its lack of drug-drug interaction potential and its clinical profile, positions it well as a partner for future combination therapies.
In addition, we intend to commercialize our product candidates, if approved, in key markets in the United States, the European Union (“EU”) and APAC, either alone or with partners in order to maximize the worldwide commercial potential of our programs. Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities.
In addition, we intend to commercialize our product candidates, if approved, in key markets in the United States, the European Union (“EU”) and APAC, either alone or with partners in order to maximize the worldwide commercial potential of our programs. 14 Table of Contents Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCPs, which are standards meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters 18 Table of Contents to be used in monitoring safety, and the effectiveness criteria to be evaluated.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCPs, which are standards meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
For all our product candidates, we intend to identify and qualify redundant manufacturers to provide the API and drug product and prior to submission of the NDA to the FDA and/or a marketing authorization application to the European Medicines Agency (“EMA”) and/or other health authorities. ESK-001 and A-005 are compounds of low molecular weight, generally called small molecules.
For all our product candidates, we intend to identify and qualify redundant manufacturers to provide the API and drug product and prior to submission of the NDA to the FDA and/or a marketing authorization application to the European Medicines Agency (“EMA”) and/or other health authorities. envu and A-005 are compounds of low molecular weight, generally called small molecules.
TYK2 inhibition represents a breadth of opportunity, and there have been or are ongoing clinical trials of TYK2 inhibitors in multiple indications such as psoriatic arthritis, SLE, cutaneous lupus, alopecia areata, Sjogren’s disease, vitiligo, Crohn’s disease and ulcerative colitis. Our TYK2 Franchise ESK-001: Our Allosteric TYK2 Inhibitor ESK-001 is a potent, highly selective, allosteric TYK2 inhibitor.
TYK2 inhibition represents a breadth of opportunity, and there have been or are ongoing clinical trials of TYK2 inhibitors in multiple indications such as psoriatic arthritis, SLE, cutaneous lupus, alopecia areata, Sjogren’s disease, vitiligo, Crohn’s disease and ulcerative colitis. Our TYK2 Franchise Envu: Our Allosteric TYK2 Inhibitor Envu is a potent, highly selective, allosteric TYK2 inhibitor.
To date, we have obtained active pharmaceutical ingredients (“API”) for ESK-001 and A-005 for our preclinical and clinical testing from different third-party API manufacturers and bulk drug product from other third-party manufacturers. We obtain our preclinical and clinical supplies from these manufacturers on a purchase order basis and currently do not have long-term supply arrangements in place.
To date, we have obtained active pharmaceutical ingredients (“API”) for envu and A-005 for our preclinical and clinical testing from different third-party API manufacturers and bulk drug product from other third-party manufacturers. We obtain our preclinical and clinical supplies from these manufacturers on a purchase order basis and currently do not have long-term supply arrangements in place.
In contrast to what has been reported with first-generation allosteric TYK2 inhibitors, skin rashes have been observed at much lower frequency with ESK-001 to date, even at very high and sustained levels of target inhibition, suggesting that skin toxicities may not be an on-target, class effect of TYK2 inhibitors.
In contrast to what has been reported with first-generation allosteric TYK2 inhibitors, skin rashes have been observed at much lower frequency with envu to date, even at very high and sustained levels of target inhibition, suggesting that skin toxicities may not be an on-target, class effect of TYK2 inhibitors.
The FDA has committed to reviewing such NDA resubmissions in two or six months from the date of receipt, depending on the type of information included. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the drug outweigh the potential risks.
The FDA has committed to reviewing such resubmissions in two or six months from the date of receipt, depending on the type of information included. As a condition of approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the product outweigh the potential risks.
Any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing EU member state within three years after authorization ceases to be valid (the so-called sunset clause) unless, in justified circumstances, authorization is extended.
Any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing 22 Table of Contents EU member state within three years after authorization ceases to be valid (the so-called sunset clause) unless, in justified circumstances, authorization is extended.
In some instances, an ANDA applicant may receive approval prior to expiration of certain non-patent exclusivity if the applicant seeks, and FDA permits, the omission of such exclusivity-protected information from the ANDA prescribing information. 29 Table of Contents Hatch-Waxman Exclusivity Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications.
In some instances, an ANDA applicant may receive approval prior to expiration of certain non-patent exclusivity if the applicant seeks, and FDA permits, the omission of such exclusivity-protected information from the ANDA prescribing information. Hatch-Waxman Exclusivity Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications.
Medicinal products used in clinical trials must be manufactured in accordance with the guidelines on GMP and in a GMP certified facility, which is subject to GMP inspections. Review and Approval Process of Medicinal Products in the EU In the EU, medicinal products can only be commercialized after a related marketing authorization (“MA”) has been granted.
Medicinal products used in clinical trials must be manufactured in accordance with the guidelines on GMP and in a GMP certified facility, which is subject to GMP inspections. Review and Approval Process of Medicinal Products in the EU 21 Table of Contents In the EU, medicinal products can only be commercialized after a related marketing authorization (“MA”) has been granted.
For some medications, the MHLW requires additional post marketing studies (Phase 4) to further evaluate safety and/or to gather information concerning the quality, efficacy, and safety of the product under specified conditions, in addition to post marketing surveillance including Early Post-marketing Phase Vigilance (“EPPV”) based on the RMP for all new medications.
For some medications, the MHLW requires additional post marketing studies (Phase 4) to further evaluate safety and/or to gather information concerning the quality, efficacy, and safety of the product under specified conditions, in addition to post marketing surveillance including Early Post-marketing Phase Vigilance 26 Table of Contents (“EPPV”) based on the RMP for all new medications.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will generally inspect the facility or the facilities at which the drug is manufactured.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will generally inspect the facility or the facilities at which the product is manufactured.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of nonclinical laboratory tests, animal studies and formulation studies in accordance with Good Laboratory Practice regulations (“GLPs”) and other applicable regulations; ● submission to the FDA of an Investigational New Drug (“IND”) application, which must become effective before human clinical trials may begin; ● approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before each trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice regulations (“GCPs”) to evaluate the safety and efficacy of the drug for its intended use; ● submission to the FDA of a New Drug Application (“NDA”); ● a determination by the FDA within 60 days of its receipt of the NDA to file the submission for review; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity, and of inspection of selected clinical investigation sites to assess compliance with GCPs; and ● FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of nonclinical laboratory tests, animal studies and formulation studies in accordance with Good Laboratory Practice regulations (“GLPs”) and other applicable regulations; ● submission to the FDA of an Investigational New Drug (“IND”) application, which must become effective before human clinical trials may begin; ● approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before each trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice regulations (“GCPs”) to evaluate the safety and efficacy of the drug for its intended use; 16 Table of Contents ● submission to the FDA of an NDA or Biologics License Application (“BLA”); ● a determination by the FDA within 60 days of its receipt of the NDA or BLA to file the submission for review; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements to assure that the facilities, methods and controls are adequate to preserve its identity, strength, quality and purity, and of inspection of selected clinical investigation sites to assess compliance with GCPs; and ● FDA review and approval of the NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States.
Phase 3 trials are undertaken to obtain additional information about clinical efficacy and safety in an expanded patient population, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug.
Phase 3 trials are undertaken to obtain additional information about clinical efficacy and safety in an expanded patient population, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the investigational product and to provide adequate information for labeling.
We believe that our product candidates, indications, clinical data and data analytics make our company an attractive partner. Given our scientific expertise and significant therapeutic depth, and the broad addressable populations of our product candidates, the right partner could help us expand the breadth of indications we pursue and increase our commercial reach.
We believe that our product candidates, indications, clinical data and data analytics make our company an 8 Table of Contents attractive partner. Given our scientific expertise and significant therapeutic depth, and the broad addressable populations of our product candidates, the right partner could help us expand the breadth of indications we pursue and increase our commercial reach.
REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries.
REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, 18 Table of Contents and the use of patient registries.
Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the FDA inspects manufacturing facilities to assess compliance with cGMP. Changes to the manufacturing process 21 Table of Contents are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.
Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the FDA inspects manufacturing facilities to assess compliance with cGMP. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.
The FDA will not approve a drug unless the facility at which the drug is manufactured has a satisfactory cGMP compliance status. After the FDA evaluates the NDA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter.
The FDA will not approve a product unless the facility at which it is manufactured has a satisfactory cGMP compliance status. After the FDA evaluates the NDA or BLA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter.
Conditions for exclusivity include the FDA’s determination that information relating to the use of a new drug in the pediatric population may produce health benefits in that population, the FDA making a “written request” for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.
Conditions for exclusivity include the FDA’s determination that information relating to the use of the product in the pediatric population may produce health benefits in that population, the FDA making a “written request” for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.
We have observed, and expect to continue to observe that additional AEs and SAEs, consistent with known side effects of TYK2 inhibition may emerge in our ongoing and future clinical trials of ESK-001, and we have also observed and expect to continue to observe trial participant withdrawals or discontinuations due to AEs.
We have observed and expect to continue to observe that additional AEs and SAEs, consistent with known side effects of TYK2 inhibition, may emerge in our ongoing and future clinical trials of envu, and we have also observed and expect to continue to observe trial participant withdrawals or discontinuations due to AEs.
Work under the Services Agreement is memorialized in a series of Statements of 13 Table of Contents Work and we pay Foresite Labs for the estimated costs of its services in advance on a quarterly basis, with a true-up to actuals at the end of each quarter.
Work under the Services Agreement is memorialized in a series of Statements of Work and we pay Foresite Labs for the estimated costs of its services in advance on a quarterly basis, with a true-up to actuals at the end of each quarter.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops during which additional information or written or oral explanations are provided by the applicant in 23 Table of Contents response to questions of the CHMP.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops during which additional information or written or oral explanations are provided by the applicant in response to questions of the CHMP.
For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent national authorities in connection with an MA.
For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent 24 Table of Contents national authorities in connection with an MA.
Phase 2 usually involves trials in a limited patient population with the specified disease or conditions to evaluate the effectiveness of the drug for a particular indication, to determine optimal dose and regimen, and to identify common AEs and safety risks.
Phase 2 usually involves trials in a limited patient population with the specified disease or conditions to evaluate the effectiveness of the investigational product for a particular indication, to determine optimal dose and regimen, and to identify common AEs and safety risks.
In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of a novel drug product.
In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of a product.
Data and Market Exclusivity in the EU The EU provides opportunities for data and market exclusivity related to MAs. Upon receipt of an MA, innovative medicinal products (i.e., reference products) are generally entitled to benefit from eight years of data exclusivity and an additional two years of market exclusivity.
Data and Market Exclusivity in the EU 23 Table of Contents The EU provides opportunities for data and market exclusivity related to MAs. Upon receipt of an MA, innovative medicinal products (i.e., reference products) are generally entitled to benefit from eight years of data exclusivity and an additional two years of market exclusivity.
Therapeutic inhibition of TYK2 and associated cytokine pathways, in particular IL-23/IL-17 and type I IFN, have been broadly validated to address immune dysfunction in immune-mediated diseases, such as psoriasis, psoriatic arthritis and 9 Table of Contents SLE.
Therapeutic inhibition of TYK2 and associated cytokine pathways, in particular IL-23/IL-17 and type I IFN, have been broadly validated to address immune dysfunction in immune-mediated diseases, such as psoriasis, psoriatic arthritis and SLE.
The FDA may extend its PDUFA goal date for reviewing both standard and priority-review NDAs for three additional months to allow the FDA to consider certain late-submitted information or information intended to clarify information already provided in the NDA submission.
The FDA may extend its PDUFA goal date for reviewing both standard and priority-review applications for three additional months to allow the FDA to consider certain late-submitted information or information intended to clarify information already provided in the submission.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the drug does not undergo unacceptable deterioration over its shelf life. U.S. Review and Approval Process After completion of the required clinical testing, the sponsor prepares and submits an NDA to the FDA.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life. U.S. Review and Approval Process After completion of the required clinical testing, the sponsor prepares and submits an NDA or BLA to the FDA.
In addition, ESK-001 has a desirable half-life in humans of approximately 8 to 12 hours and we have not observed any concerns for drug-drug interactions with other therapies. ● Maximal Target Inhibition.
In addition, envu has a desirable half-life in humans of approximately 8 to 12 hours and we have not observed any concerns for drug-drug interactions with other therapies. ● Maximal Target Inhibition.
We believe TYK2 inhibition has the potential to treat the neuroinflammatory component of other neurodegenerative diseases where activated microglia and/or TYK2 proinflammatory cytokines including interferon are implicated such as Alzheimer’s disease, ALS, optic neuritis, neuromyelitis optica, and Parkinson’s disease. 12 Table of Contents Development A-005 for the Treatment of Multiple Sclerosis MS is a chronic immune-mediated disease of the central nervous system.
We believe TYK2 inhibition has the potential to treat the neuroinflammatory component of other neurodegenerative diseases where activated microglia and/or TYK2 proinflammatory cytokines including interferon are implicated such as Alzheimer’s disease, ALS, optic neuritis, neuromyelitis optica, and Parkinson’s disease. Development A-005 for the Treatment of MS MS is a chronic immune-mediated disease of the central nervous system.
We expect to continue to develop product candidates that can be produced cost-effectively at contract manufacturing facilities. 16 Table of Contents Competition The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical companies and generic drug companies.
We expect to continue to develop product candidates that can be produced cost-effectively at contract manufacturing facilities. Competition The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical companies and generic drug companies.
Pediatric Information Under the Pediatric Research Equity Act, NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is determined by the FDA to be safe and effective.
Pediatric Information Under the Pediatric Research Equity Act, NDAs, BLAs or supplements thereto must contain data to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is determined by the FDA to be safe and effective.
A-005: Our CNS-Penetrant Allosteric TYK2 Inhibitor The second clinical product candidate in our TYK2 franchise, A-005, is a highly differentiated, CNS-penetrant, allosteric TYK2 inhibitor that has potential applications in multiple sclerosis and other neurological diseases.
A-005: Our CNS-Penetrant Allosteric TYK2 Inhibitor The second clinical product candidate in our TYK2 franchise, A-005, is a highly differentiated, CNS-penetrant, allosteric TYK2 inhibitor that has potential applications in multiple sclerosis and other neurological diseases. as well as peripheral diseases.
FDA approval of the NDA is required before marketing and distribution of the product may begin in the United States. The NDA must include, among other information, the results of all nonclinical, clinical, and other testing along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, and proposed labeling.
FDA approval of the application is required before marketing and distribution of the product may begin in the United States. The application must include, among other information, the results of all nonclinical, clinical, and other testing along with descriptions of the manufacturing process, analytical tests conducted on the product, and proposed labeling.
ESK-001 is highly permeable with low efflux resulting in high and rapid systemic absorption and favorable tissue distribution in vivo . These properties result in its highly predictable, linear PK profile in humans with low variability.
Envu is highly permeable with low efflux resulting in high and rapid systemic absorption and favorable tissue distribution in vivo . These properties result in its highly predictable, linear PK profile in humans with low variability.
Our principal suppliers of critical raw materials are located in India and in Taiwan. We are in the process of implementing a redundant supply chain for ESK-001 API, drug product and critical raw material.
Our principal suppliers of critical raw materials are located in India and in Taiwan. We are in the process of implementing a redundant supply chain for envu API, drug product and critical raw material.
Clinical trials involve the administration of the investigational drug to healthy volunteers or patients under the supervision of a qualified investigator.
Clinical trials involve the administration of the investigational product to healthy volunteers or patients under the supervision of a qualified investigator.
Key Differentiating Features We believe ESK-001 is differentiated from first-generation TYK2 inhibitors for the following reasons: ● Intrinsic Selectivity and Preclinical Pharmacology . Due to ESK-001’s design as an allosteric inhibitor, the molecule is both potent and intrinsically selective for TYK2 over other protein kinases, including the related JAK family members.
Key Differentiating Features We believe envu is differentiated from first-generation TYK2 inhibitors for the following reasons: ● Intrinsic Selectivity and Preclinical Pharmacology . Due to envu’s design as an allosteric inhibitor, the molecule is both potent and intrinsically selective for TYK2 over other protein kinases, including the related JAK family members.
Strategic Indication Selection TYK2-mediated cytokine signaling is involved in a broad range of immune-mediated diseases. TYK2 loss-of-function mutations have been shown to be protective for several conditions including psoriasis, psoriatic arthritis, Crohn’s disease, 10 Table of Contents ulcerative colitis and MS. Therefore, ESK-001 has the potential to provide benefit in a large number of indications.
Strategic Indication Selection TYK2-mediated cytokine signaling is involved in a broad range of immune-mediated diseases. TYK2 loss-of-function mutations have been shown to be protective for several conditions including psoriasis, psoriatic arthritis, Crohn’s disease, ulcerative colitis and MS. Therefore, envu has the potential to provide benefit in a large number of indications.
The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee. Under an approved NDA, the applicant is also subject to an annual program fee. These fees are typically increased annually.
The cost of preparing and submitting an application is substantial. The submission of most applications is additionally subject to a substantial user fee. Under an approved NDA or BLA, the applicant is also subject to an annual program fee. These fees are typically increased annually.
The FDA may also refer applications for novel drugs, as well as drugs that present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation as to whether the NDA should be approved.
The FDA may also refer applications for novel products, as well as those that present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation as to whether the application should be approved.
There have been no clinically limiting findings across our clinical trials to date that prevent ESK-001 from being dosed to achieve maximal target inhibition.
There have been no clinically limiting findings across our clinical trials to date that prevent envu from being dosed to achieve maximal target inhibition.
The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy.
The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.
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; ● warning 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 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, fines or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● warning 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 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, fines or the imposition of civil or criminal penalties. 20 Table of Contents The FDA strictly regulates marketing, labeling, advertising and promotion of drugs and biologics that are placed on the market.
We intend to expand clinical 8 Table of Contents development of ESK-001 to additional therapeutic areas and indications where TYK2 inhibition and our differentiated profile have the potential to deliver significant improvements for patients. ● Expand our TYK2 franchise with A-005, our allosteric TYK2 inhibitor selected to penetrate the CNS to treat neuroinflammation.
We intend to expand clinical development of envu to additional therapeutic areas and indications where TYK2 inhibition and our differentiated profile have the potential to deliver significant improvements for patients. ● Expand our TYK2 franchise with A-005, our allosteric TYK2 inhibitor selected to penetrate the CNS to treat neuroinflammation.
Guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. 25 Table of Contents Manufacturing Regulation in the EU In addition to an MA, various other requirements apply to the manufacture and placing on the EU market of medicinal products.
Guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. Manufacturing Regulation in the EU In addition to an MA, various other requirements apply to the manufacture and placing on the EU market of medicinal products. The manufacture of medicinal products in the EU requires a manufacturing authorization.
The manufacturing process must be capable of consistently producing quality batches of the drug and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
The manufacturing process must be capable of consistently producing quality batches and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the finished product.
An investigational drug can receive Breakthrough Therapy designation if preliminary clinical evidence indicates that the drug, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Breakthrough Therapy designation is provided if preliminary clinical evidence indicates that the drug or biologic, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
In addition, a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act; ● HIPAA, which prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program (including private health plans) or making false statements relating to healthcare matters.
In addition, a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act; ● HIPAA, which, in addition to the privacy, security, and breach notification obligations described above, also prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program (including private health plans) or making false statements relating to healthcare matters.
As of December 31, 2024, the most common AEs reported by patients across active (ESK-001) trial arms were headaches, upper respiratory tract infections and nasopharyngitis, and the most common AEs deemed related to study drug by the principal investigator included headaches, upper respiratory tract infections, nasopharyngitis, rash and nausea.
As of December 31, 2025, the most common AEs reported by patients across active (envu) trial arms were headaches, upper respiratory tract infections, nasopharyngitis and acne, and the most common AEs deemed related to study drug by the principal investigator included headaches, upper respiratory tract infections, nasopharyngitis, rash and nausea.
Proposed Merger with ACELYRIN On February 6, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ACELYRIN, Inc., a Delaware corporation (“ACELYRIN”), and Arrow Merger Sub, Inc., a Delaware corporation and our direct wholly owned subsidiary (“Merger Sub”).
ACELYRIN Merger On February 6, 2025, we entered into an Agreement and Plan of Merger, and, on April 20, 2025, we entered into an Amendment to Agreement and Plan of Merger (collectively the “Merger Agreement”) with ACELYRIN, Inc. (“ACELYRIN”) and Arrow Merger Sub, Inc., a Delaware corporation and our direct wholly owned subsidiary (“Merger Sub”).
The sponsor of a Fast Track drug candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.
The sponsor of a Fast Track designated investigational product has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA or BLA is submitted, the application may be eligible for priority review.
We own one patent family with claims directed to methods of treating a TYK2-mediated disease using ESK-001, that includes a pending U.S. application and over 10 foreign applications pending in various jurisdictions such as Europe, Brazil, Canada, China, Australia and Japan.
We own one patent family with claims directed to methods of treating a TYK2-mediated disease using envu, that includes a pending U.S. application and over 10 foreign applications pending in various jurisdictions such as Europe and Japan.
We are a clinical stage biopharmaceutical company with an initial focus on developing our two Tyrosine Kinase 2 (“TYK2”) inhibitors: ESK-001, a second-generation inhibitor that we are developing to maximize target inhibition and optimize tolerability, and A-005, a central nervous system (“CNS”) penetrant molecule.
We are a clinical stage biopharmaceutical company with an initial focus on developing our two Tyrosine Kinase 2 (“TYK2”) inhibitors: envudeucitinib (“envu”), formerly known as ESK-001, a second-generation inhibitor that we are developing to maximize target inhibition and optimize tolerability, and A-005, a central nervous system (“CNS”) penetrant allosteric TYK2 inhibitor.
With regard to a Fast Track drug candidate, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
The FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
ESK-001 and A-005 In regard to ESK-001 and A-005, we own one patent family with claims directed to composition of matter and methods of use that includes four issued U.S. patents, one pending U.S. patent application, over five granted foreign patents in Europe (validated in over 35 countries), and certain other countries, and over 10 foreign patent applications pending in various jurisdictions, such as Europe, Canada, China, Australia, Japan and India.
Envu and A-005 In regard to envu and A-005, we own one patent family with claims directed to composition of matter and methods of use that includes five issued U.S. patents, one pending U.S. patent application, over fifteen granted foreign patents in Europe (each validated in over 35 countries), and certain other countries, and over 10 foreign patent applications pending in various jurisdictions, such as Europe and Japan.
Safety Profile of ESK-001 ESK-001 has been administered to more than 800 participants and in some cases administered for up to two years. ESK-001 has been generally well-tolerated in our Phase 2 STRIDE and OLE clinical trials to date, with the majority of AEs observed in such clinical trials having been graded mild-to-moderate in severity.
Safety Profile of Envu Envu has been administered to more than 2,000 participants and in some cases administered for up to three years. Envu has been generally well-tolerated in our Phase 2 STRIDE and OLE and Phase 3 ONWARD clinical trials to date, with the majority of AEs observed in such clinical trials having been graded mild-to-moderate in severity.
Drug Development Process In the United States, pharmaceutical products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations.
Drug and Biologic Development Process In the United States, pharmaceutical products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations. Biologics are additionally subject to the Public Health Service Act and its implementing regulations.
Not accounting for any patent term adjustment or extension and assuming that all annuity and/or maintenance fees are paid timely, any patent applications claiming the benefit of the PCT applications, or patent applications claiming priority to the PCT applications or the provisional patent application, if issued, will be expected to expire between 2044 and 2045.
Not accounting for any patent term adjustment or extension and assuming that all applicable annuity and/or maintenance fees are paid timely, any patent applications claiming priority to the provisional applications, if issued, will be expected to expire in 2045.
No JAK-related pharmacology has been observed with ESK-001 to date. ● Optimized Molecular Properties and PK . At the core of ESK-001’s differentiation from other clinical-stage allosteric inhibitors of TYK2 are its physicochemical properties that we believe impart highly desirable drug-like features.
No JAK-related pharmacology has been observed with envu to date. ● Optimized Molecular Properties and Pharmacokinetics (“PK”) . At the core of envu’s differentiation from 9 Table of Contents other clinical-stage allosteric inhibitors of TYK2 are its physicochemical properties that we believe impart highly desirable drug-like features.

… 164 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

242 edited+100 added−114 removed559 unchanged
While we take steps designed to anticipate, detect and remediate threats and vulnerabilities, because the threats and techniques used to exploit such vulnerabilities and gain unauthorized access to, to sabotage or otherwise compromise systems change frequently, are often sophisticated in nature, and are often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement and maintain adequate preventative measures.
While we take steps designed to anticipate, detect and remediate threats and vulnerabilities, because the threats and techniques used to exploit such vulnerabilities and gain unauthorized access to, to sabotage or otherwise compromise systems change frequently, are often sophisticated in nature, and are often not recognized until launched against a target, we may be unable to anticipate these techniques or implement and maintain adequate preventative measures.
Our operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by a wildfire, earthquake or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster. Our current operations are predominantly located in California.
Our operations are predominantly concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by a wildfire, earthquake or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster. Our current operations are predominantly located in California.
Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European could remain under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunction.
Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents and allow for the possibility of a competitor to obtain pan-European injunction.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, some of which are beyond our control, including: ● the safety, efficacy, tolerability and ease of administration of our product candidates; ● the clinical indications for which the products are approved and the approved claims that we may make for the products; ● limitations or warnings contained in the product’s approved labeling, including potential limitations on the use of the product or warnings for such products that may be more restrictive than other competitive products; ● distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to such product candidates or to which we agree as part of a mandatory REMS or risk management plan; ● changes in the standard of care for the targeted indications for such product candidates; ● the relative difficulty of administration or compliance with administration instructions of such product candidates; ● cost of treatment as compared to the clinical benefit in relation to alternative treatments or therapies; ● the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid or comparable foreign programs; ● the extent and strength of our marketing and distribution of such product candidates; ● the safety, efficacy and other potential advantages of, and availability of, alternative treatments already used or that may later be approved for any of our intended indications; ● the timing of market introduction of such product candidates, as well as competitive products; ● the reluctance of physicians to switch their patients’ current standard of care; 54 Table of Contents ● the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; ● our ability to offer such product candidates for sale at competitive prices; ● the extent and strength of our third-party manufacturer and supplier support; ● adverse publicity about our product or favorable publicity about competitive products; and ● potential product liability claims.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, some of which are beyond our control, including: ● the safety, efficacy, tolerability and ease of administration of our product candidates; ● the clinical indications for which the products are approved and the approved claims that we may make for the products; ● limitations or warnings contained in the product’s approved labeling, including potential limitations on the use of the product or warnings for such products that may be more restrictive than other competitive products; ● distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to such product candidates or to which we agree as part of a mandatory REMS or risk management plan; ● changes in the standard of care for the targeted indications for such product candidates; 47 Table of Contents ● the relative difficulty of administration or compliance with administration instructions of such product candidates; ● cost of treatment as compared to the clinical benefit in relation to alternative treatments or therapies; ● the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid or comparable foreign programs; ● the extent and strength of our marketing and distribution of such product candidates; ● the safety, efficacy and other potential advantages of, and availability of, alternative treatments already used or that may later be approved for any of our intended indications; ● the timing of market introduction of such product candidates, as well as competitive products; ● the reluctance of physicians to switch their patients’ current standard of care; ● the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; ● our ability to offer such product candidates for sale at competitive prices; ● the extent and strength of our third-party manufacturer and supplier support; ● adverse publicity about our product or favorable publicity about competitive products; and ● potential product liability claims.
If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to: ● price our products competitively such that third-party and government reimbursement permits broad product adoption; 50 Table of Contents ● demonstrate the superiority of our products compared to the standard of care, as well as to other therapies in development; ● create market demand for our product candidates through our own marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; ● receive regulatory approval for the targeted patient populations and claims that are necessary or desirable for successful marketing; ● effectively commercialize any of our products that receive regulatory approval; ● manufacture product candidates through CMOs in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; ● establish and maintain agreements with wholesalers, distributors, pharmacies, and group purchasing organizations on commercially reasonable terms; ● obtain, maintain, protect and enforce patent and other intellectual property protection and regulatory exclusivity for our products; ● achieve market acceptance of our products by patients, the medical community, and third-party payors; ● maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and further capable of timely product delivery to commercial clinical sites; and ● assure that our product will be used as directed and that additional unexpected safety risks will not arise.
If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to: ● price our products competitively such that third-party and government reimbursement permits broad product adoption; ● demonstrate the superiority of our products compared to the standard of care, as well as to other therapies in development; ● create market demand for our product candidates through our own marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; ● receive regulatory approval for the targeted patient populations and claims that are necessary or desirable for successful marketing; ● effectively commercialize any of our products that receive regulatory approval; ● manufacture product candidates through CMOs in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; ● establish and maintain agreements with wholesalers, distributors, pharmacies, and group purchasing organizations on commercially reasonable terms; 44 Table of Contents ● obtain, maintain, protect and enforce patent and other intellectual property protection and regulatory exclusivity for our products; ● achieve market acceptance of our products by patients, the medical community, and third-party payors; ● maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and further capable of timely product delivery to commercial clinical sites; and ● assure that our product will be used as directed and that additional unexpected safety risks will not arise.
There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our or any future licensors’ patent claims do not cover the invention, or decide that the other party’s use of our or any future licensors’ patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1).
There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our or any current or future licensors’ patent claims do not cover the invention, or decide that the other party’s use of our or any current or future licensors’ patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1).
For example: ● others may be able to make product candidates that are similar to ours but that are not covered by the pending patent applications that we own or any patents or patent applications that we may in-license in the future; ● we or any future licensors or collaborators might not have been the first to make the inventions covered by the pending patent application that we own or may in-license in the future; ● we or any future licensors or collaborators might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned intellectual property rights or any patent applications that we may license in the future; ● it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; ● it is possible that our pending owned patent applications or those that we may own or license in the future will not lead to issued patents; ● issued patents, if any arise in the future, that we either own or that we may license in the future may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; ● others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis; 66 Table of Contents ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● we cannot predict the scope of protection of any patent issuing based on our or any future licensors’ patent applications, including whether the patent applications that we own, or, in the future, in-license will result in issued patents with claims directed to our product candidates or uses thereof in the United States or in other foreign countries; ● there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; ● countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; ● if enforced, a court may not hold that our patents, if they issue in the future, are valid, enforceable and infringed; ● we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; ● we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; ● we may fail to adequately protect and police our trademarks and trade secrets; and ● the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patent applications.
For example: ● others may be able to make product candidates that are similar to ours but that are not covered by the pending patent applications that we own or any patents or patent applications that we currently in-license or may in-license in the future; ● we or any current or future licensors or collaborators might not have been the first to make the inventions covered by the pending patent application that we own or may in-license in the future; ● ​​we or any current or future licensors or collaborators might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned intellectual property rights or any patent applications that we may license in the future; ● it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; ● it is possible that our pending owned patent applications or those that we may own or license in the future will not lead to issued patents; ● issued patents, if any arise in the future, that we either own or that we may license in the future may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; ● others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● we cannot predict the scope of protection of any patent issuing based on our or any current or future licensors’ patent applications, including whether the patent applications that we own, or, in the future, in-license will result 61 Table of Contents in issued patents with claims directed to our product candidates or uses thereof in the United States or in other foreign countries; ● there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; ● countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; ● if enforced, a court may not hold that our patents, if they issue in the future, are valid, enforceable and infringed; ● we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; ● we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; ● we may fail to adequately protect and police our trademarks and trade secrets; and ● the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patent applications.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or any future licensors were the first to either (i) file any patent application related to our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our or any future licensors’ patents or patent applications.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or any current or future licensors were the first to either (i) file any patent application related to our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our or any current or future licensors’ patents or patent applications.
Collaborations are subject to numerous risks, which may include that: ● collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; ● collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; ● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; ● disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; ● collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; ● collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings.
Collaborations are subject to numerous risks, which may include that: ● collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; ● collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, 66 Table of Contents such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; ● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; ● disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; ● collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; ● collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings.
Complying with these numerous, complex and often changing regulations is expensive and difficult, and failure to comply with any data privacy or security laws, whether by us, one of our CROs, CMOs or another third party with whom we work, could adversely affect our business, financial condition, results of operations and prospects, including but not limited to: regulatory investigation costs; material fines and penalties; compensatory, special, punitive and statutory damages; litigation (including class claims); consent orders regarding our data privacy and security practices; requirements that we provide notices, bans on processing personal information (including clinical trial data), orders to destroy or not use personal information, credit monitoring services and/or credit restoration services or other relevant services to impacted individuals in the event of an information security incident impacting personal information; adverse actions against our licenses to do business; reputational damage; and injunctive relief.
Complying with these numerous, complex and often changing regulations is expensive and difficult, and failure to comply with any data privacy or security obligations, whether by us, one of our CROs, CMOs or another third party with whom we work, could adversely affect our business, financial condition, results of operations and prospects, including but not limited to: regulatory investigation costs; material fines and penalties; compensatory, special, punitive and statutory damages; litigation (including class claims); consent orders regarding our data privacy and security practices; requirements that we provide notices, bans on processing personal information (including clinical trial data), orders to destroy or not use personal information, credit monitoring services and/or credit restoration services or other relevant services to impacted individuals in the event of an information security incident impacting personal information; adverse actions against our licenses to do business; reputational damage; and injunctive relief.
The ability of the FDA and comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or comparable foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or comparable foreign regulatory authorities’ ability to perform routine functions.
The ability of the FDA and comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, government shutdowns, statutory, regulatory, and policy changes, the FDA’s or comparable foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or comparable foreign regulatory authorities’ ability to perform routine functions.
Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of patent applications filed after March 2013 and the enforcement or defense of our future issued patents or claiming priority to patent applications filed after March 2023.
Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of patent applications filed after March 2013 and the enforcement or defense of our future issued patents or claiming priority to patent applications filed after March 2013.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products.
Such increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products.
Any future licensors may retain certain rights under the relevant agreements with us, including the right to use the underlying product candidates for academic and research use, to publish general scientific findings from research related to the product candidates, to make customary scientific and scholarly disclosures of information relating to the product candidates, or to develop or commercialize the licensed product candidates in certain regions.
In addition, any future licensors may retain certain rights under the relevant agreements with us, including the right to use the underlying product candidates for academic and research use, to publish general scientific findings from research related to the product candidates, to make customary scientific and scholarly disclosures of information relating to the product candidates, or to develop or commercialize the licensed product candidates in certain regions.
The legal systems of many countries do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our or any future licensors’ patents or marketing of competing products in violation of our proprietary rights.
The legal systems of many countries do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our or any current or future licensors’ patents or marketing of competing products in violation of our proprietary rights.
Our future arrangements with healthcare providers, healthcare organizations and third-party payors will expose us to broadly applicable anti-bribery, fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we research, market, sell and distribute our product candidates, if approved.
Our arrangements with healthcare providers, healthcare organizations and third-party payors will expose us to broadly applicable anti-bribery, fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we research, market, sell and distribute our product candidates, if approved.
Consequently, we may not be able to prevent third parties from practicing our or any future licensors’ inventions in all countries outside the United States, even in jurisdictions where we or any future licensors do pursue patent protection, or from selling or importing products made using our or any future licensors’ inventions in and into the United States or other jurisdictions.
Consequently, we may not be able to prevent third parties from practicing our or any current or future licensors’ inventions in all countries outside the United States, even in jurisdictions where we or any current or future licensors do pursue patent protection, or from selling or importing products made using our or any current or future licensors’ inventions in and into the United States or other jurisdictions.
In addition, our product candidates could 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; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval, including due to the heterogeneity of patient populations, or apparent improvement in trial participants receiving placebo; ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● 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 the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates; ● approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; ● the FDA or comparable foreign regulatory authorities will review CMOs’ manufacturing process and inspect our CMOs’ commercial manufacturing facilities and may not approve our CMOs’ manufacturing process or facilities with respect to our product candidates; and 52 Table of Contents ● 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 addition, our product candidates could 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; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval, including due to the heterogeneity of patient populations, or apparent improvement in trial participants receiving placebo; ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● 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 the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates; ● approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; ● the FDA or comparable foreign regulatory authorities will review CMOs’ manufacturing process and inspect our CMOs’ commercial manufacturing facilities and may not approve our CMOs’ manufacturing process or facilities with respect to our product candidates; 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.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents or any future licensors’ patents are invalid or unenforceable, or both. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents or any current or future licensors’ patents are invalid or unenforceable, or both. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of pharmaceutical products is prohibited in the EU. Relationships with healthcare professionals and associations are subject to stringent anti-gift statutes and anti-bribery laws, the scope of which differs across the EU.
The provision of benefits or advantages to healthcare professionals to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of pharmaceutical products is prohibited in the EU. Relationships with healthcare professionals and associations are subject to stringent anti-gift statutes and anti-bribery laws, the scope of which differs across the EU.
Competitors may use our or any future licensors’ technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we or any future licensors have patent protection, but enforcement is not as strong as that in the United States.
Competitors may use our or any current or future licensors’ technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we or any current or future licensors have patent protection, but enforcement is not as strong as that in the United States.
A third party that files a patent application in the USPTO after March 2013, but before we file an application covering the same invention, could therefore be awarded a patent covering an invention of ours or any future licensors even if we had made the invention before it was made by such third party.
A third party that files a patent application in the USPTO after March 2013, but before we file an application covering the same invention, could therefore be awarded a patent covering an invention of ours or any current or future licensors even if we had made the invention before it was made by such third party.
In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours or any future licensors is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.
In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours or any current or future licensors is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.
We cannot be certain that the claims in our or any future licensors’ pending patent applications directed to our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries. There can be no assurance that any such patent applications will issue as granted patents.
We cannot be certain that the claims in our or any current or future licensors’ pending patent applications directed to our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries. There can be no assurance that any such patent applications will issue as granted patents.
One aspect of the determination of patentability of our or any future licensors’ inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
One aspect of the determination of patentability of our or any current or future licensors’ inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
An adverse outcome in a litigation or proceeding involving our or any future licensors’ patents could limit our ability to assert our or any future licensors’ patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.
An adverse outcome in a litigation or proceeding involving our or any current or future licensors’ patents could limit our ability to assert our or any current or future licensors’ patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.
Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our or any future licensors’ patent applications and the enforcement or defense of our or any future licensors’ future issued patents, all of which could adversely affect our business, financial condition, results of operations and prospects.
Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our or any current or future licensors’ patent applications and the enforcement or defense of our or any current or future licensors’ future issued patents, all of which could adversely affect our business, financial condition, results of operations and prospects.
The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue or raise additional capital. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity (deficit) and our working capital.
The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue or raise additional capital. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and our working capital.
We may become subject to claims challenging the inventorship or ownership of our or any future licensors’ patents and other intellectual property. We may be subject to claims that former employees, collaborators or other third parties have an interest in our or any future licensors’ patents or other intellectual property as an inventor or co-inventor.
We may become subject to claims challenging the inventorship or ownership of our or any current or future licensors’ patents and other intellectual property. We may be subject to claims that former employees, collaborators or other third parties have an interest in our or any current or future licensors’ patents or other intellectual property as an inventor or co-inventor.
Accordingly, a third party may attempt to use the USPTO procedures to invalidate our or any future licensors’ patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
Accordingly, a third party may attempt to use the USPTO procedures to invalidate our or any current or future licensors’ patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
Although there are currently various mechanisms that may be used to transfer personal information from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, the EU-US Data Privacy Framework, and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States.
Although there are currently various mechanisms that may be used to transfer personal information from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, the EU-US Data Privacy Framework, and the UK extension thereto (“Data Privacy Framework”) (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Data Privacy Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States.
If we or any future licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
If we or any current or future licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
Any future licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the United States government, such that these licensors are not the sole and exclusive owners of the patents we in-licensed.
Any current or future licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the United States government, such that these licensors are not the sole and exclusive owners of the patents we in-licensed.
Because we currently rely and intend to continue to rely on these third parties, we will have less control over the timing, quality and other aspects of preclinical studies and clinical trials than we would have had we conducted them independently.
Because we currently rely and intend to continue to rely on these third parties, we will have less control over the timing, quality and other aspects of preclinical studies and clinical trials than we would have if we had conducted them independently.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our financial or other obligations under the license agreement; ● the extent to which our processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by any future licensors and us and our partners; and ● the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our financial or other obligations under the license agreement; ● the extent to which our processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and ● the priority of invention of patented technology.
Even if the patents do issue based on our or any future licensors’ patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
Even if the patents do issue based on our or any current or future licensors’ patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
Furthermore, even if they are unchallenged, patents in our or any future licensors’ portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.
Furthermore, even if they are unchallenged, patents in our or any current or future licensors’ portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.
To counter infringement or unauthorized use, we or any future licensors may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.
To counter infringement or unauthorized use, we or any current or future licensors may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.
There may be prior art of which we are not aware that may affect the patentability of our or any future licensors’ patent claims or, if issued, affect the validity or enforceability of a patent claim.
There may be prior art of which we are not aware that may affect the patentability of our or any current or future licensors’ patent claims or, if issued, affect the validity or enforceability of a patent claim.
Any future collaborations that we enter into may not be successful and we may not enter into such collaborations at all. The success of our collaboration arrangements will depend heavily on the efforts and activities of any future collaborators.
The current, and any future, collaborations that we enter into may not be successful and we may not enter into such collaborations at all. The success of our collaboration arrangements will depend heavily on the efforts and activities of any future collaborators.
Our or any future licensors’ pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.
Our or any current or future licensors’ pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.
Security incidents (or perceived security incidents), may result in material adverse consequences such as legal claims or proceedings, liability including litigation exposure, penalties and fines under relevant legal obligations, enforcement actions and investigations by regulatory authorities, additional reporting requirements or oversight, restrictions on processing sensitive information (including personal information), indemnification obligations, monetary fund diversions, diversion of management attention, other financial loss, and damage to our reputation and a loss of confidence in us and our ability to conduct clinical trials, which could delay the clinical development of our product candidates, and of which may adversely affect our business, results of operations or financial condition.
Security incidents (or perceived security incidents), may result in material adverse consequences such as legal claims or proceedings, liability including litigation exposure, penalties and fines under relevant legal obligations, enforcement 55 Table of Contents actions and investigations by regulatory authorities, additional reporting requirements or oversight, restrictions on processing sensitive information (including personal information), indemnification obligations, monetary fund diversions, diversion of management attention, other financial loss, and damage to our reputation and a loss of confidence in us and our ability to conduct clinical trials, which could delay the clinical development of our product candidates, and of which may adversely affect our business, results of operations or financial condition.
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; ● the federal criminal and civil false claims laws, including the federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions against individuals or entities, and the Federal Civil Monetary Penalties Laws, which prohibit, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be 81 Table of Contents made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
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; ● the federal criminal and civil false claims laws, including the federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions against individuals or entities, and the Federal Civil Monetary Penalties Laws, which prohibit, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Participant enrollment, a significant factor in the timing of clinical trials, is affected by many conditions, including the size and nature of the patient population, the number and location of clinical sites we enroll, the proximity of participants to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, the inability to obtain and maintain participant consents, the risk that enrolled participants will drop out before completion, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation 40 Table of Contents to other available therapies, including any new drugs or biologics that may be approved for the indications being investigated by us.
Participant enrollment, a significant factor in the timing of clinical trials, is affected by many conditions, including the size and nature of the patient population, the number and location of clinical sites we enroll, the proximity of participants to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, the inability to obtain and maintain participant consents, the risk that enrolled participants will drop out before completion, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs or biologics that may be approved for the indications being investigated by us.
In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice and (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In cases where data from foreign clinical trials are intended to serve as the sole basis for 39 Table of Contents regulatory approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice and (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
To 87 Table of Contents the extent we are unable to successfully identify and manage the performance of third-party service providers in the future, our business may be materially and adversely affected. If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements or do so on commercially reasonable terms.
To the extent we are unable to successfully identify and manage the performance of third-party service providers in the future, our business may be materially and adversely affected. 82 Table of Contents If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements or do so on commercially reasonable terms.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have a total annual gross revenue of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion 94 Table of Contents of our initial public offering (“IPO”); (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the end of the fiscal year in which the market value of common stock held by non-affiliates exceeds $700 million as of the prior June 30.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have a total annual gross revenue of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering (“IPO”); (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the end of the fiscal year in which the market value of common stock held by non-affiliates exceeds $700 million as of the prior June 30.
Other potentially significant negative consequences associated with AEs include: ● we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; ● regulatory authorities may withdraw, suspend or change their approvals of a product; ● regulatory authorities may require additional warnings on the label or limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; and ● we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies.
Other potentially significant negative consequences associated with AEs include: ● we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; ● regulatory authorities may withdraw, suspend or change their approvals of a product; 38 Table of Contents ● regulatory authorities may require additional warnings on the label or limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; and ● we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies.
If our operations are found to be in violation of any such requirements, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA or comparable foreign regulatory authorities, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid or comparable foreign programs, integrity oversight and reporting obligations, or reputational harm, any of which could adversely affect our financial results.
If our operations are found to be in violation of any such requirements, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA or comparable foreign regulatory authorities, exclusion from participation in government 77 Table of Contents contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid or comparable foreign programs, integrity oversight and reporting obligations, or reputational harm, any of which could adversely affect our financial results.
We or any future collaborators may experience delays in initiating or completing clinical trials due to unforeseen events or otherwise, that could delay or prevent our ability to receive regulatory approval or commercialize our current and any future product candidates, including: ● we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; 42 Table of Contents ● regulators, such as the FDA or comparable foreign regulatory authorities, may disagree with the design or implementation of our clinical trials; ● regulators, such as the FDA or comparable foreign regulatory authorities, IRBs, or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not allow us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols, or regulators may require that we modify or amend our clinical trial protocols; ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with trial sites and CROs, the terms of which can be subject to extensive negotiation and may vary significantly; ● we may be unable to identify, recruit, or train suitable clinical investigators; ● clinical trial sites may deviate from trial protocol or drop out of a trial; ● we may be unable to complete our clinical trials due to trial participant withdrawals and discontinuations due to AEs; ● the number of participants required for clinical trials may be larger than we anticipate, enrollment in clinical trials may be slower than we anticipate or participants may drop out or fail to return for post-treatment follow-up at a higher rate than we anticipate; ● the cost of clinical trials may be greater than we anticipate, or we may have insufficient funds to initiate or complete a clinical trial or to pay the substantial user fees required by the FDA upon the submission of a New Drug Application or comparable marketing authorization application in another jurisdiction; ● the quality or quantity of data relating to our product candidates or other materials necessary to conduct our clinical trials may be inadequate to initiate or complete a given clinical trial; ● reports from clinical testing of other therapies may raise safety, tolerability or efficacy concerns about our product candidates; ● clinical trials of our product candidates may fail to show appropriate safety, tolerability or efficacy, may produce negative or inconclusive results, or may otherwise fail to improve on the existing standard of care, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs; ● our CROs or clinical trial sites may fail to perform in accordance with GCP requirements or other applicable regulations, rules or guidelines; ● we may be unable to manufacture our product candidates from our contract manufacturing organizations (“CMOs”) in accordance with current Good Manufacturing Practice (“cGMP”) regulations or other applicable requirements in sufficient quantities for use in our clinical trials; ● SAEs may occur in our clinical trials or in trials of the same class of agents conducted by other companies that could be considered similar to our product candidates; ● we may select clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; ● we may be required to transfer our manufacturing processes to larger-scale facilities operated by a different CMO, or may experience delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and 43 Table of Contents ● third parties may be unwilling or unable to satisfy their contractual obligations to us in a timely manner.
We or any future collaborators may experience delays in initiating or completing clinical trials due to unforeseen events or otherwise, that could delay or prevent our ability to receive regulatory approval or commercialize our current and any future product candidates, including: ● we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; ● regulators, such as the FDA or comparable foreign regulatory authorities, may disagree with the design or implementation of our clinical trials; ● regulators, such as the FDA or comparable foreign regulatory authorities, IRBs, or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not allow us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols, or may require that we modify or amend our clinical trial protocols; ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with trial sites and CROs, the terms of which can be subject to extensive negotiation and may vary significantly; ● we may be unable to identify, recruit, or train suitable clinical investigators; ● clinical trial sites may deviate from trial protocol or drop out of a trial; ● we may be unable to complete our clinical trials due to trial participant withdrawals and discontinuations due to AEs; ● the number of participants required for clinical trials may be larger than we anticipate, enrollment in clinical trials may be slower than we anticipate or participants may drop out or fail to return for post-treatment follow-up at a higher rate than we anticipate; ● the cost of clinical trials may be greater than we anticipate, or we may have insufficient funds to initiate or complete a clinical trial or to pay the substantial user fees required by the FDA upon the submission of an NDA or comparable marketing authorization application in another jurisdiction; ● the quality or quantity of data relating to our product candidates or other materials necessary to conduct our clinical trials may be inadequate to initiate or complete a given clinical trial; ● reports from clinical testing of other therapies may raise safety, tolerability or efficacy concerns about our product candidates; ● clinical trials of our product candidates may fail to show appropriate safety, tolerability or efficacy, may produce negative or inconclusive results, or may otherwise fail to improve on the existing standard of care, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs; ● our CROs or clinical trial sites may fail to perform in accordance with GCP requirements or other applicable regulations, rules or guidelines; ● we may be unable to manufacture our product candidates from our contract manufacturing organizations 36 Table of Contents (“CMOs”) in accordance with cGMP regulations or other applicable requirements in sufficient quantities for use in our clinical trials; ● SAEs may occur in trials of the same class of agents conducted by other companies that could be considered similar to our product candidates; ● we may select clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; ● ​we may be required to transfer our manufacturing processes to larger-scale facilities operated by a different CMO, or may experience delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and ● third parties may be unwilling or unable to satisfy their contractual obligations to us in a timely manner.
Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize and products that we may develop, and a decline in our stock price.
Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize and products that we may develop, and a 51 Table of Contents decline in our stock price.
Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations and prospects. We have engaged in and may in the future engage in strategic transactions in the future, which could impact our liquidity, increase our expenses and present significant distractions to our management.
Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations and prospects. We have engaged in, and may in the future engage in, strategic transactions, which could impact our liquidity, increase our expenses, dilute our stockholders and present significant distractions to our management.
If our CMOs were to encounter any of these difficulties, our ability to provide our product 89 Table of Contents candidates to participants in preclinical and clinical trials, or to provide product for treatment of participants once approved, would be jeopardized. We depend on limited source suppliers for certain raw materials used in our product candidates.
If our CMOs were to encounter any of these difficulties, our ability to provide our product candidates to participants in preclinical and clinical trials, or to provide product for treatment of participants once approved, would be jeopardized. 84 Table of Contents We depend on limited source suppliers for certain raw materials used in our product candidates.
We continue to evaluate the safety profile of ESK-001 in our ongoing Phase 2 OLE and Phase 3 trials . ​ If AEs, SAEs or other side effects are observed in any of our ongoing or future clinical trials that are atypical of, or more severe than, the known side effects of the respective class of agents that each of our product candidates are a part of, we may have difficulty recruiting participants to our clinical trials, participants may drop out of our trials, or we may be required to abandon those trials or our development efforts of one or more product candidates altogether.
We continue to evaluate the safety profile of envu in our ongoing Phase 2 OLE and Phase 3 trials . ​ If AEs, SAEs or other side effects are observed in any of our ongoing or future clinical trials that are atypical of, or more severe than, the known side effects of the respective class of agents that each of our product candidates are a part of, we may have difficulty recruiting participants to our clinical trials, participants may drop out of our trials, or we may be required to abandon those trials or our development efforts of one or more product candidates altogether.
In addition, any future license agreements are likely to be complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
In addition, our license agreements are, and any future license agreements are likely to be, complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
In the event that any of our manufacturers 88 Table of Contents fails to comply with such requirements or to perform its obligations in relation to quality, timing or otherwise, or if our projected manufacturing capacity or supply of materials becomes limited, interrupted, or more costly than anticipated, we may be forced to enter into an agreement with another third party, which we may not be able to do timely or on reasonable terms, if at all.
In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations in relation to quality, timing or otherwise, or if our projected manufacturing capacity or supply of materials becomes limited, interrupted, or more costly than anticipated, we may be forced to enter into an agreement with another third party, which we may not be able to do timely or on reasonable terms, if at all.
These provisions may limit a stockholders’ ability to bring a claim, and may result in increased costs for a stockholder to bring such a claim, in a judicial forum of their choosing for disputes with us or our directors, officers, other employees or agents, which may discourage lawsuits against us and our directors, officers, other employees or agents.
These provisions may limit a stockholder’s ability to bring a claim, and may result in increased costs for a stockholder to bring such a claim, in a judicial forum of their choosing for disputes with us or our directors, officers, other employees or agents, which may discourage lawsuits against us and our directors, officers, other employees or agents.
Furthermore, future or past business transactions (such as the proposed Merger or other acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
Furthermore, future or past business transactions (such as the ACELYRIN Merger or other acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we obtain regulatory approval.
In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit 74 Table of Contents coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we obtain regulatory approval.
Disruptions at the FDA and other government agencies or comparable foreign regulatory authorities caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies or comparable foreign regulatory authorities caused by funding shortages, government shutdowns or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, reviewed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
If we are unable to obtain funding when and as needed on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
If we are unable to obtain funding when and as needed on a timely basis, we may be required to significantly curtail, delay or discontinue 34 Table of Contents one or more of our research or development programs or the commercialization of any product candidate, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
If such effects are more severe or less reversible than we expect, or not reversible at all, we may decide or be required to perform additional studies or to halt or delay further clinical development of ESK-001, A-005 or any future product candidates, which could result in the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
If such effects are more severe or less reversible than we expect, or not reversible at all, we may decide or be required to perform additional studies or to halt or delay further clinical development of envu, A-005 or any future product candidates, which could result in the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.
Our amended and restated certificate of incorporation, to the fullest extent permitted by law, provides that the Court of Chancery of the State of Delaware is the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim that 95 Table of Contents is governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation, to the fullest extent permitted by law, provides that the Court of Chancery of the State of Delaware is the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim that is governed by the internal affairs doctrine.
For example, we are currently developing ESK-001 for the treatment of PsO and SLE. Other emerging and established life sciences companies have been focused on similar therapeutics and indications. If approved, ESK-001 would compete with several currently approved or late-stage oral clinical therapeutics in each such indication as well as other drugs used to treat such patients.
For example, we are currently developing envu for the treatment of PsO and SLE. Other emerging and established life sciences companies have been focused on similar therapeutics and indications. If approved, envu would compete with several currently approved or late-stage oral clinical therapeutics in each such indication as well as other drugs used to treat such patients.
Additionally, stockholders who hold, in the aggregate, more than 10% of our common stock and non-voting common stock, but 10% or less of our common stock, and are not otherwise an insider, may not be required to report changes in their ownership due to transactions in our non-voting common stock pursuant to Section 16(a) of the Exchange Act, and may not be subject to the short-swing profit provisions of Section 16(b) of the Exchange Act.
Additionally, stockholders who hold, in the aggregate, more than 10% of 91 Table of Contents our common stock and non-voting common stock, but 10% or less of our common stock, and are not otherwise an insider, may not be required to report changes in their ownership due to transactions in our non-voting common stock pursuant to Section 16(a) of the Exchange Act, and may not be subject to the short-swing profit provisions of Section 16(b) of the Exchange Act.
We cannot ensure that patent rights relating to inventions described and claimed in our or any future licensors pending patent applications will issue or that patents based on our or any future licensors patent applications will not be challenged and rendered invalid and/or unenforceable.
We cannot ensure that patent rights relating to inventions described and claimed in our or any current or future licensors and licensees pending patent applications will issue or that patents based on our or any current or future licensors and licensees patent applications will not be challenged and rendered invalid and/or unenforceable.
Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or 67 Table of Contents may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
Moreover, if disputes over intellectual property that we may license in the future prevent or impair our ability to maintain future licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could adversely affect our business, financial condition, results of operations, and prospects.
Moreover, if disputes over intellectual property that we have licensed or may license in the future prevent or impair our ability to maintain our current or future licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could adversely affect our business, financial condition, results of operations, and prospects.
For example, we are implementing certain manufacturing process changes for ESK-001 to increase scalability with respect to our Phase 3 clinical trials. Such changes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our current or future product candidates to perform differently and affect the results of our future clinical trials.
For example, we are implementing certain manufacturing process changes for envu to increase scalability with respect to our Phase 3 clinical trials. Such changes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our current or future product candidates to perform differently and affect the results of our future clinical trials.
For example, the Committee for Medicinal Products for Human Use in the EU provided comments on the length of our two pivotal 24-week Phase 3 trials, and we plan to address their feedback with our 51 Table of Contents comparator trials. These modifications could delay our development timelines for EU regulatory approval and require substantially more resources.
For example, the Committee for Medicinal Products for Human Use in the EU provided comments on the length of our two pivotal 24-week Phase 3 trials, and we plan to address their feedback with our comparator trials. These modifications could delay our development timelines for EU regulatory approval and require substantially more resources.
Any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 98 Table of Contents These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
This Health Technology Assessment, process is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted.
This HTA process is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted.
In the United States, we are not permitted to market our product candidates until we receive regulatory approval of an NDA from the FDA. Similar approvals are required in order to market product candidates in foreign countries.
In the United States, we are not permitted to market our product candidates until we receive regulatory approval of an NDA or BLA from the FDA. Similar approvals are required in order to market product candidates in foreign countries.
It entails substantial upfront capital expenditures and significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval or become commercially viable. Our most advanced candidate is ESK-001, an oral, small molecule allosteric inhibitor of TYK2.
It entails substantial upfront capital expenditures and significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval or become commercially viable. Our most advanced candidate is envu, an oral, small molecule allosteric inhibitor of TYK2.
For example, as long-term treatment with ESK-001 continues to be evaluated in our STRIDE OLE, ONWARD3 LTE study and LUMUS Part B OLE, we expect to see discontinuation rates rise over time. Withdrawal of participants from our clinical trials may compromise the quality of our data.
For example, as long-term treatment with envu continues to be evaluated in our STRIDE OLE, ONWARD3 LTE study and LUMUS Part B OLE, we expect to see discontinuation rates rise over time. Withdrawal of participants from our clinical trials may compromise the quality of our data.
This may require longer and more extensive clinical development, or regulatory authorities may increase the amount of data and information required to approve, market, or maintain ESK-001, A-005 or any future product candidates and could result in warnings and precautions in our product labeling or a restrictive REMS or comparable foreign strategies.
This may require longer and more extensive clinical development, or regulatory authorities may increase the amount of data and information required to approve, market, or maintain envu, A-005 or any future product candidates and could result in warnings and precautions in our product labeling or a restrictive REMS or comparable foreign strategies.
Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or the use of our product candidates. As such, there may be applications of others now pending or recently revived patents of which we are unaware.
Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could 62 Table of Contents cover our product candidates or the use of our product candidates. As such, there may be applications of others now pending or recently revived patents of which we are unaware.
This of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU member states, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
This assessment of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU member states, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the original country.
Enrollment and retention of participants in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying patients, the availability of competitive products, and significant competition for recruiting participants in clinical trials.
Enrollment and retention of participants in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying 33 Table of Contents patients, the availability of competitive products and significant competition for recruiting participants in clinical trials.
We have in the past and may continue to enter into strategic transactions, including acquisitions of companies, asset purchases and in-licensing of intellectual property with the potential to acquire and advance new assets or product 57 Table of Contents candidates where we believe we are well qualified to optimize the development of promising therapies.
We have in the past and may continue to enter into strategic transactions, including acquisitions of companies, asset purchases and in-licensing of intellectual property with the potential to acquire and advance new assets or product candidates where we believe we are well qualified to optimize the development of promising therapies.

… 376 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed9 unchanged
For a description about risks from cybersecurity threats that may materially affect the Company and how they may do so, see our Risk Factors under Part I, Item 1A., under the heading “If our information technology systems, or those used by 99 Table of Contents our CROs, CMOs, clinical sites or other third parties with whom we work, or our data are or were compromised, become unavailable or suffer security breaches, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, regulatory investigations or actions, litigation, fines, penalties and liability, and other adverse consequences to our business, results of operations, and financial condition.” Governance The board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
For a description about risks from cybersecurity threats that may materially affect the Company and how they may do so, see our Risk Factors under Part I, Item 1A., under the heading “If our information technology systems, or those used by 94 Table of Contents our CROs, CMOs, clinical sites or other third parties with whom we work, or our data are or were compromised, become unavailable or suffer security breaches, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, regulatory investigations or actions, litigation, fines, penalties and liability, and other adverse consequences to our business, results of operations, and financial condition.” Governance The board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
The audit committee of our board of directors (the “Audit Committee”) evaluates our overall enterprise risks. We use service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example, outside security consultants and vendors, third party penetration testing providers, and forensic providers.
The audit committee of our board of directors (the “Audit Committee”) evaluates our overall enterprise risks. We use service providers to assist us from time to time in our efforts to identify, assess, and manage material risks from cybersecurity threats, including for example, outside security consultants and vendors, third party penetration testing providers, and forensic providers.
The Company’s incident response processes also include reporting to the Disclosure Committee and the Audit Committee for certain cybersecurity incidents. In addition, the Audit Committee receives periodic updates on cybersecurity risks and information technology matters, including related risk exposures and the processes the Company has implemented to address them, from management.
The Company’s incident response processes also include reporting to the Disclosure Committee and the Audit Committee for certain cybersecurity incidents. In addition, the Audit Committee receives periodic updates on cybersecurity risks and information technology matters, including related risk exposures and the processes the Company has implemented which are designed to address them, from management.
Further, we use third-party service providers to perform a variety of functions throughout our business, such as software-as-a-service providers, data hosting companies, and contract research organizations. We maintain a vendor risk management process designed to help manage cybersecurity risks associated with our use of these providers.
Further, we use third-party service providers to perform a variety of functions throughout our business, such as software-as-a-service providers, data hosting companies, and CROs. We maintain a vendor risk management process designed to help manage cybersecurity risks associated with our use of these providers.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed0 unchanged
Item 2. Properties Our principal executive office is located in South San Francisco, California. We entered into the lease for our principal executive office in August 2022, for approximately 55,000 square feet of combined office and laboratory space in South San Franscisco, which will expire in August 2033.
Item 2. Properties Our principal executive offices are located in South San Francisco, California. We entered into the lease for our principal executive offices in August 2022, for approximately 55,000 square feet of combined office and laboratory space in South San Franscisco, which will expire in August 2033.
In December 2024, we entered into a lease for approximately 22,000 square feet of additional office space in South San Francisco, California. The lease began in January 2025, and the lease term will end in December 2026.
In December 2024, we entered into a lease for approximately 22,000 square feet of additional office space in South San Francisco, California which will end in December 2026.
We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Both facilities have been subleased through the end of their lease terms. We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Added
Upon the closing of the ACELYRIN Merger, the Company became the successor to ACELYRIN’s rights under ACELYRIN’s lease agreements that included approximately 10,012 square feet of office space in Southern California, which expires in August 2028, and approximately 22,365 square feet of office space in South San Francisco, California, which expires in October 2029.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+7 added−1 removed0 unchanged
Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources, negative publicity, reputational harm and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safety Disclosures Not applicable. ​ 100 Table of Contents PART II
Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources, negative publicity, reputational harm and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safety Disclosures Not applicable. PART II
Item 3. Legal Proceedings From time to time, we may become involved in material legal proceedings or be subject to claims arising in the ordinary course of our business.
We could be forced to expend significant resources in the defense against this and any other related lawsuits and we may not prevail. ​ From time to time, we may become involved in additional legal proceedings arising in the ordinary course of business.
Removed
We are currently not party to any legal proceedings material to our operations or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by a government authority.
Added
Item 3. Legal Proceedings On November 15, 2023, a purported federal securities class action lawsuit was commenced in the United States District Court for the Central District of California. On February 15, 2024, the Court appointed joint lead plaintiffs and lead counsel. An amended complaint was filed on March 26, 2024 (Boukadoum v.
Added
Acelyrin, Inc. et al., No. 2:23-cv-09672-FMO-MAA), naming ACELYRIN and then-current and former executive officers and directors as defendants. The complaint alleges that the defendants violated the Exchange Act and Securities Act by misleading investors about the Phase 2b trial of izokibep in hidradenitis suppurativa.
Added
The original complaint was filed following ACELYRIN’s announcement of the week 16 results from the Part B portion of such Phase 2b trial.
Added
The amended complaint seeks damages 95 Table of Contents and an award of reasonable costs and expenses, including attorneys’ fees, expert fees and other costs, as well as such other and further relief as the court may deem just and proper.
Added
On May 3, 2024, the defendants filed their motion to dismiss the amended complaint, which was granted by the court, with leave to amend, in January 2026.
Added
On February 5 2026, the plaintiffs filed a second amended complaint, which seeks damages and an award of reasonable costs and expenses, as well as such other and further relief as the court may deem just and proper. On February 19, 2026, the defendants filed their motion to dismiss the second amended complaint, which remains pending.
Added
It is possible that additional suits will be filed, or allegations made by stockholders, with respect to these same or other matters and also naming us and or our officers and directors as defendants. This lawsuit and any other potential lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−13 removed4 unchanged
Holders of Common Stock As of March 12, 2025, there were 67 stockholders of record of our voting common stock and 2 stockholders of our non-voting common stock.
Holders of Common Stock As of March 12, 2026, there were 47 stockholders of record of our voting common stock and 2 stockholders of our non-voting common stock.
In addition, our ability to pay cash dividends on our capital stock in the future may be limited by the terms of any future debt or preferred securities we issue or any credit facilities we enter into.
In addition, our ability to pay cash dividends on our capital stock in the future may be limited by the terms of any future debt or preferred securities we issue or any credit facilities we enter into. Unregistered Sales of Equity Securities Since January 1, 2025, we have not issued any unregistered securities.
Removed
Unregistered Sales of Equity Securities Equity Plan-Related Issuances From January 1, 2024 through June 30, 2024, we granted certain directors, officers, employees, consultants and other service providers options to purchase an aggregate of (i) 1,796,797 shares of our common stock under our 2021 Stock Plan (the 2021 Plan”) at exercise prices ranging from $8.84 to $13.32 per share, (ii) 1,880,680 shares of our common stock under our 2024 Performance Option Plan (the “2024 POP”) at an exercise price of $10.19 per share and (iii) 163,131 shares of our common stock under our 2024 Equity Incentive Plan (the “2024 EIP”) at an exercise price of $16.00 per share.
Added
Purchases of Equity Securities by Issuers and Affiliated Purchasers None. 96 Table of Contents Item 6. [Reserved] ​ ​ ​ 97 Table of Contents
Removed
Redeemable Convertible Preferred Stock Issuances In May 2024, we sold an aggregate of 41,264,892 shares of our Series C redeemable convertible preferred stock at a purchase price of $3.13826 per share. The aggregate purchase price for the Series C redeemable convertible preferred shares was $129,499,960.
Removed
Concurrent Private Placement In connection with our IPO, we completed a concurrent private placement that closed on July 17, 2024, in which we issued and sold 2,500,000 shares of common stock at $16.00 per share, the IPO price, to AyurMaya Capital Management Fund, LP, an existing investor (the “Concurrent Private Placement”).
Removed
This transaction did not involve any underwriters, underwriting discounts or commissions, or any public offering.
Removed
The offers, sales and issuances of the securities described in the preceding paragraphs were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.
Removed
The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any 101 Table of Contents distribution thereof.
Removed
Each of the recipients of securities in these transactions was either an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act or had adequate access, through employment, business or other relationships, to information about us. Appropriate legends were affixed to the securities issued in these transactions.
Removed
Use of Proceeds from our Initial Public Offering of Common Stock and Concurrent Private Placement On June 27, 2024, our Registration Statement on Form S-1, as amended (File No. 333-280068) (the “Registration Statement”), was declared effective in connection with our IPO, pursuant to which we sold an aggregate of 13,125,000 shares of our common stock at a price to the public of $16.00 per share.
Removed
Morgan Stanley & Co. LLC, Leerink Partners LLC, Cantor Fitzgerald & Co. and Guggenheim Securities, LLC acted as joint book-running managers. The IPO closed on July 1, 2024. The aggregate net proceeds from the IPO were $193.3 million, after deducting underwriting discounts and commissions and other offering costs of $16.7 million.
Removed
The offering terminated after the sale of all securities registered pursuant to the Registration Statement. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
Removed
In connection with the IPO, we completed the Concurrent Private Placement that closed on July 17, 2024, in which we issued and sold 2,500,000 shares of common stock at $16.00 per share, the IPO price, to AyurMaya Capital Management Fund, LP, an existing investor.
Removed
The net proceeds from our IPO and Concurrent Private Placement have been invested according to our approved investment policy in a mix of money market funds and high-quality, available-for-sale marketable securities.
Removed
There has been no material change in the planned use of proceeds from our IPO as described in the Company’s final prospectus for its IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 28, 2024. Item 6. [Reserved] ​ ​ 102 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Item 6. [Reserved] ​ 102 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 103 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 120 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 121 ​ ​ ​
Item 6. [Reserved] ​ 97 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 98 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 116 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 118 ​ ​ ​

Item 7. Management's Discussion & Analysis

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

85 edited+76 added−61 removed58 unchanged
Our actual results and the timing of selected events could differ materially from those described or implied by these forward-looking statements as a result of several factors, including those set forth under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K.
Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors, including those set forth under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K.
See also see the section titled “Special Note Regarding Forward-Looking Statements.” Overview Our mission is to significantly improve the lives of patients by replacing broad immunosuppression with targeted therapies. Our name, Alumis, captures our mission to enlighten immunology, and is inspired by the words “allumer”—French for illuminate—and “immunis”—Latin for the immune system.
See also the section titled “Special Note Regarding Forward-Looking Statements.” Overview Our mission is to significantly improve the lives of patients by replacing broad immunosuppression with targeted therapies. Our name, Alumis, captures our mission to enlighten immunology, and is inspired by the words “allumer”—French for illuminate—and “immunis”—Latin for the immune system.
Further, the United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could significantly increase tariffs on a broad array of goods.
Further, the United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could continue to significantly increase tariffs on a broad array of goods.
Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital.
Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital.
There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all.
There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us.
If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us.
Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation exemptions to the requirements for (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.
Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation exemptions to the requirements for (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.
Our future funding requirements will depend on many factors, including the following: ● the timing, scope, progress and results of our preclinical studies and clinical trials for our current and future product candidates; ● the number, scope and duration of clinical trials required for regulatory approval of our current and future product candidates; ● the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities for our product candidates; ● the cost of manufacturing clinical and commercial supplies as well as scale up of our current and future product candidates; ● the increase in the number of our employees and expansion of our physical facilities to support growth initiatives; ● our ability to establish new, strategic collaborations, licensing or other arrangements; 112 Table of Contents ● the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights; ● the extent to which we acquire or in-license other product candidates and technologies; ● the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our product candidates; ● the timing of when we pay our operating expenses; ● the effect of competing technological and market developments; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; ● the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; ● our implementation of various computerized informational systems and efforts to enhance operational systems; ● the costs associated with being a public company; and ● other factors, including economic uncertainty and geopolitical tensions, which may exacerbate the magnitude of the factors discussed above.
Our future funding requirements will depend on many factors, including the following: ● the timing, scope, progress and results of our preclinical studies and clinical trials for our current and future product candidates; ● the number, scope and duration of clinical trials required for regulatory approval of our current and future product candidates; ● the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities for our product candidates; ● the cost of manufacturing clinical and commercial supplies as well as scale up of our current and future product candidates; ● the increase in the number of our employees and expansion of our physical facilities to support growth initiatives; ● our ability to establish new, strategic collaborations, licensing or other arrangements; ● the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights; ● the extent to which we acquire or in-license other product candidates and technologies; ● the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our product candidates; ● the timing of when we pay our operating expenses; ● the effect of competing technological and market developments; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; ● the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; ● our implementation of various computerized informational systems and efforts to enhance operational systems; 109 Table of Contents ● the costs associated with being a public company; and ● other factors, including economic uncertainty and geopolitical tensions, which may exacerbate the magnitude of the factors discussed above.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements in Part II, Item 8. of this Annual Report on Form 10-K for additional information.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Although our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements in Part II, Item 8. of this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Although our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Our ability to achieve and sustain profitability will depend on our ability to successfully develop, obtain regulatory approval for and commercialize our product candidates. There can be no assurance that we will ever earn revenue or achieve profitability, or if achieved, that the revenue or profitability will be sustained on a continuing basis.
Our ability to achieve and sustain profitability will depend on our ability to successfully develop, obtain regulatory approval for and commercialize our product candidates. There can be no assurance that we will ever achieve profitability, or if achieved, that the revenue or profitability will be sustained on a continuing basis.
Additionally, we may decide to build our own manufacturing facility in the future to provide us greater flexibility and control over our clinical or commercial manufacturing needs.
Additionally, we may decide to build our own manufacturing facility in the future to provide us with greater flexibility and control over our clinical or commercial manufacturing needs.
Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts, needed, on the terms which are favorable, we could be required to delay, scale back, or abandon some or all of our planned development programs and other operations, which could materially harm our business, financial condition and results of operations. ​ 111 Table of Contents Future Funding Requirements Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures.
Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts, needed, on the terms which are favorable, we could be required to delay, scale back, or abandon some or all of our planned development programs and other operations, which could materially harm our business, financial condition and results of operations. ​ Future Funding Requirements Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures.
Until such time as we can generate significant revenue 104 Table of Contents from product sales, if ever, we expect to finance our operations through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions.
Until such time as we can generate significant revenue 108 Table of Contents from product sales, if ever, we expect to finance our operations through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions.
Our future research and development costs may vary significantly based on factors such as: ● the timing and progress of our preclinical and clinical development activities; 107 Table of Contents ● the number and scope of preclinical and clinical programs we decide to pursue; ● the costs and timing of manufacturing of our product candidates ● the amount and timing of any milestone payment due under our existing asset acquisition agreement and any future license or collaboration agreements; ● the number of patients that participate in our clinical trials, and per participant clinical trial costs; ● the number and duration of clinical trials required for approval of our product candidates; ● the number of sites included in our clinical trials, and the locations of those sites; ● delays or difficulties in adding trial sites and enrolling participants; ● patient drop-out or discontinuation rates; ● additional safety monitoring if requested by regulatory authorities; ● the phase of development of our product candidates; ● the timing, receipt and terms of any approvals from applicable regulatory authorities including the FDA and comparable foreign regulatory authorities; ● maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates; ● changes in the competitive outlook; ● the extent to which we establish additional strategic collaborations or other arrangements; and ● the impact of any business interruptions to our operations or to those of the third parties with whom we work.
Our future research and development costs may vary significantly based on factors such as: ● the timing and progress of our preclinical and clinical development activities; ● the number and scope of preclinical and clinical programs we decide to pursue; ● the costs and timing of manufacturing of our product candidates; ● the amount and timing of any milestone payment due under our FronThera Acquisition, Pierre Fabre Agreement, the Kaken Collaboration Agreement and any future license or collaboration agreements; ● the number of patients that participate in our clinical trials, and per participant clinical trial costs; ● the number and duration of clinical trials required for approval of our product candidates; ● the number of sites included in our clinical trials, and the locations of those sites; ● delays or difficulties in adding trial sites and enrolling participants; ● patient drop-out or discontinuation rates; ● additional safety monitoring if requested by regulatory authorities; ● the phase of development of our product candidates; ● the timing, receipt and terms of any approvals from applicable regulatory authorities including the FDA and comparable foreign regulatory authorities; ● maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates; 103 Table of Contents ● changes in the competitive outlook; ● the extent to which we establish additional strategic collaborations or other arrangements; and ● the impact of any business interruptions to our operations or to those of the third parties with whom we work.
This process involves reviewing open contracts and purchase orders and communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the services when we have not yet been invoiced or otherwise notified of actual costs.
This process involves reviewing open contracts and purchase orders and communicating with our applicable personnel to identify services that have been performed on our behalf and estimating 112 Table of Contents the level of service performed and the associated cost incurred for the services when we have not yet been invoiced or otherwise notified of actual costs.
Milestone payments made after a product’s regulatory approval will be capitalized and amortized over the remaining useful life of the related product. We expense research and development costs as incurred. Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks.
Milestone payments made after a product’s regulatory approval will be capitalized and amortized over the remaining useful life of the related product. 102 Table of Contents We expense research and development costs as incurred. Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Since our inception, we have devoted substantially all of our efforts to organizing our company, hiring personnel, business planning, acquiring and developing our product candidates, performing research and development, conducting preclinical studies and clinical trials, establishing and protecting our intellectual property portfolio, raising capital and providing general and administrative support for these activities.
Since our inception, we have devoted substantially all of our efforts to organizing our company, hiring personnel, business planning, acquiring and developing our product candidates, performing research and development, conducting preclinical studies and clinical trials, establishing and protecting our intellectual property portfolio, raising capital, integrating the acquired ACELYRIN business and personnel, and providing general and administrative support for these activities.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 119 Table of Contents
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Substantially all of our net losses have resulted from costs incurred in connection 103 Table of Contents with our research and development efforts, including acquisitions of in-process research and development assets, and, to a lesser extent, from general and administrative costs associated with our operations.
Substantially all of our net losses have resulted from costs incurred in connection with our research and development efforts, including acquisitions of in-process research and development assets, and, to a lesser extent, from general and administrative costs associated with our operations.
In May 2023 and in March 2024, in connection with our redeemable convertible preferred stock financings, we issued options to purchase additional shares of redeemable convertible preferred stock at a specified price, which were accounted for as derivative liabilities.
In March 2024, in connection with our redeemable convertible preferred stock financings, we issued options to purchase additional shares of redeemable convertible preferred stock at a specified price, which were accounted for as derivative liabilities.
The Company has also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period.
We have also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period.
We are a clinical stage biopharmaceutical company with an initial focus on developing our two TYK2 inhibitors: ESK-001, a second-generation inhibitor that we are developing to maximize target inhibition and optimize tolerability, and A-005, a CNS penetrant molecule.
We are a clinical stage biopharmaceutical company with an initial focus on developing our two TYK2 inhibitors: envu, formerly known as ESK-001, a second-generation inhibitor that we are developing to maximize target inhibition and optimize tolerability, and A-005, a CNS penetrant molecule.
In July 2024, we met a milestone in connection with the first administration of ESK-001 to a patient enrolled in a Phase 3 clinical trial of ESK-001 and made a $23.0 million milestone payment in August 2024, which was recorded in research and development expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.
In July 2024, we met a milestone in connection with the first administration of envu to a patient enrolled in a Phase 3 clinical trial of envu and made a $23.0 million milestone payment in August 2024, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.
We expect to continue to incur significant and increasing expenses and increasing substantial losses for the foreseeable future as we continue our development of and seek regulatory approvals for our product candidates and commercialize any approved products, seek to expand our product pipeline and invest in our organization.
We expect to continue to incur significant and increasing expenses and increasing substantial losses for the foreseeable future as we continue our development of and seek regulatory approvals for our product candidates and commercialize any approved products, seek to expand our product pipeline and invest in our expanded organization following the ACELYRIN Merger.
Since our inception and through December 31, 2024, our external research and development expenses were primarily related to the discovery and advancement of programs under our TYK2 platform, including our two most advanced product candidates, ESK-001 and A-005. We use internal resources primarily for managing our research, process development, manufacturing and clinical development activities.
Since our inception and through December 31, 2025, our external research and development expenses were primarily related to the discovery and advancement of programs under our TYK2 platform, including our two most advanced product candidates, envu and A-005. We use internal resources primarily for managing our research, process development, manufacturing and clinical development activities.
The assumptions utilized in the calculation included the Company’s expected common stock price, expected volatility, risk-free rate and expected term.
The assumptions utilized in the calculation included our expected common stock price, expected volatility, risk-free rate and expected term.
In the year ended December 31, 2022, we incurred and made a $37.0 million milestone payment for the first administration of ESK-001 to a patient enrolled in a Phase 2 clinical trial of ESK-001, which was recorded in research and development expenses in the consolidated statements of operations and comprehensive loss.
In the year ended December 31, 2022, we incurred and made a $37.0 million milestone payment for the first administration of envu to a patient enrolled in a Phase 2 clinical trial of envu, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive loss.
Off-Balance Sheet Arrangements During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC. JOBS Act Transition Period and Smaller Reporting Company Status We are an “emerging growth company” as defined in the JOBS Act.
Off-Balance Sheet Arrangements During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the Securities and Exchange Commission (“SEC”). JOBS Act Transition Period and Smaller Reporting Company Status We are an “emerging growth company” as defined in the JOBS Act.
We may continue to be a smaller reporting company if either (i) the market value of our common stock and non-voting common stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common stock and non-voting common stock held by non-affiliates is less than $700.0 million.
We may continue to be a smaller reporting company if either (i) the market value of our common stock and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common stock and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Financing Activities Net cash provided by financing activities of $492.4 million for the year ended December 31, 2024, included net proceeds of $258.5 million from the issuance of our Series C redeemable convertible preferred stock and related derivative liability, net of offering costs, $193.3 million net proceeds from our IPO, net of underwriter discounts and commissions and other offering costs, gross and net proceeds of $40.0 million from a private placement transaction and proceeds of $0.6 million from the issuance of common stock upon exercise of stock options.
Net cash provided by financing activities of $492.4 million for the year ended December 31, 2024, included $258.5 million proceeds from the issuance of redeemable convertible preferred stock and derivative liability, net of offering costs, $193.3 million proceeds from initial public offering, net of underwriter discounts and commissions and other offering costs, $40.0 million proceeds from a private placement transaction and $0.6 million proceeds from issuance of common stock upon exercise of stock options.
Research and Development Expenses Research and development expenses consist of external and internal costs primarily related to acquiring and developing our research pipeline and technologies and clinical development of our product candidates. 106 Table of Contents External costs include: ● costs associated with acquiring technology and intellectual property licenses that have no alternative future uses and costs incurred under in-license or assignment agreements, including milestone payments; ● expenses incurred in connection with the discovery and preclinical development of our pipeline programs; ● costs incurred in connection with the clinical development of our product candidates, including under agreements with CROs, CMOs and other third parties that conduct clinical trials and manufacture clinical supplies, product candidates and components on our behalf; and ● costs for third-party professional research and development consulting services.
External costs include: ● costs associated with acquiring technology and intellectual property licenses that have no alternative future uses and costs incurred under in-license or assignment agreements, including milestone payments; ● expenses incurred in connection with the discovery and preclinical development of our pipeline programs; ● costs incurred in connection with the clinical development of our product candidates, including under agreements with CROs, CMOs and other third parties that conduct clinical trials and manufacture clinical supplies, product candidates and components on our behalf; and ● costs for third-party professional research and development consulting services.
In addition, we have incurred and will continue to incur additional costs associated with operating as a public company, including significant legal, audit, accounting, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer liability insurance costs, investor and public relations costs, and other expenses that we did not incur as a private company.
We have incurred and will continue to incur costs associated with operating as a public company, including significant legal, audit, accounting, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer liability insurance costs, investor and public relations costs, and other expenses.
In connection with the IPO, an existing investor and a holder of more than 5% of our capital stock, purchased an additional 2,500,000 shares of our common stock at the IPO price per share for total gross and net proceeds of $40.0 million in the Concurrent Private Placement.
In connection with the IPO, on July 17, 2024, an existing investor and a holder of more than 5% of our capital stock, purchased an additional 2,500,000 shares of our common stock at the IPO price per share for total gross and net proceeds of $40.0 million in a private placement transaction (the “Concurrent Private Placement”).
Milestones related to previously acquired IPR&D assets for the year ended December 31, 2024, included a $23.0 million clinical milestone payment made in connection with the FronThera Acquisition. No clinical milestones were achieved or probable during the year ended December 31, 2023.
Milestones related to previously acquired IPR&D assets for the year ended December 31, 2024, included a $23.0 million clinical milestone payment made in connection with the FronThera Acquisition.
Macroeconomic Trends Our business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer 105 Table of Contents confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the ongoing conflicts in Ukraine and Israel and the surrounding areas).
Macroeconomic Trends Our business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the evolving U.S. and ex-U.S. tariff landscape).
Interest income increased by $8.7 million, to $12.0 million for the year ended December 31, 2024, from $3.4 million for the year ended December 31, 2023, primarily as a result of higher balances of cash equivalents and marketable securities.
Interest income increased by $2.2 million, to $14.2 million for the year ended December 31, 2025, from $12.0 million for the year ended December 31, 2024, primarily as a result of higher balances of cash equivalents and marketable securities.
We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure.
Item 8 of this Annual Report on Form 10-K. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure.
We have incurred significant operating losses and negative cash flows since our inception. Our net loss for the years ended December 31, 2024 and 2023 was $294.2 million and $155.0 million, respectively. As of December 31, 2024, we had an accumulated deficit of $658.6 million.
We have incurred significant operating losses and negative cash flows since our inception. Our net loss for the years ended December 31, 2025 and 2024 was $243.3 million and $294.2 million, respectively. As of December 31, 2025, we had an accumulated deficit of $901.9 million.
Given our stage of development, we do not yet have a marketing or sales organization or commercial infrastructure; however, we intend to build the necessary sales, marketing and commercialization capabilities and infrastructure over time as our product candidates advance through clinical development.
Given our stage of development, we do not yet have a fully established marketing or sales organization or commercial infrastructure; however, we have begun building foundational capabilities and intend to continue expanding the necessary sales, marketing and commercialization capabilities and infrastructure over time as our product candidates advance through clinical development and regulatory approval.
Under the agreement, we are obligated to pay contingent consideration of up to an aggregate of $120.0 million based on the achievement of specified clinical and approval milestones, for up to an aggregate of $70.0 million payable for clinical milestones, and for up to an aggregate of $50.0 million payable for approval milestones, all related to technology acquired under the agreement.
Under the agreement, we are obligated to pay contingent consideration of up to an aggregate of $120.0 million based on the achievement of specified clinical and approval milestones, for up to an aggregate of $70.0 million payable for clinical milestones, and for up to an aggregate of $50.0 million payable for approval milestones, including receipt of first commercialization approval in the United States or certain other jurisdictions, all related to technology acquired under the agreement.
Net cash used in operating activities for the year ended December 31, 2023, was due to our net loss for the period of $155.0 million, partially offset by changes in non-cash items of $13.0 million and changes in operating assets and liabilities of 113 Table of Contents $12.0 million.
Net cash used in operating activities for the year ended December 31, 2025 was due to our net loss for the period of $243.3 million and changes in non-cash items totaling $144.0 million, partially offset by changes in operating assets and liabilities of $17.8 million.
Other research and development costs decreased by $1.2 million, to $10.3 million for the year ended December 31, 2024, from $11.5 million for the year ended December 31, 2023, primarily due to timing of preclinical studies to support our clinical trials for ESK-001 and A-005.
Other research and development costs decreased by $1.2 million, to $9.1 million for the year ended December 31, 2025, from $10.3 million for the year ended December 31, 2024, primarily due to the timing of preclinical studies.
Professional consulting services expenses increased by $6.0 million, to $19.2 million for the year ended December 31, 2024, from $13.2 million for the year ended December 31, 2023, primarily due to increased support for our clinical trials for ESK-001, A-005 and other research programs.
Professional consulting services expenses increased by $11.0 million, to $30.2 million for the year ended December 31, 2025, from $19.2 million for the year ended December 31, 2024, primarily due to services to support our clinical trial for envu and other programs.
Stock-Based Compensation Expense We grant stock-based awards to employees, directors and non-employee consultants in the form of stock options to purchase shares of our common stock.
Stock-Based Compensation Expense We account for stock-based compensation expense in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). We grant stock-based awards to employees, directors and non-employee consultants in the form of stock options and restricted stock units (“RSUs”) to purchase shares of our common stock.
Investing Activities Net cash used in investing activities of $113.8 million for the year ended December 31, 2024, was related to purchases of marketable securities of $240.1 million and purchases of property and equipment of $1.7 million, partially offset by proceeds from maturities of marketable securities of $128.0 million.
Net cash used in investing activities of $113.8 million for the year ended December 31, 2024, was related to purchases of marketable securities of $240.1 million and purchases of property and equipment of $1.7 million, partially offset by maturities of marketable securities of $128.0 million . 110 Table of Contents Financing Activities Net cash provided by financing activities of $2.1 million for the year ended December 31, 2025 was primarily related to proceeds from the issuance of common stock under the 2024 ESPP (defined below) of $1.6 million and proceeds from issuance of common stock upon exercise of stock options of $0.5 million.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Net cash used in operating activities ​ $ (255,078) ​ $ (129,975) Net cash (used in) provided by investing activities ​ ​ (113,790) ​ ​ 60,472 Net cash provided by financing activities 492,367 89,682 Net increase in cash, cash equivalents and restricted cash $ 123,499 $ 20,179 Operating Activities Net cash used in operating activities was $255.1 million and $130.0 million for the years ended December 31, 2024 and 2023, respectively.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Net cash used in operating activities ​ $ (369,523) ​ $ (255,078) Net cash provided by (used in) investing activities ​ ​ 287,877 ​ ​ (113,790) Net cash provided by financing activities 2,067 492,367 Net (decrease) increase in cash, cash equivalents and restricted cash $ (79,579) $ 123,499 Operating Activities Net cash used in operating activities was $369.5 million and $255.1 million for the years ended December 31, 2025 and 2024, respectively.
We expect that our general and administrative expenses will increase substantially in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates and facility occupancy costs, and support of general operations and ACELYRIN general and administrative activities, if the Merger closes.
Personnel-related costs include salaries, annual bonuses, benefits, travel and meal expenses and stock-based compensation expense for our general and administrative personnel. We expect that our general and administrative expenses will increase substantially in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates and facility occupancy costs.
On an ongoing basis, we evaluate our estimates and assumptions, including but not limited to those related to research and development expenses and accruals, stock-based compensation expense, the fair value of our common stock and the fair value of our derivative liability prior to our IPO.
On an ongoing basis, we evaluate our estimates and assumptions, including but not limited to those related to research and development expenses and accruals, valuation of acquired IPR&D intangible assets, revenue recognition and stock-based compensation expense.
Personnel-related costs increased by $14.7 million, to $46.8 million for the year ended December 31, 2024, from $32.1 million for the year ended December 31, 2023, primarily due to increased research and development headcount and included an increase in stock-based compensation expense of $5.4 million as a result of additional stock options granted, which included awards granted under the 2024 POP.
Personnel-related costs increased by $45.9 million, to $92.7 million for the year ended December 31, 2025, from $46.8 million for the year ended December 31, 2024, primarily due to an increase in research and development headcount and severance costs related to the ACELYRIN Merger, and included an increase in stock-based compensation expense of $11.2 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted.
Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards.
Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards. 115 Table of Contents Stock-based compensation expense related to stock purchase rights under our 2024 Employee Stock Purchase Plan (the “2024 ESPP”) is measured based on grant date at fair value using the Black-Scholes option-pricing model.
The derivative liability was re-measured at fair value and settled in May 2024, when we closed the second tranche of the Series C financing.
The derivative liability was re-measured at fair value and settled in May 2024, when we closed the second tranche of the Series C financing. Income Tax Benefit Income tax benefit was $8.6 million for the year ended December 31, 2025, as compared to zero for the year ended December 31, 2024.
See Note 10 to our consolidated financial statements in Part II, Item 8. of this Annual Report on Form 10-K for additional information about the assumptions we used to determine the estimated fair value of our stock options granted in the periods presented.
See Note 3 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
To date, we have primarily funded our operations with proceeds from sales of shares of our common stock and redeemable convertible preferred stock and the issuance of convertible promissory notes in private placements and, more recently, from our IPO and Concurrent Private Placement.
To date, we have primarily funded our operations through the issuance of common stock, including in connection with the ACELYRIN Merger, our IPO and Concurrent Private Placement, the issuance of redeemable convertible preferred stock and convertible promissory notes in private placements and, most recently, our public offering of common stock which closed on January 9, 2026.
Upfront and milestone payments are accrued for and expensed as in process research and development (“IPR&D”) assets expense when the achievement of the milestone is probable up to the point of regulatory approval and, absent obtaining such approval, have no alternative future use.
Upfront payments related to acquired IPR&D assets are recognized as expenses when we determine that the assets acquired do not have alternative future uses. Milestone payments are accrued and expensed when the achievement of the milestone is probable up to the point of regulatory approval and, absent obtaining such approval, have no alternative future use.
The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all.
Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all. To date, the macroeconomic trends discussed above have not had a material adverse impact on our business, financial condition or results of operations.
CRO, CMO and clinical trials expenses increased by $82.5 million, to $151.4 million for the year ended December 31, 2024, from $69.0 million for the year ended December 31, 2023, primarily due to an increase in clinical trial and CRO expenses due to increased activities related to our clinical trials for ESK-001 and A-005 and an increase in CMO expenses associated with manufacturing of clinical supplies to support our trials.
CRO, CMO and clinical trials expenses increased by $79.7 million, to $231.1 million for the year ended December 31, 2025, from $151.4 million for the year ended December 31, 2024, primarily due to an increase in clinical trial and CRO expenses related to the progression of our clinical trials for envu and other programs, including costs to support acceleration of clinical trial activities for our Phase 3 ONWARD clinical program, partially offset by a decrease in CMO expenses associated with manufacturing of clinical supplies to support our trials.
As of December 31, 2024, we had total undiscounted lease payment obligations under non-cancelable leases of $5.0 million payable in the 12 months following December 31, 2024 and $43.4 million payable thereafter. In December 2024, we entered into a lease agreement for approximately 22,000 square feet of additional office space in South San Francisco, California.
Contractual Obligations and Commitments Leases We have operating lease arrangements for office and laboratory space in South San Francisco, California and office space in Southern California. As of December 31, 2025, we had total undiscounted lease payment obligations under non-cancelable leases of $8.5 million payable in the 12 months following December 31, 2025, and $44.5 million payable thereafter.
FL2021-001, Inc.’s name was changed to Esker Therapeutics, Inc. in March 2021, and to Alumis Inc. in January 2022.
Alumis was incubated by Foresite Labs and incorporated on January 29, 2021, as a Delaware corporation under the name FL2021-001, Inc. FL2021-001, Inc.’s name was changed to Esker Therapeutics, Inc. in March 2021, and to Alumis Inc. in January 2022.
Liquidity, Capital Resources and Capital Requirements Sources of Liquidity Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.
The income tax benefit was related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger. 107 Table of Contents Liquidity, Capital Resources and Capital Requirements Sources of Liquidity Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.
The changes in operating assets and liabilities primarily included a decrease of $5.5 million in research and development prepaid expenses, an increase of $5.2 million in research and development accrued expenses and an increase of $2.5 million in other accrued expenses and current liabilities.
The changes in operating assets and liabilities primarily included a decrease of $17.2 million in other prepaid expenses and other assets, a decrease of $11.5 million in research and development prepaid expenses, an increase of $6.0 million in other accrued expenses and current liabilities, an increase of $4.1 million in deferred revenue, and an increase of $2.1 million in research and development accrued expenses, partially offset by an $8.6 million decrease in deferred tax liability, a decrease of $6.0 million in accounts payable, an increase of $5.5 million in other assets, non-current and a decrease of $3.2 million in operating lease liabilities.
We also expect an increase in costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements, additional director and officer insurance costs, and investor and public relations costs. 108 Table of Contents Other Income (Expense) Other income (expense) consists primarily of interest income, including amortization of premiums and accretion of discounts on marketable securities and change in fair value of derivative liability.
We also expect to continue incurring costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements, additional director and officer insurance costs, and investor and public relations costs.
All outstanding Class A common stock shares and all outstanding Class B common stock shares were redesignated immediately thereafter into the same number of shares of common stock and non-voting common stock, respectively.
All outstanding Class A common stock shares and all outstanding Class B common stock shares were redesignated immediately thereafter into the same number of shares of common stock and non-voting common stock, respectively. ACELYRIN Merger On February 6, 2025, we entered into a Merger Agreement with ACELYRIN and Merger Sub, a Delaware corporation and a direct wholly owned subsidiary.
Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided.
Our estimates of research and development accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided.
The Merger Agreement was approved by the disinterested directors on our board and the board of directors of ACELYRIN and is subject to stockholder approval by the stockholders of each company and the satisfaction or waiver of other closing conditions.
The Merger Agreement was approved by the disinterested directors on our board of directors and the board of directors of ACELYRIN and was approved by the stockholders of each company on May 13, 2025.
Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed.
Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. We determine accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of studies, or the services completed.
IPO and Concurrent Private Placement On June 27, 2024, our Registration Statement on Form S-1 for our IPO was declared effective, and, on July 1, 2024, we completed our IPO, pursuant to which we issued and sold 13,125,000 shares of our common stock at $16.00 price per share to the public.
IPO and Concurrent Private Placement On July 1, 2024, we completed our IPO, pursuant to which we issued and sold 13,125,000 shares of our common stock at $16.00 price per share to the public. Net proceeds from the IPO were $193.3 million, after deducting underwriting discounts and commissions and other offering costs totaling $16.7 million.
We will need to raise significant additional capital to fund ongoing research and development activities and maintain future operations. We plan to monitor expenses and may raise additional capital through a combination of public and private equity, debt financings, strategic alliances, and licensing arrangements.
We continuously monitor and, where necessary, may reduce our operating expenses in response to our clinical development progress and our ability and need to raise additional capital through a combination of public and private equity, debt financings, strategic alliances, and licensing arrangements.
We are also a “smaller reporting company,” meaning that the market value of our common stock and non-voting common stock held by non-affiliates plus the aggregate amount of gross proceeds expected from our IPO was less than $700.0 million as of June 30, 2024, and our annual revenue was less than $100.0 million during the most recently completed fiscal year.
We are also a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our common stock and non-voting common stock held by non-affiliates was less than $250.0 million as of June 30, 2025.
For additional information on the Merger and Merger Agreement, see Note 15 to our consolidated financial statements, in Part II, Item 8. of this Annual Report on Form 10-K. Components of Results of Operations Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.
The gain on bargain purchase was recognized as other income in the consolidated statements of operations and comprehensive loss as of the Closing Date of the ACELYRIN Merger. See Note 3 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Net cash provided by investing activities of $60.5 million for the year ended December 31, 2023, was related to proceeds from maturities of marketable securities of $76.3 million, partially offset by purchases of marketable securities of $11.3 million and purchases of property and equipment of $4.5 million.
Investing Activities Net cash provided by investing activities of $287.9 million for the year ended December 31, 2025, was related to maturities of marketable securities of $448.0 million and cash, cash equivalents and restricted cash acquired in connection with the ACELYRIN Merger of $49.7 million, partially offset by purchases of marketable securities of $209.2 million and by purchases of property and equipment of $0.7 million.
On March 5, 2021, we entered into a stock purchase agreement to acquire FronThera U.S. Holdings, Inc. and its wholly owned subsidiary, FronThera U.S. Pharmaceuticals LLC. The transaction was accounted for as an asset acquisition.
FronThera Contingent Consideration On March 5, 2021, we entered into the FronThera Acquisition, and the transaction was accounted for as an asset acquisition.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, particularly if and as we: ● continue to progress the development of our product candidates in multiple clinical trials in parallel; ● continue committing substantial capital resources to the contemplated Merger, and if the Merger closes, the anticipated integration and development activities related to the acquired ACELYRIN business ; ● explore additional indications for our existing product candidates; ● hire additional clinical, scientific and operational personnel; ● obtain, maintain, expand and protect our intellectual property rights; ● make royalty, milestone, or other payments under the FronThera Acquisition agreement and any future license or collaboration agreements; ● seek to identify, acquire or in-license new technologies or product candidates; ● seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials, if any; ● procure manufacturing and supply chain capacity for our product candidates, including commercial manufacturing readiness and scale-up; ● experience any delays, challenges or other issues associated with the clinical development and regulatory approvals of our product candidates; ● add operational, legal, financial and management information systems and personnel to support our product development, clinical execution and planned future commercialization efforts, as well as to support our transition to a public company; ● establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and ● operate as a public company.
Pharmaceuticals LLC, in March 2021 (the “FronThera Acquisition”), the March 25, 2021 license and commercialization agreement with Pierre Fabre, as amended (the “Pierre Fabre Agreement”), the Kaken Collaboration Agreement and any future license or collaboration agreements; ● seek to identify, acquire or in-license new technologies or product candidates; ● seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials, if any; ● procure manufacturing and supply chain capacity for our product candidates, including commercial manufacturing readiness and scale-up; ● experience any delays, challenges or other issues associated with the clinical development and regulatory approvals of our product candidates; ● add operational, legal, financial and management information systems and personnel to support our product development, clinical execution and planned future commercialization efforts, as well as to support our operating as a public company; ● establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and ● operate as a public company. 99 Table of Contents We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates and commercialize our products or enter into collaboration agreements with third parties.
Personnel-related expenses increased by $9.0 million, to $20.0 million for the year ended December 31, 2024, from $11.0 million for the year ended December 31, 2023, primarily due to increased general and administrative headcount and included an increase in stock-based compensation expense of $5.5 million as a result of additional stock options granted, which included awards granted under the 2024 POP. 110 Table of Contents Professional consulting services expenses increased by $5.4 million, to $13.3 million for the year ended December 31, 2024, from $7.9 million for the year ended December 31, 2023, primarily due to an increase in consulting services to support our growth, public company requirements, business development and market analysis, and an increase in recruiting costs.
Personnel-related expenses increased by $28.8 million, to $48.9 million for the year ended December 31, 2025, from $20.0 million for the year ended December 31, 2024, primarily due an increase in general and administrative headcount and severance costs related to the ACELYRIN Merger, and included an increase in stock-based compensation expense of $12.9 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted.
To date, the macroeconomic trends discussed above have not had a material adverse impact on our business, financial condition or results of operations. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed.
If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. Components of Results of Operations Revenue On March 25, 2025, we entered into the Kaken Collaboration Agreement.
Based on our current operating plan, our existing cash, cash equivalents and marketable securities of $288.3 million as of December 31, 2024, will not be sufficient to meet our operating and capital requirements for at least 12 months from the date of issuance of our consolidated financial statements included in Part II, Item 8. of this Annual Report on Form 10-K and there is substantial doubt about our ability to continue as a going concern.
Based on our current operating plan, our existing cash, cash equivalents and marketable securities of $308.5 million as of December 31, 2025, as well as net proceeds of $324.4 million, after deducting underwriting discounts and commissions, from our public offering of common stock, which closed on January 9, 2026, will be sufficient to meet our operating and capital requirements for at least 12 months from the date of issuance of our consolidated financial statements included in Part II.
To date, we have primarily funded our operations with proceeds from sales of shares of our common stock and redeemable convertible preferred stock and the issuance of convertible promissory notes in private placements.
To date, we have primarily funded our operations primarily through issuance of common stock, including in connection with the ACELYRIN Merger, our IPO and private placement transaction, the issuance of redeemable convertible preferred stock and convertible promissory notes in private placements, payments received under the Kaken Collaboration Agreement and, most recently, the public offering of common stock which closed on January 9, 2026.

… 142 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed6 unchanged
We do not believe that inflation had a material effect on our business, results of operations, or financial condition, or on our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. ​ 120 Table of Contents
We do not believe that inflation had a material effect on our business, results of operations, or financial condition, or on our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. ​ 117 Table of Contents
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The primary objectives of our investment activities are to ensure liquidity and to preserve capital. We are exposed to market risks related to changes in interest rates of our cash equivalents and marketable securities.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk 116 Table of Contents The primary objectives of our investment activities are to ensure liquidity and to preserve capital. We are exposed to market risks related to changes in interest rates of our cash equivalents and marketable securities.