10q10k10q10k.net

What changed in Annovis Bio, Inc.'s 10-K — 2022 vs 2023

vs

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

+381 added−378 removedSource: 10-K (2024-03-29) vs 10-K (2023-03-31)

Top changes in Annovis Bio, Inc.'s 2023 10-K

381 paragraphs added · 378 removed · 262 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

90 edited+37 added−19 removed195 unchanged
Biggest changeReduction of Neurotoxic Proteins We observed that Buntanetap administration for 25 days lowered secreted APP α and β as well as total-tau and phosphorylated-tau levels in AD patients, and alpha-synuclein levels in PD patients. APP and its downstream products and tau are the neurotoxic proteins involved in AD, while αSYN is the primary neurotoxic culprit of PD.
Biggest changeAPP and its downstream products and tau are the neurotoxic proteins involved in AD, while αSYN is the primary neurotoxic culprit of PD. Changes in Biomarkers After 25 Days Treatment with Buntanetap * All values are in comparison to placebo based on all data points.
As the interim analysis was conducted at two months of the six-month endpoint and only on 132 patients, it may not be indicative of the results at six months for the full patient population because as the trial progresses, clinical outcomes may materially change as patient enrollment continues and more patient data become available, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
As the interim analysis was conducted at two months of the six-month endpoint and only on 132 patients, it may not be indicative of the results at six months for the full patient population because as the trial progresses, clinical outcomes may materially change as patient enrollment continues and more patient data become available, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
The second trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early PD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 3 PD Trial.
The second trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early PD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, which is to be determined based upon the results of the Phase 3 PD Trial.
At 25 days, the treated group’s improvement from baseline was 3.3 points, or 20.71%, better than the placebo group’s improvement from baseline. 16 Table of Contents * P The WAIS coding test measures speed in movement and thinking. Treated AD patients showed a 6.6 point, or 16.17%, statistically significant improvement from baseline.
At 25 days, the treated group’s improvement from baseline was 3.3 points, or 20.71%, better than the placebo group’s improvement from baseline. * P 17 Table of Contents The WAIS coding test measures speed in movement and thinking. Treated AD patients showed a 6.6 point, or 16.17%, statistically significant improvement from baseline.
We the 54 PD patients received doses of either 5mg, 10mg, 20mg, 40mg or 80mg Buntanetap treatment or placebo once per day. We observed a statistically significant improvement in Part II, III and IV individually.
The 54 PD patients received doses of either 5mg, 10mg, 20mg, 40mg or 80mg Buntanetap treatment or placebo once per day. We observed a statistically significant improvement in Part II, III and IV individually.
Since the AD brain contains several neurotoxic proteins—amyloid precursor protein and its toxic fragments Aβ42 and IC99, a well as tau and αSYN. We believe that a DMD drug needs to target more than just one toxic protein to be efficacious and we are developing Buntanetap with this approach in mind.
Since the AD brain contains several neurotoxic proteins—amyloid precursor protein and its toxic fragments Aβ42 and IC99, as well as tau and αSYN. We believe that a DMD drug needs to target more than just one toxic protein to be efficacious and we are developing Buntanetap with this approach in mind.
Specifically, Part III of the MDS-UPDRS measures the motor functions and has long been used as a standard to assess drugs’ effects on patients’ mobility. **p We combined the two best doses, 10 and 20 mgs, and all doses, and saw an improvement of 3.6 (16.4%) for 10 and 20 mg, and of 2.4 (13.3%) for all doses combined compared to baseline. 17 Table of Contents * p In the WAIS coding test, PD patients show a statistically significant improvement both from baseline (17.1% for 10+20mg; 13.3% for all doses combined) and from placebo (27.1% for 10+20mg; 23.3% for all doses combined).
Specifically, Part III of the MDS-UPDRS measures the motor functions and has long been used as a standard to assess drugs’ effects on patients’ mobility. ** P We combined the two best doses, 10 and 20 mgs, and all doses, and saw an improvement of 3.6 (16.4%) for 10 and 20 mg, and of 2.4 (13.3%) for all doses combined compared to baseline. * p 18 Table of Contents In the WAIS coding test, PD patients show a statistically significant improvement both from baseline (17.1% for 10+20mg; 13.3% for all doses combined) and from placebo (27.1% for 10+20mg; 23.3% for all doses combined).
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations. ● Submission to the FDA of an IND, which must become effective before human clinical trials may begin. ● Approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated. 25 Table of Contents ● Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”), requirements to establish the safety and efficacy of the proposed drug product for each indication. ● Submission to the FDA of an NDA. ● Satisfactory completion of an FDA advisory committee review, if applicable. ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity. ● Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data. ● Payment of user fees and securing FDA approval of the NDA. ● Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and the potential requirement to conduct post-approval studies.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations. ● Submission to the FDA of an IND, which must become effective before human clinical trials may begin. ● Approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated. ● Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”), requirements to establish the safety and efficacy of the proposed drug product for each indication. ● Submission to the FDA of an NDA. ● Satisfactory completion of an FDA advisory committee review, if applicable. ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity. ● Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data. 27 Table of Contents ● Payment of user fees and securing FDA approval of the NDA. ● Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and the potential requirement to conduct post-approval studies.
Specifically, The FDA requested two co-primary endpoints to have an objective primary endpoint (MDS-UPDRS Part III, motor function) and a subjective primary endpoint (MDS-UPDRS Part II, activities of daily living). Together, these co-primary endpoints are intended to provide in a more complete picture of the study and treatment results.
Specifically, The FDA requested two co-primary endpoints to have an objective primary endpoint (MDS-UPDRS Part III, motor function) and a subjective primary endpoint (MDS-UPDRS Part II, activities of daily living). Together, these co-primary endpoints are intended to provide a more complete picture of the study and treatment results.
The FDA requested to include two co-primary endpoints to have an objective primary endpoint (ADAScog, cognition) and a subjective primary endpoint (ADCS-CGIC, activities of daily living). Together, these co-primary endpoints are intended to provide in a more complete picture of the study and treatment results.
The FDA requested to include two co-primary endpoints to have an objective primary endpoint (ADAScog, cognition) and a subjective primary endpoint (ADCS-CGIC, activities of daily living). Together, these co-primary endpoints are intended to provide a more complete picture of the study and treatment results.
The term “remuneration” has been broadly interpreted to include anything of value; ● federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent; ● provisions of the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services.
The term “remuneration” has been broadly interpreted to include anything of value; 31 Table of Contents ● federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent; ● provisions of the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services.
The Phase 3 PD Trial’s primary endpoints are evaluated using the following measures: the MDS-Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Part II and III, which is a 42-item rating scale designed to assess Parkinson's disease-related disability and impairment, and evaluates activities of daily living and motor function; and safety and tolerability, which is assessed using physical examinations, vital signs, clinical laboratory test results, 12 Table of Contents electrocardiogram findings, adverse events (AEs) leading to study discontinuation, drug related AEs, severity of AEs and AEs.
The Phase 3 PD Trial’s primary endpoints are evaluated using the following measures: the MDS-Unified Parkinson’s Disease Rating Scale (MDS-UPDRS) Part II and III, which is a 42-item rating scale designed to assess Parkinson’s disease-related disability and impairment, and evaluates activities of daily living and motor function; and safety and tolerability, which is assessed using physical examinations, vital signs, clinical laboratory test results, electrocardiogram findings, adverse events (AEs) leading to study discontinuation, drug related AEs, severity of AEs and AEs.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of 27 Table of Contents the disease or condition will be recovered from sales of the product).
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product).
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the 28 Table of Contents product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS.
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls. ● Fines, warning letters or holds on post-approval clinical trials. ● Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals. ● Product seizure or detention, or refusal to permit the import or export of products. ● Injunctions 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. ● Fines, warning letters or holds on post-approval clinical trials. 30 Table of Contents ● Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals. ● Product seizure or detention, or refusal to permit the import or export of products. ● Injunctions or the imposition of civil or criminal penalties.
In this six-month study, patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 3 PD Trial.
In this six-month study, patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, which is to be determined based upon the results of the Phase 3 PD Trial.
U.S. Healthcare Fraud and Abuse Laws and Compliance Requirements We are subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales and marketing programs.
Healthcare Fraud and Abuse Laws and Compliance Requirements We are subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales and marketing programs.
Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients with cancer within the last year and patients suffering from alcohol or substance abuse are excluded from participating. Patients will be randomly assigned to receive either 7.5, 15 or 30 mg of Buntanetap or placebo once per day.
Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients with cancer within the last year and patients suffering from alcohol or substance abuse are excluded from participating. Patients were randomly assigned to receive either 7.5, 15 or 30 mg of Buntanetap or placebo once per day.
This rigorous approach to understanding the mode of action shows that while Buntanetap does lower the levels of more than one neurotoxic protein, it is exquisitely specific for the atypical stem loops in the mRNAs of these proteins. The following illustration shows the mechanism of action of Buntanetap: MOA; Chen XQ et al.
This rigorous approach to understanding the mode of action shows that while Buntanetap does lower the levels of more than one neurotoxic protein, it is exquisitely specific for the atypical stem loops in the mRNAs of these proteins. 7 Table of Contents The following illustration shows the mechanism of action of Buntanetap: MOA; Chen XQ et al.
Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients who had cancer within the prior year and patients who suffered from alcohol or substance abuse were excluded from the trial. 13 Table of Contents The AD/PD Trials were designed to assess the safety, tolerability, and PK of Buntanetap.
Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients who had cancer within the prior year and patients who suffered from alcohol or substance abuse were excluded from the trial. The AD/PD Trials were designed to assess the safety, tolerability, and PK of Buntanetap.
To understand how Buntanetap can potentially inhibit translation, we undertook two 7 Table of Contents complementary approaches: a macro approach to examine all proteins in the cell whose translation is affected by Buntanetap, and a micro approach to study the mechanism of action using molecular biology, to understand and validate the binding and function.
To understand how Buntanetap can potentially inhibit translation, we undertook two complementary approaches: a macro approach to examine all proteins in the cell whose translation is affected by Buntanetap, and a micro approach to study the mechanism of action using molecular biology, to understand and validate the binding and function.
Changes in Inflammatory Markers after 25 Days Treatment with Buntanetap *All values are in comparison to placebo based on all data points. Again, CSF was extracted at baseline and for 6 hours after the study and the values of the placebo patients were subtracted from the Buntanetap treated patients.
Changes in Inflammatory Markers after 25 Days Treatment with Buntanetap *All values are in comparison to placebo based on all data points. 15 Table of Contents Again, CSF was extracted at baseline and for 6 hours after the study and the values of the placebo patients were subtracted from the Buntanetap treated patients.
The extended effect of Buntanetap in the four human patients was generally consistent with the preclinical data in rodent brains. We believe the persistence of Buntanetap in the CSF and brain and the extended pharmacodynamic effect observed has the potential to make Buntanetap a good candidate for once-a-day dosing.
The extended effect of Buntanetap in the four human patients was generally consistent with the preclinical data in rodent brains. 19 Table of Contents We believe the persistence of Buntanetap in the CSF and brain and the extended pharmacodynamic effect observed has the potential to make Buntanetap a good candidate for once-a-day dosing.
Our approach is innovative in that we do not have a single therapeutic target for a single disease; instead, we are developing a technology platform that has the potential to target the mRNAs of multiple neurotoxic proteins, which are potentially impactful for multiple diseases.
Our approach is innovative in that we do not have a single therapeutic target 8 Table of Contents for a single disease; instead, we are developing a technology platform that has the potential to target the mRNAs of multiple neurotoxic proteins, which are potentially impactful for multiple diseases.
We believe that higher Ab42 levels we observed suggest that the course of AD was reversed and the patients improved. 14 Table of Contents Inflammation We observed that Buntanetap reduced inflammation in both AD and PD patients, shown by Complement C3, YKL-40, GFAP and sTREM2.
We believe that higher Ab42 levels we observed suggest that the course of AD was reversed and the patients improved. Inflammation We observed that Buntanetap reduced inflammation in both AD and PD patients, shown by Complement C3, YKL-40, GFAP and sTREM2.
In accordance with our hypothesis the levels of inflammatory markers were significantly 19 Table of Contents reduced. We also measured Factor FH, a complement regulatory protein, as our control factor. As we had expected, Factor FH was not downregulated by Buntanetap.
In accordance with our hypothesis the levels of inflammatory markers were significantly reduced. We also measured Factor FH, a complement regulatory protein, as our control factor. As we had expected, Factor FH was not downregulated by Buntanetap.
Since Buntanetap is designed to inhibit more than one neurotoxic protein, we believe that it may have the potential to slow or eventually stop AD, PD and mixed pathology diseases. Approaches and Competition Alzheimer’s Disease Approaches Drug development for AD has proven to be very difficult.
Since Buntanetap is designed to inhibit more than one neurotoxic protein, we believe that it may have the potential to slow or eventually stop AD, PD and mixed pathology diseases. 23 Table of Contents Approaches and Competition Alzheimer’s Disease Approaches Drug development for AD has proven to be very difficult.
Changes in Synaptic Markers after 25 Days Treatment with Buntanetap *All values are in comparison to placebo based on all data points. 15 Table of Contents The same CSF as above was used to measure neurofilament light and neurogranin before and after treatment and to compare Buntanetap patients to placebo.
Changes in Synaptic Markers after 25 Days Treatment with Buntanetap *All values are in comparison to placebo based on all data points. The same CSF as above was used to measure neurofilament light and neurogranin before and after treatment and to compare Buntanetap patients to placebo.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU.
The market exclusivity period prevents a successful generic or biosimilar applicant from 32 Table of Contents commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU.
In August 2019, the U.S. Patent and Trademark Office (“USPTO”) granted the first of our Annovis patents from this family covering PD and Lewy body diseases. Subsequently the USPTO also granted patents covering tau and tauopathies, chronic traumatic encephalopathy, prion diseases, amyotrophic lateral sclerosis, Alzheimer’s and Huntington’s disease.
In August 2019, the U.S. Patent and Trademark Office (“USPTO”) granted the first of our Annovis patents from this family covering treatment of PD and Lewy body diseases. Subsequently, the USPTO also granted patents covering treatment frontotemporal dementia and Prion’s disease, tauopathies, chronic traumatic encephalopathy, prion diseases, amyotrophic lateral sclerosis, Alzheimer’s and Huntington’s disease.
Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the 29 Table of Contents rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development.
Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. U.S.
In February 2023, we initiated the first of the three studies: a Phase 2/3 clinical trial of Buntanetap in 320 mild to moderate AD patients, which were separated into four cohorts of 80 patients (the “Phase 2/3 AD Trial”). The Phase 2/3 AD Trial is expected to be conducted at approximately 80 sites in the U.S.
In February 2023, we initiated the first of the three studies: a Phase 2/3 clinical trial of Buntanetap in 320 mild to moderate AD patients, which were separated into four cohorts of 80 patients (the “Phase 2/3 AD Trial”). The Phase 2/3 AD Trial was conducted at approximately 64 sites in the U.S.
In the repeat dose studies, 18 Table of Contents treatment with 60 mg four times a day was not associated with any side effects not also seen in placebo. The adverse events seen included nausea, vomiting and dizziness.
In the repeat dose studies, treatment with 60 mg four times a day was not associated with any side effects not also seen in placebo. The adverse events seen included nausea, vomiting and dizziness.
ANVS301 was observed to improve memory and learning in very old rats by lowering the number of errors from six to three and shortening run times from approximately 75 to approximately 28 seconds. ANVS301 is in a Phase 1 clinical trial that was conducted and financed by the National Institutes of Health (“NIH”).
ANVS301 was observed to improve memory and learning in very old rats by lowering the number of errors from six to three and shortening run times from approximately 75 to approximately 28 seconds. ANVS301 finished single ascending dose Phase 1 clinical trial that was conducted and financed by the National Institutes of Health (“NIH”).
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: ● Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. ● Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. ● Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. 26 Table of Contents Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined: ● Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. ● Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. ● Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Annovis has filed seven families of patents and patent applications to prolong the patent life of Buntanetap.
Annovis has filed ten (10) families of patents and patent applications to prolong the patent life of Buntanetap.
Clinical Trials of Buntanetap Development Plan for Alzheimer’s Disease The development of Buntanetap for AD is expected to include a short study for moderate AD showing symptomatic efficacy, a long 18-month study in early AD showing disease-modifying efficacy, and a second short 6-month study in advanced AD.
Clinical Trials of Buntanetap Development Plan for Alzheimer’s Disease The development of Buntanetap for AD is expected to include the ongoing short study for moderate AD showing symptomatic efficacy, a long 18-month study in early AD showing disease-modifying efficacy, and a second short 6-month study in advanced AD, as well as an open label extension.
We also contract with additional consultants and third parties for the conduct of certain clinical development, accounting and administrative activities. We are in the process of hiring additional employees as we advance in our clinical trial program. None of our employees are represented by labor unions or covered by collective bargaining agreements.
We contract with consultants and third parties for the conduct of certain clinical development, accounting and administrative activities. We anticipate hiring of additional employees as we continue to advance our clinical trial programs. None of our employees are represented by labor unions or covered by collective bargaining agreements.
In our AD/PD Trials, we observed that Buntanetap reduced levels of neurotoxic proteins, improved axonal transport and synaptic function, reduced inflammation, improved the health of nerve cells and improved cognition and function in mild to moderate AD and PD patients. We have observed that Buntanetap reduced the levels of multiple neurotoxic proteins in animals and reversed the toxic cascade.
In our AD/PD Trials in human AD and PD patients, we observed that Buntanetap reduced levels of neurotoxic proteins, improved axonal transport and synaptic function, reduced inflammation, improved the health of nerve cells and improved cognition and function in mild to moderate AD and PD patients.
The pending patent applications were invented and filed by Annovis and include claims directed to: ● a method of treating neurodegenerative diseases such as AD and PD; ● a method of treating and/or preventing acute brain and nerve injuries; ● a method of prevention and treatment of disease states due to metal dis-homeostasis such as AD or PD as well as other acute or chronic neurodegenerative diseases; ● a method of treating viral and bacterial infections of the brain, including COVID-19; ● a method of inhibiting cancer metastasis; ● a combination with some drugs; and ● a method of treating neuropsychiatric indications.
The pending patent applications were invented and filed by Annovis include claims directed to: ● a method of treating neurodegenerative diseases such as AD and PD; ● a method of treating and/or preventing acute brain and nerve injuries; ● a method of prevention and treatment of disease states due to metal dis-homeostasis such as AD or PD as well as other acute or chronic neurodegenerative diseases; ● a method of treating viral and bacterial infections of the brain, including COVID-19; ● a method of inhibiting cancer metastasis; ● combinations of Buntanetap with some drugs and uses of these combinations to treat neurodegenerative diseases; ● a method of treating neuropsychiatric indications; and ● a new composition of matter of Posiphen, form B or ANVS402.
Damiano has held various senior management positions throughout her career, with experience garnered at companies including Centocor, MedImmune, OraSure Technologies and Vicuron Pharmaceuticals. Ms. Damiano holds a track record in the definition and execution of regulatory strategies. She holds an M.S. from the Drexel University College of Medicine.
Damiano has held various senior management positions throughout her career, with experience garnered at companies including Centocor, MedImmune, OraSure Technologies and Vicuron Pharmaceuticals. Ms. Damiano holds a track record in the definition and execution of regulatory strategies.
Medicinal products designated as orphan drugs are eligible for incentives made available by the EU and its Member States to support research into, and the development and availability of, orphan drugs. Human Capital Resources As of February 2023, we had five full-time employees. We also utilize the services of twelve consultants.
Medicinal products designated as orphan drugs are eligible for incentives made available by the EU and its Member States to support research into, and the development and availability of, orphan drugs. Human Capital As of February 29, 2024, we had six full-time employees. We also utilize the services of ten part-time employees or consultants.
The third patent application family relates to the use of the mechanism of action of Buntanetap and ANVS405 to prevent and treat neurodegenerative diseases and would be expected to expire, assuming all required fees and other charges are paid, in 2038, before any patent term adjustments or extensions.
The third patent application family relates to the use of the mechanism of action of Buntanetap and ANVS405 to prevent and treat neurodegenerative diseases and would be expected to expire in 2038, before any patent term adjustments or extensions.
The second trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early AD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 2/3 AD Trial.
The second AD trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early AD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, which is to be determined based upon the results of the Phase 2/3 AD Trial. 11 Table of Contents The third trial we intend to conduct is a six-month study in advanced AD patients, which is expected to take place during the second half of the 18-month disease modifying Phase 3 study.
Presently we are working with a U.S. supplier for the manufacture of good manufacturing practice (“cGMP”) active pharmaceutical ingredient (API) to meet our Buntanetap clinical study supply demands. We have also engaged a backup API manufacturing contractor, with primary operations in China.
We also rely on these third parties for encapsulating, packaging and stabilizing clinical trial materials. Presently we are working with a U.S. supplier for the manufacture of good manufacturing practice (“cGMP”) active pharmaceutical ingredient (API) to meet our Buntanetap clinical study supply demands. We have also engaged a backup API manufacturing contractor, with primary operations in China.
Pharmaceutics 09-2021 Iron and Neurodegeneration; Wong f. et al. Frontiers Aging Neuroscience; 03-2022 The special region in the mRNA is a 5’UTR iron responsive element (“IRE”) present in all mRNAs of neurotoxic aggregating proteins.
Pharmaceutics 09-2021 Iron and Neurodegeneration; Wong f. et al. Frontiers Aging Neuroscience; 03-2022 The special region in the mRNA is a 5’UTR iron responsive element (“IRE”) present in all mRNAs of neurotoxic aggregating proteins. The RNA binding protein is the Iron Regulatory Protein -1 (“IRP1”) that specifically binds the IREs of neurotoxic aggregating proteins.
The second patent application family covers ANVS405’s use in acute brain and nerve trauma and would be expected to expire, assuming all required fees and other charges are paid, in 2036, before any patent term adjustments or extensions.
The second patent application family covers ANVS405’s use in acute brain and nerve trauma and would be expected to expire in 2036, before any patent term adjustments or extensions.
In the United States, it is estimated that there are six million patients with AD. Nearly eightfold as many people have preclinical AD as have symptomatic AD and are at risk for progressing to manifest disease. Disease modifying treatments (“DMTs“) that will prevent or delay the onset or slow the progression of AD are urgently needed.
Nearly eightfold as many people have preclinical AD as have symptomatic AD and are at risk for progressing to manifest disease. Disease modifying treatments (“DMTs“) that will prevent or delay the onset or slow the progression of AD are urgently needed.
We also may explore the use of a variety of types of collaboration, co-promotion, distribution and other marketing arrangements with one or more third parties to commercialize our product candidates. Manufacturing Buntanetap is a small molecule that is manufactured using a patented process. We do not own, operate, and currently have no plans to establish, any manufacturing facilities.
We also may explore the use of a variety of types of collaboration, co-promotion, distribution and other marketing arrangements with one or more third parties to commercialize our product candidates. 26 Table of Contents Manufacturing Buntanetap is a small molecule that is manufactured using a patented process.
In May 2020, we filed a patent application with the USPTO concerning a method of inhibiting, preventing, or treating neurological injuries due to viral, bacterial, fungal, protozoan, or parasitic infections in humans and in animals via administration of Buntanetap or related compounds which would be expected to expire, assuming all required fees and other charges are paid, in 2041, before any 24 Table of Contents patent term adjustments or extensions; we have not received any office actions, yet.
In May 2020, we filed a patent application with the USPTO concerning a method of inhibiting, preventing, or treating neurological injuries due to viral, bacterial, fungal, protozoan, or parasitic infections in humans and in animals via administration of Buntanetap or related compounds, which would be expected to expire in 2041, before any patent term adjustments or extensions.
The first patent application family we filed, which would be expected to expire, assuming all required fees and other charges are paid, in 2031, covers the use of Buntanetap at much lower doses and expands its use to the treatment of AD, PD and other neurodegenerative disorders such as Huntington’s disease, prion diseases, amyotrophic lateral sclerosis, tauopathies and frontotemporal dementia, based on our preclinical research.
The first patent application family we filed, which would be expected to expire in 2031, before any patent term adjustments or extensions, covers the use of Buntanetap at much lower doses and expands its use to the treatment of AD, PD and other neurodegenerative disorders such as Huntington’s disease, prion diseases, amyotrophic lateral sclerosis, tauopathies, frontotemporal dementia, Lewy bodies disease, and chronic traumatic encephalopathy, based on our preclinical research.
The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU; and ● National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. 30 Table of Contents Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member State through the Mutual Recognition Procedure.
The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU; and ● National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure.
Although several drugs have shown potential neuroprotective 23 Table of Contents ability in preclinical studies, demonstrating these effects in clinical studies remains a challenge. Beyond drug therapies, a few cell and gene therapy approaches are also being explored. Progress across these newer technology platforms has been slow.
Although several drugs have shown potential neuroprotective ability in preclinical studies, demonstrating these effects in clinical studies remains a challenge. Beyond drug therapies, a few cell and gene therapy approaches are also being explored.
Intellectual Property We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties.
Progress across these newer technology platforms has been slow. 24 Table of Contents Intellectual Property We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties.
Alzheimer’s Disease Market AD is a neurodegenerative disorder with cognitive, functional, and behavioral alterations. AD is age related, and its incidence is increasing with the aging of the population. It is estimated that currently 44 million victims of AD dementia exist in the world and by 2050, more than 100 million people worldwide will be living with AD.
AD is age related, and its incidence is increasing with the aging of the population. It is estimated that currently 44 million victims of AD dementia exist in the world and by 2050, more than 100 million people worldwide will be living with AD. In the United States, it is estimated that there are six million patients with AD.
With respect to Ab42, we observed that levels were slightly higher, which is consistent with our hypothesis that Ab42 levels are lower in advanced AD and higher in early AD.
In all but one case, Ab42, we saw that the levels in Buntanetap treated patients were lower than in placebo patients. With respect to Ab42, we observed that levels were slightly higher, which is consistent with our hypothesis that Ab42 levels are lower in advanced AD and higher in early AD.
Here we assessed the colonic motility by measuring the time required to expel a glass bead inserted into the colon at four and seven months of age.
Untreated PD tg mice resemble pre-Parkinson’s patients, showing symptoms of constipation by three months of age. Here we assessed the colonic motility by measuring the time required to expel a glass bead inserted into the colon at four and seven months of age.
In addition, Buntanetap was observed to reverse the entire toxic cascade in animals and recover function, be it in the brain, the body, or the eyes. 9 Table of Contents Pipeline Our pipeline consists of: Buntanetap for chronic neurodegeneration - including AD and PD; ANVS405 for acute neurodegeneration; and ANVS301 for advanced AD.
We have observed that Buntanetap reduced the levels of multiple neurotoxic proteins in animals and reversed the entire toxic cascade in animals and recovered the affected function, be it in the brain, the body, or the eyes. 9 Table of Contents Pipeline Our pipeline consists of: Buntanetap for chronic neurodegeneration - including AD and PD; ANVS405 for acute neurodegeneration; and ANVS301 for advanced AD.
We therefore rely, and expect to continue to rely, solely on third-party contractors for manufacturing clinical supplies for our current and future potential product candidates, and plan to do so for commercial supplies also if any of our product candidates received marketing approval. We also rely on these third parties for encapsulating, packaging and stabilizing clinical trial materials.
We do not own, operate, and currently have no plans to establish, any manufacturing facilities. We therefore rely, and expect to continue to rely, solely on third-party contractors for manufacturing clinical supplies for our current and future potential product candidates, and plan to do so for commercial supplies also if any of our product candidates received marketing approval.
Axonal Transport in Human Nerve Cells When the information highway of a nerve cell slows down, the nerve cell is unable to properly communicate with other nerve cells, internal organs and the periphery and it gets sick and dies.
Axonal Transport in Human Nerve Cells When the information highway of a nerve cell slows down, the nerve cell is unable to properly communicate with other nerve cells, internal organs and the periphery and it gets sick and dies. 20 Table of Contents The transfer of information in a nerve cell is called axonal transport and when transport and synaptic transmission are impaired, the cell releases lower levels of neurotransmitters, leading to impaired nerve cell health.
Further, the FDA may approve more than one product for the same orphan indication or disease if the products contain different active ingredients. Moreover, competitors may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.
Further, the FDA may approve more than one product for the same orphan indication or disease if the products contain different active ingredients.
To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.
To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need. 28 Table of Contents The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.
We plan to consult with the FDA following completion of these interim analyses, to obtain feedback on our ongoing and planned AD and PD studies, including conducting an open label extension study following the completion of the initial trials.
We plan to consult with the FDA following completion of the full analyses of the two studies, to obtain feedback on our planned AD and PD studies, including conducting disease-modifying studies and open label extensions.
The RNA binding protein is the Iron Regulatory Protein -1 (“IRP1”) that specifically binds the IREs of neurotoxic aggregating proteins. 8 Table of Contents The Toxic Cascade Leading to Nerve Cell Death and Loss of Function The toxic cascade in neurodegeneration begins with high levels of neurotoxic proteins which lead to impaired axonal transport, inflammation, death of nerve cells and loss of cognition and motor function.
The Toxic Cascade Leading to Nerve Cell Death and Loss of Function The toxic cascade in neurodegeneration begins with high levels of neurotoxic proteins which lead to impaired axonal transport, inflammation, death of nerve cells and loss of cognition and motor function.
Cognition in AD Patients We performed ADAS-Cogs and WAIS coding tests to evaluate Buntanetap’s effects on AD patients’ cognition. * P ADAS-Cog11 was performed at the beginning of the study at baseline and at the end at 25 days in the Buntanetap-treated and the placebo groups.
We believe these results suggest that Buntanetap has the potential to reduce neurotoxic proteins, rescue axonal transport, reduce inflammation, and protect synaptic functions. 16 Table of Contents Cognition in AD Patients We performed ADAS-Cogs and WAIS coding tests to evaluate Buntanetap’s effects on AD patients’ cognition. * P ADAS-Cog11 was performed at the beginning of the study at baseline and at the end at 25 days in the Buntanetap-treated and the placebo groups.
We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our collaborators and selected consultants.
Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our collaborators and selected consultants.
The inclusion of our website address is, in each case, intended to be an inactive textual reference only and not an active hyperlink to our website. The information contained in, or that can be accessed through, our website is not part of this Annual Report on Form 10-K.
Our website and the information contained on, or that can be accessed through, our website shall not be deemed to be incorporated by reference in, and is not considered part of this Annual Report on Form 10-K.
PK parameters for Buntanetap in plasma of AD and PD patients were similar to those seen in Phase 1 in our single ascending dose (“SAD”) and multiple ascending dose (“MAD”) studies in healthy volunteers, and in a proof-of-concept study in mild-cognitive impaired (“MCI”) patients.
PK parameters for Buntanetap in plasma of AD and PD patients were similar to those seen in Phase 1 in our single ascending dose (“SAD”) and multiple ascending dose (“MAD”) studies in healthy volunteers, and in a proof-of-concept study in mild-cognitive impaired (“MCI”) patients. 14 Table of Contents Reduction of Neurotoxic Proteins We observed that Buntanetap administration for 25 days lowered secreted APP α and β as well as total-tau and phosphorylated-tau levels in AD patients, and alpha-synuclein levels in PD patients.
Those with dementia most often have multiple brain pathologies, which greatly increases the odds of dementia. Specifically, in people with 22 Table of Contents dementia, over 50% had multiple diagnoses (AD, PD/Lewy body dementia, PDD or infarcts).
Those with dementia most often have multiple brain pathologies, which greatly increases the odds of dementia. Specifically, in people with dementia, over 50% had multiple diagnoses (AD, PD/Lewy body dementia, PDD or infarcts). After accounting for age, persons with multiple diagnoses were almost three times more likely to exhibit dementia compared to those with one pathologic diagnosis.
Thus, we considered whether 20 Table of Contents Buntanetap could re-establish healthy behavior in these mice like that seen in wild-type mice. We measured the rate of spontaneous alternations in a Y-maze and found that the alternation rate is significantly lower in DS trisomic mice versus wild-type mice reflecting impaired working memory.
We measured the rate of spontaneous alternations in a Y-maze and found that the alternation rate is significantly lower in DS trisomic mice versus wild-type mice reflecting impaired working memory. While Buntanetap treatment increased alternation rate in DS trisomic mice it had no obvious effects in wild-type mice.
Changes in Biomarkers After 25 Days Treatment with Buntanetap * All values are in comparison to placebo based on all data points. Cerebrospinal fluid (“CSF”) was extracted before starting the study at baseline and at time 0 to 6 hours at the end of the study in both placebo and Buntanetap treated patients.
Cerebrospinal fluid (“CSF”) was extracted before starting the study at baseline and at time 0 to 6 hours at the end of the study in both placebo and Buntanetap treated patients. The values from time 0 to 6 hours were pooled to lower variability and the placebo values were deducted from the treated values.
SNCAA53T and SNCAA30P Mouse Models of PD We used these PD tg mice as models of early gastrointestinal dysfunction, which is common in PD patients and precedes the onset of motor symptoms by many years to decades. Untreated PD tg mice resemble pre-Parkinson’s patients, showing symptoms of constipation by three months of age.
All DS trisomic mice treated with Buntanetap displayed improved working memory to a variable extent. 21 Table of Contents SNCAA53T and SNCAA30P Mouse Models of PD We used these PD tg mice as models of early gastrointestinal dysfunction, which is common in PD patients and precedes the onset of motor symptoms by many years to decades.
Melissa Gaines, Vice President, Clinical Operations, is an accomplished clinical research professional with over 20 years’ experience garnered from positions held in academia, contract research organizations and pharmaceutical companies. She was previously Senior Director, Clinical Operations, for Worldwide Clinical Trials, and has over a decade of experience at INC Research.
He earned his BS in chemistry from the University of Michigan and his doctorate from MIT. Melissa Gaines, Vice President, Clinical Operations, is an accomplished clinical research professional with over 20 years’ experience garnered from positions held in academia, contract research organizations and pharmaceutical companies.
The transfer of information in a nerve cell is called axonal transport and when transport and synaptic transmission are impaired, the cell releases lower levels of neurotransmitters, leading to impaired nerve cell health. The diseased cell is then attacked by the immune system, which is activated when it detects a diseased cell, and it eventually kills the cell.
The diseased cell is then attacked by the immune system, which is activated when it detects a diseased cell, and it eventually kills the cell. Impairment in axonal transport, therefore, leads to inflammation and eventually to nerve cell death.
She has demonstrated proven success in leading cross-functional teams as well as driving operational success. She holds a B.A. in Psychology from Millersville University of Pennsylvania. Mechanism of Action Our lead product candidate, Buntanetap, is designed as an oral translational inhibitor of neurotoxic aggregating proteins (“TINAP”) such as APP, tau and αSYN.
Mechanism of Action Our lead product candidate, Buntanetap, is designed as an oral translational inhibitor of neurotoxic aggregating proteins (“TINAP”) such as APP, tau and αSYN.
They have elevated levels of APP that has been shown in mice to contribute to deficient memory and learning, cognitive impairment as well as dementia. DS trisomic mice are used as a model for AD, because they exhibit similar deficits as seen in AD.
Buntanetap treatment did not affect wild-type mice. Trisomic Mouse Model of AD-DS DS trisomic mice display several abnormal behaviors reminiscent of AD, including memory loss. They have elevated levels of APP that has been shown in mice to contribute to deficient memory and learning, cognitive impairment as well as dementia.
Based on the results of the interim analysis, we intend to proceed with the Phase 3 PD Study as planned in accordance with the previously established protocol. We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial.
We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial, yet.
Based on the results of the interim analysis, we intend to proceed with the Phase 3 PD Study as planned in accordance with the previously established protocol. We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial.
We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial, yet.
Therefore, just attacking one 21 Table of Contents of these proteins may result in no or lower efficacy than attacking them all. To prove that this approach is possible, we are studying the effects of Buntanetap on the levels of several neurotoxic proteins and other surrogate markers, in parallel, in AD and PD patients.
To prove that this approach is possible, we are studying the effects of Buntanetap on the levels of several neurotoxic proteins and other surrogate markers, in parallel, in AD and PD patients. 22 Table of Contents Alzheimer’s Disease Market AD is a neurodegenerative disorder with cognitive, functional, and behavioral alterations.
Phase 1/2 AD/PD Trials In 2021, we completed a Phase 1/2 clinical trial of Buntanetap in 14 early AD and 54 early PD patients (the “AD/PD Trials”) which were conducted at 12 sites in the U.S. The AD/PD Trials were double-blind placebo-controlled studies which treated mild to moderate AD and early PD patients for 25 +/- 2 days.
We are also considering adding an open-label extension to allow all patients that participated in one of our PD studies to continue on the medication. 13 Table of Contents Phase 1/2 AD/PD Trials In 2021, we completed a Phase 1/2 clinical trial of Buntanetap in 14 early AD and 54 early PD patients (the “AD/PD Trials”) which were conducted at 12 sites in the U.S.

… 66 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

128 edited+40 added−55 removed517 unchanged
Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; ● the Federal Food, Drug and Cosmetic Act (“FDCA”), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; ● the U.S. federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics, and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and ● analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; ● the Federal Food, Drug and Cosmetic Act (“FDCA”), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; ● the U.S. federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics, and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and ● analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 60 Table of Contents Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it is possible that some of our business activities, including our consulting agreements and other relationships with physicians and other healthcare providers, some of whom receive stock or stock options as compensation for their services, could be subject to challenge under one or more of such laws.
If one or both financial institutions fail, our deposit accounts could be adversely affected due to the loss of or delay in obtaining access to all or a portion of our uninsured funds. The cash and cash equivalents that we use to meet our working capital and operating expense needs are held in deposit accounts at two financial institutions.
The cash and cash equivalents that we use to meet our working capital and operating expense needs are held in deposit accounts at two financial institutions. If one or both financial institutions fail, our deposit accounts could be adversely affected due to the loss of or delay in obtaining access to all or a portion of our uninsured funds.
Collaborations involving Buntanetap or any future product candidates would pose significant risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not perform their obligations as expected or at all; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or drugs, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ● a collaborator with marketing and distribution rights to any product candidate that achieves regulatory approval may not commit sufficient resources to the marketing and distribution of such products; ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings; ● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; 73 Table of Contents ● collaborators may not properly enforce, maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; ● collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● collaborators may not provide us with timely and accurate information regarding development, regulatory or commercialization status or results, which could adversely impact our ability to manage our own development efforts, accurately forecast financial results or provide timely information to our stockholders regarding our out-licensed product candidates; ● we may be required to invest resources and attention into such collaboration, which could distract from other business objectives; ● disputes may arise between the collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations; ● collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; ● if a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated; and ● collaborations may be terminated, including for the convenience of the collaborator, prior to or upon the expiration of the agreed upon terms and, if terminated, we may find it more difficult to enter into future collaborations or be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Collaborations involving Buntanetap or any future product candidates would pose significant risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not perform their obligations as expected or at all; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or drugs, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ● a collaborator with marketing and distribution rights to any product candidate that achieves regulatory approval may not commit sufficient resources to the marketing and distribution of such products; ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings; ● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ● collaborators may not properly enforce, maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; ● collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● collaborators may not provide us with timely and accurate information regarding development, regulatory or commercialization status or results, which could adversely impact our ability to manage our own development efforts, 75 Table of Contents accurately forecast financial results or provide timely information to our stockholders regarding our out-licensed product candidates; ● we may be required to invest resources and attention into such collaboration, which could distract from other business objectives; ● disputes may arise between the collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations; ● collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; ● if a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated; and ● collaborations may be terminated, including for the convenience of the collaborator, prior to or upon the expiration of the agreed upon terms and, if terminated, we may find it more difficult to enter into future collaborations or be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (“IRB”) approval at each site, or Independent Ethics Committee (“IEC”) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● patients failing to complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; 38 Table of Contents ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or ● manufacturing sufficient quantities of product candidate for use in clinical trials.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (“IRB”) approval at each site, or Independent Ethics Committee (“IEC”) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● patients failing to complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or 40 Table of Contents ● manufacturing sufficient quantities of product candidate for use in clinical trials.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, including but not limited to: ● the efficacy and potential advantages compared to alternative treatments; ● the indications for which our product candidates are approved; ● the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling; ● effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments, including any similar generic treatments; ● our ability to offer our products for sale at competitive prices; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; ● the availability of third-party coverage and adequate reimbursement; ● the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; ● any restrictions on the use of our product together with other medications; ● potential product liability claims; ● the timing of market introduction of our products as well as availability, safety and efficacy of competitive drugs; and 52 Table of Contents ● unfavorable publicity relating to the product.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, including but not limited to: ● the efficacy and potential advantages compared to alternative treatments; 53 Table of Contents ● the indications for which our product candidates are approved; ● the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling; ● effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments, including any similar generic treatments; ● our ability to offer our products for sale at competitive prices; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; ● the availability of third-party coverage and adequate reimbursement; ● the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; ● any restrictions on the use of our product together with other medications; ● potential product liability claims; ● the timing of market introduction of our products as well as availability, safety and efficacy of competitive drugs; and ● unfavorable publicity relating to the product.
Doing business internationally involves a number of risks, including but not limited to: ● the burden of complying with multiple, conflicting and changing laws and regulations, such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; ● failure by us to obtain and maintain regulatory approvals for the use of our products in various jurisdictions; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining protection and enforcing our intellectual property; 53 Table of Contents ● difficulties in staffing and managing foreign operations; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.
Doing business internationally involves a number of risks, including but not limited to: ● the burden of complying with multiple, conflicting and changing laws and regulations, such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; ● failure by us to obtain and maintain regulatory approvals for the use of our products in various jurisdictions; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining protection and enforcing our intellectual property; ● difficulties in staffing and managing foreign operations; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.
Patient enrollment and retention in clinical trials depends on many factors, including: ● the patient eligibility and exclusion criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; 41 Table of Contents ● the nature and design of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to obtain and maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
Patient enrollment and retention in clinical trials depends on many factors, including: ● the patient eligibility and exclusion criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature and design of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; 43 Table of Contents ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to obtain and maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering (“IPO”) on January 31, 2020, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as of the end of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering (“IPO”) on January 31, 2020, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as of the end of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
These estimates have been derived from a variety of sources, including the scientific literature, patient foundations and market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these indications.
These estimates have been derived from a variety of sources, including relevant scientific literature, patient foundations and market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these indications.
Furthermore, our ability to successfully develop, commercialize and license any product candidates and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval” and “—Risks Related to Commercialization.” This will require us to be successful in a range of challenging activities, including completing clinical trials and preclinical studies of Buntanetap and any other product candidates, acquiring additional product candidates, obtaining regulatory approval for Buntanetap and any other product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval.
Furthermore, our ability to successfully develop, commercialize and license any product candidates and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval” and “—Risks Related to Commercialization.” This will require us to be successful in a range of challenging activities, including completing clinical trials of Buntanetap and any other product candidates, acquiring additional product candidates, obtaining regulatory approval for Buntanetap and any other product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval.
Similar to the U.S. 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; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, which impose, among other things, specified requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by covered entities subject to the rule, such as health plans, healthcare clearinghouses and healthcare providers as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health 58 Table of Contents information.
Similar to the U.S. 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; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, which impose, among other things, specified requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by covered entities subject to the rule, such as health plans, healthcare clearinghouses and healthcare providers as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; 47 Table of Contents ● refusal to permit the import or export of our products; ● product seizure; or ● injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; or ● injunctions or the imposition of civil or criminal penalties.
The GDPR applies extraterritorially and implements stringent operational requirements for processors and controllers of personal data, including, for example, high standards for obtaining consent from individuals to process their personal data, robust disclosures to individuals, a comprehensive individual data rights regime, data export restrictions governing 59 Table of Contents transfers of data from the European Union (“EU”) to other jurisdictions, short timelines for data breach notifications, limitations on retention of information, increased requirements pertaining to health data, other special categories of personal data and coded data and additional obligations if we contract third-party processors in connection with the processing of personal data.
The GDPR applies extraterritorially and implements stringent operational requirements for processors and controllers of personal data, including, for example, high standards for obtaining consent from individuals to process their personal data, robust disclosures to individuals, a comprehensive individual data rights regime, data export restrictions governing transfers of data from the European Union (“EU”) to other jurisdictions, short timelines for data breach notifications, limitations on retention of information, increased requirements pertaining to health data, other special categories of personal data and coded data and additional obligations if we contract third-party processors in connection with the processing of personal data.
Any such outcome could have a materially adverse effect on our business and our company could cease to exist. Annovis has filed seven families of patent applications to prolong the patent life of Buntanetap. Unless these applications are approved by the U.S. and international patent offices, the patent life of using Buntanetap is limited.
Any such outcome could have a materially adverse effect on our business and our company could cease to exist. Annovis has filed ten families of patent applications to prolong the patent life of Buntanetap. Unless these applications are approved by the U.S. and international patent offices, the patent life of using Buntanetap is limited.
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute 80 Table of Contents payments not previously approved.
The total addressable market across all of the potential indications for Buntanetap and any future product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
The total addressable market across all of the potential indications for Buntanetap and any future 46 Table of Contents product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully 57 Table of Contents commercialize any product candidate that we develop.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and 66 Table of Contents elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical 57 Table of Contents products and which suppliers will be included in their prescription drug and other healthcare programs.
Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
Even if we believe third party infringement claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize the applicable product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
Even if we believe 65 Table of Contents third party infringement claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize the applicable product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
Moreover, we may not be successful in our efforts to establish or maintain a strategic partnership or other alternative arrangements for any future product candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs may be deemed to be at too early a stage of development for collaborative effort and third parties may not view our product candidates and programs as having the requisite 72 Table of Contents potential to demonstrate safety and efficacy.
Moreover, we may not be successful in our efforts to establish or maintain a strategic partnership or other alternative arrangements for any future product candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs may be deemed to be at too early a stage of development for collaborative effort and third parties may not view our product candidates and programs as having the requisite potential to demonstrate safety and efficacy.
If the FDA is not satisfied with the quantity and nature of the data we collect, we may be forced to undertake additional preclinical studies or clinical trials to obtain regulatory approval, which will lead to delays in our 36 Table of Contents clinical development plans and cause us to incur additional costs, both of which may have a material adverse effect on our business.
If the FDA is not satisfied with the quantity and nature of the data we collect, we may be forced to undertake additional preclinical studies or clinical trials to obtain regulatory approval, which will lead to delays in our clinical development plans and cause us to incur additional costs, both of which may have a material adverse effect on our business.
We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. 79 Table of Contents We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
Namely, the current presidential administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
Namely, the current presidential administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially 49 Table of Contents delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
Some claimants may have 63 Table of Contents substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
Because PTA added to the term of patents covering pharmaceutical products has particular value, our business may be adversely affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated. Intellectual property rights do not address all potential threats to our competitive advantage.
Because PTA added to the term of patents covering 69 Table of Contents pharmaceutical products has particular value, our business may be adversely affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated. Intellectual property rights do not address all potential threats to our competitive advantage.
These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.
These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding 48 Table of Contents the distribution of samples to physicians and recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.
We may be required to incur substantial expenses in connection 60 Table of Contents with future environmental compliance or remediation activities, in which case, the production efforts of our third-party manufacturers or our development efforts may be interrupted or delayed. Recent U.S. tax legislation may materially adversely affect our financial condition, results of operations and cash flows.
We may be required to incur substantial expenses in connection with future environmental compliance or remediation activities, in which case, the production efforts of our third-party manufacturers or our development efforts may be interrupted or delayed. Recent U.S. tax legislation may materially adversely affect our financial condition, results of operations and cash flows.
If the patent applications we own with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for Buntanetap or any future product candidate, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize future product candidates.
If the patent applications we own with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for Buntanetap or any future product candidate, it could dissuade companies from collaborating with us to develop product candidates, 63 Table of Contents and threaten our ability to commercialize future product candidates.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent with the USPTO. This applies to all of our 65 Table of Contents U.S. patents, even those issued before March 16, 2013.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent with the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013.
Alternatively, if a court were to find this provision of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
Alternatively, if a court were to find this provision of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs 81 Table of Contents associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
Any of these events could prevent us from achieving or maintaining market acceptance of a product candidate, if approved, and could significantly harm our business, results of operations and prospects. 44 Table of Contents The market opportunities for Buntanetap or any other product candidates, if approved, may be smaller than we anticipate, which could adversely affect our business, financial condition and results of operations.
Any of these events could prevent us from achieving or maintaining market acceptance of a product candidate, if approved, and could significantly harm our business, results of operations and prospects. The market opportunities for Buntanetap or any other product candidates, if approved, may be smaller than we anticipate, which could adversely affect our business, financial condition and results of operations.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience 71 Table of Contents competition for the hiring of scientific and clinical personnel from universities and research institutions.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to advance the clinical development of Buntanetap. If we obtain receive regulatory approval for Buntanetap or any other product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution.
Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to advance the clinical development of 35 Table of Contents Buntanetap. If we obtain receive regulatory approval for Buntanetap or any other product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution.
We can be held liable for the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities, and any training or compliance programs or other initiatives we undertake to prevent such activities may not be effective.
We can be held liable for 61 Table of Contents the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities, and any training or compliance programs or other initiatives we undertake to prevent such activities may not be effective.
These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. 70 Table of Contents However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
We may not be able to protect our rights to these trademarks and trade 69 Table of Contents names, which we need to build name recognition among potential collaborators or customers in our markets of interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions.
We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential collaborators or customers in our markets of interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it 68 Table of Contents difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
If patients are unwilling or unable to participate in our trials for any reason, including the existence of concurrent clinical trials for similar target populations, the availability of approved or authorized therapies, the effects of the COVID-19 pandemic, or the fact that enrolling in our trials may prevent patients from taking a different product, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting patients, conducting trials and obtaining regulatory approval of our product candidates may be delayed.
If patients are unwilling or unable to participate in our trials for any reason, including the existence of concurrent clinical trials for similar target populations, the availability of approved or authorized therapies, or the fact that enrolling in our trials may prevent patients from taking a different product, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting patients, conducting trials and obtaining regulatory approval of our product candidates may be delayed.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may 67 Table of Contents obtain approval to market competing products sooner.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.
Results of any 43 Table of Contents clinical trial we conduct could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Patients treated with Buntanetap to date, at high doses have experienced adverse events that include nausea, vomiting and dizziness.
Results of any clinical trial we conduct could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Patients treated with Buntanetap to date, at high doses have experienced adverse events that include nausea, vomiting and dizziness.
We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death.
We expect to have to train medical personnel 45 Table of Contents using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death.
In addition, even if one or more of our product 48 Table of Contents candidates qualify as breakthrough therapies, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may 73 Table of Contents experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of 64 Table of Contents their substantially greater financial resources.
We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources.
If we are unsuccessful in identifying and developing additional product candidates or are unable to do so, our business, results of operations, cash flows, financial condition and/or prospects may be materially and adversely affected.
If we are unsuccessful in identifying and developing additional product 39 Table of Contents candidates or are unable to do so, our business, results of operations, cash flows, financial condition and/or prospects may be materially and adversely affected.
The market price of our common stock may be subject to wide fluctuations in response to a variety of factors, including the following: ● results of our clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ● our ability to enroll subjects in our future clinical trials; ● delays or unanticipated developments in the completion of our planned clinical trials; ● any delay in submitting an NDA and any adverse development or perceived adverse development with respect to the FDA’s review of that NDA; ● our ability to obtain and maintain regulatory approval of Buntanetap or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● failure to successfully develop and commercialize Buntanetap or any future product candidates; ● the degree and rate of physician and market adoption of any of our current and future product candidates; ● inability to obtain additional funding or obtaining funding on unattractive terms; ● regulatory or legal developments in the United States and other countries applicable to Buntanetap or any other product candidates; ● adverse regulatory decisions; 75 Table of Contents ● changes in the structure of healthcare payment systems; ● manufacturing, supply or distribution delays or shortages, including our inability to obtain adequate product supply for Buntanetap or any other product candidates, or the inability to do so at acceptable prices; ● the success or failure of our efforts to identify, develop, acquire or license additional product candidates; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial projections we provide to the public; ● failure to meet or exceed the estimates and projections of the investment community; ● changes in the market valuations of companies similar to ours; ● market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● any changes to our relationship with any manufacturers, suppliers, collaborators or other strategic partners; ● significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● sales of our common stock by us or our stockholders in the future; ● changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; ● changes in accounting standards, policies, guidelines, interpretations or principles; ● trading volume of our common stock; ● actual or anticipated fluctuations in our financial condition and results of operations; ● publication of news releases by other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls; ● general economic, industry and market conditions, including but not limited to the impact of the COVID-19 pandemic; ● announcement or progression of geopolitical events (including in relation to the conflict between Russia and Ukraine); and ● the other factors described in this “Risk Factors” section.
The market price of our common stock may be subject to wide fluctuations in response to a variety of factors, including the following: ● results of our clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ● our ability to enroll subjects in our future clinical trials; ● delays or unanticipated developments in the completion of our planned clinical trials; ● any delay in submitting an NDA and any adverse development or perceived adverse development with respect to the FDA’s review of that NDA; ● our ability to obtain and maintain regulatory approval of Buntanetap or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● failure to successfully develop and commercialize Buntanetap or any future product candidates; ● the degree and rate of physician and market adoption of any of our current and future product candidates; ● inability to obtain additional funding or obtaining funding on unattractive terms; 77 Table of Contents ● regulatory or legal developments in the United States and other countries applicable to Buntanetap or any other product candidates; ● adverse regulatory decisions; ● changes in the structure of healthcare payment systems; ● manufacturing, supply or distribution delays or shortages, including our inability to obtain adequate product supply for Buntanetap or any other product candidates, or the inability to do so at acceptable prices; ● the success or failure of our efforts to identify, develop, acquire or license additional product candidates; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial projections we provide to the public; ● failure to meet or exceed the estimates and projections of the investment community; ● changes in the market valuations of companies similar to ours; ● market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● any changes to our relationship with any manufacturers, suppliers, collaborators or other strategic partners; ● significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● sales of our common stock by us or our stockholders in the future; ● changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; ● changes in accounting standards, policies, guidelines, interpretations or principles; ● trading volume of our common stock; ● actual or anticipated fluctuations in our financial condition and results of operations; ● publication of news releases by other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls; ● announcement or progression of geopolitical events (including in relation to the conflict between Russia and Ukraine); and ● the other factors described in this “Risk Factors” section. 78 Table of Contents In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
They may also terminate or refuse to renew their agreement at a time that is costly or otherwise inconvenient for us. If we were unable to find an adequate CMO or another acceptable solution in time, our clinical trials could be delayed, or our commercial activities could be harmed.
They may also 56 Table of Contents terminate or refuse to renew their agreement at a time that is costly or otherwise inconvenient for us. If we were unable to find an adequate CMO or another acceptable solution in time, our clinical trials could be delayed, or our commercial activities could be harmed.
These organizations may have significantly greater resources than we do and may conduct similar research; seek patent protection; and establish collaborative arrangements for research, development, manufacturing and marketing of products that may compete with us.
These organizations may have significantly greater 51 Table of Contents resources than we do and may conduct similar research; seek patent protection; and establish collaborative arrangements for research, development, manufacturing and marketing of products that may compete with us.
If we obtain regulatory approval of product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including: ● different regulatory requirements for approval of drugs in foreign countries; ● reduced protection for intellectual property rights; ● the existence of additional third-party patent rights of potential relevance to our business; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with export control and import laws and regulations; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● foreign reimbursement, pricing and insurance regimes; ● workforce uncertainty in countries where labor unrest is common; ● differing regulatory requirements with respect to manufacturing of products; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; 46 Table of Contents ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires; and ● disruptions resulting from the impact of public health pandemics or epidemics (including, for example, the COVID-19 pandemic).
If we obtain regulatory approval of product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including: ● different regulatory requirements for approval of drugs in foreign countries; ● reduced protection for intellectual property rights; ● the existence of additional third-party patent rights of potential relevance to our business; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with export control and import laws and regulations; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● foreign reimbursement, pricing and insurance regimes; ● workforce uncertainty in countries where labor unrest is common; ● differing regulatory requirements with respect to manufacturing of products; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
Accordingly, if the interim data upon which we rely is later shown to be materially different from the final, complete study results, the basis upon which we set forth our development plans may be called into question and our ability to obtain approval for, and commercialize, Buntanetap may be harmed, which could harm our business, operating results, prospects or financial condition.
Accordingly, if the interim data upon which we have relied on is shown to be materially different from the final, complete study results, the basis upon which we set forth our development plans may be called into question and our ability to obtain approval for, and commercialize, Buntanetap may be harmed, which could harm our business, operating results, prospects or financial condition.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products 45 Table of Contents effectively.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
Because we expect to rely on third parties to manufacture Buntanetap and any future product candidates, and we expect to collaborate with third parties on the development of Buntanetap and any future 68 Table of Contents product candidates, we must, at times, share trade secrets with them.
Because we expect to rely on third parties to manufacture Buntanetap and any future product candidates, and we expect to collaborate with third parties on the development of Buntanetap and any future product candidates, we must, at times, share trade secrets with them.
Legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming and likely to divert significant resources from our core business, including distracting our management and scientific personnel from their normal responsibilities and generally harm our business.
Legal 64 Table of Contents proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming and likely to divert significant resources from our core business, including distracting our management and scientific personnel from their normal responsibilities and generally harm our business.
Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
Furthermore, in many countries, owning and maintaining a trademark registration may not 71 Table of Contents provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.
In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable 61 Table of Contents in light of the prior art.
In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable in light of the prior art.
However, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our or our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents. Additionally, the U.S.
However, the AIA and its implementation could increase the uncertainties and costs 67 Table of Contents surrounding the prosecution of our or our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents. Additionally, the U.S.
However, the failure to obtain approval in one jurisdiction may negatively impact our ability to obtain approval elsewhere. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country.
However, the failure to obtain approval in one jurisdiction may negatively impact our ability to obtain approval elsewhere. In addition, clinical trials 47 Table of Contents conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country.
Our expenses will also increase substantially if and as we: ● commence our Phase 3 trials in AD and PD, or conduct clinical trials for any other product candidates; ● scale-up cGMP drug supply manufacturing and complete necessary work to support an NDA for Buntanetap in AD or in PD; 32 Table of Contents ● are required by the FDA to complete additional toxicological/pharmacological studies to support an NDA for Buntanetap in AD or in PD; ● are required by the FDA to complete multiple Phase 3 trials to support an NDA for Buntanetap in AD or in PD; ● establish a sales, marketing and distribution infrastructure to commercialize our drug, if approved, and for any other product candidates for which we may obtain marketing approval; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, scientific and commercial personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and future commercialization efforts, as well as to support our requirements as a public reporting company; and ● acquire or in-license or invent other product candidates or technologies.
Our expenses will also increase substantially if and as we: ● continue to progress our development in AD and PD with additional studies, or conduct clinical trials for any other product candidates; ● scale-up cGMP drug supply manufacturing and complete necessary work to support an NDA for Buntanetap in AD or in PD; ● are required by the FDA to complete additional toxicological/pharmacological studies to support an NDA for Buntanetap in AD or in PD; ● establish a sales, marketing and distribution infrastructure to commercialize our drug, if approved, and for any other product candidates for which we may obtain marketing approval; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, scientific and commercial personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and future commercialization efforts, as well as to support our requirements as a public reporting company; and ● acquire or in-license or invent other product candidates or technologies.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, the conflict between Russia and Ukraine and other factors, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, progression of geopolitical events (including in the relation to the conflict between Russia and Ukraine), diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.
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.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order 59 Table of Contents to have committed a violation.
Based on our current operating plan, we believe that our current cash and cash equivalents and funding from existing grants will enable us to fund our operating expenses and capital expenditure requirements until the fourth quarter of 2023.
Based on our current operating plan, we believe that our current cash and cash equivalents and funding from existing grants will enable us to fund our operating expenses and capital expenditure requirements until the second quarter of 2024.
Although, to our knowledge, we have not experienced any such material security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
Although, to our knowledge, we have not experienced any such material security breach to date, any 72 Table of Contents such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
For example, unlike other countries, China has a heightened requirement for patentability, and 66 Table of Contents specifically requires a detailed description of medical uses of a claimed drug.
For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug.
Even if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees. 70 Table of Contents Our proprietary information may be lost, or we may suffer security breaches.
Even if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees. Our proprietary information may be lost, or we may suffer security breaches.
Approval from the FDA and comparable foreign authorities may be delayed or denied for a variety of reasons, including: ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; ● serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates, or other products containing the active ingredient in our product candidates; ● negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● 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 acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; ● the FDA or comparable foreign authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates; ● the FDA or comparable foreign regulatory authorities may fail to approve or find deficiencies with the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and 39 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.
Approval from the FDA and comparable foreign authorities may be delayed or denied for a variety of reasons, including: ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; ● serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates, or other products containing the active ingredient in our product candidates; ● negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● 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 acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; ● the FDA or comparable foreign authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates; ● the FDA or comparable foreign regulatory authorities may fail to approve or find deficiencies with the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. 41 Table of Contents Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses.
Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Additionally, increases in inflation, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; ● the costs associated with any products or technologies that we may in-license or acquire; and 34 Table of Contents ● any delays and cost increases that may result from the COVID-19 or any future pandemic.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; 36 Table of Contents ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and ● the costs associated with any products or technologies that we may in-license or acquire; Conducting clinical trials and preclinical studies and potentially identifying future product candidates is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and commercialize Buntanetap or any future product candidates.
If a collaborator terminates its agreement with us, we may find it more difficult to attract new collaborators and the perception of our business and our stock price could be adversely affected. 56 Table of Contents We may in the future collaborate with additional pharmaceutical and biotechnology companies for development and potential commercialization of therapeutic products.
If a collaborator terminates its agreement with us, we may find it more difficult to attract new collaborators and the perception of our business and our stock price could be adversely affected. We may in the future collaborate with additional pharmaceutical and biotechnology companies for development and potential commercialization of therapeutic products. We face significant competition in seeking appropriate collaborators.
We cannot be certain that, following a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transaction.
We cannot be certain that, following a strategic transaction or license, 74 Table of Contents we will achieve the revenues or specific net income that justifies such transaction.
We are only in the preliminary stages of most of these activities. As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.
As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.
We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
Regulatory authorities also weigh the benefits of a product against its risks and may view the efficacy results in the context of safety as not being supportive of approval. 40 Table of Contents The only drugs approved by the FDA to treat AD and PD to date address the diseases’ symptoms.
Regulatory authorities also weigh the benefits of a product against its risks and may view the efficacy results in the context of safety as not being supportive of approval. The only drugs approved by the FDA to treat AD and PD to date address the diseases’ symptoms. No new treatments have been approved for AD since 2003.
While we provide oversight of manufacturing activities, we do not and will not control the execution of manufacturing activities by, and are or will be essentially dependent on, our CMOs for compliance with cGMP requirements for the manufacture of our product candidates.
The facilities used to manufacture our product candidates must be inspected by the FDA and comparable foreign authorities. While we provide oversight of manufacturing activities, we do not and will not control the execution of manufacturing activities by, and are or will be essentially dependent on, our CMOs for compliance with cGMP requirements for the manufacture of our product candidates.
If a CMO or third-party supplier fails to acquire the proper licenses or otherwise infringes the proprietary rights of others in the course of providing services to us, we may have to find alternative CMOs or third-party suppliers or defend against claims of infringement, either of which would significantly impact our ability to develop, obtain regulatory approval for or commercialize our product candidates, if approved. 55 Table of Contents We currently rely and in the future intend to rely on third parties to conduct, supervise and monitor our clinical trials.
If a CMO or third-party supplier fails to acquire the proper licenses or otherwise infringes the proprietary rights of others in the course of providing services to us, we may have to find alternative CMOs or third-party suppliers or defend against claims of infringement, either of which would significantly impact our ability to develop, obtain regulatory approval for or commercialize our product candidates, if approved.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends 77 Table of Contents for the foreseeable future. In addition, any future debt agreements may preclude us from paying dividends.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, any future debt agreements may preclude us from paying dividends.
Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. 49 Table of Contents Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities.
Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities. We do not carry insurance for all categories of risk that our business may encounter.
Our directors, executive officers and certain stockholders own a significant percentage of our common stock and, if they choose to act together, will be able to exert significant control over matters subject to stockholder approval.
Our directors, executive officers and certain stockholders own a significant percentage of our common stock and, if they choose to act together, will be able to exert significant control over matters subject to stockholder approval. Our directors, executive officers, and stockholders affiliated with our directors and executive officers own 25.6% of the current voting power of our outstanding common stock.
We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include general liability, employment benefits liability, workers’ compensation, products liability, and directors’ and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
Some of the policies we currently maintain include general liability, employment benefits liability, workers’ compensation, products liability, and directors’ and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
Risks Related to Our Dependence on Third Parties Our employees and independent contractors, including principal investigators, CROs, consultants, vendors, and any third parties we may engage in connection with development and commercialization, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.
Any of these factors could significantly harm any future international expansion and operations and, consequently, our results of operations. 55 Table of Contents Risks Related to Our Dependence on Third Parties Our employees and independent contractors, including principal investigators, CROs, consultants, vendors, and any third parties we may engage in connection with development and commercialization, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.

… 143 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeWe are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition. Item 4. Mine Safety Disclosures. Not applicable. ​ 81 Table of Contents PART II
Biggest changeWe are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition. Item 4. Mine Safety Disclosures. Not applicable. ​ 83 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures. 81 ​ ​ Part II. 82 ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 82 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 82 ​ ​ ​
Biggest changeItem 4. Mine Safety Disclosures. 83 ​ ​ Part II. 84 ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 84 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 84 ​ ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+2 added−1 removed4 unchanged
Biggest changeFrom January 29, 2020, the date of our initial public offering, to November 17, 2021, our common stock traded on the NYSE American. Prior to January 29, 2020, there was no public market for our stock. Holders of Record As of March 30, 2022, there were approximately 19 holders of record of shares of our common stock.
Biggest changeFrom January 29, 2020, the date of our initial public offering, to November 17, 2021, our common stock traded on the NYSE American. Prior to January 29, 2020, there was no public market for our stock. Holders of Record As of March 28, 2023, there were approximately 23 holders of record of shares of our common stock.
Removed
Recent Sales of Unregistered Securities We did not issue any equity securities during the year ended December 31, 2022 that were not registered under the Securities Act and that have not otherwise been described in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K. ​
Added
Recent Sales of Unregistered Securities On November 27, 2023, the Company sold 207,660 shares of its common stock in a private placement to directors and officers at a price of $6.10 per share for aggregate proceeds of $1.27 million.
Added
The securities were sold pursuant to an exemption from registration under Section 4 (2) of the Securities Act of 1933, as amended. ​

Item 7. Management's Discussion & Analysis

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

41 edited+40 added−41 removed31 unchanged
Biggest changeIf we are unable to raise sufficient additional capital or defer sufficient operating expenses, we may be compelled to reduce the scope of our operations. 87 Table of Contents We expect to incur significant operating losses for the foreseeable future, and for these losses to further increase, as we ramp up our clinical development programs and begin activities for commercial launch readiness.
Biggest changeWe expect to incur significant operating losses for the foreseeable future, and for these losses to further increase, as we ramp up our clinical development programs and begin activities for commercial launch readiness. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
In several studies, Buntanetap was observed to inhibit the synthesis of neurotoxic proteins—APP/Aβ (“APP”), tau/phospho-tau (“tau”) and α-Synuclein (“αSYN”)—that are one of the main causes of neurodegeneration. High levels of 82 Table of Contents neurotoxic proteins lead to impaired axonal transport, which is responsible for the communication between and within nerve cells.
In several studies, Buntanetap was observed to inhibit the synthesis of neurotoxic proteins—APP/Aβ 84 Table of Contents (“APP”), tau/phospho-tau (“tau”) and α-Synuclein (“αSYN”)—that are one of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to impaired axonal transport, which is responsible for the communication between and within nerve cells.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; ● the costs associated with any products or technologies that we may in-license or acquire; and ● any delays and cost increases that may result from the COVID-19 or any future pandemic.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and 89 Table of Contents ● the costs associated with any products or technologies that we may in-license or acquire.
General and Administrative Expenses General and administrative expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in our executive, finance, accounting, and administrative functions. Our general and administrative expenses also include professional fees for legal services, including patent-related expenses, consulting, tax and accounting services, insurance, rent and general corporate expenses.
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in our executive, finance, accounting, and administrative functions. Our general and administrative expenses also include professional fees for legal services, including patent-related expenses, consulting, tax and accounting services, insurance, rent and general corporate expenses.
We expect that our general and administrative expenses will increase with the continued development and potential commercialization of our product candidates. We expect that our general and administrative expenses in 2023 and for the next several years will be significantly higher than in 2022 as we increase our employee count.
We expect that our general and administrative expenses will increase with the continued development and potential commercialization of our product candidates. We expect that our general and administrative expenses in 2024 and for the next several years will be significantly higher than in 2023 as we increase our employee count.
The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and 85 Table of Contents the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenues and expenses during the reporting periods.
The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenues and expenses during the reporting periods.
We believe that our current cash and cash equivalents and funding from existing grants will be sufficient to fund our operating expenses and capital expenditure requirements until the fourth quarter of 2023, including our ongoing Phase 2/3 AD Trial and our ongoing Phase 3 PD Trial.
We believe that our current cash and cash equivalents and funding from existing grants will be sufficient to fund our operating expenses and capital expenditure requirements until the second quarter of 2024, including our ongoing Phase 2/3 AD Trial and our ongoing Phase 3 PD Trial.
In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies.
In other words, an 92 Table of Contents “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies.
We expect cash used in operating activities to increase in 2023 as compared to 2022 due to an expected increase in our operating losses associated with ongoing development of our product candidates and planned increases in our personnel count.
We expect cash used in operating activities to increase in 2024 as compared to 2023 due to an expected increase in our operating losses associated with continued development of our product candidates and planned increases in our personnel count.
Income Taxes As of December 31, 2022, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $27,536,031 which may be available to offset future income tax liabilities. Federal NOL carryforwards generated in 2017 and prior of $2,764,240 will expire beginning 2032. The remaining federal NOL carryforwards generated beginning in 2018, do not expire.
Income Taxes As of December 31, 2023, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $38,085,386 which may be available to offset future income tax liabilities. Federal NOL carryforwards generated in 2017 and prior of $2,764,240 will expire beginning 2032. The remaining federal NOL carryforwards generated beginning in 2018, do not expire.
We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting 90 Table of Contents standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. This item is not required for smaller reporting companies.
Our accumulated deficit at December 31, 2022 was $54,054,774. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates.
Our accumulated deficit at December 31, 2023 was $110,259,087. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates.
In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics of Buntanetap, our AD/PD Trials met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, and in function in PD patients.
In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics of Buntanetap, our AD/PD Trials met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, and in function in PD patients. Following completion of the AD/PD Trials, we submitted our data to the U.S.
At the completion of the ADCS Trial, the data showed that Buntanetap is a translational inhibitor in humans just like in animals, and we further observed that there was statistical improvement in cognition in early AD patients, just like in the AD/PD Trials. Our Phase 3 PD Study and Phase 2/3 AD Study each have built in interim analyses.
At the completion of the ADCS Trial, the data showed that Buntanetap is a translational inhibitor in humans just like in animals, and we further observed that there was statistical improvement in cognition in early AD patients, just like in the AD/PD Trials.
Completion of our clinical development and clinical trials may take several years or more and the length of time generally varies according to the type, complexity, novelty and intended use of our product candidates.
These expenditures are subject to numerous uncertainties regarding timing and cost to achieve completion. Completion of our clinical development and clinical trials may take several years or more and the length of time generally varies according to the type, complexity, novelty and intended use of our product candidates.
This item is not required for smaller reporting companies. Item 8. Financial Statements and Supplementary Data. Our financial statements, accompanying notes and Report of Independent Registered Public Accounting Firm are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated in this Item 8 by reference. Item 9.
Item 8. Financial Statements and Supplementary Data. Our financial statements, accompanying notes and Report of Independent Registered Public Accounting Firm are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated in this Item 8 by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.
NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code.
S. state NOL carryforwards of $40,632,269 which may be available to offset future income tax liabilities and will expire beginning in 2028. 86 Table of Contents NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code.
Cash Flows The following table summarizes our cash flows from operating, investing and financing activities. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ 2022 2021 ​ ​ ​ (in thousands) ​ Statement of Cash Flows Data: ​ ​ ​ Total net cash (used in) provided by: ​ ​ ​ Operating activities ​ $ (17,312.9) ​ $ (9,132.1) ​ Financing activities ​ 4.6 ​ 46,743.5 ​ Net (decrease) increase in cash and cash equivalents ​ $ (17,308.3) ​ $ 37,611.4 ​ ​ Operating Activities For the year ended December 31, 2022, cash used in operations was $17,312.9 thousand compared to $9,132.1 thousand for the year ended December 31, 2021.
Cash Flows The following table summarizes our cash flows from operating, investing and financing activities. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 ​ ​ (in thousands) Statement of Cash Flows Data: ​ ​ Total net cash used in: ​ ​ Operating activities ​ $ (39,967.3) ​ $ (17,312.9) Financing activities ​ 17,344.3 ​ 4.6 Net decrease in cash and cash equivalents ​ $ (22,623.0) ​ $ (17,308.3) ​ Operating Activities For the year ended December 31, 2023, cash used in operations was $39,967.3 thousand compared to $17,312.9 thousand for the year ended December 31, 2022.
JOBS Act Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
The Company has not determined the impact ASU 2023-09 may have on the Company’s financial statement disclosures. JOBS Act Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Future Capital Requirements We do not have sufficient capital on hand to fund our operations for the next 12 months and will need to raise additional capital to meet our obligations as they become due.
These exercises resulted in aggregate proceeds of $0.42 million, net of underwriter commissions. 88 Table of Contents Future Capital Requirements We do not have sufficient capital on hand to fund our operations for the next 12 months and will need to raise additional capital to meet our obligations as they become due.
Our research and development expenses in 2022 were primarily related to our Phase 3 study in early PD patients.Our research and development expenses in 2021 were primarily related to the AD/PD Trials which began treating patients in August 2020.
Our research and development expenses in 2023 were primarily related to our Phase 3 study in early PD patients and our Phase 2/3 study in AD patients. Our research and development expenses in 2022 were primarily related to our Phase 3 study in early PD patients.
Research and Development Expenses Our research and development expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including: ● expenses associated with clinical development; ● personnel-related expenses, such as salaries, benefits, travel and other related expenses, including stock-based compensation; and ● payments to third-party contract research organizations (“CROs”), contractor laboratories and independent contractors.
Financial Operations Overview The following discussion sets forth certain components of our statements of operations as well as factors that impact those items. 85 Table of Contents Research and Development Expenses Our research and development (“R&D”) expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including: ● expenses associated with clinical development; ● personnel-related expenses, such as salaries, benefits, travel and other related expenses, including stock-based compensation; and ● payments to third-party contract research organizations (“CROs”), contractor laboratories and independent contractors.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when we will be able to achieve or maintain profitability, if at all. Financial Operations Overview The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when we will be able to achieve or maintain profitability, if at all.
We may also be required to sell or license our rights to product candidates in certain territories or indications that we would otherwise prefer to develop and commercialize ourselves.
If we are unable to raise additional funds as required, we may need to delay, reduce, or terminate some or all development programs and clinical trials. We may also be required to sell or license our rights to product candidates in certain territories or indications that we would otherwise prefer to develop and commercialize ourselves.
By the end of 2026, our goal is to have conducted the required pivotal studies for Buntanetap to be able to file two new drug applications (“NDAs”) with the FDA. 83 Table of Contents We believe that we are the only company developing a drug for AD and PD that is designed to inhibit more than one neurotoxic protein, and has a mechanism of action designed to restore nerve cell axonal and synaptic activity.
We believe that we are the only company developing a drug for AD and PD that is designed to inhibit more than one neurotoxic protein and has a mechanism of action designed to restore nerve cell axonal and synaptic activity.
In collaboration with the Alzheimer’s Disease Cooperative Study (“ADCS”), we also conducted a trial in 16 early AD patients (the “ADCS Trial”). In the ADCS Trial, early AD patients were defined as those patients with a MMSE score between 19 and 28. All three clinical trials were double-blind, placebo-controlled studies.
In 2021, we completed two Phase 1/2 clinical studies: one in 14 early AD patients, and one in 54 early PD patients (together, the “AD/PD Trials”). In collaboration with the Alzheimer’s Disease Cooperative Study (“ADCS”), we also conducted a trial in 16 early AD patients (the “ADCS Trial”). All three clinical trials were double-blind, placebo-controlled studies.
Results of Operations Years ended December 31, 2022 and 2021 Operating expenses and other income were comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2022 2021 ​ ​ (in thousands) Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 16,515.5 $ 8,479.0 General and administrative ​ $ 8,995.7 ​ $ 6,058.2 ​ Other income: ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 182.7 ​ $ 13.3 ​ Grant income ​ $ — ​ $ 36.8 ​ ​ 86 Table of Contents Research and Development Expenses Research and development expenses increased by $8,036.5 thousand for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Results of Operations Years ended December 31, 2023 and 2022 Operating expenses and other income were comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 ​ ​ (in thousands) Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ $ 38,790.6 $ 16,515.5 General and administrative ​ $ 6,244.4 ​ $ 8,995.7 Other income (expense): ​ ​ ​ ​ ​ ​ Change in fair value of warrants ​ $ (11,837.2) ​ $ — Interest income ​ $ 667.9 ​ $ 182.7 ​ Research and Development Expenses Research and development expenses increased by $22,275.1 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. 88 Table of Contents Adequate funding may not be available to us on acceptable terms or at all.
Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. Adequate funding may not be available to us on acceptable terms or at all. Our potential inability to raise capital when needed could have a negative impact on our financial condition and our ability to pursue our business strategies.
Due to the stage of our research and development, we are unable to accurately determine the duration or completion costs of our development of Buntanetap.
The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development. Due to the stage of our research and development, we are unable to accurately determine the duration or completion costs of our development of Buntanetap.
To date, we have not generated any revenues from the sale of products, and we do not anticipate generating any revenues from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception.
We have financed our operations primarily with the proceeds from the sale of common stock, convertible preferred stock and convertible promissory notes. To date, we have not generated any revenues from the sale of products, and we do not anticipate generating any revenues from the sales of products for the foreseeable future.
NOL carryforwards generated beginning in 2021 are permitted to offset 80% of taxable income in future years. As of December 31, 2022, the Company also had U. S. state NOL carryforwards of $30,082,914 which may be available to offset future income tax liabilities and will expire beginning in 2028.
NOL carryforwards generated beginning in 2018 are permitted to offset 80% of taxable income in future years. As of December 31, 2023, the Company also had U.
Financing Activities Cash provided by financing activities was $4.6 thousand during the year ended December 31, 2022, attributable to proceeds from the exercise of stock options.
Cash provided by financing activities was $4.6 thousand during the year ended December 31, 2022, attributable to attributable to proceeds from the exercise of stock options. 90 Table of Contents Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
We plan to consult with the FDA following completion of these interim analyses, to obtain feedback on our ongoing and planned AD and PD studies, including conducting an open label extension study following the completion of the initial trials.
Both studies have been completed and presently we are organizing and cleaning the data, while we are still blinded to all data. We plan to consult with the FDA following completion of the full analyses of the two studies, to obtain feedback on our planned AD and PD studies, including conducting disease-modifying studies and open label extensions.
Liquidity and Capital Resources Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities. We have financed our operations primarily with the proceeds from the sale of common stock, convertible preferred stock and convertible promissory notes.
The increase was primarily the result of higher interest rates compared to the prior year being earned on our cash and cash equivalents. Liquidity and Capital Resources Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities.
Based on the results of the interim analysis, we intend to proceed with the Phase 3 PD Study as planned in accordance with the previously established protocol. We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial.
Our Phase 3 PD Study and Phase 2/3 AD Study each have built in interim analyses, which were both promising. Based on the results of the interim analysis, we proceeded with the Phase 3 PD and with the Phase 2/3 AD Study as planned in accordance with the previously established protocol.
Grant Income Grant income decreased $36.8 thousand for the year ended December 31, 2022 compared to the year ended December 31, 2021.
General and Administrative Expenses General and administrative expenses decreased by $2,751.3 thousand for the year ended December 31, 2023, compared to the year ended December 31, 2022.
We expect that our research and development expenses in 2023 and for the next several years will be significantly higher than in 2022 as a result of costs associated with our planned Phase 3 trials. These expenditures are subject to numerous uncertainties regarding timing and cost to completion.
We expect that our research and development expenses in 2024 and for the next several years will continue to remain elevated as a result of costs associated with completing our Phase 3 trial for PD, our Phase 2/3 trial for AD and subsequent planned activities leading up to an NDA filing with the FDA.
Cash provided by financing activities was $46,743.5 thousand during the year ended December 31, 2021, attributable to net proceeds from our equity offering of approximately $46,648.4 thousand, and proceeds from the exercise of stock options of $95.1 thousand.
Financing Activities Cash provided by financing activities was $17,344.3 thousand during the year ended December 31, 2023, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, as well as proceeds from exercises of our Canaccord Warrants.
Research and Development Expenses We rely on third parties to conduct our clinical studies and to provide services, including data management, statistical analysis and electronic compilation. At the end of each reporting period, we compare the payments made to each service provider to the estimated progress towards completion of the related project.
Research and development expenses include, among other categories, development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. We rely on third-parties to conduct our clinical studies and to provide many of these services, including data management, statistical analysis and electronic compilation.
Interest Income, Net Interest income, net increased $159.8 thousand for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily the result of higher interest rates compared to the prior year.
The change in fair value was primarily driven by the change in our stock price during the fourth quarter of 2023. 87 Table of Contents Interest Income Interest income increased $487.8 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
We estimate the fair value of stock options as of the date of grant using the Black-Scholes option pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculations, including the expected term, the expected volatility of our common stock, the risk-free interest rate and the expected dividend rate.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, 91 Table of Contents stock price volatility, the risk-free interest rate, and expected dividends.
Removed
In 2021, we completed two Phase 1/2 clinical studies: one in 14 early AD patients, and one in 54 early PD patients (together, the “AD/PD Trials”).
Added
By the end of 2026, our goal is to have conducted the required pivotal studies for Buntanetap to be able to file two new drug applications (“NDAs”) with the FDA.
Removed
In the AD/PD Trials, early AD patients were defined as those with a Mini Mental State Examination (MMSE) score between 19 and 28 and early PD patients as those patients at Hoehn & Yahr stages 1, 2 or 3.
Added
We have not yet conducted a comprehensive study to assess whether a change of ownership as defined by Section 382 has occurred since our inception.
Removed
MMSE is a brief screening instrument used to assess cognitive function, with total scores ranging from 0 to 30 and a lower score indicating greater disease severity, while the Hoehn & Yahr scale is a medical assessment used to measure staging of the functional disability associated with PD where a higher stage indicates greater disease severity.
Added
The increase was primarily the result of an increase of $23,707.8 thousand in expenses related to our clinical trial and CMC costs, due to the fact that our primary CROs and other outsource partners were fully operational and conducting Phase 2 and Phase 3 studies for all of 2023.
Removed
We believe that the AD/PD Trials represent the first double-blind placebo-controlled studies that showed improvements in AD patients, as measured by ADAS-Cog, and in PD patients, as measured by UPDRS. Following completion of the AD/PD Trials, we submitted our data to the U.S.
Added
This increase is partially offset by a decrease of $1,160.9 thousand for R&D stock-based compensation expense, driven by lower fair values being amortized in 2023 as compared to 2022 as a result of lower stock price and a decrease of $452.2 thousand for lower employee cost allocations to R&D.
Removed
In the Phase 3 PD Study, early PD patients were defined as those at Hoehn & Yahr stages 1, 2 or 3, and OFF times of less than two hours per day. OFF time refers to when PD motor and/or non-motor symptoms occur between medication doses.
Added
The decrease was primarily the result of decreases of $3,363.3 thousand in stock-based compensation expense, driven by lower fair values being amortized in 2023 as compared to 2022 as a result of lower stock price, decreases of $237.9 thousand employee in related costs related to lower cash bonuses accrued in 2023, as well as a decrease in corporate insurance expense of $204.6 thousand given lower renewal premiums year over year.
Removed
In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24.
Added
These decreases were partially offset by increases of $942.3 thousand for professional fees relating primarily to increased accounting, audit and legal costs incurred as a result of the material weakness identified in 2023 and associated remediation efforts.
Removed
Our Phase 3 PD Study incorporated an interim analysis at two months, the results of which were disclosed on March 31, 2023. The pre-planned interim analysis was conducted by our data analytics provider based on 132 patients from all cohorts collectively for which baseline and two-month data was available.
Added
Change in Fair Value of Warrants Change in fair value of warrants decreased by $11,837.2 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Removed
As the interim analysis was conducted at two months of the six-month endpoint and only on 132 patients, it may not be indicative of the results at six months for the full patient population because as the trial progresses, clinical outcomes may materially change as patient enrollment continues and more patient data become available, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
Added
This change was attributable to the loss on the change in fair value of our liability-classified Canaccord Warrants from the date of issuance in the fourth quarter of 2023 to December 31, 2023.
Removed
A separate safety interim analysis is in process and we expect that interim analysis to be released in the second quarter of 2023. We intend to disclose the results of an interim analysis for our Phase 2/3 AD Study in Fall 2023.
Added
We have incurred losses and generated negative cash flows from operations since inception. As of December 31, 2023, our principal source of liquidity was our cash and cash equivalents, which totaled $5,754.7 thousand. Equity Financings On March 31, 2023, the Company, entered into an ATM Equity Offering Sales Agreement SM (the “Sales Agreement”) with BofA Securities, Inc.
Removed
Using the data from the Phase 3 PD Study interim analysis, we intend to design an 18-month long disease-modifying Phase 3 study in the same early PD patients.
Added
(“BofA”) and ThinkEquity LLC (“ThinkEquity” and, together with BofA, the “Sales Agents”), as sales agents, pursuant to which the Company may offer and sell, from time to time through the Sales Agents, shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $50.0 million.
Removed
In addition, we intend to conduct a short 6-month study in advanced PD patients during the second half of the 18-month disease modifying Phase 3 study, at which time we will define the advanced PD patient population for the purposes of such study.
Added
On April 4, 2023, the Company delivered written notice to BofA and ThinkEquity to terminate the Sales Agreement, effective April 9, 2023, pursuant to Section 9(a) of the Sales Agreement. The Company is not subject to any termination penalties related to the termination of the Sales Agreement.
Removed
Similarly, using the data from the Phase 2/3 AD Study interim analysis, we intend to design an 18-month disease modifying Phase 3 study in the same early AD patient population.
Added
Prior to termination of the Sales Agreement, the Company sold 704,000 shares of Common Stock pursuant to the Sales Agreement at a price of $10.88 per share, for gross proceeds of $7.60 million before commissions.
Removed
In addition, we intend to conduct a short 6-month study in advanced AD patients during the second half of the 18-month disease modifying Phase 3 study, at which time we will define the advanced AD patient population for the purposes of such study.
Added
As a result of the termination of the Sales Agreement, the Company will not offer or sell any additional shares of Common Stock under the Sales Agreement.
Removed
We expect both the ongoing Phase 3 PD Study and the Phase 2/3 AD Study to be completed by the end of 2023, and we intend to announce the data from the final analyses in the first quarter of 2024.
Added
On April 7, 2023, the Company sold 84,453 shares of its common stock in a private placement to individual members of its Board of Directors and management at a price of $12.61 per share, for aggregate proceeds of $1.06 million.
Removed
The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others: ● the number of sites included in the clinical trials; 84 Table of Contents ● the length of time required to enroll suitable patients; ● the size of patient populations participating in the clinical trials; ● the duration of patient follow-ups; ● the development stage of the product candidates; and ● the efficacy and safety profile of the product candidates.
Added
On October 31, 2023, the Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC relating to the sale of 1,250,000 units consisting of (i) one share of its common stock and (ii) an accompanying warrant (the “Canaccord Warrants”; each warrant was to purchase one share of common stock). The public offering price was $6.00 per unit.
Removed
Grant Income Grants received are recognized as grant income in the statements of operations as and when they are earned for the specific research and development projects for which these grants are designated.
Added
Each common stock warrant sold with the shares of common stock represents the right to purchase one share of our common stock at an exercise price of $9.00 per share, and redeemable at the Company’s option, in whole or in part, at a redemption price equal to $0.001 per warrant upon 30 days’ prior written notice, at any time after (i) the Company’s public announcement of Positive Topline Data (as defined in the Warrant Agreement) from its Phase 3 pivotal study in patients with Parkinson’s Disease and (ii) the date on which (a) the closing price of the Company’s common stock on the principal exchange or trading facility on which it is then traded has equaled or exceeded $14.25 and (b) the average daily trading value (ADTV) of the Company’s common stock is equal to or exceeds $2.0 million for two consecutive Trading Days.
Removed
Grants payments received in excess of grant income earned are recognized as deferred grant on the balance sheet and grant income earned in excess of grant payments received is recognized as grant receivable on the balance sheets.
Added
The Canaccord Warrants are exercisable immediately and will expire on November 2, 2028, five years from the date of issuance. The net proceeds from the offering were approximately $6.83 million, after deducting underwriting discounts, commissions and offering expenses and excluding the exercise of any warrants.
Removed
Factors that we consider in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of our vendors. These estimates are subject to change as additional information becomes available.
Added
On November 27, 2023, the Company sold 207,660 shares of its common stock in a private placement to individual members of its Board of Directors and management at a price of $6.10 per share, for aggregate proceeds of $1.27 million.
Removed
Depending on the timing of payments to vendors and estimated services provided, we record net prepaid or accrued expenses related to these costs. Stock-Based Compensation We account for grants of stock options to employees and non-employees based on their grant date fair value and recognize compensation expense over the vesting periods.
Added
On December 28, 2023, the Company received exercise notices for 50,000 of its Canaccord Warrants at an exercise price of $9.00 per share.
Removed
Given the lack of a public market for our common stock prior to the IPO, the expected stock price volatility is based on a weighted approach that incorporates the historic daily volatility of our common stock since the IPO and the historic daily volatility of similar companies that have been publicly traded for a period commensurate with the expected term of the option.

… 42 more changes not shown on this page.

Other ANVS 10-K year-over-year comparisons