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What changed in ARVINAS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ARVINAS, 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.

+811 added−658 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-23)

Top changes in ARVINAS, INC.'s 2023 10-K

811 paragraphs added · 658 removed · 500 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

268 edited+180 added−84 removed516 unchanged
Biggest changePursuant to the IP Contribution Agreement by and between BCS and Oerth Bio, or the BCS IP Contribution Agreement, in addition to certain non-exclusive licenses, BCS and certain of its affiliates granted to Oerth Bio an exclusive, worldwide, fully paid-up, royalty-free license, including certain rights to sublicense, to use certain of BCS’ or its affiliates’ intellectual property that covers ubiquitin ligases or moieties that bind ubiquitin ligase complexes, and linkers that attach ubiquitin ligase binding moieties to moieties that bind to a target, to research, develop, manufacture, use and commercialize and sell PROTAC Products in the field of agriculture.
Biggest changePursuant to the IP Contribution Agreement by and between BCS and Oerth Bio, or the BCS IP Contribution Agreement, in addition to certain non-exclusive licenses, BCS and certain of its affiliates granted to Oerth Bio an exclusive, worldwide, fully paid-up, royalty-free license, including certain rights to sublicense, to use certain of BCS’ or its affiliates’ intellectual property that covers ubiquitin ligases or moieties that bind ubiquitin ligase complexes, and linkers that attach ubiquitin ligase binding moieties to moieties that bind to a target, to research, develop, manufacture, use and commercialize and sell PROTAC Products in the field of agriculture. 43 The Company IP Contribution Agreement and the BCS IP Contribution Agreement also contain a non-exclusive, worldwide, fully paid-up, royalty-free license grant from Oerth Bio to each of us and BCS, respectively, under various forms of intellectual property developed by Oerth Bio to research, develop, manufacture, use and commercialize products outside of the field of agriculture, in each case excluding intellectual property licensed by the other contributing party to Oerth Bio.
As per the palbociclib USPI, a Grade ≥3 decrease in neutrophil 21 counts was reported in 66% of patients receiving IBRANCE plus letrozole in Study 1 (PALOMA-2) and 66% of patients receiving IBRANCE plus fulvestrant in Study 2 (PALOMA-3). • There was no increase in the rate of infection reported in the ARV-471 with palbociclib Phase 1b investigation relative to the rates reported in the registrational Phase 3 studies of palbociclib. • The neutropenia events in the ARV-471 Phase 1b trial were manageable with standard dose reductions of palbociclib. • In the arm combining palbociclib with 200 mg ARV-471, one of 21 patients discontinued.
As per the palbociclib USPI, a Grade ≥3 decrease in neutrophil counts was reported in 66% of patients receiving IBRANCE plus letrozole in Study 1 (PALOMA-2) and 66% of patients receiving IBRANCE plus fulvestrant in Study 2 (PALOMA-3). • There was no increase in the rate of infection reported in the ARV-471 with palbociclib Phase 1b investigation relative to the rates reported in the registrational Phase 3 studies of palbociclib. • The neutropenia events in the ARV-471 Phase 1b trial were manageable with standard dose reductions of palbociclib. • In the arm combining palbociclib with 200 mg ARV-471, one of 21 patients discontinued.
If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the HHS, as well as state authorities.
If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of HHS, as well as state authorities.
The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
Restrictions under applicable federal and state health care laws and regulations, include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, ordering, leasing, arranging for, or recommending the purchasing, ordering, or leasing of, any good or service for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid; • the federal civil and criminal false claims laws, including the civil False Claims Act, and Civil Monetary Penalties Law, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, false or fraudulent claims for payment or knowingly making, using or causing to made or used a false record or statement material to a false or fraudulent claim or to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or making false statements relating to health care matters; 55 • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and the regulations promulgated thereunder, including 45 C.F.R.
Restrictions under applicable federal and state health care laws and regulations, include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, ordering, leasing, arranging for, or recommending the purchasing, ordering, or leasing of, any good or service for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid; • the federal civil and criminal false claims laws, including the civil False Claims Act, and Civil Monetary Penalties Law, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, false or fraudulent claims for payment or knowingly making, using or causing to made or used a false record or statement material to a false or fraudulent claim or to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or making false statements relating to health care matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and the regulations promulgated thereunder, including 45 C.F.R.
Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive, (ii) it is likely that the sponsor will be in a position to provide the required comprehensive clinical trial data, (iii) the product fulfills an unmet medical need and (iv) the benefit to public health of the immediate availability on the market of the 61 medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.
Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive, (ii) it is likely that the sponsor will be in a position to provide the required comprehensive clinical trial data, (iii) the product fulfills an unmet medical need and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.
In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.
In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the 60 “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.
Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’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 50 management mechanisms under a REMS which can materially affect the potential market and profitability of the product.
Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’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 which can materially affect the potential market and profitability of the product.
Under the statute, a generic drug is bioequivalent to a RLD if “the 52 rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.
Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.
The following were observed: • An approximate increase of 50% in mean palbociclib exposure (i.e., pharmacokinetic area under the curve and Cmax) in the fed state was observed relative to historical palbociclib pharmacokinetic data in the fasted state. • Grade 3/4 neutropenia, a known dose-related adverse reaction associated with palbociclib, was 76% for 200 mg ARV-471 with 125 mg palbociclib (n=21). • As per the U.S.
The following were observed: • An approximate increase of 50% in mean palbociclib exposure (i.e., pharmacokinetic area under the curve and Cmax) in the fed state was observed relative to historical palbociclib pharmacokinetic data in the fasted state. 24 • Grade 3/4 neutropenia, a known dose-related adverse reaction associated with palbociclib, was 76% for 200 mg ARV-471 with 125 mg palbociclib (n=21). • As per the U.S.
A well-controlled, statistically robust Phase 3 clinical trial may be designed to deliver 45 the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug: such Phase 3 studies are referred to as “pivotal.” A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to support marketing approval of a product candidate.
A well-controlled, statistically robust Phase 3 clinical trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug: such Phase 3 studies are referred to as “pivotal.” A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to support marketing approval of a product candidate.
We have three investigational clinical stage programs: ARV-471, a novel PROTAC estrogen receptor, or ER, protein degrader for the treatment of patients with locally advanced or metastatic ER positive / human epidermal growth factor receptor 2, or HER2, negative, or ER+/HER2-, breast cancer and bavdegalutamide (ARV-110) and ARV-766, each an oral PROTAC protein degrader that targets the androgen receptor protein, or AR, for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC.
We have three investigational clinical stage programs: Vepdegestrant (ARV-471), a novel PROTAC estrogen receptor, or ER, protein degrader for the treatment of patients with locally advanced or metastatic ER positive / human epidermal growth factor receptor 2, or HER2, negative, or ER+/HER2-, breast cancer and ARV-766 and bavdegalutamide (ARV-110), each an oral PROTAC protein degrader that targets the androgen receptor protein, or AR, for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC.
These cellular responses often result in a need for higher dosing levels, which can in turn introduce safety challenges from off-target and toxic effects, or drug resistance. 9 Gene therapy approaches act by augmenting the errant protein with normal protein by using viral vectors to introduce DNA from an exogenous source that codes for a functional protein.
These cellular responses often result in a need for higher dosing levels, which can in turn introduce safety challenges from off-target and toxic effects, or drug resistance. Gene therapy approaches act by augmenting the errant protein with normal protein by using viral vectors to introduce DNA from an exogenous source that codes for a functional protein.
As shown in the figure below, in a 28-day dosing study in MCF-7 xenografts, ARV-471 at 30 mpk daily in combination with palbociclib was superior in shrinking tumors, as compared to either palbociclib as a single agent at 60 mpk daily, or the standard-of-care combination of palbociclib at 60 mpk daily plus fulvestrant at 200 mpk twice per week for two weeks and then once per week for two weeks.
As shown in the figure below, in a 28-day dosing study in MCF-7 xenografts, ARV-471 at 30 mpk daily in combination with palbociclib was superior in shrinking tumors, as compared to either palbociclib as a single agent at 60 mpk daily, or the standard-of-care 22 combination of palbociclib at 60 mpk daily plus fulvestrant at 200 mpk twice per week for two weeks and then once per week for two weeks.
These licensed intellectual property rights arose from the research conducted by Dr. Craig Crews at Yale. We are obligated to use commercially reasonable efforts to implement a written plan we agreed to with Yale setting forth a description of any research and development, testing, governmental approval and commercialization activities relating to licensed products and our financing plans.
These licensed intellectual property rights arose from the research conducted by Dr. Craig Crews at Yale. 38 We are obligated to use commercially reasonable efforts to implement a written plan we agreed to with Yale setting forth a description of any research and development, testing, governmental approval and commercialization activities relating to licensed products and our financing plans.
The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The overall ten-year period will be extended to a maximum of 11 years if, 69 during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
Further, ARV-471 was shown to reduce ER by 79% and 88% at the 10 mpk and 30 mpk dosing levels, respectively, compared with 63% at the 200 mpk of fulvestrant dosing level. 19 We have also conducted studies of ARV-471 in combination with palbociclib, a CDK4/6 inhibitor that is standard of care when used together with fulvestrant.
Further, ARV-471 was shown to reduce ER by 79% and 88% at the 10 mpk and 30 mpk dosing levels, respectively, compared with 63% at the 200 mpk of fulvestrant dosing level. We have also conducted studies of ARV-471 in combination with palbociclib, a CDK4/6 inhibitor that is standard of care when used together with fulvestrant.
In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, 43 among other things, must be submitted to the FDA as part of an IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin.
In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, must be submitted to the FDA as part of an IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin.
Both bavdegalutamide and ARV-766 demonstrated activity in preclinical models of AR overexpression and AR mutations, both common mechanisms of resistance to current standard-of-care agents in men with prostate cancer. We believe that the differentiated PROTAC pharmacology of bavdegalutamide and ARV-766, including their iterative activity, has the potential to translate into significantly improved clinical outcomes over current standard-of-care agents.
Both ARV-766 and bavdegalutamide (ARV-110) demonstrated activity in preclinical models of AR overexpression and AR mutations, both common mechanisms of resistance to current standard-of-care agents in men with prostate cancer. We believe that the differentiated PROTAC pharmacology of ARV-766 and bavdegalutamide (ARV-110), including their iterative activity, has the potential to translate into significantly improved clinical outcomes over current standard-of-care agents.
Protein Degradation When proteins become old, mutated, misfolded or simply have served their purpose, they are naturally degraded by the body through the ubiquitin proteasome system in which cells mark or tag a particular protein for disposal by attaching several molecules of the small regulatory protein ubiquitin to the protein to be disposed.
Protein Degradation When proteins become old, mutated, misfolded or simply have served their purpose, they are naturally degraded by the body through the ubiquitin proteasome system in which cells mark or tag a particular protein for 13 disposal by attaching several molecules of the small regulatory protein ubiquitin to the protein to be disposed.
After our PROTAC targeted protein degrader facilitates the tagging of a target protein molecule with ubiquitin through formation of the trimer complex, it can move on to another target 10 protein molecule to conduct the degradation process again, potentially completing this cycle hundreds of times before eventually being metabolized or eliminated from the cell.
After our PROTAC targeted protein degrader facilitates the tagging of a target protein molecule with ubiquitin through formation of the trimer complex, it can move on to another target protein molecule to conduct the degradation process again, potentially completing this cycle hundreds of times before eventually being metabolized or eliminated from the cell.
Commercialization Plans We have not yet established our own commercial organization or distribution capabilities because our product candidates are still in preclinical and clinical development. Other than our discovery collaboration agreements, we have retained commercialization rights for all of our development programs including global co-commercialization rights for ARV-471 through our collaboration with Pfizer.
Commercialization Plans We have not yet established our own commercial organization or distribution capabilities because our product candidates are still in preclinical and clinical development. Other than our discovery collaboration agreements, we have retained commercialization rights for all of our development programs including global co-commercialization rights for vepdegestrant (ARV-471) through our collaboration with Pfizer.
Patients with locally advanced or metastatic ER+ / HER2- breast cancer are often treated with hormone therapy, such as an aromatase inhibitor, sometimes in combination with targeted drugs such as CDK4/6 inhibitors. In patients with aggressive disease or whose disease continues to progress with a hormonal treatment regimen, chemotherapy may be prescribed.
Patients with locally advanced or metastatic ER+ / HER2- breast cancer are 21 often treated with hormone therapy, such as an aromatase inhibitor, sometimes in combination with targeted drugs such as CDK4/6 inhibitors. In patients with aggressive disease or whose disease continues to progress with a hormonal treatment regimen, chemotherapy may be prescribed.
Pfizer ARV-471 Collaboration Agreement In July 2021, we entered into a collaboration agreement with Pfizer, or the ARV-471 Collaboration Agreement, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound ARV-471, or the Licensed Products. Under the ARV-471 Collaboration Agreement, we received an upfront, non-refundable payment of $650 million.
Pfizer ARV-471 Collaboration Agreement In July 2021, we entered into a collaboration agreement with Pfizer, or the ARV-471 Collaboration Agreement, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound vepdegestrant (ARV-471), or the Licensed Products. Under the ARV-471 Collaboration Agreement, we received an upfront, non-refundable payment of $650 million.
FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate- 44 size patient populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application.
FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application.
Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if the company with 54 orphan drug exclusivity is not able to meet market demand or the subsequent product is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care.
Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if the company with orphan drug exclusivity is not able to meet market demand or the subsequent product is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care.
Parts 160 and 164, imposing rules regarding privacy, security, and data breach notifications; • the Foreign Corrupt Practices Act, or FCPA, which prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment; • the federal physician transparency requirements known as the Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the Affordable Care Act, or the ACA, which requires manufacturers of drugs, medical devices, biological and medical supplies covered by Medicare, Medicaid, or State Children’s Health Insurance Program to report annually to the Centers for Medicare & Medicaid Services, or CMS, within HHS, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to health care items or services that are reimbursed by non-government third-party payors, including private insurers.
Parts 160 and 164, imposing rules regarding privacy, security, and data breach notifications; • the FCPA, which prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment; • the federal physician transparency requirements known as the Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the Affordable Care Act, or the ACA, which requires manufacturers of drugs, medical devices, biological and medical supplies covered by Medicare, Medicaid, or State Children’s Health Insurance Program to report annually to the Centers for Medicare & Medicaid 61 Services, or CMS, within HHS, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to health care items or services that are reimbursed by non-government third-party payors, including private insurers.
The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The new law 58 also caps Medicare beneficiaries' out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.
The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The new law also caps Medicare beneficiaries' out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.
We refer to this recycling as our PROTAC targeted protein degraders’ iterative mechanism of action. The figure below depicts our PROTAC-induced cycle from E3 ligase binding and target protein recruitment, to trimer formation and ubiquitin transfer, to degradation of the target protein by the proteasome, to the release of ubiquitin and PROTAC targeted protein degrader for further degradation cycles .
We refer to this recycling as our PROTAC targeted protein degraders’ iterative mechanism of action. 14 The figure below depicts our PROTAC-induced cycle from E3 ligase binding and target protein recruitment, to trimer formation and ubiquitin transfer, to degradation of the target protein by the proteasome, to the release of ubiquitin and PROTAC targeted protein degrader for further degradation cycles .
We also intend to seek patent term extensions in any jurisdiction where they are available; however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.
We also intend to seek patent term extensions in any jurisdiction where they are available; however, there is no 37 guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.
The ARVINAS word mark is also registered for pharmaceutical products in Australia, Brazil, Colombia, the EU, Hong Kong, India, Indonesia, Israel, Japan, Mexico, New Zealand, Norway, Singapore, South Africa, South Korea, Switzerland, Taiwan, and the United Kingdom, and is pending registration in several other countries.
The ARVINAS word mark is also registered for pharmaceutical products in Australia, Brazil, China, Colombia, the EU, Hong Kong, India, Indonesia, Israel, Japan, Mexico, New Zealand, Norway, Singapore, South Africa, South Korea, Switzerland, Taiwan, and the United Kingdom, and is pending registration in several other countries.
Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined.
Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. 49 Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined.
A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product candidate has the potential to address unmet medical needs for such disease or condition.
A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product candidate 55 has the potential to address unmet medical needs for such disease or condition.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products and products with a new active substance 60 indicated for the treatment of certain diseases, including products for the treatment of cancer.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer.
Pfizer has the right to exercise an option to obtain an exclusive worldwide license with respect to each Target for a specified period of time after receipt of the applicable deliverables for such Target. If Pfizer does not 36 exercise its option for a Target, such Target is no longer subject to the Pfizer Research Collaboration Agreement.
Pfizer has the right to exercise an option to obtain an exclusive worldwide license with respect to each Target for a specified period of time after receipt of the applicable deliverables for such Target. If Pfizer does not exercise its option for a Target, such Target is no longer subject to the Pfizer Research Collaboration Agreement.
Finally, we own pending applications in the U.S. for the PROTAC mark for bi-functional small molecules that mediate targeted protein degradation through the ubiquitin proteasome system for agricultural and pesticide use and agricultural products development services. These applications are licensed for use by Oerth Bio.
We own pending applications in the U.S. for the PROTAC mark for bi-functional small molecules that mediate targeted protein degradation through the ubiquitin proteasome system for agricultural and pesticide use and agricultural products development services. These applications are licensed for use by Oerth Bio.
If the sponsor does not 53 challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the sponsor is not seeking approval).
If the sponsor does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the sponsor is not seeking approval).
Adoption of price controls and cost-containment measures, 56 and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time.
Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time.
Developing PROTAC Targeted Protein Degraders that Degrade Proteins Associated with Neurodegenerative Diseases We have conducted preclinical studies to establish the potential of our PROTAC Discovery Engine in the CNS for the treatment of neurodegenerative diseases, including tauopathies, the largest of which is Alzheimer’s disease.
Developing PROTAC Targeted Protein Degraders that Degrade Proteins Associated with Neurodegenerative Diseases We have conducted preclinical studies to establish the potential of our PROTAC Discovery Engine in the CNS for the treatment of neurodegenerative diseases, including tauopathies, the largest of which is 34 Alzheimer’s disease.
We also own a U.S. trademark registration for the mark PROTAC for small molecule products aimed at degrading disease-causing cellular 33 proteins for treatment in the fields of oncology, immunology, inflammatory diseases, and central nervous system disorders.
We also own a U.S. trademark registration for the mark PROTAC for small molecule products aimed at degrading disease-causing cellular proteins for treatment in the fields of oncology, immunology, inflammatory diseases, and central nervous system disorders.
To reach this determination, the FDA must determine that the drug is effective and that its expected benefits outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA.
To reach this determination, the FDA must determine that the drug is safe and effective and that its expected benefits outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA.
Recent genomic advances continue to implicate the role of specific proteins in many disease states. There are multiple therapeutic approaches, both approved and in development, to treat diseases caused by abnormal proteins or aberrant protein expression.
Recent genomic advances continue to implicate the role of specific proteins in many disease states. 12 There are multiple therapeutic approaches, both approved and in development, to treat diseases caused by abnormal proteins or aberrant protein expression.
Some of the currently approved drug therapies are branded and subject to patent protection, 40 and others are available on a generic basis. Many of these approved drugs are well established therapies and are widely accepted by physicians, patients and third-party payors.
Some of the currently approved drug therapies are branded and subject to patent protection, and others are available on a generic basis. Many of these approved drugs are well established therapies and are widely accepted by physicians, patients and third-party payors.
Our efforts to recruit and retain a diverse and passionate workforce include providing competitive compensation, 65 including equity incentive compensation, and comprehensive benefits that provide resources to help employees manage their health, finances and life outside of wor k.
Our efforts to recruit and retain a diverse and passionate workforce include providing competitive compensation, including equity incentive compensation, and comprehensive benefits that provide resources to help employees manage their health, finances and life outside of wor k.
Proteins are responsible for many structural, functional and regulatory processes in cells. 8 Proteins are large, complex biomolecules made through a series of steps based on instructions carried from DNA, the genetic “blueprint” within the cell.
Proteins are responsible for many structural, functional and regulatory processes in cells. Proteins are large, complex biomolecules made through a series of steps based on instructions carried from DNA, the genetic “blueprint” within the cell.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring 45 technologies complementary to, or necessary for, our programs.
We have chosen ER degradation as a therapeutic focus given the well-documented biology of ER signaling as a principal driver in a high percentage of breast cancers. ARV-471 has demonstrated activity in ER+ breast cancer preclinical models.
We have chosen ER degradation as a therapeutic focus given the well-documented biology of ER signaling as a principal driver in a high percentage of breast cancers. Vepdegestrant (ARV-471) has demonstrated activity in ER+ breast cancer preclinical models.
Bayer Joint Venture In July 2019, we, Bayer and Bayer CropScience LP, or BCS, formed a joint venture, Oerth Bio, a Delaware limited liability company. We and BCS each received an initial ownership interest in Oerth Bio representing 50% of the ownership interests.
Bayer Joint Venture In July 2019, we, Bayer and Bayer CropScience LP, or BCS, formed a joint venture, Oerth Bio, initially a Delaware limited liability company. We and BCS each received an initial ownership interest in Oerth Bio representing 50% of the ownership interests.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which 57 a company promotes or distributes drug products.
We use our proprietary PROTAC Discovery Engine Platform to engineer PROTAC targeted protein degraders that are designed to harness the body’s own natural protein disposal system to selectively and efficiently remove disease-causing proteins.
We use our proprietary PROTAC Discovery Engine Platform to engineer PROTAC targeted protein degraders that are designed to harness the body’s own natural 10 protein disposal system to selectively and efficiently remove disease-causing proteins.
The 34 expiration of the last to expire patent right licensed from Yale, if it issues as a patent and all appropriate maintenance fees are paid, is currently expected be in 2039.
The expiration of the last to expire patent right licensed from Yale, if it issues as a patent and all appropriate maintenance fees are paid, is currently expected be in 2039.
In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track application before the application is complete, a process known as rolling review.
In addition to other 54 benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track application before the application is complete, a process known as rolling review.
The sponsor will be required to report, among other things, certain adverse reactions and manufacturing problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements.
The sponsor will be required to report, among other things, certain adverse reactions and manufacturing problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and 56 promotional labeling requirements.
For costs incurred in excess of the budgeted amount, Genentech has the option of either having us continue the work on the Target and reimbursing us for our costs in doing so or terminating the work on such Target.
For costs incurred in excess of 39 the budgeted amount, Genentech has the option of either having us continue the work on the Target and reimbursing us for our costs in doing so or terminating the work on such Target.
We have proteomics capabilities that enable us to understand that specificity in precise detail and iterate quickly to optimize the selectivity of our PROTAC degraders for the protein target. 12 Turning Degraders into Drugs • Arvinas Rules - Optimization of traditional small molecule agents tends to focus on guidelines that increase the chances of such molecules having sufficient permeability and solubility to make them orally bioavailable.
We have proteomics capabilities that enable us to understand that specificity in precise detail and iterate quickly to optimize the selectivity of our PROTAC degraders for the protein target. 16 Turning Degraders into Drugs • Arvinas Rules - Optimization of traditional small molecule agents tends to focus on guidelines that increase the chances of such molecules having sufficient permeability and solubility to make them orally bioavailable.
More than 18,000 people are diagnosed with DLBCL each year. Treatment for DLBCL is largely devoid of oral options and there are currently no approved BCL6-targeted therapies on the market or in the clinic. BCL6 may also be a clinically relevant therapeutic target in various solid tumors including breast cancer, non-small cell lung cancer and glioblastoma.
More than 74,000 people are diagnosed with DLBCL each year. Treatment for DLBCL is largely devoid of oral options and there are currently no approved BCL6-targeted therapies on the market or in the clinic. BCL6 may also be a clinically relevant therapeutic target in various solid tumors including breast cancer, non-small cell lung cancer and glioblastoma.
Under the joint 38 venture agreement, we have no obligation to provide additional funding and our ownership interest will not be diluted from future contributions from BCS.
Under the joint venture agreement, we have no obligation to provide additional funding and our ownership interest will not be diluted from future contributions from BCS.
In 2020, President Trump issued several executive orders 57 intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations.
In 2020, President Trump issued several executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations.
As of December 31, 2022, and for the last several years, our company turnover rate was and has been lower than the industry market average. Training and educating our employees is key to our organizational success. We endeavor to provide in person and virtual trainings, as well as experiential learning through cross-functional exposure via presentations or shadowing opportunities.
As of December 31, 2023 , and for the last several years, our company turnover rate was and has been lower than the industry market average. Training and educating our employees is key to our organizational success. We endeavor to provide in person and virtual trainings, as well as experiential learning through cross-functional exposure via presentations or shadowing opportunities.
Our PROTAC Discovery Engine is built from over 20 years of experience, know-how, and intellectual property and comprises three stages: 11 Ligase Selection and Ligand Identification • E3 KnowledgeBase - The human body has more than 600 E3 ligases, and we select ligands for E3 ligases from our proprietary library for incorporation into our PROTAC targeted protein degraders.
Our PROTAC Discovery Engine is built from over 20 years of experience, know-how, and intellectual property and comprises three stages: 15 Ligase Selection and Ligand Identification • E3 KnowledgeBase - The human body has more than 600 E3 ligases, and we select ligands for E3 ligases from our proprietary library for incorporation into our PROTAC targeted protein degraders.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. On December 14, 2018, a U.S.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. The U.S.
Deliverability We have developed PROTAC targeted protein degraders that are capable of being delivered orally, intravenously, subcutaneously and intrathecally, among other routes of administration, as well as PROTAC 15 targeted protein degraders that are able to penetrate the blood brain barrier. The multiple routes of delivery for our PROTAC targeted protein degraders potentially provide many attractive clinical dosing options.
Deliverability We have developed PROTAC targeted protein degraders that are capable of being delivered orally, intravenously, subcutaneously and intrathecally, among other routes of administration, as well as PROTAC 19 targeted protein degraders that are able to penetrate the blood brain barrier. The multiple routes of delivery for our PROTAC targeted protein degraders potentially provide many attractive clinical dosing options.
This resistance can be seen in the figure below, as tumors in mice dosed with enzalutamide grew at nearly the same rate as tumors in mice dosed only with the drug vehicle - a control similar 23 to dosing a placebo. Orally delivered bavdegalutamide significantly inhibited tumor growth, described as tumor growth inhibition, or TGI, in these enzalutamide-resistant VCaP tumors.
This resistance can be seen in the figure below, as tumors in mice dosed with enzalutamide grew at nearly the same rate as tumors in mice dosed only with the drug vehicle - a control similar 29 to dosing a placebo. Orally delivered bavdegalutamide significantly inhibited tumor growth, described as tumor growth inhibition, or TGI, in these enzalutamide-resistant VCaP tumors.
The joint steering committee established under the collaboration shall determine 37 whether the research program with respect to a given Target has been completed.
The joint steering committee established under the collaboration shall determine whether the research program with respect to a given Target has been completed.
We have engineered PROTAC targeted protein degraders that, in preclinical studies, have successfully achieved blood-brain barrier penetration, a key step in developing drugs with the potential to treat neurodegenerative disease. We believe there are many other indications for which our PROTAC technology may be advantageous.
We have engineered PROTAC targeted protein degraders that, in preclinical studies, have successfully achieved blood-brain barrier penetration, a key step in developing drugs with the potential to treat neurodegenerative diseases. We believe there are many other indications for which our PROTAC technology may be advantageous.
The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the U.S., and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the U.S., and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
Importantly, we have achieved brain penetration in preclinical models following parenteral administration of PROTAC degrader molecules designed to specifically target pathologic oligomers of mutant huntingtin, tau, and α-synuclein, for the treatment of Huntington's disease, Alzheimer’s disease (tauopathies) and Parkinson’s disease (synucleinopathies), respectively.
Importantly, we have achieved brain penetration in preclinical models following parenteral administration of PROTAC degrader molecules designed to specifically target pathologic oligomers of mutant huntingtin, tau, and α-synuclein, for the treatment of Huntington's disease, Alzheimer’s disease (tauopathies) and PD (synucleinopathies), respectively.
Under the terms of our collaboration, we expect Pfizer to manufacture commercial supply of ARV-471. All of our product candidates are organic compounds of low molecular weight, generally called small molecules, but which are larger than traditional small molecule therapeutics.
Under the terms of our collaboration, we expect Pfizer to manufacture commercial supply of vepdegestrant (ARV-471). 46 All of our product candidates are organic compounds of low molecular weight, generally called small molecules, but which are larger than traditional small molecule therapeutics.
In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor. The FDA may request additional information rather than accept the application for filing. In this event, the application must be resubmitted with the additional information.
In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File determination to the sponsor. The FDA may request additional information rather than accept the application for filing. In this event, the application must be resubmitted with the additional information.
The potency of our PROTAC targeted protein degraders is determined by a number of kinetic 13 factors: formation of the trimer complex, rapid ubiquitination, trafficking of the ubiquitinated target to the proteasome and release of the PROTAC targeted protein degrader to enter another iterative cycle of degradation.
The potency of our PROTAC targeted protein degraders is determined by a number of kinetic 17 factors: formation of the trimer complex, rapid ubiquitination, trafficking of the ubiquitinated target to the proteasome and release of the PROTAC targeted protein degrader to enter another iterative cycle of degradation.
In addition, we have initiated sites and are actively recruiting patients for TACTIVE-N, a Phase 2 clinical trial with ARV-471 as a monotherapy in patients with early breast cancer in the neoadjuvant setting in the fourth quarter of 2022.
In addition, in the fourth quarter of 2022, we initiated sites for TACTIVE-N, a Phase 2 clinical trial with ARV-471 as a monotherapy in patients with early breast cancer in the neoadjuvant setting and are actively recruiting patients for this trial.
Bavdegalutamide has also reduced the levels of PSA in plasma comparable to levels achieved with enzalutamide in a different VCaP xenograft mouse model but at a lower dosing level. Bavdegalutamide: Our Clinical Trials In 2019, we initiated dosing in a Phase 1 clinical trial of bavdegalutamide.
Bavdegalutamide has also reduced the levels of PSA in plasma comparable to levels achieved with enzalutamide in a different VCaP xenograft mouse model but at a lower dosing level. In 2019, we initiated dosing in a Phase 1 clinical trial of bavdegalutamide.
Further, with passage of the Pre-Approval Information 51 Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.
With passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.
The figure on the right depicts cells treated with a foretinib-based PROTAC targeted protein degrader degrading 14 only a small subset of cellular proteins (lower left quadrant of the graph) as shown by mass spectrometry analysis.
The figure on the right depicts cells treated with a foretinib-based PROTAC targeted protein degrader degrading 18 only a small subset of cellular proteins (lower left quadrant of the graph) as shown by mass spectrometry analysis.
An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.
An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug 58 substance.
The figure below shows western blots of cells treated by increasing concentrations of our PROTAC targeted protein degrader and shows decreasing presence of each of BCR-Abl 16 and C-Abl protein (depicted by a lighter shade of the BCR/Abl and C-Abl band in the western blot).
The figure below shows western blots of cells treated by increasing concentrations of our PROTAC targeted protein degrader and shows decreasing presence of each of BCR-Abl 20 and C-Abl protein (depicted by a lighter shade of the BCR/Abl and C-Abl band in the western blot).
In preclinical studies, ARV-471 demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models, and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a cyclin-dependent kinase, or CDK, 4/6 inhibitor.
In preclinical studies, vepdegestrant demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a cyclin-dependent kinase, or CDK, 4/6 inhibitor.
Further, several large pharmaceutical companies have disclosed preclinical or clinical investments in this field, including AbbVie, Amgen, AstraZeneca plc, Boehringer Ingelheim, Bristol Myers Squibb Company, GlaxoSmithKline plc, Genentech, Novartis International AG and Sanofi SA. Since 2020, some of these biotechnology and pharmaceutical companies have announced the initiation of clinical trials for targeted protein degraders.
Further, several large pharmaceutical companies have disclosed preclinical or clinical investments in this field, including AbbVie Inc., Amgen Inc., AstraZeneca plc, Boehringer Ingelheim, Bristol Myers Squibb Company, GlaxoSmithKline plc, Genentech, Novartis AG and Sanofi. Since 2020, some of these biotechnology and pharmaceutical companies have announced the initiation of clinical trials for targeted protein degraders.
We are clinically investigating ARV-471 for use as a single agent and in combination with CDK4/6 inhibitors such as palbociclib, abemaciclib and ribociclib, everolimus and other targeted therapies.
We are clinically investigating vepdegestrant (ARV-471) for use as a single agent and in combination with CDK4/6 inhibitors such as palbociclib, abemaciclib and ribociclib, everolimus, CDK7 inhibitors, and other targeted therapies.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA is authorized to expedite the review of applications in several ways.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. Expedited Review Programs The FDA is authorized to expedite the review of applications in several ways.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe anticipate that our expenses will increase substantially if and as we: • continue a Phase 1/2 clinical trial of our product candidate ARV-471, a Phase 1b clinical trial of ARV-471 in combination with palbociclib, a Phase 1b cohort expansion in combination with a standard of care agent, and a Phase 3 trial with ARV-471 as a second-line treatment, and initiate a Phase 3 trial of ARV-471 in combination with palbociclib, each in patients with locally advanced or metastatic ER+ / HER2-breast cancer; • continue a Phase 1/2 clinical trial of our product candidate bavdegalutamide (ARV-110) and a Phase 1b clinical trial of bavdegalutamide in combination with abiraterone for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC, and initiate one or more additional Phase 1b cohort expansions of bavdegalutamide in combination with standard of care agents and a Phase 3 clinical trial, in men with mCRPC; • continue a Phase 1/2 clinical trial of our product candidate ARV-766 in men with mCRPC; • apply our PROTAC Discovery Engine to advance additional product candidates into preclinical and clinical development; • expand the capabilities of our PROTAC Discovery Engine; • seek marketing approvals for any product candidates that successfully complete clinical trials; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • expand, maintain and protect our intellectual property portfolio; • hire additional development, including clinical and regulatory, and scientific personnel; and • add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company.
Biggest changeWe anticipate that our expenses will increase substantially if and as we: • continue our ongoing and planned clinical trials for vepdegestrant (ARV-471) for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer, ongoing and planned clinical trials for ARV-766 for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC, and ongoing clinical trails for bavdegalutamide, also for the treatment of men with mCRPC; • initiate Phase 1 clinical trials for ARV-393, our PROTAC protein degrader designed to target the BCL6 protein, and ARV-102, our PROTAC degrader designed to target the LRRK2 protein; • progress additional PROTAC protein degrader programs into IND- or CTA-enabling studies; • apply our PROTAC Discovery Engine to advance additional product candidates into preclinical and clinical development; • expand the capabilities of our PROTAC Discovery Engine; • seek marketing approvals for any product candidates that successfully complete clinical trials; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • expand, maintain and protect our intellectual property portfolio; • hire additional development, including clinical and regulatory, and scientific personnel; and • add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These include the following: • Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, ordering, leasing, arranging for, or recommending the purchasing, ordering, or leasing of, any good or service for which payment may be made, in whole or in part, under a federal health care program such as Medicare or Medicaid; • False Claims Act - the federal civil and criminal false claims laws, including the civil False Claims Act, and Civil Monetary Penalties Law, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, false or fraudulent claims for payment or knowingly making, using or causing to made or used a false record or statement material to a false or fraudulent claim or to avoid, decrease or conceal an obligation to pay money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government; 96 • HIPAA - the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any health care benefit program or making false statements relating to health care matters, and apply regardless of the payor (e.g., public or private); • HIPAA and HITECH - HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which impose obligations on HIPAA covered entities and their business associates, including mandatory contractual terms and required implementation of administrative, physical and technical safeguards to maintain the privacy and security of individually identifiable health information; • Transparency Requirements - the federal physician transparency requirements known as the Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires manufacturers of drugs, medical devices, biological and medical supplies covered by Medicare, Medicaid, or State Children’s Health Insurance Program to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • Analogous State, Local and Foreign Laws - analogous state, local and foreign fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader than similar federal laws, can apply to claims involving health care items or services regardless of payor, and are enforced by many different federal and state agencies as well as through private actions.
These include the following: • Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, ordering, leasing, arranging for, or recommending the purchasing, ordering, or leasing of, any good or service for which payment may be made, in whole or in part, under a federal health care program such as Medicare or Medicaid; • False Claims Act - the federal civil and criminal false claims laws, including the civil False Claims Act, and Civil Monetary Penalties Law, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, false or fraudulent claims for payment or knowingly making, using or causing to made or used a false record or statement material to a false or fraudulent claim or to avoid, decrease or conceal an obligation to pay money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government; • HIPAA - the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any health care benefit program or making false statements relating to health care matters, and apply regardless of the payor (e.g., public or private); • HIPAA and HITECH - HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which impose obligations on HIPAA covered entities and their business associates, including mandatory contractual terms and 106 required implementation of administrative, physical and technical safeguards to maintain the privacy and security of individually identifiable health information; • Transparency Requirements - the federal physician transparency requirements known as the Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires manufacturers of drugs, medical devices, biological and medical supplies covered by Medicare, Medicaid, or State Children’s Health Insurance Program to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • Analogous State, Local and Foreign Laws - analogous state, local and foreign fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader than similar federal laws, can apply to claims involving health care items or services regardless of payor, and are enforced by many different federal and state agencies as well as through private actions.
Similarly, our research collaborations with Pfizer and Bayer are managed by joint research committees composed of an equal number of representatives from us and our respective collaborative partners, with the collaborative partner having final decision-making authority. • Collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition or business combination that diverts resources or creates competing priorities. • Genentech, Pfizer and Bayer have broad rights to select any target for protein degradation development on an exclusive basis, even as to us, so long as not excluded by us under the terms of each collaboration and may select targets we are considering but have not taken sufficient action to exclude under the collaboration. 78 • 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 products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours. • Collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products. • Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way that could jeopardize or invalidate our proprietary information or expose us to potential litigation.
Similarly, our research collaborations with Pfizer and Bayer are managed by joint research committees composed of an 87 equal number of representatives from us and our respective collaborative partners, with the collaborative partner having final decision-making authority. • Collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition or business combination that diverts resources or creates competing priorities. • Genentech, Pfizer and Bayer have broad rights to select any target for protein degradation development on an exclusive basis, even as to us, so long as not excluded by us under the terms of each collaboration and may select targets we are considering but have not taken sufficient action to exclude under the collaboration. • 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 products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours. • Collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products. • Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way that could jeopardize or invalidate our proprietary information or expose us to potential litigation.
If our or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million Euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
If our or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million Euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well 109 as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
In addition, there are risks inherent in conducting clinical trials in multiple jurisdictions, inside and outside of the United States, such as: • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct our clinical trials; • foreign exchange rate fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; and • the risk that the patient populations in such trials are not considered representative as compared to the patient population in the target markets where approval is being sought.
In addition, there are risks inherent in conducting clinical trials in multiple jurisdictions, inside and outside of the United States, such as: • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct our clinical trials; • foreign exchange rate fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; and 85 • the risk that the patient populations in such trials are not considered representative as compared to the patient population in the target markets where approval is being sought.
If any product candidates we develop are associated with serious adverse events, or undesirable side effects, or have characteristics that are unexpected, we may need to abandon their development or limit development to certain uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective, any of which would have a material adverse effect on our business, financial condition, results of operations, and prospects.
If any product candidates we develop are associated with serious adverse events, or undesirable side effects, or have characteristics that are unexpected, we may need to abandon their development or limit 82 development to certain uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective, any of which would have a material adverse effect on our business, financial condition, results of operations, and prospects.
Our research 76 programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including: • potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval or achieve market acceptance; or • potential product candidates may not be effective in treating their targeted diseases.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including: • potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval or achieve market acceptance; or • potential product candidates may not be effective in treating their targeted diseases.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulators or institutional review boards may require that we or our investigators suspend or terminate clinical trials for various reasons, including noncompliance with regulatory requirements; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials; • unforeseen global instability, including political instability or instability from an outbreak of pandemic or contagious disease, such as the COVID-19 pandemic, in or around the countries in which we 72 conduct our clinical trials, could delay the commencement or timing of completion of our clinical trials; • the cost of clinical trials of our product candidates may be greater than we anticipate and could be exacerbated by macroeconomic conditions such as inflation; and • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate, or their cost could increase dramatically making them financially infeasible.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; 81 • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulators or institutional review boards may require that we or our investigators suspend or terminate clinical trials for various reasons, including noncompliance with regulatory requirements; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials; • unforeseen global instability, including political instability or instability from an outbreak of pandemic or contagious disease, such as the recent COVID-19 pandemic, in or around the countries in which we conduct our clinical trials, could delay the commencement or timing of completion of our clinical trials; • the cost of clinical trials of our product candidates may be greater than we anticipate and could be exacerbated by macroeconomic conditions such as inflation; and • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate, or their cost could increase dramatically making them financially infeasible.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the 118 transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
The pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by legislative initiatives. Current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any FDA approved product.
The pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by legislative initiatives. Current laws, 110 as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any FDA approved product.
Any disclosure to or misappropriation by 84 third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market. Moreover, the patent applications we own, co-own or license may fail to result in issued patents in the United States or in other foreign countries.
Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market. Moreover, the patent applications we own, co-own or license may fail to result in issued patents in the United States or in other foreign countries.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines 80 or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, unauthorized access to or deletion of files, social engineering and other means to affect service reliability and threaten the 104 confidentiality, integrity and availability of information. Cyber-attacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient.
Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, unauthorized access to or deletion of files, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. Cyber-attacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient.
Holders of a significant portion of our common stock have rights, subject to 107 specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. In July 2019, we issued 1,346,313 shares of our common stock to Bayer.
Holders of a significant portion of our common stock have rights, subject to specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. In July 2019, we issued 1,346,313 shares of our common stock to Bayer.
If we identify one or more material weaknesses, it could result in harm to our reputation or an 108 adverse reaction in the financial markets and it could restrict our future access to the capital markets due to a loss of confidence in the reliability of our consolidated financial statements which would materially harm our business.
If we identify one or more material weaknesses, it could result in harm to our reputation or an adverse reaction in the financial markets and it could restrict our future access to the capital markets due to a loss of confidence in the reliability of our consolidated financial statements which would materially harm our business.
There can be no assurance that our PROTAC technology will not cause undesirable side effects. A potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in itself could cause adverse 73 events, undesirable side effects, or unexpected characteristics.
There can be no assurance that our PROTAC technology will not cause undesirable side effects. A potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in itself could cause adverse events, undesirable side effects, or unexpected characteristics.
There is also a risk that due to regulatory changes, such as suspensions on the use of net operating losses, or other unforeseen reasons, our existing any future net operating losses could expire or otherwise become unavailable to offset future income tax liabilities.
There is also a risk that due to regulatory changes, such as suspensions on the use of net operating losses, or other unforeseen reasons, our existing and any future net operating losses could expire or otherwise become unavailable to offset future income tax liabilities.
Our commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection in the United States and other countries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing patent applications in the United States and other jurisdictions related to our novel technologies and product candidates.
Our commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection in the United States and other countries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing patent applications in the United States and other 93 jurisdictions related to our novel technologies and product candidates.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts, which could adversely affect our business, financial condition, results of operations or prospects.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws 114 and regulations may impair our research, development or production efforts, which could adversely affect our business, financial condition, results of operations or prospects.
These efforts may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. 82 Factors that may inhibit our efforts to commercialize our products on our own include: • our inability to recruit, train and retain adequate numbers of effective, knowledgeable and experienced sales and marketing personnel; • the inability of such sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
These efforts may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. 91 Factors that may inhibit our efforts to commercialize our products on our own include: • our inability to recruit, train and retain adequate numbers of effective, knowledgeable and experienced sales and marketing personnel; • the inability of such sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Adverse differences between preliminary or interim data and final data could significantly harm our reputation and business prospects. If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.
Adverse differences between preliminary or interim data and final data could significantly harm our reputation and business prospects. 83 If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.
Our ability to generate revenue from product sales, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates.
Our ability to generate revenue from product sales, which we do not expect will occur for many years, if ever, will depend heavily on 80 the successful development and eventual commercialization of one or more of our product candidates.
We may also seek a priority review designation for one or more of our product candidates. If the FDA determines that a product candidate offers major advances in treatment or provides a treatment where no 94 adequate therapy exists, the FDA may designate the product candidate for priority review.
We may also seek a priority review designation for one or more of our product candidates. If the FDA determines that a product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists, the FDA may designate the product candidate for priority review.
Such litigation, if instituted against us, whether successful or not, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm our business, financial condition, results of operations and prospects.
Such litigation, if 117 instituted against us, whether successful or not, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm our business, financial condition, results of operations and prospects.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors also may 86 obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
The FCPA, the Bribery Act, and these other laws generally prohibit us, our officers and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to 102 obtain or retain business or gain some other business advantage.
The FCPA, the Bribery Act, and these other laws generally prohibit us, our officers and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.
In April 2020, we announced that, as a result of the COVID-19 pandemic, two trial sites for our ongoing Phase 1/2 clinical trial of bavdegalutamide had publicly announced pauses in patient enrollment for clinical trials, including our trials.
For example, in April 2020, we announced that, as a result of the COVID-19 pandemic, two trial sites for our ongoing Phase 1/2 clinical trial of bavdegalutamide had publicly announced pauses in patient enrollment for clinical trials, including our trials.
Any future growth will impose significant added responsibilities on members of management, including, but not limited to: • identifying, recruiting, training, integrating, retaining and motivating additional employees; • managing our internal development efforts effectively, including the clinical and FDA review process for bavdegalutamide, ARV-471, ARV-766 and any product candidate we develop, while complying with our contractual obligations to contractors and other third parties, including our partners and collaborators; and • improving our managerial, operational and financial controls, reporting systems and procedures.
Any future growth will impose significant added responsibilities on members of management, including, but not limited to: • identifying, recruiting, training, integrating, retaining and motivating additional employees; • managing our internal development efforts effectively, including the clinical and FDA review process for vepdegestrant (ARV-471), ARV-766 and any product candidate we develop, while complying with our contractual obligations to contractors and other third parties, including our partners and collaborators; and • improving our managerial, operational and financial controls, reporting systems and procedures.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially. 89 We only have limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially. 98 We only have limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world.
If we or any of our licensors are forced to grant a license to third parties under patents relevant to our business, or if we or our licensors are prevented from enforcing patent rights against third parties, our competitive position may be substantially impaired in such jurisdictions. 90 Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal and Compliance Matters The regulatory approval process of the FDA is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed.
If we or any of our licensors are forced to grant a license to third parties under patents relevant to our business, or if we or our licensors are prevented from enforcing patent rights against third parties, our competitive position may be substantially impaired in such jurisdictions. 99 Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal and Compliance Matters The regulatory approval process of the FDA is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed.
In addition, some of our competitors have ongoing clinical trials for product candidates that treat the same indications as our product candidates, and patients who would 74 otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.
In addition, some of our competitors have ongoing clinical trials for product candidates that treat the same indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, 102 which would adversely affect our business.
The success of our product candidates will depend on several factors, including the following: • successfully completing preclinical studies and clinical trials; • receipt and related terms of marketing approvals from applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; 71 • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party coverage and adequate reimbursement; • maintaining a continued acceptable safety profile of the products following approval; and • effectively competing with other therapies.
The success of our product candidates will depend on several factors, including the following: • successfully completing preclinical studies and clinical trials; • receipt and related terms of marketing approvals from applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; • establishing sales, marketing, market access and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party coverage and adequate reimbursement; • maintaining a continued acceptable safety profile of the products following approval; and • effectively competing with other therapies.
If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval. 83 There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the FDA or similar regulatory authorities approve the drug outside of the United States.
If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval. 92 There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the FDA or similar regulatory authorities approve the drug outside of the United States.
Consequently, any predictions stockholders make about our future success or viability may not be as accurate as they could be if we had a longer operating history. 69 In addition, as a young business with limited operating experience and no history of revenue-generating commercial activity, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.
Consequently, any predictions stockholders make about our future success or viability may not be as accurate as they could be if we had a longer operating history. In addition, as a business with limited operating experience and no history of revenue-generating commercial activity, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.
We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
We have based this estimate on assumptions that may prove to be wrong, and we 77 could use our capital resources sooner than we currently expect.
Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, 91 advertising, promotion, sale and distribution, export and import are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the EMA and similar regulatory authorities outside of the United States.
Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, 100 advertising, promotion, sale and distribution, export and import are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the EMA and similar regulatory authorities outside of the United States.
As a result, our owned, co-owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 85 Changes in patent laws or patent jurisprudence could diminish the value of our patents in general, thereby impairing our ability to protect our product candidates.
As a result, our owned, co-owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 94 Changes in patent laws or patent jurisprudence could diminish the value of our patents in general, thereby impairing our ability to protect our product candidates.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace. 88 Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent offices, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace. 97 Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent offices, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
If our product candidates are approved, we expect that they will be priced at a significant premium over competitive generic products. 77 Risks Related to Dependence on Third Parties If our collaboration with Pfizer is not successful, we may not be able to capitalize on the market potential of ARV-471.
If our product candidates are approved, we expect that they will be priced at a significant premium over competitive generic products. Risks Related to Dependence on Third Parties If our collaboration with Pfizer is not successful, we may not be able to capitalize on the market potential of vepdegestrant (ARV-471).
Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to significantly influence or control all matters submitted to stockholders for approval. Our executive officers and directors, combined with our stockholders who own more than 5% of our outstanding common stock, in the aggregate, beneficially own shares representing approximately 53% of our capital stock.
Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to significantly influence or control all matters submitted to stockholders for approval. Our executive officers and directors, combined with our stockholders who own more than 5% of our outstanding common stock, in the aggregate, beneficially own shares representing approximately 44% of our capital stock.
The licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or 86 attractive in order to commercialize our product candidates.
The licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or 95 attractive in order to commercialize our product candidates.
In addition, we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control.
We may experience ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control.
Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.
Approval by the FDA does not ensure approval 101 by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.
Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we, and any collaborators will not be able to promote any products we develop for indications or uses for which they are not approved.
Promotional communications with respect to prescription products are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we will not be able to promote any products we develop for indications or uses for which they are not approved.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
Even if we do achieve profitability, we may not be able to sustain or 76 increase profitability on a quarterly or annual basis.
In addition, under Section 382 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
Patient enrollment is affected by other factors including: • the severity of the disease under investigation; • the eligibility criteria for the trial in question; • the perceived risks and benefits of the product candidates under study; • the efforts to facilitate timely enrollment in clinical trials; • the availability of competing therapies; • the patient referral practices of physicians; • the burden on patients due to inconvenient procedures; • the ability to monitor patients adequately during and after treatment; and • the proximity and availability of clinical trial sites for prospective patients.
Patient enrollment is affected by other factors including: • the prevalence and severity of the disease under investigation; • the eligibility criteria for the trial in question; • the requirements of the trial protocols; • the perceived risks and benefits of the product candidates under study; • the efforts to facilitate timely enrollment in clinical trials; • the availability of competing therapies; • the patient referral practices of physicians; • the burden on patients due to inconvenient procedures; • the ability to monitor patients adequately during and after treatment; and • the proximity and availability of clinical trial sites for prospective patients.
Termination of any of our current or future in-licenses would reduce or eliminate our rights under these agreements and may result in our having to negotiate new or reinstated agreements with less favorable terms or cause us to lose our rights under these agreements, including our rights to important intellectual property or 87 technology.
Termination of any of our current or future in-licenses would reduce or eliminate our rights under these agreements and may result in our having to negotiate new or reinstated agreements with less favorable terms or cause us to lose our rights under these agreements, including our rights to important intellectual property or 96 technology.
The market price for our common stock may be influenced by many factors, including: • the degree of success of any competitive products or technologies; • results of or developments in preclinical studies and clinical trials of our product candidates or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional technologies or product candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems in the United States and other jurisdictions; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • the degree of success of any competitive products or technologies; • results of or developments in preclinical studies and clinical trials of our product candidates or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional technologies or product candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems in the United States and other jurisdictions; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions, including geopolitical conflicts, inflation and high interest rates; and • the other factors described in this “Risk Factors” section.
Our future financial performance and our ability to advance the development of and, if approved, commercialize bavdegalutamide, ARV-471, ARV-766 and any other product candidate we develop will depend, in part, on our ability to effectively manage any future growth.
Our future financial performance and our ability to advance the development of and, if approved, commercialize vepdegestrant (ARV-471), ARV-766 and any other product candidate we develop will depend, in part, on our ability to effectively manage any future growth.
Even if bavdegalutamide or ARV-471 were to receive marketing approval or be commercialized for use in combination with other existing drugs, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the drug used in combination with bavdegalutamide or ARV-471 or that safety, efficacy, manufacturing or supply issues could arise with these existing drugs.
Even if vepdegestrant (ARV-471) or ARV-766 were to receive marketing approval or be commercialized for use in combination with other existing drugs, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the drug used in combination with vepdegestrant (ARV-471) or ARV-766 or that safety, efficacy, manufacturing or supply issues could arise with these existing drugs.
We did not develop or obtain marketing approval for, nor do we manufacture or sell, any of the currently approved drugs that we are or may study in combination with ARV-471, bavdegalutamide or ARV-766.
We did not develop or obtain marketing approval for, nor do we manufacture or sell, any of the currently approved drugs that we are or may study in combination with vepdegestrant (ARV-471), ARV-766 or bavdegalutamide (ARV-110).
We currently expect that we would build our own focused, specialized sales and marketing organization to support the commercialization of product candidates in the United States for which we receive marketing approval and that can be commercialized with such capabilities. There are risks involved with establishing our own sales and marketing capabilities.
We currently expect that we would continue to build our own focused, specialized sales, marketing and market access organization to support the commercialization of our product candidates in the United States for which we receive marketing approval and that can be commercialized with such capabilities. There are risks involved with establishing our own sales and marketing capabilities.
We are currently conducting clinical trials of ARV-471, bavdegalutamide and ARV-766 and intend to conduct other clinical trials for each of ARV-471, bavdegalutamide and ARV-766 and potentially other product candidates, in combination with other therapies.
We are currently conducting clinical trials of vepdegestrant (ARV-471), ARV-766, and bavdegalutamide (ARV-110) and intend to conduct other clinical trials for each of vepdegestrant (ARV-471) and ARV-766 and potentially other product candidates, in combination with other therapies.
If we are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed. All of our product candidates are in development.
If we are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed. All of our product candidates are in clinical or preclinical development.
If we are unable to establish sales and marketing capabilities, we may not be successful in commercializing our product candidates if and when they are approved. We do not currently have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of biopharmaceutical products.
If we are unable to establish sales and marketing capabilities, we may not be successful in commercializing our product candidates if and when they are approved. Though we are working to build, we do not currently have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of biopharmaceutical products.
Hoffman LaRoche Ltd., collectively referred to as Genentech; and Bayer AG, or Bayer; • the costs, timing and outcome of regulatory review of our product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and • our ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of our product candidates.
Hoffman LaRoche Ltd., collectively referred to as Genentech; and Bayer AG, or Bayer; • the costs, timing and outcome of regulatory review of our product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and • our ability to establish additional collaboration arrangements with other biotechnology; or • pharmaceutical companies on favorable terms, if at all, or enter into license, marketing and royalty arrangements, and similar transactions for the development or commercialization of our product candidates.
In addition, if manufacturing or other issues result in a shortage of supply of the drugs with which we determine to combine with bavdegalutamide or ARV-471, we may not be able to complete clinical development of bavdegalutamide or ARV-471 on our current timeline or at all.
In addition, if manufacturing or other issues result in a shortage of supply of the drugs with which we determine to combine with vepdegestrant (ARV-471) or ARV-766, we may not be able to complete clinical development of vepdegestrant (ARV-471) or ARV-766 on our current timeline or at all.
If the FDA or similar regulatory authorities outside of the United States revoke 75 their approval of the drug or drugs in combination with which we determine to develop ARV-471, bavdegalutamide or ARV-766 we will not be able to market ARV-471, bavdegalutamide or ARV-766 in combination with such revoked drugs.
If the FDA or similar regulatory authorities outside of the United States revoke their approval of the drug or drugs in combination with which we determine to develop vepdegestrant (ARV-471) or ARV-766 we will not be able to market vepdegestrant (ARV-471) or ARV-766 in combination with such revoked drugs.
Further, several large pharmaceutical companies have disclosed preclinical investments in this field, including AbbVie, Amgen Inc., AstraZeneca plc, Boehringer Ingelheim, Bristol Myers Squibb Company, GlaxoSmithKline plc, Genentech, Novartis International AG and Sanofi SA. Since 2020, some of these biotechnology and pharmaceutical companies have announced the initiation of clinical trials for targeted protein degraders.
Further, several large pharmaceutical companies have disclosed preclinical investments in this field, including AbbVie Inc., Amgen Inc., AstraZeneca plc, Boehringer Ingelheim, C.H., Bristol Myers Squibb Company, GlaxoSmithKline plc, Genentech, Novartis AG and Sanofi. Since 2020, some of these biotechnology and pharmaceutical companies have announced the initiation of clinical trials for targeted protein degraders.
If we determine that an ownership change has occurred and our ability to use our historical net operating loss and tax credit 70 carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.
If we determine that an ownership change has occurred and our ability to use our historical net operating loss and research and development tax credit carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.
If the drugs we use are replaced as the standard of care for the indications we choose for bavdegalutamide or ARV-471, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials.
If the drugs we use are replaced as the standard of care for the indications we choose for vepdegestrant (ARV-471) or ARV-766, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials.
If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face civil and criminal penalties.
If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, we could face civil and criminal penalties.
While we have not experienced any material system failure, accident or security breach to date, if such an event were to occur, it could result in diversion of management's attention and a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions.
While we have not experienced any material system failure, accident or security breach to date, if such an event were to occur, or if we were unable to implement satisfactory remedial measures, it could result in diversion of management's attention and a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions.
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue our ongoing and initiate our planned clinical trials of bavdegalutamide, ARV-471 and ARV-766, advance our other oncology and neurodegenerative programs and continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and our other product candidates.
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue our ongoing and initiate our planned clinical trials of vepdegestrant (ARV-471), ARV-766, ARV-393 and ARV-102, in addition to our ongoing bavdegalutamide (ARV-110) clinical trials, advance our other oncology and neurodegenerative programs and continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and our other product candidates.
Additionally, in October 2022, President Joe Biden signed an executive order to implement the EU-U.S. Data Privacy Framework, which would serve as a replacement to the EU-U.S. Privacy Shield. The EU initiated the process to adopt an adequacy decision for the EU-U.S. Data Privacy Framework in December 2022.
As a response to the CJEU decision, President Joe Biden signed an executive order to implement the EU-U.S. Data Privacy Framework, which would serve as a replacement to the EU-U.S. Privacy Shield. The EU initiated the process to adopt an adequacy decision for the EU-U.S. Data Privacy Framework in December 2022.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of our ongoing clinical trials for ARV-471, bavdegalutamide and ARV-766 and any future clinical development of ARV-471, bavdegalutamide and ARV-766; • the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs; • the number of, and development requirements for, other product candidates that we pursue, including our other oncology and neurodegenerative research programs; 68 • the success of our collaborations with Pfizer, Inc., or Pfizer; Genentech, Inc. and F.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of our ongoing and planned clinical trials for vepdegestrant (ARV-471) and ARV-766 and any future clinical development of vepdegestrant and ARV-766 and our ongoing clinical trails for bavdegalutamide; • the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs, including ARV-393 and ARV-102; • the number of, and development requirements for, other product candidates that we pursue, including our other oncology and neurodegenerative research programs; • the success of our collaborations with Pfizer, Inc., or Pfizer; Genentech, Inc. and F.
For example, the initial safety, tolerability, pharmacokinetic and efficacy data that we have disclosed in connection with our ongoing Phase 1/2 clinical trials of ARV-471 and bavdegalutamide (ARV-110) may not be indicative of the full results of those trials obtained upon completion.
For example, the initial safety, tolerability, pharmacokinetic and efficacy data that we have disclosed in connection with our ongoing clinical trials of vepdegestrant (ARV-471), ARV-766 and bavdegalutamide (ARV-110) may not be indicative of the full results of those trials obtained upon completion.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA, EMA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Additionally, other novel targeting mechanisms could ultimately address similar patient populations, such as CYP11A1 inhibitor (which is being developed by Orion/Merck) and an AR N-Terminal Domain inhibitor (which is being developed by ESSA Pharma) in Prostate Cancer.
Additionally, other novel targeting mechanisms could ultimately address similar patient populations, such as CYP11A1 inhibitor (which is being developed by Orion Corporation in collaboration with Merck & Co., Inc.) and an AR N-Terminal Domain inhibitor (which is being developed by ESSA Pharma Inc.) in prostate cancer.
The FDA and other agencies, including the Department of Justice, or the DOJ, closely regulate and monitor the post-approval marketing and promotion of drugs to ensure they are marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling.
The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling.
We currently have on file with the SEC universal shelf registration statements on Form S-3 which allow us to offer and sell registered common stock, preferred stock, debt securities, depositary shares, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.
We currently have on file with the SEC a universal shelf registration statement on Form S-3 which allows us to offer and sell registered common stock, preferred stock, debt securities, depository shares, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.
In addition, later discovery of previously unknown side effects or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: • restrictions on such products, manufacturers or manufacturing processes; • restrictions and warnings on the labeling or marketing of a product; • 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; 95 • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products; • product seizure; • injunctions or the imposition of civil or criminal penalties; or • litigation involving patients using our products.
Failure to comply with regulatory requirements, may yield various results, including: • restrictions on such products, manufacturers or manufacturing processes; • restrictions or warnings on the labeling or marketing of a product; • restrictions on product distribution or use of a product; • requirements to conduct post-marketing studies or clinical trials; 105 • 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 detention; • injunctions or the imposition of civil or criminal penalties; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; or • litigation involving patients using our products.
During the year ended December 31, 2022 , no shares were issued under this agreement. Sales of substantial amounts of shares of our common stock or other securities by our stockholders under our universal shelf registration statement, including pursuant to our "at-the-market" offering program, or otherwise could also dilute our stockholders.
During the year ended December 31, 2023 , since the amendment and restatement of the agreement, no shares were issued under this agreement. 119 Sales of substantial amounts of shares of our common stock or other securities by our stockholders under our universal shelf registration statement, including pursuant to our "at-the-market" offering program, or otherwise could also dilute our stockholders.
Further, even if we receive a designation, the receipt of such designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA, including the Fast Track designation we received in May 2019 for bavdegalutamide for mCRPC.
Further, even if we receive a designation, the receipt of such designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA, including the Fast Track designation we received in May 2019 for bavdegalutamide for mCRPC and the Fast Track designation we received in the first quarter of 2024 for vepdegestrant for ER+/HER2- breast cancer.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. 97 Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
Cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult, time consuming and costly to detect and we have experienced certain attacks, though minor, related to third party vendors.
In recent years, cyber-attacks have increased in their frequency, sophistication and intensity, and have become increasingly difficult, time consuming and costly to detect and we have experienced certain attacks, though minor, related to third party vendors.
We had cash, cash equivalents, restricted cash and marketable securities of approximately $1.2 billion as of December 31, 2022. We believe that our cash, cash equivalents, restricted cash and marketable securities as of December 31, 2022 will enable us to fund our planned operating expenses and capital expenditure requirements into 2026.
We had cash, cash equivalents, restricted cash and marketable securities of approximately $1.3 billion as of December 31, 2023. We believe that our cash, cash equivalents, restricted cash and marketable securities as of December 31, 2023 will enable us to fund our planned operating expenses and capital expenditure requirements into 2027.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our facilities are sufficient to meet our current needs and that suitable additional or alternative space will be available as and when needed on commercially reasonable terms for our future growth. 109
Biggest changeWe believe that our facilities are sufficient to meet our current needs and that suitable additional or alternative space will be available as and when needed on commercially reasonable terms for our future growth.
In May 2021, we entered into a lease, which was amended in August 2022, for approximately 160,000 square feet of office and laboratory space in New Haven, Connecticut which we expect to begin occupying in 2024.
In May 2021, we entered into a lease, which was amended in August 2022, for approximately 160,000 square feet of office and laboratory space in New Haven, Connecticut which we expect to begin occupying in 2025.
Item 2. Properties. We lease approximately 63,000 square feet of office and laboratory space in New Haven, Connecticut under leases, as amended, that expire in December 2024.
Item 2. Properties. We lease approximately 66,000 square feet of office and laboratory space in New Haven, Connecticut under leases, as amended, that expire in December 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to any material litigation or legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 110 PART II
Biggest changeWe are not currently a party to any material litigation or legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 122 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities We did not issue any securities that were not registered under the Securities Act of 1933, as amended, or the Securities Act, during the year ended December 31, 2022. Purchases of Equity Securities We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.
Biggest changePurchases of Equity Securities We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.
The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future filing 111 under the Exchange Act or Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future 123 filing under the Exchange Act or Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
The graph assumes an investment of $100 on September 27, 2018 in our common shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index and assumes that any dividends are reinvested. All index values are weighted by the capitalization of the companies included in the index. The comparisons shown in the graph below are based upon historical data.
The graph assumes an investment of $100 on December 31, 2018 in our common shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index and assumes that any dividends are reinvested. All index values are weighted by the capitalization of the companies included in the index. The comparisons shown in the graph below are based upon historical data.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been publicly traded on the Nasdaq Global Select Market under the symbol “ARVN” since September 27, 2018 in connection with our initial public offering, or IPO.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been publicly traded on the Nasdaq Global Select Market under the symbol “ARVN” since September 27, 2018 in connection with our initial public offering. Prior to that time, there was no public market for our common stock.
Dividend Policy We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends in respect of our common stock in the foreseeable future.
We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends in respect of our common stock in the foreseeable future.
Performance Graph The performance graph shown below compares the quarterly change in cumulative total shareholder return on our common shares with the Nasdaq Composite Index and the Nasdaq Biotechnology Index from September 27, 2018 (the first date on which shares of our common stock were publicly traded) through the quarter ended December 31, 2022.
Performance Graph The performance graph shown below compares the quarterly change in cumulative total shareholder return on our common shares with the Nasdaq Composite Index and the Nasdaq Biotechnology Index from December 31, 2018 through December 31, 2023.
Prior to that time, there was no public market for our common stock. Holders As of February 17, 2023, there were approxima tely 24 holders of recor d of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
Holders As of February 20, 2024, there were approxima tely 35 holders of recor d of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name. Dividend Policy We have never declared or paid cash dividends on our capital stock.
Added
Recent Sales of Unregistered Securities We did not issue any securities that were not registered under the Securities Act of 1933, as amended, or the Securities Act, during the year ended, other than pursuant to transactions previously disclosed in our Current Reports on Form 8-K.

Item 7. Management's Discussion & Analysis

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

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Biggest changeSpecifically, we anticipate that our expenses will increase substantially if, and as we: • continue a Phase 1/2 clinical trial of our product candidate ARV-471, a Phase 1b clinical trial of ARV-471 in combination with palbociclib, Phase 1b cohort expansion in combination with a standard of care agent, and a Phase 3 trial with ARV-471 as a second-line treatment, and initiate a Phase 3 trial of ARV-471 in combination with palbociclib, each in patients with locally advanced or metastatic ER+ / HER2- breast cancer; • continue a Phase 1/2 clinical trial of our product candidate bavdegalutamide (ARV-110) and a Phase 1b clinical trial of bavdegalutamide in combination with abiraterone for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC, and initiate one or more additional Phase 1b cohort expansions of bavdegalutamide in combination with standard of care agents and a Phase 3 clinical trial, in men with mCRPC; • continue a Phase 1/2 clinical trial of our product candidate ARV-766 in men with mCRPC; • apply our PROTAC Discovery Engine to advance additional product candidates into preclinical and clinical development; • expand the capabilities of our PROTAC Discovery Engine; • seek marketing approvals for any product candidates that successfully complete clinical trials; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • expand, maintain and protect our intellectual property portfolio; • hire additional development, including clinical and regulatory, and scientific personnel; and • add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company. 125 We had cash, cash equivalents, restricted cash and marketable securities of approximately $1.2 billion as of December 31, 2022.
Biggest changeSpecifically, we anticipate that our expenses will increase substantially if, and as we: • continue our ongoing and planned clinical trials of our product candidates vepdegestrant (ARV-471) for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer, our ongoing and planned clinical trials for ARV-766 for the treatment of men with mCRPC, and our ongoing clinical trials for bavdegalutamide for the treatment of men with mCRPC; • initiate Phase 1 trials for ARV-393, our PROTAC protein degrader designed to target the BCL6 protein, and ARV-102, our PROTAC degrader designed to target the LRRK2 protein; • progress additional PROTAC protein degrader programs into IND- or CTA-enabling studies; • apply our PROTAC Discovery Engine to advance additional product candidates into preclinical and clinical development; • expand the capabilities of our PROTAC Discovery Engine; • seek marketing approvals for any product candidates that successfully complete clinical trials; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • expand, maintain and protect our intellectual property portfolio; 139 • hire additional development, including clinical and regulatory, and scientific personnel; and • add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2022 totaled $242.8 million, attributable to maturities and sales of marketable securities in excess of purchases of $249.6 million, partially offset by purchases of property and equipment of $6.8 million.
Net cash provided by investing activities for the year ended December 31, 2022 totaled $242.8 million, attributable to maturities and sales of marketable securities in excess of purchases of $249.6 million, partially offset by purchases of property and equipment of $6.8 million.
We have three investigational clinical stage programs: ARV-471, a novel PROTAC estrogen receptor, or ER, protein degrader for the treatment of patients with locally advanced or metastatic ER positive / human epidermal growth factor receptor 2, or HER2, negative, or ER+/HER2-, breast cancer and bavdegalutamide (ARV-110) and ARV-766, each an oral PROTAC protein degrader that targets the androgen receptor protein, or AR, for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC.
We have three investigational clinical stage programs: Vepdegestrant (ARV-471), a novel PROTAC estrogen receptor, or ER, protein degrader for the treatment of patients with locally advanced or metastatic ER positive / human epidermal growth factor receptor 2, or HER2, negative, or ER+/HER2-, breast cancer and ARV-766 and bavdegalutamide (ARV-110), each an oral PROTAC protein degrader that targets the androgen receptor protein, or AR, for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC.
We are also entitled to receive up to $225.0 million in development milestone payments and up to $550.0 million in sales-based milestone payments for all designated targets under the Pfizer Research Collaboration Agreement, as well as mid- to high-single digit tiered royalties, which may be subject to reductions, on net sales of PROTAC targeted protein degrader-related products.
We are also entitled to receive up to $225.0 million in 130 development milestone payments and up to $550.0 million in sales-based milestone payments for all designated targets under the Pfizer Research Collaboration Agreement, as well as mid- to high-single digit tiered royalties, which may be subject to reductions, on net sales of PROTAC targeted protein degrader-related products.
For example, if the FDA or another regulatory authority were to require us to conduct 118 clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.
For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.
We base our estimates on historical experience, known trends and events and various other factors 119 that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.
We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.
Pfizer ARV-471 Collaboration Agreement In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound ARV-471, or the Licensed Products. Under the ARV-471 Collaboration Agreement, we received an upfront, non-refundable payment of $650 million.
Pfizer ARV-471 Collaboration Agreement In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound vepdegestrant (ARV-471), or the Licensed Products. Under the ARV-471 Collaboration Agreement, we received an upfront, non-refundable payment of $650 million.
We continually assess the probability of significant reversals for any amounts that become likely to be realized prior to recognizing the variable consideration associated with these payments within the transaction price. Revenue is recognized ratably over our expected performance period under each respective arrangement.
We continually assess the probability of significant reversals for any amounts that become likely to be realized prior to recognizing the variable consideration associated with these payments within the transaction price. 134 Revenue is recognized ratably over our expected performance period under each respective arrangement.
Amounts received prior to satisfying the above revenue recognition criteria are recorded as contract liabilities in our accompanying consolidated balance sheets. 120 Research and Development Contract Costs and Accruals As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses.
Amounts received prior to satisfying the above revenue recognition criteria are recorded as contract liabilities in our accompanying consolidated balance sheets. Research and Development Contract Costs and Accruals As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses.
We anticipate recognizing these milestone and royalty payments if and when subsequent sales are generated by customers from the use of the technology. To date, no revenue from these sales-based milestone and royalty payments has been recognized for any periods.
We anticipate recognizing these milestones and royalty payments if and when subsequent sales are generated by customers from the use of the technology. To date, no revenue from these sales-based milestone and royalty payments has been recognized for any periods.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include: • salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions; • expenses incurred under agreements with third parties, including CROs and other third parties that conduct research and preclinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical studies and clinical trials; • costs of outside consultants, including their fees, stock-based compensation and related travel expenses; 117 • the costs of laboratory supplies and developing preclinical studies and clinical trial materials; • facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; and • third-party licensing fees.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include: • salaries, benefits and other related costs, including travel and stock-based compensation expense, for personnel engaged in research and development functions; • expenses incurred under agreements with third parties, including CROs and other third parties that conduct research and preclinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical studies and clinical trials; • costs of outside consultants, including their fees, stock-based compensation and related travel expenses; • the costs of laboratory supplies and developing preclinical studies and clinical trial materials; • facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; • costs incurred in the development of intellectual property; and • third-party licensing fees.
For the years ended December 31, 2022, 2021 and 2020, the transaction price allocated to the combined performance obligations identified under the individual research collaboration and license agreements was recognized as revenue on either a straight-line basis over the estimated performance period under the arrangement or over the estimated performance period based on our best estimate of costs to be incurred.
For the years ended December 31, 2023, 2022 and 2021, the transaction price allocated to the combined performance obligations identified under the individual research collaboration and license agreements was recognized as revenue on either a straight-line basis over the estimated performance period under the arrangement or over the estimated performance period based on our best estimate of costs to be incurred.
As of December 31, 2022, Arvinas, Inc. had four wholly owned subsidiaries organized as C-corporations: Arvinas Operations, Inc., Arvinas Androgen Receptor, Inc., Arvinas Estrogen Receptor, Inc., and Arvinas Winchester, Inc. Prior to December 31, 2018, these subsidiaries were separate filers for federal tax purposes. Net operating loss carryforwards are generated from the C-corporation subsidiaries’ filings.
As of December 31, 2023, Arvinas, Inc. had four wholly owned subsidiaries organized as C-corporations: Arvinas Operations, Inc., Arvinas Androgen Receptor, Inc., Arvinas Estrogen Receptor, Inc., and Arvinas Winchester, Inc. Prior to December 31, 2018, these subsidiaries were separate filers for federal tax purposes. Net operating loss carryforwards are generated from the C-corporation subsidiaries’ filings.
The 2018 Assistance Agreement requires that we be located in the State of Connecticut through September 2028 with a default penalty of repayment of the full original funding amount of $2.0 million plus liquidated damages of 7.5% of the total amount of funding received. As of December 31, 2022, $1.0 million remains outstanding under the 2018 Assistance Agreement.
The 2018 Assistance Agreement requires that we be located in the State of Connecticut through September 2028 with a default penalty of repayment of the full original funding amount of $2.0 million plus liquidated damages of 7.5% of the total amount of funding received. As of December 31, 2023, $1.0 million remains outstanding under the 2018 Assistance Agreement.
We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and Securities and Exchange Commission requirements; director and officer insurance costs; and investor and public relations costs.
We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq Stock Market and Securities and Exchange Commission requirements; director and officer insurance costs; and investor and public relations costs.
Since inception, we have incurred significant operating losses and expect to incur increasing operating losses for at least the next several years due to costs associated with our ongoing and anticipated clinical activities for ARV-471, bavdegalutamide and ARV-766, development activities associated with our other product candidates, research activities in oncology, neurological and other disease areas to expand our pipeline, hiring additional personnel in research, clinical trials, quality and other functional areas, increased expenses incurred with CMOs to supply us with product for our preclinical and clinical studies and CROs for the synthesis of compounds in our preclinical development activities, as well as other associated costs including the management of our intellectual property portfolio.
Since inception, we have incurred significant operating losses and expect to incur increasing operating losses for at least the next several years due to costs associated with our ongoing and anticipated preclinical and clinical activities for vepdegestrant (ARV-471), ARV-766, and ARV-393, ongoing clinical activities for bavdegalutamide, ARV-102 development activities, research activities in oncology, neurological and other disease areas to expand our pipeline, hiring additional personnel in research, clinical trials, quality and other functional areas, increased expenses incurred with CMOs to supply us with product for our preclinical and clinical studies and CROs for the synthesis of compounds in our preclinical development activities, as well as other associated costs including the management of our intellectual property portfolio.
Either party may terminate the ARV-471 Collaboration Agreement for the other party’s uncured material breach or insolvency.
Either party may terminate the ARV-471 Collaboration Agreement for the other party’s uncured material 131 breach or insolvency.
In preclinical studies, ARV-471 demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models, and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a cyclin-dependent kinase, or CDK, 4/6 inhibitor.
In preclinical studies, vepdegestrant demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a cyclin-dependent kinase, or CDK, 4/6 inhibitor.
This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of: • successful completion of preclinical studies and clinical trials; • receipt and related terms of marketing approvals from applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party coverage and adequate reimbursement; • maintaining a continued acceptable safety profile of the products following approval; and • effectively competing with other therapies.
This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of: • successfully completing preclinical studies and clinical trials; • receipt and related terms of marketing approvals from applicable regulatory authorities; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; • establishing sales, marketing, market access and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party coverage and adequate reimbursement; • maintaining a continued acceptable safety profile of the products following approval; and • effectively competing with other therapies.
ARV-471 ARV-471 is an investigational orally bioavailable PROTAC protein degrader designed to target and degrade the ER for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer. We are co-developing ARV-471 with Pfizer, Inc., or Pfizer, pursuant to a collaboration agreement that we and Pfizer entered into in July 2021.
Estrogen Receptor Program: Vepdegestrant (ARV-471) Vepdegestrant (ARV-471) is an investigational orally bioavailable PROTAC protein degrader designed to target and degrade the ER for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer. We are co-developing vepdegestrant with Pfizer, Inc., or Pfizer, pursuant to a collaboration agreement that we and Pfizer entered into in July 2021.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. New Accounting Pronouncements For information on new accounting standards, see Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. 135 New Accounting Pronouncements For information on new accounting standards, see Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Our contracts may also call for certain sales-based milestone and royalty payments upon successful commercialization of a target.
Our contracts may also call for certain sales-based milestones and royalty payments upon successful commercialization of a target.
Bayer Collaboration Agreement In June 2019, we entered into a Collaboration and License Agreement, or the Bayer Collaboration Agreement, with Bayer AG, or, together with its controlled affiliates, Bayer, setting forth our collaboration to identify or optimize PROTAC targeted protein degraders that mediate for degradation of Targets, using our proprietary platform technology, that are selected by Bayer, subject to certain exclusions and limitations.
Bayer Collaboration Agreement In June 2019, we entered into a Collaboration and License Agreement, or the Bayer Collaboration Agreement, with Bayer, setting forth our collaboration to identify or optimize PROTAC targeted protein degraders that mediate for degradation of Targets, using our proprietary platform technology, that are selected by Bayer, subject to certain exclusions and limitations.
We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support increased research and development activities relating to our product candidates.
We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support increased research and development activities relating to our product candidates and develop our commercial operations.
In 2019, we initiated a Phase 1/2 clinical trial of bavdegalutamide designed to assess the safety, tolerability and pharmacokinetics of bavdegalutamide and which trial also included measures of anti-tumor activity as secondary endpoints, including reduction in prostate specific antigen, or PSA, a well-recognized biomarker of prostate cancer progression. In 2019, we also received Fast Track designation for bavdegalutamide for mCRPC.
In 2019, we initiated a Phase 1/2 clinical trial of bavdegalutamide designed to assess the safety, tolerability and pharmacokinetics of bavdegalutamide and which trial also included measures of anti-tumor activity as secondary endpoints, including reduction in prostate specific antigen, or PSA, a well-recognized biomarker of prostate cancer progression.
Since inception through December 31, 2022, we raised approximately $1.3 billion in gross proceeds from the sale of equity instruments and the exercise of stock options, and had received an aggregate of $780.5 million in payments primarily from collaboration partners. We are a clinical-stage company.
Since inception through December 31, 2023, we raised approximately $1.7 billion in gross proceeds from the sale of equity instruments and the exercise of stock options, and had received an aggregate of $783.0 million in payments primarily from collaboration partners. We are a clinical-stage company.
The following table summarizes our research and development expenses for our AR program, which includes bavdegalutamide and ARV-766, ER program, which includes ARV-471, and all other platform and exploratory research and development costs: Years Ended December 31, (dollars in millions) 2022 2021 2020 AR program development costs $ 57.5 $ 41.8 $ 24.4 ER program development costs 72.1 30.9 17.5 Other research and development costs 185.4 107.7 66.5 Total research and development costs $ 315.0 $ 180.4 $ 108.4 Research and development activities are central to our business model.
The following table summarizes our research and development expenses for our AR program, which includes ARV-766 and bavdegalutamide (ARV-110), ER program, which includes vepdegestrant (ARV-471), and all other platform and exploratory research and development costs: Years Ended December 31, (dollars in millions) 2023 2022 2021 AR program development costs $ 79.5 $ 57.5 $ 41.8 ER program development costs 113.7 72.1 30.9 Other research and development costs 186.5 185.4 107.7 Total research and development costs $ 379.7 $ 315.0 $ 180.4 Research and development activities are central to our business model.
Genentech License Agreement In September 2015, we entered into an Option and License Agreement with Genentech, Inc. and F. Hoffmann-La Roche Ltd, collectively referred to as Genentech, focused on PROTAC targeted protein degrader discovery and research for target proteins, or Targets, based on our proprietary platform technology, other than excluded Targets as described below.
Genentech License Agreement In September 2015, we entered into an Option and License Agreement with Genentech, focused on PROTAC targeted protein degrader discovery and research for target proteins, or Targets, based on our proprietary platform technology, other than excluded Targets as described below.
General and Administrative Expenses General and administrative exp enses totaled $79.6 million for the year ended December 31, 2022, compared with $61.6 million for the year ended December 31, 2021.
General and Administrative Expenses General and administrative exp enses totaled $100.3 million for the year ended December 31, 2023, compared with $79.6 million for the year ended December 31, 2022.
We granted Pfizer worldwide co-exclusive rights to develop and commercialize ARV-471.
We granted Pfizer worldwide co-exclusive rights to develop and commercialize vepdegestrant.
Income Taxes Since our inception in 2013, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our federal or state earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.
Interest expense consists primarily of interest paid or accrued on our outstanding debt with the State of Connecticut. 133 Income Taxes Since our inception in 2013, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our federal or state earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.
We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we continue to conduct our ongoing clinical trials for ARV-471, bavdegalutamide and ARV-766, including our Phase 3 clinical trial for ARV-471, and continue to discover and develop additional product candidates.
We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we continue to conduct our ongoing clinical trials for vepdegestrant (ARV-471), ARV-766 and the initiation of clinical trials for ARV-393 and ARV-102, and continue to discover and develop additional product candidates.
The increase of $134.6 million was primarily due to investments in our platform and exploratory programs of $77.7 million and increases in expenses related to our AR and ER programs of $15.7 million and $41.2 million, respectively.
The increase of $64.7 million was primarily due to investments in our platform and exploratory programs of $1.1 million and increases in expenses related to our AR and ER programs of $22.0 million and $41.6 million, respectively.
The increase of $3.7 million was due to increased operating losses incurred by Oerth Bio. 122 Results of Operations — Years Ended December 31, 2021 and 2020 Discussion and analysis of the results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020 is included under the heading "Comparison of Years Ended December 31, 2021 and 2020" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our 2021 Annual Report on Form 10-K as filed with the SEC on February 28, 2022 and incorporated by reference into this Annual Report on Form 10-K.
Results of Operations — Years Ended December 31, 2022 and 2021 Discussion and analysis of the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 is included under the heading "Comparison of Years Ended December 31, 2022 and 2021" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our 2022 Annual Report on Form 10-K as filed with the SEC on February 23, 2023 and incorporated by reference into this Annual Report on Form 10-K.
Results of Operations Comparison of Years Ended December 31, 2022 and 2021 Years Ended December 31, (dollars in millions) 2022 2021 $ change Revenue $ 131.4 $ 53.6 $ 77.8 Research and development expenses (315.0) (180.4) (134.6) General and administrative expenses (79.6) (61.6) (18.0) Other income 12.2 4.3 7.9 Income tax expense (20.9) — (20.9) Loss from equity method investment (10.6) (6.9) (3.7) Net loss $ (282.5) $ (191.0) $ (91.5) Revenue Revenues for the year ended December 31, 2022 totaled $131.4 million, compared with $53.6 million for the year ended December 31, 2021.
Results of Operations Comparison of Years Ended December 31, 2023 and 2022 Years Ended December 31, (dollars in millions) 2023 2022 $ change Revenue $ 78.5 $ 131.4 $ (52.9) Research and development expenses (379.7) (315.0) (64.7) General and administrative expenses (100.3) (79.6) (20.7) Other income 37.6 12.2 25.4 Income tax expense (0.9) (20.9) 20.0 Loss from equity method investment (2.5) (10.6) 8.1 Net loss $ (367.3) $ (282.5) $ (84.8) Revenue Revenues for the year ended December 31, 2023 totaled $78.5 million, compared with $131.4 million for the year ended December 31, 2022.
Non-cash charges were primarily stock compensation expense of $57.1 million, net accretion of bond discounts/premiums of $9.4 million and depreciation and amortization of $4.8 million.
Non-cash charges consisted primarily of stock compensation expense of $71.6 million, depreciation and amortization of $4.8 million and net accretion of bond discounts/premiums of $16.6 million.
Research and development expenses related to ARV-471 are shared equally with Pfizer from July 22, 2021, the effective date of the ARV-471 Collaboration Agreement. The ER program development costs in the table above reflect the cost sharing with Pfizer.
Research and development expenses related to vepdegestrant (ARV-471) are shared equally with Pfizer from July 22, 2021, the effective date of the Vepdegestrant (ARV-471) Collaboration Agreement.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research or product development programs or any future commercialization efforts, or to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research or product development programs or any future commercialization efforts, or to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. 129 Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future.
We cannot determine with certainty the duration and costs of future clinical trials of ARV-471, bavdegalutamide and ARV-766 or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval.
The ER program development costs in the table above reflect the cost sharing with Pfizer. 132 We cannot determine with certainty the duration and costs of future clinical trials of vepdegestrant, ARV-766, ARV-393, ARV-102 or unexpected costs of ongoing clinical trails for bavdegalutamide, or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval.
Research and Development Expenses Research and development expenses for the year ended December 31, 2022 totaled $315.0 million , compared with $180.4 million for the year ended December 31, 2021 .
Research and Development Expenses Research and development expenses for the year ende d December 31, 2023 totaled $379.7 million, compared with $315.0 million for the year ended December 31, 2022.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. 140 Borrowings In January 2014, we entered into an Assistance Agreement with the State of Connecticut, or the 2014 Assistance Agreement, under which we borrowed $2.5 million.
We had an outstanding loan balance of $1.0 million as of December 31, 2022 and 2021. 123 The following table summarizes our sources and uses of cash for the period presented: Years Ended December 31, (dollars in millions) 2022 2021 2020 Net cash (used in) provided by operating activities $ (273.5) $ 559.4 $ (89.7) Net cash provided by (used in) investing activities 242.8 (1,313.6) 164.3 Net cash provided by financing activities 4.7 278.6 504.6 Net (decrease) increase in cash, cash equivalents and restricted cash $ (26.0) $ (475.6) $ 579.2 Operating Activities Net cash used in operating activities for the year ended December 31, 2022 totaled $273.5 million, primarily due to our net loss of $282.5 million and a decrease in deferred revenue of $116.8 million, driven largely by the ARV-471 Collaboration Agreement with Pfizer, partially offset by non-cash charges of $91.6 million and a decrease in accounts receivable of $14.0 million, related to payments pursuant to the ARV-471 Collaboration Agreement.
The following table summarizes our sources and uses of cash for the period presented: Years Ended December 31, (dollars in millions) 2023 2022 2021 Net cash (used in) provided by operating activities $ (347.8) $ (273.5) $ 559.4 Net cash provided by (used in) investing activities 203.5 242.8 (1,313.6) Net cash provided by financing activities 374.7 4.7 278.6 Net increase (decrease) in cash, cash equivalents and restricted cash $ 230.4 $ (26.0) $ (475.6) Operating Activities Net cash used in operating activities for the year ended December 31, 2023 totaled $347.8 million, primarily due to our net loss of $367.3 million and a decrease in deferred revenue of $74.6 million, driven largely by our ARV-471 Collaboration Agreement with Pfizer, partially offset by non-cash charges of $63.9 million, an increase in accounts payable and accrued liabilities of $17.3 million, and a decrease in prepaid expenses and other current assets of $14.1 million.
Genentech also has the right to remove a Target from the collaboration and substitute a different Target that is not an excluded Target at any time prior to us commencing research on such Target or in certain circumstances following commencement of research by us. 115 At the time we entered into the original agreement with Genentech, we received an upfront payment of $11.0 million, and, at the time we entered into the Restated Genentech Agreement, we received an additional $34.5 million in upfront and expansion target payments.
Genentech also has the right to remove a Target from the collaboration and substitute a different Target that is not an excluded Target at any time prior to us commencing research on such Target or in certain circumstances following commencement of research by us.
We are also eligible to receive up to $197.5 million in development milestone payments and up to $490.0 million in sales-based milestone payments for all designated Targets. In addition, we are eligible to receive, on net sales of PROTAC targeted protein degrader-related products, mid-single digit to low-double digit tiered royalties, which may be subject to reductions.
In addition, we are eligible to receive, on net sales of PROTAC targeted protein degrader-related products, mid-single digit to low-double digit tiered royalties, which may be subject to reductions.
We 112 are using our PROTAC Discovery Engine to build an extensive pipeline of protein degradation product candidates to target diseases in areas of unmet need, including oncology (including immuno-oncology), neuroscience and other therapeutic areas.
We 124 are using our PROTAC Discovery Engine to build an extensive pipeline of protein degradation product candidates to target diseases in areas of unmet need, including oncology (including immuno-oncology), neuroscience and other therapeutic areas. We and our collaborators have initiated programs across multiple therapeutic areas with the goal of developing and delivering life-changing therapies to patients in need.
Since inception through December 31, 2022, we had received an aggregate of $780.5 million in payments from collaboration partners, grant funding and forgivable and partially forgivable loans from the State of Connecticut and raised approximately $1.3 billion in gross proceeds from the sale of equity interests and the exercise of stock options, including: • October 2018: completion of our IPO, in which we issued and sold 7,700,482 shares of common stock for aggregate gross proceeds of $123.2 million, before fees and expenses; • July 2019: sale of 1,346,313 shares of common stock to Bayer AG for aggregate gross proceeds of $32.5 million; • November 2019: completion of a follow-on offering in which we issued and sold 5,227,273 shares of common stock for aggregate gross proceeds of $115.0 million, before fees and expenses; • September - December 2020: sale of 2,593,637 shares of common stock in an “at-the-market offering” for aggregate gross proceeds of $65.6 million, before fees and expenses; • December 2020: completion of a follow-on offering in which we issued and sold 6,571,428 shares of common stock for aggregate gross proceeds of $460.0 million, before fees and expenses; and • September 2021: issuance of 3,457,815 share of common stock to Pfizer for aggregate gross proceeds of $350.0 million.
Since inception through December 31, 2023, we had received an aggregate of $783.0 million in payments from collaboration partners, grant funding and forgivable and partially forgivable loans from the State of Connecticut and raised approximately $1.7 billion in gross proceeds from the sale of equity interests and the exercise of stock options, including: • October 2018: completion of our initial public offering in which we issued and sold 7,700,482 shares of common stock for aggregate gross proceeds of $123.2 million, before fees and expenses; • July 2019: sale of 1,346,313 shares of common stock to Bayer AG for aggregate gross proceeds of $32.5 million; • November 2019: completion of a follow-on offering in which we issued and sold 5,227,273 shares of common stock for aggregate gross proceeds of $115.0 million, before fees and expenses; • September - December 2020: sale of 2,593,637 shares of common stock in an “at-the-market offering” for aggregate gross proceeds of $65.6 million, before fees and expenses; • December 2020: completion of a follow-on offering in which we issued and sold 6,571,428 shares of common stock for aggregate gross proceeds of $460.0 million, before fees and expenses; • September 2021: issuance of 3,457,815 shares of common stock to Pfizer for aggregate gross proceeds of $350.0 million. • August 2023: sale of 1,449,275 shares of common stock in an “at-the-market" offering for aggregate gross proceeds of $37.2 million before fees and expenses; and • November 2023: sale of 12,963,542 shares of common stock and pre-funded warrants to purchase 3,422,380 shares of common stock in a private placement for aggregate gross proceeds of $350.0 million before fees and expenses. 137 In November 2023, we amended and restated the Equity Distribution Agreement with Piper Sandler & Company and Cantor Fitzgerald & Co. , pursuant to which we may offer and sell from time to time, through the agents, up to approximately $262.8 million of the common stock registered under the universal shelf registration statement pursuant to one or more “at-the-market” offerings.
We borrowed $2.0 million under the 2018 Assistance Agreement in September 2018, of which $1.0 million was forgiven upon meeting certain employment conditions. Borrowings under the agreement bear an interest rate of 3.25% per annum, with interest only payments required for the first 60 months, and mature in September 2028.
Borrowings under the agreement bear an interest rate of 3.25% per annum, with interest only payments required for the first 60 months, and mature in September 2028.
This approach follows the recent analysis of data from the ongoing Phase 1b combination study of ARV-471 with palbociclib, in which an increase in palbociclib exposure was observed relative to historical palbociclib pharmacokinetic data.
This approach follows the analysis of data from the ongoing Phase 1b/2 ARV-471-mBC-101 combination trial of vepdegestrant with palbociclib, in which an increase in palbociclib exposure was observed relative to historical palbociclib pharmacokinetic data. In the second quarter of 2023, we evaluated and announced preliminary data from Part C of the ongoing Phase 1b/2 clinical trial of vepdegestrant.
Hoffman LaRoche Ltd., collectively referred to as Genentech; and Bayer AG, or Bayer; • the costs, timing and outcome of regulatory review of our product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and • our ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of our product candidates.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of our ongoing and planned clinical trials for vepdegestrant (ARV-471) ARV-766 and any future clinical development of vepdegestrant and ARV-766, and our ongoing clinical trials for bavdegalutamide; • the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs, including ARV-393 and ARV-102; • the number of, and development requirements for, other product candidates that we pursue, including our other oncology and neurodegenerative research programs; • the success of our collaborations with Pfizer, Genentech and Bayer ; • the costs, timing and outcome of regulatory review of our product candidates; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and • our ability to establish additional collaboration arrangements with other biotechnology; or • pharmaceutical companies on favorable terms, if at all, or enter into license, marketing and royalty arrangements, and similar transactions for the development or commercialization of our product candidates.
Net cash provided by investing activities for the year ended December 31, 2020 totaled $164.3 million, attributable to the net maturities and sales of marketable securities in excess of purchases of $170.7 million, offset by the purchases of property and equipment of $6.4 million. 124 Financing Activities Net cash provided by financing activities for the year ended December 31, 2022 totaled $4.7 million, attributable to proceeds from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2022 totaled $4.7 million, attributable to proceeds from the exercise of stock options.
Effective in March 2016, the full principal amount under the 2014 Assistance Agreement had been forgiven. While borrowings under the 2014 Assistance Agreement have been forgiven, we remain subject to an ongoing covenant to be located in the State of Connecticut through January 2024.
While borrowings under the 2014 Assistance Agreement have been forgiven, we remain subject to an ongoing covenant to be located in the State of Connecticut through January 2024. Upon violation of this covenant, we would be required to repay the full original funding amount of $2.5 million plus liquidated damages of 7.50%.
ARV-471, bavdegalutamide (ARV-110) and ARV-766 are each in Phase 1/2 clinical trials and ARV-471 is in a Phase 3 clinical trial, and our other drug discovery activities are at the research and preclinical development stages.
Vepdegestrant (ARV-471), ARV-766 and bavdegalutamide (ARV-110) are each in clinical development and we are planning to initiate clinical development for ARV-393 and ARV-102, Our other drug discovery activities are at the research and preclinical development stages.
ARV-766 ARV-766 is an investigational orally bioavailable PROTAC protein degrader designed to target AR with a different profile than bavdegalutamide, as a potential treatment for men with mCRPC. In preclinical studies, ARV-766 degraded all tested resistance-driving point mutations of AR, including L702H, a mutation associated with treatment with abiraterone and other AR-pathway therapies.
In preclinical studies, ARV-766 degraded all tested resistance-driving point mutations of AR, including L702H, a mutation associated with treatment with abiraterone and other AR-pathway therapies.
Borrowings In January 2014, we entered into an Assistance Agreement with the State of Connecticut, or the 2014 Assistance Agreement, under which we borrowed $2.5 million. Borrowings under the 2014 Assistance Agreement were forgivable if we maintained a minimum number of full-time jobs in the State of Connecticut for 126 a minimum period at a minimum annual salary.
Borrowings under the 2014 Assistance Agreement were forgivable if we maintained a minimum number of full-time jobs in the State of Connecticut for a minimum period at a minimum annual salary. Effective in March 2016, the full principal amount under the 2014 Assistance Agreement had been forgiven.
We expect that any revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future. To date, we have not received any sales-based milestone payments or royalties under any of the collaboration agreements.
Our revenues to date have been generated through research collaboration and license agreements. Revenue is recognized ratably over our expected performance period under each agreement. We expect that any revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future.
Direct expenses related to our platform and exploratory targets increased by $28.7 million as we expanded the number of protein targets in the exploratory and lead optimization phases as well as more investments in our platform discovery efforts.
Expenses related to our platform and exploratory targets also increased by $16.0 million as we continued to expand the number of protein targets in the exploratory and lead optimization phases and continued to make investments into our platform discovery efforts. Additionally, personnel and infrastructure related costs increased by $14.8 million.
Once occupied, the base rent will range from $7.7 million to $8.8 million annually over a ten-year lease term. In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound ARV-471.
During the year ended December 31, 2023 , no shares were issued under the amended and restated agreement. In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound ARV-471.
We believe that our cash, cash equivalents, restricted cash and marketable securities as of December 31, 2022 will enable us to fund our planned operating expenses and capital expenditure requirements into 2026. We have based this estimate on assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect.
We have based this estimate on assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect.
Upon violation of this covenant, we would be required to repay the full original funding amount of $2.5 million plus liquidated damages of 7.50%. In June 2018, we entered into an additional Assistance Agreement with the State of Connecticut, or the 2018 Assistance Agreement, to provide funding for the expansion and renovation of laboratory and office space.
In June 2018, we entered into an additional Assistance Agreement with the State of Connecticut, or the 2018 Assistance Agreement, to provide funding for the expansion and renovation of laboratory and office space. We borrowed $2.0 million under the 2018 Assistance Agreement in September 2018, of which $1.0 million was forgiven upon meeting certain employment conditions.
In preclinical studies, bavdegalutamide demonstrated activity of AR mutation or overexpression, both common mechanisms of resistance to currently available AR-targeted therapies.
Bavdegalutamide (ARV-110) Bavdegalutamide (ARV-110) is an investigational orally bioavailable PROTAC protein degrader designed to target and degrade the AR for the treatment of men with mCRPC. In preclinical studies, bavdegalutamide demonstrated activity of AR mutation or overexpression, both common mechanisms of resistance to currently available AR-targeted therapies.
Income Tax Expense Income tax expense totaled $20.9 million for the year ended December 31, 2022 , compared with zero for the year ended December 31, 2021, primarily due to current income taxes resulting from revenue recognition for tax purposes from our ARV-471 Collaboration Agreement and the mandatory capitalization of research and development expenses incurred on or after January 1, 2022.
The decrease of $20.0 million in income tax expense was primarily due to revenue recognition for tax purposes from our ARV-471 Collaboration Agreement in 2022. Loss from Equity Method Investment Loss from equity method investment totaled $2.5 million for the year ended December 31, 2023 , compared with $10.6 million for the year ended December 31, 2022.
Food and Drug Administration, or the FDA, to review the proposed update to the trial protocol for the VERITAC-3 first-line, metastatic ER+ / HER2- breast cancer Phase 3 trial of ARV-471 in combination with IBRANCE® (palbociclib) to determine the optimal dose of palbociclib as part of the trial design.
Food and Drug Administration, or the FDA, on an approach for VERITAC-3 and in the second quarter of 2023, we, along with Pfizer, initiated the study-lead in of the VERITAC-3 Phase 3 clinical trial in combination with palbociclib as a first-line treatment in patients with ER+/HER2- locally advanced or metastatic breast cancer.
The increase of $77.8 million was primarily due to $72.5 million of 121 revenue from the ARV-471 Collaboration Agreement entered into during the third quarter of 2021 and $3.7 million of previously constrained deferred revenue related to our Oerth Bio joint venture.
The decrease of $52.9 million was primarily due to adjustments to revenue from changes in contract estimates related to our Pfizer ARV-471 Collaboration Agreement, Pfizer Research Collaboration Agreement and Bayer Collaboration Agreement, net of current year revenues, totaling $39.7 million, a decrease in revenue recognized from our Genentech License Agreement of $5.1 million and a decrease of $8.1 million in previously constrained deferred revenue recognized in 2023 related to our Oerth Bio joint venture.
Clinical trial costs and related drug manufacturing costs increased by $37.0 million as we continued to expand our AR and ER programs into additional clinical trials. ER program costs include a year over year cost sharing increase of $16.0 million in accordance with our ARV-471 Collaboration Agreement with Pfizer.
The increase in spending over all of our programs was primarily driven by clinical trial costs and related drug manufacturing costs of $33.8 million as we expanded our AR and ER programs into additional clinical trials.
Net cash used in operating activities for the year ended December 31, 2020 totaled $89.7 million, resulting from our net loss of $119.3 million and a decrease in deferred revenue of $13.3 million, partially offset by non-cash expenses of $35.6 million and an increase in accounts payable and accrued expenses of $12.8 million.
Net cash used in operating activities for the year ended December 31, 2022 totaled $273.5 million, primarily due to our net loss of $282.5 million and a decrease in deferred revenue of $116.8 million, driven largely by the ARV-471 Collaboration Agreement with Pfizer, partially offset by non-cash charges of $91.6 million and a decrease in accounts receivable of $14.0 million, related to payments pursuant to the ARV-471 Collaboration Agreement.
In addition, in the fourth quarter of 2022, we initiated a Phase 2 clinical trial with ARV-471 as a monotherapy in patients with early breast cancer in the neoadjuvant setting (TACTIVE-N). In the first quarter of 2023, we and Pfizer requested a meeting with the U.S.
We completed enrollment in the TACTIVE-N Phase 2 clinical trial of vepdegestrant as a monotherapy in the neoadjuvant setting in patients with ER+/HE R2- localized breast cancer in the first quarter of 2024 and we expect to complete enrollment for the VERITAC-2 Phase 3 trial of vepdegestrant as a monotherapy in patients with metastatic breast cancer in the second half of 2024.
During the years ended December 31, 2022 and 2021, no shares were issued under this agreement. Cash Flows Our cash, cash equivalents, restricted cash and marketable securities totaled $1.2 billion and $1.5 billion as of December 31, 2022 and 2021, respectively.
Under the ARV-471 Collaboration Agreement, Pfizer made an upfront, nonrefundable payment of $650.0 million. Cash Flows Our cash, cash equivalents, restricted cash and marketable securities totaled $1.3 billion and $1.2 billion as of December 31, 2023 and 2022, respectively. We had an outstanding loan balance of $1.0 million as of December 31, 2023 and 2022.
The increase of $18.0 million was primarily due to an increase of personnel related costs of $15.0 million, which includes $7.2 million related to stock compensation expense, and professional fees of $5.6 million. Other Income Other income totaled $12.2 million for the year ended December 31, 2022, compared with $4.3 million for the year ended December 31, 2021.
Other Income Other income totaled $37.6 million for the year ended December 31, 2023, compared with $12.2 million for the year ended December 31, 2022. The increase of $25.4 million was primarily due to higher interest 136 income of $26.8 million from marketable securities and money market accounts, offset in part by $0.5 million of higher year-over-year realized losses.
We anticipate initiating a Phase 1b or Phase 2 dose escalation trial for either of bavdegalutamide or ARV-766 in patients with AR-dependent tumors who have not previously received novel hormonal agents, or NHA, such as enzalutamide or abiraterone, and who may benefit from bavdegalutamide or ARV-766 therapy, in the second half of 2023.
We expect to continue enrollment of the Phase 2 dose expansion trial with ARV-766, with progression free survival, or PFS, data anticipated in mid-2024. We also initiated a Phase 1b/2 trial for ARV-766 in combination with abiraterone in patients with AR-dependent tumors who have not previously received NHAs in the fourth quarter of 2023.
Net cash provided by financing activities for the year ended December 31, 2020 totaled $504.6 million, primarily attributable to the proceeds from sales of our common stock from our public offering and at-the-market offering of $496.3 million, net of combined underwriter discounts from the public offering and offering costs of $29.3 million and the proceeds from the exercise of stock options of $8.3 million.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 totaled $374.7 million, attributable to proceeds from the issuance of shares of our common stock and pre-funded warrants to purchase shares of our common stock in a private placement of approximately $350.0 million, before deducting placement agent fees and offering costs of approximately $15.9 million, proceeds from the issuance of shares of our common stock in an "at-the-market" offering of approximately $37.2 million, less offering costs of approximately $1.1 million, and proceeds from the exercise of stock options and issuance of ESPP shares of $4.5 million .
Under the terms of the Bayer Collaboration Agreement, we received an aggregate upfront, non-refundable payment of $17.5 million.
Under the terms of the Bayer Collaboration Agreement, we received an aggregate upfront, non-refundable payment of $17.5 million and an additional $12.0 million in research funding payments from inception through December 31, 2023. We are also eligible to receive up to $197.5 million in development milestone payments and up to $490.0 million in sales-based milestone payments for all designated Targets.
In the fourth quarter of 2022, we presented initial data from VERITAC at the San Antonio Breast Cancer Symposium and we initiated, with Pfizer, the VERITAC-2 Phase 3 trial with ARV-471 as a monotherapy as a second-line and later treatment in patients with ER+/HER2- metastatic breast cancer.
In the fourth quarter of 2023, we presented, with Pfizer, updated data (data cutoff of June 6, 2023) from the Phase 1b trial assessing vepdegestrant in combination with palbociclib, at the San Antonio Breast Cancer Symposium, or SABCS.
Following correspondence and alignment with the FDA, we and Pfizer determined an approach to the planned Phase 3 trial to enable trial initiation in the second half of 2023, which includes a Phase 3 lead-in to evaluate the optimal dose of palbociclib (100 mg or 75 mg) in combination with 200 mg ARV-471.
Moving forward, we expect to continue enrollment in the study-lead in of the VERITAC-3 Phase 3 clinical trial to evaluate the dose of palbociclib (100 mg or 75 mg) in combination with 200 mg of vepdegestrant once daily.
The increase in spending over all of our programs was primarily due to increased personnel and personnel costs utilized across all of our programs of $42.3 million, which includes $11.2 million related to stock compensation expense.
The increase of $20.7 million was primarily due to increased spending in personnel and infrastructure related costs of $11.5 million, an increase in professional fees of $6.3 million and increases related to establishing our commercial operations of $3.5 million, offset in part by reduced insurance costs of $1.0 million.
We expect to share data from the Phase 1 dose escalation trial of ARV-766 for the treatment of men with metastatic castration-resistant prostate cancer in the second quarter of 2023.
Additional detail regarding our clinical development of ARV-766 is discussed in Part I, Item 1 Business Section and below. In the second quarter of 2023, we presented ARV-766 preclinical data and compound structure at the AACR annual meeting and we shared data from the Phase 1/2 dose escalation and expansion trial of ARV-766 for the treatment of men with mCRPC.
By year-end 2023, we expect to submit an investigational new drug, or IND, application or clinical trial application, or CTA, for our PROTAC degrader designed to target each of the BCL6 protein, a protein mutated in patients with different forms of Non-Hodgkins Lymphoma, or NHL, including Diffuse Large B-Cell Lymphoma, or DLBCL, and the LRRK2 protein, a protein kinase that has been genetically linked to some forms of Parkinson's Disease, or PD.
In the fourth quarter of 2023, the FDA and the European Medicines Agency, or EMA, respectively, cleared our investigational new drug application, or IND, for ARV-393, a PROTAC degrader designed to target the BCL6 protein, and our clinical trial application, or CTA, for ARV-102, a PROTAC degrader designed to target the LRRK2 protein.
Also in the fourth quarter of 2022, we initiated the first of two arms in the ongoing Phase 1b umbrella trial of ARV-471, with ARV-471 in combination with each of the CDK4/6 inhibitors abemaciclib and ribociclib (TACTIVE-U). We initiated the second of two arms in the first quarter of 2023.
We also initiated an additional arm of the Phase 1b combination umbrella trial with Carrick's CDK7 inhib itor in the first quarter of 2024.
Removed
In 2019, we initiated a Phase 1 clinical trial of ARV-471 designed to assess the safety, tolerability and pharmacokinetics of ARV-471, which also included measures of anti-tumor activity as secondary endpoints and in the fourth quarter of 2020, we initiated a Phase 1b cohort expansion of ARV-471 in combination with the CDK4/6 inhibitor Ibrance® (palbociclib).
Added
We also have two preclinical product candidates: ARV-393, a PROTAC degrader designed to target the BCL6 protein, and ARV-102, a PROTAC degrader designed to target the LRRK2 protein. In addition to the programs above and our early-stage collaborations with Pfizer, Inc., or Pfizer, Genentech, Inc. and F.
Removed
In 2021, we initiated VERITAC, the Phase 2 single agent expansion cohort of the ARV-471 clinical trial. In the third quarter of 2022, we initiated TACTIVE-E, a Phase 1b clinical trial with ARV-471 in combination with everolimus in patients with metastatic breast cancer.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur outstanding debt totaled $1.0 million as of December 31, 2022 and carries a fixed interest rate of 3.25% per annum. Item 8. Financial Statements and Supplementary Data. Our financial statements, together with the report of our independent registered public accounting firm, appear on pages F-1 through F-28 of t his Annual Report on Form 10-K. Item 9.
Biggest changeOur outstanding debt totaled $1.0 million as of December 31, 2023 and carries a fixed interest rate of 3.25% per annum. Item 8. Financial Statements and Supplementary Data. Our financial statements, together with the report of our independent registered public accounting firm, appear on pages F-1 through F-27 of this Annual Report on Form 10-K. Item 9.
Our interest income is sensitive to changes in the general level of interest rates, primarily U.S. interest rates. As of December 31, 2022, our cash equivalents consisted of bank deposits and money market funds and our marketable securities included interest-earning securities. Such interest-earning instruments carry a degree of interest rate risk.
Our interest income is sensitive to changes in the general level of interest rates, primarily U.S. interest rates. As of December 31, 2023, our cash equivalents consisted of bank deposits and money market funds and our marketable securities included interest-earning securities. Such interest-earning instruments carry a degree of interest rate risk.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. Our interest-earning assets consist of cash, cash equivalents, restricted cash and marketable securities. Interest income earned on these assets tota led $12.0 million in 2022.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. Our interest-earning assets consist of cash, cash equivalents, restricted cash and marketable securities. Interest income earned on these assets tota led $38.8 million in 2023.

Other ARVN 10-K year-over-year comparisons