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What changed in Praxis Precision Medicines, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Praxis Precision Medicines, 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.

+490 added−429 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-05)

Top changes in Praxis Precision Medicines, Inc.'s 2024 10-K

490 paragraphs added · 429 removed · 338 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

113 edited+87 added−31 removed179 unchanged
Biggest changeOur competitors fall primarily into the following groups of treatment: • T-type calcium channel inhibitor programs in development targeting ET, including that of Jazz Pharmaceuticals, as well as other programs in clinical development targeting other mechanisms of action such as GABA by Sage Therapeutics, and approved therapies, such as propranolol, and off-label therapies, such as primidone. • Sodium channel blocker or similar ion channel-targeting programs in development for focal epilepsy, including those of SK-Pharma, Xenon Pharmaceuticals, and Biohaven Pharmaceuticals, as well as other programs in clinical development targeting other mechanisms of action including those from Longboard Pharmaceuticals, Marinus Pharmaceuticals and Stoke Therapeutics, and approved therapies including other existing ion channel blockers. 12 Table of Contents Many of our competitors have substantially greater financial resources, expertise and capabilities in research and development, the regulatory approval process, manufacturing and marketing than we do.
Biggest changeOur competitors fall primarily into the following groups of treatment: • A pproved therapies for ET, such as propranolol, and off-label therapies, such as primidone. • Sodium channel blocker or similar ion channel-targeting programs in development for common epilepsies, including those of SK-Pharma, Xenon Pharmaceuticals, and Biohaven Pharmaceuticals, as well as other programs in clinical development targeting other mechanisms of action including those from Lundbeck and Stoke Therapeutics, and approved therapies including other existing ion channel blockers.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each intended use; • preparation and submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA audits of clinical trial sites to assess compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of certain preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each intended use; • preparation and submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA audits of clinical trial sites to assess compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
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, among other things: • Imposition of post-marketing studies or clinical trials to assess new safety risks, or restrictions under a REMS program; • Restrictions on the marketing, manufacturing or distribution of the product, complete withdrawal of the product from the market or product recalls; • Fines, warning letters, untitled letters or other enforcement-related letters or clinical holds on post-approval clinical trials; 21 Table of Contents • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • 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; • Issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
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, among other things: • Imposition of post-marketing studies or clinical trials to assess new safety risks, or restrictions under a REMS program; • Restrictions on the marketing, manufacturing or distribution of the product, complete withdrawal of the product from the market or product recalls; • Fines, warning letters, untitled letters or other enforcement-related letters or clinical holds on post-approval clinical trials; • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • 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; 17 Table of Contents • Issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Solidus ™ (ASO platform) We have built a platform, Solidus™, to discover and develop first- and best-in-class ASOs with high probability of advancement into the clinic. Solidus™ is enabled by our proprietary, computational workflow to discover ASOs with desired drug-like properties to optimize for up/down-regulation, avoidance of toxic motifs and optimization of binding affinity and specificity.
Solidus ™ (ASO platform) We have built Solidus™ to discover and develop first- and best-in-class ASOs with high probability of advancement into the clinic. Solidus™ is enabled by our proprietary, computational workflow to discover ASOs with desired drug-like properties to optimize for up/down-regulation, avoidance of toxic motifs and optimization of binding affinity and specificity.
We leverage translational tools to both confirm pharmacodynamic effects of our drug product candidates in the brain and establish on-mechanism effects. Our programs utilize target-specific electroencephalogram, or EEG, endpoints to serve as robust markers of pharmacological engagement of the drug target and novel transgenic animal models to assess the therapeutic activity of our molecules.
We leverage translational tools to both confirm pharmacodynamic, or PD, effects of our drug product candidates in the brain and establish on-mechanism effects. Our programs utilize target-specific electroencephalogram, or EEG, endpoints to serve as robust markers of pharmacological engagement of the drug target and novel transgenic animal models to assess the therapeutic activity of our molecules.
Most countries outside of the United States, including the European Union, or the EU, require that clinical trial applications be submitted to and approved by the local regulatory authority for each clinical study.
Most countries outside of the United States, including the European Union, or the EU, require that clinical trial applications, or CTAs, be submitted to and approved by the local regulatory authority for each clinical study.
While the Clinical Trials Directive required a separate clinical trial application, or CTA, to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
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, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.
A REMS is a safety strategy to manage a known or potential serious risk associated with a drug and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.
While standard-of-care sodium channel blockers inhibit persistent sodium current, they also block peak sodium current at therapeutic concentrations, which can cause significant adverse events, or AEs, such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI, resulting in subpar outcomes for patients and significant need for better therapeutic options.
While standard-of-care sodium channel blockers inhibit persistent sodium current, they also block peak sodium current at therapeutic concentrations, which can cause significant AEs, such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI, resulting in subpar outcomes for patients and significant need for better therapeutic options.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply now or in the future to our operations or the operations of our partners.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including the Health Insurance Portability and Accountability Act of 1996 and regulations promulgated thereunder, or HIPAA, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply now or in the future to our operations or the operations of our partners.
Ulixacaltamide Phase 3 Essential3 trial Essential3 is a decentralized, Phase 3, multi-study, clinical trial evaluating the safety and efficacy of 60 mg of ulixacaltamide in ET.
Ulixacaltamide Phase 3 Essential3 Program Essential3 is a decentralized, Phase 3, multi-study, clinical trial evaluating the safety and efficacy of 60 mg of ulixacaltamide in ET.
Moreover, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminated the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, beginning January 1, 2024. The rebate was previously capped at 100% of a drug's average manufacturer price.
Moreover, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, beginning January 1, 2024. The rebate was previously capped at 100% of a drug's average manufacturer price.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. Cerebrum ™ (small molecule platform) We have built a platform, Cerebrum™, which is enabled by innovative computational and experimental tools, to discover and develop first- and best-in-class CNS small molecule therapies.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. Cerebrum ™ (small molecule platform) We have built Cerebrum™, enabled by innovative computational and experimental tools, to discover and develop first- and best-in-class CNS small molecule therapies.
Recent investigations have led to the identification of over 500 genes that are causal or risk factors for different forms of epilepsy, providing the field with an outsized understanding of epilepsy genetics relative to other diseases such as Alzheimer’s disease, amyotrophic lateral sclerosis, or ALS, and many others.
Recent investigations have led to the identification of over 900 genes that are causal or risk factors for different forms of epilepsy, providing the field with an outsized understanding of epilepsy genetics relative to other diseases such as Alzheimer’s disease, amyotrophic lateral sclerosis, or ALS, and many others.
We pursue the development of candidates that address the treatment needs of patients, caregivers and the treating community, including targeting the underlying disease pathology versus just symptom management. We focus on clinical endpoints that offer a clear connection between pharmacodynamic effects and clinical measures that are meaningful to patients, physicians and regulatory agencies.
We pursue the development of candidates that address the treatment needs of patients, caregivers and the treating community, including targeting the underlying disease pathology versus just symptom management. We focus on clinical endpoints that offer a clear connection between PD effects and clinical measures that are meaningful to patients, physicians and regulatory agencies.
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medical products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 27 Table of Contents
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 26 Table of Contents
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available through the “Investors + Media” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available through the “Investors + Media” portion of our website free of charge as soon as reasonably practicable after we electronically 25 Table of Contents file such material with, or furnish it to, the SEC.
A second patent family is directed to certain pharmaceutical formulations of ulixacaltamide and methods of use in treating disorders such as essential tremor. Two U.S. patents have issued in this patent family, and expire in 2040, and this family remains pending in multiple jurisdictions of potential commercial interest.
A second patent family is directed to certain pharmaceutical formulations of ulixacaltamide and methods of use in treating disorders such as essential tremor. Three U.S. patents have issued in this patent family, and expire in 2040, and this family remains pending in multiple jurisdictions of potential commercial interest.
These patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases, such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2043. GABA A receptor positive allosteric modulators We own five patent families directed to GABA A receptor positive allosteric modulators.
These patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases, such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2043. GABA A receptor positive allosteric modulators We own four patent families directed to GABA A receptor positive allosteric modulators.
T-type Calcium channel blockers We own twelve patent families directed to T-type Calcium channel blockers. One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including ulixacaltamide. This patent family has issued in many major pharmaceutical markets and is pending in others and expires in 2029.
T-type Calcium channel blockers We own fourteen patent families directed to T-type Calcium channel blockers. One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including ulixacaltamide. This patent family has issued in many major pharmaceutical markets and is pending in others and expires in 2029.
Post-approval requirements Following approval of a new prescription drug product, the manufacturer and the approved drug are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring and recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
Post-approval requirements Following approval of a drug product, the manufacturer and the approved drug are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring and recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
As a last line therapy, a small subset of patients will opt for invasive procedures such as gamma knife and MRI guided focused ultrasound thalamotomy, where part of the thalamus involved in the cerebello-thalamo-cortical, or CTC, circuit is ablated, or deep brain stimulation, or DBS, where an electrode is implanted to deliver therapeutic electrical stimulation to the 9 Table of Contents thalamus.
As a last line therapy, a small subset of patients will opt for invasive procedures such as gamma knife and MRI guided focused ultrasound thalamotomy, where part of the thalamus involved in the cerebello-thalamo-cortical, or CTC, circuit is ablated, or deep brain stimulation, or DBS, where an electrode is implanted to deliver therapeutic electrical stimulation to the thalamus.
During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) NDA submitted by another company for a generic or follow-on version of the protected drug product, respectively, where the applicant does not own or have a legal right of reference to all the data required for approval.
During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) NDA submitted by another company for a 16 Table of Contents generic or follow-on version of the protected drug product, respectively, where the applicant does not own or have a legal right of reference to all the data required for approval.
In-vivo studies of PRAX-562 have demonstrated dose-dependent block of seizures up to complete inhibition of seizure activity in SCN2A, SCN8A and other DEE mouse models. PRAX-562 has been generally well-tolerated in three Phase 1 studies and has demonstrated biomarker changes indicative of voltage-gated sodium channel, or NaV channel, blocking effects.
In-vivo studies of relutrigine have demonstrated dose-dependent block of seizures up to complete inhibition of seizure activity in SCN2A, SCN8A and other DEE mouse models. Relutrigine has been generally well-tolerated in three Phase 1 studies and has demonstrated biomarker changes indicative of voltage-gated sodium channel, or NaV channel, blocking effects.
Clinical trials Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Clinical trials 12 Table of Contents Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Fast track, breakthrough therapy and priority review designations The FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.
Fast track, breakthrough therapy and priority review designations 15 Table of Contents The FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the NDA in condition for approval, including requests for additional information or clarification. If a CRL is issued, the applicant may choose to either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the NDA in condition for approval, including requests for additional information or clarification. If a CRL is 14 Table of Contents issued, the applicant may choose to either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
One patent family discloses and claims salts and polymorphs of PRAX-114. Two patents are granted in the United States, which expire in 2039. A second patent family is directed to alternative salt forms of PRAX-114, and a U.S. patent has issued, which expires in 2042.
One patent family discloses and claims salts and polymorphs of PRAX-114. Two patents are granted in the United States, which expire in 2039. A second patent family is directed to alternative salt forms of PRAX-114, and a U.S. patent has 9 Table of Contents issued, which expires in 2042.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or 16 Table of Contents may not result in FDA authorization to begin a clinical trial.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
These agencies regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drug products.
These agencies regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, 11 Table of Contents storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drug products.
The aforementioned EU rules are generally applicable in the European Economic Area, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.
The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.
A third family is directed to titration methods of using ulixacaltamide and expires in 2041. A fourth patent family is directed to certain analog compounds of ulixacaltamide and expires in 2040. A fifth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with ulixacaltamide and expires in 2043.
A third family is directed to titration methods of using ulixacaltamide and expires in 2041. A fourth patent family is directed to certain analog compounds 8 Table of Contents of ulixacaltamide and expires in 2040. A fifth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with ulixacaltamide and expires in 2043.
A second family discloses other persistent sodium current blockers and generically claims PRAX-562, as well as methods of treating diseases such as pediatric epilepsy. This patent family is pending in multiple jurisdictions and expires in 2037.
A second family discloses other persistent sodium current blockers and generically claims relutrigine, as well as methods of treating diseases such as pediatric epilepsy. This patent family is pending in multiple jurisdictions and expires in 2037.
We expect to rely on third parties for our manufacturing processes and the production of all clinical supply drug substance and drug product and currently expect to 15 Table of Contents continue to do so for commercial supplies of our product candidates, if approved.
We expect to rely on third parties for our manufacturing processes and the production of all clinical supply drug substance and drug product and currently expect to continue to do so for commercial supplies of our product candidates, if approved.
Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.
Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted.
Laws and regulations governing international operations If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
Laws and regulations governing international operations 24 Table of Contents If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
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 increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025).
We expect these tools, along with rigorous preclinical pharmacokinetics, or PK, and pharmacodynamic characterization of our molecules will position us to more efficiently translate preclinical findings into clinical utility. 8 Table of Contents 3. Pursue efficient, rigorous clinical development paths to proof-of-concept in humans .
We expect these tools, along with rigorous preclinical pharmacokinetics, or PK, and PD characterization of our molecules will position us to more efficiently translate preclinical findings into clinical utility. 2 Table of Contents 3. Pursue efficient, rigorous clinical development paths to proof-of-concept in humans .
While we believe that our technology, knowledge, experience and scientific personnel provide us with competitive advantages, we face substantial competition from many different sources, including large and small pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private institutions.
While we believe that our technology, knowledge, experience and scientific personnel provide us with competitive advantages, we face substantial competition from many different sources, 7 Table of Contents including large and small pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private institutions.
Upon the occurrence of one of these three payment triggers, both the Initial Interest Amount and Second Interest Amount are due and payable to Ionis. In the second quarter of 2023, Ionis earned the Additional Milestone fee of $5.0 million, as well as the Initial Interest Amount of $1.9 million.
Upon the occurrence of one of these three payment triggers, both the Initial Interest Amount and Second Interest Amount are due and payable to Ionis. In the second quarter of 2023, Ionis earned the Additional Milestone fee of $5.0 million, as well as the Initial Interest Amount of $1.9 million. The $6.9 million milestone fee was paid in July 2023.
The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a New Drug Application, or NDA, plus the time between the submission date of an NDA and the approval of that application.
The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a NDA, plus the time between the submission date of an NDA and the approval of that application.
The ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars; expanded the types of entities eligible for the 340B drug discount program; introduced 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; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; established annual fees and taxes on manufacturers of certain branded prescription drugs; and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off 22 Table of Contents negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
The ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars; expanded the types of entities eligible for the 340B drug discount program; introduced 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; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; established annual fees and taxes on manufacturers of certain branded prescription drugs; and created a new Medicare Part D coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Importantly, a dedicated contact and rapporteur from the Committee for Medicinal Products for Human Use is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.
Importantly, a dedicated contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act of 2018, or CCPA, the California Privacy Rights Act of 2020, or CPRA, and the General Data Protection Regulation, or GDPR, and the U.K.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, collectively, the CCPA, and the General Data Protection Regulation, or GDPR, and the U.K.
A third family is directed to pharmaceutical formulations of PRAX-562, methods of use in treating diseases such as pediatric epilepsy, cephalgia, short-lasting unilateral neuralgiform headache attacks with conjunctival injection, or SUNCT, and tearing and short-lasting unilateral neuralgiform headache attacks with cranial autonomic symptoms, or SUNA, and 13 Table of Contents methods of making PRAX-562, and expires in 2040.
A third family is directed to pharmaceutical formulations of relutrigine, methods of use in treating diseases such as pediatric epilepsy, cephalgia, short-lasting unilateral neuralgiform headache attacks with conjunctival injection, or SUNCT, and tearing and short-lasting unilateral neuralgiform headache attacks with cranial autonomic symptoms, or SUNA, and methods of making relutrigine, and expires in 2040.
In this patent family, PRAX-562 is covered by a patent that has granted in the United States, and patent applications pending in other potentially commercially relevant jurisdictions, which expire in 2039. In this same patent family, PRAX-628 is covered by two granted U.S. patents that will expire in 2039.
In this patent family, relutrigine is covered by a patent that has granted in the United States, and patent applications pending in other potentially commercially relevant jurisdictions, which expire in 2039. In this same patent family, vormatrigine is covered by two granted U.S. patents that will expire in 2039.
The first has claims directed to a method of treating SCN2A gain of function neurological diseases using certain ASOs. This patent family is pending in the United States and expires in 2041. The second is directed to methods of treating SCN2A-related disorders using SCN2A inhibitors and expires in 2043. KCNT1 blockers We own sixteen patent families directed to KCNT1 blockers.
We own seven patent families directed to our elsunersen program. The first has claims directed to a method of treating SCN2A gain of function neurological diseases using certain ASOs. This patent family is pending in the United States and expires in 2041. The second is directed to methods of treating SCN2A-related disorders using SCN2A inhibitors and expires in 2043.
One patent family discloses and claims certain persistent sodium current blockers, including PRAX-562 and PRAX-628, and methods of use in treating diseases such as epilepsy (including pediatric epilepsy), as well as migraine and pain.
One patent family discloses and claims certain persistent sodium current blockers, including relutrigine and vormatrigine, and methods of use in treating diseases such as epilepsy (including pediatric epilepsy), as well as migraine and pain.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers.
Thus, the ACA will remain in effect in its current form. In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers.
PRAX-562 has received Orphan Drug Designation, or ODD, and Rare Pediatric Disease Designation, or RPD, from the FDA, and ODD from the European Medicines Agency, or EMA, for the treatment of SCN2A-DEE and SCN8A-DEE, respectively.
Relutrigine has received Orphan Drug Designation, or ODD, and Rare Pediatric Disease Designation, or RPD, from the FDA, and ODD from the European Medicines Agency, or EMA, for the treatment of SCN2A-DEE and SCN8A-DEE, respectively. Relutrigine has also received RPD from the FDA for the treatment of Dravet Syndrome.
Congress has only authorized the Rare Pediatric 19 Table of Contents Disease Priority Review Voucher program until September 30, 2024. Consequently, sponsors of marketing applications approved after that date will not receive the voucher unless Congress reauthorizes the program.
Congress has only authorized the Rare Pediatric Disease Priority Review Voucher program until December 20, 2024. Consequently, sponsors of marketing applications approved after that date will not receive the voucher unless Congress reauthorizes the program.
Additionally, we have an exclusive collaboration and license agreement with Tenacia Biotechnology (Shanghai) Company, Ltd., a China-based portfolio company of Bain Capital, to develop and commercialize ulixacaltamide for the treatment of ET in China, Hong Kong, Macau and Taiwan.
Additionally, we have an exclusive collaboration and license agreement with Tenacia Biotechnology (Shanghai) Company, Ltd., a China-based portfolio company of Bain Capital, to develop and commercialize ulixacaltamide for the treatment of ET in China, Hong Kong, Macau and Taiwan. Ulixacaltamide has the potential to be developed for other indications, including Parkinson’s disease.
Since its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
Since its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed the most recent judicial challenge to the 18 Table of Contents ACA brought by several states without specifically ruling on the constitutionality of the ACA.
SCN8A-DEE SCN8A-DEE is a rare DEE caused by a gain-of-function variant in the SCN8A gene. Similar to SCN2A-DEE, patients with SCN8A-DEE suffer from recurrent, typically drug-resistant seizures, which start as early as the first day of life. The seizures can be of multiple different types, up to dozens per day, with poor response to current treatment options.
Similar to SCN2A-DEE, patients with SCN8A-DEE suffer from recurrent, typically drug-resistant seizures, which start as early as the first day of life. The seizures can be of multiple different types, up to dozens per day, with poor response to current treatment options.
As part of the RogCon Agreement, we agreed to provide up-front consideration of $2.1 million, consisting of a $1.0 million deposit, $0.7 million in cash reimbursements for certain historical costs previously incurred by RogCon and $0.4 million for the retirement of existing loan balances as of September 11, 2019. 14 Table of Contents Subsequent to September 11, 2019, we will reimburse RogCon for its out-of-pocket costs incurred for activities performed under the RogCon Agreement.
As part of the RogCon Agreement, we agreed to provide up-front consideration of $2.1 million, consisting of a $1.0 million deposit, $0.7 million in cash reimbursements for certain historical costs previously incurred by RogCon and $0.4 million for the retirement of existing loan balances as of September 11, 2019.
Persistent sodium current blockers We own fifteen patent families directed to persistent sodium current blockers, including a patent family that relates to PRAX-562 and PRAX-628, two additional patent families that relate to PRAX-562 program, and the remaining patent families related to other persistent sodium current blockers.
Persistent sodium current blockers We own fifteen patent families directed to persistent sodium current blockers, including a patent family that relates to relutrigine and vormatrigine, two additional patent families that relate to relutrigine, and the remaining patent families relate to other persistent sodium current blockers.
A ninth patent family is directed to methods of treatment using ulixacaltamide and expires in 2044.The remaining patent families are directed to other TTCC blockers of various core structures and methods of use in treating diseases such as movement disorders, which expire in 2039 and 2040.
The remaining patent families are directed to other TTCC blockers of various core structures and methods of use in treating diseases such as movement disorders, which expire in 2039 and 2040.
In March 2016, the European Medicines Agency, or EMA, launched the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs.
In 21 Table of Contents March 2016, the EMA launched an initiative, the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs.
An approval letter authorizes commercial marketing of the drug with specific prescribing information and for specific indications. A CRL will describe all of the deficiencies in the NDA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections and/or reviewing proposed labeling.
A CRL will describe all of the deficiencies in the NDA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections and/or reviewing proposed labeling.
To date, Cerebrum™ has generated three clinical stage product candidates – ulixacaltamide (formerly known as PRAX-944), PRAX-562 and PRAX-628, and has the potential to continue delivering first- and best-in-class orally available therapies for genetic CNS targets.
To date, Cerebrum™ has generated three clinical stage product candidates, ulixacaltamide (formerly known as PRAX-944), vormatrigine (formerly known as PRAX-628) and relutrigine (formerly known as PRAX-562), as well as PRAX-020 which has been in-licensed by UCB Biopharma SRL, or UCB. Cerebrum™ has the potential to continue delivering first- and best-in-class orally available therapies for genetic CNS targets.
The design of the IND-enabling toxicology study was prepared and mutually agreed to by us and Ionis. We are obligated to reimburse any out-of-pocket costs incurred by Ionis related to research activities, identification of a development candidate and conducting IND-enabling studies.
We are obligated to reimburse any out-of-pocket costs incurred by Ionis related to research activities, identification of a development candidate and conducting IND-enabling studies.
Part 1 of the EMBRAVE study was a 21-week open label cohort, in which participants received elsunersen for up to 13 weeks, designed to determine the safety and tolerability of intrathecal delivery of elsunersen. Dosing for Part 1 of the EMBRAVE study was completed in the fourth quarter of 2023. No treatment related AEs or SAEs were observed.
EMBRAVE study Part 1 of the EMBRAVE study was a 21-week open label cohort, in which participants received elsunersen for up to 13 weeks, designed to determine the safety and tolerability of intrathecal delivery of elsunersen. No treatment related AEs or SAEs were observed. Additionally, patients observed a marked reduction in seizures and increase in seizure-free days.
Sales of any products for which we receive regulatory approval for commercial sale 23 Table of Contents will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.
Coverage, pricing and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval. Sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.
Essential Tremor ET is the most common movement disorder with a prevalence of approximately 7 million patients in the United States alone, including more than two million diagnosed patients, one million of whom are actively treated for their ET.
Results of the Essential1 study informed the design of the Phase 3 Essential3 program. Essential Tremor 3 Table of Contents ET is the most common movement disorder with a prevalence of approximately seven million patients in the United States alone, including more than two million diagnosed patients, one million of whom are actively treated for their ET.
A second patent family is directed to methods of treating SCN1A encephalopathy using ASOs targeting SCN2A and expires in 2039. The other in-licensed patent family is owned by Ionis Pharmaceuticals, Inc., and is directed to compositions of matter of PRAX-222. This family expires in 2041. We own two patent families directed to our PRAX-222 program.
A second patent family is directed to methods of treating SCN1A encephalopathy using ASOs targeting SCN2A and expires in 2039. The other in-licensed patent family is owned by Ionis Pharmaceuticals, Inc., and is directed to compositions of matter of elsunersen. This family expires in 2041 and one U.S. patent has issued in this family.
In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition or requirement of approval of an NDA. 17 Table of Contents Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Other patent applications cover processes for making related to PRAX-114 and methods of use in treating diseases (including the use of combination formulations), such as epilepsy, major depressive disorder, musculoskeletal conditions, motor disorder or essential tremor, which expire from 2042 to 2043.
Other patent applications cover methods of use in treating diseases (including the use of combination formulations), such as epilepsy, musculoskeletal conditions, motor disorder or essential tremor, which expire from 2042 to 2043. PCDH19 We own one patent family directed to compositions and methods for the treatment of PCDH19 related disorders, which expires in 2042.
Focal Epilepsy Focal epilepsy is the most common type of epilepsy, accounting for approximately 60% of all cases. In the United States alone, it is estimated that focal epilepsy affects approximately two million people. Focal epilepsy is characterized by seizures that originate in one side or area of the brain and affects one side of the body.
Common Epilepsies (Focal Onset Seizures and Generalized Epilepsy) An estimated 3.5 million people in the United States suffer from common epilepsies, with FOS being the most common type of epilepsy, accounting for approximately 60% of all cases. FOS are characterized by seizures that originate in one side or area of the brain and affects one side of the body.
Marketing application submission and FDA review and approval Assuming successful completion of the required clinical testing, the results of preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable deterioration over their shelf life. 13 Table of Contents Marketing application submission and FDA review and approval Assuming successful completion of the required clinical testing, the results of preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Our approach to build and progress a robust clinical pipeline provides a platform for exploration and innovation. At Praxis, we are all involved in building the company together, and as a flat and agile organization, each employee has an impact.
Our people, the patient communities we serve and their caregivers and families are at the forefront of our efforts. Our approach to building a robust clinical pipeline provides a forum for exploration and innovation where we are all involved in building the company together. As a flat and agile organization, each employee has an impact.
Fundamentals of brain electrophysiology and mechanisms dictating seizure genesis are conserved across species and, consequently, animal models of seizures and epilepsy enable a clinically predictive and therefore efficient drug development path.
Hyperexcitability can lead to abnormal synchronization of neurons and neuronal circuits, which is the electrical basis of a seizure. Fundamentals of brain electrophysiology and mechanisms dictating seizure genesis are conserved across species and, consequently, animal models of seizures and epilepsy enable a clinically predictive and therefore efficient drug development path.
For example, the FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.
U.S. drug product marketing exclusivity Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications. For example, the FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.
While these procedures are generally effective, they are associated with significant side effects and risk. Therefore, many patients who are eligible elect not to have these procedures. In totality, there is significant unmet need for an effective and tolerable pharmacotherapy targeted for ET.
While these procedures are generally effective, they are associated with significant side effects and risk. Therefore, many patients who are eligible elect not to have these procedures.
In vitro, PRAX-628 has demonstrated superior selectivity for disease-state NaV channel hyperexcitability. In vivo studies of PRAX-628 have demonstrated unprecedented potency in the maximal electroshock seizure, or MES, model, a highly predictive translational model for efficacy in focal epilepsy.
Preclinical data demonstrates vormatrigine is differentiated from standard of care, with the potential to be best-in-class for focal epilepsy. In vitro, vormatrigine has demonstrated superior selectivity for disease-state NaV channel hyperexcitability. In vivo studies of vormatrigine have demonstrated unprecedented potency in the maximal electroshock seizure, or MES, model, a highly predictive translational model for efficacy in focal epilepsy.
The platform is uniquely positioned to continue discovering and advancing other new ASOs for novel genetic CNS targets. 7 Table of Contents Below is a summary of our portfolio: *PRAX-020 (KCNT1) is a research collaboration with UCB Biopharma SRL +PRAX-080 (PCDH19), PRAX-090 (SYNGAP1) & PRAX-100 (SCN2A-LoF) ASOs are a collaboration with The Florey Institute of Neuroscience and Mental Health Our Strategy & Approach to Drug Development We leverage the genetics of epilepsy as a gateway for CNS drug discovery and development.
The platform is uniquely positioned to continue discovering and advancing other new ASOs for novel genetic CNS targets. 1 Table of Contents Below is a summary of our portfolio: ^PRAX-020 (KCNT1) has been in-licensed by UCB Biopharma SRL Our Strategy & Approach to Drug Development We leverage the genetics of epilepsy as a gateway for CNS drug discovery and development.
For clinical supply, we rely on CDMOs to manufacture drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practices, or cGMP.
We currently source all of our non-clinical and clinical compound supply through third-party contract development and manufacturing organizations, or CDMOs. For clinical supply, we rely on CDMOs to manufacture drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practices, or cGMP.
Either party may terminate the RogCon Agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior written notice to RogCon. Upon termination by either party, all rights and licenses granted by RogCon to us will revert back to RogCon.
Either party may terminate the RogCon Agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior written notice to RogCon.
Any product candidates that we successfully develop and commercialize will compete with currently approved therapies and new therapies that may become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, convenience, cost, effectiveness of promotional support and intellectual property protection of our products.
Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, convenience, cost, effectiveness of promotional support and intellectual property protection of our products.
We expense these costs as incurred as research and development. Expenses incurred for all periods presented were not material. Additionally, RogCon has agreed to certain defined exclusivity obligations.
Subsequent to September 11, 2019, we will reimburse RogCon for its out-of-pocket costs incurred for activities performed under the RogCon Agreement. We expense these costs as incurred as research and development. Expenses incurred for all periods presented were not material. Additionally, RogCon has agreed to certain defined exclusivity obligations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, both our current and future U.S. federal net operating losses and U.S. federal tax credits may be subject to limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if we undergo an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in our equity ownership by certain stockholders or groups of stockholders over a rolling three-year period.
Biggest changeUnder Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders or groups of stockholders over a rolling three-year period, the corporation’s ability to use its pre-change U.S. federal net operating losses and U.S. federal tax credits to offset its post-change U.S. federal taxable income or U.S. federal income tax liabilities may be limited.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.
Collaborations involving our research programs, or any 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 research programs, 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 or research programs that results 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 or research programs; • 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 control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our products candidates; • 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 research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide to not 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 program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs 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 may restrict us from researching, developing or commercializing certain products or technologies without their involvement; • 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; 72 Table of Contents • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may grant sublicenses to our technology or product candidates or undergo a change of control and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how or intellectual property of the collaborator relating to our products, product candidates or research programs; • 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; • if our collaborators do not satisfy their obligations under our agreements with them, or if they terminate our collaborations with them, we may not be able to develop or commercialize product candidates as planned; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our research programs, or any 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 research programs, 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 or research programs that results 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 or research programs; • 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 control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our products candidates; 70 Table of Contents • 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 research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide to not 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 program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs 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 may restrict us from researching, developing or commercializing certain products or technologies without their involvement; • 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 grant sublicenses to our technology or product candidates or undergo a change of control and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how or intellectual property of the collaborator relating to our products, product candidates or research programs; • 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; • if our collaborators do not satisfy their obligations under our agreements with them, or if they terminate our collaborations with them, we may not be able to develop or commercialize product candidates as planned; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Food and Drug Administration, or the FDA, and comparable foreign regulatory authorities; • delays in obtaining approval from independent Institutional Review Boards, or IRBs, or ethics committees at the clinical sites we intend to utilize in our clinical trials; • delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; delays in reaching agreement on acceptable terms with prospective contract research organizations, or 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; • delays in identifying, recruiting and training suitable clinical investigators; • delays in recruiting suitable patients to participate in our clinical trials; • 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 authorities; • developments on trials conducted by competitors for related technology that raises 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 in recruiting, screening and enrolling patients and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • delays caused by operational issues at clinical sites or the use of a decentralized clinical trial model; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties or us to adhere to clinical trial protocols; 33 Table of Contents • failure to perform in accordance with the FDA’s or any other regulatory authority’s Good Clinical Practice, or 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, or occurrence of adverse events in trials of the same class of agents conducted by other companies; • changes to the clinical trial protocols; • clinical sites deviating from trial protocol or dropping out of a trial; • 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; • selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; • the cost of clinical trials of our product candidates being greater than we anticipated; • 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 contract development and manufacturing organization, or CDMO, and delays or failure by our CDMOs or us to make any necessary changes to such manufacturing process; and • third parties being unwilling or unable to satisfy their contractual obligations to us.
Food and Drug Administration, or the FDA, and comparable foreign regulatory authorities; • delays in obtaining approval from independent Institutional Review Boards, or IRBs, or ethics committees at the clinical sites we intend to utilize in our clinical trials; • delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; delays in reaching agreement on acceptable terms with prospective contract research organizations, or 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; • delays in identifying, recruiting and training suitable clinical investigators; • delays in recruiting suitable patients to participate in our clinical trials; • 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 authorities; • developments on trials conducted by competitors for related technology that raises FDA or foreign regulatory authority concerns about risk to patients of the technology broadly, or if the FDA or a foreign 32 Table of Contents regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; • delays in recruiting, screening and enrolling patients and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • delays caused by operational issues at clinical sites or the use of a decentralized clinical trial model; • 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, or 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, or occurrence of adverse events in trials of the same class of agents conducted by other companies; • changes to the clinical trial protocols; • clinical sites deviating from trial protocol or dropping out of a trial; • 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; • selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; • the cost of clinical trials of our product candidates being greater than we anticipated; • 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 contract development and manufacturing organization, or CDMO, and delays or failure by our CDMOs or us to make any necessary changes to such manufacturing process; and • third parties being unwilling or unable to satisfy their contractual obligations to us.
In addition to the factors discussed in this “Risk Factors” section, factors that may affect the trading price of our common stock include: • the commencement, enrollment, completion or results of our current clinical trials of our product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of any of our product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; • changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; 79 Table of Contents • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section, factors that may affect the trading price of our common stock include: • the commencement, enrollment, completion or results of our current clinical trials of our product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of any of our product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; 77 Table of Contents • changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these 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 result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or may be held invalid or unenforceable as a result of legal challenges by third parties; 58 Table of Contents • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past, and are likely to continue to do so in the future.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; 56 Table of Contents • 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 result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or may be held invalid or unenforceable as a result of legal challenges by third parties; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past, and are likely to continue to do so in the future.
A medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) 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 (3) 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 product will be of significant benefit to those affected by the condition.
A medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) 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 the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) 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 product will be of significant benefit to those affected by the condition.
Our ability to generate revenue and achieve profitability depends on many factors, including: • initiating and successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals for product candidates for which we successfully complete clinical development and clinical trials, if any; • 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 commercial demand of 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; • launching and successfully commercializing product candidates for which we obtain regulatory approval, if any, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; 30 Table of Contents • obtaining and maintaining an adequate price for our product candidates in the countries where our products are commercialized, if any; • obtaining adequate reimbursement for our product candidates from payors; • obtaining market acceptance of our product candidates as viable treatment options; • addressing any competing technological and market developments; • receiving milestone and other payments under any future collaboration arrangements; • 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 on many factors, including: • initiating and successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals for product candidates for which we successfully complete clinical development and clinical trials, if any; • 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 commercial demand of 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; • launching and successfully commercializing product candidates for which we obtain regulatory approval, if any, 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 in the countries where our products are commercialized, if any; 29 Table of Contents • obtaining adequate reimbursement for our product candidates from payors; • obtaining market acceptance of our product candidates as viable treatment options; • addressing any competing technological and market developments; • receiving milestone and other payments under any future collaboration arrangements; • 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.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it; 48 Table of Contents • the federal Physician Payments Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician providers including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous U.S. state, local and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and other relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of biopharmaceutical sales representatives.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it; • the federal Physician Payments Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician providers including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous U.S. state, local and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and other relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of biopharmaceutical sales representatives.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States, including our ability to prosecute or maintain patents in Russia due to the sanctions imposed by the United States and other countries on Russia as a result of Russia’s invasion of Ukraine and our ability to enforce patents due to Russia's March 2022 decree that allows the use of inventions, utility models and industrial designs that are held by intellectual property owners from "unfriendly countries," including the United States, without the consent of or payment of any compensation to such owners; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs and trade barriers; • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is more common than in the United States; • difficulties associated with staffing and managing international operations, including differing labor relations • potential liability under the Foreign Corrupt Practices Act, U.K.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States, including our ability to prosecute or maintain patents in Russia due to the sanctions imposed by the United States and other countries on Russia as a result of Russia’s invasion of Ukraine and our ability to enforce patents due to Russia's March 2022 decree that allows the use of inventions, utility models and industrial designs that are held by intellectual property owners from "unfriendly countries," including the United States, without the consent of or payment of any compensation to such owners; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs and trade barriers; • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is more common than in the United States; 72 Table of Contents • difficulties associated with staffing and managing international operations, including differing labor relations • potential liability under the Foreign Corrupt Practices Act, U.K.
We anticipate that our expenses will increase substantially if and as we: • continue to develop and conduct clinical trials, including in expanded geographies such as Europe, for our product candidates; • initiate and continue research and development, including preclinical, clinical and discovery efforts for any future product candidates; • seek to identify additional product candidates; • seek regulatory approvals for our product candidates that may successfully complete clinical development; • add operational, financial and management information systems and personnel, including personnel to support our product candidate development and help us comply with our obligations as a public company; • hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel; • maintain, expand and protect our intellectual property portfolio; • establish sales, marketing, distribution, manufacturing, supply chain and other commercial infrastructure in the future to commercialize various products for which we may obtain regulatory approval; • add equipment and physical infrastructure to support our research and development; and • acquire or in-license other product candidates and technologies.
We anticipate that our expenses will increase substantially if and as we: • continue to develop and conduct clinical trials, including in expanded geographies internationally, for our product candidates; • initiate and continue research and development, including preclinical, clinical and discovery efforts for any future product candidates; • seek to identify additional product candidates; • seek regulatory approvals for our product candidates that may successfully complete clinical development; • add operational, financial and management information systems and personnel, including personnel to support our product candidate development and help us comply with our obligations as a public company; • hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel; • maintain, expand and protect our intellectual property portfolio; • establish sales, marketing, distribution, manufacturing, supply chain and other commercial infrastructure in the future to commercialize various products for which we may obtain regulatory approval; • add equipment and physical infrastructure to support our research and development; and • acquire or in-license other product candidates and technologies.
Concerns over our privacy practices, whether actual or unfounded, could damage our reputation and brand and deter users, advertisers and partners from using our products and services. Any of these occurrences could seriously harm our business. Risks Related to Tax Laws Legislation or other changes in tax law could adversely affect our business and financial condition.
Concerns over our privacy practices, whether actual or unfounded, could damage our reputation and brand and deter users, advertisers and partners from using our products and services. Any of these occurrences could seriously harm our business. Risks Related to Tax Laws Legislation or other changes in tax laws could adversely affect our business and financial condition.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; • the failure of third-party contractors to comply with applicable regulatory requirements; • the failure of the third party to manufacture our product candidates according to our specifications; 70 Table of Contents • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or study drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time and at expected cost due to inflationary impacts, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; • the failure of third-party contractors to comply with applicable regulatory requirements; • the failure of the third party to manufacture our product candidates according to our specifications; • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or study drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time and at expected cost due to inflationary impacts, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
From time to time, we may publicly disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
From time to time, we publicly disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • relative convenience and ease of administration compared to alternative treatments; • perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of our products and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the size of the market for such product candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • the strength of sales, marketing and distribution support; • the timing of any such marketing approval in relation to other product approvals; • any restrictions on concomitant use of other medications; • support from patient advocacy groups; • the ability to obtain sufficient third-party coverage and adequate reimbursement; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • relative convenience and ease of administration compared to alternative treatments; • perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of our products and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; 44 Table of Contents • the size of the market for such product candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • the strength of sales, marketing and distribution support; • the timing of any such marketing approval in relation to other product approvals; • any restrictions on concomitant use of other medications; • support from patient advocacy groups; • the ability to obtain sufficient third-party coverage and adequate reimbursement; and • the prevalence and severity of any side effects.
If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: • infringement and other intellectual property claims, which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; • substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third-party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; • a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third-party licenses its product rights to us, which it is not required to do; • if a license is available from a third-party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross- licenses to intellectual property rights for our products and any license that is 61 Table of Contents available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property; and • redesigning our product candidates or processes so that they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
If a third-party claims that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: • infringement and other intellectual property claims, which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; • substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third-party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; • a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third-party licenses its product rights to us, which it is not required to do; • if a license is available from a third-party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross- licenses to intellectual property rights for our products and any license that is available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property; and • redesigning our product candidates or processes so that they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; 82 Table of Contents • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue convertible preferred stock on terms determined by the board of directors without stockholder approval and which convertible preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue convertible preferred stock on terms determined by the board of directors without stockholder approval and which convertible preferred stock may include rights superior to the rights of the holders of common stock.
Our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws (in each case, as they may be amended from time to time) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
Our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws 81 Table of Contents (in each case, as they may be amended from time to time) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
In the event that we are subject to or affected by 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 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.
Various states, such as California and Massachusetts, have also implemented similar privacy laws and regulations, such as the California Confidentiality of Medical Information Act, or the CMIA, that impose restrictive requirements regulating the use and disclosure of health information and other personally identifiable information.
Various states have also implemented similar privacy laws and regulations, such as the California Confidentiality of Medical Information Act, or the CMIA, that impose restrictive requirements regulating the use and disclosure of health information and other personally identifiable information.
Third-party patents may exist which might be enforced against our current or future proprietary technologies and product candidates, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Third-party patents may exist which might be enforced against our current or future proprietary technologies and product candidates, resulting in either an injunction 57 Table of Contents prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; • the federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs; knowingly making, using or causing to be made or used, a false record or statement material to a false, fictitious or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; • the federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, 47 Table of Contents false, fictitious or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs; knowingly making, using or causing to be made or used, a false record or statement material to a false, fictitious or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to significant sanctions, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be 48 Table of Contents subject to significant sanctions, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.
Unless and until we can generate a substantial amount of revenue from our product candidates, we expect to finance our future cash needs 29 Table of Contents through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources, or any combination of the foregoing.
Unless and until we can generate a substantial amount of revenue from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources, 28 Table of Contents or any combination of the foregoing.
Food and Drug Administration, or the FDA, or other regulatory authorities to perform clinical trials in addition to those that we 28 Table of Contents currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our product candidates.
Food and Drug Administration, or the FDA, or other regulatory authorities to perform clinical trials in addition to those that we 27 Table of Contents currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our product candidates.
Although we have sought consensus with FDA and other regulatory authorities in connection with the design and implementation of our clinical studies, utilizing novel trial endpoints may increase the 34 Table of Contents risk that the FDA and other regulatory authorities will consider the results from such trials, even if successful, insufficient to establish the safety or efficacy of our product candidates, which could require us to conduct additional studies beyond those we currently contemplate for our product candidates.
Although we have sought consensus with FDA and other regulatory authorities in connection with the design and implementation of our clinical studies, utilizing novel trial endpoints may increase the risk that the FDA and other regulatory authorities will consider the results from such trials, even if successful, insufficient to establish the safety or efficacy of our product candidates, which could require us to conduct additional studies beyond those we currently contemplate for our product candidates.
In addition, if our third party manufacturers are not able to optimize their manufacturing processes to increase the product yield for our product candidates, or if they are unable to produce increased amounts of our product candidates while maintaining the quality of the product, then we may not be able to meet the demands of clinical trials or market demands, which could decrease our ability to generate profits and have a material adverse impact on our business and results of operation.
In addition, if our third party manufacturers are not able to optimize their manufacturing processes to increase the product yield for our product candidates, or if they are 69 Table of Contents unable to produce increased amounts of our product candidates while maintaining the quality of the product, then we may not be able to meet the demands of clinical trials or market demands, which could decrease our ability to generate profits and have a material adverse impact on our business and results of operation.
If we cannot successfully negotiate sufficient ownership and commercial rights to any inventions that result from our use of a third-party collaborator’s materials, or if disputes arise with respect to the intellectual property developed with the use of a collaborator’s samples, or data developed in a collaborator’s study, in cases where written agreements either do or do not exist, we may be limited in our ability to capitalize on the market potential of these inventions or developments.
If we cannot successfully negotiate sufficient ownership and commercial rights to any inventions that result from our use of a third-party collaborator’s materials, or if disputes arise with respect to the intellectual property developed with the use of a collaborator’s samples, or data developed 60 Table of Contents in a collaborator’s study, in cases where written agreements either do or do not exist, we may be limited in our ability to capitalize on the market potential of these inventions or developments.
Risks Related to Research and Development and the Biopharmaceutical Industry Risks Related to Preclinical and Clinical Development 31 Table of Contents The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable.
Risks Related to Research and Development and the Biopharmaceutical Industry Risks Related to Preclinical and Clinical Development The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time- 30 Table of Contents consuming, and inherently unpredictable.
The authority for the FDA to award rare pediatric disease priority review vouchers for drug products after September 30, 2024 is currently limited to product candidates that receive rare pediatric disease designation on or prior to September 30, 2024, and the FDA may only award rare pediatric disease priority review vouchers through September 30, 2026.
The authority for the FDA to award rare pediatric disease priority review vouchers for drug products after December 20, 2024 is currently limited to product candidates that receive rare pediatric disease designation on or prior to December 20, 2024, and the FDA may only award rare pediatric disease priority review vouchers through September 30, 2026.
Misconduct by those 75 Table of Contents parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: • regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities; • manufacturing standards; • federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable non-U.S. regulatory authorities; and • laws that require the accurate reporting of financial information or data.
Misconduct by those parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: • regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities; • manufacturing standards; • federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable non-U.S. regulatory authorities; and • laws that require the accurate reporting of financial information or data.
This concentration of ownership control may adversely affect the market price of our common stock by: • delaying, deferring or preventing a change in control; • entrenching our management and the board of directors; • impeding a merger, consolidation, takeover or other business combination involving us that other stockholders may desire; and/or • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
This concentration of ownership control may adversely affect the market price of our common stock by: • delaying, deferring or preventing a change in control; • entrenching our management and the board of directors; • impeding a merger, consolidation, takeover or other business combination involving us that other stockholders may desire; and/or 79 Table of Contents • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
Any 51 Table of Contents failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with current and future laws and regulations could result in government enforcement actions (including the imposition of significant penalties), criminal and/or civil liability for us and our officers and directors, private litigation and/or adverse publicity that negatively affects our business.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with current and future laws and regulations could result in government enforcement actions (including the imposition of significant penalties), criminal and/or civil liability for us and our officers and directors, private litigation and/or adverse publicity that negatively affects our business.
Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a 60 Table of Contents cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements.
Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements.
Risks Related to the Commercialization of our Product Candidates Risks Related to Post-Marketin g Regulatory Requirements Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.
Risks Related to the Commercialization of our Product Candidates 42 Table of Contents Risks Related to Post-Marketin g Regulatory Requirements Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.
If a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur 83 Table of Contents additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition, or results of operations. Item 1B. Unresolved Staff Comments None.
If a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition, or results of operations. Item 1B. Unresolved Staff Comments None.
If a natural disaster, power outage, health epidemic or other event occurred that prevented us from conducting our clinical trials, releasing clinical trial 74 Table of Contents results or delaying our ability to obtain regulatory approval for our product candidates , it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
If a natural disaster, power outage, health epidemic or other event occurred that prevented us from conducting our clinical trials, releasing clinical trial results or delaying our ability to obtain regulatory approval for our product candidates , it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or could increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our 59 Table of Contents business, financial condition, results of operations and prospects.
The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or could increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
If a court of competent jurisdiction finds us liable for any such claims, we may be prohibited from using certain intellectual property, trade secrets and confidential information, effectively blocking our ability to seek patent protection for our inventions and slowing or halting the progress of our clinical development and commercialization efforts.
If a court of competent 59 Table of Contents jurisdiction finds us liable for any such claims, we may be prohibited from using certain intellectual property, trade secrets and confidential information, effectively blocking our ability to seek patent protection for our inventions and slowing or halting the progress of our clinical development and commercialization efforts.
Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to 43 Table of Contents monitor the safety and efficacy of the product candidate.
Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
If a prolonged government shutdown occurs, or if global health concerns hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if global health concerns hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory 52 Table of Contents authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible, or require substantial time and monetary expenditure.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible, or 61 Table of Contents require substantial time and monetary expenditure.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following regulatory approval, if obtained. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following regulatory approval, if obtained. 34 Table of Contents Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
In markets outside of the United States and EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
In markets outside of the United States and EU, reimbursement and healthcare payment 53 Table of Contents systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
Regulations associated with controlled substances govern manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas, recordkeeping, reporting, handling, shipment and disposal. These regulations increase the personnel needs and the expense associated with development and commercialization of product candidates including controlled substances. The DEA, and some states, conduct periodic inspections of registered establishments that handle controlled substances.
Regulations associated with controlled substances govern manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas, recordkeeping, reporting, handling, shipment and disposal. 40 Table of Contents These regulations increase the personnel needs and the expense associated with development and commercialization of product candidates including controlled substances. The DEA, and some states, conduct periodic inspections of registered establishments that handle controlled substances.
Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. In addition, many compounds that have initially showed promise in clinical or earlier stage testing are later found to cause 35 Table of Contents undesirable or unexpected side effects that prevented further development of the compound.
Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. In addition, many compounds that have initially showed promise in clinical or earlier stage testing are later found to cause undesirable or unexpected side effects that prevented further development of the compound.
Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and product candidates and, resultantly, on our business, financial condition, prospects and results of operations. 67 Table of Contents We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.
Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and product candidates and, resultantly, on our business, financial condition, prospects and results of operations. We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.
In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may 32 Table of Contents approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.
Even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful 31 Table of Contents commercialization of that product candidate.
Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion or relocation of our operations, retain key employees, or identify, recruit and train additional qualified personnel.
Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion or relocation of our operations, retain key employees, or identify, recruit and train additional qualified 74 Table of Contents personnel.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized 80 Table of Contents override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Accordingly, to the extent we receive marketing approval for one or more of our product candidates, we and our third-party partners will continue to expend time, money and effort in all areas of regulatory compliance, including promotional and labeling compliance, manufacturing, production, product surveillance and quality control.
Accordingly, to the extent we receive marketing approval for one or more of our product candidates, we and our 43 Table of Contents third-party partners will continue to expend time, money and effort in all areas of regulatory compliance, including promotional and labeling compliance, manufacturing, production, product surveillance and quality control.
We do not currently have the infrastructure or internal capability to manufacture supplies of our product candidates for use in development and commercialization. We rely, and expect to continue to rely, on third-party manufacturers for the production of our product candidates for preclinical studies and clinical trials under the guidance of members of our organization.
We do not currently have the infrastructure or internal capability to manufacture supplies of our product candidates for use in development and commercialization. We rely, and expect to continue to rely, on third-party manufacturers for the production of our product candidates for preclinical studies and clinical trials under the 68 Table of Contents guidance of members of our organization.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and 33 Table of Contents may interpret the information of the treated group more favorably given this knowledge.
If we fail in defending any such claims, or portion of 62 Table of Contents such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business.
If we fail in defending any such claims, or portion of such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business.
Replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully.
Replacing executive officers or 73 Table of Contents other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully.
Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue. 45 Table of Contents Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue. Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
If the breadth or strength of protection provided by the patent applications that we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop new or improved products and threaten our ability to commercialize our product candidates.
If the breadth or strength of protection provided by the patent applications that we hold with respect to our product candidates is threatened, it could 55 Table of Contents dissuade companies from collaborating with us to develop new or improved products and threaten our ability to commercialize our product candidates.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United 49 Table of Contents States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
The provision of benefits or advantages to physicians is governed by the national laws of EU member states, and in respect of the United Kingdom (which is 53 Table of Contents longer a member of the EU), the U.K. Bribery Act of 2010. Infringement of these laws could result in substantial fines and imprisonment.
The provision of benefits or advantages to physicians is governed by the national laws of EU member states, and in respect of the United Kingdom (which is longer a member of the EU), the U.K. Bribery Act of 2010. Infringement of these laws could result in substantial fines and imprisonment.
Our cloud computing services have broad discretion to change and interpret its terms of service and other policies with respect to us, and those actions may be unfavorable to us. Our cloud computing services may also 77 Table of Contents alter how we are able to process data on the platform.
Our cloud computing services have broad discretion to change and interpret its terms of service and other policies with respect to us, and those actions may be unfavorable to us. Our cloud computing services may also alter how we are able to process data on the platform.
Our executive officers, directors and their affiliates and our principal stockholders own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.
Our executive officers and directors and principal stockholders own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.
These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia. If such an event were to occur, it could have a material adverse effect on our business.
These actions could result in abandonment or lapse of our 66 Table of Contents patents or patent applications, resulting in partial or complete loss of patent rights in Russia. If such an event were to occur, it could have a material adverse effect on our business.
Our unused U.S. federal net operating losses generated in tax years beginning before January 1, 2018, and unused state net operating losses subject to expiration, will carry forward to offset future taxable income, if any, until such unused net operating losses expire.
Our U.S. federal net operating losses generated in tax years beginning before January 1, 2018, and state net operating losses subject to expiration, will carry forward to offset future taxable income, if any, until such net operating losses expire. Such U.S. federal and state net operating losses could expire unused and be unavailable to offset future taxable income.
Risks Related to Ongoing Regulatory and Legal Compliance 47 Table of Contents Risks Related to Healthcare and Related Laws Our relationships with healthcare providers and physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
Risks Related to Ongoing Regulatory and Legal Compliance Risks Related to Healthcare and Related Laws Our relationships with healthcare providers and physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
If we encounter difficulties enrolling patients in our future clinical trials, our clinical development activities could be delayed or otherwise adversely affected. 36 Table of Contents We have, and may in the future, experience difficulties in patient enrollment in our clinical trials for a variety of reasons.
If we encounter difficulties enrolling patients in our future clinical trials, our clinical development activities could be delayed or otherwise adversely affected. We have, and may in the future, experience difficulties in patient enrollment in our clinical trials for a variety of reasons.
We may be subject to, or may in the future become subject to, U.S. federal and state, and foreign laws and regulations imposing obligations on how we collect, use, disclose, store and process personal information. 49 Table of Contents Our actual or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business.
We may be subject to, or may in the future become subject to, U.S. federal and state, and foreign laws and regulations imposing obligations on how we collect, use, disclose, store and process personal information. Our actual or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business.
Establishing additional or replacement suppliers for the raw materials used in our product candidates, if required, may not be accomplished quickly. If we are able to find a 71 Table of Contents replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory inspection or approval, which could result in further delay.
Establishing additional or replacement suppliers for the raw materials used in our product candidates, if required, may not be accomplished quickly. If we are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory inspection or approval, which could result in further delay.
If we acquire businesses with promising 73 Table of Contents markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and company culture.
If we acquire businesses with promising markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and company culture.
Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the same condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the 38 Table of Contents same condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care.
In addition, future changes in our stock 78 Table of Contents ownership, many of which are outside of our control, could result in an ownership change. Our net operating losses and tax credits may be similarly limited under state law.
In addition, future changes in our stock ownership, many of which are outside of our control, could result in an ownership change. Our net operating losses and tax credits may be similarly limited under state law.
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 increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025).
Designation of a drug product as a product for a rare 39 Table of Contents pediatric disease does not guarantee that a NDA for such drug product will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved.
Designation of a drug product as a product for a rare pediatric disease does not guarantee that a NDA for such drug product will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved.
An adverse result in any litigation or defense proceedings could put one or more of our patents at 64 Table of Contents risk of being invalidated, held unenforceable or interpreted narrowly, and could put our patent applications at risk of not issuing.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly, and could put our patent applications at risk of not issuing.
Any such changes could result in an increase in our or our shareholders’ tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.
Any such changes could result in an increase in our or our shareholders’ tax liability or require changes in the manner in which we operate in 76 Table of Contents order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.
To the extent such pre-funded warrants are exercised, additional shares of common stock will 80 Table of Contents be issued for nominal or no additional consideration, which could result in substantial dilution to then existing holders of our common stock and will increase the number of shares eligible for resale in the public market.
To the extent such pre-funded warrants are exercised, additional shares of common stock will be issued for nominal or no additional consideration, which could result in dilution to then existing holders of our common stock and will increase the number of shares eligible for resale in the public market.
Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. We received rare pediatric disease designation for PRAX-562 and elsunersen.
Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. We received rare pediatric disease designation for relutrigine and elsunersen.
In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
In the event securities or industry analysts initiate coverage, if one or more of 78 Table of Contents the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, expands the types of entities eligible for the 340B drug discount program; introduced 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; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; established annual fees and taxes on manufacturers of certain branded prescription drugs; and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, expands the types of entities eligible for the 340B drug discount program; introduced 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; increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; established annual fees and taxes on manufacturers of certain branded prescription drugs; and created a new Medicare Part D coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services and our broader enterprise-IT environment; • adoption of various cybersecurity software, including but not limited to cloud-based malware, ransomware and antivirus software, phishing monitoring and artificial intelligence-based anomaly detection; • a security team principally responsible for managing (1) our cybersecurity risk-assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • security audits and a third-party risk assessment process for key service providers, suppliers and vendors.
Biggest changeKey elements of our cybersecurity risk management program include but are not limited to: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • adoption of various cybersecurity software, including but not limited to cloud-based malware, ransomware and antivirus software, phishing monitoring and artificial intelligence-based anomaly detection; • a security team principally responsible for managing (1) our cybersecurity risk-assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; 82 Table of Contents • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • security audits and a third-party risk assessment process for key service providers, suppliers and vendors.
For more information, see the section titled “Risk Factor—Risks Related to Data Privacy and Cybersecurity—Cyberattacks or other failures in our telecommunications or information technology, or IT, systems, or those of our collaborators, contract research organizations, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.” Governance Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other IT risks as well as management’s implementation of our cybersecurity risk management program.
For more information, see the section titled “Risk Factor—Risks Related to Data Privacy and Cybersecurity—Cyberattacks or other failures in our telecommunications or information technology, or IT, systems, or those of our collaborators, contract research organizations, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.” Governance Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and risks, including oversight of management’s implementation of our cybersecurity risk management program.
We have an Executive Compliance Committee consisting of executive officers and members from senior management across the regulatory, quality, legal, finance and people operations functions that supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which includes updates from our internal cybersecurity team, as relevant; review of any threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
We have an Executive Compliance Committee consisting of executive officers and members from senior management across the regulatory, quality, legal, finance and people operations functions that takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which includes updates from our internal cybersecurity team, as relevant; review of any threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
We have an internal cybersecurity team, led by our Chief Financial Officer, who is responsible for (i) managing our overall cybersecurity risk-management program; (ii) assessing and managing our risks from cybersecurity 84 Table of Contents threats; and (iii) overseeing retained cybersecurity consultants and providers for additional external expertise.
We have an internal cybersecurity team, reporting to our Chief Financial Officer, who is responsible for (i) managing our overall cybersecurity risk-management program; (ii) assessing and managing our risks from cybersecurity threats; and (iii) overseeing retained cybersecurity consultants and providers for additional external expertise.
The Audit Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Audit Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, when it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
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This internal team's experience includes over 30 years in cybersecurity implementation, testing and management.
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This internal team is led by our Vice President of Information Technology, who has over 20 years of experience managing cybersecurity, systems architecture and complex data operations for biotechnology and pharmaceutical companies. Additional team members have between 12 to 15 years of experience each in cybersecurity, IT management and cloud architecture.
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The internal team works closely with external network operations and cybersecurity teams who provide 24/7 network operations and cybersecurity review and response capabilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 83 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Our Common Stock As of March 1, 2024, there were approximately four holders of record of shares of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeHolders of Our Common Stock As of February 26, 2025, there were approximately two holders of record of shares of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Recent Sales of Unregistered Securities We did not make any sales of unregistered securities during the three months ended December 31, 2023. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2023.
Recent Sales of Unregistered Securities We did not make any sales of unregistered securities during the three months ended December 31, 2024. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2024.

Item 7. Management's Discussion & Analysis

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

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Biggest changeResearch and Development Expense The following table summarizes our research and development expenses for each period presented, along with the changes in those items (in thousands): Year Ended December 31, Change 2023 2022 Cerebrum™ $ 31,290 $ 92,708 $ (61,418) Solidus™ 18,449 17,500 949 Personnel-related (including stock-based compensation) 29,103 37,392 (8,289) Other indirect research and development expenses 7,924 7,440 484 Total research and development expenses $ 86,766 $ 155,040 $ (68,274) The $68.3 million decrease in research and development expenses was primarily attributable to the following: • $61.4 million decrease in expense related to our Cerebrum™ platform, driven primarily by: ◦ $29.9 million decrease in clinical-related spend for our PRAX-114 program due to our strategic realignment in the second quarter of 2022; ◦ $15.5 million decrease in spend for our PRAX-562 program primarily related to the prior year manufacturing spend and Phase 1 trial spending, partially offset by costs related to our EMBOLD Phase 2 clinical trial in 2023; ◦ $11.3 million decrease in spend for our ulixacaltamide program, primarily due to prior year Phase 2a and Phase 1 trial spend, prior year manufacturing costs, and decreased spend in the current year related to our Essential1 study, partially offset by costs related to our Essential3 study, which we initiated in the fourth quarter of 2023; ◦ $6.7 million decrease in activities for our earlier stage assets due to prioritization of our clinical-stage programs; and ◦ $2.0 million increase in clinical-related spend for our PRAX-628 program driven by our Phase 1 clinical trial and our Phase 2 PPR clinical trial. • $8.3 million decrease in personnel-related costs due to decreased headcount; • $0.9 million increase in expense related to our Solidus™ platform for our PRAX-222 EMBRAVE study; and 93 Table of Contents • $0.5 million increase in indirect expenses, none of which were individually significant.
Biggest changeResearch and Development Expense The following table summarizes our research and development expenses for each period presented, along with the changes in those items (in thousands): Year Ended December 31, Change 2024 2023 Cerebrum™ $ 93,591 $ 31,680 $ 61,911 Solidus™ 5,738 19,009 (13,271) Personnel-related (including stock-based compensation) 43,407 28,904 14,503 Other indirect research and development expenses 9,677 7,173 2,504 Total research and development expenses $ 152,413 $ 86,766 $ 65,647 The $65.6 million increase in research and development expenses was primarily attributable to the following: • $61.9 million increase in expense related to our Cerebrum™ platform, driven primarily by: ◦ $49.8 million increase in spend for our ulixacaltamide program, primarily due to Essential3 study spend and Phase 1 trial spend, partially offset by completion of the Essential1 study in the prior year; 92 Table of Contents ◦ $11.4 million increase in spend for our vormatrigine program, primarily driven by spend for our ENERGY program and manufacturing-related spend; ◦ $2.3 million increase in spend for our relutrigine program, primarily related to EMBOLD Phase 2 clinical trial spend; partially offset by ◦ $1.6 million decrease in activities for our earlier stage assets; • $14.5 million increase in personnel-related costs mainly due to increased headcount and stock-based compensation expense; • $2.5 million increase in indirect expenses, primarily driven by increased consulting spend to support operations; partially offset by • $13.3 million decrease in expense related to our Solidus™ platform, primarily related to our elsunersen program, driven by a $6.9 million milestone payment to Ionis Pharmaceuticals Inc. upon initiation of our EMBRAVE study in the prior year, as well as prior year study activity.
During the year ended December 31, 2023, we issued and sold an aggregate of 212,453 shares under the 2023 Sales Agreement for aggregate net proceeds of $4.0 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2023, we issued and sold an aggregate of 212,453 shares under the 2023 Sales Agreement for aggregate net proceeds of $4.0 million, after deducting commissions and offering expenses payable by us.
Financing Activities During the year ended December 31, 2023, net cash provided by financing activities of $91.9 million consisted primarily of net proceeds from our June 2023 follow-on public offering of $63.4 million and from at-the-market offerings of $28.2 million.
During the year ended December 31, 2023, net cash provided by financing activities of $91.9 million consisted primarily of net proceeds from our June 2023 follow-on public offering of $63.4 million and from at-the-market offerings of $28.2 million.
The purchase prices per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • our ability to add and retain key research and development personnel; • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates; • our successful enrollment in and completion of clinical trials; • the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations; • our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our product candidates; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; • the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; • our ability to obtain and maintain patent, trade secret and other IP protection and regulatory exclusivity for our product candidates, if approved; • our receipt of marketing approvals from applicable regulatory authorities; • our ability to commercialize products, if approved, whether alone or in collaboration with others; and • the continued acceptable safety profiles of our product candidates.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • our ability to add and retain key research and development personnel; • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates; 90 Table of Contents • our successful enrollment in and completion of clinical trials; • the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations; • our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our product candidates; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; • the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; • our ability to obtain and maintain patent, trade secret and other IP protection and regulatory exclusivity for our product candidates, if approved; • our receipt of marketing approvals from applicable regulatory authorities; • our ability to commercialize products, if approved, whether alone or in collaboration with others; and • the continued acceptable safety profiles of our product candidates.
The 2021 Sales Agreement was terminated in June 2023. During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
We terminated the 2021 Sales Agreement in June 2023. During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.5 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants.
In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants.
The costs above comprise the following categories: • personnel-related expenses, including salaries, benefits and stock-based compensation expense; • expenses incurred under agreements with third parties, such as consultants, investigative sites and CROs, that conduct our preclinical and clinical studies and in-licensing arrangements; • costs incurred to maintain compliance with regulatory requirements; • costs incurred with third-party contract development and manufacturing organizations to acquire, develop and manufacture materials for preclinical and clinical studies; and • depreciation, amortization and other direct and allocated expenses, including rent and other operating costs, such as information technology, incurred as a result of our research and development activities.
The costs above comprise the following categories: • personnel-related expenses, including salaries, benefits and stock-based compensation expense; • expenses incurred under agreements with third parties, such as consultants, investigative sites and CROs, that conduct our preclinical and clinical studies and in-licensing arrangements; 89 Table of Contents • costs incurred to maintain compliance with regulatory requirements; • costs incurred with third-party contract development and manufacturing organizations to acquire, develop and manufacture materials for preclinical and clinical studies; and • depreciation, amortization and other direct and allocated expenses, including rent and other operating costs, such as information technology, incurred as a result of our research and development activities.
See “Business—License Agreements—License Agreement with RogCon.” Under our collaboration agreement with Ionis Pharmaceuticals, Inc., or Ionis,, we reimbursed Ionis for identifying a development candidate and conducting an investigational new drug application, or IND, enabling toxicology study, as well as out of pocket costs incurred by Ionis related to research activities.
See “Business—License Agreements—License Agreement with RogCon.” Under our collaboration agreement with Ionis, we reimbursed Ionis for identifying a development candidate and conducting an investigational new drug application, or IND, enabling toxicology study, as well as out of pocket costs incurred by Ionis related to research activities.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.7 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.7 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
We anticipate that our expenses will increase substantially if and as we: • advance the clinical development of our clinical-stage product candidates within our Cerebrum™ and Solidus™ platforms; • advance the development of any additional product candidates; • conduct research and continue preclinical development of potential product candidates; • make strategic investments in manufacturing capabilities; 95 Table of Contents • maintain our IP portfolio and opportunistically acquire complementary IP; • seek to obtain regulatory approvals for our product candidates; • potentially establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we may obtain regulatory approval; • when needed, add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
We anticipate that our expenses will increase substantially if and as we: • advance the clinical development of our clinical-stage product candidates within our Cerebrum™ and Solidus™ platforms; • advance the development of any additional product candidates; • conduct research and continue preclinical development of potential product candidates; • make strategic investments in manufacturing capabilities; • maintain our IP portfolio and opportunistically acquire complementary IP; • seek to obtain regulatory approvals for our product candidates; • establish a sales, marketing, technology and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we may obtain regulatory approval; • when needed, add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024.
In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock from time to time in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024.
For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial 91 Table of Contents resources and time to complete our clinical development activities.
For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time to complete our clinical development activities.
When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in our financial statements. 97 Table of Contents We have agreements with certain vendors for various services, including services related to clinical operations and support, for which we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors.
When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in our financial statements. We have agreements with certain vendors for various services, including services related to clinical operations and support, for which we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors.
As of December 31, 2023 and 2022, we had U.S. federal and state net operating loss carryforwards which may be available to offset future taxable income and which begin to expire in 2035.
As of December 31, 2024 and 2023, we had U.S. federal and state net operating loss carryforwards which may be available to offset future taxable income and which begin to expire in 2035.
On June 21, 2023, we completed a public offering of: (i) an aggregate of 4,296,646 shares of common stock at a public offering price of $14.25 per share, including the underwriters' full exercise of their option to purchase 619,979 additional shares of common stock, and (ii) pre-funded warrants to purchase 470,000 shares of common stock at a public offering price of $14.2485 per share.
In June 2023, we completed a public offering of: (i) an aggregate of 4,296,646 shares of common stock at a public offering price of $14.25 per share, including the underwriters' full exercise of their option to purchase 619,979 additional shares of common stock, and (ii) pre-funded warrants to purchase 470,000 shares of common stock at a public offering price of $14.2485 per share.
Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives. 96 Table of Contents Adequate additional funds may not be available to us on acceptable terms, or at all.
Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives. Adequate additional funds may not be available to us on acceptable terms, or at all.
Our income tax provision may be significantly affected by changes to our estimates. There was no income tax provision recognized for the years ended December 31, 2023 and 2022.
Our income tax provision may be significantly affected by changes to our estimates. There was no income tax provision recognized for the years ended December 31, 2024 and 2023.
To date, we have financed our operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, follow-on public offerings and at-the-market offerings under our shelf registration statement.
To date, we have financed our operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, common stock and pre-funded warrants through follow-on public offerings and common stock from at-the-market offerings under our shelf registration statement.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Critical Accounting Policies and Significant Judgments and Estimates 97 Table of Contents Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Examples of estimated accrued and prepaid research and development expenses include fees paid to: • CROs in connection with performing research services and preclinical and clinical studies; • investigative sites or other providers in connection with preclinical and clinical studies; • vendors in connection with preclinical and clinical development activities; and 98 Table of Contents • vendors related to product manufacturing, development and distribution of preclinical and clinical supplies.
Examples of estimated accrued and prepaid research and development expenses include fees paid to: • CROs in connection with performing research services and preclinical and clinical studies; • investigative sites or other providers in connection with preclinical and clinical studies; • vendors in connection with preclinical and clinical development activities; and • vendors related to product manufacturing, development and distribution of preclinical and clinical supplies.
Recently Issued Accounting Pronouncements We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our current operations.
Recently Issued Accounting Pronouncements 98 Table of Contents We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our current operations.
In July 2023, upon initiation of the PRAX-222 EMBRAVE study in the second quarter of 2023, we paid a milestone payment of $6.9 million to Ionis. Ionis may be entitled to additional development milestone payments, additional milestone payments, and sales royalties or sublicense fees.
In July 2023, upon initiation of the elsunersen EMBRAVE study in the second quarter of 2023, we paid a milestone payment of $6.9 million to Ionis. Ionis may be entitled to additional development milestone payments, additional milestone payments, and sales royalties or sublicense fees.
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have incurred significant losses in each period. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all.
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have incurred significant losses in each period. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we may not generate revenue from sales of any products for several years, if at all.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying 88 Table of Contents share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The 2021 Sales Agreement was terminated in June 2023. During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including net losses of $123.3 million and $214.0 million for the years ended December 31, 2023 and 2022, respectively.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including net losses of $182.8 million and $123.3 million for the years ended December 31, 2024 and 2023, respectively.
As a company operating in a virtual environment, a significant portion of our research and development costs have been external costs. We track direct external research and development expenses to specific platforms and product candidates upon commencement.
As a company operating in a virtual environment, a significant portion of our research and development costs have been external costs incurred by third-parties. We track direct external research and development expenses to specific platforms and product candidates upon commencement.
As of December 31, 2023 and 2022, we also had federal and state research and development tax credit carryforwards which may be available to offset future income tax liabilities and which begin to expire in 2031. Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences.
As of December 31, 2024 and 2023, we also had federal and state research and development tax credit carryforwards which may be available to offset future income tax liabilities and which begin to expire in 2032. 91 Table of Contents Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences.
In November 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent.
In November 2021, we entered into the 2021 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate amount of $125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent. We terminated the 2021 Sales Agreement in June 2023.
Since inception, we have devoted substantially all of our resources to developing our preclinical and clinical product candidates, building our intellectual property, or IP, portfolio, business planning, raising capital and providing general and administrative support for these operations.
We were incorporated in 2015 and commenced operations in 2016. Since inception, we have devoted substantially all of our resources to developing our preclinical and clinical product candidates, building our intellectual property, or IP, portfolio, business planning, raising capital and providing general and administrative support for these operations.
However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.
We have based this estimate on assumptions that may provide to be wrong, and we could exhaust our available capital resources sooner than we expect.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
In January 2024, we issued and sold 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
The 2023 Sales Agreement was terminated in January 2024. During the year ended December 31, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
In January 2024, we issued and sold 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we: • advance our lead product candidate, ulixacaltamide, through the Phase 3 Essential3 clinical trial program for ET; • advance our PRAX-562 product candidate in the EMBOLD clinical trial; • advance our PRAX-222 product candidate in the EMBRAVE clinical trial; • advance our PRAX-628 product candidate in the Phase 2a PPR clinical trial and begin the Phase 2 focal epilepsy clinical trial; • advance our preclinical candidates to clinical trials; • further invest in our pipeline; • further invest in our manufacturing capabilities; • seek regulatory approval for our product candidates; • maintain, expand, protect and defend our IP portfolio; • acquire or in-license technology; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and • when needed, increase our headcount to support our development efforts and any future commercialization efforts.
We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we: • advance our lead product candidate, ulixacaltamide, through completion of the Phase 3 Essential3 clinical trial program for ET; • advance relutrigine (formally PRAX-562) in the EMBOLD and EMERALD clinical trials; • advance vormatrigine (formerly PRAX-628) in efficacy clinical trials for focal onset seizures or generalized epilepsy; • advance elsunersen (formerly PRAX-222) into the pivotal stage of the program; • advance our preclinical candidates to clinical trials; • further invest in our pipeline; • further invest in our manufacturing capabilities; • seek regulatory approval for our product candidates; • maintain, expand, protect and defend our IP portfolio; • acquire or in-license technology; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and • when needed, increase our headcount to support our development efforts and any future commercialization efforts.
Investing Activities During the year ended December 31, 2023, net cash provided by investing activities of $39.0 million primarily related to maturities of marketable securities. During the year ended December 31, 2022, net cash provided by investing activities of $96.9 million primarily related to maturities of marketable securities, partially offset by purchases of marketable securities.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities of $248.5 million primarily related to purchases of marketable securities, partially offset by maturities of marketable securities. During the year ended December 31, 2023, net cash provided by investing activities of $39.0 million primarily related to maturities of marketable securities.
In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024.
In March 2024, we entered into an Open Market Sale Agreement, or the March 2024 Sales Agreement, with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $150.0 million of common stock from time to time in at-the-market offerings.
As of December 31, 2023, we had an accumulated deficit of $653.9 million. We expect to incur significant expenses and operating losses for the foreseeable future as 87 Table of Contents we expand our research and development activities.
As of December 31, 2024, we had an accumulated deficit of $836.7 million. We expect to incur significant expenses and operating losses for the foreseeable future as we expand our research and development activities.
Cash Flows 94 Table of Contents The following table provides information regarding our cash flows for each period presented (in thousands): Year Ended December 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (111,136) $ (185,043) Investing activities 38,950 96,889 Financing activities 91,871 10,465 Net increase (decrease) in cash, cash equivalents and restricted cash $ 19,685 $ (77,689) Operating Activities Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business.
Cash Flows The following table provides information regarding our cash flows for each period presented (in thousands): Year Ended December 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (131,757) $ (111,136) Investing activities (248,494) 38,950 Financing activities 514,323 91,871 Net increase in cash, cash equivalents and restricted cash $ 134,072 $ 19,685 Operating Activities Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business.
During the year ended December 31, 2022, we issued and sold an aggregate of 239,684 shares under the 2021 Sales Agreement for aggregate net proceeds of $9.6 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 1,614,975 shares under the March 2024 Sales Agreement for aggregate net proceeds of $113.1 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2022, we issued and sold an aggregate of 239,684 shares under the 2021 Sales Agreement for aggregate net proceeds of $9.6 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 1,614,975 shares under the March 2024 Sales Agreement for aggregate net proceeds of $113.1 million, after deducting commissions and offering expenses payable by us.
From inception through December 31, 2023, we have raised $617.5 million in aggregate cash proceeds from such transactions, net of issuance costs. As of December 31, 2023, we had cash and cash equivalents of $81.3 million.
From inception through December 31, 2024, we have raised $1.1 billion in aggregate cash proceeds from such transactions, net of issuance costs. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $469.5 million.
As of December 31, 2022, all costs related to the strategic realignment had been paid. Financial Operations Overview 89 Table of Contents Revenue We have not generated any revenue since inception and do not expect to generate any revenue from the sale of products for several years, if at all.
Financial Operations Overview Revenue We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for several years, if at all.
As discussed in Note 9 to our audited consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022.
As discussed in Note 9 to our audited consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022. We recognized $8.6 million and $2.4 million, respectively, of collaboration revenue from the Collaboration Agreement during the years ended December 31, 2024 and 2023.
We have historically experienced negative cash flows from operating activities as we have invested in developing our portfolio, drug discovery efforts and related infrastructure. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in operating assets and liabilities.
We have historically experienced negative cash flows from operating activities as we have invested in developing our portfolio, drug discovery efforts and related infrastructure.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves. 96 Table of Contents Contractual Obligations and Commitments We have entered into certain agreements under which we have incurred or may in the future incur obligations and commitments that could have a material impact on our capital resources.
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions. 87 Table of Contents Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.
Because of the numerous risks and uncertainties associated with product development and potential collaborations with third parties for the development of our product candidates, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.
However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect. 95 Table of Contents Because of the numerous risks and uncertainties associated with product development and potential collaborations with third parties for the development of our product candidates, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.
The $3.0 million milestone payment is due when the first profit share payment has become due and payable and certain contingent payments have become due and payable to Ionis under our collaboration agreement with Ionis. The profit share payments are based on a low-double-digit percentage of net profits, depending on sales volume.
Additionally, we may be obligated to pay RogCon a milestone payment of $3.0 million and profit share payments. The $3.0 million milestone payment is due when the first profit share payment has become due and payable and certain contingent payments have become due and payable to Ionis under our collaboration agreement with Ionis.
During the year ended December 31, 2022, net cash used in operating activities of $185.0 million was primarily due to our $214.0 million net loss and $1.8 million in changes in operating assets and liabilities primarily related to a decrease in accrued expenses, partially offset by $30.8 million of non-cash charges primarily related to stock-based compensation.
The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in operating assets and liabilities. 94 Table of Contents During the year ended December 31, 2024, net cash used in operating activities of $131.8 million was primarily due to our $182.8 million net loss and $10.9 million in changes in operating assets and liabilities primarily related to an increase in accrued expenses and accounts payable, partially offset by $40.1 million of non-cash charges primarily related to stock-based compensation.
We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our current cash and cash equivalents, which includes proceeds from our January 2024 public offering and at-the-market offerings, will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2026.
We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our current cash, cash equivalents and marketable securities will be sufficient to fund our operating expenditures and capital expenditure requirements into 2028.
As of December 31, 2023, our operating lease commitments for the remainder of the lease term were $2.7 million. In addition, we have entered into collaboration and license agreements with RogCon Inc., or RogCon, and Ionis Pharmaceuticals, Inc., or Ionis, under which we could be obligated to pay certain fees, milestone payments and cost reimbursements.
In addition, we have entered into collaboration and license agreements with RogCon Inc., or RogCon, and Ionis Pharmaceuticals, Inc., or Ionis, under which we could be obligated to pay certain fees, milestone payments and cost reimbursements. Under our license agreement with RogCon, we are obligated to reimburse RogCon for its out-of-pocket costs incurred for activities performed under the license agreement.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. For our most advanced product candidate under the Cerebrum™ platform, ulixacaltamide (formerly known as PRAX-944), we expect to announce topline results from the Phase 3 Essential3 clinical trial in essential tremor, or ET, in the second half of 2024.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. For our most advanced product candidate under the Cerebrum™ platform, ulixacaltamide, our Phase 3 Essential3 clinical trials in essential tremor, or ET, are ongoing. A pre-planned interim analysis of Study 1 was conducted in the first quarter of 2025.
The following table reflects our research and development expenses, including direct expenses summarized by platform and indirect or shared operating costs recognized as research and development expenses during each period presented (in thousands): 90 Table of Contents Year Ended December 31, 2023 2022 Cerebrum™ $ 31,290 $ 92,708 Solidus™ 18,449 17,500 Personnel-related (including stock-based compensation) 29,103 37,392 Other indirect research and development expenses 7,924 7,440 Total research and development expenses $ 86,766 $ 155,040 Research and development activities are central to our business model.
The following table reflects our research and development expenses, including direct expenses summarized by platform and indirect or shared operating costs recognized as research and development expenses during each period presented (in thousands): Year Ended December 31, 2024 2023 Cerebrum™ $ 93,591 $ 31,680 Solidus™ 5,738 19,009 Personnel-related (including stock-based compensation) 43,407 28,904 Other indirect research and development expenses 9,677 7,173 Total research and development expenses $ 152,413 $ 86,766 Research and development activities are central to our business model.
Either party may terminate the license agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior notice to RogCon.
The profit share payments are based on a low-double-digit percentage of net profits, depending on sales volume. Either party may terminate the license agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior notice to RogCon.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our consolidated statements of operations for each period presented (in thousands): 92 Table of Contents Year Ended December 31, Change 2023 2022 Collaboration revenue $ 2,447 $ — $ 2,447 Operating expenses: Research and development 86,766 155,040 (68,274) General and administrative 42,054 59,946 (17,892) Total operating expenses 128,820 214,986 (86,166) Loss from operations (126,373) (214,986) 88,613 Other income: Other income, net 3,096 957 2,139 Total other income 3,096 957 2,139 Net loss $ (123,277) $ (214,029) $ 90,752 Collaboration Revenue The $2.4 million increase in collaboration revenue is associated with the revenue recorded as research services provided and costs incurred under the Collaboration Agreement with UCB that was executed in December 2022.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our consolidated statements of operations for each period presented (in thousands): Year Ended December 31, Change 2024 2023 Collaboration revenue $ 8,553 $ 2,447 $ 6,106 Operating expenses: Research and development 152,413 86,766 65,647 General and administrative 56,305 42,054 14,251 Total operating expenses 208,718 128,820 79,898 Loss from operations (200,165) (126,373) (73,792) Other income: Other income, net 17,346 3,096 14,250 Total other income 17,346 3,096 14,250 Net loss $ (182,819) $ (123,277) $ (59,542) Collaboration Revenue The $6.1 million increase in collaboration revenue is associated with an increase in revenue recorded under the Collaboration Agreement with UCB that was executed in December 2022.
Operating Expenses Research and Development Expenses The nature of our business and primary focus of our activities generate a significant amount of research and development costs.
In December 2024, UCB exercised its option to in-license global development and commercialization rights under the terms of the Collaboration Agreement. Operating Expenses Research and Development Expenses The nature of our business and primary focus of our activities generate a significant amount of research and development costs.
As of December 31, 2023, we had cash and cash equivalents of $81.3 million. We expect that our current cash and cash equivalents, which includes proceeds from our January 2024 public offering and at-the-market offerings, will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2026.
We expect that our cash, cash equivalents, and marketable securities as of December 31, 2024 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials int o 2028. The analysis included consideration of our current financial needs and ongoing research and development plans.
General and Administrative Expense The $17.9 million decrease in general and administrative expenses was primarily attributable to the following: • $7.6 million decrease in professional fees and consulting expenses; • $7.4 million decrease in personnel-related costs due to decreased headcount; and • $2.9 million decrease in other general and administrative expenses.
General and Administrative Expense The $14.3 million increase in general and administrative expenses was primarily attributable to the following: • $11.7 million increase in personnel-related costs mainly due to increased stock-based compensation expense; • $1.7 million increase in professional fees; and • $0.9 million increase in other general and administrative expenses, none of which were individually significant.
During the year ended December 31, 2022, net cash provided by financing activities of $10.5 million consisted primarily of net proceeds from at-the-market offerings of $9.6 million and $1.4 million in proceeds from purchases of common stock under our employee stock purchase plan and from the exercise of stock options.
Financing Activities During the year ended December 31, 2024, net cash provided by financing activities of $514.3 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia.
Within our PRAX-628 program, we initiated a Phase 2a Photo-Paroxysmal Response, or PPR, study of PRAX-628 in the second quarter of 2023 and expect to report topline results in the first quarter of 2024. We also plan to initiate a Phase 2b study of PRAX-628 in focal epilepsy in the second half of 2024.
Within our vormatrigine program (formerly known as PRAX-628), we announced positive results from our Photo-Paroxysmal Response ("PPR") study in the first quarter of 2024, and have initiated or plan to initiate four studies to generate patient eligibility, efficacy, safety and pharmacokinetics (PK) data for the program.
Removed
Our PRAX-562 Phase 2 EMBOLD study was initiated in the first quarter of 2023, with initial cohorts in SCN2A-DEE and SCN8A-DEE, and we expect to announce topline results for both cohorts in mid-2024.
Added
The Independent Data Monitoring Committee, or IDMC, overseeing the interim analysis of Study 1 of the Essential3 program has provided Praxis with the outcome of such analysis.
Removed
For our most advanced product candidate under the Solidus™ platform, PRAX-222, we initiated the EMBRAVE study in the second quarter of 2023, which was completed in the fourth quarter of 2023. For further details on our business, refer to the Business section of Part I of this report. We were incorporated in 2015 and commenced operations in 2016.
Added
Based on the predefined decision framework for Study 1, the IDMC has recommended that the study be stopped for futility, due to the results being unlikely to meet the primary efficacy endpoint under the parameters set by the statistical model.
Removed
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable.
Added
The committee also indicated that some underlying assumptions of the statistical model might have influenced this outcome and encouraged us to explore alternative analysis methods.
Removed
The analysis included consideration of our current financial needs and ongoing research and development plans. We have based this estimate on assumptions that may provide to be wrong, and we could exhaust our available capital resources sooner than we expect.
Added
Given the advanced state of enrollment for both Study 1 and Study 2 in the Essential3 program, and in the context of the advice received by the IDMC, we have decided to continue both studies to completion, with topline results expected in the third quarter of 2025.
Removed
Restructuring In June 2022, we began a strategic realignment across our Cerebrum™ and Solidus™ platforms, which resulted in a reduction of our workforce.
Added
The decision about whether the data supports the submission of an NDA will be made after analyzing the final results for Study 1 and Study 2.
Removed
We incurred $1.0 million of costs related to the realignment, of which $0.6 million was recognized in research and development expenses and $0.4 million was recognized in general and administrative expenses in the consolidated statement of operations during the year ended December 31, 2022. These costs related to employee severance, benefits and related costs.
Added
We initiated the EMPOWER study, an observational study of vormatrigine in patients with epilepsy, in the third quarter of 2024, and initiated or plan to initiate three efficacy studies. The first efficacy study, RADIANT, is an open label eight-week study in patients with focal onset seizures or generalized epilepsy that is currently enrolling, with topline results expected by mid-year 2025.
Removed
We recognized $2.4 million of collaboration revenue from the Collaboration Agreement during the year ended December 31, 2023 and did not recognize any revenue from the Collaboration Agreement during the year ended December 31, 2022.
Added
We have also initiated the POWER1 study, a double-blind, placebo-controlled, 12-week study in focal onset seizures, with topline results expected in the second half of 2025, and plan to begin enrollment in the POWER2 study, a third efficacy study, in the second half of 2025.
Removed
Contractual Obligations and Commitments We have entered into certain agreements under which we have incurred or may in the future incur obligations and commitments that could have a material impact on our capital resources. We sublease building space in Boston, Massachusetts. Our sublease will expire on January 31, 2026.
Added
Within our relutrigine program (formerly known as PRAX-562), we announced positive topline results from the first cohort of our EMBOLD study in the third quarter of 2024 and have initiated enrollment of the second cohort, with topline results expected in the first half of 2026.
Removed
Under our license agreement with RogCon, Inc., or RogCon, we are obligated to reimburse RogCon for its out-of-pocket costs incurred for activities performed under the license agreement. Additionally, we may be obligated to pay RogCon a milestone payment of $3.0 million and profit share payments.

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Other PRAX 10-K year-over-year comparisons