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What changed in Surrozen, Inc./DE's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Surrozen, Inc./DE'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.

+407 added−491 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-10)

Top changes in Surrozen, Inc./DE's 2024 10-K

407 paragraphs added · 491 removed · 302 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

90 edited+59 added−118 removed185 unchanged
Biggest changeNone of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages. We consider our relationship with our employees to be good. We believe our total compensation package helps us attract and retain our employees.
Biggest changeEmployees and Human Capital Resources Our Employees As of March 3, 2025, we had 40 full-time and 1 part-time employees, with 26 in research and development and 15 in general and administrative functions. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages.
Seeking to limit or eliminate the potential oncogenic risk from Wnt pathway activation through our selective activation in the target disease tissue, we focus on severe disease and limited treatment exposure, and mimicking a physiologic repair process that is self-limiting. In preclinical studies, we have observed that the predominant response to Wnt signaling is in diseased tissue.
Seeking to limit or eliminate the potential oncogenic risk from Wnt pathway activation through our selective activation in the target disease tissue, we focus on severe disease, limited treatment exposure, and mimicking a physiologic repair process that is self-limiting. In preclinical studies, we have observed that the predominant response to Wnt signaling is in diseased tissue.
Stanford License Agreements In March 2016, we entered into a license agreement with Stanford University, or the 2016 Stanford Agreement, which was amended in July 2016, October 2016 and January 2021, pursuant to which we obtained a worldwide, exclusive, sublicensable license under certain patents, rights, or licensed patents and technology related to our engineered Wnt surrogate molecules to make, use, import, offer to sell and sell products that are claimed by the licensed patents or that use or incorporate such technology, or licensed products, for the treatment, diagnosis and prevention of human and veterinary diseases.
Stanford License Agreements In March 2016, we entered into a license agreement with Stanford University, or the Stanford Agreement, which was amended in July 2016, October 2016 and January 2021, pursuant to which we obtained a worldwide, exclusive, sublicensable license under certain patents, rights, or licensed patents and technology related to our engineered Wnt surrogate molecules to make, use, import, offer to sell and sell products that are claimed by the licensed patents or that use or incorporate such technology, or licensed products, for the treatment, diagnosis and prevention of human and veterinary diseases.
One patent family has been granted in Australia, Europe, Japan and the United States and is pending in the United States, Australia, Canada, and Japan, and any patents that grant from this patent family are predicted to expire in 2035 absent any patent term adjustment or extension.
One patent family has been granted in Australia, Europe, Japan and the United States and is pending in the United States and Canada, and any patents that grant from this patent family are predicted to expire in 2035 absent any patent term adjustment or extension.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory and animal studies in accordance with applicable regulations, including studies conducted in accordance with the FDA’s Good Laboratory Practice, or GLP, requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board, or IRB, or independent ethics committee at each clinical trial site before each clinical trial may be commenced; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practice, or GCP, requirements and other clinical trial-related regulations to establish the safety, purity and potency of the product candidate for each proposed indication; • preparation and submission to the FDA of a biologics license application, or BLA, after completion of all clinical trials; • payment of any user fees for FDA review of the BLA; • a determination by the FDA within 60 days of its receipt of a BLA to accept the application for review; • satisfactory completion of an FDA Advisory Committee review, if applicable; • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with current cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory and animal studies in accordance with applicable regulations, including studies conducted in accordance with the FDA’s Good Laboratory Practice, or GLP, requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; 17 • approval by an institutional review board, or IRB, or independent ethics committee at each clinical trial site before each clinical trial may be commenced; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practice, or GCP, requirements and other clinical trial-related regulations to establish the safety, purity and potency of the product candidate for each proposed indication; • preparation and submission to the FDA of a biologics license application, or BLA, after completion of all clinical trials; • payment of any user fees for FDA review of the BLA; • a determination by the FDA within 60 days of its receipt of a BLA to accept the application for review; • satisfactory completion of an FDA Advisory Committee review, if applicable; • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with current cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • Federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician 28 assistants and nurse practitioners), and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members; • Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • State and foreign laws that are analogous to each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by non-governmental third-party payors, including private insurers, and state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and • State and foreign laws that require pharmaceutical companies to implement compliance programs, comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physicians and other healthcare providers; state laws that require the reporting of marketing expenditures or drug pricing, including information pertaining to and justifying price increases; state and local laws that require the registration of pharmaceutical sales representatives; state laws that prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals; state laws that require the posting of information relating to clinical trials and their outcomes; and other federal, state and foreign laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus requiring additional compliance efforts.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • Federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners), and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members; • Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • State and foreign laws that are analogous to each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by non-governmental third-party payors, including private insurers, and state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and 24 • State and foreign laws that require pharmaceutical companies to implement compliance programs, comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physicians and other healthcare providers; state laws that require the reporting of marketing expenditures or drug pricing, including information pertaining to and justifying price increases; state and local laws that require the registration of pharmaceutical sales representatives; state laws that prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals; state laws that require the posting of information relating to clinical trials and their outcomes; and other federal, state and foreign laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus requiring additional compliance efforts.
The primary purpose of these clinical trials is to assess the safety, dosage tolerance, absorption, metabolism and distribution of the product candidate in humans, the side effects associated with increasing doses, and, if possible, early evidence of effectiveness. • Phase 2 clinical trials generally involve studies conducted in a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.
The primary purpose of these clinical trials is to assess the safety, dosage tolerance, absorption, metabolism and distribution of the product candidate in humans, the side effects associated with increasing doses, and, if possible, early evidence of effectiveness. 18 • Phase 2 clinical trials generally involve studies conducted in a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.
In October 2022, we executed the CLA with BI to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. 9 Wnt Signaling Pathway—A Central Regulator of Tissue Regeneration As gatekeepers for the maintenance of stem cells and functions, prior attempts at modulating Wnt signaling were hampered by an absence of drug-like properties.
In October 2022, we executed the CLA with BI to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. Wnt Signaling Pathway—A Central Regulator of Tissue Regeneration As gatekeepers for the maintenance of stem cells and functions, prior attempts at modulating Wnt signaling were hampered by an absence of drug-like properties.
We expect every employee, officer and director to read and understand our Code of Business Conduct and Ethics and its application to the performance of his or her business responsibilities. Corporate Information Our principal executive offices are located at 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080 and our telephone number is (650) 489-9000.
We expect every employee, officer and director to read and understand our Code of Business Conduct and Ethics and its application to the performance of his or her business responsibilities. 27 Corporate Information Our principal executive offices are located at 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080 and our telephone number is (650) 489-9000.
Moreover, any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented, or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, could have an adverse impact on our anticipated product revenues.
Moreover, any significant spending reductions affecting Medicare, Medicaid or other publicly 25 funded or subsidized health programs that may be implemented, or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, could have an adverse impact on our anticipated product revenues.
Preclinical model studies have shown that Wnt signaling is instrumental for liver regeneration, intestine epithelium turnover and injury repair, and plays a role in maintaining residential stem cells in many more adult tissues including lung, kidney, cochlea, skin and the central nervous system. • Common activation mechanism across Wnt proteins.
Preclinical model studies have shown that Wnt signaling is instrumental for liver regeneration, intestine epithelium turnover and injury repair, and plays 9 a role in maintaining residential stem cells in many more adult tissues including lung, kidney, cochlea, skin and the central nervous system. • Common activation mechanism across Wnt proteins.
A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that 20 the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
Our core capabilities are described below: Wnt Biology Expertise: We have established a deep understanding of the Wnt pathway and its role in disease biology and have invested significantly in our people and technologies that enable us to selectively modulate Wnt signaling. Our research and development organization is led by world-class scientists.
Our core capabilities are described below: Wnt Biology Expertise: We have established a deep understanding of the Wnt pathway and its role in disease biology and have invested significantly in our people and technologies that enable us to selectively modulate Wnt signaling. Our research and 5 development organization is led by world-class scientists.
Our current and future operations are subject to regulation by various federal, state, and local authorities in addition to the FDA, including 27 but not limited to CMS, HHS (including the Office of Inspector General, Office for Civil Rights and the Health Resources and Services Administration), the U.S. Department of Justice, or DOJ, and individual U.S.
Our current and future operations are subject to regulation by various federal, state, and local authorities in addition to the FDA, including but not limited to CMS, HHS (including the Office of Inspector General, Office for Civil Rights and the Health Resources and Services Administration), the U.S. Department of Justice, or DOJ, and individual U.S.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards. Strategic Talent and Culture Vision We are committed to being a great place to work for enterprising pioneers.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards. 26 Strategic Talent and Culture Vision We are committed to being a great place to work for enterprising pioneers.
For more information, please see the section titled “ Risk Factors—Risks Related to Our Intellectual Property .” Competition The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property.
For more information, please see the section titled “ Risk Factors—Risks Related to Our Intellectual Property .” 16 Competition The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property.
Under the goals agreed to by the FDA under the PDUFA, the FDA has ten months, from the filing date, in which 23 to complete its initial review of an original BLA and respond to the applicant, and six months from the filing date of an original BLA designated for priority review.
Under the goals agreed to by the FDA under the PDUFA, the FDA has ten months, from the filing date, in which to complete its initial review of an original BLA and respond to the applicant, and six months from the filing date of an original BLA designated for priority review.
Competitors, however, may receive approval of either a different product for the same indication or the same product for a different indication. A designated orphan drug many not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.
Competitors, however, may receive approval of either a different product for the same indication or the same product for a different indication. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.
Regulatory Approval in the United States In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act, the Public Health 21 Service Act, or PHSA, and other federal, state, local and foreign statutes and regulations.
Regulatory Approval in the United States In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or PHSA, and other federal, state, local and foreign statutes and regulations.
Expedited Development and Review Programs 24 The FDA offers a number of expedited development and review programs for qualifying product candidates intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.
Expedited Development and Review Programs The FDA offers a number of expedited development and review programs for qualifying product candidates intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.
Stanford retains the right under the 2016 Stanford Agreement, on behalf of itself, Stanford Hospital and Clinics, the University of Washington and all other non-profit research institutions, to practice the licensed patents and technology for any non-profit purpose.
Stanford retains the right under the Stanford Agreement, on behalf of itself, Stanford Hospital and Clinics, the University of Washington and all other non-profit research institutions, to practice the licensed patents and technology for any non-profit purpose.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and 23 require strict compliance in order to offer protection.
As with drugs, after approval of biologics, manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to 25 periodic inspection after approval.
As with drugs, after approval of biologics, manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval.
The 2016 Stanford Agreement covers two patent families and any patents that grant from these families are predicted to expire in 2035 and 2037, absent any patent term adjustments or extensions.
The Stanford Agreement covers two patent families and any patents that grant from these families are predicted to expire in 2035 and 2037, absent any patent term adjustments or extensions.
The royalty payments 17 will be subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property.
The royalty payments will be subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property.
Wnt signaling is critical in tissue regeneration throughout the body, including in intestine, liver, lung, retina, kidney, cochlea, cornea, skin, pancreas and central nervous system. Our research suggests that SWAP and SWEETS will provide us with the opportunity to generate specific modulators of Wnt signaling.
Wnt signaling is critical in tissue regeneration throughout the body, including in the eye, intestine, liver, lung, retina, kidney, cochlea, cornea, skin, pancreas and central nervous system. Our research suggests that SWAP will provide us with the opportunity to generate specific modulators of Wnt signaling.
Our corporate website address is www.surrozen.com. The contents of our website is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only. 32
Our corporate website address is www.surrozen.com. The contents of our website is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only. 28
We granted BI an exclusive, royalty-bearing, worldwide, sublicensable license, under our applicable patents and know-how, to develop, manufacture and commercialize, for all uses, one lead and two back-up Fzd4 bi-specific antibodies selected by BI and their derivatives.
We granted BI an exclusive, royalty-bearing, worldwide, sublicensable license, under our applicable patents and know-how, to develop, manufacture and commercialize, for all uses, one lead and two back-up Fzd4 bi-specific antibodies selected by BI.
Among other things, the Affordable Care Act, among other things, increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, under which they must agree to offer point-of-sale discounts (increased to 70 percent, effective as of January 1, 2019) 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; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs, implemented 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 expanded the types of entities eligible for the 340B drug discount program; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. 29 There have been executive, judicial and congressional challenges to certain aspects of the Affordable Care Act.
Among other things, the Affordable Care Act, among other things, increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, under which they must agree to offer point-of-sale discounts (increased to 70 percent, effective as of January 1, 2019) 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; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs, implemented 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 expanded the types of entities eligible for the 340B drug discount program; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, suspension of the approval, complete withdrawal of the product from the market or product recalls; • fines, warning or other enforcement-related letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties. 26 The FDA closely regulates the marketing, labeling, advertising and promotion of biologics.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, suspension of the approval, complete withdrawal of the product from the market or product recalls; • fines, warning or other enforcement-related letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
As a result of our discoveries, we are pioneering the selective activation of Wnt signaling, designing and engineering Wnt pathway mimetics, and advancing tissue-selective Wnt candidates. Our lead product candidates are multi-specific, antibody-based therapeutics that mimic the roles of naturally occurring Wnt or R-spondin proteins, which are involved in activation and enhancement of the Wnt pathway, respectively.
As a result of our discoveries, we are pioneering the selective activation of Wnt signaling, designing and engineering Wnt pathway mimetics, and advancing tissue-selective Wnt candidates. Our lead product candidates are multi-specific, antibody-based therapeutics that mimic the roles of naturally occurring Wnt proteins, which are involved in activation and enhancement of the Wnt pathway, respectively.
The key obstacles to drug development targeting the Wnt signaling pathway are described below: Potent Pathway Activation: While the activity of naturally occurring Wnt pathway agonists is well established, previous attempts to engineer synthetic Wnt and R-spondin ligands have not resulted in selective, potent activation of Wnt signaling. Selectivity: Naturally occurring Wnt ligands are not selective in their interactions.
The key obstacles to drug development targeting the Wnt signaling pathway are described below: Potent Pathway Activation: While the activity of naturally occurring Wnt pathway agonists is well established, previous attempts to engineer synthetic Wnt ligands have not resulted in selective, potent activation of Wnt signaling. Selectivity: Naturally occurring Wnt ligands are not selective in their interactions.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
Fzd4 mediated Wnt signaling is known to play a critical role in retinal vascular integrity and function. Data generated in preclinical models of retinopathy demonstrated SZN-413 stimulated Wnt signaling and was able to induce normal retinal vessel regrowth while suppressing pathological vessel growth.
Fzd4 mediated Wnt signaling is known to play a critical role in retinal vascular integrity and function. Data generated in preclinical models of retinopathy demonstrated SZN-413 stimulated Wnt signaling and the ability to induce normal retinal vessel regrowth while suppressing pathological vessel growth.
For five years after the effective date of the CLA, we are prohibited from preclinically and clinically developing or commercializing Fzd4 bi-specific antibodies for any diseases of the eye, and BI is prohibited from clinically developing or commercializing licensed products for any purpose other than diseases of the eye.
For five years after the effective date of the CLA, we are prohibited from preclinically and clinically developing or commercializing Fzd4 bi-specific antibodies that have certain properties for any diseases of the eye, and BI is prohibited from clinically developing or commercializing licensed products for any purpose other than diseases of the eye.
We strive to foster an environment for our employees where: • we bravely explore and innovate together, with passion for the work and honesty towards each other; • flexibility in skills, resilience, and adaptability to change are valued; • diversity, equity, and inclusion are embraced, and everyone makes a difference; • the workplace is fun, supportive and rewarding; and • patients are at the heart of what we do.
We strive to foster an environment for our employees where: • we bravely explore and innovate together, with passion for the work and honesty towards each other; • flexibility in skills, resilience, and adaptability to change are valued; • we recognize that everyone makes a difference; • the workplace is fun, supportive and rewarding; and • patients are at the heart of what we do.
We expect that additional state and federal healthcare reform measures will be adopted in the future. Environmental Regulations We are subject to various environmental laws of federal, state and local governments and foreign governments at various levels. We believe we are compliant in all material respects with applicable environmental laws.
We expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the recent change in administration. Environmental Regulations We are subject to various environmental laws of federal, state and local governments and foreign governments at various levels. We believe we are compliant in all material respects with applicable environmental laws.
Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or the IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in the Affordable Care Act marketplaces through plan year 2025.
For example, on August 16, 2022, the Inflation Reduction Act of 2022, or the IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in the Affordable Care Act marketplaces through plan year 2025.
We are developing a series of product candidates based on the SWAP technology, which combines binding domains for specific Fzd receptors and binding domains for specific Lrp receptors. Our current SWAP product candidate, SZN-413, is for the treatment of retinal vascular associated diseases.
We are developing a series of product candidates based on the SWAP technology, which combines binding domains for specific Fzd receptors and binding domains for specific Lrp receptors. Our current SWAP product candidate, SZN-413, is for the treatment of retinal vascular associated diseases. In addition, we are developing other product candidates for the potential treatment of ocular diseases.
A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
We have generated libraries of Wnt and R-spondin receptor binders that have helped us create a broad portfolio of product candidates.
We have generated libraries of Wnt receptor binders that have helped us create a broad portfolio of product candidates.
Under the terms of the CLA, BI paid a non-refundable upfront payment of $12.5 million less applicable withholding tax and we are eligible to receive success-based milestone payments up to a total of $587.0 million and mid-single digit to low-double digit royalties on net sales of the licensed products should any reach commercialization.
Under the terms of the CLA, BI agreed to pay a non-refundable upfront payment of $12.5 million less applicable withholding tax, success-based milestone payments up to a total of $587.0 million and mid-single digit to low-double digit royalties on net sales of the licensed products should any reach 14 commercialization.
If any of our product candidates are approved and successfully commercialized, it is likely that we will face increased competition as a result of other companies pursuing development of products to address similar diseases. We are aware of product candidates under development for AH and liver failure.
If any of our product candidates are approved and successfully commercialized, it is likely that we will face increased competition as a result of other companies pursuing development of products to address similar diseases.
For example, the IRA, among other things, directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
For example, the IRA, among other things, directs HHS to negotiate the price of certain high-expenditure, single-source biologics that have been on the market for at least 11 years covered under Medicare, or the Medicare Drug Price Negotiation Program, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
These patent applications are directed to, for example, the SWAP and SWEETS platforms, the parental constructs of our lead product candidate, SZN-043, the out-licensed SZN-413, as well as methods of treating disorders of the liver, intestine, retina, cornea, lacrimal gland, lung and kidney. 19 SWAP Platform Technology As of December 31, 2023, we solely own or exclusively license 15 patent families related to our SWAP platform.
These patent applications are directed to, for example, the SWAP platform, the out-licensed SZN-413, as well as methods of treating disorders of the liver, intestine, retina, cornea, lacrimal gland, lung and kidney. SWAP Platform Technology As of December 31, 2024, we solely own or exclusively license 15 patent families related to our SWAP platform.
We have one candidate, SZN-043, in clinical development. Wnt Activation: SWAP The Wnt pathway is equipped with binding sites for two receptors found on the surface of cells that can be triggered by Wnt protein. Binding to just one of these two receptors does not cause activation of the Wnt pathway.
Wnt Activation: SWAP The Wnt pathway is equipped with binding sites for two receptors found on the surface of cells that can be triggered by Wnt protein. Binding to just one of these two receptors does not cause activation of the Wnt pathway.
Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.
Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments.
Another patent family is filed in the United States, and any patents that grant from this patent family are predicted to expire in 2039 absent any patent term adjustment or extension.
The other patent family is pending in the United States, and any patents that grant from this patent family are predicted to expire in 2037 absent any patent term adjustment or extension.
Collaboration and Licensing Arrangements Collaboration and License Agreement with Boehringer Ingelheim International GmbH In October 2022, we executed the CLA with BI to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. We and BI are conducting partnership research focused on SZN-413 during a one-year period, which BI extended for an additional six-month period.
Collaboration and Licensing Arrangements Collaboration and License Agreement with Boehringer Ingelheim International GmbH In October 2022, we executed the CLA with BI to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. We and BI conducted partnership research focused on SZN-413 during a 1.5-year period.
Our mission is to transform the treatment of serious disease by fully exploiting the Wnt pathway. We are discovering and developing biologic drug candidates to selectively modulate the Wnt pathway, a critical mediator of tissue repair, in a broad range of organs and tissues, for human diseases.
We are discovering and developing biologic drug candidates to selectively modulate the Wnt pathway, a critical mediator of tissue repair, in a broad range of organs and tissues, for human diseases.
Biosimilars and Reference Product Exclusivity The Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product.
The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. 22 Biosimilars and Reference Product Exclusivity The Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product.
Unlike our antibodies, Wnt proteins are highly hydrophobic, making them difficult to express, solubilize and purify. 6 Dr. Christopher Garcia, a Howard Hughes Medical Institute Investigator and one of our founders, enabled our SWAP approach through the discovery of surrogate Wnt agonists.
Unlike our antibodies, Wnt proteins are highly hydrophobic, making them difficult to express, solubilize and purify. Dr. Christopher Garcia, a Howard Hughes Medical Institute Investigator and one of our founders, enabled our SWAP approach through the discovery of surrogate Wnt agonists. His surrogate ligands were water soluble, consisted of two domains and provided the building blocks for our SWAP technology.
We believe we are potentially the first developer to manufacture synthetic, soluble Wnt mimetics. To date, we have developed potent, selective and manufacturable Wnt and R-spondin mimetics that are designed to replicate the role of naturally occurring Wnt and R-spondin proteins.
To date, we have developed potent, selective and manufacturable Wnt mimetics that are designed to replicate the role of naturally occurring Wnt proteins.
EyeBio’s Restoret, an investigational tri-specific Wnt agonist antibody, is in a Phase 1b/2a clinical trial in patients with treatment-naïve diabetic macular edema and treatment-naïve neovascular age-related macular degeneration.
Merck’s Restoret (gained through its acquisition of EyeBio), an investigational tri-specific Wnt agonist antibody, is in a Phase 2/3 clinical trial in patients with treatment-naïve diabetic macular edema and treatment-naïve neovascular age-related macular degeneration.
It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our product candidates or processes, obtain licenses, or cease certain activities.
Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our product candidates or processes, obtain licenses, or cease certain activities.
We isolate RNA for gene expression to identify potential deficiencies in Wnt signaling in specific diseases. Through our genetic mapping, we have increased our understanding of Wnt biology in numerous diseases and Wnts’ involvement in diseases that had previously not been well-characterized.
Through our genetic mapping, we have increased our understanding of Wnt biology in numerous diseases and Wnts’ involvement in diseases that had previously not been well-characterized.
In October 2022, we executed a Collaboration and Licensing Agreement, or CLA, with Boehringer Ingelheim International GmbH, or BI, to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. We anticipate the potential to nominate the lead Fzd-4 targeted Wnt agonist development candidate in 2024, which would trigger a $10.0 million milestone payment to us.
In October 2022, we executed a Collaboration and License Agreement, or CLA, with Boehringer Ingelheim International GmbH, or BI, to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. In September 2024, BI decided to move forward with the development of SZN-413, which triggered a $10.0 million milestone payment to us.
PREA applies to BLAs for orphan-designated biologics if the biologic is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA has determined is substantially relevant to the growth or progression of a pediatric cancer.
PREA applies to BLAs for orphan-designated biologics if the biologic is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA has determined is substantially relevant to the growth or progression of a pediatric cancer. 21 The Best Pharmaceuticals for Children Act, or BPCA, provides a six-month extension of any exclusivity—patent or non-patent—for a biologic if certain conditions are met.
Product candidates generated by our technologies have demonstrated the ability to repair tissue damage in multiple preclinical models including IBD and liver injuries. We were able to select a specific candidate molecule and technology for each disease area based on tissue biology, profile of Wnt signaling in disease versus normal, and functional test of molecules.
We were able to select a specific candidate molecule and technology for each disease area based on tissue biology, profile of Wnt signaling in disease versus normal, and functional test of molecules. We have multiple ophthalmology candidates in preclinical development.
We consider ourselves to be pioneers in the selective modulation of the Wnt signaling pathway and intend to utilize our proprietary insights into Wnt biology and our proprietary technologies to further advance our research and exploration of its therapeutic potential. • Developing SZN-043 for the treatment of liver disease.
We consider ourselves to be pioneers in the selective modulation of the Wnt signaling pathway and intend to utilize our proprietary insights into Wnt biology and our proprietary technologies to further advance our research and exploration of its therapeutic potential. • Developing novel product candidates and expanding our platform technologies focused in ophthalmology to further our leading position in developing the Wnt signaling pathway modulators .
Compliance with existing laws has not had a material effect on capital expenditures, financial condition, or our competitive position with respect to any of our operations.
Compliance with existing laws has not had a material effect on capital expenditures, financial condition, or our competitive position with respect to any of our operations. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on our business.
The FDA will accept a well- designed and well-conducted foreign clinical trial not conducted under an IND if the clinical trial was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary. 22 For purposes of BLA submission and approval, clinical trials are generally conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap or be combined: • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
For purposes of BLA submission and approval, clinical trials are generally conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap or be combined: • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. 19 The FDA also may audit data from clinical trials to ensure compliance with GCP requirements and the integrity of the data supporting safety, purity, and potency of the product candidate.
Under each of the 2016 Stanford Agreement and the 2018 Stanford Agreement, or the Stanford Agreements, we agreed to use commercially reasonable efforts to develop and commercialize licensed products and we agreed to achieve certain funding and development milestones by certain dates.
Under the Stanford Agreement, we agreed to use commercially reasonable efforts to develop and commercialize licensed products and we agreed to achieve certain funding and development milestones by certain dates. Unless earlier terminated, Stanford Agreement will continue until the expiration of the patents licensed under such Stanford Agreement.
Proprietary Antibody Discovery and Research Technologies: We have developed proprietary antibody discovery capabilities that have led to the discovery of two initial antibody technologies that enable us to potently and selectively modulate the Wnt pathway.
Proprietary Antibody Discovery and Research Technologies: We have developed proprietary antibody discovery capabilities that have led to the discovery of antibody technologies that enable us to potently and selectively modulate the Wnt pathway. Our SWAP (Surrozen Wnt signal Activating Protein) technology enables the design and development of Wnt-mimetics.
BI has the right to terminate the CLA for any reason after a specified notice period. Each party has the right to terminate the CLA on account of the other party’s bankruptcy or material, uncured breach.
Unless terminated earlier, the CLA will remain effective, on a country-by-country and product-by-product basis, until the expiration of BI's royalty obligations. BI has the right to terminate the CLA for any reason after a specified notice period. Each party has the right to terminate the CLA on account of the other party’s bankruptcy or material, uncured breach.
Item 1. Business. Overview We are a clinical stage biotechnology company committed to discovering and developing drug candidates to selectively modulate the Wnt pathway, a critical mediator of tissue repair, in a broad range of organs and tissues. We are located in South San Francisco, California.
Item 1. Business. Overview We are a biotechnology company committed to discovering and developing drug candidates to selectively modulate the Wnt pathway, a critical mediator of tissue repair with a current focus in ophthalmology. We are located in South San Francisco, California. Our mission is to transform the treatment of serious disease by fully exploiting the Wnt pathway.
Manufacturing: Wnt ligands are highly hydrophobic, making them difficult to express, solubilize and purify and therefore difficult to manufacture. Our Wnt Therapeutics Platform Our Scientific Capabilities We believe that our breakthrough discoveries and technologies will enable us to overcome the challenges facing drug developers targeting the Wnt pathway.
Our Wnt Therapeutics Platform Our Scientific Capabilities We believe that our breakthrough discoveries and technologies will enable us to overcome the challenges facing drug developers targeting the Wnt pathway. We believe we are potentially the first developer to manufacture synthetic, soluble Wnt mimetics.
Figure 1 below compares natural Wnt signaling to how our SWAP product candidates engage receptors on the cell surface to trigger Wnt signal activation. Figure 1.
We have also discovered that binding two different Fzds together with Lrp leads to efficient Wnt signal activation. Figure 1 below compares natural Wnt signaling to how our SWAP product candidates engage receptors on the cell surface to trigger Wnt signal activation. Figure 1.
Patents and Other Proprietary Rights As of December 31, 2023, our patent portfolio consisted of over 20 pending patent application families, including 17 families that have entered national phase in the United States and/or other countries, four families with pending Patent Cooperation Treaty, or PCT, applications, one of which has also been filed in certain non-PCT countries (e.g., Taiwan), and four families with pending U.S. provisional applications.
Kutzkey, a member of our board of directors, serves as Managing Partner of The Column Group. 15 Patents and Other Proprietary Rights As of December 31, 2024, our patent portfolio consisted of over 20 pending patent application families, including 18 families that have entered national phase in the United States and/or other countries, three families with pending Patent Cooperation Treaty, or PCT, applications, and three families with pending U.S. provisional applications.
Additional Novel Wnt Modulating Technologies: We have developed and filed patent applications for additional Wnt modulating antibody technologies, and are committed to continuously integrating new insights, tools, technologies and capabilities to apply to additional diseases and areas. 5 Genetic Mapping of Wnt Signaling: The role of Wnt signaling in disease and the differential expression of genes involved in Wnt signaling have not been well characterized across many disease states.
Additional Novel Wnt Modulating Technologies: We have developed and filed patent applications for additional Wnt modulating antibody technologies, and are committed to continuously integrating new insights, tools, technologies and capabilities to apply to additional diseases and areas.
We may terminate either UCSF Agreement at any time for any reason by providing at least 60 days’ written notice to UCSF. UCSF may terminate either UCSF Agreement if UCSF reasonably believes we are in material breach of such UCSF Agreement and we fail to remedy such breach within 60 days after written notice of such breach given by UCSF.
We may terminate Stanford Agreement at any time for any reason by providing at least 30 days’ written notice to Stanford. Stanford may terminate Stanford Agreement if we breach certain provisions and fail to remedy such breach within 90 days after written notice of the breach by Stanford. Research Collaboration Agreement with TCGFB, Inc.
To the extent that our collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. 20 Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties.
In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
We have generated and validated a broad library of SWAPs that have successfully activated Wnt-signaling. Our product candidate, SZN-413, utilizes our SWAP technology and is designed to activate the Wnt pathway in injured tissue where certain Fzd receptors are expressed and the natural Wnt ligand is disturbed.
Our product candidate, SZN-413, utilizes our SWAP technology and is designed to activate the Wnt pathway in injured tissue where certain Fzd receptors are expressed and the natural Wnt ligand is disturbed. 6 Key characteristics of our SWAP technology include: Potency: Our Wnt mimetics are multivalent, designed to bind one or more Fzd receptors and one or more Lrp receptors.
Our SWAP (Surrozen Wnt signal Activating Protein) technology enables the design and development of Wnt-mimetics, and our SWEETS (Surrozen Wnt signal Enhancers Engineered for Tissue Specificity) technology enables the design and development of R-spondin mimetics. Importantly, our approach provides a flexible and robust platform that has generated multiple antibodies that possess either tissue or cell selectivity based on preclinical studies.
Importantly, our approach provides a flexible and robust platform that has generated multiple antibodies that possess either tissue or cell selectivity based on preclinical studies.
Employee Wellness and Safety It is our goal to provide a safe and healthy workplace for all employees and to eliminate occupational injuries and illnesses. To be successful, the program requires cooperation in all safety and health matters, not only between supervisors and employees, but also between individual employees and their coworkers.
To be successful, the program requires cooperation in all safety and health matters, not only between supervisors and employees, but also between individual employees and their coworkers. It is the obligation of every employee to comply with the requirements of our Injury and Illness Prevention Program at all times.
We offer our employees flexible benefits to meet the individual health and wellness needs of our employees, including competitive pay, equity grants, medical benefits, leave programs, and a 401(k) savings plan. Our human capital objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
We consider our relationship with our employees to be good. We believe our total compensation package helps us attract and retain our employees. We offer our employees flexible benefits to meet the individual health and wellness needs of our employees, including competitive pay, equity grants, medical benefits, leave programs, and a 401(k) savings plan.
Our Wnt Therapeutics Platform We have discovered two proprietary technologies of modulators of Wnt signaling: SWAP and SWEETS. We have designed and continue to design antibodies that modulate the Wnt signaling pathway by acting as mimetics of either Wnt protein or one of its regulators, R-spondin.
Our Wnt Therapeutics Platform We have discovered proprietary technologies of modulators of Wnt signaling: SWAPs. We have designed and continue to design antibodies that modulate the Wnt signaling pathway by acting as mimetics of the Wnt protein. Product candidates generated by our technologies have demonstrated the ability to repair tissue damage in multiple preclinical retinal disease models.
We are actively initiating the aforementioned Phase 1b clinical trial and anticipate potential proof-of-concept data from the Phase 1b clinical trial in the first half of 2025. 8 SZN-413 Our product candidate, SZN-413, a Fzd4 targeted bi-specific antibody, is being developed as a novel treatment for retinal vascular-associated diseases and utilizes our proprietary SWAP technology to activate Wnt signaling.
SZN-413, a Fzd4 targeted bi-specific antibody, is being developed as a novel treatment for retinal vascular-associated diseases and utilizes our proprietary SWAP technology to activate Wnt signaling. Fzd4 mediated Wnt signaling is known to play a critical role in retinal vascular integrity and function.
Product candidates generated by these technologies have demonstrated the ability to repair tissue damage in multiple preclinical models including colitis and liver injury. We have developed specific candidate molecules for each disease area based on the associated tissue biology, the role of Wnt signaling in disease versus normal tissue, and a functional assessment of our candidate molecules.
We have developed specific candidate molecules for each disease area based on the associated tissue biology, the role of Wnt signaling in disease versus normal tissue, and a functional assessment of our candidate molecules. Wnt Activation: SWAP (Surrozen Wnt signal Activating Protein) Our SWAP molecules are designed to mimic the activity of naturally occurring Wnt proteins.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock. • In our initial Phase 1 clinical trial for SZN-043, treatment-related adverse events have been observed, and if these findings are present in patients with severe alcohol-associated hepatitis and do not represent acceptable safety, we could require additional capital to complete our clinical trial and development efforts for SZN-043 or we may need to delay or abandon development of SZN-043. • We will need substantial additional funds to advance development of product candidates of our Wnt therapeutics platform, and we cannot guarantee that we will have sufficient funds available in the future to develop and commercialize our current or potential future product candidates. • None of our product candidates have received regulatory approval; our ability to achieve and sustain profitability depends on obtaining regulatory approval and successfully commercializing product candidates, either alone or with collaborators. • If any current or future product candidate, after it begins clinical trials or receives marketing approval, demonstrates undesirable safety or tolerability side effects or safety concerns, our ability to market and derive revenue from the product candidate could be compromised. • We have incurred significant operating losses since inception and anticipate that we will incur continued losses for the foreseeable future. • Any future equity or debt issuances or other financing transactions may have dilutive or adverse effects on our existing stockholders. • We rely on third parties to conduct our preclinical studies and our clinical trials, and those third parties may not perform satisfactorily. • Our clinical development activities could be delayed or otherwise adversely affected for various reasons. • The manufacturing of our product candidates is complex.
Biggest changeWe expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock. • We will need substantial additional funds to advance development of product candidates of our Wnt therapeutics platform, and we cannot guarantee that we will have sufficient funds available in the future to develop and commercialize our current or potential future product candidates. • None of our product candidates have received regulatory approval; our ability to achieve and sustain profitability depends on obtaining regulatory approval and successfully commercializing product candidates, either alone or with collaborators. • If any current or future product candidate, after it begins clinical trials or receives marketing approval, demonstrates undesirable safety or tolerability side effects or safety concerns, our ability to market and derive revenue from the product candidate could be compromised. • We have incurred significant operating losses since inception and anticipate that we will incur continued losses for the foreseeable future. • Any future equity or debt issuances or other financing transactions may have dilutive or adverse effects on our existing stockholders. • We rely on third parties to conduct our preclinical studies and our clinical trials, and those third parties may not perform satisfactorily. • Our clinical development activities could be delayed or otherwise adversely affected for various reasons. • We cannot predict how difficult it will be to enroll and retain patients for our future clinical trials and we may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. • The manufacturing of our product candidates is complex.
This may be exacerbated if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, a product candidate, such as: • negative or inconclusive results from our preclinical or clinical trials (including as described above) or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies or clinical trials or abandon any or all of our programs; • product-related side effects experienced by participants in our clinical trials (such as the asymptomatic transaminase elevations discussed above) or by individuals using drugs or therapeutic antibodies similar to ours, including immunogenicity; • delays in submitting IND applications or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or other regulatory authorities regarding the scope or design of our clinical trials; • delays in enrolling research subjects in clinical trials; • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; • chemistry, manufacturing and control, or CMC, challenges associated with manufacturing and scaling up manufacturing of biologic product candidates to ensure consistent quality, stability, purity and potency among different batches used in clinical trials; • greater-than-anticipated clinical trial costs; • poor potency or effectiveness of our product candidates during clinical trials; • unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing site; • failure of us or Boehringer Ingelheim International GmbH to adequately perform under the Collaboration and License Agreement; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines; or • the FDA or other regulatory authorities interpreting our data differently than it does.
This may be exacerbated if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, a product candidate, such as: • negative or inconclusive results from our preclinical or clinical trials (including as described above) or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies or clinical trials or abandon any or all of our programs; • product-related side effects experienced by participants in our clinical trials (such as the asymptomatic transaminase elevations discussed above) or by individuals using drugs or therapeutic antibodies similar to ours, including immunogenicity; • delays in submitting IND applications or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or other regulatory authorities regarding the scope or design of our clinical trials; • delays in enrolling research subjects in clinical trials; 32 • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; • chemistry, manufacturing and control, or CMC, challenges associated with manufacturing and scaling up manufacturing of biologic product candidates to ensure consistent quality, stability, purity and potency among different batches used in clinical trials; • greater-than-anticipated clinical trial costs; • poor potency or effectiveness of our product candidates during clinical trials; • unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing site; • failure of us or Boehringer Ingelheim International GmbH to adequately perform under the Collaboration and License Agreement; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines; or • the FDA or other regulatory authorities interpreting our data differently than it does.
Collaborations involving our product candidates, including our collaboration with BI, pose many risks to us, including that: • Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • Collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on 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; 55 • 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 products 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; • A collaborator with marketing and distribution rights to one or more product candidates or products may not commit sufficient resources to the marketing and distribution of such drugs; • Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our product candidates, including our collaboration with BI, pose many risks to us, including that: • Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • Collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on 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 products 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; • A collaborator with marketing and distribution rights to one or more product candidates or products may not commit sufficient resources to the marketing and distribution of such drugs; • Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Even if we identify investigational medicines that initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following: • the research methodology used may not be successful in identifying potential investigational medicines; • competitors may develop alternatives that render its investigational medicines obsolete; • investigational medicines it develops may nevertheless be covered by third parties’ patents or other exclusive rights; • an investigational medicine may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio; • an investigational medicine may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and • an approved product may not be accepted as safe and effective by trial patients, the medical community or third-party payors.
Even if we identify investigational medicines 33 that initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following: • the research methodology used may not be successful in identifying potential investigational medicines; • competitors may develop alternatives that render its investigational medicines obsolete; • investigational medicines it develops may nevertheless be covered by third parties’ patents or other exclusive rights; • an investigational medicine may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio; • an investigational medicine may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and • an approved product may not be accepted as safe and effective by trial patients, the medical community or third-party payors.
The commencement or completion of our clinical trials could be substantially delayed or prevented by many factors, including: • further discussions with the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials, including the endpoint measures required for regulatory approval and our statistical plan; • the limited number of, and competition for, suitable study sites and investigators to conduct our clinical trials, many of which may already be engaged in other clinical trial programs with similar patients, including some that may be for the same indication as our product candidates; • any delay or failure to obtain timely approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient quantities or inability to produce quantities of consistent quality, purity and potency of the product candidate for our clinical trials; • delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain institutional review board, or IRB, approval to conduct a clinical trial at a prospective site; • the FDA or other comparable foreign regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial; • slower than expected rates of patient recruitment and enrollment; • failure of patients to complete the clinical trial; • the inability to enroll a sufficient number of patients in studies to ensure adequate statistical power to detect statistically significant treatment effects; • unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by patients, including possible deaths; • lack of efficacy or failure to measure a statistically significant clinical benefit within the dose range with an acceptable safety margin during clinical trials; • termination of our clinical trials by one or more clinical trial sites; • inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols; • inability to monitor patients adequately during or after treatment by us or our CROs; • our CROs or clinical study sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a study; • inability to address any noncompliance with regulatory requirements or safety concerns that arise during the course of a clinical trial; • the impact of, and delays related to, health epidemics; • the need to suspend, repeat or terminate clinical trials as a result of non-compliance with regulatory requirements, inconclusive or negative results or unforeseen complications in testing; and • the suspension or termination of our clinical trials upon a breach or pursuant to the terms of any agreement with, or for any other reason by, any future strategic collaborator that have responsibility for the clinical development of any of our product candidates. 44 Changes in regulatory requirements, policies and guidelines may also occur and we may need to significantly modify our clinical development plans to reflect these changes with appropriate regulatory authorities.
The commencement or completion of our clinical trials could be substantially delayed or prevented by many factors, including: • further discussions with the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials, including the endpoint measures required for regulatory approval and our statistical plan; • the limited number of, and competition for, suitable study sites and investigators to conduct our clinical trials, many of which may already be engaged in other clinical trial programs with similar patients, including some that may be for the same indication as our product candidates; • any delay or failure to obtain timely approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient quantities or inability to produce quantities of consistent quality, purity and potency of the product candidate for our clinical trials; • delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain institutional review board, or IRB, approval to conduct a clinical trial at a prospective site; • the FDA or other comparable foreign regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial; • slower than expected rates of patient recruitment and enrollment; • failure of patients to complete the clinical trial; • the inability to enroll a sufficient number of patients in studies to ensure adequate statistical power to detect statistically significant treatment effects; • unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by patients, including possible deaths; • lack of efficacy or failure to measure a statistically significant clinical benefit within the dose range with an acceptable safety margin during clinical trials; • termination of our clinical trials by one or more clinical trial sites; • inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols; • inability to monitor patients adequately during or after treatment by us or our CROs; • our CROs or clinical study sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a study; • inability to address any noncompliance with regulatory requirements or safety concerns that arise during the course of a clinical trial; • the impact of, and delays related to, health epidemics; • the need to suspend, repeat or terminate clinical trials as a result of non-compliance with regulatory requirements, inconclusive or negative results or unforeseen complications in testing; and • the suspension or termination of our clinical trials upon a breach or pursuant to the terms of any agreement with, or for any other reason by, any future strategic collaborator that have responsibility for the clinical development of any of our product candidates. 39 Changes in regulatory requirements, policies and guidelines may also occur and we may need to significantly modify our clinical development plans to reflect these changes with appropriate regulatory authorities.
In the event that any of our current or potential future product candidates receive regulatory approval and we or others identify undesirable side effects caused by one of these products, any of the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business: 39 • regulatory authorities may withdraw their approval of the product or seize the product; • we may be required to recall the product or change the way the product is administered to patients; • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be subject to fines, injunctions or the imposition of civil or criminal penalties; • regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication; • regulatory authorities may require additional post-marketing safety studies or registries; • we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
In the event that any of our current or potential future product candidates receive regulatory approval and we or others identify undesirable side effects caused by one of these products, any of the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business: • regulatory authorities may withdraw their approval of the product or seize the product; • we may be required to recall the product or change the way the product is administered to patients; • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be subject to fines, injunctions or the imposition of civil or criminal penalties; • regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication; • regulatory authorities may require additional post-marketing safety studies or registries; • we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates and covered subcontractors that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • the federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act” under the Affordable Care Act, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the Centers for Medicare & Medicaid Services, or CMS, information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests of such physicians and their immediate family members; and 72 • analogous local, state and foreign laws and regulations, such as state anti-kickback and false claims laws that may apply to healthcare items or services reimbursed by third party payors, including private insurers; local, state and foreign transparency laws that require manufacturers to report information related to payments and transfers of value to other healthcare providers and healthcare entities, marketing expenditures, or drug pricing; state laws that require pharmaceutical companies to register certain employees engaged in marketing activities in the location and comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates and covered subcontractors that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • the federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act” under the Affordable Care Act, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the Centers for Medicare & Medicaid Services, or CMS, information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests of such physicians and their immediate family members; and • analogous local, state and foreign laws and regulations, such as state anti-kickback and false claims laws that may apply to healthcare items or services reimbursed by third party payors, including private insurers; local, state and foreign transparency laws that require manufacturers to report information related to payments and transfers of value to other 64 healthcare providers and healthcare entities, marketing expenditures, or drug pricing; state laws that require pharmaceutical companies to register certain employees engaged in marketing activities in the location and comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Any claims of patent infringement asserted by third parties would be time consuming and could: 62 • result in costly litigation that may cause negative publicity; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing any of our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • subject us to significant liability to third parties; or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in its competitors gaining access to the same technology.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation that may cause negative publicity; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing any of our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • subject us to significant liability to third parties; or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in its competitors gaining access to the same technology.
We will remain an emerging growth 78 company until the earliest of (i) the last day of the fiscal year in which the market value of our common stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2025.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of our common stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2025.
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 product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; 59 • 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 collaborators; and • the priority of invention of patented technology.
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 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 collaborators; and • the priority of invention of patented technology.
The following examples are illustrative: 66 • others may be able to make antibodies or portions of antibodies or formulations that are similar to our product candidates, but that are not covered by the claims of any patents that we own, license or control; • we or any strategic collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own license or control; • we or our licensors might not have been the first to file patent applications covering certain of our owned and in-licensed inventions; • others may independently develop the same, similar, or alternative technologies without infringing, misappropriating or violating our owned or in-licensed intellectual property rights; • it is possible that our owned or in-licensed pending patent applications will not lead to issued patents; • issued patents that we own, in-licenses, or controls may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such trade secrets or know-how; and • the patents of others may have an adverse effect on our business.
The following examples are illustrative: 59 • others may be able to make antibodies or portions of antibodies or formulations that are similar to our product candidates, but that are not covered by the claims of any patents that we own, license or control; • we or any strategic collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own license or control; • we or our licensors might not have been the first to file patent applications covering certain of our owned and in-licensed inventions; • others may independently develop the same, similar, or alternative technologies without infringing, misappropriating or violating our owned or in-licensed intellectual property rights; • it is possible that our owned or in-licensed pending patent applications will not lead to issued patents; • issued patents that we own, in-licenses, or controls may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such trade secrets or know-how; and • the patents of others may have an adverse effect on our business.
Our development programs may be delayed for a variety of reasons, including delays related to: • unfavorable findings or observations that cause us to pause or modify our clinical trial; • the FDA or other regulatory authorities requiring additional data or imposing other requirements before permitting initiation of a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee, or EC, approval at each clinical trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; 67 • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; or • manufacturing sufficient quantities of our product candidates for use in clinical trials. • Furthermore, we expect to rely on CROs, collaborators such as BI and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we may have limited influence over their actual performance.
Our development programs may be delayed for a variety of reasons, including delays related to: • unfavorable findings or observations that cause us to pause or modify our clinical trial; • the FDA or other regulatory authorities requiring additional data or imposing other requirements before permitting initiation of a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee, or EC, approval at each clinical trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; or • manufacturing sufficient quantities of our product candidates for use in clinical trials. 60 • Furthermore, we expect to rely on CROs, collaborators such as BI and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we may have limited influence over their actual performance.
We face potential competition from many different sources, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing, and commercialization of therapies aimed at treating autoimmune, inflammatory, metabolic, and other diseases, including indications that we are pursuing or may pursue in the future.
We face potential competition from many different sources, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing, and commercialization of therapies aimed at treating 42 autoimmune, inflammatory, metabolic, and other diseases, including indications that we are pursuing or may pursue in the future.
If we breach any material obligations, including diligence obligations with respect to development and commercialization of product candidates covered by the intellectual property licensed to us, or uses the licensed intellectual property in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture, and sell products that are covered by the licensed intellectual property or enable a competitor to gain access to the licensed intellectual property.
If we breach any material obligations, including diligence obligations with respect to development and commercialization of product candidates covered by the intellectual property licensed to us, or uses the licensed intellectual property in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate 51 the license, which could result in us being unable to develop, manufacture, and sell products that are covered by the licensed intellectual property or enable a competitor to gain access to the licensed intellectual property.
Privacy Shield and the SCCs, any transfers by us or our vendors of personal data from Europe may not comply with European data protection law, which may increase Our exposure to the GDPR’s heightened sanctions for violations of its cross-border data transfer restrictions and may prohibit the transfer of EU personal data outside of the EU (including clinical trial data), and may adversely impact Our operations, product development, and ability to provide our products.
Privacy Shield and the SCCs, any transfers by us or our vendors of personal data from Europe may not 46 comply with European data protection law, which may increase Our exposure to the GDPR’s heightened sanctions for violations of its cross-border data transfer restrictions and may prohibit the transfer of EU personal data outside of the EU (including clinical trial data), and may adversely impact Our operations, product development, and ability to provide our products.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual 70 revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter.
If our manufacturing collaborators are unable to successfully scale the manufacture of any current or potential future product candidate in sufficient quality and quantity, the development, testing, clinical trials and commercialization of that product candidate may be delayed or infeasible and regulatory approval or commercial launch of any potential resulting product may be delayed or not obtained, which could significantly harm our business.
If our manufacturing 41 collaborators are unable to successfully scale the manufacture of any current or potential future product candidate in sufficient quality and quantity, the development, testing, clinical trials and commercialization of that product candidate may be delayed or infeasible and regulatory approval or commercial launch of any potential resulting product may be delayed or not obtained, which could significantly harm our business.
Even if our owned or in-licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any 56 competitive advantage. our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.
Even if our owned or in-licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.
As a result, government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, 73 third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.
As a result, government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.
If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, it may have to 65 abandon development of the relevant program or product candidate, which could have a material adverse effect on its business, financial condition, results of operations, and prospects.
If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, it may have to abandon development of the relevant program or product candidate, which could have a material adverse effect on its business, financial condition, results of operations, and prospects.
In addition, such redemption may occur at a time when the public warrants are “out-of-the-money,” in 79 which case, holders of public warrants would lose any potential embedded value from a subsequent increase in the value of our common stock had the public warrants remained outstanding. Item 1B. Unresolved Staff Comments. None.
In addition, such redemption may occur at a time when the public warrants are “out-of-the-money,” in which case, holders of public warrants would lose any potential embedded value from a subsequent increase in the value of our common stock had the public warrants remained outstanding. Item 1B. Unresolved Staff Comments. None.
Because we have limited financial and human resources, we intend to initially focus on research programs and product candidates for a limited set of indications. As a result, we may forgo or delay pursuit of opportunities with other product candidates or for other 38 indications that later prove to have greater commercial potential or a greater likelihood of success.
Because we have limited financial and human resources, we intend to initially focus on research programs and product candidates for a limited set of indications. As a result, we may forgo or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential or a greater likelihood of success.
We may also have to take inventory 45 write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Furthermore, it is too early to estimate our cost of goods sold.
We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Furthermore, it is too early to estimate our cost of goods sold.
If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing any of our current or future technologies or product candidates that are held to be infringing, misappropriating or otherwise violating third-party intellectual property rights.
If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited 57 from commercializing any of our current or future technologies or product candidates that are held to be infringing, misappropriating or otherwise violating third-party intellectual property rights.
There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes.
There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire 43 or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes.
In the United States, patent term extension cannot extend the remaining term of a patent beyond 14 years from the date of product approval; only one patent may be extended; and extension is available for only those claims covering the approved drug, a method for using it, or a method for manufacturing it.
In the United States, patent term extension cannot extend the remaining term of a patent beyond 14 years from the date of product approval; only one patent may be extended; and extension is available for only those claims 53 covering the approved drug, a method for using it, or a method for manufacturing it.
In addition, there could be public announcements of the results of hearings, motions or other interim 61 proceedings or developments and if securities analysts or investors perceive these results to be negative, such announcements could have a material adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, such announcements could have a material adverse effect on the price of our common stock.
Similarly, the Swiss Federal Data Protection and Information Commissioner has opined that the Swiss-U.S. Privacy Shield is inadequate for transfers of data from Switzerland to the U.S. The United Kingdom, or UK, whose data protection laws are similar to those of the EU, may similarly 52 determine that the EU-U.S.
Similarly, the Swiss Federal Data Protection and Information Commissioner has opined that the Swiss-U.S. Privacy Shield is inadequate for transfers of data from Switzerland to the U.S. The United Kingdom, or UK, whose data protection laws are similar to those of the EU, may similarly determine that the EU-U.S.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist in formulating research and development and commercialization strategies. Our consultants and advisors 49 may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist in formulating research and development and commercialization strategies. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or to continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product candidates.
If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or to continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product 56 candidates.
In such an event, our trials could be suspended or terminated and the FDA or other regulatory authorities could order us to cease further development of or deny approval of a product candidate for any or all targeted indications.
In such an event, our trials could be suspended or 34 terminated and the FDA or other regulatory authorities could order us to cease further development of or deny approval of a product candidate for any or all targeted indications.
It is possible that defects of form in the preparation or filing of our patents or patent applications may 58 exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.
It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.
Under the unitary patent system, European applications will soon have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court, or UPC. As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
Under the unitary patent system, European applications have the option, upon grant of a patent, of becoming a Unitary Patent, which will be subject to the jurisdiction of the Unitary Patent Court, or UPC. As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
We also are, or may be asserted to be, subject to the terms of our external and internal privacy and security policies, representations, certifications, publications and frameworks and contractual obligations to third parties related to privacy, data protection, information 53 security and processing.
We also are, or may be asserted to be, subject to the terms of our external and internal privacy and security policies, representations, certifications, publications and frameworks and contractual obligations to third parties related to privacy, data protection, information security and processing.
The license agreements with Stanford impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us.
The license agreements with Stanford impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, 52 milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us.
We cannot be sure that coverage and adequate reimbursement will be available for any product that it commercializes and, if reimbursement is available, that the level of reimbursement will be adequate. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.
We cannot 65 be sure that coverage and adequate reimbursement will be available for any product that it commercializes and, if reimbursement is available, that the level of reimbursement will be adequate. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates. 43 If clinical trials for our product candidates are prolonged, delayed or stopped, we may be unable to seek or obtain regulatory approval and commercialize our product candidates on a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any product revenue.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates. 38 If clinical trials for our product candidates are prolonged, delayed or stopped, we may be unable to seek or obtain regulatory approval and commercialize our product candidates on a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any product revenue.
The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire third-party intellectual property rights that We may consider attractive or necessary.
The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire third-party intellectual property rights that 58 We may consider attractive or necessary.
Healthcare legislative reform measures may have a material adverse effect on our business and results of operations. 70 In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.
Healthcare legislative reform measures may have a material adverse effect on our business and results of operations. In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.
For example, over the last several years, the U.S. government has shut down several times, and certain regulatory authorities, such as the FDA and the SEC, have had to furlough critical 74 employees and stop critical activities.
For example, over the last several years, the U.S. government has shut down several times, and certain regulatory authorities, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.
In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of its patents.
In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, 55 the patent owner may have limited remedies, which could materially diminish the value of its patents.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board 68 of directors.
If these companies develop therapeutics or product candidates more rapidly than we do, or if their therapeutics or product candidates are more effective or have fewer side effects, our ability to develop and successfully commercialize product candidates may be adversely affected. • If we are unable to maintain proper and effective internal controls over financial reporting, the accuracy and timeliness of our financial reporting and the market price of our common stock may be adversely affected. 33 • Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. • Our business, operations and clinical development plans and timelines could be adversely affected by the effects of health epidemics, natural disasters and other events on the manufacturing, clinical trial and other business activities performed by us or by third parties with whom it conducts business, including contract manufacturers, CROs, shippers and others. • To the extent we enter into any other collaborations, we may depend on such collaborations for the development and commercialization of our product candidates.
If these companies develop therapeutics or product candidates more rapidly than we do, or if their therapeutics or product candidates are more effective or have fewer side effects, our ability to develop and successfully commercialize product candidates may be adversely affected. • If we are unable to maintain proper and effective internal controls over financial reporting, the accuracy and timeliness of our financial reporting and the market price of our common stock may be adversely affected. • Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. 29 • Our business, operations and clinical development plans and timelines could be adversely affected by the effects of health epidemics, natural disasters and other events on the manufacturing, clinical trial and other business activities performed by us or by third parties with whom it conducts business, including contract manufacturers, contract research organizations, or CROs, shippers and others. • To the extent we enter into any other collaborations, we may depend on such collaborations for the development and commercialization of our product candidates.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain 71 product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from 63 other countries and bulk purchasing.
Additionally, we, and our service providers, collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some data and that of users, develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.
Additionally, we, and our service providers, collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some data and that of users to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.
The timing and amount of our operating expenditures will depend largely on: • the timing and progress of preclinical and clinical development of SZN-043, SZN-413 and other potential future product candidates; • the timing and progress of the development of our Wnt therapeutics platform; • the price and pricing structure that we are able to obtain from our third-party contract manufacturers to manufacture our preclinical study and clinical trial materials and supplies; • the extent to which prices for supplies and materials increase due to inflationary pressures and labor market constraints; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to maintain our current licenses, research and development programs and to establish new collaborations; • the progress of the development efforts of parties with whom we may in the future enter into collaboration and research and development agreements; • the costs involved in obtaining, maintaining, enforcing and defending patents and other intellectual property rights; • the impact of the health epidemics on our business; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company.
The timing and amount of our operating expenditures will depend largely on: 31 • the timing and progress of preclinical and clinical development of SZN-413, SZN-8141, SZN-8143, SZN-113 and other potential future product candidates; • the timing and progress of the development of our Wnt therapeutics platform; • the price and pricing structure that we are able to obtain from our third-party contract manufacturers to manufacture our preclinical study and clinical trial materials and supplies; • the extent to which prices for supplies and materials increase due to inflationary pressures and labor market constraints; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to maintain our current licenses, research and development programs and to establish new collaborations; • the progress of the development efforts of parties with whom we may in the future enter into collaboration and research and development agreements; • the costs involved in obtaining, maintaining, enforcing and defending patents and other intellectual property rights; • the impact of the health epidemics on our business; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company.
As a result, we or any current or future collaborators may be unable to obtain 51 sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have a material and adverse effect on our business, financial condition, results of operations and prospects.
As a result, we or any current or future collaborators may be unable to obtain sufficient insurance at a reasonable cost to 45 protect us against losses caused by product liability claims that could have a material and adverse effect on our business, financial condition, results of operations and prospects.
Although we believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable for resulting damages, which could be substantial.
Department of Labor. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable for resulting damages, which could be substantial.
Furthermore, if we or any current or future collaborator succeed in developing any products, we anticipate marketing them in the European Union, or EU, and other jurisdictions in addition to the United States. If approved, we or any 50 future collaborator may hire sales representatives and conduct physician and patient association outreach activities outside of the United States.
Furthermore, if we or 44 any current or future collaborator succeed in developing any products, we anticipate marketing them in the European Union, or EU, and other jurisdictions in addition to the United States. If approved, we or any future collaborator may hire sales representatives and conduct physician and patient association outreach activities outside of the United States.
Such disclosures are costly, and the disclosures or any actual or alleged failure to comply with such requirements could lead to a materially adverse impact on the business, including negative publicity, a loss of confidences in our services or security measures by its business partners or breach of contract claims.
Such disclosures are costly, and the disclosures or any actual or alleged failure to comply with such requirements could lead to a materially adverse impact on the business, including negative publicity, a loss of confidence in our services or security measures by its business partners or breach of contract claims.
Our business involves significant risks that may have a material adverse effect on our business, financial condition, results of operations, prospects and stock price. These risks are more fully described below and include, among others: • We are a clinical stage biopharmaceutical company with a history of losses.
Our business involves significant risks that may have a material adverse effect on our business, financial condition, results of operations, prospects and stock price. These risks are more fully described below and include, among others: • We are a biopharmaceutical company with a history of losses.
We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock. We are a clinical stage biopharmaceutical company with a history of losses.
We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock. We are a biopharmaceutical company with a history of losses.
Our ability to achieve or sustain profitability, if ever, will depend on, among other things, successfully developing product candidates, continuing clinical trials for SZN-043, successful development and testing of SZN-413 through our partnership with Boehringer Ingelheim International GmbH, or BI, obtaining regulatory approvals to market and commercialize product candidates, manufacturing any approved products on commercially reasonable terms, entering into potential future alliances, establishing a sales and marketing organization or suitable third-party alternatives for any approved product and raising sufficient funds to finance business activities.
Our ability to achieve or sustain profitability, if ever, will depend on, among other things, successfully developing product candidates, continuing development for our lead product candidates, successful development and testing of SZN-413 through our partnership with Boehringer Ingelheim International GmbH, or BI, obtaining regulatory approvals to market and commercialize product candidates, manufacturing any approved products on commercially reasonable terms, entering into potential future alliances, establishing a sales and marketing organization or suitable third-party alternatives for any approved product and raising sufficient funds to finance business activities.
Any regulatory approvals that we or our current or potential future collaborators obtain for SZN-043, SZN-413 or any potential future product candidate may also be subject to limitations on the approved indicated uses for which a 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 such product candidate.
Any regulatory approvals that we or our current or potential future collaborators obtain for our product candidate may also be subject to limitations on the approved indicated uses for which a 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 such product candidate.
A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We have determined that we likely had an ownership change in September 2020.
A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We have determined that we likely had an ownership change in September 2020 and April 2024.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how any additional future challenges or the healthcare reform measures of the Biden administration will impact the ACA and our business.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how any additional future challenges or the healthcare reform measures of the second Trump administration will impact the ACA and our business.
The enrollment of patients depends on many factors, including: • the severity of the disease under investigation; • the patient eligibility criteria defined in the clinical trial protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity and availability of clinical trial sites for prospective patients; • willingness of physicians to refer their patients to our clinical trials; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • factors we cannot control that may limit patients, principal investigators or staff or clinical site available, including restrictions related to the conflict between Russia and Ukraine.
The enrollment of patients depends on many factors, including: • the severity of the disease under investigation; • the patient eligibility criteria defined in the clinical trial protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity and availability of clinical trial sites for prospective patients; • willingness of physicians to refer their patients to our clinical trials; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • factors we cannot control that may limit patients, principal investigators or staff or clinical site availability.
Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors or partners, including existing and future CROs may be vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, theft or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents.
Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors or partners, including existing and future CROs are vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, theft or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions took effect progressively starting in fiscal year 2023.
Compliance with such regulations may limit our exclusive rights and limit our ability to contract with non-U.S. manufacturers. • Clinical development includes a lengthy and expensive process with an uncertain outcome, we may have negative results and results of earlier studies and trials may not be predictive of future trial results. • We have conducted our clinical trial for our product candidate outside of the United States.
Compliance with such regulations may limit our exclusive rights and limit our ability to contract with non-U.S. manufacturers. • Clinical development includes a lengthy and expensive process with an uncertain outcome, we may have negative results and results of earlier studies and trials may not be predictive of future trial results. • We historically have and may in the future conduct clinical trials for our product candidate outside of the United States.
Any of these occurrences or failure to resolve the findings related to SZN-043 may materially and adversely affect our business and financial condition and impair our ability to generate revenues. Further, clinical trials by their nature use a sample of the potential patient population.
Any of these occurrences or failure to resolve the findings may materially and adversely affect our business and financial condition and impair our ability to generate revenues. Further, clinical trials by their nature use a sample of the potential patient population.
However, the FDA and other foreign equivalents may not accept data from such trials, in which case its development plans will be delayed, which could materially harm its business. • A few stockholders, including one of our directors, control the voting rights with respect to a large number of shares of our common stock and could exercise their voting power in a manner that adversely affects us or our stockholders. 34 Risks Related to Our Business We are a clinical stage biopharmaceutical company with a history of losses.
However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business. • A few stockholders, including one of our former directors, control the voting rights with respect to a large number of shares of our common stock and could exercise their voting power in a manner that adversely affects us or our stockholders. 30 Risks Related to Our Business We are a biopharmaceutical company with a history of losses.
We may be unable to prevent competitors from entering the market with a product that is similar or identical to SZN-043, SZN-413 or any future product candidates. The filing of a patent application or the issuance of a patent is not conclusive as to its ownership, inventorship, scope, patentability, validity or enforceability.
We may be unable to prevent competitors from entering the market with a product that is similar or identical to SZN-413, SZN-8141, SZN-8143, SZN-113 or any future product candidates. The filing of a patent application or the issuance of a patent is not conclusive as to its ownership, inventorship, scope, patentability, validity or enforceability.
In addition, if the FDA or any other regulatory authority approves SZN-043, SZN-413 or any of our future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, import, export, advertising, promotion and recordkeeping for such product will be subject to extensive and ongoing regulatory requirements.
In addition, if the FDA or any other regulatory authority approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, import, export, advertising, promotion and recordkeeping for such product will be subject to extensive and ongoing regulatory requirements.
SZN-043, SZN-413 and any potential future product candidates are subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of therapeutic biologics.
SZN-413, SZN-8141, SZN-8143, SZN-113 and any potential future product candidates are subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of therapeutic biologics.
The market price for our common stock may be influenced by many factors, including the other risks described in this section of this Annual Report titled “ Risk Factors ” and the following: • our ability, or the ability of our business partners, to advance SZN-043, SZN-413 or potential future product candidates into the clinic; • results of preclinical and clinical studies for SZN-043, SZN-413 or potential future product candidates, or those of our competitors or current and potential future collaborators; • the impact of health epidemic on our business; • regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our future products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization collaborators, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory authorities with respect to our future products, clinical trials, manufacturing process or sales and marketing terms; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any future collaborations, including, but not limited to, those with our sources of manufacturing supply and our commercialization collaborators; • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic alliances, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; 75 • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters, public health crises and other calamities; and • general economic, industry and market conditions.
The market price for our common stock may be influenced by many factors, including the other risks described in this section of the Report titled “ Risk Factors ” and the following: • our ability, or the ability of our business partners, to advance our product candidates into the clinic; • results of preclinical and clinical studies for our product candidates, or those of our competitors or current and potential future collaborators; • the impact of health epidemic on our business; • regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our future products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization collaborators, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory authorities with respect to our future products, clinical trials, manufacturing process or sales and marketing terms; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any future collaborations, including, but not limited to, those with our sources of manufacturing supply and our commercialization collaborators; • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic alliances, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters, public health crises and other calamities; and • general economic, industry and market conditions. 67 In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that has been often unrelated to the operating performance of the issuer.
Although our research and development efforts to date have resulted in the discovery and development of SZN-043, SZN-413 and other potential product candidates, our current product candidates may not be safe or effective therapeutics and we may not be able to develop any successful product candidates.
Although our research and development efforts to date have resulted in the discovery and development of SZN-413, SZN-8141, SZN-8143, SZN-113 and other potential product candidates, our current product candidates may not be safe or effective therapeutics and we may not be able to develop any successful product candidates.
We may issue additional shares of common stock or other equity securities without your approval, including pursuant to our employee stock plans, our agreement with Lincoln Park and our agreement with Guggenheim, and holders of warrants and options may choose to exercise their warrants and options requiring us to issue shares of common stock; all of these actions would dilute your ownership interest and may depress the market price of our common stock.
We may issue additional shares of common stock or other equity securities without your approval, including pursuant to our employee stock plans, and holders of warrants and options may choose to exercise their warrants and options requiring us to issue shares of common stock; all of these actions would dilute your ownership interest and may depress the market price of our common stock.
If SZN-043, SZN-413 or any of our potential future product candidates prove to be ineffective, unsafe or commercially unviable, our entire pipeline could have little, if any, value, which could require us to change our focus and approach to antibody-based discovery and development and materially and adversely affect our business, financial condition, results of operations and prospects.
If our product candidates prove to be ineffective, unsafe or commercially unviable, our entire pipeline could have little, if any, value, which could require us to change our focus and approach to antibody-based discovery and development and materially and adversely affect our business, financial condition, results of operations and prospects.
Even if regulatory approval is obtained for a product candidate, including SZN-043, we may not generate or sustain revenue from sales of approved products.
Even if regulatory approval is obtained for a product candidate, we may not generate or sustain revenue from sales of approved products.
Our public warrants are issued in registered form under a warrant agreement by and between Continental Stock Transfer & Trust Company, as the warrant agent, and us, dated as of March 31, 2023, or the Warrant Agreement.
Our public warrants are issued in registered form under an amended and restated warrant agreement by and between Continental Stock Transfer & Trust Company, as the warrant agent, and us, dated as of March 31, 2023, or the Warrant Agreement.
If the market opportunities for our current and potential future product candidates, including SZN-043 and SZN-413, are smaller than we believe they are, our future product revenues may be adversely affected and our business may suffer.
If the market opportunities for our current and potential future product candidates, including SZN-413, SZN-8141, SZN-8143 and SZN-113, are smaller than we believe they are, our future product revenues may be adversely affected and our business may suffer.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America, will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; • any claim or cause of action for breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; • any claim or cause of action against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, or DGCL, our certificate of incorporation or our bylaws; • claim or cause of action seeking to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws; • any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our current or former directors, officers or other employees that is governed by the internal-affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as defendants. 77 This provision would not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, or the Securities Act, or the Securities Exchange Act of 1934, as amended, or the Exchange Act, or any claim for which the U.S. federal courts have exclusive jurisdiction.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America, will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; • any claim or cause of action for breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; • any claim or cause of action against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, or DGCL, our certificate of incorporation or our bylaws; • claim or cause of action seeking to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws; • any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our current or former directors, officers or other employees that is governed by the internal-affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as defendants.
To date, we have not observed any such tumor formation with SZN-043 in our preclinical toxicology studies and clinical trial, but there can be no guarantee that our current or future product candidates will not result in tumor formation.
To date, we have not observed any such tumor formation in our preclinical toxicology studies and clinical trials, but there can be no guarantee that our current or future product candidates will not result in tumor formation.
For example, although SZN-043 exhibited encouraging results in animal studies, they may not demonstrate the same properties in humans and may interact with human physiology in unforeseen, ineffective or harmful ways, as shown by the observations of asymptomatic transaminase elevations discussed above.
For example, although our lead product candidates exhibited encouraging results in animal studies, they may not demonstrate the same properties in humans and may interact with human physiology in unforeseen, ineffective or harmful ways, as shown by the observations of asymptomatic transaminase elevations discussed above.
Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs and biologics under the law, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source biologics that have been on the market for at least 11 years covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs and biologics under the law, or the Medicare Drug Price Negotiation Program, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
We may be unable to obtain U.S. or foreign regulatory approval and, as a result, be unable to commercialize SZN-043, SZN-413 or potential future product candidates.
We may be unable to obtain U.S. or foreign regulatory approval and, as a result, be unable to commercialize SZN-413, SZN-8141, SZN-8143, SZN-113 or potential future product candidates.
Patents granted before the implementation of the UPC will have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
Patents granted before the implementation of the UPC had the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties that we have encountered and that are frequently encountered by clinical stage biopharmaceutical companies such as us. We may not be able to access the financial resources to continue development of, or to enter into any collaborations for, SZN-043 or any potential future product candidates.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties that we have encountered and that are frequently encountered by clinical stage biopharmaceutical companies such as us. We may not be able to access the financial resources to develop, or to enter into any collaborations for, our lead product candidates.
We or our current and potential future collaborator may be subject to post-marketing testing requirements to maintain regulatory approval. 37 SZN-043, SZN-413 and any other of our future product candidates that are tested in humans may not demonstrate the safety, purity and potency, or efficacy, necessary to become approvable or commercially viable.
We or our current and potential future collaborator may be subject to post-marketing testing requirements to maintain regulatory approval. Our product candidates that are tested in humans may not demonstrate the safety, purity and potency, or efficacy, necessary to become approvable or commercially viable.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property and confidential information that is proprietary, strategic or competitive in nature.
Biggest changeItem 1C. Cybersecurit y Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property and confidential information that is proprietary, strategic or competitive in nature.
Depending on the environment, we implement and maintain various processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information system and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training, and penetration testing.
Depending on the environment, we implement and maintain various processes, standards, and/or policies designed to manage and mitigate material risks from 71 cybersecurity threats to our information system and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training, and penetration testing.
We are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
We are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, which have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Such individuals have an average of over 15 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems and programming.
Such individuals have an average of over 20 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems and programming.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive office is located in South San Francisco, California, pursuant to a lease that expires in April 2025. We believe that our current facility is adequate to meet our ongoing needs and, if we require additional space, we will be able to obtain additional facilities on commercially reasonable terms.
Biggest changeItem 2. Properties. Our principal executive office is located in South San Francisco, California, pursuant to a lease that expires in April 2029. We believe that our current facility is adequate to meet our ongoing needs and, if we require additional space, we will be able to obtain additional facilities on commercially reasonable terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. 80 From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.
Biggest changeItem 3. Legal Proceedings. From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures. Not applicable. 81 PART II
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures. Not applicable. 72 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of March 31, 2024, there were 56 holders of record of our shares of common stock and 15 holders of record of our public warrants. These amounts do not include stockholders for whom shares are held in street name by banks, brokers and other nominees.
Biggest changeHolders As of March 20, 2025, there were 56 holders of record of our shares of common stock and 11 holders of record of our public warrants. These amounts do not include stockholders for whom shares are held in street name by banks, brokers and other nominees.
Recent Sales of Unregistered Equity Securities There were no sales of unregistered securities during the period covered by this Annual Report other than those previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Issuer Purchases of Equity Securities Not applicable. Item 6. [Reserved] 82
Recent Sales of Unregistered Equity Securities There were no sales of unregistered securities during the period covered by this Annual Report other than those previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Issuer Purchases of Equity Securities Not applicable. Item 6. [Reserved] 73

Item 7. Management's Discussion & Analysis

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

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Biggest changeOther Income, Net Other income, net primarily consists of the gain on the change in fair value of warrant liabilities. 86 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes results of operations for the periods presented (dollars in thousands): Year Ended December 31, $ % 2023 2022 Change Change Collaboration and license revenue $ — $ 12,500 $ (12,500 ) -100 % Operating expenses: Research and development 27,230 37,013 (9,783 ) -26 % General and administrative 15,798 19,826 (4,028 ) -20 % Restructuring 2,752 — 2,752 * Total operating expenses 45,780 56,839 (11,059 ) -19 % Loss from operations (45,780 ) (44,339 ) (1,441 ) 3 % Interest income 2,340 781 1,559 200 % Other income, net 398 7,554 (7,156 ) -95 % Net loss $ (43,042 ) $ (36,004 ) $ (7,038 ) 20 % * Percentage is not meaningful Research and Development Expenses The following table summarizes research and development expenses for the periods presented (dollars in thousands): Year Ended December 31, $ % 2023 2022 Change Change SZN-043 $ 11,240 $ 11,702 $ (462 ) -4 % SZN-1326 5,913 8,827 (2,914 ) -33 % Discovery and preclinical stage programs 10,077 16,484 (6,407 ) -39 % Total research and development expenses $ 27,230 $ 37,013 $ (9,783 ) -26 % The decrease of $0.5 million, or 4%, in SZN-043 program expenses for 2023, compared to 2022, is primarily due to the workforce reductions effective in 2023.
Biggest changeResearch and Development Expenses The following table summarizes research and development expenses for the periods presented (dollars in thousands): Year Ended December 31, $ % 2024 2023 Change Change SZN-043 $ 10,784 $ 11,240 $ (456 ) -4 % SZN-1326 1,462 5,913 (4,451 ) -75 % Discovery and preclinical stage programs 8,886 10,077 (1,191 ) -12 % Total research and development expenses $ 21,132 $ 27,230 $ (6,098 ) -22 % The decrease of $0.4 million, or 4%, in SZN-043 program expenses for 2024, compared to 2023, is primarily due to the workforce reductions effective in 2023.
Private Placement In April 2024, we entered into a securities purchase agreement with certain institutional investors and management and issued and sold in a private placement: (i) 1,091,981 shares of common stock, (ii) pre-funded warrants to purchase up to 40,000 shares of common stock, and (iii) warrants to purchase up to 11,136,106 shares of common stock.
In April 2024, we entered into a securities purchase agreement with certain institutional investors and management and issued and sold in a private placement: (i) 1,091,981 shares of common stock, (ii) pre-funded warrants to purchase up to 40,000 shares of common stock, and (iii) warrants to purchase up to 11,136,106 shares of common stock.
This is due to the numerous risks and uncertainties associated with the development of product candidates, many of which are outside of our control, including those associated with: • our ability, and the ability of our primary business partners, to hire and retain key 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 maintain our current research and development programs and to establish new ones; 85 • establishing an appropriate safety profile with IND-enabling studies; • the number of sites and patients included in the clinical trials; • the countries in which the clinical trials are conducted; • per patient trial costs; • successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates, the availability of alternate treatments and the limited pool of eligible patients in certain disease areas; • the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • the number of trials required for regulatory approval; • the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities; • our ability to establish new licensing or collaboration arrangements; • the performance of our current and future business partners, if any; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • significant and changing government regulation and regulatory guidance; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; • the impact of inflation on our expenses; • launching commercial sales of our drug candidates, if approved, whether alone or in collaboration with others; • the effect of products that may compete with our product candidates or other market developments; and • maintaining a continued acceptable safety profile of the drug candidates following approval.
This is due to the numerous risks and uncertainties associated with the development of product candidates, many of which are outside of our control, including those associated with: • our ability, and the ability of our primary business partners, to hire and retain key 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 maintain our current research and development programs and to establish new ones; • establishing an appropriate safety profile with IND-enabling studies; • the number of sites and patients included in the clinical trials; • the countries in which the clinical trials are conducted; • per patient trial costs; • successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates, the availability of alternate treatments and the limited pool of eligible patients in certain disease areas; • the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • the number of trials required for regulatory approval; • the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities; 76 • our ability to establish new licensing or collaboration arrangements; • the performance of our current and future business partners, if any; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • significant and changing government regulation and regulatory guidance; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; • the impact of inflation on our expenses; • launching commercial sales of our drug candidates, if approved, whether alone or in collaboration with others; • the effect of products that may compete with our product candidates or other market developments; and • maintaining a continued acceptable safety profile of the drug candidates following approval.
We anticipate that we will continue to incur net losses for the foreseeable future because of additional costs and expenses related to our research and development activities, including increased expenses from pipeline advancement and advancement of our product candidates into and through clinical developments and associated regulatory submissions, and increased general and administrative expenses as we scale our organization as a public company.
We anticipate that we will continue to incur net losses for the foreseeable future because of additional costs and expenses related to our research and development activities, including increased expenses from pipeline advancement and advancement of our product candidates into and through clinical developments and associated regulatory submissions, as well as increased general and administrative expenses as we scale our organization as a public company.
For licenses that are bundled with other promised goods or services, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable upfront fees.
For licenses that are bundled with other 82 promised goods or services, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable upfront fees.
We do not expect to generate any revenue from the sale of our products unless and until we obtain regulatory clearance or approval. Operating Expenses We classify operating expenses into three main categories: (i) research and development expenses, (ii) general and administrative expenses and (iii) restructuring expenses.
We do not expect to generate any revenue from the sale of our products unless and until we obtain regulatory clearance or approval. 75 Operating Expenses We classify operating expenses into three main categories: (i) research and development expenses, (ii) general and administrative expenses and (iii) restructuring expenses.
Since our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, developing and optimizing our Wnt therapeutics platform, identifying potential product candidates, undertaking research and development activities, engaging in strategic transactions, establishing and enhancing our 83 intellectual property portfolio, and providing general and administrative support for these operations.
Since our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, developing and optimizing our Wnt therapeutics platform, identifying potential product candidates, undertaking research and development activities, engaging in strategic transactions, establishing and enhancing our 74 intellectual property portfolio, and providing general and administrative support for these operations.
We also have entered into patent and research license arrangements with third-parties. The license agreements require milestone payments upon the achievement of certain regulatory and developmental stages. In addition, we will be required to pay royalties on sales of certain licensed products. As of December 31, 2023, we have incurred nominal fees and milestone payments under our license agreements.
We also have entered into patent and research license arrangements with third-parties. The license agreements require milestone payments upon the achievement of certain regulatory and developmental stages. In addition, we will be required to pay royalties on sales of certain licensed products. As of December 31, 2024, we have incurred nominal fees and milestone payments under our license agreements.
Our unique approach and platform technologies have led to the discovery and advancement of two lead product candidates. The chart below represents a summary of our wholly owned product candidates: Please see “ Part I, Item I – Business ” for a further discussion of our product candidates and clinical development programs.
Our unique approach and platform technologies have led to the discovery and advancement of two lead product candidates. The chart below represents a summary of our product candidates: Please see “ Part I, Item I – Business ” for a further discussion of our product candidates and clinical development programs.
We granted BI an exclusive, royalty-bearing, worldwide, sublicensable license, under our applicable patents and know-how, to develop, manufacture and commercialize, for all uses, one lead and two back-up Fzd4 bi-specific antibodies selected by BI and their derivatives.
We granted BI an exclusive, royalty-bearing, worldwide, sublicensable license, under our applicable patents and know-how, to develop, manufacture and commercialize, for all uses, one lead and two back-up Fzd4 bi-specific antibodies selected by BI.
Given that the amount and timing related to such payments are uncertain, they are not considered to be contractual obligations. As of December 31, 2023, we had not accrued for any termination or cancellation charges as these were not considered probable.
Given that the amount and timing related to such payments are uncertain, they are not considered to be contractual obligations. As of December 31, 2024, we had not accrued for any termination or cancellation charges as these were not considered probable.
The payment obligations under the license agreements are contingent upon future events, such as our achievement of specified milestones or generating product sales. As of December 31, 2023, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales.
The payment obligations under the license agreements are contingent upon future events, such as our achievement of specified milestones or generating product sales. As of December 31, 2024, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales.
Our future funding requirements will depend on many factors, including, but not limited to: 88 • the scope, rate of progress, results and costs of researching and developing our lead product candidates or any future product candidates, conducting preclinical and clinical studies, in particular our current ongoing clinical study of SZN-043; • the outcome, costs, and timing involved in obtaining regulatory approvals for our product candidates; • the achievement of milestones that trigger payments to us and the timing, receipt and amount of royalties under the CLA and any collaboration and license agreement we may enter in the future; • the number and scope of clinical programs we decide to pursue; • the cost of acquiring, licensing, or investing in product candidates and technologies; • the costs associated with securing and establishing commercialization; • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense, and enforcement of any patents or other intellectual property rights; • our need and ability to retain key management and hire scientific, technical, business, and medical personnel; • the effect of competing products and product candidates and other market developments; • the timing, receipt, and amount of sales from SZN-043 and any other product candidates, if approved; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the economic and other terms, timing of, and success of any collaboration, licensing, or other arrangements which we may enter in the future; and • the effects of the disruptions to and volatility in the credit and financial markets in the U.S. and worldwide.
Our future funding requirements will depend on many factors, including, but not limited to: • the scope, rate of progress, results and costs of researching and developing our lead product candidates or any future product candidates, conducting preclinical and clinical studies; • the outcome, costs, and timing involved in obtaining regulatory approvals for our product candidates; • the achievement of milestones that trigger payments to us and the timing, receipt and amount of royalties under the CLA and any collaboration and license agreement we may enter in the future; • the number and scope of clinical programs we decide to pursue; • the cost of acquiring, licensing, or investing in product candidates and technologies; • the costs associated with securing and establishing commercialization; 80 • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense, and enforcement of any patents or other intellectual property rights; • our need and ability to retain key management and hire scientific, technical, business, and medical personnel; • the effect of competing products and product candidates and other market developments; • the timing, receipt, and amount of sales from our lead product candidates, if approved; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the economic and other terms, timing of, and success of any collaboration, licensing, or other arrangements which we may enter in the future; and • the effects of the disruptions to and volatility in the credit and financial markets in the U.S. and worldwide.
As a result of our discoveries, we are pioneering the selective activation of Wnt signaling, designing and engineering Wnt pathway mimetics, and advancing tissue-selective Wnt candidates. Our lead product candidates are multi-specific, antibody-based therapeutics that mimic the roles of naturally occurring Wnt or R-spondin proteins, which are involved in activation and enhancement of the Wnt pathway, respectively.
As a result of our discoveries, we are pioneering the selective activation of Wnt signaling, designing and engineering Wnt pathway mimetics, and advancing tissue-selective Wnt candidates. Our lead product candidates are multi-specific, antibody-based therapeutics that mimic the roles of naturally occurring Wnt proteins, which are involved in activation and enhancement of the Wnt pathway, respectively.
For five years after the effective date of the CLA, we are prohibited from preclinically and clinically developing or commercializing Fzd4 bi-specific antibodies for any diseases of the eye, and BI is prohibited from clinically developing or commercializing licensed products for any purpose other than diseases of the eye.
For five years after the effective date of the CLA, we are prohibited from preclinically and clinically developing or commercializing Fzd4 bi-specific antibodies that have certain properties for any diseases of the eye, and BI is prohibited from clinically developing or commercializing licensed products for any purpose other than diseases of the eye.
Under the terms of the CLA, BI paid us a non-refundable upfront payment of $12.5 million less applicable withholding tax, and we are eligible to receive success-based milestone payments up to $587.0 million and mid-single digit to low-double digit royalties on net sales of the licensed products should any reach commercialization.
Under the terms of the CLA, BI paid us a non-refundable upfront payment of $12.5 million less applicable withholding tax and agreed to pay success-based milestone payments up to $587.0 million and mid-single digit to low-double digit royalties on net sales of the licensed products should any reach commercialization.
Contractual Obligations and Commitments As of December 31, 2023, we have lease obligations primarily consisting of one operating lease for our facility. The lease expires in April 2025. Under the terms of our operating leases, we had lease obligations of $3.6 million in payments through 2025 as of December 31, 2023.
Contractual Obligations and Commitments As of December 31, 2024, we have lease obligations primarily consisting of one operating lease for our facility. The lease expires in April 2029. Under the terms of our operating leases, we had lease obligations of $10.1 million in payments through 2029 as of December 31, 2024.
The decrease of $6.4 million, or 39%, in discovery and preclinical stage program expenses for 2023, compared to 2022, is primarily due to the workforce reductions implemented in 2023 to focus our resources on our clinical stage programs.
The decrease of $1.2 million, or 12%, in discovery and preclinical stage program expenses for 2024, compared to 2023, is primarily due to the workforce reductions implemented in 2023 to focus our resources on our clinical stage programs.
At the closing of the private placement, we received aggregate upfront gross proceeds of approximately $17.6 million, before deducting placement agent fees and other expenses. If the warrants are exercised in full we will receive additional gross proceeds of approximately $175.5 million.
At the closing of the private placement, we received aggregate net proceeds of approximately $16.0 million, after deducting placement agent fees and other expenses. If the warrants are exercised in 79 full we will receive additional gross proceeds of approximately $175.5 million.
Cash used in operating activities of $44.1 million for 2022 was primarily due to the use of funds in our operations and the resulting net loss of $36.0 million and a net change of $8.4 million in our net operating assets and liabilities, partially offset by $0.3 million in non-cash charges.
Cash used in operating activities of $40.4 million for 2023 was primarily due to the use of funds in our operations and the resulting net loss of $43.0 million and a net change of $3.9 million in our net operating assets and liabilities, partially offset by $6.6 million in non-cash charges.
Summary of Cash Flows The following table sets forth the primary sources and uses of cash, cash equivalents and restricted cash for the periods presented below (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (40,363 ) $ (44,145 ) Net cash provided by investing activities 51,723 38,309 Net cash provided (used in) by financing activities 276 (2,565 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 11,636 $ (8,401 ) Cash Used in Operating Activities Cash used in operating activities of $40.4 million for 2023 was primarily due to the use of funds in our operations and the resulting net loss of $43.0 million and a net change of $3.9 million in our net operating assets and liabilities, partially offset by $6.6 million in non-cash charges.
Summary of Cash Flows The following table sets forth the primary sources and uses of cash, cash equivalents and restricted cash for the periods presented below (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (17,628 ) $ (40,363 ) Net cash (used in) provided by investing activities (26 ) 51,723 Net cash provided by financing activities 16,176 276 Net (decrease) increase in cash, cash equivalents and restricted cash $ (1,478 ) $ 11,636 Cash Used in Operating Activities Cash used in operating activities of $17.6 million for 2024 was primarily due to the use of funds in our operations and the resulting net loss of $63.6 million and a net change of $0.8 million in our net operating assets and liabilities, partially offset by $46.8 million in non-cash charges.
We have incurred net losses since inception. For the years ended December 31, 2023 and 2022, we incurred net losses of $43.0 million and $36.0 million, respectively. As of December 31, 2023, we had an accumulated deficit of $221.7 million and cash and cash equivalents of $36.0 million.
We have incurred net losses since inception. For the years ended December 31, 2024 and 2023, we incurred net losses of $63.6 million and $43.0 million, respectively. As of December 31, 2024, we had an accumulated deficit of $285.3 million and cash and cash equivalents of $34.6 million.
We believe, based on our current operating plan, that our existing cash, cash equivalents and the gross proceeds of approximately $17.6 million received in April 2024 from the closing of the private placement, before deducting placement agent fees and other expenses, will be sufficient to fund our operations for at least the next 12 months from the date of this Annual Report.
We believe, based on our current operating plan, that our existing cash, cash equivalents and the gross proceeds of approximately $76.4 million received from the private placement in March 2025 will be sufficient to fund our operations for at least the next 12 months from the date of this Annual Report.
We incurred significant net operating losses and negative cash flows from operations. Historically, we have financed our operations primarily through the sales of our equity securities and the payment received under our collaboration and license agreement.
Liquidity and Capital Resources Since inception, we have only generated revenue and income under the CLA with BI and TCGFB Collaboration. We incurred significant net operating losses and negative cash flows from operations. Historically, we have financed our operations primarily through the sales of our equity securities and the payment received under our collaboration and license agreement.
Specifically, in the near term we expect to incur substantial expenses relating to our clinical trials, the development and validation of our manufacturing processes, and other research and development activities. Please see Note 8 “ Restructuring ” to our consolidated financial statements for further discussion of our restructuring activities.
Specifically, in the near term we expect to incur substantial expenses relating to our clinical trials, the development and validation of our manufacturing processes, and other research and development activities.
If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee's control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received or the underlying activity has been completed.
Milestone payments that are not within our or the licensee's control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received or the underlying activity has been completed.
We only apply the five-step model to contracts when it is probable that we will collect the consideration that we are entitled to in exchange for the goods or services transferred to the customer. 90 At contract inception, we assess the goods or services promised within the contract, determine those that are performance obligations, and assess whether each promised good or service is distinct.
We only apply the five-step model to contracts when it is probable that we will collect the consideration that we are entitled to in exchange for the goods or services transferred to the customer.
These costs consist of employee severance and other termination benefits. Interest Income Interest income consists primarily of interest earned on our cash equivalents and marketable securities.
These costs consist of employee severance and other termination benefits. Interest Income Interest income consists of interest earned on our cash and cash equivalents. Other (Expense) Income, Net Other (expense) income, net primarily consists of the gain on the change in fair value of warrant liabilities.
Licensing Arrangements In October 2022, we executed the CLA with BI to research, develop and commercialize Fzd4 bi-specific antibodies designed using the our SWAP technology, including SZN-413. We and BI are conducting partnership research focused on SZN-413 during a one-year period, which BI extended for an additional six-month period.
Licensing Arrangements In October 2022, we executed a Collaboration and Licensing Agreement, or the CLA, with Boehringer Ingelheim International GmbH, or BI, to research, develop and commercialize Frizzled 4, or Fzd4, bi-specific antibodies designed using our SWAP technology, including SZN-413. We and BI conducted partnership research focused on SZN-413 during a 1.5-year period.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone Payments: At contract inception, we use the most likely amount method to evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price.
Milestone Payments: At contract inception, we use the most likely amount method to evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price. If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price.
The net change in our operating assets and liabilities was primarily due to an increase in accounts receivable and a net decrease in accounts payable and accrued and other liabilities. 89 Cash Provided by Investing Activities Cash provided by investing activities of $51.7 million for 2023 consisted primarily of $80.2 million of proceeds from the maturities of marketable securities, partially offset by $28.0 million of cash used for the purchases of marketable securities and $0.4 million of cash used for the purchases of property and equipment.
Cash (Used in) Provided by Investing Activities Cash used in investing activities of $26,000 for 2024 consisted of the purchases of lab equipment Cash provided by investing activities of $51.7 million for 2023 consisted primarily of $80.2 million of proceeds from the maturities of marketable securities, partially offset by $28.0 million of cash used for the purchases of marketable securities and $0.4 million of cash used for the purchases of property and equipment.
Upon the achievement of further regulatory and developmental milestones and the sale of licensed products, we may incur significant fees and royalties under these licenses.
Upon the achievement of further regulatory and developmental milestones and the sale of licensed products, we may incur significant fees and royalties under these licenses. Please see “ Part I, Item I – Business – Intellectual Property - Collaboration and Licensing Arrangements ” for a further discussion of our collaboration and licensing arrangements.
Cash Provided by (Used in) Financing Activities Cash provided by financing activities of $0.3 million for 2023 consisted primarily of proceeds from the issuance of common stock under the employee stock purchase plan.
Cash Provided by Financing Activities Cash provided by financing activities of $16.2 million for 2024 consisted primarily of net proceeds from the issuance and sale of common stock, pre-funded warrants and warrants to investors and certain members of management in a private placement. 81 Cash provided by financing activities of $0.3 million for 2023 consisted primarily of proceeds from the issuance of common stock under the employee stock purchase plan.
Please see “ Part I, Item I – Business – Intellectual Property - Collaboration and Licensing Arrangements ” for a further discussion of our collaboration and licensing arrangements. 84 Components of Results of Operations Collaboration and License Revenue We had not generated any revenue prior to the execution of the CLA in October 2022.
Components of Results of Operations Revenue Collaboration and License Revenue We had not generated any revenue prior to the execution of the CLA in October 2022.
As of December 31, 2023, we had cash and cash equivalents of $36.0 million and accumulated deficit of $221.7 million.
As of December 31, 2024, we had cash and cash equivalents of $34.6 million and accumulated deficit of $285.3 million.
No fractional shares were issued because of the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share received a cash payment in lieu thereof. Impact of Inflation Inflation has increased and is expected to continue to increase for the near future. Inflation generally affects us by increasing our labor costs, research and clinical trial costs.
Impact of Inflation Inflation has increased and is expected to continue to increase for the near future. Inflation generally affects us by increasing our labor costs, research and clinical trial costs.
We then recognize revenue for the amount of the transaction price that is allocated to the respective performance obligations when or as the performance obligations are satisfied. We constrain the estimate of the transaction price up to the amount (the variable consideration constraint) that a significant reversal of recognized revenue is not probable.
We constrain the estimate of the transaction price up to the amount (the variable consideration constraint) that a significant reversal of recognized revenue is not probable. We record accounts receivable for amounts billed to the customer for which we have an unconditional right to consideration.
We expect that our research and development expenses will increase for the foreseeable future as we identify and develop product candidates, in particular as we seek to continue clinical trials and pursue regulatory approval and commercialization for SZN-043. The successful development of our product candidates is highly uncertain.
We expect that our research and development expenses will increase for the foreseeable future as we identify and develop product candidates. The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs required to complete the development of our lead product candidates.
General and Administrative Expenses The decrease of $4.0 million, or 20%, in general and administrative expenses for 2023, compared to 2022, is primarily attributable to employee retention credits of $1.3 million received in 2023, and a reduction in employee-related expenses, professional fees and recruiting associated with the workforce reductions implemented in 2023.
General and Administrative Expenses The decrease of $0.7 million, or 5%, in general and administrative expenses for 2024, compared to 2023, is primarily attributable to reductions in employee-related expenses as a result of the workforce reductions in 2023, as well as lower consulting and professional fees as a result of the restructuring plans we implemented in 2023. 78 Restructuring The decrease of $2.8 million, or 100%, in restructuring charges for 2024, compared to 2023, is attributable to workforce reductions implemented in 2023.
The decrease of $2.9 million, or 33%, in SZN-1326 program expenses for 2023, compared to 2022, is primarily due to the completion of manufacturing drug substance and the workforce reductions effective in 2023.
The decrease of $4.5 million, or 75%, in SZN-1326 program expenses for 2024, compared to 2023, is primarily due to the workforce reductions we implemented in 2023, as well as the discontinuation of the clinical development of SZN-1326 in January 2024.
Emerging Growth Company Status We are an emerging growth company, or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact our results of operations in future periods. 83 Emerging Growth Company Status We are an emerging growth company, or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
We received $10.5 million of the upfront payment from BI in November 2022 and expect to receive the refund of the associated withholding tax of $2.2 million in 2024. The non-refundable upfront payment of $12.5 million was recognized as collaboration and license revenue in 2022.
In September 2024, a milestone was achieved as BI decided to move forward with the development of SZN-413, and we received a $10.0 million non-refundable and non-creditable payment from BI pursuant to the terms of the CLA. The milestone payment of $10.0 million was recognized as collaboration and license revenue for the year ended December 31, 2024.
Restructuring The increase of $2.8 million in restructuring charges for 2023, compared to 2022, is attributable to workforce reductions implemented in 2023. Interest Income The increase of $1.6 million, or 200%, in interest income for 2023, compared to 2022, is due to the increase in market interest rates on our money market funds and marketable securities.
Interest Income The decrease of $0.6 million, or 28%, in interest income for 2024, compared to 2023, is due to a decrease in cash and cash equivalents.
Removed
Restructuring In January 2023, we implemented a restructuring plan approved by our board of directors to prioritize and focus our resources on key clinical and discovery programs. The plan included a reduction of our overall workforce by approximately 25%.
Added
In October 2024, we entered into a strategic research collaboration with a privately-held company, TCGFB, Inc., or TCGFB, to discover antibody therapeutics targeting transforming growth factor beta, or TGF-β, for the potential treatment of patients with idiopathic pulmonary fibrosis, or TCGFB Collaboration.
Removed
We completed the workforce reduction in the first quarter of 2023 and incurred one-time restructuring charges of approximately $1.2 million, including employee severance and other termination benefits. In July 2023, we adopted and executed another restructuring plan approved by our board of directors to further reduce our overall workforce by approximately 38%.
Added
Under the terms of the agreement, we provide antibody discovery services for a period of up to two years. TCGFB will own all TGF-β product related intellectual property.
Removed
We believe that the restructuring plan will enable us to better align our workforce with our business needs and focus more of our capital resources on our clinical stage programs.
Added
In exchange for our research services, TCGFB agreed to pay us a fixed monthly fee up to $6.0 million in the aggregate, plus any third-party costs, and issued us a warrant exercisable for up to 3.4 million shares of TCGFB common stock at an exercise price of $0.0001 per share based on certain vesting conditions.
Removed
We substantially completed the workforce reduction by the end of 2023, and incurred one-time restructuring charges of approximately $1.6 million, including employee severance and other termination benefits, to be recognized ratably over the requisite service period.
Added
TCGFB was founded and is controlled by entities affiliated with The Column Group. The agreement constitutes a related party transaction because entities affiliated with The Column Group hold more than 5% of our common stock and Dr. Kutzkey, a member of our board of directors, serves as Managing Partner of The Column Group.
Removed
Reverse Stock Split On December 13, 2023, we filed a certificate of amendment to our certificate of incorporation to effect a 1-for-15 reverse stock split of our issued and outstanding common stock, or the Reverse Stock Split.
Added
Research Service Revenue – Related Party Research service revenue – related party relates to the amounts recognized for the research service performed in 2024 in connection with TCGFB Collaboration.
Removed
As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock was converted into one issued and outstanding share of common stock, without any change in par value per share.
Added
Loss on Issuance of Common Stock, Pre-Funded Warrants and Warrants Loss on issuance of common stock, pre-funded warrants and warrants represents the excess of the initial fair value of common stock, pre-funded warrants and warrants over the aggregate gross proceeds in the private placement consummated in April 2024. 77 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes results of operations for the periods presented (dollars in thousands): Year Ended December 31, $ % 2024 2023 Change Change Collaboration and license revenue $ 10,000 $ — $ 10,000 * Research service revenue - related party 655 — 655 * Total revenue 10,655 — 10,655 * Operating expenses: Research and development 21,132 27,230 (6,098 ) -22 % General and administrative 15,062 15,798 (736 ) -5 % Restructuring — 2,752 (2,752 ) -100 % Total operating expenses 36,194 45,780 (9,586 ) -21 % Loss from operations (25,539 ) (45,780 ) 20,241 -44 % Interest income 1,693 2,340 (647 ) -28 % Other (expense) income, net (19,321 ) 398 (19,719 ) * Loss on issuance of common stock, pre-funded warrants and warrants (20,397 ) — (20,397 ) * Net loss $ (63,564 ) $ (43,042 ) $ (125 ) 0 % * Percentage is not meaningful Collaboration and License Revenue The increase of $10.0 million in collaboration and license revenue for 2024, compared to 2023 is due to the recognition of a milestone achieved under the CLA with BI in September 2024.
Removed
The Reverse Stock Split affected all shares of our common stock outstanding immediately prior to the effectiveness of the Reverse Stock Split, as well as the number of shares of common stock available for issuance under our equity incentive plans and employee stock purchase plan.
Added
Research Service Revenue – Related Party The increase of $0.7 million in research service revenue – related party for 2024, compared to 2023, is attributable to the research service performed in 2024 in accordance with TCGFB Collaboration.
Removed
In addition, the Reverse Stock Split effected a reduction in the number of shares of common stock issuable upon the exercise of stock options, restricted stock units and warrants outstanding immediately prior to the effectiveness of the Reverse Stock Split with a corresponding increase in the exercise price per share applicable to such stock options and warrants.
Added
Other (Expense) Income, Net The increase of $19.7 million, or 50%, in other expense, net, for 2024, compared to 2023, is primarily attributable to a $18.0 million increase in non-cash change in fair value of warrant liabilities, and $1.5 million related to the transaction costs allocated to the warrants issued in the April 2024 private placement.
Removed
At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of SZN-043 or any future product candidates.
Added
Loss on Issuance of Common Stock, Pre-Funded Warrants and Warrants The increase of $20.4 million in loss on issuance of common stock, pre-funded warrants and warrants for 2024, compared to 2023, as the fair value of warrants issued was greater than the proceeds received in a private placement closed in April 2024.
Removed
Other Income, Net The decrease of $7.2 million, or 95%, in other income, net, for 2023, compared to 2022, is primarily attributable to a $7.7 million decrease in gain on the change in fair value of warrant liabilities, offset by a $0.3 million increase in expenses related to the commitment shares issued to Lincoln Park under the Equity Purchase Agreement in February 2022 and a $0.2 million increase in income related to the foreign currency remeasurement on the refund of the withholding tax associated with the upfront payment from BI. 87 Liquidity and Capital Resources Since inception, we have only generated collaboration and license revenue under the CLA with BI.
Added
Private Placements In March 2025, we entered into a securities purchase agreement with certain institutional and accredited investors to issue and sell an aggregate of 15,086,236 units in a two-tranche private placement at a purchase price of $11.60 per share and $11.5999 per pre-funded warrant, for gross proceeds of approximately $175.0 million to fund multiple ophthalmology programs through initial Phase 1 safety, tolerability and efficacy studies.
Removed
Lincoln Park Equity Line of Credit We entered into a purchase agreement and a registration rights agreement with Lincoln Park in February 2022, pursuant to which Lincoln Park is obligated to purchase up to $50.0 million shares of our common stock, subject to the terms of the purchase agreement.
Added
Each unit consists of one share of common stock, or pre-funded warrant in lieu thereof, and an accompanying one half of a warrant to purchase common stock, or Series E common stock warrant.
Removed
To date we have not sold any shares of common stock under the purchase agreement. Guggenheim “At-the-Market” Program We entered into an at-the-market sales agreement with Guggenheim Securities, LLC, in December 2022, under which we may issue and sell up to $23.0 million shares of our common stock.
Added
At the closing of the first tranche of this private placement on March 26, 2025, (i) 5,213,415 shares of common stock, (ii) pre-funded warrants to purchase up to 1,373,000 shares of common stock, and (iii) Series E common stock warrants to purchase up to 3,293,207 shares of common stock were issued and sold for aggregate gross proceeds of approximately $76.4 million, before deducting placement agent fees and other expenses.
Removed
To date we have not sold any shares of common stock under the sales agreement.
Added
None of the warrants issued in the private placement have been exercised as of the filing of this Annual Report. In the second tranche of the private placement, which is contingent upon the public announcement of the receipt of clearance from the U.S.
Removed
All of the warrants issued in the private placement are outstanding as of the filing of this Annual Report. Funding Requirements To date, we have only generated revenue from our partnership with BI in connection with the CLA.
Added
Food and Drug Administration on or prior to October 31, 2026 of our Investigation New Drug Application for SZN-8141, or the second closing milestone, we expect to issue a (i) 6,043,321 shares of common stock, (ii) pre-funded warrants to purchase up to 2,456,500 shares of common stock, and (iii) Series E common stock warrants to purchase up to 4,249,910 shares of common stock; provided that the second tranche may not occur prior to September 27, 2026.
Removed
Cash provided by investing activities of $38.3 million for 2022 consisted primarily of $68.6 million of proceeds from the maturities of marketable securities, partially offset by $29.6 million of cash used for the purchase of marketable securities and $0.8 million of cash used for the purchase of property and equipment.
Added
If we terminate our SZN-8141 program prior to October 31, 2026, then we will provide written notice to each purchaser, referred to as the Termination Notice, and each purchaser will have the right, but not the obligation, for 30 calendar days following the receipt of such notice, upon written notice to us, to purchase the additional shares of common stock, pre-funded warrants, and Series E common stock warrants subscribed for by such purchaser in the second closing.
Removed
Cash used in financing activities of $2.6 million for 2022 consisted primarily of $2.7 million of cash used for the repurchase of common stock and warrants, partially offset by $0.1 million of proceeds from the issuance of common stock under the employee stock purchase plan.
Added
In addition, at any time prior to October 31, 2026 or the date of the Termination Notice (if earlier), in lieu of the requirement to purchase units in the second closing, each purchaser has the right, but not the obligation, upon five trading days’ prior written notice to us to purchase all (but not a portion) of the units subscribed for by such purchaser in the second closing, which we refer to as an optional closing.
Removed
We record accounts receivable for amounts billed to the customer for which we have an unconditional right to consideration. We assess accounts receivable for impairment and, to date, no impairment losses have been recorded.
Added
If a purchaser fails to purchase in full its subscribed for units after the achievement of the second closing milestone in the second closing, or previously at the first closing or an optional closing, then the Series E common stock warrants issued to such purchaser shall automatically be cancelled and cease to be exercisable.
Removed
Impairment of Long-Lived Assets We review our long-lived assets, which include property and equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.
Added
Please see Note 17 to the consolidated financial statements for further information regarding this private placement.
Removed
Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise required under this item. 92
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise required under this item. 84

Other SRZN 10-K year-over-year comparisons