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What changed in 4D Molecular Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of 4D Molecular Therapeutics, Inc.'s 2023 and 2024 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 2024 report.

+474 added−546 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in 4D Molecular Therapeutics, Inc.'s 2024 10-K

474 paragraphs added · 546 removed · 369 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

105 edited+33 added−108 removed177 unchanged
Biggest changeProduct candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites. 26 Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation, RMAT designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.
Biggest changeProduct candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites.
Intravitreal delivery of biologics to the eye is routine, and a single dose intravitreal genetic medicine that could provide long-term efficacy in patients would be an advantage for patients who struggle with compliance and treatment burden and treatment resistance. 4DMT Differentiation: AAV Genetic Medicines for wet AMD and DME AAV genetic medicine approaches are being developed by several companies to treat wet AMD by delivering a functional copy of an anti-angiogenic transgene by either subretinal surgical delivery or suprachoroidal injection with a conventional AAV vector, or intravitreal administration with a mouse-evolved vector.
Intravitreal delivery of biologics to the eye is routine, and a single dose intravitreal genetic medicine that could provide long-term efficacy in patients would be an advantage for patients who struggle with compliance, treatment burden and treatment resistance. 4DMT Differentiation: AAV Genetic Medicines for wet AMD and DME AAV genetic medicine approaches are being developed by several companies to treat wet AMD by delivering a functional copy of an anti-angiogenic transgene by either subretinal surgical delivery or suprachoroidal injection with a conventional AAV vector, or intravitreal administration with a mouse-evolved vector.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on clinical studies; 23 • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects 23 or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLPs; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an Institutional Review Board (IRB) or ethics committee at each clinical site before the trial is commenced; 22 • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current GMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLPs; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an Institutional Review Board ("IRB") or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current GMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); and 17 • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2—The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.
These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2—The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing 18 schedule and to identify possible adverse side effects and safety risks.
In August 2023, the Company executed an amendment to the CF Foundation Agreement increasing the funding commitment under that agreement by $2.8 million to a total of $6.3 million, which covers anticipated spend for further development of our aerosolized lung epithelium gene delivery vectors. The repayment is capped at nine times the grant actually paid to us.
In August 2023, the Company executed an amendment to the CF Foundation Agreement increasing the funding commitment under that agreement by $2.8 million to a total of $6.3 16 million, which covers anticipated spend for further development of our aerosolized lung epithelium gene delivery vectors. The repayment is capped at nine times the grant actually paid to us.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price 26 increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Under the accelerated approval program, the FDA may approve a BLA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Under the accelerated approval program, the FDA may approve a BLA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint 21 that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the 28 approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by 25 managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.
Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future drugs may have a material adverse impact on us. Strategic Collaborations Astellas Gene Therapies, Inc. On July 5, 2023, the Company entered into a licensing agreement (the “License Agreement”) with Astellas Gene Therapies, Inc.
Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future drugs may have a material adverse impact on us. Strategic Collaborations Astellas Gene Therapies, Inc. On July 5, 2023, we entered into a licensing agreement (the “License Agreement”) with Astellas Gene Therapies, Inc.
People with cystic fibrosis require lifelong 11 treatment with multiple daily medications, frequent hospitalizations and, ultimately, lung transplants in some end-stage patients. The quality of life for people with cystic fibrosis is further compromised as a result of spending significant time on self-care every day and frequent outpatient doctor visits and hospitalizations.
People with cystic fibrosis require lifelong treatment with multiple daily medications, frequent hospitalizations and, ultimately, lung transplants in some end-stage patients. The quality of life for people with cystic fibrosis is further compromised as a result of spending significant time on self-care every day and frequent outpatient doctor visits and hospitalizations.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical 29 trials to demonstrate the safety, purity and potency of its product.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.
Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.
Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based 24 on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.
Even with frequent treatment, disease can often be under poor control in many patients leading to variability in retina tissue edema and thickness, and this poor anatomic control can lead to vision 5 loss. Finally, VEGF-C has been shown to be an escape mechanism from VEGF-A inhibition and significant contributor to disease.
Even with frequent treatment, disease can often be under poor control in many patients leading to variability in retina tissue edema and thickness, and this poor anatomic control can lead to vision loss. Finally, VEGF-C has been shown to be an escape mechanism from VEGF-A inhibition and significant contributor to disease.
The grant was increased to $3.5 million in 2017 and was subsequently amended to allocate the $3.5 million to different milestones. In August 2023, the grant agreement was further amended, which modified the research plan, increased 21 the aggregate milestone payments from $3.5 million to $6.3 million and extended the estimated project completion date.
The grant was increased to $3.5 million in 2017 and was subsequently amended to allocate the $3.5 million to different milestones. In August 2023, the grant agreement was further amended, which modified the research plan, increased the aggregate milestone payments from $3.5 million to $6.3 million and extended the estimated project completion date.
A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.
A deferral may be granted for several reasons, including a 19 finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.
In patients with CFTR mutations that are amenable to modulator medicines, while therapies demonstrate improvements in lung function, these modulators do not restore normal lung function in most patients. Further, these chronic therapies require daily dosing for the patient’s lifetime.
In patients with CFTR mutations that are amenable to modulator medicines, while therapies demonstrate 8 improvements in lung function, these modulators do not restore normal lung function in most patients. Further, these chronic therapies require daily dosing for the patient’s lifetime.
The submission of a BLA requires payment of a substantial user fee to FDA, and the sponsor of an approved 24 BLA is also subject to an annual program fee. A waiver of user fees may be obtained under certain limited circumstances.
The submission of a BLA requires payment of a substantial user fee to FDA, and the sponsor of an approved BLA is also subject to an annual program fee. A waiver of user fees may be obtained under certain limited circumstances.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 33
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 28
In addition, we have developed significant experience in performing Therapeutic Vector Evolution programs in NHPs. We have patent applications and issued patents covering hundreds of proprietary, unique AAV capsid vectors.
In addition, we have developed significant experience in performing Therapeutic Vector Evolution programs 11 in NHPs. We have patent applications and issued patents covering hundreds of proprietary, unique AAV capsid vectors.
Our current in-house manufacturing capabilities include GMP manufacturing (upstream, downstream and fill/finish), production capabilities for clinical trials, IND-enabling GLP toxicology studies, and research candidate production. We also collaborate with contract manufacturing organizations (“CMOs”) to supplement our internal capacity. cGMP Capabilities Our team has extensive experience with the manufacturing and analytical testing of numerous unique AAV capsids.
Our current in-house manufacturing capabilities include GMP manufacturing (upstream, downstream and fill/finish), production capabilities for late-phase clinical trials, IND-enabling GLP toxicology studies, and research candidate production. We also collaborate with contract manufacturing organizations (“CMOs”) to supplement our internal capacity. cGMP Capabilities Our team has extensive experience with the manufacturing and analytical testing of numerous unique AAV capsids.
Our principal executive offices are located at 5858 Horton Street #455, Emeryville, California 94608, and our telephone number is (510) 505-2680. 32 Available Information Our website address is www.4dmoleculartherapeutics.com. The information on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K. The U.S.
Our principal executive offices are located at 5858 Horton Street #455, Emeryville, California 94608, and our telephone number is (510) 505-2680. 27 Available Information Our website address is www.4dmoleculartherapeutics.com. The information on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K. The U.S.
We believe these major retinal diseases are ideal candidate applications for genetic medicines. There are multiple products on the market that validate the anti-VEGF therapeutic approach, and emerging randomized clinical trial data suggest that inhibiting additional molecular targets (e.g. VEGF-C) can extend the efficacy and durability of anti-VEGF A therapy alone.
We believe these major retinal vascular diseases are ideal applications for genetic medicines. There are multiple products on the market that validate the anti-VEGF therapeutic approach, and emerging randomized clinical trial data suggest that inhibiting additional molecular targets (e.g. VEGF-C) can extend the efficacy and durability of anti-VEGF A therapy alone.
Manufacturing Team Our team of approximately 40 highly trained individuals is led by our President and Chief Operating Officer, Dr. Fred Kamal, and includes Ph.D. scientists. Collectively, they have significant experience in viral vector manufacturing, chemistry-manufacturing-controls (“CMC”), regulatory affairs, analytical and process development, and quality assurance and controls.
Manufacturing Team Our team of approximately 50 highly trained individuals is led by our President and Chief Operating Officer, Dr. Fred Kamal, and includes Ph.D. scientists. Collectively, they have significant experience in viral vector manufacturing, chemistry-manufacturing-controls (“CMC”), regulatory affairs, analytical and process development, and quality assurance and controls.
Berkeley patent portfolio, Australia, Brazil, Canada, China, Hong Kong, India, Japan, Korea and Mexico, and for our in-licensed University of Pennsylvania patent portfolio, Australia, Brazil, Canada, China, Israel, Japan, Korea and Hong Kong), patents, if issued on pending applications in our in-licensed patent portfolio, where applicable, relating to our product candidates, including composition of matter and various other patents, including dosage unit form, method-of-treatment and medical use patents are expected to expire between June 2024 and June 2038 for our in-licensed U.C.
Berkeley patent portfolio, Australia, Brazil, Canada, China, Hong Kong, India, Japan, Korea and Mexico, and for our in-licensed University of Pennsylvania patent portfolio, Australia, Brazil, Canada, China, Israel, Japan, Korea and Hong Kong), patents, if issued on pending applications in our in-licensed patent portfolio, where applicable, relating to our product candidates, including composition of matter and various other patents, including dosage unit form, method-of-treatment and medical use patents are expected to expire between August 2027 and June 2038 for our in-licensed U.C.
Coverage and Reimbursement Sales of any pharmaceutical product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors.
Coverage and Reimbursement Sales of any pharmaceutical product depend, in part, on the extent to which such product will be reimbursed by third-party payors, such as federal, state and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors.
We have completed enrolling patients in two cohorts of patients with severe disease activity and high anti-VEGF treatment burden: Phase 1 Dose Exploration cohort (N=15, n=5 in 3 dose arms of 3E10, 1E10, and 6E9 vg/eye of 4D-150) and Phase 2 Dose Expansion cohort (N=51, randomized 2:2:1 to receive one of 3E10 and 1E10 vg/eye of 4D-150 or aflibercept Q8 week control).
We have completed enrollment of patients in two cohorts of patients with severe disease activity and high anti-VEGF treatment burden: Phase 1 Dose Exploration cohort (N=15, n=5 in 3 dose arms of 3E10, 1E10, and 6E9 vg/eye of 4D-150) and Phase 2a Dose Expansion cohort (N=51, randomized 2:2:1 to receive one of 3E10 and 1E10 vg/eye of 4D-150 or aflibercept Q8 week control).
As partial consideration for the rights and licenses granted to AGT by the Company under this Agreement, AGT paid the Company an upfront amount of $20 million, which was received in July 2023. The Company may receive potential future option fees and milestones of up to $942.5 million including potential near-term development milestones of $15 million for the initial target.
As partial consideration for the rights and licenses granted to AGT by us under this Agreement, AGT paid us an upfront amount of $20 million, which was received in July 2023. We may receive potential future option fees and milestones of up to $942.5 million including potential near-term development milestones of $15 million for the initial target.
We also face competition from AAV-based gene therapy based programs including ABBV-RGX-314 from AbbVie and REGENXBIO (Phase 3 subretinal, Phase 2 suprachoroidal), Ixo-Vec from Adverum (Phase 2, discontinued in diabetic populations), and LX102 from Innostellar.
We also face competition from AAV-based gene therapy programs including ABBV-RGX-314 from AbbVie and REGENXBIO (Phase 3 subretinal, Phase 2 suprachoroidal) and Ixo-Vec from Adverum (Phase 2, discontinued in diabetic populations).
The Phase 1/2 clinical trial is a multicenter, open-label, dose-escalation and dose-expansion trial of 4D-710 in people with cystic fibrosis who are ineligible for CFTR modulator therapy or who have discontinued therapy due to adverse effects. The primary endpoint of the study is safety and tolerability.
Clinical Development: AEROW Phase 1/2 Clinical Trial The AEROW Phase 1/2 clinical trial is a multicenter, open-label, dose-escalation and dose-expansion trial of 4D-710 in people with cystic fibrosis who are ineligible for CFTR modulator therapy or who have discontinued therapy due to adverse effects. The primary endpoint of the study is safety and 9 tolerability.
In addition, the Company is entitled to receive mid-single digit to double-digit, sub-teen royalties on net sales of all licensed products. Cystic Fibrosis Foundation In 2016, we received a grant from Cystic Fibrosis Foundation (“CFF”) in the amount of $525,000 to support discovery and development of product candidates to treat cystic fibrosis.
In addition, we are entitled to receive mid-single digit to double-digit, sub-teen royalties on net sales of all licensed products. Cystic Fibrosis Foundation In 2016, we received a grant from Cystic Fibrosis Foundation (“CFF”) in the amount of $525,000 to support discovery and development of product candidates to treat cystic fibrosis.
Diabetes mellitus affects approximately 400 million adults worldwide and the prevalence is expected to increase by approximately 45% in the next decade. Diabetic eye disease is a leading cause of vision loss and blindness in working-age adults and occurs due to the development of diabetic macular edema (“DME”; swelling and edema in the central retina).
Diabetes mellitus affects approximately 400 million adults worldwide and the prevalence is expected to increase by approximately 45% in the next decade. Diabetic eye disease is a leading cause of vision loss and blindness in working-age adults and occurs due to the development of DME (swelling and edema in the central retina).
This product candidate has completed non-GLP dose-ranging and GLP toxicology and biodistribution studies in primates by aerosol delivery. No notable adverse effects were reported, and widespread biodistribution and transgene expression were observed throughout all lung segments tested in all NHPs. We are currently enrolling the AEROW Phase 1/2 clinical trial in patients with cystic fibrosis (“CF”).
This product candidate has completed non-GLP dose-ranging and GLP toxicology and biodistribution studies in primates by aerosol delivery. No notable adverse effects were reported, and widespread biodistribution and transgene expression were observed throughout all lung segments tested in all NHPs. We are currently enrolling the AEROW Phase 1/2 clinical trial in patients with CF.
As of February 2024, our team had submitted 6 INDs, all of which have been granted clearance by the U.S. FDA, enabling our clinical candidates to advance to Phase 1/2 clinical development. Our team also has experience prior to 4DMT with manufacturing multiple viral vectors from preclinical studies through to multiple Phase 3 trials. For example, Dr.
As of February 2024, our team had submitted 7 INDs, all of which have been granted clearance by the U.S. FDA, enabling our clinical candidates to advance to Phase 3 clinical development. Our team also has experience prior to 4DMT with manufacturing multiple viral vectors from preclinical studies through to multiple Phase 3 trials. For example, Dr.
Our second pulmonology product candidate is 4D-725 for alpha-1 antitrypsin deficiency lung disease; 4D-725 is currently in preclinical development. 4D-710 for Cystic Fibrosis Lung Disease Disease Background, Unmet Medical Need, and Target Patient Population Cystic fibrosis is the most common fatal inherited disease in the United States and results from mutations in the cystic fibrosis transmembrane conductance regulator (“ CFTR ”) gene.
Our second pulmonology product candidate is 4D-725 for alpha-1 antitrypsin deficiency lung disease; 4D-725 is currently in preclinical development. 7 4D-710 for Cystic Fibrosis Lung Disease Disease Background, Unmet Medical Need, and Target Patient Population Cystic fibrosis is the most common fatal inherited disease in the United States and results from mutations in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene.
These angiogenic diseases of the retina, including wet AMD and DME, represent therapeutic markets of over $18 billion. 4D-150 is engineered for efficient intravitreal delivery to the retina of a payload expressing two transgenes.
These angiogenic diseases of the retina, including wet AMD and DME, represent global therapeutic markets of over $16 billion. 4D-150 is engineered for efficient intravitreal delivery to the retina of a payload expressing two transgenes.
Our team has internally manufactured over 200 unique AAV vectors, including both proprietary evolved 4DMT capsid variants and naturally occurring capsids. Our team has manufactured over 300 total lots of AAV vectors for research or clinical use. This total also includes multiple lots of product candidate material for GLP toxicology and biodistribution studies.
Our team has internally manufactured over 290 unique AAV vectors, including both proprietary evolved 4DMT capsid variants and naturally occurring capsids. Our team has manufactured over 400 total lots of AAV vectors for research or clinical use. This total also includes multiple lots of product candidate material for GLP toxicology and biodistribution studies.
Our Solution 4D-150 is a dual-transgene, intravitreal genetic medicine, designed to inhibit four distinct VEGF members to prevent angiogenesis and reduce vascular permeability, for the treatment of angiogenic diseases of the retina.
Our Solution 4D-150 is a dual-transgene, intravitreal genetic medicine, designed to inhibit four distinct VEGF members to prevent angiogenesis and reduce vascular permeability, for the treatment of retinal vascular diseases.
The proliferation and leakage of abnormal blood vessels is stimulated by protein members of the vascular endothelial growth factor (“VEGF”) family, such as VEGF-A, -B, -C, and placental growth factor (“PIGF”). This process distorts and can potentially destroy central vision and may progress to blindness without treatment.
The proliferation and leakage of abnormal blood vessels is stimulated by protein members 2 of the VEGF family, such as VEGF-A, -B, -C, and placental growth factor (“PIGF”). This process distorts and can potentially destroy central vision and may progress to blindness without treatment.
We expect that United States and European patents, if issued from pending applications in our solely owned portfolio, would expire between May 2037 and April 2042. excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
We expect that United States and European patents, if issued from pending applications in our solely owned portfolio, would expire between May 2037 and March 2043, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
Large Market Ophthalmology Portfolio 4D-150 for Wet AMD and Diabetic Macular Edema Disease Background, Unmet Medical Need, and Target Patient Population Wet AMD is a highly prevalent disease with an estimated 3 million patients affected in the United States and major European markets.
Large Market Ophthalmology Portfolio 4D-150 for Wet AMD and DME Disease Background, Unmet Medical Need, and Target Patient Population Wet AMD is a highly prevalent disease with an estimated 3 million patients affected in the United States and major European markets.
(“AGT”), pursuant to which the Company granted to AGT a license to utilize its intravitreal R100 vector (“4D Vector”) to develop and commercialize licensed compounds and licensed products for one genetic target implicated in rare monogenic ophthalmic disease(s), with options to add up to two additional targets implicated in rare monogenic ophthalmic diseases after paying additional option exercise fees.
(“AGT”), pursuant to which we granted to AGT a license to utilize our intravitreal R100 vector (“4D Vector”) to develop and commercialize licensed compounds and licensed products for one genetic target implicated in rare monogenic ophthalmic disease(s), with options to add up to two additional targets implicated in rare monogenic ophthalmic diseases after paying additional option exercise fees.
In other jurisdictions (currently, Argentina, Australia, Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, Egypt, Hong Kong, India, Indonesia, Iran, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, New Zealand, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, United Arab Emirates, Ukraine, and Vietnam), patents, if issued on pending applications in our solely owned patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter, dosage unit form, method of treatment and medical use, are expected to expire between May 2037 and April 2042, if the appropriate maintenance, renewal, annuity, and other government fees are paid.
In other jurisdictions (currently, Argentina, Australia, Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, Egypt, Hong Kong, India, Indonesia, Iran, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, New Zealand, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, United Arab Emirates, Ukraine, and Vietnam), patents, if issued on pending applications in our solely owned patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter, dosing regimen, method of treatment, medical uses, and formulations are expected to expire between May 2037 and March 2043, if the appropriate maintenance, renewal, annuity, and other government fees are paid.
We have filed several non-provisional and provisional patent applications, all owned by us, relating to our product and lead optimization candidates in the United States and certain foreign countries and through the World Intellectual Property Organization that are directed to compositions of matter, dosage unit forms, methods of treatment, and medical uses.
We have filed several non-provisional and provisional patent applications, all owned by us, relating to our product and lead optimization candidates in the United States and certain foreign countries and through the World Intellectual Property Organization that are directed to compositions of matter, dosing regimens, methods of treatment, medical uses, and formulations.
As of February 16, 2024, our in-licensed University of Pennsylvania patent portfolio includes one granted U.S. patents and six granted foreign patents; each of these patents is expected to expire September 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
As of February 14 2025, our in-licensed University of Pennsylvania patent portfolio includes two granted U.S. patents and six granted foreign patents; each of these patents is expected to expire September 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
Our solely owned patent portfolio also includes two pending U.S. provisional patent applications.
Our solely owned patent portfolio also includes nine pending U.S. provisional patent applications.
We consider our most direct competitors in late-stage development with respect to 4D-150 for the treatment of wet AMD and DME to be late-stage sustained release anti-VEGF tyrosine kinase inhibitor programs at EyePoint and Ocular, and VEGF-C/D inhibitor sozinibercept from Opthea.
We consider our most direct competitors in late-stage development with respect to 4D-150 for the treatment of wet AMD and DME to be late-stage sustained release anti-VEGF tyrosine kinase inhibitor programs at EyePoint and Ocular Therapeutix, antibody biopolymer conjugate drug programs from Kodiak Sciences, and VEGF-C/D inhibitor sozinibercept from Opthea.
We then deploy Therapeutic Vector Evolution with our capsid libraries in non-human primates (“NHPs”) and use competitive selection to identify targeted and evolved vectors from our libraries that demonstrate the strongest match to the Target Vector Profile.
We then deploy Therapeutic Vector Evolution with our capsid libraries in NHPs and use competitive selection to identify targeted and evolved vectors from our libraries that demonstrate the strongest match to the Target Vector Profile.
The current treatment paradigm for wet AMD and DME is intravitreal injection of patients with anti-VEGF proteins that inhibit blood vessel leakage and proliferation of new blood vessels, reducing edema and bleeding risk, and allowing in many instances some visual acuity to be recovered.
The current treatment paradigm for both wet AMD and DME requires frequent intravitreal bolus injections of patients with anti-VEGF proteins that inhibit blood vessel leakage and proliferation of new blood vessels, reducing edema and bleeding risk, and allowing in many instances some visual acuity to be recovered.
Under the terms of the License Agreement, the Company has provided its 4D vector technology to Astellas to deliver Astellas’ genetic payloads for the treatment of rare monogenic diseases. Astellas will conduct all subsequent research, development, manufacturing, and commercialization activities.
Under the terms of the License Agreement, we have provided our 4D vector technology to Astellas to deliver Astellas’ genetic payloads for the treatment of rare monogenic diseases. Astellas will conduct all subsequent research, development, manufacturing, and commercialization activities.
Our customized and evolved vector, A101, is used in all of our pulmonology disease product candidates at this time. A101 was invented for aerosol delivery leading to transgene expression throughout all regions of the airways and alveoli, as well as resistance to pre-existing antibodies in humans.
Pulmonology Therapeutic Area Introduction We are developing product candidates to treat lung diseases. Our customized and evolved vector, A101, is used in all of our pulmonology disease product candidates at this time. A101 was invented for aerosol delivery leading to transgene expression throughout all regions of the airways and alveoli, as well as resistance to pre-existing antibodies in humans.
The rebate was previously capped at 100% of a drug’s average manufacturer price. 31 Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.
We are also aware that Janssen has a CD59 targeting gene therapy. We consider our most direct competitors with respect to 4D-710 for the treatment of cystic fibrosis lung disease to be Vertex, which has several approved CFTR modulators, as well as other companies in preclinical/early-clinical development of cystic fibrosis products, including Vertex, Krystal, Spirovant, Arcturus, and ReCode.
We consider our most direct competitors with respect to 4D-710 for the treatment of cystic fibrosis lung disease to be Vertex, which has several approved CFTR modulators, as well as other companies in preclinical/early-clinical development of cystic fibrosis products, including Vertex, Sionna, Krystal, Spirovant, Arcturus, and ReCode.
In addition, in vitro studies of R100 versus AAV2 have shown superior transduction by R100 in human retinal cells. We have not compared R100 to AAV2 in patients in clinical studies. R100 has been associated with a low inflammation profile at relatively low doses, and a lack of any clinically significant inflammation observed in 110 human eyes injected with 4D-150.
We have not compared R100 to AAV2 in patients in clinical studies. R100 has been associated with a low inflammation profile at relatively low doses, and a lack of any clinically significant inflammation observed in 110 human eyes injected with 4D-150.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees and Human Capital As of December 31, 2023, we had 147 full-time employees. Of these employees, 105 are engaged in research and development and 37 hold M.D. or Ph.D. degrees.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees and Human Capital As of February 11, 2025, we had 227 full-time employees. Of these employees, 166 are engaged in research and development and 55 hold M.D. or Ph.D. degrees.
We have in-house cGMP manufacturing capabilities for clinical trial material production. Our manufacturing team has completed and released 18 lots of clinical trial material for our five product candidates in clinical development.
We have in-house cGMP manufacturing capabilities for clinical trial material production. Our manufacturing team has completed and released 28 lots of clinical trial material for six product candidates in current or previous clinical development.
In April 2022, we announced that we had dosed our first patient in the AEROW after receiving clearance to enroll within the Cystic Fibrosis Therapeutics Development Network, the largest CF clinical trials network in the world. In November 2023, we announced positive interim clinical data at the North American Cystic Fibrosis Conference.
In April 2022, we announced that we had dosed our first patient in the AEROW after receiving clearance to enroll within the Cystic Fibrosis Therapeutics Development Network, the largest CF clinical trials network in the world.
We expect that United States and European patents, if issued from applications in our in-licensed portfolio would expire between June 2024 and June 2038, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
We expect that United States and European patents, if issued from applications in our in-licensed portfolio would expire September 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid. In other jurisdictions (currently, for our in-licensed U.C.
In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, beginning January 1, 2024.
In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price.
Our solely owned patent portfolio also includes eight pending U.S. non-provisional applications and one hundred and nineteen pending foreign applications.
Our solely owned patent portfolio also 14 includes thirteen pending U.S. non-provisional applications and one hundred and twenty-nine pending foreign applications.
Product candidates for large market ophthalmology indications such as wet AMD, diabetic macular edema, and geographic atrophy have the potential to be major value drivers for 4DMT.
We believe product candidates for large market ophthalmology indications such as wet AMD and DME have the potential to be major value drivers for 4DMT.
These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our 20 product or lead optimization candidates is obtained in those countries.
These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our product or lead optimization candidates is obtained in those countries. For example, in Japan, the term of a patent may be extended by a maximum of five years in certain circumstances.
In addition, we have completed enrollment in the Phase 2 Population Extension cohort (N=32, who received one of 3E10 and 1E10 vg/eye of 4D-150) in patients with a broad range of disease activity and treatment burden. The primary endpoints of the study are safety and tolerability.
In addition, we have completed enrollment in the Phase 2b Population Extension cohort (N=45, who received one of 3E10 and 1E10 vg/eye of 4D-150) in patients with a broad range of disease activity and treatment burden. In addition, 16 patients have been dosed with 3E10 vg/eye in the Phase 2 Alternate Steroids cohort.
We have obtained fast track designation for 4D-310 for the treatment of Fabry disease and for 4D-125 for the treatment of patients with inherited retinal dystrophies due to defects in the RPGR gene, including XLRP, and we obtained RMAT designation for 4D-150 for the treatment of neovascular (wet) AMD, and we plan to seek additional expedited designations for some or all of our product candidates in which there is a medically plausible basis for the use of these products.
We have obtained RMAT designation for 4D-150 for the treatment of neovascular (wet) AMD, and we plan to seek additional expedited designations for some or all of our product candidates in which there is a medically plausible basis for the use of these products.
Patent and Trademark Office (“USPTO”) delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period.
In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office (“USPTO”) delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period.
The study design consists of a Dose Confirmation cohort followed by a randomized, masked Dose Expansion cohort. In the Dose Confirmation cohort (N=12-18), patients were sequentially enrolled to one of two dose arms (1E10 and 3E10 vg/eye) of 4D-150. In the Dose Expansion cohort (N=54), patients will be randomized 1:1:1 to one of two doses of 4D-150 or aflibercept.
In the Dose Confirmation cohort, patients were sequentially enrolled to one of three dose arms of 4D-150 (5E9, 1E10 and 3E10 vg/eye). In the Dose Expansion cohort (Part 2, N=54), patients were to be randomized 1:1:1 to one of two doses of 4D-150 or aflibercept.
The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Third-party payors are increasingly challenging the prices charged, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical products, in addition to questioning their safety and efficacy.
In addition, third-party payors are increasingly reducing reimbursements for pharmaceutical products and services. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.
As of February 16, 2024, our in-licensed patent portfolio includes six granted U.S. patents and twenty-one granted foreign patents; each of these patents is expected to expire between June 2024 and May 2036, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
As of February 14, 2025, our solely owned patent portfolio includes eighteen granted U.S. patents and sixty-five granted foreign patents; each of these patents is expected to expire between May 2037 and August 2041, , excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.
Our in-licensed patent portfolio also includes six pending U.S. non-provisional patent applications and twelve pending foreign patent applications.
Our in-licensed University of Pennsylvania patent portfolio also includes one pending U.S. non-provisional patent application and eleven pending foreign patent applications.
For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.
For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may be limited, which may impact physician utilization.
Leveraging internal testing capabilities in addition to qualified contract testing laboratories, we fully test and release our GLP and GMP lots for use in toxicology and clinical trials, respectively. We have developed and qualified assays 18 for characterization, in-process testing, and release and stability testing of our internally and externally manufactured proprietary AAV vectors.
Leveraging internal testing capabilities in addition to qualified contract testing laboratories, we fully test and release our GLP and GMP lots for use in toxicology and clinical trials, respectively.
One-time therapy : Unlike intravitreal protein therapeutics that require repeat dosing every few weeks for a patient’s lifetime, 4D-150 is designed as a one-time treatment . 3.
Multi-year durability and treatment burden reduction with a single injection : Unlike intravitreal protein therapeutics that require repeat dosing every few weeks for a patient’s lifetime, a backbone therapy 4D-150 is designed to provide sustained, multi-year benefit with a one-time treatment. 3.
Moreover, they are not, to our knowledge, comprised of AAV vectors evolved in primates for aerosol delivery diffusely throughout the lung airways and alveoli. In addition, we believe these products were not designed for resistance to pre-existing antibodies to conventional AAVs, which is potentially a key requirement for successful delivery in the lung.
In addition, we believe these products were not designed for resistance to pre-existing antibodies to conventional AAVs, which is potentially a key requirement for successful delivery in the lung.
Our customized and evolved vector, R100, is used in all three of our clinical stage and one preclinical stage ophthalmology product candidates. R100 was invented for routine intravitreal injection to express transgene payloads across the entire surface area of the retina, and in the major cell layers of the retina.
R100 was invented for routine intravitreal injection to express transgene payloads across the entire surface area of the retina, and in the major cell layers of the retina.
Based on current clinical experience, after several years of treatment, the early vision gains are frequently lost, and visual acuity declines may result at least in part from poor patient compliance and undertreatment.
Each anti-VEGF injection requires an in-office visit, which carries significant burden and discomfort to patients. When patients miss doses, they may experience vision decline due to undertreatment. Based on current clinical experience, after several years of treatment, the early vision gains are frequently lost, and visual acuity declines may result at least in part from poor patient compliance and undertreatment.
Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee. 27 A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the disease or condition for which it received orphan designation.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the disease or condition for which it received orphan designation.
The FDA may also require one or more Phase IV post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
The FDA may also require one or more Phase IV post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies. 20 Expedited Development and Review Programs A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of drugs and biological products that meet certain criteria.
Under the terms of the Funding Agreement, neither the $10.0 million investment in the Series C redeemable convertible preferred stock nor the $4.0 million of funding upon Acceptance are restricted as to withdrawal or usage. Arbor Biotechnologies, Inc. On December 20, 2023 (the “Effective Date”), we entered into a co-development and co-commercialization agreement (the “Arbor Agreement”) with Arbor Biotechnologies, Inc.
Under the terms of the Funding Agreement, neither the $10.0 million investment in the Series C redeemable convertible preferred stock nor the $4.0 million of funding upon Acceptance are restricted as to withdrawal or usage.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, designation is granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biological product or where there is no satisfactory method of diagnosis, prevention, or treatment, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.
Biggest changeA medicinal product may be designated as orphan if its sponsor can establish that (i) the product is intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition; (ii) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (iii) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the medicinal product will be 54 of significant benefit to those affected by the condition.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate program to individuals enrolled in Medicaid managed care organizations; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • a licensure framework for follow-on biologic products; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare & Medicaid Innovation (“CMMI”) at the Centers for Medicare & Medicaid Services (“CMS”) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: 57 • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate program to individuals enrolled in Medicaid managed care organizations; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • a licensure framework for follow-on biologic products; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare & Medicaid Innovation (“CMMI”) at the Centers for Medicare & Medicaid Services (“CMS”) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: • the timing and success or failure of preclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners; • the timing and cost of, and level of investment in research, development and commercialization activities, which may change from time to time; • the timing of receipt of approvals from regulatory authorities in the United States and internationally; • the timing and status of enrollment and safety and efficacy readouts for our clinical trials; • the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity of production, the cost of continuing to establish and scale up our internal manufacturing capabilities, and the terms of any agreements we enter into with third-party suppliers; • timing and amount of any option, milestone, royalty or other payments due under any current or future collaboration or license agreement; • coverage and reimbursement policies with respect to our genetic medicine product candidates and potential future drugs that compete with our products, if approved; • expenditures that we may incur to acquire, develop or commercialize additional products and technologies; • the level of demand for our genetic medicine products, if approved, which may vary significantly over time; • future accounting pronouncements or changes in our accounting policies; and • the impact from general macroeconomic trends, such as higher inflation and increased interest rates.
These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: • the timing and success or failure of preclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners; • the timing and cost of, and level of investment in research, development and commercialization activities, which may change from time to time; • the timing of receipt of approvals from regulatory authorities in the United States and internationally; • the timing and status of enrollment and safety and efficacy readouts for our clinical trials; • the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity of production, the cost of continuing to establish and scale up our internal manufacturing capabilities, and the terms of any agreements we enter into with third-party suppliers; • timing and amount of any option, milestone, royalty or other payments due under any current or future collaboration or license agreement; • coverage and reimbursement policies with respect to our genetic medicine product candidates and potential future drugs that compete with our products, if approved; • expenditures that we may incur to acquire, develop or commercialize additional products and technologies; • the level of demand for our genetic medicine products, if approved, which may vary significantly over time; • future accounting pronouncements or changes in our accounting policies; and • the impact from general macroeconomic trends, such as higher inflation, tariffs and increased interest rates.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications or those of our licensors may issue as patents; • others will not or may not be able to make, use, offer to sell, or sell products that are the same as or similar to our own but that are not covered by the claims of the patents that we own or license; • we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • we or our licensors were the first to make the inventions covered by each of the patents and pending patent applications that we own or license; • we or our licensors were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe the patents we own or license; • any of the patents we own or license will be found to ultimately be valid and enforceable; • any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable products or will provide us with any competitive advantages; • a third party may not challenge the patents we own or license and, if challenged, a court would hold that such patents are valid, enforceable and infringed; • we may develop or in-license additional proprietary technologies that are patentable; • the patents of others will not have an adverse effect on our business; • our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications or those of our licensors may issue as patents; 68 • others will not or may not be able to make, use, offer to sell, or sell products that are the same as or similar to our own but that are not covered by the claims of the patents that we own or license; • we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • we or our licensors were the first to make the inventions covered by each of the patents and pending patent applications that we own or license; • we or our licensors were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe the patents we own or license; • any of the patents we own or license will be found to ultimately be valid and enforceable; • any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable products or will provide us with any competitive advantages; • a third party may not challenge the patents we own or license and, if challenged, a court would hold that such patents are valid, enforceable and infringed; • we may develop or in-license additional proprietary technologies that are patentable; • the patents of others will not have an adverse effect on our business; • our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
These provisions, among other things: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • provide that our directors may be removed only for cause; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • provide for a staggered board, which will result in only a few directors being up for re-election in each calendar year; 87 • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of our common stock to amend many of the provisions described above; and • limit the liability of, and provide indemnification to, our directors and officers.
These provisions, among other things: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship; • provide that our directors may be removed only for cause; • permit stockholders to only take actions at a duly called annual or special meeting and not by written consent; • prohibit stockholders from calling a special meeting of stockholders; • provide for a staggered board, which will result in only a few directors being up for re-election in each calendar year; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend the bylaws; • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of our common stock to amend many of the provisions described above; and • limit the liability of, and provide indemnification to, our directors and officers.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file 71 any patent application related to our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our licensors' patent applications for any patent application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our licensors’ patent applications for any patent application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for 67 disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.
For example: • others may be able to make genetic medicine products that are similar to our product candidates or utilize similar genetic medicine technology but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; 76 • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
For example: • others may be able to make genetic medicine products that are similar to our product candidates or utilize similar genetic medicine technology but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
Factors that may inhibit our efforts to commercialize any approved product on our own include: • our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, compliance, customer service, medical affairs and other support personnel; • our inability to recruit and build a commercial infrastructure; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products; • the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors; • the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability; • restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent commercialization organization.
Factors that may inhibit our efforts to commercialize any approved product on our own include: • our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, compliance, customer service, medical affairs and other support personnel; • our inability to recruit and build a commercial infrastructure; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products; • the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors; 46 • the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability; • restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent commercialization organization.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products and product candidates that compete directly or indirectly with our product candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products and product candidates may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may adversely affect the price of our common stock and may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; • collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and 77 • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products and product candidates that compete directly or indirectly with our product candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products and product candidates may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; 75 • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may adversely affect the price of our common stock and may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; • collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaborations involving our product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates that result from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates; • disputes may arise with respect to the ownership of intellectual property developed pursuant to collaborations; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide not to pursue development and commercialization of any product candidates we 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 that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may undergo a change of control and the new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become party to a business combination transaction and the continued pursuit and emphasis on our development or commercialization program by the resulting entity under our existing collaboration could be delayed, diminished or terminated; 69 • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, devices, materials, know-how or intellectual property of the collaborator relating to our products and product candidates; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or our Therapeutic Vector Evolution platform technology; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or may use our proprietary information in 64 such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates that result from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates; • disputes may arise with respect to the ownership of intellectual property developed pursuant to collaborations; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide not to pursue development and commercialization of any product candidates we 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 that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may undergo a change of control and the new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become party to a business combination transaction and the continued pursuit and emphasis on our development or commercialization program by the resulting entity under our existing collaboration could be delayed, diminished or terminated; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, devices, materials, know-how or intellectual property of the collaborator relating to our products and product candidates; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders, or disrupt our management and business; 65 • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or our Therapeutic Vector Evolution platform technology; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal civil and criminal false claims and civil monetary penalties laws, including the civil federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal civil and criminal false claims and civil monetary penalties laws, including the civil federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions, which prohibit, among other things, individuals or entities from knowingly presenting, 61 or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government.
This summary should be read in conjunction with the other risk factors included in this “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business. • We are in the early stages of drug development and have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability. • We have had recurring net losses, and we expect to continue to incur significant net losses for the foreseeable future. • We will require substantial additional capital to finance our operations.
This summary should be read in conjunction with the other risk factors included in this “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business. • We are in the early stages of drug development and have a limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability. • We have had recurring net losses, and we expect to continue to incur significant net losses for the foreseeable future. • We will require substantial additional capital to finance our operations.
Such laws include: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under any U.S. federal healthcare program, such 65 as Medicare and Medicaid.
Such laws include: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under any U.S. federal healthcare program, such as Medicare and Medicaid.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased or interrupted demand for our products; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • injury to our reputation; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; 90 • costs to defend the related litigation; • a diversion of management’s time and our resources; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased or interrupted demand for our products; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • injury to our reputation; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; • costs to defend the related litigation; • a diversion of management’s time and our resources; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize any product candidate; and • a decline in our share price.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof, and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political 62 parties or officials thereof, and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Our ability to generate revenue and achieve profitability depends significantly on many factors, including: • successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and any commercial demand for our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • launching and successfully commercializing product candidates for which we obtain marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates, both in the United States and in foreign countries where our product candidates are commercialized; • obtaining adequate reimbursement for our product candidates or procedures using our product candidates from payors; • the convenience and durability of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates, or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for any of our product candidates that may be approved; • addressing any competing technological and market developments; • the effects of any public health emergencies, including the COVID-19 pandemic, which may result in delays to patient enrollment, patients discontinuing their treatment or follow up visits or changes to trial protocols; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Our ability to generate revenue and achieve profitability depends significantly on many factors, including: • successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and any commercial demand for our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates or future approved products, if any; • launching and successfully commercializing product candidates for which we obtain marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates, both in the United States and in foreign countries where our product candidates are commercialized; • obtaining adequate reimbursement for our product candidates or procedures using our product candidates from payors; • the convenience and durability of our treatment or dosing regimen; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates, or any future product candidates, if approved, including relative to alternative and competing treatments; • patient demand for any of our product candidates that may be approved; • addressing any competing technological and market developments; • the effects of any public health emergencies which may result in delays to patient enrollment, patients discontinuing their treatment or follow up visits or changes to trial protocols; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Patient enrollment, a determinative factor in the timing of clinical trials, is affected by many factors including the severity of and difficulty of diagnosing the disease under investigation, knowledge of the disease in the medical community and availability of effective diagnostic methods, size and distribution of the patient population and process for identifying subjects, access of patients to medical professionals experienced in their disease, our ability to effectively disseminate information about our clinical trials to the patient population and access of patients to such information, eligibility and exclusion criteria for the trial in question, design of the trial protocol, availability, efficacy of, and our ability to compete with approved and standard of care therapies or other clinical trials for the disease or condition under investigation, perceived risks and benefits of the product candidate under trial or testing, availability of genetic testing for potential patients, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, ability to obtain and maintain subject consent, the risk that enrolled subjects will drop out before completion of the trial, the ability to monitor patients adequately during and after treatment, the time and financial 44 commitments required of patients to enroll in our trials beyond the costs covered by the company, and the proximity and availability of and access to clinical trial sites for prospective patients.
Patient enrollment, a determinative factor in the timing of clinical trials, is affected by many factors including the severity of and difficulty of diagnosing the disease under investigation, knowledge of the disease in the medical community and availability of effective diagnostic methods, size and distribution of the patient population and process for identifying subjects, access of patients to medical professionals experienced in their disease, our ability to effectively disseminate information about our clinical trials to the patient population and access of patients to such information, eligibility and exclusion criteria for the trial in question, design of the trial protocol, availability, efficacy of, and our ability to compete with approved and standard of care therapies or other clinical trials for the disease or condition under investigation, perceived 39 risks and benefits of the product candidate under trial or testing, availability of genetic testing for potential patients, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, ability to obtain and maintain subject consent, the risk that enrolled subjects will drop out before completion of the trial, the ability to monitor patients adequately during and after treatment, the time and financial commitments required of patients to enroll in our trials beyond the costs covered by the company, and the proximity and availability of and access to clinical trial sites for prospective patients.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; 51 • the ability to offer appropriate patient access programs, such as co-pay assistance; • sufficient third-party coverage or reimbursement; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by FDA, EMA or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; • the potential and perceived advantages compared to alternative treatments; • the ability to offer our products for sale at competitive prices; • the ability to offer appropriate patient access programs, such as co-pay assistance; • sufficient third-party coverage or reimbursement; • the extent to which physicians recommend our products to their patients; • convenience and ease of dosing and administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by FDA, EMA or other regulatory agencies; • product labeling or product insert requirements of the FDA, EMA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; • restrictions on how the product is distributed; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; and 47 • the prevalence and severity of any side effects.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed 91 to have waived our compliance with federal securities laws and the rules and regulations thereunder.
These reporting requirements, rules and regulations, coupled with the 86 increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
Events that may prevent successful or timely initiation or completion of clinical trials include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • delays in reaching a consensus with regulatory agencies on study design or implementation of the clinical trials; • delays or failure in obtaining regulatory authorization to commence a trial; • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • refusal of the FDA to accept data from clinical trials in geographies outside the United States; • delays in identifying, recruiting and training suitable clinical investigators; • delays in identifying, recruiting, and enrolling patients who meet the requirements of our clinical trials; • delays in obtaining required IRB approval at each clinical trial site; • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing; 43 • insufficient or inadequate supply or quality of product candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; • imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA or amendment, or equivalent foreign application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; • developments on trials conducted by competitors for related technology that raise FDA or foreign regulatory authority concerns about risk to patients of the technology broadly; or if the FDA or a foreign regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; • delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical trial protocols; • failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice (“GCP”) requirements or applicable regulatory guidelines in other countries; • occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipate; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such product candidates; • transfer of manufacturing processes to larger-scale facilities operated by a CMO or by us, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; • third parties being unwilling or unable to satisfy their contractual obligations to us; and • adverse public perception or regulatory scrutiny of genetic medicine technology may negatively impact the developmental progress or commercial success of products that we develop alone or with collaborators.
Events that may prevent successful or timely initiation or completion of clinical trials include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • delays in reaching a consensus with regulatory agencies on study design or implementation of the clinical trials; • delays or failure in obtaining regulatory authorization to commence a trial; • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • refusal of the FDA to accept data from clinical trials in geographies outside the United States; • delays in identifying, recruiting and training suitable clinical investigators; • delays in identifying, recruiting, and enrolling patients who meet the requirements of our clinical trials; • delays in obtaining required IRB approval or ethics committee opinion at each clinical trial site; 38 • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing; • insufficient or inadequate supply or quality of product candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; • imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA or amendment, or equivalent foreign application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; • developments on trials conducted by competitors for related technology that raise FDA or foreign regulatory authority concerns about risk to patients of the technology broadly; or if the FDA or a foreign regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; • delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical trial protocols; • failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice (“GCP”) requirements or applicable regulatory guidelines in other countries; • occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipate; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such product candidates; • transfer of manufacturing processes to larger-scale facilities operated by a CMO or by us, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; • third parties being unwilling or unable to satisfy their contractual obligations to us; and • adverse public perception or regulatory scrutiny of genetic medicine technology may negatively impact the developmental progress or commercial success of products that we develop alone or with collaborators.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 62 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
In the future, we may choose to build a focused sales, marketing and commercial support infrastructure to sell, or participate in sales activities with our collaborators for some of our product candidates if and when they are approved. 50 There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services.
In the future, we may choose to build a focused sales, marketing and commercial support infrastructure to sell, or participate in sales activities with our collaborators for some of our product candidates if and when they are approved. There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services.
If such confirmatory studies fail to confirm the drug’s clinical benefit, or if the sponsor fails to conduct required confirmatory studies in a timely manner, the FDA may 56 withdraw its approval of the drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through fiscal year 2023.
If such confirmatory studies fail to confirm the drug’s clinical benefit, or if the sponsor fails to conduct required confirmatory studies in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through fiscal year 2023.
U.S. patent nos. 11,136,557 and 11,634,691 were made with the support of U.C. Berkeley and relate to our A101 vector of our 4D-710 and 4D-725 product candidates. U.S. patent no. 10,988,519 was made with the support of University of Pennsylvania and relates to our short-form human complement factor H (sCFH) payload of our 4D-175 product candidate.
U.S. patent nos. 11,136,557 and 66 11,634,691 were made with the support of U.C. Berkeley and relate to our A101 vector of our 4D-710 and 4D-725 product candidates. U.S. patent no. 10,988,519 was made with the support of University of Pennsylvania and relates to our short-form human complement factor H (sCFH) payload of our 4D-175 product candidate.
Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
Our competitors in both the United States and abroad, many of which have substantially greater resources and 77 have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
We and any contract manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment and disposal of 91 hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety.
We and any contract manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety.
Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials.
Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising 43 results in earlier trials.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or through reliance upon data obtained from a meaningful number of sites, including through expansion of clinical trials to a sufficient number sites, as appropriate.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or through reliance upon data obtained from a 55 meaningful number of sites, including through expansion of clinical trials to a sufficient number sites, as appropriate.
Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to 60 country and could delay or prevent the introduction of our products in those countries.
In addition, if 78 we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business.
Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in 89 the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.
Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.
Additionally, should our supply needs exceed our internal capabilities and supply agreements with other parties with whom we have manufacturing agreements be terminated for any reason, there are a limited number of manufacturers who would be suitable replacements, and it would take a significant amount of time to transition the manufacturing to a alternative manufacturing organization.
Additionally, should our supply needs exceed our internal capabilities and supply agreements with other parties with whom we have manufacturing agreements be terminated for any reason, there are a limited number of manufacturers who would be suitable replacements, and it would take a significant amount of time to transition the manufacturing to an alternative manufacturing organization.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could seriously harm our business.
Any failure or perceived failure by 84 us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could seriously harm our business.
Even if such licenses are available, we could incur substantial costs related to royalty payments for licenses obtained from third 94 parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us.
Even if such licenses are available, we could incur substantial costs related to royalty payments for licenses obtained from third parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us.
Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that we, our employees or a consultant inadvertently or otherwise 96 used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.
Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that we, our employees or a consultant inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.
An adverse determination in any such submission, proceeding or litigation could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position. This could have a negative impact on some of our intellectual property and could increase uncertainties surrounding obtaining and enforcement or defense of our issued patents.
An adverse determination in any such submission, proceeding or litigation could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position. This could have a negative impact on some of our intellectual property and could increase uncertainties surrounding obtaining and enforcement or defense of 70 our issued patents.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could seriously harm our business. Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could seriously harm our business. 74 Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
We may also be subject to claims that patents and applications we have filed to protect inventions of our employees or consultants, even those related to one or more of our product candidates, are rightfully owned by their former or concurrent employer or former or current client. Litigation may be necessary to defend against these claims.
We may also be subject to claims that patents and applications we have filed to protect inventions of our employees or consultants, even those related to one or more of our product candidates, 80 are rightfully owned by their former or concurrent employer or former or current client. Litigation may be necessary to defend against these claims.
Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements We are in the early stages of drug development and have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements We are in the early stages of drug development and have a limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
To date, few genetic medicine products have been approved by the FDA or comparable foreign regulatory authorities, which makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the European Union or other jurisdictions.
To date, few genetic medicine products have been approved by the FDA or comparable foreign regulatory authorities, which makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the European Union (“EU”) or other jurisdictions.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our product candidates may not successfully complete preclinical studies or clinical trials; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it does not meet applicable regulatory criteria; • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop platform technologies that render our Therapeutic Vector Evolution platform technology obsolete or less attractive; • the product candidates and Therapeutic Vector Evolution platform technology that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights or may be covered by third-party patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate; • delays in our clinical development plans due to public health emergencies, such as the COVID-19 pandemic; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following: • our product candidates may not successfully complete preclinical studies or clinical trials; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it does not meet applicable regulatory criteria; • our competitors may develop therapeutics that render our product candidates obsolete or less attractive; • our competitors may develop platform technologies that render our Therapeutic Vector Evolution platform technology obsolete or less attractive; • the product candidates and Therapeutic Vector Evolution platform technology that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights or may be covered by third-party patents or other intellectual property or exclusive rights; • the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; • if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate; • delays in our clinical development plans due to public health emergencies; and • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial 63 launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country.
In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could seriously harm our business. The lives of our patents may not be sufficient to effectively protect our product candidates and business. Patents have a limited lifespan.
In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could seriously harm our business. 69 The lives of our patents may not be sufficient to effectively protect our product candidates and business. Patents have a limited lifespan.
These agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our proprietary technology and product candidates infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; 92 • diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or jointly; • the scope and duration of our payment obligations; • rights upon termination of such agreement; and • the scope and duration of exclusivity obligations of each party to the agreement.
These agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our proprietary technology and product candidates infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • diligence obligations under the license agreement and what activities satisfy those diligence obligations; 76 • the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or jointly; • the scope and duration of our payment obligations; • rights upon termination of such agreement; and • the scope and duration of exclusivity obligations of each party to the agreement.
There can be no assurance that our patent applications or those of our licensors will result 70 in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
There can be no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting 73 patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes.
As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes.
If a security breach or other incident were to result in the unauthorized access to or unauthorized use, disclosure, release or other processing of clinical trial data or personal data, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media, and other parties pursuant to privacy and security laws.
If a security breach or other incident were to result in the unauthorized access to or unauthorized use, disclosure, release or other processing of clinical trial data or personal data, it may be necessary to 83 notify individuals, governmental authorities, supervisory bodies, the media, and other parties pursuant to privacy and security laws.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, 98 if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be 48 required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
For example, the FDA may determine that a BLA, even if ultimately 60 approved, does not meet the eligibility criteria for a priority review voucher, including for the following reasons: • the product no longer meets the definition of a rare pediatric disease; • the product contains an active ingredient (including any ester or salt of the active ingredient) that has been previously approved in another marketing application; • the application does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population; • the application is approved for a different adult indication than the rare pediatric disease for which the product is designated Moreover, Congress included a sunset provision in the statute authorizing the rare pediatric disease priority review voucher program.
For example, the FDA may determine that a BLA, even if ultimately approved, does not meet the eligibility criteria for a priority review voucher, including for the following reasons: 56 • the product no longer meets the definition of a rare pediatric disease; • the product contains an active ingredient (including any ester or salt of the active ingredient) that has been previously approved in another marketing application; • the application does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population; • the application is approved for a different adult indication than the rare pediatric disease for which the product is designated Moreover, Congress included a sunset provision in the statute authorizing the rare pediatric disease priority review voucher program.
If we or our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we will not be able to obtain and/or maintain regulatory approval for our products as manufactured at their manufacturing facilities.
If we or our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we will not be able to obtain 49 and/or maintain regulatory approval for our products as manufactured at their manufacturing facilities.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common 79 stock.
If we are 34 ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed. • Our employees, independent contractors, consultants, research or commercial partners or collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. • Our success depends on our ability to protect our intellectual property and our proprietary technologies. • Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.
If we are ultimately unable to obtain regulatory approval for our 29 product candidates, we will be unable to generate product revenue and our business will be substantially harmed. • Our success depends on our ability to protect our intellectual property and our proprietary technologies. • Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors. • Our employees, independent contractors, consultants, research or commercial partners or collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
If our revenue or operating results fall below or if operating expenses or other costs are higher than the expectations of analysts or investors or below or above, as the case may be, any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.
If our revenue or operating results fall below or if operating expenses or other costs are higher than the expectations of analysts or investors or below or above, as the case may 33 be, any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.
A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer 52 time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may adversely affect our ability to commercialize and generate revenue from our products.
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may adversely affect our ability to commercialize and generate revenue from our 53 products.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of any of our future domestic and foreign earnings. Any new taxes could adversely affect our domestic and international business operations, and our business and financial performance.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of any of our future domestic and foreign earnings. Any new taxes could adversely affect our domestic and international business operations, and our business and 86 financial performance.
We have recently completed the build out of approximately 17,000 square feet of laboratory and manufacturing space at our headquarters in Emeryville, California, a large portion of which we plan to devote to manufacturing activities for our clinical trials under cGMP.
We have completed the build out of approximately 17,000 square feet of laboratory and manufacturing space at our headquarters in Emeryville, California, a large portion of which we plan to devote to manufacturing activities for our clinical trials under cGMP.
Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and 64 regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.
Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.
Our security measures may not prevent an employee, consultant, collaborator or third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
Our security measures may not prevent an employee, consultant, collaborator or third party from misappropriating our trade secrets 72 and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by HIPAA, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase.
If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated 93 with compliance with such laws are also likely to increase.
Should any of these events occur, they could seriously harm our business. Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products.
Should any of these events occur, they could seriously harm our business. Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products. Any future collaborations that we enter into may not be successful.
Investors should not rely on our past results as an indication of our future performance. 38 This variability and unpredictability could also result in our failing to meet the expectations of financial analysts or investors for any period.
Investors should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of financial analysts or investors for any period.
For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental 61 and private payors.
For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental and private payors.
Our ability to generate 68 revenue from these arrangements with commercial entities will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.
Our ability to generate revenue from these arrangements with commercial entities will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.
Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management 95 personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
A material shortage, contamination, recall or restriction on the use of biologically derived substances 54 in the manufacture of our product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could seriously harm our business.
A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could seriously harm our business.
There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements.
There can be no 81 assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements.
Negative public perception about the use of AAV technology in human therapeutics, whether related to our technology or a competitor’s technology, could result in increased governmental regulation, delays in the development and commercialization of product candidates or decreased demand for the resulting products, any of which may seriously harm our business. 40 Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.
Negative public perception about the use of AAV technology in human therapeutics, whether related to our technology or a competitor’s technology, could result in increased governmental regulation, delays in the development and commercialization of product candidates or decreased demand for the resulting products, any of which may seriously harm our business. 35 Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.
Conducting trials in smaller subject populations increases the risk that any safety or efficacy issues observed in only a few patients could prevent such trials from reaching statistical significance or otherwise meeting their specified endpoints, which could require us to conduct additional clinical trials, or delay or prevent our product candidates from receiving regulatory approval, which would seriously harm our business. 45 Research and development of biopharmaceutical products is inherently risky.
Conducting trials in smaller subject populations increases the risk that any safety or efficacy issues observed in only a few patients could prevent such trials from reaching statistical significance or otherwise meeting their specified endpoints, which could require us to conduct additional clinical trials, or delay or prevent our product candidates from receiving regulatory approval, which would seriously harm our business. 40 Research and development of biopharmaceutical products is inherently risky.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics 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 drugs and biologics to be reviewed and/or approved by necessary government 42 agencies, which would adversely affect our business.
As we look to respond to evolving standards for identifying, measuring, and reporting ESG metrics, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements, which may negatively impact our financial results, our reputation, our ability to attract or retain employees, our attractiveness as an investment or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders. 99
As we look to respond to evolving standards for identifying, measuring, and reporting ESG metrics, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements, which may negatively impact our financial results, our reputation, our ability to attract or retain employees, our attractiveness as an investment or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders. 94
If we or our contractors fail to comply with regulations concerning the treatment of animals used in research, we may be subject to fines and penalties and adverse publicity, and our operations could be adversely affected. 67 Risks Related to Our Reliance on Third Parties We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.
If we or our contractors fail to comply with regulations concerning the treatment of animals used in research, we may be subject to fines and penalties and adverse publicity, and our operations could be adversely affected. 63 Risks Related to Our Reliance on Third Parties We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.
If we initiate lawsuits to protect or enforce our patents, 72 or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.
If we initiate lawsuits to protect or enforce our patents, or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security 80 measures, and lead to regulatory scrutiny.
Any security compromise affecting us, our partners or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures, and lead to regulatory scrutiny.
In addition, we must successfully complete a pre-approval inspection of our manufacturing facility by the FDA before any of our product candidates can obtain marketing approval, if ever.
In addition, we must successfully complete a pre-approval inspection of our manufacturing facility by the FDA before any of our product candidates 48 can obtain marketing approval, if ever.
Any trademarks we may register in the future or any current unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
Any trademarks we may register in the future or any current registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
In addition, we cannot be certain that we could redesign our product candidates or proprietary technologies to avoid infringement, if necessary, or on a cost-effective basis.
In addition, we cannot be certain that we could redesign our product candidates or proprietary technologies to avoid 78 infringement, if necessary, or on a cost-effective basis.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in Emeryville, California, where we lease approximately 59,000 square feet of office, research and development, engineering and laboratory space pursuant to lease agreements that expire in July 2024 and December 2029.
Biggest changeItem 2. Properties. Our corporate headquarters are located in Emeryville, California, where we lease approximately 91,000 square feet of office, research and development, engineering, laboratory and warehouse space pursuant to lease agreements that expire between August 2026 and December 2030.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Ite m 4. Mine Safety Disclosures. None. 101 PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Ite m 4. Mine Safety Disclosures. None. 96 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 101 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 102 Item 6. [Reserved] 103 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 104 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 116 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 96 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 97 Item 6. [Reserved] 97 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 98 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 110 Item 8.
Financial Statements and Supplementary Data 117 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 117
Financial Statements and Supplementary Data 111 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 111

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None.
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchases None.
Holders of Common Stock As of February 23, 2024, there were approximately 13 holders of record of our common stock.
Holders of Common Stock As of February 26, 2025, there were approximately 13 holders of record of our common stock.
Removed
Use of Proceeds from Initial Public Offering On December 15, 2020, we closed our IPO, in which we issued and sold 9,660,000 shares of common stock at a price to the public of $23.00 per share. We received net proceeds of $204.7 million, after deducting underwriting discounts and commissions of $15.6 million and offering costs of $1.9 million.
Removed
None of the expenses associated with the IPO were paid to directors, officers, or persons owning 10% or more of any class of equity securities, or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries. Goldman Sachs & Co.
Removed
LLC, BofA Securities and Evercore ISI acted as book-running managers for the offering. Shares of our common stock began trading on the Nasdaq Global Select Market on December 11, 2020. The shares were registered under the Securities Act on a Registration Statement on Form S-1 (File No. 333-250150), which was declared effective by the SEC on December 11, 2020.
Removed
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus dated December 11, 2020, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act. 102 Purchases of Equity Securities by the Issuer and Affiliated Purchases None.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe increase was due to: • a $2.5 million increase in personnel costs mainly due to a $2.0 million increase in employee stock-based compensation expense and a $0.7 million increase in employee bonus, offset by a $0.8 million decrease in employee recruiting expense; • a $1.1 million increase in outside services; and • a $1.0 million decrease in business insurance and $0.4 million decrease in consulting services, offset by $0.7 million increase in consultant and professional fees and $0.7 million increase in facility-related expenses. 108 Other Income (Expense), Net Other income (expense), net increased by $9.5 million, or 374%, from the year ended December 31, 2022 to the year ended December 31, 2023.
Biggest changeThe increase was due to: • a $5.1 million increase in personnel costs mainly due to increased headcount of general and administrative personnel, including a $0.8 million increase in employee stock-based compensation; • a $5.0 million increase mainly due to increased consulting and outside services, increased non-employee stock compensation expense, increased facilities related expenses, software expenses, audit and tax fees, service fees and business taxes, which was partially offset by lower business insurance.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $156.8 million for the year ended December 31, 2023, which was due to proceeds from the issuance of common stock pursuant to public offerings of $129.2 million, proceeds from the issuance of common stock from the ATM offering program of $19.1 million, proceeds from the issuance of common stock upon exercise of stock options of $7.3 million and proceeds from ESPP purchases of $1.2 million.
Net cash provided by financing activities was $156.8 million for the year ended December 31, 2023, which was due to proceeds from the issuance of common stock pursuant to public offerings of $129.2 million, proceeds from the issuance of common stock from the ATM offering program of $19.1 million, proceeds from the issuance of common stock upon exercise of stock options of $7.3 million and proceeds from ESPP purchases of $1.2 million.
Our future capital requirements will depend on many factors, including: • the progress of our current and future product candidates through preclinical and clinical development; • potential delays in our preclinical studies and clinical trials, whether current or planned; • expanding our manufacturing facilities and working with our contract manufacturers to scale up the manufacturing processes for our product candidates; • continuing our research and discovery activities; • continuing the development of our Therapeutic Vector Evolution platform; • initiating and conducting additional preclinical, clinical or other studies for our product candidates; • changing or adding additional contract manufacturers or suppliers; • seeking regulatory approvals and marketing authorizations for our product candidates; • establishing sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval; • acquiring or in-licensing product candidates, intellectual property and technologies; • making milestone, royalty or other payments due under any current or future collaboration or license agreements; • obtaining, maintaining, expanding, protecting and enforcing our intellectual property portfolio; • attracting, hiring and retaining qualified personnel; • potential delays or other issues related to our operations; • meeting the requirements and demands of being a public company; • defending against any product liability claims or other lawsuits related to our products; and 110 • the impact of the COVID-19 pandemic and adverse macroeconomic conditions such as, but not limited to, higher inflation and increased interest rates, each of which may exacerbate the magnitude of the factors discussed above.
Our future capital requirements will depend on many factors, including: • the progress of our current and future product candidates through preclinical and clinical development; • potential delays in our preclinical studies and clinical trials, whether current or planned; • expanding our manufacturing facilities and working with our contract manufacturers to scale up the manufacturing processes for our product candidates; 104 • continuing our research and discovery activities; • continuing the development of our Therapeutic Vector Evolution platform; • initiating and conducting additional preclinical, clinical or other studies for our product candidates; • changing or adding additional contract manufacturers or suppliers; • seeking regulatory approvals and marketing authorizations for our product candidates; • establishing sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval; • acquiring or in-licensing product candidates, intellectual property and technologies; • making milestone, royalty or other payments due under any current or future collaboration or license agreements; • obtaining, maintaining, expanding, protecting and enforcing our intellectual property portfolio; • attracting, hiring and retaining qualified personnel; • potential delays or other issues related to our operations; • meeting the requirements and demands of being a public company; • defending against any product liability claims or other lawsuits related to our products; and • the lingering impact of the COVID-19 pandemic and adverse macroeconomic conditions such as, but not limited to, higher inflation and increased interest rates, each of which may exacerbate the magnitude of the factors discussed above.
As partial consideration for the rights and licenses granted to AGT under License Agreement, we received an upfront payment of $20.0 million which we recognized as revenue during the third quarter of 2023. 105 In August 2019, we amended our agreement with uniQure and entered into a separate new collaboration and license agreement with uniQure.
As partial consideration for the rights and licenses granted to AGT under License Agreement, we received an upfront payment of $20.0 million which we recognized as revenue during the third quarter of 2023. In August 2019, we amended our agreement with uniQure and entered into a separate new collaboration and license agreement with uniQure.
See the section titled “Risk Factors” for additional risks regarding regulatory development and approval. 106 General and Administrative Our general and administrative expenses consist primarily of personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense for our personnel in executive, finance and accounting, legal, human resources, business development, and other administrative functions.
See the section titled “Risk Factors” for additional risks regarding regulatory development and approval. General and Administrative Our general and administrative expenses consist primarily of personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense for our personnel in executive, finance and accounting, legal, human resources, business development, and other administrative functions.
The noncash charges 111 primarily consisted of stock-based compensation expense of $19.7 million, depreciation and amortization of $4.2 million, amortization of operating lease right-of-use assets of $1.5 million and change in fair value of derivative liability of $0.2 million, partially offset by accretion of discount on marketable securities of $1.2 million.
The noncash charges primarily consisted of stock-based compensation expense of $19.7 million, depreciation and amortization of $4.2 million, amortization of operating lease right-of-use assets of $1.5 million and change in fair value of derivative liability of $0.2 million, partially offset by accretion of discount on marketable securities of $1.2 million.
Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option. 114 • Expected Dividend Yield —We have not paid and do not currently anticipate paying any dividends on our common stock. Accordingly, we have estimated the dividend yield to be zero.
Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option. • Expected Dividend Yield —We have not paid and do not currently anticipate paying any dividends on our common stock. Accordingly, we have estimated the dividend yield to be zero.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with preclinical development and clinical studies; and • CMOs and other vendors related to process development and manufacturing of materials for use in preclinical development and clinical studies.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with preclinical development and clinical studies; and • other vendors related to process development and manufacturing of materials for use in preclinical development and clinical studies.
Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources to complete the clinical development for the product candidates for treatment of wet AMD, DME, GA, cystic fibrosis lung disease, alpha-1 antitrypsin deficiency lung disease, Fabry disease cardiomyopathy, XLRP, choroideremia or any other indication we may pursue.
Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources to complete the clinical development for the product candidates for treatment of wet AMD, DME, GA, cystic fibrosis lung disease, alpha-1 antitrypsin deficiency lung disease, Fabry disease cardiomyopathy or any other indication we may pursue.
In November 2021, we completed an underwritten public offering ("2021 Offering") in which 4,750,000 shares of our common stock were sold at an offering price of $25.00 per share. The net proceeds from the 2021 Offering were $111.1 million after deducting underwriting discounts and commissions and offering expenses.
In November 2021, we completed an underwritten public offering (“2021 Offering”) in which 4,750,000 shares of our common stock were sold at an offering price of $25.00 per share. The net proceeds from the 2021 Offering were $111.1 million after deducting underwriting discounts and commissions and offering expenses.
The net proceeds from the 2024 Offering were $281.4 million, after deducting underwriting discounts and commissions and other offering expenses. We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering.
The net proceeds from the 2024 Offering were $281.2 million, after deducting underwriting discounts and commissions and other offering expenses. We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering.
As of December 31, 2023, our principal commitments consisted of obligations under our operating lease for our headquarters. Please see Note 9 to our financial statements included elsewhere in this report. 112 Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States.
As of December 31, 2024, our principal commitments consisted of obligations under our operating lease for our headquarters. Please see Note 9 to our financial statements included elsewhere in this report. Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States.
Liquidity and Capital Resources Sources of Liquidity We have funded our operations primarily through the sale and issuance of our equity securities, including from the sale of our common stock in our IPO and Follow-on Offering and the sale of our Series A, Series A-1, Series B and Series C redeemable preferred stock, and to a lesser extent from cash received pursuant to our collaboration and license agreements.
Liquidity and Capital Resources Sources of Liquidity We have funded our operations primarily through the sale and issuance of our equity securities, including from the sale of our common stock in our IPO, Follow-on Offerings, and “at-the-market” offerings and the sale of our Series A, Series A-1, Series B and Series C redeemable preferred stock, and to a lesser extent from cash received pursuant to our collaboration and license agreements.
The net proceeds from the 2024 Offering were $281.4 million, after deducting underwriting discounts and commissions and other offering expenses.
The net proceeds from the 2024 Offering were $281.2 million, after deducting underwriting discounts and commissions and other offering expenses.
Depending on the timing of payments to the service providers and the estimated expenses incurred, we may record net prepaid or accrued research and development expenses relating to these costs.
Depending on the timing of payments to the service providers and the estimated expenses incurred, we may record net prepaid or accrued clinical research organization expenses relating to these costs.
We began recognizing revenue related to uniQure in 2020 and recognized the remaining revenue under the agreement during the third quarter of 2023. We recognized immaterial revenue during the year ended December 31, 2023, and $3.1 million during the year ended December 31, 2022 related to this agreement.
We began recognizing revenue related to uniQure in 2020 and recognized the remaining revenue under the agreement during the third quarter of 2023. We recognized immaterial revenue during the during the year ended December 31, 2023 related to this agreement.
The change in operating assets and liabilities was primarily due to a $3.1 million decrease in deferred revenue, $1.6 million decrease in accounts payable, $0.3 million decrease in operating lease liabilities, offset by an increase of $2.5 million in accrued and other liabilities and a $1.2 million decrease in prepaid expenses and other current assets.
The change in operating assets and liabilities was primarily due to a $6.5 million increase in accrued and other liabilities, a $0.9 million increase in accounts payable and $0.1 million increase in deferred revenue, offset by a $1.7 million decrease in operating lease liabilities, a $1.7 million increase in prepaid expenses and other current assets and a $3.6 million increase in other assets.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, the war in Ukraine, rising interest rates, inflation and otherwise.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from conflicts in the Middle East, the lingering impact of the COVID-19 pandemic, the war in Ukraine, rising interest rates, inflation and otherwise.
Payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.
Payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our balance sheet.
In February 2024, we completed an underwritten public offering (the “2024 Offering”) in which 6,586,015 shares of our common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of our common stock at an offering price of $29.4999 per underlying share pursuant to our effective registration statement on Form S-3.
In February 2024, we completed an underwritten public offering (the “2024 Offering” and, together with the 2023 Offering and the 2021 Offering (as defined below), the “Follow-on Offerings”) in which 6,586,015 shares of our common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of our common stock at an offering price of $29.4999 per underlying share pursuant to our effective registration statement on Form S-3.
Revenue Recognition We determine revenue recognition for arrangements within the scope of ASC 606 by performing the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation.
Revenue Recognition We determine revenue recognition for arrangements within the scope of ASC 606 by performing the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. 107 Our revenue is primarily derived through our license, research, development and commercialization agreements.
NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (IRS) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.
To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. 109 NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.
As of December 31, 2023, the unrecognized stock-based compensation expense related to stock options was $55.0 million and is expected to be recognized as expense over a weighted-average period of approximately 2.1 years.
As of December 31, 2024, the unrecognized stock-based compensation expense related to stock options was $54.5 million and is expected to be recognized as expense over a weighted-average period of approximately 2.1 years.
We do not allocate our costs by product candidate, as a significant amount of research and development expenses includes internal costs, such as salary and other personnel-related expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, none of which are tracked by product candidate.
The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed. 100 We do not allocate our costs by product candidate, as a significant amount of research and development expenses includes internal costs, such as salary and other personnel-related expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, none of which are tracked by product candidate.
Our revenue is primarily derived through our license, research, development and commercialization agreements. The terms of these types of agreements may include (i) licenses to our technology, (ii) research and development services, and (iii) services or obligations in connection with participation in research or steering committees.
The terms of these types of agreements may include (i) licenses to our technology, (ii) research and development services, and (iii) services or obligations in connection with participation in research or steering committees.
Our net losses were $100.8 million and $107.5 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $415.3 million. We do not expect positive cash flows from operations in the foreseeable future.
Our net losses were $160.9 million and $100.8 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $576.2 million. We do not expect positive cash flows from operations in the foreseeable future.
The noncash charges primarily consisted of stock-based compensation expense of $17.1 million, depreciation and amortization of $2.4 million, amortization of operating lease right-of-use assets of $1.5 million and amortization/accretion of premium/discount on marketable securities of $1.1 million.
The noncash charges primarily consisted of stock-based compensation expense of $26.1 million, depreciation and amortization of $4.7 million and amortization of operating lease right-of-use assets of $2.1 million, partially offset by accretion of discount on marketable securities of $7.2 million.
This was primarily due to the net loss of $100.8 million partially offset by a change of $24.4 million in noncash charges and by a net change of $0.6 million in our operating assets and liabilities.
Net cash used in operating activities was $$75.8 million for the year ended December 31, 2023. This was primarily due to the net loss of $100.8 million partially offset by a change of $24.4 million in noncash charges and by a net change of $0.6 million in our operating assets and liabilities.
The fair value of the option granted is recognized on a straight-line basis over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period, which usually is the vesting period.
Our determination of the fair value of stock options on the date of grant utilizes the Black-Scholes option pricing model. 108 The fair value of the option granted is recognized on a straight-line basis over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period, which usually is the vesting period.
We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering. 104 We have incurred significant operating losses and expect that our operating losses will increase significantly as we, among other things, continue to advance our product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; broaden and improve our platform; acquire, discover, validate and develop additional product candidates; maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.
We have incurred significant operating losses and expect that our operating losses will increase significantly as we, among other things, continue to advance our product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; broaden and improve our platform; acquire, discover, validate and develop additional product candidates; maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.
In March 2022, we also entered into an Open Market Sales Agreement (the "Sales Agreement") with Jefferies LLC as sales agent to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $100.0 million pursuant to the S-3 Registration Statement as an “at-the-market” offering under the Securities Act (the "2022 ATM Offering Program").
In March 2022, we also entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC as sales agent to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $100.0 million pursuant to the S-3 Registration Statement as an “at-the-market” offering under the Securities Act (the “2022 ATM Offering Program”). 1,684,550 shares of the Company’s common stock have been sold pursuant to the Sales Agreement for net proceeds to the Company of $34.4 million, after deducting issuance costs.
Summary Statement of Cash Flows The following is a summary of cash flows for the periods indicated below (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (75,792 ) $ (86,685 ) Net cash provided by (used in) investing activities 115,717 (17,050 ) Net cash provided by financing activities 156,832 3,085 Net increase (decrease) in cash and cash equivalents $ 196,757 $ (100,650 ) Net Cash Used in Operating Activities Net cash used in operating activities was $75.8 million for the year ended December 31, 2023.
Summary Statement of Cash Flows The following is a summary of cash flows for the periods indicated below (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (134,585 ) $ (75,792 ) Net cash provided by (used in) investing activities (302,437 ) 115,717 Net cash provided by financing activities 337,250 156,832 Net increase (decrease) in cash and cash equivalents $ (99,772 ) $ 196,757 Net Cash Used in Operating Activities Net cash used in operating activities was $134.6 million for the year ended December 31, 2024.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 increased by $3.6 million, or 11%, from the year ended December 31, 2022.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2024 increased by $10.1 million, or 28%, from the year ended December 31, 2023.
Significant management judgment is required to determine the level of effort required under an arrangement, and the period over which the Company expects to complete its performance obligations under the arrangement.
Significant management judgment is required to determine the level of effort required under an arrangement, and the period over which the Company expects to complete its performance obligations under the arrangement. Changes in these estimates can have a material effect on revenue recognized.
Net Cash Provided by (Used in) Investing Activities Net cash provided by investing activities was $115.7 million for the year ended December 31, 2023, consisting of maturities of marketable securities of $173.3 million offset by purchases of marketable securities of $54.8 million and purchases of property and equipment of $2.8 million.
This was due to maturities of marketable securities of $173.3 million offset by purchases of marketable securities of $54.8 million and purchases of property and equipment of $2.8 million. 106 Net Cash Provided by Financing Activities Net cash provided by financing activities was $337.3 million for the year ended December 31, 2024.
In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases.
We have not generated any revenue from the sale of approved products and do not expect to do so for the foreseeable future. In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases.
The intrinsic value of all outstanding stock options as of December 31, 2023 was approximately $46.9 million, of which approximately $19.2 million related to vested options and approximately $27.7 million related to unvested options.
The intrinsic value of all outstanding stock options as of December 31, 2024 was approximately $0.3 million, of which $0.3 million related to vested options and zero related to unvested options.
Stock-Based Compensation Expense We use a fair value-based method to account for all stock-based compensation arrangements with employees and nonemployees including stock options and stock awards. Our determination of the fair value of stock options on the date of grant utilizes the Black-Scholes option pricing model.
Stock-Based Compensation Expense We use a fair value-based method to account for all stock-based compensation arrangements with employees and nonemployees including stock options and stock awards.
Net cash used in investing activities was $17.0 million for the year ended December 31, 2022, consisting of purchases of marketable securities of $153.3 million, as well as purchases of property and equipment of $11.5 million, offset by the maturities of marketable securities of $147.8 million.
Net Cash Provided by (Used in) Investing Activities Net cash used in investing activities was $302.4 million for the year ended December 31, 2024. This was due to purchases of marketable securities of $467.6 million and purchases of property and equipment of $3.8 million, offset by maturities of marketable securities of $169.0 million.
Net cash used in operating activities was $86.7 million for the year ended December 31, 2022. This was primarily due to the net loss of $107.5 million partially offset by a change of $22.1 million in noncash charges and by a net change of $1.3 million in our operating assets and liabilities.
This was primarily due to the net loss of $160.9 million partially offset by a change of $25.7 million in noncash charges and by a net change of $0.5 million in our operating assets and liabilities.
In addition, we have two product candidates in preclinical studies: 4D-175 for geographic atrophy (“GA”) and 4D-725 for alpha-1 antitrypsin deficiency lung disease. We have funded our operations primarily through the sale and issuance of equity securities and to a lesser extent from cash received pursuant to our collaboration and license agreements.
We have funded our operations primarily through the sale and issuance of equity securities and to a lesser extent from cash received pursuant to our collaboration and license agreements.
Research and Development Expenses The following table provides a breakout of research and development expenses for the periods indicated (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Research and development trials and consumables expenses $ 39,550 $ 30,886 $ 8,664 28 % Payroll and personnel expenses 42,848 38,037 4,811 13 % Facilities and other research and development expenses 14,698 11,330 3,368 30 % Total research and development expenses $ 97,096 $ 80,253 $ 16,843 21 % Research and development expenses for the year ended December 31, 2023 increased by $16.8 million, or 21%, from the year ended December 31, 2022.
Research and Development Expenses The following table provides a breakout of research and development expenses for the periods indicated (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Research and development trials and consumables expenses $ 64,757 $ 39,550 $ 25,207 64 % Payroll and personnel expenses 57,383 42,848 14,535 34 % Facilities and other research and development expenses 19,159 14,698 4,461 30 % Total research and development expenses $ 141,299 $ 97,096 $ 44,203 46 % Research and development expenses for the year ended December 31, 2024 increased by $44.2 million, or 46%, from the year ended December 31, 2023.
In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases. As partial consideration for the rights and licenses granted to AGT under the License Agreement, we received an upfront payment of $20.0 million.
As partial consideration for the rights and licenses granted to AGT under the License Agreement, we received an upfront payment of $20.0 million.
As of December 31, 2023, we had cash, cash equivalents and marketable securities of $299.2 million. 109 Future Funding Requirements We have experienced recurring net losses and had an accumulated deficit of $415.3 million at December 31, 2023.
For the year ended December 31, 2024, no shares had been sold pursuant to the Leerink Sales Agreement. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $505.5 million. Future Funding Requirements We have experienced recurring net losses and had an accumulated deficit of $576.2 million at December 31, 2024.
Kasahara delivered notice of his resignation from our Board, including his role as a member and the Chair of the Science and Technology Committee of the Board, effective on January 1, 2024.
Kasahara delivered notice of his resignation from our Board, including his role as a member and the Chair of the Science and Technology Committee of the Board, effective on January 1, 2024. On August 5, 2024, we named Dhaval Desai, PharmD as Chief Development Officer who will oversee late-stage Product Development, Medical Affairs, Scientific Communications, Regulatory and Quality operations.
In May 2023, we completed the 2023 Offering in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share. The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses.
On May 31, 2024, we terminated the Sales Agreement and the 2022 ATM Offering Program pursuant to the terms of the Sales Agreement. In May 2023, we completed the 2023 Offering in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.
We have strengthened our ophthalmology senior leadership team and announced formation of the Ophthalmology Advisory Board, ahead of first Phase 3 clinical trial initiation for 4D-150 in wet AMD. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.
The increase was due to the following: • an $8.7 million increase in research and development trials and consumables expense primarily due to higher clinical trial costs of $6.6 million, higher selection and validation costs of $1.9 million and higher other outside service costs of $1.2 million, offset by lower consumables of $1.0 million; • a $4.8 million increase in payroll and personnel expenses due to increased headcount of research and development personnel, including a $1.5 million increase in employee bonus and $0.5 million increase in employee stock-based compensation expense; and • a $3.3 million increase in facilities and other research and development expenses mainly due to higher fixed assets depreciation and facility maintenance expenses.
The increase was due to the following: • a $25.2 million increase in research and development trials and consumables expense mainly due to increased clinical trial activity for our product candidates, primarily 4D-150; • a $14.5 million increase in payroll and personnel expenses due to increased headcount of research and development personnel, including a $4.1 million increase in employee stock-based compensation; and 102 • a $4.5 million increase in consulting services, facilities related expenses, software expenses and other research and development related expenses.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, the war in Ukraine, rising interest rates and inflation.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the war in Ukraine, conflicts in the Middle East, any expansion of these conflicts, rising interest rates and inflation, natural disasters and pandemics. 105 If we are unable to obtain additional funding, we expect to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or investment in internal manufacturing capabilities, which could adversely affect our business.
Components of Results of Operations Revenue Our revenue to date has been generated through payments from our collaboration and license agreements, primarily from upfront and milestone payments and expense reimbursement. We have not generated any revenue from the sale of approved products and do not expect to do so for the foreseeable future.
Chris was most recently SVP & Chief Commercial Officer at Iveric Bio where he led commercial strategy and execution for the launch of IZERVAY. Components of Results of Operations Revenue Our revenue to date has been generated through payments from our collaboration and license agreements, primarily from upfront and milestone payments and expense reimbursement.
The increase is primarily attributable to higher market yields on our cash equivalents and marketable securities.
Other Income, Net Other income, net, increased by $15.0 million, or 124%, from the year ended December 31, 2023 to the year ended December 31, 2024. The increase is attributable to higher balances of cash equivalents and marketable securities, and higher market yields on our cash equivalents and marketable securities.
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 115 JOBS Act We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements as defined in the rules and regulations of the SEC. Recent Accounting Pronouncements See Note 2 to our financial statements included elsewhere in this report for information.
Net cash provided by financing activities was $3.1 million for the year ended December 31, 2022, which was due to proceeds received from the issuance of common stock upon exercise of stock options of $2.7 million and from ESPP purchases of $0.8 million, offset by payment of offering costs of $0.5 million.
This was due to proceeds from the issuance of common stock upon public offering, net of issuance costs, of $316.1 million, proceeds from the issuance of common stock from the 2022 ATM Offering Program of $15.3 million, proceeds from the issuance of common stock from the exercise of stock options and warrants of $4.6 million and proceeds from the issuance of common stock from purchases from the Company’s 2020 Employee Stock Purchase Plan (“ESPP”) of $1.3 million.
Changes in these estimates can have a material effect on revenue recognized. 113 Accrued Research and Development Expenses We estimate our accrued research and development expenses as of each balance sheet date.
Accrued Clinical Research Organization Costs We estimate our accrued clinical research organization costs as of each balance sheet date.
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Overview We are a leading clinical-stage biopharma company focused on unlocking the full potential of genetic medicines through proprietary customized vectors that are optimized for the specific diseases we treat. 4DMT’s proprietary invention platform, Therapeutic Vector Evolution, combines the power of the Nobel Prize-winning technology, directed evolution, with approximately one billion synthetic AAV capsid-derived sequences to invent customized and evolved vectors for use in our wholly owned and partnered product candidates.
Added
Overview We are a leading late-stage biotechnology company advancing durable and disease-targeted therapeutics with potential to transform treatment paradigms and provide unprecedented benefits to patients. Our core pipeline focus is advancing 4D-150 for the treatment of wet AMD and DME through late-stage studies and 4D-710 for treatment of cystic fibrosis through early-stage studies.
Removed
We believe key features of our targeted and evolved vectors will help us to potentially create targeted genetic medicine product candidates with improved therapeutic profiles. These profiles will allow us to treat a broad range of large market diseases, unlike most current genetic medicines that generally focus on rare or small market diseases.
Added
We believe these product candidates are differentiated and can support meaningful near-term and long-term value generation. In January 2025, we implemented a strategic pipeline prioritization designed to prioritize the development of 4D-150 and 4D-710.
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Our product design, development, and manufacturing engine helps us efficiently create and advance our diverse product pipeline with the goal of revolutionizing medicine with potential curative therapies for millions of patients. We have built a deep portfolio of genetic medicine product candidates, with three novel, highly targeted next generation AAV vectors currently in the clinic.
Added
Further, we will be seeking strategic alternatives, including potential partnering, for our other clinical stage product candidates: 4D-175 for the treatment of geographic atrophy, 4D-725 for the treatment of alpha-1 antitrypsin deficiency, and 4D-310 for the treatment of Fabry disease cardiomyopathy.
Removed
This portfolio includes five product candidates in clinical trials: 4D-150 for the treatment of wet age-related macular degeneration ("wet AMD") and diabetic macular edema (“DME”), 4D-710 for the treatment of cystic fibrosis lung disease, 4D-310 for the treatment of Fabry disease cardiomyopathy , 4D-125 for the treatment of X-linked retinitis pigmentosa ("XLRP") and 4D-110 for the treatment of choroideremia.
Added
In addition, we terminated the development of 4D-110 for the treatment of choroideremia and 4D-125 for the treatment of X-linked retinitis pigmentosa.
Removed
In May 2023, we completed an underwritten public offering (the "2023 Offering") in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share pursuant to our effective shelf registration statement on Form S-3. The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses.
Added
Our lead product candidate 4D-150 utilizes our proprietary R100 vector and a transgene cassette encoding aflibercept and inhibitory miRNA targeting vascular endothelial growth factor-C (“VEGF-C”). 4D-150 was designed to become the first backbone therapy for the treatment of retinal vascular diseases by providing multi-year sustained production of anti-VEGF from the retina with a single, safe, intravitreal injection, substantially reducing treatment burden and improving long-term patient outcomes. 4D-150 is initially being developed for the treatment of wet age-related macular degeneration (“wet AMD”) and diabetic macular edema (“DME”).
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In July 2023, we entered into a licensing agreement (the “License Agreement”) with Astellas Gene Therapies, Inc. (“AGT”) for our intravitreal R100 vector to develop and commercialize products for genetic targets implicated in rare monogenic ophthalmic disease.
Added
Our second priority product candidate is 4D-710, which we believe is the first known genetic medicine to demonstrate successful delivery and expression of the CFTR transgene in the lungs of people with cystic fibrosis (CF). We believe these results will translate into durable clinical improvements in people with CF, including improved lung function and quality of life.
Removed
AGT paid the Company an upfront amount of $20.0 million and may receive potential future option fees and milestones of up to $942.5 million including potential near-term development milestones of $15.0 million for the initial target.
Added
We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering. 98 In March 2024, the underwriters exercised their option to purchase 1,259,299 additional shares of common stock resulting in net proceeds of $34.9 million, after deducting underwriting discounts and commissions.
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Other Income (Expense), Net Our other income (expense), net primarily consists of interest income earned on our cash equivalents and marketable securities and adjustments for the change in the fair value of our derivative liability which must be remeasured at each reporting date.
Added
Dhaval was most recently SVP & Chief Development Officer at Iveric Bio where he led development and approval of IZERVAY. Also on August 5, 2024, we named Carlos Quezada-Ruiz, M.D., FASRS as SVP, Therapeutic Area Head, Ophthalmology who will lead the Ophthalmology franchise and oversee Early- and Late-stage Clinical Development. Dr.
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Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the periods indicated (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Revenue: Collaboration and license revenue $ 20,723 $ 3,129 $ 17,594 562 % Operating expenses: Research and development 97,096 80,253 16,843 21 % General and administrative 36,494 32,908 3,586 11 % Total operating expenses 133,590 113,161 20,429 18 % Loss from operations (112,867 ) (110,032 ) (2,835 ) 3 % Other income, net 12,030 2,538 9,492 374 % Net loss $ (100,837 ) $ (107,494 ) $ 6,657 -6 % 107 Revenue Revenue for the year ended December 31, 2023 increased by $17.6 million, or 562%, from the year ended December 31, 2022 mainly due to the upfront fees received from the License Agreement with Astellas which was partially offset by lower revenue from uniQure in 2023.
Added
Quezada-Ruiz was most recently Group Medical Director, Ophthalmology at Genentech where he led clinical development and approval of VABYSMO and SUSVIMO. 99 Effective September 25, 2024, Christopher Simms joined as Chief Commercial Officer and will oversee Pre-commercial and Commercial organizations, pre-launch preparations and development.
Removed
As of December 31, 2023, 1.1 million shares of the Company's common stock had been sold pursuant to the Sales Agreement for net proceeds to the Company of $19.1 million, after deducting issuance costs. As of December 31, 2023, $80.1 million of common stock remained available for sale under the Sales Agreement.
Added
Other Income, Net Our other income, net primarily consists of interest income earned on our cash equivalents and marketable securities and adjustments for the change in the fair value of our derivative liability which must be remeasured at each reporting date. 101 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the periods indicated (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Revenue: Collaboration and license revenue $ 37 $ 20,723 $ (20,686 ) -100 % Operating expenses: Research and development 141,299 97,096 44,203 46 % General and administrative 46,579 36,494 10,085 28 % Total operating expenses 187,878 133,590 54,288 41 % Loss from operations (187,841 ) (112,867 ) (74,974 ) 66 % Other income (expense): Interest income 27,050 12,211 14,839 122 % Other expense, net (77 ) (181 ) 104 -57 % Total other income, net 26,973 12,030 14,943 124 % Net loss $ (160,868 ) $ (100,837 ) $ (60,031 ) 60 % Revenue Revenue for the year ended December 31, 2024 decreased by $20.7 million, or 100%, from the year ended December 31, 2023.
Removed
If we are unable to obtain additional funding, we expect to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or investment in internal manufacturing capabilities, which could adversely affect our business.
Added
The decrease in revenue is due to the upfront fees received from the License Agreement with Astellas in 2023.
Removed
Prior to our IPO in December 2020, the estimated fair value of the common stock underlying our stock options and stock awards was determined at each grant date by our board of directors, with assistance from management and external appraisers.
Added
The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses. 103 In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases.
Removed
All options to purchase shares of our common stock were intended to be exercisable at a price per share not less than the per-share fair value of our common stock underlying those options on the date of grant.
Added
In March 2024, the underwriters exercised their option and purchased 1,259,299 additional shares of common stock resulting in net proceeds of $34.9 million, after deducting underwriting discounts and commissions.

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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 changeAs of December 31, 2023, we had cash, cash equivalents and marketable securities of $299.2 million, consisting of bank deposits, interest-bearing money market funds, and marketable securities, for which the fair value would be affected by changes in the general level of U.S. interest rates.
Biggest changeAs of December 31, 2024, we had cash, cash equivalents and marketable securities of $505.5 million, consisting of bank deposits, interest-bearing money market funds, and marketable securities, for which the fair value would be affected by changes in the general level of U.S. interest rates.
We do not believe that inflation or interest rate changes have had a significant impact on our results of operations for any periods presented herein. 116
We do not believe that inflation or interest rate changes have had a significant impact on our results of operations for any periods presented herein. 110

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