10q10k10q10k.net

What changed in X4 Pharmaceuticals, Inc's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of X4 Pharmaceuticals, Inc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+491 added−443 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-21)

Top changes in X4 Pharmaceuticals, Inc's 2023 10-K

491 paragraphs added · 443 removed · 329 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

132 edited+103 added−48 removed126 unchanged
Biggest changeWe have successfully advanced mavorixafor through a pivotal, Phase 3 clinical trial, referred to as the 4WHIM trial, in people with WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency, through a Phase 1b clinical trial in people with congenital, idiopathic, or cyclic neutropenia, and through a Phase 1b clinical trial of mavorixafor in combination with the Bruton tyrosine kinase inhibitor ibrutinib in people with a rare B-cell lymphoma called Waldenström’s macroglobulinemia (“Waldenström’s”). 5 We have also developed two pre-clinical candidates: X4P-003, a second-generation CXCR4 antagonist designed to have enhanced properties relative to mavorixafor, potentially enabling broader opportunities in CXCR4-dependent disorders and primary immunodeficiencies; and X4P-002, a CXCR4 antagonist with a unique distribution profile and a demonstrated ability to cross the blood-brain barrier. * Programs only being advanced through partnership Following our July 2022 announced strategic re-prioritization, we are now advancing mavorixafor solely in chronic neutropenic disorder indications, including WHIM syndrome, while pausing our pre-clinical programs and only progressing our oncology programs upon completion of strategic partnership(s).
Biggest changeWe have two pre-clinical candidates: X4P-003, a second-generation CXCR4 antagonist designed to have enhanced properties relative to mavorixafor, potentially enabling broader opportunities in CXCR4-dependent disorders and primary immunodeficiencies; and X4P-002, a CXCR4 antagonist with a unique distribution profile and a demonstrated ability to cross the blood-brain barrier. 6 About WHIM Syndrome WHIM syndrome is both a rare, combined immunodeficiency and a congenital neutropenic disorder in which the body’s immune system does not function properly and has trouble fighting infections.
Our Focus We have developed a pipeline of small-molecule, oral antagonists of the chemokine receptor CXCR4. CXCR4, or C-X-C receptor type 4, is a cell receptor that helps regulate the movement of immune cells within the body.
Our Focus We have developed a pipeline of small-molecule, oral antagonists of the chemokine receptor CXCR4, or C-X-C receptor type 4. CXCR4 is a cell receptor that helps regulate the movement of immune cells within the body.
Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors with us, particularly through collaborative arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors to us, particularly through collaborative arrangements with large and established companies.
Based on a preliminary U.S market research study sponsored by us and conducted by a third-party research firm, we believe that the prevalence of WHIM syndrome worldwide is significantly higher than previous registries suggest. 6 • The study solicited input from community-based physicians of different specialties, including physicians focused on non-malignant hematology, immunology, dermatology, pulmonology, and infectious diseases, who are known to manage and/or treat patients with WHIM syndrome. • The 212 physicians across these specialties identified to participate in this study reported more than 1,700 patients in the United States with genetically confirmed or highly probable WHIM syndrome.
Based on a preliminary U.S. market research study sponsored by us and conducted by a third-party research firm, we believe that the prevalence of WHIM syndrome worldwide is significantly higher than previous registries suggest. • The study solicited input from community-based physicians of different specialties, including physicians focused on non-malignant hematology, immunology, dermatology, pulmonology, and infectious diseases, who are known to manage and/or treat patients with WHIM syndrome. • The 212 physicians across these specialties identified to participate in this study reported more than 1,700 patients in the United States with genetically confirmed or highly probable WHIM syndrome.
In December 2021, we announced the following additional data from the Phase 2 open-label extension trial of mavorixafor in people with WHIM syndrome: • Mavorixafor continued to show durable increases in neutrophils, lymphocytes, and monocytes, sustained improvements in infections and warts, and was well tolerated (median treatment duration = 148.4 weeks). • Decreases in mean annualized infection rates correlated well with TAT-ANC. 8 • Standardized participant interviews revealed that long-term treatment with mavorixafor was well tolerated and continued to demonstrate beneficial treatment effects, including decreased frequency, severity, and duration of infections and fewer hospital/doctor visits.
In December 2021, we announced the following additional data from the Phase 2 open-label extension trial of mavorixafor in people with WHIM syndrome: • Mavorixafor continued to show durable increases in neutrophils, lymphocytes, and monocytes, sustained improvements in infections and warts, and was well tolerated (median treatment duration = 148.4 weeks). • Decreases in mean annualized infection rates correlated well with TAT-ANC. • Standardized participant interviews revealed that long-term treatment with mavorixafor was well tolerated and continued to demonstrate beneficial treatment effects, including decreased frequency, severity, and duration of infections and fewer hospital/doctor visits.
Secondary endpoints include time above threshold-absolute lymphocyte count (TAT-ALC) of ≥ 1,000 cells per microliter over a 24-hour period, a composite clinical efficacy endpoint for mavorixafor based on total infection score and total wart change score, total wart change score for mavorixafor based on central blinded, independent review of 3 target skin regions, total infection score for mavorixafor based on number and severity of infections adjudicated by a blinded, independent adjudication committee; and a number of quality-of-life measurements and other exploratory endpoints.
Secondary endpoints include time above threshold-absolute lymphocyte count (TAT-ALC) of ≥ 1,000 cells per microliter over a 24-hour period, a composite clinical efficacy endpoint for mavorixafor based on total infection score and total wart change score, total wart change score for mavorixafor based on central 9 blinded, independent review of 3 target skin regions, total infection score for mavorixafor based on number and severity of infections adjudicated by a blinded, independent adjudication committee; and a number of quality-of-life measurements and other exploratory endpoints.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States (or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales of such drug in the United States).
Orphan Drug and Rare Pediatric Disease Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States (or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales of such drug in the United States).
Bone marrow transplants bring additional risks into the management of the disorders. Clinical Development of Mavorixafor in Chronic Neutropenic Disorders In 2022, we conducted a proof-of-concept Phase 1b open-label, multicenter study designed to assess the safety and tolerability of oral mavorixafor, with or without injectable G-CSF, in participants with chronic neutropenic disorders, including idiopathic, cyclic, and congenital neutropenia.
Bone marrow transplants bring additional risks into the management of the disorders. 11 Clinical Development of Mavorixafor in Chronic Neutropenic Disorders In 2022, we conducted a proof-of-concept Phase 1b open-label, multicenter study designed to assess the safety and tolerability of oral mavorixafor, with or without injectable G-CSF, in participants with chronic neutropenic disorders, including idiopathic, cyclic, and congenital neutropenia.
If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug.
If a drug demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug.
In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.
In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any 17 advantage of any such patent.
Because antagonism of the CXCR4 receptor has been shown to increase the trafficking of white blood cells, we believe that therapeutic inhibition of the CXCR4/CXCL12 axis holds the potential to benefit people with a wide variety of diseases where there remain significant unmet needs, including chronic neutropenic disorders and certain types of cancer.
Because antagonism of the CXCR4 receptor has been shown to increase the trafficking of white blood cells, we believe that therapeutic inhibition of the 5 CXCR4/CXCL12 axis holds the potential to benefit people with a wide variety of diseases where there remain significant unmet needs, including chronic neutropenic disorders and certain types of cancer.
License Agreement with Dana Farber Cancer Institute In November 2020, we entered into a license agreement with Dana Farber Cancer Institute (“DFCI”) pursuant to which we obtained a non-exclusive, worldwide license to use, make, have made, develop, market, import, distribute, sell and have sold licensed products and certain processes covered by licensed patent rights owned by DFCI.
License Agreement with Dana Farber Cancer Institute In November 2020, we entered into a license agreement with Dana Farber Cancer Institute (“DFCI”) pursuant to which we obtained a non-exclusive, worldwide license to use, make, have made, develop, market, import, distribute, sell or have sold licensed products and certain processes covered by licensed patent rights owned by DFCI.
Importantly, even with antibiotic use, infections are known to recur more frequently and persist longer in patients with WHIM syndrome. Further, the toll of multiple, chronic infections in WHIM patients has been known to lead to devastating irreversible pathologies such as hearing loss, due to chronic ear infections and bronchiectasis, or damaged lung airways.
Importantly, even with antibiotic use, infections are known to recur more frequently and persist longer in patients with WHIM syndrome. Further, the toll of multiple, chronic infections in WHIM patients has been known to lead to devastating irreversible pathologies such as hearing loss, due to chronic ear infections and bronchiectasis (damaged lung airways).
Breakthrough Designation A product can be designated as a breakthrough therapy by FDA if it is intended to treat a serious or life-threatening condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
A product can be designated as a Breakthrough Therapy by FDA if it is intended to treat a serious or life-threatening condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.
Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. 25 Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.
The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time or impose other sanctions if it believes that the clinical trial either is not being conducted in accordance with the FDA requirements or presents an unacceptable risk to the clinical trial patients.
The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time or impose other sanctions if it believes that the clinical trial either is not being conducted in accordance with applicable requirements or presents an unacceptable risk to the clinical trial patients.
An ANDA or 505(b)(2) application may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification and thus no ANDA or 505(b)(2) application may be filed before the expiration of the exclusivity period.
An ANDA or 505(b)(2) NDA application may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification and thus no ANDA or 505(b)(2) application may be filed before the expiration of the exclusivity period.
In December 2022, we presented results from what we believe was the first study examining the prevalence of chronic neutropenia disorders (including idiopathic, cyclic, and congenital neutropenia) in the United States; we believe that determining the estimated projected prevalence of chronic neutropenic disorders is a key step to understanding the extent of existing unmet medical needs in this patient population. • Using a retrospective analysis of a large U.S. claims database, the analysis included people with a diagnosis code for neutropenia during the calendar years 2018, 2019, and 2021 (the year 2020 was excluded from this analysis owing to anticipated reduced claims during the COVID-19 pandemic). • People with a diagnostic, procedural, or product code for neutropenia resulting from secondary causes including chemotherapy, drug exposure, infection, solid organ transplantation, myelodysplastic syndrome, and end-stage renal disease within 24-month period prior to selection were excluded. • A 13- to 24-month lookback period prior to index date was used to confirm chronic status. 9 • The analysis used longitudinal prescription data and office-based claims data from an IQVIA claims database that included 93% of retail prescription claims, 77% of mail-in prescription claims, and had more than 1.5 billion office-based claims per year. • This retrospective analysis projected that in 2021, up to 48,000 people in the United States were living with a diagnosis of chronic neutropenia, with the most common type of chronic neutropenic disorder being idiopathic (~40,000), followed by cyclic (~5,000), and congenital (~3,000), and with the majority of affected people being female adults.
In December 2022, we presented results from what we believe was the first study examining the prevalence of chronic neutropenia disorders (including idiopathic, cyclic, and congenital neutropenia) in the United States; we believe that determining the estimated projected prevalence of chronic neutropenic disorders is a key step to understanding the extent of existing unmet medical needs in this patient population. • Using a retrospective analysis of a large U.S. claims database, the analysis included people with a diagnosis code for neutropenia during the calendar years 2018, 2019, and 2021 (the year 2020 was excluded from this analysis owing to anticipated reduced claims during the COVID-19 pandemic). • People with a diagnostic, procedural, or product code for neutropenia resulting from secondary causes including chemotherapy, drug exposure, infection, solid organ transplantation, myelodysplastic syndrome, and end-stage renal disease within 24-month period prior to selection were excluded. • A 13- to 24-month look back period prior to index date was used to confirm chronic status. • The analysis used longitudinal prescription data and office-based claims data from an IQVIA claims database that included 93% of retail prescription claims, 77% of mail-in prescription claims, and had more than 1.5 billion office-based claims per year. • This retrospective analysis projected that in 2021, up to 48,000 people in the United States were living with a diagnosis of chronic neutropenia, with the most common type of chronic neutropenic disorder being idiopathic (~40,000), followed by cyclic (~5,000), and congenital (~3,000), and with the majority of affected people being female adults.
Drugs approved in this way are considered to be therapeutically equivalent to the listed drug, are commonly referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug in accordance with state law.
Drugs approved in this way generally are considered to be therapeutically equivalent to the listed drug, are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug in accordance with state law.
Other firms also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Other firms also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring technologies complementary to, or 12 necessary for, our programs.
We are also eligible to receive potential development, regulatory and commercial milestone payments of up to $214 million, which will vary based on the ultimate sales, if any, of the approved licensed products.
We are also eligible to receive potential development, regulatory and commercial milestone payments of up to $214.0 million, which will vary based on the ultimate sales, if any, of the approved licensed products.
Georgetown may terminate the Georgetown agreement or convert our license to non-exclusive in the event (i) we fail to pay any amount and fail to cure such failure within 30 days after receipt of notice, (ii) we default in our obligation to obtain and maintain insurance and fail to remedy such breach within 45 days after receipt of notice, (iii) we declare insolvency or bankruptcy or (iv) we materially default in the performance of any material obligations under the Georgetown agreement which is not cured within a certain period from the date of written notice of such default.
Georgetown may terminate the Georgetown agreement or convert our license to non-exclusive in the event: (i) we fail to pay any amount and fail to cure such failure within 30 days after receipt of notice, (ii) we default in our obligation to obtain and maintain insurance and fail to remedy such breach within 45 days after receipt of notice, (iii) we declare insolvency or bankruptcy or (iv) we materially default in the performance of any material obligations under the Georgetown agreement that is not cured within a certain period from the date of written notice of such default.
Our lead clinical candidate is mavorixafor, a small molecule antagonist of chemokine receptor CXCR4, that is being developed as an oral, once-daily therapy.
Our lead clinical candidate is mavorixafor, a small-molecule selective antagonist of chemokine receptor CXCR4, that is being developed as an oral, once-daily therapy.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured to assess compliance with cGMP.
Rest of World Government Regulation In addition to regulations in the United States, we are and will be subject, either directly or through our distribution partners, to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products, if approved.
Rest of World Government Regulation In addition to laws and regulations in the United States, we are and will be subject, either directly or through our distribution partners, to a variety of regulations in other jurisdictions governing, among other things, clinical trials, manufacturing and any commercial sales and distribution of our products, if approved.
WHIM syndrome is named for its four common clinical findings, although not all patients experience all symptoms, and not all symptoms are required for a diagnosis: W arts, related to infection with the Human Papilloma Virus (HPV), H ypogammaglobulinemia, a condition of low immunoglobulin (“IG”) levels, I nfections, including both bacterial and fungal infections, and M yelokathexis, a hyper-dense population of immune cells in the bone marrow.
WHIM syndrome is named for its four common manifestations, although not all patients experience all symptoms, and not all symptoms are required for a diagnosis: W arts, related to infection with the Human Papilloma Virus (HPV), H ypogammaglobulinemia, a condition of low immunoglobulin (“IG”) levels, I nfections, including both bacterial and fungal infections, and M yelokathexis, a hyper-dense population of immune cells in the bone marrow.
The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years. For patents that might expire during the application phase, the patent owner may request an interim patent extension.
The extension period can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years. For patents that might expire during the application phase, the patent owner may request an interim patent extension.
In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. The FDA may, however, determine that a drug is effective based on one clinical trial plus confirmatory evidence.
In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of the drug. The FDA may, however, determine that a drug is safe and effective based on one clinical trial plus confirmatory evidence.
Unless otherwise required by regulation, PREA does not apply to any drug for an indication for which orphan designation has been granted. The sponsor or the FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations.
Unless otherwise required by regulation, PREA does not apply to any drug for an indication for which orphan designation has been granted. The sponsor may request a deferral or waiver of pediatric studies for some or all of the pediatric subpopulations.
Left untreated, chronic HPV-infections are also known to increase the risk of cancer. • Hypogammaglobulinemia : Intravenous or subcutaneous IG administration, referred to as IVIG or SCIG, respectively, can be administered to patients with low IG levels.
Left untreated, chronic HPV-infections are also known to increase the risk of cancer. • Hypogammaglobulinemia : Intravenous or subcutaneous IG administration, referred to as IVIG (“IVIG”) or SCIG (“SCIG”), respectively, can be administered to patients with low IG levels.
With respect to chronic neutropenia, filgrastim injections (human G-CSF) and two biosimilars (Zarxio and Nivestym) are FDA approved to reduce the incidence and duration of after-effects of severe neutropenia (e.g. fever‚ infections‚ oropharyngeal ulcers) in symptomatic patients with severe neutropenia.
Filgrastim injections (human G-CSF) and two biosimilars (Zarxio and Nivestym) are FDA approved to reduce the incidence and duration of after-effects of severe neutropenia (e.g. fever, infections, oropharyngeal ulcers) in symptomatic patients with severe neutropenia.
License Agreements License Agreement with Genzyme In July 2014, we entered into a license agreement with Genzyme, a wholly owned subsidiary of Sanofi, pursuant to which we were granted an exclusive license to certain patent applications and other intellectual property owned or controlled by Genzyme related to the CXCR4 receptor to develop and commercialize products containing licensed compounds, including but not limited to mavorixafor.
License Agreement License Agreement with Genzyme In July 2014, we entered into a license agreement with Genzyme Corporation (“Genzyme”), a wholly owned subsidiary of Sanofi, pursuant to which we were granted an exclusive license to certain patent applications and other intellectual property owned or controlled by Genzyme related to the CXCR4 receptor to develop and commercialize products containing licensed compounds, including but not limited to, mavorixafor.
Mavorixafor has received multiple special designations from global regulatory authorities in WHIM syndrome, including Breakthrough Therapy Designation, Fast Track Designation, and Rare Pediatric Designation in the United States, and Orphan Drug Status in both the United States and European Union.
Mavorixafor has received multiple special designations from global regulatory authorities in WHIM syndrome, including Breakthrough Therapy Designation, Fast Track Designation, and Rare Pediatric Designation in the United States, and orphan designation in both the United States and European Union.
Exclusivity 18 Upon NDA approval of a new chemical entity, or NCE, which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA or 505(b)(2) application seeking approval of a drug that references a version of the NCE drug.
Exclusivity Upon NDA approval of a new chemical entity (“NCE”), which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA or 505(b)(2) NDA application seeking approval of a drug that references the NCE drug.
The genetic panel looks at more than 550 genes known to be associated with PIDs; to date, the program has proven helpful not only in identifying WHIM patients, but also providing a better understanding of novel genetic variants causing PIDs and assisting participant enrollment in X4-sponsored clinical trials.
The genetic panel looks at more than 550 genes known to be associated with PIDs; to date, the program has proven helpful not only in diagnosing WHIM, but also providing a better understanding of novel genetic variants causing PIDs and assisting participant enrollment in X4-sponsored clinical trials.
Under the terms of the DFCI agreement we paid a one-time, upfront fee of $25 thousand and we are responsible for the reimbursement of certain future patent prosecution cost and the payment of an annual maintenance fee.
Under the terms of the DFCI agreement we paid a one-time, upfront fee of $25 thousand and we are responsible for the reimbursement of certain future patent prosecution costs and the payment of an annual maintenance fee.
Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.
Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book (“Orange Book”).
The primary endpoint of the 4WHIM trial is a clinically relevant reduction of duration of severe neutropenia as measured by the increase in TAT-ANC (500 cells per microliter) in peripheral blood.
The primary endpoint of the 4WHIM trial was a clinically relevant reduction of duration of severe neutropenia as measured by the increase in TAT-ANC (500 cells per microliter) in peripheral blood.
If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.
If the applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the application has been accepted for filing by the FDA.
Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Orphan drug 21 designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the generic identity of the drug and its designated orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
The laws that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; • federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; 22 • the federal transparency laws, including the federal Physician Payments Sunshine Act, that require drug manufacturers to disclose payments and other transfers of value provided to physicians, (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementing regulations, which imposes certain requirements on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; and • Foreign and state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state and local laws governing the disclosure of payments to health care professionals, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state laws that require the reporting of information related to drug pricing, state and local laws requiring the registration of pharmaceutical sales representatives and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
The laws that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; • federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; • the federal transparency laws, including the federal Physician Payments Sunshine Act, that require drug manufacturers to disclose payments and other transfers of value provided to physicians, (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • HIPAA, as amended by the Health Information Technology and Clinical Health Act (“HITECH”), and its implementing regulations, which imposes certain requirements on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • Federal drug price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; and • Foreign and state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state and local laws governing the disclosure of payments to health care professionals, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state laws that require the reporting of information related to drug pricing, state and local laws requiring the registration of pharmaceutical sales representatives and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Five-year and three-year exclusivities do not preclude FDA approval of a 505(b)(1) application for a duplicate version of the drug during the period of exclusivity, provided that the 505(b)(1) applicant conducts or obtains a right of reference to all of the preclinical studies and adequate and well controlled clinical trials necessary to demonstrate safety and effectiveness.
Five-year and three-year exclusivities do not preclude FDA approval of another 505(b)(1) NDA application for the drug during the period of exclusivity, provided that the 505(b)(1) applicant conducts or obtains a right of reference to all of the preclinical studies and adequate and well controlled clinical trials necessary to demonstrate safety and effectiveness.
The agreement provides Abbisko with the exclusive rights in this territory to develop and commercialize mavorixafor in combination with checkpoint inhibitors or other agents in oncology indications. Pancreatic cancer, ovarian cancer and triple negative breast cancer will be explored initially.
The agreement provides Abbisko with the exclusive rights in this territory to develop and commercialize mavorixafor in combination with checkpoint inhibitors or other agents in oncology indications. Pancreatic cancer, ovarian cancer and triple negative breast cancer are expected to be explored initially.
Healthcare Reform The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the ACA, was enacted with the goal of expanding coverage for the uninsured while at the same time containing overall health care costs.
For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the ACA, was enacted with the goal of expanding coverage for the uninsured while at the same time containing overall health care costs.
A sponsor may request that a product candidate be designated as a breakthrough therapy concurrently with the submission of an IND or any time before an end-of-Phase-2 meeting, and the FDA must determine if the product candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor ’ s request.
A sponsor may request that a product candidate be designated as a breakthrough therapy concurrently with the submission of an IND or any time afterward, but ideally before an end-of-Phase-2 meeting. The FDA must determine if the product candidate qualifies for Breakthrough Therapy designation within 60 days of receipt of the sponsor ’ s request.
An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be bioequivalent to the listed drug.
An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown to be bioequivalent to the listed drug.
A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has not imposed a clinical hold on the IND or otherwise commented or questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin.
A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has not imposed a clinical hold on the IND within this 30-day period, the clinical trial proposed in the IND may begin.
Such scrutiny has resulted in several Presidential executive orders, Congressional hearings and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Such scrutiny has resulted in several Presidential executive orders, Congressional hearings and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. Congress has also passed additional reform measures.
Abbisko Agreement In July 2019, we entered into a license agreement with Abbisko. Under the terms of the agreement, we granted Abbisko the exclusive right to develop, manufacture and commercialize mavorixafor in mainland China, Taiwan, Hong Kong and Macau.
Abbisko Agreement In July 2019, we entered into a license agreement with Abbisko Therapeutics Co Ltd. (“Abbisko”). Under the terms of the agreement, we granted Abbisko the exclusive right to develop, manufacture and commercialize mavorixafor in mainland China, Taiwan, Hong Kong and Macau.
The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication.
The first NDA applicant to receive FDA approval for a particular drug to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that drug, for that disease.
Additional, less common, treatment-limiting complications of chronic G-CSF administration include myelofibrosis and leukemia. 7 • Myelokathexis : G-CSF is also sometimes used to treat the myelokathexis characteristic of WHIM syndrome to try to increase the number of neutrophils outside of the bone marrow, but G-CSF has no effect on lymphocytes and other types of white blood cells.
Additional, less common, treatment-limiting complications of chronic G-CSF administration include myelofibrosis and leukemia. • Myelokathexis : G-CSF is also sometimes used to treat the myelokathexis characteristic of WHIM syndrome to try to increase the number of neutrophils in the peripheral blood, but G-CSF has no effect on lymphocytes and other types of white blood cells.
Concurrent with this Phase 2 trial execution, we are advancing our plans to conduct a Phase 3 program of mavorixafor in people with certain chronic neutropenic disorders in the event the Phase 2 results are positive.
Concurrent with this Phase 2 trial execution, we are advancing our plans to conduct a Phase 3 program of mavorixafor in people with certain chronic neutropenic disorders.
Mavorixafor is an orally available, small-molecule CXCR4 antagonist designed to facilitate the mobilization of white blood cells from the bone marrow into the blood, to increase levels of circulating neutrophils, lymphocytes, and monocytes, and to improve immune system function. To date, more than 200 patients in clinical trials have been dosed with mavorixafor, which has demonstrated a favorable tolerability profile.
Mavorixafor is an orally available, small-molecule CXCR4 antagonist designed to facilitate the mobilization of white blood cells from the bone marrow into the blood, to increase levels of circulating neutrophils, lymphocytes, and monocytes, and to improve immune system function. To date, more than 350 subjects in clinical trials have been dosed with mavorixafor, with a favorable tolerability profile observed.
The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.
The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV notice automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant.
We are obligated to pay Genzyme milestone payments in the aggregate amount of up to $25 million, contingent upon our achievement of certain late-stage regulatory and sales milestones with respect to licensed products, and tiered royalties based on net sales of licensed products that we commercialize under the Genzyme agreement.
As of December 31, 2023, we are obligated to pay Genzyme future milestone payments in the aggregate amount of up to $20 million, contingent upon our achievement of certain late-stage regulatory and sales milestones with respect to licensed products, and tiered royalties based on net sales of licensed products that we commercialize under the Genzyme agreement.
Sublicenses that we enter into under the Genzyme agreement, including our license agreement with Abbisko obligate us to pay Genzyme a percentage of certain upfront, maintenance fees, milestone payments and royalty payments paid to us by the sublicensee.
Sublicenses that we enter into under the Genzyme agreement obligate us to pay Genzyme a percentage of certain upfront, maintenance fees, milestone payments and royalty payments paid to us by the sublicensee.
Due to its ability to increase the mobilization of mature, functional white blood cells from the bone marrow into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of chronic neutropenic disorders, including WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency.
Due to its ability to increase the mobilization of mature, functional white blood cells into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of chronic neutropenic disorders, including WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency. We are currently seeking approval from the U.S.
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 possible that the ACA will be subject to judicial or Congressional challenges in the future.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by capping the beneficiary maximum out-of-pocket cost at $2,000 per year and creating a new manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, imposed requirements for the distribution and pricing of prescription drugs for Medicare beneficiaries and included a major expansion of the prescription drug benefit under Medicare Part D.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”), imposed requirements for the distribution and pricing of prescription drugs for Medicare beneficiaries and included a major expansion of the prescription drug benefit under Medicare Part D (“Part D”).
Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, pre-clinical or clinical tests to prove the safety or effectiveness of their drug product.
Other than bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, pre-clinical or clinical tests to demonstrates the safety or effectiveness of their drug 19 product.
The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.
The ANDA or 505(b)(2) NDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.
In addition, our ability to compete may be affected because in some cases insurers or other third-party payors, including government programs, seek to encourage the use of generic products. This may have the effect of making branded products less attractive to buyers from a cost perspective.
In addition, our ability to compete may be affected because in some cases insurers or other third-party payors, including government programs, seek to encourage the use of generic products. This may have the effect of making branded products less attractive to buyers from a cost perspective. We are aware of other companies that are developing injectable CXCR4 inhibitors.
Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with GMP. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with GMP.
Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP. Manufacturers are also subject to tracking and tracing requirements. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs. Adverse Event Reporting and GMP Compliance Adverse event reporting and submission of periodic reports is required following FDA approval of an NDA.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses similar procedures in reviewing and approving NDA supplements as it does for original NDAs. Adverse event reporting and submission of annual safety reports is also required following FDA approval of an NDA.
Manufacturing We do not own or operate, and currently have no plans to establish, manufacturing facilities for the production of clinical or commercial quantities of mavorixafor or any of our other product candidates.
Manufacturing We do not own or operate, and currently have no plans to establish, manufacturing facilities for the production of clinical or commercial quantities of mavorixafor or any of our other product candidates. We currently rely, and expect to continue to rely, on third parties for the manufacture of any of our product or product candidates.
Pharmaceutical Coverage, Pricing and Reimbursement Sales of pharmaceutical products in the United States will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, such as government health programs, and commercial insurance and managed health care organizations.
Pharmaceutical Coverage, Pricing and Reimbursement Sales of pharmaceutical products in the United States will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, such as government health programs, and commercial insurance and managed health care organizations. These third-party payors are increasingly challenging the prices charged for medical products and services.
The sponsor must also submit substantial evidence, generally consisting of adequate, well-controlled clinical trials to establish that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended or suggested in the proposed labeling.
For commercial approval, the sponsor must submit adequate and well-controlled investigations demonstrating that the drug is safe for use under the conditions prescribed, recommended or suggested in the proposed labeling and providing substantial evidence, generally consisting of adequate, well-controlled clinical trials to establish that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended or suggested in the proposed labeling.
Our approach to treating WHIM syndrome involves addressing the underlying cause of the disease by blocking CXCR4 signaling using mavorixafor, which has been shown to bind to the CXCR4 receptor in a manner that inhibits the receptor from being stimulated by CXCL12, enabling white blood cells to properly mature and release into the bloodstream and improving immune cell numbers and function.
Our approach to treating WHIM syndrome involves addressing the underlying cause of the disease by blocking CXCR4 signaling using mavorixafor, which has been shown to bind to the CXCR4 receptor in a manner that inhibits the receptor from being stimulated by CXCL12, enabling white blood cells to properly mature and release into the bloodstream and improving immune cell numbers and function. 8 Clinical Development of Mavorixafor in WHIM Syndrome In January 2017, we initiated a Phase 2 clinical trial of mavorixafor for the treatment of people with WHIM syndrome.
About Chronic Neutropenic Disorders Due to its demonstrated ability to durably elevate levels of circulating white blood cells across multiple clinical trials, we believe that mavorixafor may be useful in the treatment of people with a variety of chronic neutropenic disorders.
If obtained, such PRV could potentially be sold to a third party. 10 About Chronic Neutropenic Disorders Due to its demonstrated ability to durably elevate levels of circulating white blood cells across multiple clinical trials, we believe that mavorixafor may be useful in the treatment of people with a variety of chronic neutropenic disorders.
Certain changes to a drug, such as the addition of a new indication to the package insert, are associated with a three-year period of exclusivity during which the FDA cannot approve an ANDA or 505(b)(2) application that includes the change.
Certain changes to an approved drug that are supported by clinical studies that are essential to the approval of such changes, such as the addition of a new indication, are associated with a three-year period of exclusivity during which the FDA cannot approve an ANDA or 505(b)(2) NDA application that includes the change.
Such differences in national pricing regimes may create price differentials between E.U. member states. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the United States.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the United States.
Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling. Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.
Changes to certain conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.
In general, in Phase 1, the initial introduction of the drug into healthy human volunteers or, in some cases, patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses and, if possible, early evidence of effectiveness.
Clinical trials are typically conducted in three sequential phases, but the phases may overlap. In general, in Phase 1, the initial introduction of the drug into healthy human volunteers or, in some cases, patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses and, if possible, early evidence of 18 effectiveness.
In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
In addition, the Inflation Reduction Act of 2022 (“IRA”), among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
In addition, the IRA, among other things, (i) 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” 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.
This includes the IRA, which, (i) 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” for such drugs and biologics under the law, and (ii) requires drug manufacturers to pay drug rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to the extent that drug prices increase faster than inflation.
We are also currently advancing mavorixafor in a Phase 2 clinical trial in people with certain chronic neutropenic disorders following positive results from a Phase 1b clinical trial of mavorixafor in people with idiopathic, cyclic or congenital neutropenia.
We are also advancing mavorixafor for the treatment of people with certain chronic neutropenic disorders following positive results from a Phase 1b clinical trial of a single dose of mavorixafor in people with idiopathic, cyclic, and congenital chronic neutropenia.
In these trials, we have observed drug exposure in patients, a 22-hour half-life, and bioavailability of mavorixafor to support once-daily oral dosing, which we believe would provide convenient dosing and better patient compliance for chronic or life-long use, if approved.
In these trials, we have observed drug exposure levels, a 22-hour half-life, and bioavailability of mavorixafor to support once-daily oral dosing, which we believe would provide convenient dosing and facilitate patient compliance for chronic or life-long use, if approved. The manufacturing process for mavorixafor utilizes well established, small-molecule chemistry.
As of December 31, 2022, we owned or exclusively licensed 18 issued U.S. patents, 14 pending U.S. non-provisional patent applications, eight pending U.S. provisional patent application, and approximately 175 PCT and foreign patents and patent applications in the following foreign jurisdictions: Belgium, Brazil, Canada, China, European Patent Office, France, Germany, Great Britain, Hong Kong, India, Ireland, Italy, Israel, Japan, Lichtenstein, Mexico, Netherlands, New Zealand, Singapore, South Africa, Spain, Sweden and Switzerland.
As of December 31, 2023, we owned or exclusively licensed 20 issued U.S. patents, five pending U.S. non-provisional patent applications, three pending U.S. provisional patent applications, and approximately 160 PCT and foreign patents and patent applications including in the following foreign jurisdictions: Austria, Australia, Belgium, Brazil, Canada, China, Denmark, European Patent Office, Finland, France, Germany, Great Britain, Hong Kong, India, Ireland, Israel, Italy, Japan, Lichtenstein, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden and Switzerland.
We are obligated to pay DFCI milestone payments in the aggregate amount of up to approximately $32 million, contingent upon our achievement of certain regulatory and sales milestones with respect to licensed products, and a flat royalty based on net sales of licensed products that we commercialize under the DFCI agreement. 14 The term of the DFCI agreement will continue until the expiration of the last valid claim within the patent rights covering the licensed product.
We are obligated to pay DFCI milestone payments in the aggregate amount of up to approximately $32 million, contingent upon our achievement of certain regulatory and sales milestones with respect to licensed products, and a flat royalty based on net sales of licensed products 15 that we commercialize under the DFCI agreement.
The term of the master services agreement with Catalent expires on September 10, 2023, and may be terminated by (1) us upon 30 days-notice to Catalent or (2) by either party following a material breach by the other party that remains uncured for 30 days.
(“Catalent”), which is our sole manufacturer for the final capsule drug product formulation of mavorixafor. The term of the master services agreement with Catalent expires on September 10, 2024, and may be terminated by (1) us upon 30 days-notice to Catalent or (2) by either party following a material breach by the other party that remains uncured for 30 days.

… 203 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

142 edited+39 added−37 removed389 unchanged
Biggest changeTermination of these rights or the failure to comply with obligations under these agreements could materially harm our business and prevent us from developing or commercializing our product candidates. • The results of clinical trials may not support our product candidate claims. • We may fail to enroll a sufficient number of patients in our clinical trials in a timely manner, which could delay or prevent clinical trials of our product candidates. • If the commercial opportunity for mavorixafor in chronic neutropenic disorders, including WHIM syndrome, is smaller than we anticipate, our potential future revenue from mavorixafor for the treatment of any of the diseases may be adversely affected and our business may suffer. • Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. • A breakthrough therapy designation or Fast Track designation by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and neither of these designations increases the likelihood that our product candidates will receive marketing approval. 24 • Product candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any, including marketing withdrawal. • If, in the future, we are unable to establish sales and marketing capabilities or to selectively enter into agreements with third parties to sell and market our product candidates, we may not be successful in commercializing our product candidates if and when they are approved. • We face substantial competition that may result in others discovering, developing or commercializing products before or more successfully than we do. • Even if we obtain and maintain approval for our product candidates from the FDA, we may never obtain approval for our product candidates outside of the United States, which would limit our market opportunities and could harm our business. • Even if we are able to commercialize mavorixafor or any other product candidate that we develop, the product may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business. • We have no experience manufacturing our product candidates on a large clinical or commercial scale and have no manufacturing facility.
Biggest changeTermination of these rights or the failure to comply with obligations under these agreements could materially harm our business and prevent us from developing or commercializing our product candidates. • The results of clinical trials may not support our product candidate claims. • We may fail to enroll a sufficient number of patients in our clinical trials in a timely manner, which could delay or prevent clinical trials of our product candidates. • If the commercial opportunity for mavorixafor in WHIM syndrome and other chronic neutropenic disorders is smaller than we anticipate, our potential future revenue from mavorixafor for the treatment of any of the diseases may be adversely affected and our business may suffer. • Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. 29 • Even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties and any approved products will be subject to extensive post-approval regulatory requirements.
If the FDA or similar regulatory authorities outside of the United States do not approve these other drugs or revoke their approval of, or if safety, efficacy, manufacturing or supply issues arise with, the drugs that we choose to evaluate in combination with mavorixafor or any product candidate we develop, we may be unable to obtain approval of or market mavorixafor or any product candidate we develop.
If the FDA or similar regulatory authorities outside of the United States do not approve these other drugs or revoke their approval, or if safety, efficacy, manufacturing or supply issues arise with, the drugs that we choose to evaluate in combination with mavorixafor or any product candidate we develop, we may be unable to obtain approval of or market mavorixafor or any other product candidate we develop.
Risks Related to Our Dependence on Third Parties We have no experience manufacturing our product candidates on a large clinical or commercial scale and have no manufacturing facility. We are currently dependent on a single third party manufacturer for the manufacture of mavorixafor, the active pharmaceutical ingredient (“API”), and a single manufacturer of mavorixafor finished drug product capsules.
Risks Related to Our Dependence on Third Parties We have no experience manufacturing our product candidates on a large clinical or commercial scale and have no manufacturing facility. We are currently dependent on a single third party manufacturer for the manufacture of the active pharmaceutical ingredient (“API”) for mavorixafor, and a single manufacturer of mavorixafor finished drug product capsules.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Collaborations involving our product candidates 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; • collaborators 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; 49 • 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; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or products or that result in costly litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under circumstances identified in our collaborations if we undergo a change of control; • 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 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; 52 • 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; • collaborators 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; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or products or that result in costly litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under circumstances identified in our collaborations if we undergo a change of control; • 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.
While physicians in the United States may choose, and are generally permitted, to prescribe products for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote any of our products candidates, if approved, will be narrowly limited to those indications and populations that are specifically approved by the FDA or such other regulatory agencies, and if we are found to have promoted such off-label uses, we may become subject to significant liability.
While physicians in the United States may choose, and are generally permitted, to prescribe products for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote any of our products candidates, if approved, will be limited to those indications and populations that are specifically approved by the FDA or such other regulatory agencies, and if we are found to have promoted such off-label uses, we may become subject to significant liability.
In addition, any testing by us, as and when required, conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal control over financial reporting that are deemed to be significant deficiencies or material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement.
In addition, any testing by us, as and when required, conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal control over financial reporting that are deemed to be significant deficiencies or material weaknesses or that may require prospective or retroactive changes to our 64 consolidated financial statements or identify other areas for further attention or improvement.
We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability, and such expense could increase beyond our expectations if the FDA or any other regulatory agency requires such additional clinical trials or nonclinical studies as part of the application and approval process or post-approval process if we are successful at achieving regulatory approval.
We are unable to predict the timing or 34 amount of increased expenses, or when or if we will be able to achieve or maintain profitability, and such expense could increase beyond our expectations if the FDA or any other regulatory agency requires such additional clinical trials or nonclinical studies as part of the application and approval process or post-approval process if we are successful at achieving regulatory approval.
Any such delays could negatively impact our business, financial condition, results of operations and prospects. 35 Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
Any such delays could negatively impact our business, financial condition, results of operations and prospects. Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
In addition, any drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly. Further, clinical trials by their nature utilize a sample of the potential patient population.
In addition, any drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any 39 of these occurrences may harm our business, financial condition and prospects significantly. Further, clinical trials by their nature utilize a sample of the potential patient population.
In any of the foregoing or in other situations involving third-party intellectual property rights, if we are unsuccessful in defending against claims of patent infringement, we could be forced to pay damages or be subjected to an injunction that would prevent us from utilizing the patented subject matter. Such outcomes could harm our business.
In any of the foregoing or in other situations involving third-party intellectual 53 property rights, if we are unsuccessful in defending against claims of patent infringement, we could be forced to pay damages or be subjected to an injunction that would prevent us from utilizing the patented subject matter. Such outcomes could harm our business.
Misconduct by these parties could include intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, to provide accurate information to the FDA or comparable foreign regulatory authorities, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory 48 authorities, to report financial information or data accurately or to disclose unauthorized activities to us.
Misconduct by these parties could include intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, to provide accurate information to the FDA or comparable foreign regulatory authorities, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, to report financial information or data accurately or to disclose unauthorized activities to us.
Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we research, as well as market, sell and distribute any products for which we obtain marketing approval.
Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships 48 through which we research, as well as market, sell and distribute any products for which we obtain marketing approval.
The current expectation is that we will retain our future earnings to fund the development and growth of our business. In addition, the terms of our debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain, if any, for the foreseeable future.
The current expectation is that we will retain our future earnings to fund the development and growth of our business. In addition, the terms of our debt agreements preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain, if any, for the foreseeable future.
With respect to chronic neutropenia, filgrastim injections (human granulocyte colony-stimulating factor (G-CSF)) and two biosimilars (Zarxio and Nivestym) are FDA-approved to reduce the incidence and duration of after affects of severe neutropenia (e.g.‚ fever‚ infections‚ oropharyngeal ulcers) in symptomatic patients with congenital neutropenia‚ cyclic neutropenia‚ or idiopathic neutropenia .
With respect to chronic neutropenia, filgrastim injections (human granulocyte colony-stimulating factor (G-CSF)) and two biosimilars (Zarxio 45 and Nivestym) are FDA-approved to reduce the incidence and duration of after affects of severe neutropenia (e.g.‚ fever‚ infections‚ oropharyngeal ulcers) in symptomatic patients with congenital neutropenia‚ cyclic neutropenia or idiopathic neutropenia .
Clinical trials may be delayed, suspended or terminated for a variety of reasons, including the following: • delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; • inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in competing clinical trial programs; • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; • delay or failure in having subjects complete a trial or return for post-treatment follow-up; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • delay or failure in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • delay or failure in obtaining institutional review board (“IRB”) approval to conduct a clinical trial at each site; • delays resulting from negative or equivocal findings of the Data Safety Monitoring Board (“DSMB”) if any; • ambiguous or negative results; • decision by the FDA, a comparable foreign regulatory authority, or recommendation by a DSMB to suspend or terminate clinical trials at any time for safety issues or for any other reason; • inadequate drug product for use in nonclinical studies or clinical trials; • lack of adequate funding to continue the product development program; • external business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency, such as the COVID-19 pandemic, and unforeseen events such as the war in Ukraine; or • changes in governmental regulations or requirements.
Clinical trials may be delayed, suspended or terminated for a variety of reasons, including the following: • delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute; • delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; • inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in competing clinical trial programs; • delay or failure in recruiting and enrolling suitable subjects to participate in a trial; • delay or failure in having subjects complete a trial or return for post-treatment follow-up; • clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial; • delay or failure in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • delay or failure in obtaining institutional review board (“IRB”) approval to conduct a clinical trial at each site; • delays resulting from negative or equivocal findings of the Data Safety Monitoring Board (“DSMB”) if any; • ambiguous or negative results; • decision by the FDA, a comparable foreign regulatory authority, or recommendation by a DSMB to suspend or terminate clinical trials at any time for safety issues or for any other reason; • inadequate supply of drug product for use in nonclinical studies or clinical trials; • lack of adequate funding to continue the product development program; • external business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency and unforeseen events such as the war in Ukraine; or • changes in governmental regulations or requirements.
Our current manufacturer and any future manufacturers may not be able to manufacture our product candidates at a cost or in quantities or in a timely manner necessary to make commercially successful products. If we successfully commercialize any of our product candidates, we may be required to establish large-scale commercial manufacturing capabilities.
Our current manufacturers and any future manufacturers may not be able to manufacture our product candidates at a cost or in quantities or in a timely manner necessary to make commercially successful products. If we successfully commercialize any of our product candidates, we may be required to establish large-scale commercial manufacturing capabilities.
If the equity and credit markets deteriorate, including as a result of political unrest or war, such as the war in Ukraine, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
If the equity and credit markets deteriorate, including as a result of political unrest or war, such as the war in Ukraine or in Gaza, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
Non-compliance events that could result in abandonment or lapse of a patent or 51 patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
We are prohibited from declaring or paying any cash dividends under our existing loan and security agreement with Hercules. 59 Sales of a substantial number of shares of our common stock in the public market could cause our stock price to decline.
We are prohibited from declaring or paying any cash dividends under our existing loan and security agreement with Hercules. Sales of a substantial number of shares of our common stock in the public market could cause our stock price to decline.
We are a party to several license agreements and may need to obtain additional licenses from others to advance our research and 52 development activities or allow the commercialization of our current product candidates and any that we may identify and pursue in the future.
We are a party to several license agreements and may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our current product candidates and any that we may identify and pursue in the future.
Successfully completing clinical trials and obtaining approval of an NDA is a complex, lengthy, expensive and uncertain process, and the FDA, or a comparable foreign regulatory authority, may delay, limit or deny approval of mavorixafor for the treatment of WHIM syndrome or other indications for many reasons, including, among others: • disagreement with the design or implementation of our clinical trials; • disagreement with the sufficiency of our clinical trials; • failure to demonstrate the safety and efficacy of mavorixafor or any other product candidate for its proposed indications; • failure to demonstrate that any clinical and other benefits of mavorixafor or any other product candidate outweigh its safety risks; • a negative interpretation of the data from our nonclinical studies or clinical trials; • deficiencies in the manufacturing or control processes or failure of third-party manufacturing facilities with which we contract for clinical and commercial supplies to comply with current Good Manufacturing Practice requirements, or cGMPs; 31 • insufficient data collected from clinical trials of mavorixafor or changes in the approval requirements that render its nonclinical and clinical data insufficient to support the filing of an NDA or to obtain regulatory approval; or • changes in clinical practice in or approved products available for the treatment of the target patient population that could have an impact on the indications that we are pursuing for mavorixafor or our other product candidates.
Successfully completing clinical trials and obtaining approval of an NDA is a complex, lengthy, expensive and uncertain process, and the FDA, or a comparable foreign regulatory authority, may delay, limit or deny approval of mavorixafor for the treatment of WHIM syndrome or other indications for many reasons, including, among others: • disagreement with the design or implementation of our clinical trials; • disagreement with the sufficiency of our clinical trials; • failure to demonstrate the safety and efficacy of mavorixafor or any other product candidate for its proposed indications; • failure to demonstrate that any clinical and other benefits of mavorixafor or any other product candidate outweigh its safety risks; • a negative interpretation of the data from our nonclinical studies or clinical trials; • deficiencies in the manufacturing or control processes or failure of third-party manufacturing facilities with which we contract for clinical and commercial supplies to comply with current cGMPs; • insufficient data collected from clinical trials of mavorixafor or any other product candidate, or changes in the approval requirements that render its nonclinical and clinical data insufficient to support the filing of an NDA or to obtain regulatory approval; or 36 • changes in clinical practice in or approved products available for the treatment of the target patient population that could have an impact on the indications that we are pursuing for mavorixafor or our other product candidates.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. As another example, the complexity and uncertainty of European patent laws have increased in recent years.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. 58 As another example, the complexity and uncertainty of European patent laws have increased in recent years.
From time to time, we may publish interim top-line or preliminary data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
From time to time, we may publish interim top-line or preliminary data from our clinical trials. Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
Any product candidate for which we obtain marketing approval could be subject to marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products.
Additionally, any product candidate for which we obtain marketing approval could be subject to marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products.
Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. 57 We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
If any of our trade secrets were to be disclosed to, or independently developed by, a competitor, our competitive position would be harmed. 54 We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
If any of our trade secrets were to be disclosed to, or independently developed by, a competitor, our competitive position would be harmed. We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Under the Tax Act, as modified by the CARES Act, our federal NOLs generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning after December 31, 2020, may be limited.
Under the Tax Act, as modified by the CARES 60 Act, our federal NOLs generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning after December 31, 2020, may be limited.
Some of the factors that may cause the market price of our common stock to fluctuate include: • our ability or the ability of our collaborators to develop product candidates and conduct clinical trials that demonstrate such product candidates are safe and effective; • our ability or the ability of our collaborators to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals; • failure of any our product candidates to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success; • failure to maintain our existing third-party license, manufacturing and supply agreements; • failure by us or our licensors to prosecute, maintain or enforce our intellectual property rights; • changes in laws or regulations applicable to our current or future product candidates; • any inability to obtain adequate supply of product candidates or the inability to do so at acceptable prices; • adverse decisions by regulatory authorities; • introduction of new or competing products by our competitors; • failure to meet or exceed financial and development projections that we may provide to the public; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies; • additions or departures of key personnel; • significant lawsuits, including intellectual property or stockholder litigation; 58 • announcements by us of material developments in our business, financial condition and/or operations; • if securities or industry analysts do not publish research or reports about us, or if they issue an adverse or misleading opinions regarding our business and stock; • changes in the market valuations of similar companies; • general macroeconomic, political and market conditions and overall fluctuations in the financial markets in the United States and abroad; • sales of our common stock or our stockholders in the future; • trading volume of our common stock; • adverse publicity relating to our markets generally, including with respect to other products and potential products in such markets; • changes in the structure of health care payment systems; • period-to-period fluctuations in our financial results; and • the other factors described in this “Risk Factors” section and elsewhere in this Annual Report In addition, companies trading in the stock market in general have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, including in connection with the ongoing COVID-19 pandemic, which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects.
Some of the factors that may cause the market price of our common stock to fluctuate include: 62 • our ability or the ability of our collaborators to develop product candidates and conduct clinical trials that demonstrate such product candidates are safe and effective; • our ability or the ability of our collaborators to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals; • failure of any our product candidates to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success; • failure to maintain our existing third-party license, manufacturing and supply agreements; • failure by us or our licensors to prosecute, maintain or enforce our intellectual property rights; • changes in laws or regulations applicable to our current or future product candidates; • any inability to obtain adequate supply of product candidates or the inability to do so at acceptable prices; • adverse decisions by regulatory authorities; • introduction of new or competing products by our competitors; • failure to meet or exceed financial and development projections that we may provide to the public; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies; • additions or departures of key personnel; • significant lawsuits, including intellectual property or stockholder litigation; • announcements by us of material developments in our business, financial condition and/or operations; • if securities or industry analysts do not publish research or reports about us, or if they issue an adverse or misleading opinions regarding our business and stock; • changes in the market valuations of similar companies; • general macroeconomic, political and market conditions and overall fluctuations in the financial markets in the United States and abroad; • sales of our common stock or our stockholders in the future; • trading volume of our common stock; • adverse publicity relating to our markets generally, including with respect to other products and potential products in such markets; • changes in the structure of health care payment systems; • period-to-period fluctuations in our financial results; and • the other factors described in this “Risk Factors” section and elsewhere in this Annual Report In addition, companies trading in the stock market in general have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects.
These applications and data encompass a wide variety of business-critical information including research and development information and business and financial information. 56 The secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy.
These applications and data encompass a wide variety of business-critical information including research and development information and business and financial information. The secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy.
Healthcare providers and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing 43 approval.
Healthcare providers and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
For example, any regulatory approval that the FDA grants is limited to those indications and patient populations for which a drug is deemed to be safe and effective by the FDA.
Any regulatory approval that the FDA grants is limited to those indications and patient populations for which a drug is deemed to be safe and effective by the FDA.
Approval of a product candidate in the United States by the FDA does not ensure approval of such product candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA.
Approval of a product candidate in the United States by the FDA does not ensure approval of such product candidate by regulatory authorities in other countries or jurisdictions, and approval by a foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA.
Accordingly, we recorded an impairment charge of $9.8 million to reduce the carrying amount of goodwill to $17.4 million as of December 31, 2021. While we determined that goodwill was not impaired based on its quantitative test as of December 31, 2022, future declines in the market value of our common stock may result in additional impairment charges being recorded.
Accordingly, we recorded an impairment charge of $9.8 million to reduce the carrying amount of goodwill to $17.4 million as of December 31, 2021. While we determined that goodwill was not impaired based on its quantitative test as of December 31, 2023, future declines in the market value of our common stock may result in additional impairment charges being recorded.
We may experience delays in our current or future clinical trials, including our Phase 2 clinical trial of mavorixafor for the treatment of chronic neutropenic disorders.
In addition, we may experience delays in our current or future clinical trials, including our Phase 2 clinical trial of mavorixafor for the treatment of chronic neutropenic disorders.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection 40 and establish collaborative arrangements for research, development, manufacturing and commercialization. We are developing our lead product candidate, mavorixafor, for the treatment of chronic neutropenic disorders, including WHIM syndrome.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. We are developing our lead product candidate, mavorixafor, for the treatment of WHIM syndrome and other chronic neutropenic disorders.
FDA requirements also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, the manufacturers must continue to expend time, money and effort in the areas of production and quality 47 control to maintain cGMP compliance.
FDA requirements also require investigation and correction of any deviations from 50 cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, the manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain cGMP compliance.
Our employees, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business. We are exposed to the risk that our employees, principal investigators, CROs and consultants may engage in fraudulent conduct or other illegal activity.
Our employees, principal investigators, CROs, CMOs and consultants may engage in misconduct or other improper activities, 51 including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business. We are exposed to the risk that our employees, principal investigators, CROs, CMOs and consultants may engage in fraudulent conduct or other illegal activity.
Risks Related to Development of Our Product Candidates We depend almost entirely on the success of our lead product candidate, mavorixafor, which we are developing for the potential treatment of chronic neutropenic disorders, including WHIM syndrome, and, contingent on a potential strategic partnership, for the treatment of Waldenström’s.
Risks Related to Development of Our Product Candidates We depend almost entirely on the success of our lead product candidate, mavorixafor, which we are developing for the potential treatment of WHIM syndrome and other chronic neutropenic disorders, and, contingent on a potential strategic partnership, for the treatment of Waldenström’s.
To meet our projected needs for clinical supplies to support our activities through regulatory approval and commercial manufacturing, the manufacturer with whom we currently work will need to increase its frequency and/or scale of production or we will need to find additional or alternative manufacturers.
To meet our projected needs for clinical supplies to support our development activities through regulatory approval and commercial manufacturing, the manufacturers with whom we currently work will need to increase its frequency and/or scale of production or we will need to find additional or alternative manufacturers.
Inconsistencies may occur for a variety of reasons, including differences in trial design, trial endpoints (or lack of trial endpoints in exploratory studies), subject population, number of subjects, subject selection criteria, trial duration, drug dosage and formulation or due to the lack of statistical power in the earlier trials.
Inconsistencies may occur for a variety of reasons, including differences in trial design, trial endpoints (or lack of trial endpoints in exploratory studies), subject population, number of subjects, subject selection criteria, trial duration, drug dosage and formulation or lack of statistical power in the earlier trials.
See also the risk factor titled “ Our term loan contains restrictions that limit our flexibility in operating our business ” below. 27 We cannot be certain that additional funding will be available on acceptable terms, or at all.
See also the risk factor titled “ Our term loan contains restrictions that limit our flexibility in operating our business ” below. 32 We cannot be certain that additional funding will be available on acceptable terms, or at all.
As a result of the ongoing COVID-19 pandemic, we experienced delays in clinical trial site activation and slower patient enrollment in our clinical trials of mavorixafor for the treatment of WHIM syndrome, Waldenström’s and chronic neutropenia disorders.
For example, as a result of the COVID-19 pandemic, we experienced delays in clinical trial site activation and slower patient enrollment in our clinical trials of mavorixafor for the treatment of WHIM syndrome, Waldenström’s and chronic neutropenia disorders.
If we seek approval of our product candidates outside of the United States, we expect that we will be subject to additional risks in commercialization including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters and public health epidemics, such as the ongoing COVID-19 pandemic.
If we seek approval of our product candidates outside of the United States, we expect that we will be subject to additional risks in commercialization including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; 46 • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters and public health epidemics.
We are a “smaller reporting company” and cannot predict if the reduced reporting requirements applicable to smaller reporting companies will make our securities less attractive to investors. We are a “smaller reporting company” under the Exchange Act as of June 30, 2022.
We are a “smaller reporting company” and cannot predict if the reduced reporting requirements applicable to smaller reporting companies will make our securities less attractive to investors. We are a “smaller reporting company” under the Exchange Act as of June 30, 2023.
In October 2018, we entered into a loan and security agreement, as most recently amended and restated in January 2023, with Hercules, secured by a lien on substantially all of our assets, excluding intellectual property. This loan contains various covenants that limit our ability to engage in specified types of transactions.
In October 2018, we entered into a loan and security agreement, as most recently amended in August 2023, with Hercules, secured by a lien on substantially all of our assets, excluding intellectual property. This loan contains various covenants that limit our ability to engage in specified types of transactions.
We also rely on third parties to conduct our preclinical studies in accordance with Good Laboratory Practice, or GLP, requirements and the Laboratory Animal Welfare Act of 1966 requirements.
We also rely on third parties to conduct our preclinical studies in accordance with Good Laboratory Practice, or GLP, requirements and the Laboratory Animal Welfare Act of 1966 requirements, where applicable.
Other than our common stock purchase agreement with Lincoln Park Capital Fund LLC (“Lincoln Park”), pursuant to which Lincoln Park is obligated, subject to certain limitations and conditions, to purchase up to $50.0 million in the aggregate of shares of our common stock, we do not have any committed external sources of funds and may seek to raise additional capital at any time.
Other than our common stock purchase agreement with Lincoln Park Capital Fund LLC (“Lincoln Park”), pursuant to which Lincoln Park is obligated, subject to certain limitations and conditions, to purchase up to a remaining $47.0 million in the aggregate of shares of our common stock, we do not have any committed external sources of funds and may seek to raise additional capital at any time.
In particular, we are currently evaluating mavorixafor for the treatment of WHIM syndrome and chronic neutropenic disorders, rare diseases with limited patient pools from which to draw for clinical trials. The eligibility criteria of our clinical trials will further limit the pool of available trial participants.
In particular, we are currently evaluating mavorixafor for the treatment of chronic neutropenic disorders, which are rare diseases with limited patient pools from which to draw for clinical trials. The eligibility criteria of our clinical trials will further limit the pool of available trial participants.
Any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial condition and prospects.
Any delays in completing or failures to complete our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial condition and prospects.
Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the medicine.
Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to other conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the drug.
If the size of the commercial opportunities in any of our target indications is smaller than we anticipate, we may not be able to achieve profitability and growth. Our lead clinical candidate, mavorixafor, is being developed as an oral, once-daily therapy for the potential treatment of a variety of chronic neutropenic disorders, including WHIM syndrome.
If the size of the commercial opportunities in any of our target indications is smaller than we anticipate, we may not be able to achieve profitability and growth. Our lead clinical candidate, mavorixafor, is being developed as an oral, once-daily therapy for the potential treatment of WHIM syndrome and other chronic neutropenic disorders.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such as the war in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, political crises, geopolitical events, such as the war in Ukraine and in Gaza, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for the treatment or prevention of rare diseases or conditions with relatively small patient populations as orphan drugs.
Regulatory authorities in some jurisdictions, including the United States and European Union, may designate drugs for the treatment or prevention of rare diseases or conditions with relatively small patient populations as orphan drugs.
If a drug or biologic candidate is intended for the treatment of a serious or life-threatening condition or disease and the drug demonstrates the potential to address unmet medical needs for the condition, the sponsor may apply for Fast Track designation. Designation as a breakthrough therapy and Fast Track designation are within the discretion of the FDA.
If a drug is intended for the treatment of a serious or life-threatening condition or disease and the drug demonstrates the potential to address unmet medical needs for the condition, the sponsor may apply for Fast Track designation. Breakthrough Therapy and Fast Track designations are within the discretion of the FDA.
In any event, the receipt of either or both of a breakthrough therapy designation or Fast Track designation for a product candidate may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.
The receipt of Breakthrough Therapy designation or Fast Track designation for a product candidate may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.
We have advanced mavorixafor through a pivotal, Phase 3 clinical trial (the “4WHIM trial”) in people with WHIM syndrome, and are currently advancing mavorixafor in a Phase 2 clinical trial in people with certain chronic neutropenic disorders.
We have completed a pivotal, Phase 3 clinical trial (the “4WHIM trial”) in people with WHIM syndrome, and are currently advancing mavorixafor in a Phase 2 clinical trial in people with certain chronic neutropenic disorders.
If we or our manufacturers are unable to purchase these key materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed, which would impair our ability to generate revenues from the sale of our product candidates.
If we or our manufacturers are unable to purchase these key materials after regulatory approval of our product candidates, the commercial launch of our product candidates would be delayed, which would impair our ability to generate revenues from the sale of our product candidates.
Our ability to generate profits from operations and thereafter to remain profitable depends heavily on: • the scope, number, progress, duration, endpoints, cost, results and timing of clinical trials and nonclinical studies of our current or potential future product candidates, including in particular the scope, progress, duration, endpoints, cost, results and timing for completion of our Phase 2 clinical trial of mavorixafor for the treatment of chronic neutropenic disorders; • our ability to raise sufficient funds to support the development and potential commercialization of our product candidates; • the outcomes and timing of regulatory reviews, approvals or other actions; • our ability to obtain marketing approval for our product candidates; • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the success of any other business, product or technology that we acquire or in which we invest; • our ability to maintain, expand and defend the scope of our intellectual property portfolio; • our ability to manufacture any approved products on commercially reasonable terms; • our ability to establish a sales and marketing organization or suitable third-party alternatives for any approved product; • the number and characteristics of product candidates and programs that we pursue; • hire additional clinical, regulatory and scientific personnel; and • incur additional legal, accounting and other expenses associated with operating as a public company. 26 Based on our current plans, we do not expect to generate significant revenue from product sales unless and until we (or a potential future licensee or collaborator) obtain marketing approval for, and commercialize, one or more of our current or potential future product candidates.
Our ability to generate profits from operations and thereafter to remain profitable depends heavily on: • outcomes and timing of regulatory reviews, approvals and other actions; • our ability to manufacture any approved products on commercially reasonable terms; • our ability to establish a sales and marketing organization or suitable third-party alternatives for any approved product; • the scope, number, progress, duration, endpoints, cost, results and timing of clinical trials and nonclinical studies of our current or potential future product candidates, including in particular the scope, progress, duration, endpoints, cost, results and timing for completion of our Phase 2 clinical trial of mavorixafor for the treatment of chronic neutropenic disorders; • our ability to raise sufficient funds to support the development and potential commercialization of our product candidates; • our ability to obtain marketing approval for our product candidates; • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the success of any other business, product or technology that we acquire or in which we invest; • our ability to maintain, expand and defend the scope of our intellectual property portfolio; • the number and characteristics of product candidates and programs that we pursue; • hire additional clinical, regulatory and scientific personnel; and 31 • incur additional legal, accounting and other expenses associated with operating as a public company.
We are not permitted to market mavorixafor or any other product candidate in the United States until we receive approval of an New Drug Application (“NDA”) from the FDA, or in any foreign countries until we receive the requisite approval from such countries or jurisdictions, such as the marketing authorization application (“MAA”) in the European Union from the European Medicines Agency (“EMA”).
We are not permitted to market mavorixafor or any other product candidate in the United States until we receive approval of an New Drug Application (“NDA”) from the FDA, or in any foreign countries until we receive the requisite approval from such countries or jurisdictions, such as approval of the marketing authorization application in the European Union from the European Commission.
Even if our clinical trials are completed as planned, we cannot be certain that their results will support the proposed product candidates, that the FDA or foreign government authorities will agree with our conclusions regarding such results, or that the FDA or foreign governmental authorities will not require additional clinical trials.
Even if our clinical trials are completed as planned, we cannot be certain that their results will support the safety and/or efficacy of our product candidates, that the FDA or foreign government authorities will agree with our conclusions regarding such results, or that the FDA or foreign governmental authorities will not require additional clinical trials.
Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect; • our ability to obtain marketing approval for our product candidates; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme or from other third parties; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the cost and timing of completion of commercial-scale manufacturing activities with respect to our product candidates; • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; • the success of any other business, product or technology that we acquire or in which we invest; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • our need and ability to hire additional management and scientific and medical personnel; • market acceptance of our product candidates, to the extent any are approved for commercial sale; • the effect of competing technological and market developments; • the costs to operate as a public company; and 28 • business interruptions resulting from pandemics and public health emergencies, including those related to the ongoing COVID-19 pandemic, geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.
Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect; • our ability to obtain marketing approval for our product candidates; • the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates; • the clinical development plans that we establish for these product candidates; • the number and characteristics of product candidates and programs that we develop or may in-license; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme or from other third parties; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the cost and timing of completion of commercial-scale manufacturing activities with respect to our product candidates; • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; • the success of any other business, product or technology that we acquire or in which we invest; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • our need and ability to hire additional management and scientific and medical personnel; • market acceptance of our product candidates, to the extent any are approved for commercial sale; • the effect of competing technological and market developments; • the costs to operate as a public company; and 33 • business interruptions resulting from pandemics and public health emergencies, geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.
Further, if we attempt to modify a product candidate or technology or to develop alternative methods or products in response to infringement claims or to avoid potential claims, we could incur substantial costs, encounter delays in product introductions or interruptions in sales.
Further, if we attempt to modify a product candidate or technology or to develop alternative methods or products in response to infringement claims or to avoid potential claims, we could incur substantial costs, encounter delays in product introductions or interruptions in sales. Ultimately, such efforts could be unsuccessful.
Additionally, the addressable patient population for our indications may be limited or may not be amenable to treatment with mavorixafor, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business. Results of earlier clinical trials may not be predictive of the results of later-stage clinical trials.
Additionally, the addressable patient population for our indications may be limited or may not be amenable to treatment with mavorixafor, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business.
Before obtaining regulatory approvals for the commercial sale of any product candidate, we must successfully meet a number of critical developmental milestones, including: • developing dosages that will be well-tolerated, safe and effective; • completing the development and scale-up to permit manufacture of our product candidates in commercial quantities and at acceptable costs; • demonstrating through pivotal clinical trials that each product candidate is safe and effective in patients for the intended indication; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; and • obtaining and maintaining patent and trade secret protection and non-patent exclusivity for our product candidates. 30 The time necessary to achieve these developmental milestones for any individual product candidate is long and uncertain, and we may not successfully complete these milestones for mavorixafor or any other product candidates that we may develop.
Before obtaining regulatory approvals for the commercial sale of any product candidate, we must successfully meet a number of critical developmental milestones, including: • developing dosages that will be well-tolerated, safe and effective; • completing the development and scale-up to permit manufacture of our product candidates in commercial quantities and at acceptable costs; • demonstrating through pivotal clinical trials that each product candidate is safe and effective in patients for the intended indication; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; and • obtaining and maintaining patent and trade secret protection and non-patent exclusivity for our product candidates.
If those collaborations are not successful, we may not be able to capitalize on the market potential of our product candidates. • If we are unable to protect our intellectual property rights, our competitive position could be harmed. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • Our future success depends on our ability to retain executives and to attract, retain and motivate key personnel in a competitive environment for skilled biotechnology personnel. • We will need to grow the size of our organization, and we may experience difficulties in managing this growth. • Our term load contains restrictions that limit our flexibility in operating our business. • Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such a the war in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance. • Our stock price has been and is likely to continue to be volatile and fluctuate substantially. 25 Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses and have not generated revenue from product sales since our inception.
If those collaborations are not successful, we may not be able to capitalize on the market potential of our product candidates. • If we are unable to protect our intellectual property rights, our competitive position could be harmed. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • Our future success depends on our ability to retain executives and to attract, retain and motivate key personnel in a competitive environment for skilled biotechnology personnel. • We will need to grow the size of our organization, and we may experience difficulties in managing this growth. • Our term loan contains restrictions that limit our flexibility in operating our business. 30 • Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, political crises, geopolitical events, such as the wars in Ukraine and Gaza, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance. • Our stock price has been and is likely to continue to be volatile and fluctuate substantially.
Interference or derivation proceedings brought by the USPTO or its foreign counterparts may be necessary to determine the priority of inventions with respect to our patent applications, and we may also become involved in other proceedings, such as re-examination proceedings, before the USPTO or its foreign counterparts.
Further, third parties may be dissuaded from collaborating with us. 55 Interference or derivation proceedings brought by the USPTO or its foreign counterparts may be necessary to determine the priority of inventions with respect to our patent applications, and we may also become involved in other proceedings, such as re-examination proceedings, before the USPTO or its foreign counterparts.
Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the clinical indications for which the product candidate is approved; • acceptance by major operators of hospitals, physicians and patients of the product candidate as a safe and effective treatment, particularly the ability of mavorixafor and our other product candidates to establish themselves as a new standard of care in the treatment paradigm for the indications that we are pursuing; • the potential and perceived advantages of our product candidates over alternative treatments as compared to the relative costs of the product candidates and alternative treatments; • the prevalence and severity of any side effects with respect to our product candidates, including mavorixafor; • our ability to offer any approved products for sale at competitive prices; • the timing of market introduction of our products as well as competitive products; • our pricing, and the availability of coverage and adequate reimbursement by third party payors and government authorities; • relative convenience and ease of administration; and • the effectiveness of our sales and marketing efforts and those of our potential future collaborators. 38 There may be delays in getting our product candidates, if approved, on hospital or insurance formularies or limitations on coverages that may be available in the early stages of commercialization for newly approved drugs.
Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the clinical indications for which the product candidate is approved; • acceptance by hospitals, physicians and patients of the product candidate as a safe and effective treatment, particularly the ability of mavorixafor and our other product candidates to establish themselves as a new standard of care for the indications that we are pursuing; • the potential and perceived advantages of our product candidates over alternative treatments as compared to the relative costs of the product candidates and alternative treatments; • the prevalence and severity of any side effects with respect to our product candidates, including mavorixafor; • our ability to offer any approved products for sale at competitive prices; • the timing of market introduction of our products as well as competitive products; • our pricing, and the availability of coverage and adequate reimbursement by third party payors and government authorities; • relative convenience and ease of administration; and • the effectiveness of our sales and marketing efforts and those of our potential future collaborators.
Our operations have consumed a large amount of cash since inception. To date, we have funded our operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of our preferred stock and our common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.
To date, we have funded our operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of our preferred stock and our common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.
Based on the foregoing, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of the financial statements appearing elsewhere in this Annual Report.
In such event, Hercules could require the repayment of all outstanding debt. Based on the foregoing, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of the financial statements appearing elsewhere in this Annual Report.
Our ability to generate revenue from mavorixafor or any of our current or future product candidates also depends on a number of additional factors, including our ability to: • successfully complete development activities, including all necessary nonclinical studies and clinical trials; • complete and submit New Drug Applications to the FDA and obtain regulatory approval for indications for which there is a commercial market; • complete and submit marketing applications to, and obtain regulatory approval from, foreign regulatory authorities; • set and obtain a commercially viable price for our products; • obtain commercial quantities of our products at acceptable cost levels; • develop a commercial organization capable of sales, marketing and distribution for the products we intend to sell ourselves in the markets in which we have retained commercialization rights; • find suitable collaborators to help us market, sell and distribute our approved products in other markets; and • obtain coverage and adequate reimbursement from third-party, including government, payors. 29 In addition, because of the numerous risks and uncertainties associated with product development, including the possibility that our product candidates may not advance through development or demonstrate safety and efficacy for their intended uses, the FDA or any other regulatory agency may require additional clinical trials or nonclinical studies.
Our ability to generate revenue from mavorixafor or any of our current or future product candidates also depends on a number of additional factors, including our ability to: • successfully complete development activities, including all necessary nonclinical studies and clinical trials; • complete and submit New Drug Applications to the FDA and obtain regulatory approval for indications for which there is a commercial market; • complete and submit marketing applications to, and obtain regulatory approval from, foreign regulatory authorities; • set and obtain a commercially viable price for our products; • obtain commercial quantities of our products at acceptable cost levels; • develop a commercial organization capable of sales, marketing and distribution for the products we intend to sell ourselves in the markets in which we have retained commercialization rights; • find suitable collaborators to help us market, sell and distribute our approved products in other markets; and • obtain coverage and adequate reimbursement from third-party, including government, payors.
As of December 31, 2022, we had U.S. federal and state NOLs of $342.9 million and $336.5 million, respectively. Our NOLs generated in tax years ending on or prior to December 31, 2017 are only permitted to be carried forward for 20 years under applicable U.S. tax law.
As of December 31, 2023, we had U.S. federal and state NOLs of $400.0 million and $389.0 million, respectively. Our NOLs generated in tax years ending on or prior to December 31, 2017 are only permitted to be carried forward for 20 years under applicable U.S. tax law.
For example, our debt facility with Hercules contains a minimum cash financial covenant that we project we would be in violation of in the first quarter of 2024 based on our current cash flow projections, assuming we do not raise additional funding.
For example, our debt facility with Hercules contains a minimum cash financial covenant that we project we would be in violation of in the first quarter of 2025 based on our current cash flow projections, assuming we do not raise additional funding and our drug candidate is not approved by the FDA.
We have not yet completed development of any product candidate. We also may not be able to finalize the design or formulation for our other programs. We may not be able to complete development of any product candidates that demonstrate safety and efficacy and that will have a commercially reasonable treatment and storage period.
We also may not be able to finalize the design or formulation or complete development of any product candidates that demonstrate safety 35 and efficacy and that will have a commercially reasonable treatment and storage period.
If the breadth or strength of our patent or other intellectual property rights is compromised or threatened, it could allow third parties to commercialize our technology or products or result in our inability to commercialize our technology and products without infringing third-party intellectual property rights. Further, third parties may be dissuaded from collaborating with us.
If the breadth or strength of our patent or other intellectual property rights is compromised or threatened, it could allow third parties to commercialize our technology or products or result in our inability to commercialize our technology and products without infringing third-party intellectual property rights.
Our license agreement with Georgetown imposes upon us various diligence, payment and other obligations, including our obligations to pay Georgetown milestone payments in the aggregate amount of up to $0.8 million, contingent upon our achievement of certain sales milestones with respect to licensed products, to deliver reports upon certain events and at regular intervals and to maintain customary levels of insurance.
We have the right to terminate the agreement for any reason upon 90 days’ advance written notice. 37 Our license agreement with Georgetown imposes upon us various diligence, payment and other obligations, including our obligations to pay Georgetown milestone payments in the aggregate amount of up to $0.8 million, contingent upon our achievement of certain sales milestones with respect to licensed products, to deliver reports upon certain events and at regular intervals and to maintain customary levels of insurance.
Accordingly, even if we believe that our product candidates meet the criteria for designation as a breakthrough therapy or Fast Track designation, the FDA may disagree and instead determine not to make such designation.
Accordingly, even if we believe that our product candidates meet the criteria for designation, the FDA may disagree and instead determine not to make such designation.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. 56 From time to time, we may need to rely on licenses to proprietary technologies, which may be difficult or expensive to obtain or we may lose certain licenses which may be difficult to replace.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between the Company and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or our directors, officers, employees or stockholders. 61 Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on the Company’s behalf, any action asserting a breach of fiduciary duty owed by our directors, officers, other employees or stockholders to the Company or our stockholders, any action asserting a claim against the Company arising pursuant to the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim arising pursuant to our certificate of incorporation or by-laws or governed by the internal affairs doctrine.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on the Company’s behalf, any action asserting a breach of fiduciary duty owed by our directors, officers, other employees or stockholders to the Company or our stockholders, any action asserting a claim against the Company arising pursuant to the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim arising pursuant to our certificate of incorporation or by-laws or governed by the internal affairs doctrine.
We will also require additional capital to satisfy the covenant under our existing debt facility with Hercules Capital, Inc. and certain affiliated entities (“Hercules”) that requires that we maintain a minimum level of cash of $20.0 million, subject to reduction to $10.0 million upon the achievement of certain conditions.
We will also require additional capital to satisfy the covenant under our existing debt facility with Hercules Capital, Inc. and certain affiliated entities (“Hercules”) that requires that we maintain a minimum level of cash of $20.0 million through January 2025 and thereafter, subject to reductions upon the Company’s achievement of certain operational milestones.

… 138 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−1 removed2 unchanged
Biggest changeWe lease approximately 1,200 square meters of laboratory and office space in Vienna, Austria under a lease that will expire in March 2028, with a monthly payment of approximately $23.2 thousand. ITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.
Biggest changeWe lease approximately 1,200 square meters of laboratory and office space in Vienna, Austria under a lease that will expire in March 2028, with a monthly payment of approximately $24 thousand. ITEM 3.
The base monthly payment on the lease is approximately $88.7 thousand as of December 31, 2022, subject to specified annual increases of approximately 3% during the term of the lease and not including operating expenses, certain utilities, taxes and insurance for which we are responsible.
The base monthly payment on the lease is approximately $91 thousand as of December 31, 2023, subject to specified annual increases of approximately 3% during the term of the lease and not including operating expenses, certain utilities, taxes and insurance for which we are responsible.
Removed
We are not currently subject to any material legal proceedings.
Added
LEGAL PROCEEDINGS From time to time, we may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. While the outcome of any such proceedings cannot be predicted with certainty, as of December 31, 2023, we were not party to any legal proceedings. 67

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. LEGAL PROCEEDINGS 62 Item 4 . MINE SAFETY DISCLOSURES 62 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 63 Item 6. [RESERVED] 63 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 63
Biggest changeItem 3. LEGAL PROCEEDINGS 67 Item 4 . MINE SAFETY DISCLOSURES 68 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 69 Item 6. [RESERVED] 69 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 70

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−1 removed6 unchanged
Biggest changeAny future determination to declare and pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Recent Sales of Unregistered Securities None.
Biggest changeAny future determination to declare and pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.
Holders of Our Common Stock As of March 1, 2023, there were 66 holders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).
Holders of Our Common Stock As of March 1, 2024, there were 60 holders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).
Removed
Purchase of Equity Securities by the Issuer and Affiliated Purchasers None.
Added
Equity Compensation Plan The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. Purchase of Equity Securities by the Issuer and Affiliated Purchasers None.

Item 7. Management's Discussion & Analysis

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

50 edited+18 added−27 removed51 unchanged
Biggest changeOther Expense, Net Year Ended December 31, 2022 2021 Change (in thousands) Interest income $ 219 $ 10 $ 209 Interest expense (3,993) (3,642) (351) Change in fair value of warrant and derivative liabilities 1,701 (366) 2,067 Research and development incentive program 534 789 (255) Foreign currency losses, issuance costs related to warrants and other (4,731) (363) (4,368) Total other expense, net $ (6,270) $ (3,572) $ (2,698) The increase in other expense, net, of $2.7 million for the year ended December 31, 2022 as compared to 2021 was primarily due to an increase in transaction fees associated with the issuance of warrants that are accounted for as liabilities, partially offset by a decrease in the fair value of the embedded derivative liability associated with the Hercules Loan agreement, as defined below, and the net change in the fair value of warrants accounted for as liabilities, as further described in Note 10 to the consolidated financial statements included herein.
Biggest changeOther Income (Expense), Net Year Ended December 31, 2023 2022 Change (in thousands) Interest income $ 4,582 $ 219 $ 4,363 Interest expense (5,777) (3,993) (1,784) Change in fair value of warrant and derivative liabilities 7,074 1,701 5,373 Research and development incentive program 553 534 19 Foreign currency losses and issuance costs related to warrants 1 (4,731) 4,732 Total other income (expense), net $ 6,433 $ (6,270) $ 12,703 The increase in other income (expense), net, of $12.7 million for the year ended December 31, 2023 as compared to 2022 was primarily due (i) an increase in interest income earned on our marketable securities and cash equivalents due to higher invested balances and higher interest rates (ii) income resulting from the decrease in the fair value of outstanding Class C warrants, which are accounted for as a liability, due primarily to a decrease in the value of our common stock and, (iii) transaction fees incurred in 2022 that did not recur in 2023 associated with the issuance of warrants that are accounted for as liabilities, partially offset by an increase in interest expense associated with the Hercules Loan agreement due to higher borrowings and a higher effective interest rate.
Our short term and long term funding requirements will depend on and could increase significantly as a result of many factors, including: • the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly our Phase 2 clinical trial of mavorixafor for the treatment of patients with chronic neutropenic disorders; • the outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect; • our ability to obtain marketing approval for our product candidates; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the cost and timing of completion of commercial-scale manufacturing activities with respect to our product candidates; 70 • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; • the success of any other business, product or technology that we acquire or in which we invest; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • our need and ability to hire additional management and scientific and medical personnel; • market acceptance of our product candidates, to the extent any are approved for commercial sale; • the effect of competing technological and market developments; and • the costs to operate as a public company Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties.
Our short term and long term funding requirements will depend on and could increase significantly as a result of many factors, including: • the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly our Phase 2 clinical trial of mavorixafor for the treatment of patients with chronic neutropenic disorders; • the outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect; • our ability to obtain marketing approval for our product candidates; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; • the cost and timing of completion of commercial-scale manufacturing activities with respect to our product candidates; • our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement; • the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; • the success of any other business, product or technology that we acquire or in which we invest; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • our need and ability to hire additional management and scientific and medical personnel; • market acceptance of our product candidates, to the extent any are approved for commercial sale; • the effect of competing technological and market developments; and • the costs to operate as a public company 76 Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties.
Overview We are a late clinical-stage biopharmaceutical company discovering and developing novel therapeutics for the treatment of rare diseases and those with limited treatment options, with a focus on conditions resulting from dysfunction of the immune system. Our lead clinical candidate is mavorixafor, a small molecule antagonist of chemokine receptor CXCR4 that is being developed as an oral, once-daily therapy.
Overview We are a late clinical-stage biopharmaceutical company discovering and developing novel therapeutics for the treatment of rare diseases and those with limited treatment options, with a focus on conditions resulting from dysfunction of the immune system. Our lead clinical candidate is mavorixafor, a small-molecule selective antagonist of chemokine receptor CXCR4 that is being developed as an oral, once-daily therapy.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. 71 Accrued Research and Development Expenses.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. Accrued Research and Development Expenses.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of 77 services provided and result in a prepayment of the expense.
To perform its quantitative test, we compare the fair value of our single reporting unit to the carrying value of its net assets, including goodwill. We use our market capitalization (common shares outstanding multiplied by the price per share of our common stock) to measure the fair value of the reporting unit.
To perform its quantitative test, we compare the fair value of our single reporting unit to the carrying value of its net assets, including goodwill. We use our market capitalization (common shares outstanding multiplied by the price per share of our common stock) to measure the fair 78 value of the reporting unit.
Riley Securities, Inc., Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company, Incorporated (collectively the “Sales Agents”), pursuant to which we may offer and sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock having an aggregate offering price of up to $50 million.
Riley Securities, Inc., Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company, Incorporated (collectively the “Sales Agents”), pursuant to which we may offer and sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock having an aggregate offering price of up to $75 million.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation for personnel in sale and marketing, executive, finance and administrative functions. Selling, general and administrative expenses also include direct and allocated facility-related costs, as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation for personnel in sales and marketing, executive, finance and administrative functions. Selling, general and administrative expenses also include direct and allocated facility-related costs, as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.
Financing Activities: During the year ended December 31, 2022, net cash provided by financing activities was $117.2 million, consisting primarily of net proceeds from two private placements and a public offering of our common stock, warrants, and pre-funded warrants.
During the year ended December 31, 2022, net cash provided by financing activities was $117.2 million, consisting primarily of proceeds from the sale of our common stock and pre-funded warrants in two a private placements and a public offering.
See Note 4 for more information on our goodwill impairment test as of December 31, 2022. Smaller Reporting Company Status We are a smaller reporting company as defined in the Exchange Act.
See Note 4 for more information on our goodwill impairment test as of December 31, 2023. Smaller Reporting Company Status We are a smaller reporting company as defined in the Exchange Act.
Accordingly, we classified this transaction as a “gain on sale of non-financial asset” for the year ended December 31, 2022. There was no such transaction in year ended December 31, 2021.
Accordingly, we classified this transaction as a “gain on sale of non-financial asset” for the year ended December 31, 2022. There was no such transaction in year ended December 31, 2023.
The shares of common stock that we may sell under the LPC Agreement are capped at 5.6 million, which amount may be adjusted under certain conditions as defined in the LPC Agreement. In January 2022, we raised $3.0 million from the sale of shares of our common stock through the LPC Agreement.
The shares of 73 common stock that we may sell under the LPC Agreement are capped at an aggregate of 5.6 million shares, which amount may be adjusted under certain conditions as defined in the LPC Agreement. In January 2022, we raised $3.0 million from the sale of shares of our common stock through the LPC Agreement.
We expect that our research and development expenses, particularly for our mavorixafor programs, will increase over the next several years as we continue to conduct our clinical trials of mavorixafor in chronic neutropenic disorders. Research and development expenses related to our X4P-002 and X4P-003 programs were not significant in 2022 relative to our overall research and development expenses.
We expect that our research and development expenses, particularly for our mavorixafor programs, will increase over the next several years as we continue to conduct our clinical trials of mavorixafor in chronic neutropenic disorders. Research and development expenses related to our X4P-002 and X4P-003 programs was not significant in 2023 or 2022 relative to our overall research and development expenses.
For the discussion of the financial condition and results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to our Annual Report on Form 10-K filed with the SEC on March 17, 2022.
For the discussion of the financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to our Annual Report on Form 10-K filed with the SEC on March 21, 2023.
Unless and until we reach profitability in the future, we will require additional capital to fund our operations, which could be raised through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations and strategic alliances.
To finance our operations, we will need to raise additional capital, which cannot be assured. Unless and until we reach profitability in the future, we will require additional capital to fund our operations, which could be raised through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations and strategic alliances.
During 2023 and beyond, assuming no changes to our current operational expectations, we expect our expenses to continue to increase in connection with our ongoing activities, particularly as we advance the current and anticipated clinical trials of our product candidates in development.
During 2024 and beyond, assuming no changes to our current operational expectations, we expect our expenses to continue to increase in connection with our ongoing activities, particularly as we advance the current and anticipated clinical trials of our product candidates in development and prepare for the launch and commercialization of any product candidates.
Due to its ability to increase the mobilization of mature, functional white blood cells from the bone marrow into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of chronic neutropenic disorders, including WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency.
Due to its ability to increase the mobilization of mature, functional white blood cells into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of chronic neutropenic disorders, including WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency for which there are no approved therapies.
We are also currently advancing mavorixafor in a Phase 2 clinical trial in people with certain chronic neutropenic disorders following positive results from a Phase 1b clinical trial of mavorixafor in people with idiopathic, cyclic or congenital neutropenia.
We are also currently advancing mavorixafor for the treatment of people with certain chronic neutropenic disorders following positive results from a Phase 1b clinical trial of a single dose of mavorixafor in people with idiopathic, cyclic, and congenital chronic neutropenia.
If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect our business prospects, or we may be unable to continue operations . 68 Cash Flows The following table summarizes our cash flow activities for each of the periods presented: Year Ended December 31, 2022 2021 (in thousands) Net loss $ (93,867) $ (88,696) Adjustments to reconcile net loss to net cash used in operating activities 11,029 19,289 Changes in operating assets and liabilities 5,736 (1,498) Net cash used in operating activities (77,102) (70,905) Net cash used in investing activities (103) (615) Net cash provided by financing activities 117,230 74,245 Impact of foreign exchange on cash and restricted cash (105) (319) Net increase in cash, cash equivalents and restricted cash 39,920 2,406 Cash, cash equivalents and restricted cash, beginning of period 83,108 80,702 Cash, cash equivalents and restricted cash, end of period $ 123,028 $ 83,108 Operating Activities: During the year ended December 31, 2022, net cash used in operating activities was $77.1 million, primarily resulting from our net losses of $93.9 million, adjusted for noncash expenses of $11.0 million and changes in our operating assets and liabilities of $5.7 million.
If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect our business prospects, or we may be unable to continue operations . 74 Cash Flows The following table summarizes our cash flow activities for each of the periods presented: Year Ended December 31, 2023 2022 (in thousands) Net loss $ (101,167) $ (93,867) Adjustments to reconcile net loss to net cash used in operating activities 4,311 11,029 Changes in operating assets and liabilities 344 5,736 Net cash used in operating activities (96,512) (77,102) Net cash used in investing activities (14,883) (103) Net cash provided by financing activities 88,516 117,230 Impact of foreign exchange on cash and restricted cash 99 (105) Net increase in cash, cash equivalents and restricted cash (22,780) 39,920 Cash, cash equivalents and restricted cash, beginning of period 123,028 83,108 Cash, cash equivalents and restricted cash, end of period $ 100,248 $ 123,028 Operating Activities: During the year ended December 31, 2023, net cash used in operating activities was $96.5 million, primarily resulting from our net losses of $101.2 million, adjusted for noncash expenses of $4.3 million and changes in our operating assets and liabilities of $0.3 million.
Gain on Sale of Non-Financial Asset During the year ended December 31, 2022, a third party, who had previously acquired rights to certain intellectual property from us, terminated the arrangement and transferred these rights back us and we transferred these rights to another third party in return for $0.5 million.
As of December 31, 2023 we determined that goodwill was not impaired based on its quantitative test. 72 Gain on Sale of Non-Financial Asset During the year ended December 31, 2022, a third party, who had previously acquired rights to certain intellectual property from us, terminated the arrangement and transferred these rights back us and we transferred these rights to another third party in return for $0.5 million.
Research and development expenses also increased in 2022 due to an increase in unallocated expenses, primarily due to an increase in head count within our manufacturing, regulatory and clinical operations functions, resulting in higher compensation expenses, including stock-based compensation. In addition, unallocated research and development expense increased due to higher external regulatory compliance and information technology costs.
Research and development expenses also increased in 2023 due to an increase in unallocated expenses, primarily due to an increase in head count within our manufacturing, regulatory and clinical operations functions, resulting in higher compensation expenses, including stock-based compensation.
In November 2021, we raised approximately $10.0 million through the sale of pre-funded warrants to an investor in a private placement. In March 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $3.0 million, before offering expenses.
In March 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $3.0 million, before offering expenses.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors.” Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes the results of our operations for the periods indicated: Year Ended December 31, 2022 2021 Change (in thousands) Operating expenses: Research and development $ 61,058 $ 50,647 $ 10,411 Selling, general and administrative 27,020 24,702 2,318 Gain on sale of non-financial asset (509) — (509) Impairment of goodwill — 9,758 (9,758) Total operating expenses 87,569 85,107 2,462 Loss from operations (87,569) (85,107) (2,462) Total other expense, net (6,270) (3,572) (2,698) Loss before provision for income taxes (93,839) (88,679) (5,160) Provision for income taxes 28 17 11 Net loss $ (93,867) $ (88,696) $ (5,171) 65 Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates, including employee salaries and related expenses, expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (“CROs”); the cost of manufacturing drug products for use in our preclinical studies and clinical trials, including under agreements with third parties, such as consultants and contract manufacturing organizations (“CMOs”); facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance; costs related to compliance with regulatory requirements; and payments made under third-party licensing agreements.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors.” Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes the results of our operations for the periods indicated: Year Ended December 31, 2023 2022 Change (in thousands) Operating expenses: Research and development $ 72,017 $ 61,058 $ 10,959 Selling, general and administrative 35,505 27,020 8,485 Gain on sale of non-financial asset — (509) 509 Total operating expenses 107,522 87,569 19,953 Loss from operations (107,522) (87,569) (19,953) Total other income (expense), net 6,433 (6,270) 12,703 Loss before provision for income taxes (101,089) (93,839) (7,250) Provision for income taxes 78 28 50 Net loss $ (101,167) $ (93,867) $ (7,300) Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates, including employee salaries and related expenses, expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (“CROs”); the cost of manufacturing drug products for use in our preclinical studies and clinical trials, including under agreements with third parties, such as consultants and contract manufacturing organizations (“CMOs”); facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance; costs related to compliance with regulatory requirements; and payments made under third-party licensing agreements.
Liquidity and Capital Resources Sources of Liquidity To date, we have funded our operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of our preferred stock and our common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements. 67 ATM Sales Agreement — We have entered into a Controlled Equity Offering SM Sales Agreement (“ATM Sales Agreement”), with B.
Liquidity and Capital Resources Sources of Liquidity To date, we have funded our operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of our preferred stock and our common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.
As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, the resulting share-based compensation expense could be materially different. Goodwill. Business combinations are accounted for under the acquisition method.
The assumptions underlying these valuations represent the best estimates of our management, which involve inherent uncertainties and the application of our judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, the resulting share-based compensation expense could be materially different. Goodwill. Business combinations are accounted for under the acquisition method.
Hercules Loan Agreement — In January 2023, we entered into a Second Amended and Restated Loan and Security Agreement (the “Hercules Loan Agreement”) with Hercules Capital, Inc., as agent and lender, and Hercules Capital Funding IV LLC and Hercules Capital Funding Trust 2022-1, as lenders (collectively, “Hercules”), which agreement amended and restated the Amended and Restated Loan and Security Agreement dated as of June 27, 2019, as subsequently amended from time to time (the “Previous Loan Agreement”).
Hercules Loan Agreement — In January 2023, we entered into a Second Amended and Restated Loan and Security Agreement (the “Second A&R Hercules Loan Agreement”) with Hercules Capital, Inc., as agent and lender, and Hercules Capital Funding IV LLC and Hercules Capital Funding Trust 2022-1, as lenders (collectively, “Hercules”).
In order to fund operations and satisfy the minimum cash covenant in the Hercules Loan Agreement, we will be required to raise additional capital, which may be through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations and strategic alliances.
In order to fund operations and satisfy the minimum cash covenant in the Hercules Loan Agreement, we will be required to raise additional capital, which may be through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements, the sale of a PRV that may be granted to us if we receive FDA approval of our NDA, profits generated from the sale of our drug candidate upon the receipt of FDA approval of our NDA and other collaborations and strategic alliances.
We believe that successfully developing mavorixafor and providing new therapeutic options to individuals in the U.S. diagnosed with certain chronic neutropenic disorders has the potential to revolutionize the treatment landscape, which is principally served by injectable therapies that are frequently associated with treatment-limiting adverse events.
We believe that successfully developing mavorixafor and providing a new therapeutic option to individuals diagnosed with certain chronic neutropenic disorders has the potential to revolutionize the treatment landscape, which is principally served by injectable therapies (including G-CSF) that are frequently associated with treatment-limiting adverse events. To date, we have not generated revenue from product sales.
Selling, general and administrative expenses were $27.0 million in 2022, as compared to $24.7 million in 2021, reflecting an increase of $2.3 million.
Selling, general and administrative expenses were $35.5 million in 2023, as compared to $27.0 million in 2022, reflecting an increase of $8.5 million.
In March 2021, we sold shares of common stock, redeemable common stock, and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $55.0 million, before offering expenses and $2 million paid for the subsequent settlement of redeemable common stock in August 2021.
In May 2023, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $65.0 million, before offering expenses.
We may never succeed in obtaining regulatory approval for any of our product candidates. 64 Our Pipeline * Programs only being advanced through partnership Macroeconomic Considerations Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations.
We may never succeed in obtaining regulatory approval for any of our product candidates. Macroeconomic Considerations Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.
We determine the risk-free interest rate by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
We determine the risk-free interest rate by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. We estimate that no dividends will be paid as we do not expect to pay cash dividends in the foreseeable future.
We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates.
If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates.
During the year ended December 31, 2021, net cash provided by financing activities was $74.2 million, consisting primarily of proceeds from the sale of our common stock and pre-funded warrants in a private placement.
Financing Activities: During the year ended December 31, 2023, net cash provided by financing activities was $88.5 million, consisting primarily of net proceeds from a private placement of our common stock, warrants, and pre-funded warrants, a $22.5 million term loan tranche drawn on the closing of the Amendment of our Hercules Loan Agreement and the exercise of outstanding warrants during the year.
If the fair value of the reporting unit is less than the 66 carrying value, we measure the amount of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit. As of December 31, 2022 we determined that goodwill was not impaired based on its quantitative test.
If the fair value of the reporting unit is less than the carrying value, we measure the amount of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit.
We have a covenant under our Hercules Loan Agreement that currently requires that we maintain a minimum level of cash of $20.0 million, subject to reduction to $10 million upon the achievement of operational milestones.
As noted above, we have a covenant under our Hercules Loan Agreement that currently requires that we maintain a minimum level of cash of $20.0 million through January 31, 2025, subject to subsequent reductions thereafter.
Year Ended December 31, 2022 2021 Change (in thousands) Direct research and development expenses by product candidate: Mavorixafor (X4P-001) $ 30,041 $ 25,400 $ 4,641 X4P-002 2,338 1,130 1,208 X4P-003 206 1,370 (1,164) Unallocated expense 28,473 22,747 5,726 Total research and development expenses $ 61,058 $ 50,647 $ 10,411 Research and development expenses were $61.1 million for the year ended December 31, 2022, as compared to $50.6 million for the year ended December 31, 2021, reflecting an increase of $10.4 million.
We expense research and development costs as incurred. 71 Year Ended December 31, 2023 2022 Change (in thousands) Direct research and development expenses by product candidate: Mavorixafor (X4P-001) $ 41,163 $ 30,041 $ 11,122 X4P-002 (34) 2,338 (2,372) X4P-003 75 206 (131) Unallocated expense 30,813 28,473 2,340 Total research and development expenses $ 72,017 $ 61,058 $ 10,959 Research and development expenses were $72.0 million for the year ended December 31, 2023, as compared to $61.1 million for the year ended December 31, 2022, reflecting an increase of $11.0 million.
Management has concluded that substantial doubt exists about our ability to continue as a going concern for the one-year period following the issuance of our consolidated financial statements for the year ended December 31, 2022. To finance our operations, we will need to raise additional capital, which cannot be assured.
In such event, the lenders could require the repayment of all outstanding debt. Management has concluded that substantial doubt exists about our ability to continue as a going concern for the one-year period following the issuance of our consolidated financial statements for the year ended December 31, 2023.
Cash used in operating activities was higher for the year ended December 31, 2022 as compared to the prior year primarily due to higher net losses in the current year.
The change in operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses due to the timing of payments related to our CROs. Cash used in operating activities was higher for the year ended December 31, 2023 as compared to the prior year primarily due to higher net losses in the current year.
The increase in selling, general and administrative expenses in 2022 as compared to 2021 was primarily due to an increase in compensation, including stock-based compensation costs, primarily resulting from severance payments incurred during 2022 and increases in salaries.
The increase in selling, general and administrative expenses in 2023 as compared to 2022 was primarily due to an increase in compensation expense due to in increase in head count, higher stock-based compensation costs and higher stock appreciation rights expense.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide disclosure for this Item.
Recently Issued Accounting Pronouncements There are no recently issued accounting pronouncements that may potentially cause a material impact our financial position and results of operations. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide disclosure for this Item.
To perform the quantitative test, we compare the fair value of the reporting unit to its carrying value.
We have determined that our company operates in a single operating segment and has a single reporting unit. To perform the quantitative test, we compare the fair value of the reporting unit to its carrying value.
Based on our current financial projections and with no additional funding, we believe we will not be able to maintain the minimum cash required to satisfy this covenant beginning in the first quarter of 2024. In such event, the lenders could require the repayment of all outstanding debt.
Based on our current cash flow projections, which exclude any benefit from the potential approval and sale of our drug candidate, and with no additional borrowings that may become available on Hercules Loan Agreement and with no additional external funding, we believe that we will not be able to maintain the minimum cash required to satisfy this covenant beginning in the first quarter of 2025.
Income Taxes For the years ended December 31, 2022, 2021 and 2020, we recorded an immaterial income tax provision related to our Austrian subsidiary. In addition, in 2020 we recorded tax expense related to a withholding tax related to a milestone payment received from a foreign jurisdiction.
Income Taxes For the years ended December 31, 2023 and 2022, we recorded income tax provisions related to our Austrian subsidiary and Securities Corp.
Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. We have determined that our company operates in a single operating segment and has a single reporting unit.
Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition or when our market value, measured as the price of our common stock multiplied by shares outstanding drops below the value of our net assets.
Following announcement of positive top-line data from our global, pivotal, Phase 3 clinical trial, we are currently preparing a U.S. regulatory submission seeking approval of oral, once-daily mavorixafor in the treatment of people aged 12 years and older with WHIM syndrome. Submission is expected early in the second half of 2023.
We are currently seeking approval from the U.S. Food and Drug Administration (“FDA”) for the use of oral, once-daily mavorixafor in the treatment of people aged 12 years and older with WHIM syndrome following the October 2023 acceptance of our New Drug Application (“NDA”) by the FDA.
Funding Requirements We believe that our cash and cash equivalents will allow us to fund operations into the second quarter of 2024. However, as noted above, based on our current financial projections we believe we would be in violation of a minimum cash covenant of the Hercules Loan Agreement with Hercules in the first quarter of 2024.
Funding Requirements We believe that our current cash, cash equivalents and short-term marketable securities will allow us to fund operations into the first quarter of 2025.
Borrowings under the Hercules Loan Agreement are repayable in monthly interest-only payments through September 2024, and in equal monthly payments of principal and accrued interest from October 1, 2024 until the maturity date of the loan on April 1, 2026.
Borrowings under the Hercules Loan Agreement accrues interest at a variable rate equal to the greater of (i) 10.15% or (ii) 3.15% plus the Wall Street Journal prime rate and are repayable in monthly interest-only payments through March 1, 2025, and in equal monthly payments of principal and accrued interest from April 1, 2025 until the maturity date of the loans, which is currently October 1, 2026, subject to extension upon our achievement of certain operational milestones.
To date, we have borrowed the full $32.5 million under the Hercules Loan Agreement, and such amount remains outstanding as of December 31, 2022. Going Concern— Since our inception, we have incurred significant operating losses and negative cash flows from our operations.
The Hercules Loan Agreement requires that we maintain a minimum level of cash of $20.0 million through January 31, 2025, which amount is subsequently adjusted subject to our achievement of operational milestones. Going Concern— Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have not yet commercialized any products.
The increase in research and development expenses in 2022 as compared to 2021 was primarily due to higher clinical trial expenses and third-party manufacturing costs related to mavorixafor to support our ongoing clinical trials and increased consulting and professional services expenses related to these clinical trials.
The increase in research and development expenses in 2023 as compared to 2022 was primarily due to a $5.0 million development milestone payment under our Genzyme agreement, approximately $2 million of higher regulatory costs associated with the preparation and submission of our NDA, and additional consulting and temporary help across our research and development organization to support our NDA submission and our ongoing clinical trials.
Removed
Participants are now being enrolled in this Phase 2 clinical trial and we expect to provide an update on clinical results in the second or third quarter of 2023. We also expect to provide clarity on the scope and timing of our planned Phase 3 chronic neutropenia clinical program in the second or third quarter of 2023.
Added
The FDA has granted the NDA Priority Review, establishing a goal of six months review from the date of acceptance and assigning a Prescription Drug User Fee Act (“PDUFA”) target action date of April 30, 2024. At this time, the FDA has notified us that they are not currently planning to hold an advisory committee meeting to review the filing.
Removed
To date, we have not generated revenue from product sales and do not expect to generate significant revenue from the sale of our products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales.
Added
Due to mavorixafor’s Rare Pediatric Disease designation in the U.S. for WHIM syndrome, we are eligible to receive a Priority Review Voucher (“PRV”) that can be used to obtain Priority Review for a subsequent application or sold to another drug sponsor should mavorixafor be approved.
Removed
For example, macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S. Federal Reserve raising interest rates and the Russia-Ukraine war, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.
Added
The NDA is supported by our successfully completed global, pivotal, Phase 3 clinical trial (4WHIM) that evaluated the safety and efficacy of mavorixafor in people with WHIM syndrome.
Removed
We expense research and development costs as incurred.
Added
The 4WHIM trial met its primary endpoint and a key secondary endpoint, demonstrating statistically significant increases in time above threshold for absolute neutrophil counts (“TAT-ANC”) and time above threshold for absolute lymphocyte counts (“TAT-ALC”) in participants treated with mavorixafor versus placebo.
Removed
As of December 31, 2021, our market capitalization, measured as the price of our common stock multiplied by shares of common stock outstanding, dropped below the value of our net assets, including goodwill.
Added
Additional data showed that mavorixafor treatment resulted in statistically significant reductions in annualized infection rates versus placebo and clinically meaningful reductions in the both the severity and duration of infections versus placebo. Mavorixafor was generally well tolerated throughout the 52-week trial.
Removed
As a result of the sustained decline in the market price of our common stock, the fair value of our single reporting unit, measured based on our market capitalization as of December 31, 2021, was lower than its carrying value and we concluded that goodwill was impaired.
Added
In anticipation of a potential second quarter of 2024 U.S. launch of mavorixafor in WHIM syndrome, we have continued to build our go-to-market organization, with key hires across commercial and medical functions, increased interactions with key stakeholders and rare disease patient advocacy organizations, and launched a disease-awareness campaign aiming to further the understanding of WHIM syndrome and educate patients and physicians on the importance and benefits of early diagnosis.
Removed
Accordingly, we recorded an impairment charge of $9.8 million to reduce the carrying amount of goodwill to $17.4 million as of December 31, 2021. Future declines in the market value of our common stock may result in additional impairment charges being recorded.
Added
We are now conducting a Phase 2 clinical trial, evaluating the durability, safety, and tolerability of chronic dosing of once-daily oral mavorixafor with or without concurrent treatment with injectable granulocyte colony-stimulating factor (“G-CSF”) in the same patient population. Preliminary results from the trial showed that the first three participants experienced clinically meaningful increases in ANC.
Removed
We expect this will occur when and if we are able to commercialize our drug products in the future.
Added
We expect to share further data from the Phase 2 trial in the second quarter of 2024. Concurrent with conducting this Phase 2 trial, we are advancing our plans for a Phase 3 trial in the first half of 2024 of mavorixafor in people with certain chronic neutropenic disorders.
Removed
The Hercules Loan Agreement provides for a term loan of $32.5 million and an interest-only payment period through October 1, 2024, provided however, if certain conditions are met, then the interest-only payment period will be extended to January 1, 2026.
Added
The planned 52-week, global Phase 3 trial is expected to be a 70 randomized, double-blinded, placebo-controlled trial assessing the safety and efficacy of mavorixafor, with or without concomitant G-CSF, in people with idiopathic or congenital neutropenia.
Removed
We have not yet commercialized any products and we do not expect to generate revenue from sales of any products for several years, if at all. As of December 31, 2022, our cash and cash equivalents were $121.7 million and our restricted cash balance was $1.3 million.
Added
We have added personnel to our marketing and sale operations organizations in anticipation of a potential commercial launch of our drug candidate in 2024. We have also incurred third party consulting costs associated with enabling our market access infrastructure.
Removed
Noncash expenses primarily includes stock-based compensation expense of $5.2 million. The change in operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses due to the timing of payments related to our CROs.
Added
ATM Sales Agreement — We have entered into a Controlled Equity Offering SM Sales Agreement (“ATM Sales Agreement”), with B.
Removed
Investing Activities: During the years ended December 31, 2022 and 2021, cash used in investing activities of $0.1 million, and $0.6 million, respectively, primarily related to furniture and laboratory equipment purchases related to our research and development center in Vienna, Austria.
Added
On August 2, 2023, we and Hercules entered into an amendment (the “Amendment”) to the Second A&R Hercules Loan Agreement, (as amended by the Amendment, the “Hercules Loan Agreement”), which provides for aggregate maximum borrowings of up to $115.0 million, including the $32.5 million outstanding prior to the Amendment, a $22.5 million term loan tranche drawn on the closing of the Amendment, and $60.0 million in potential additional borrowings.
Removed
Material Capital Requirements Second Amended and Restated Loan and Security Agreement with Hercules In October 2018, we entered into a Loan and Security Agreement, as subsequently amended from time to time, with Hercules. On January 6, 2023, we entered into the Hercules Loan Agreement, which amended and restated the previous loan and security agreement.
Added
These additional borrowings are available upon the achievement of operational milestones, including $20 million of additional borrowings upon the approval (“Approval”) by the FDA of our NDA for mavorixafor for the treatment of WHIM syndrome.
Removed
Under the Hercules Loan Agreement, we have borrowed the maximum aggregate principal of $32.5 million of the term loan. Borrowings under the Hercules Loan Agreement accrue interest at a variable rate equal to the greater of (i) 10.15%, or (ii) The Wall Street Journal prime rate plus 3.15%.
Added
As of December 31, 2023, our cash and cash equivalents were $99.2 million, our short-term marketable securities were $15.0 million and our restricted cash balance was $1.0 million.
Removed
In an event of default, and until such event is no longer continuing, the interest rate applicable to borrowings would be increased by 4.0%.
Added
Noncash expenses primarily includes stock-based compensation expense of $8.7 million and non-cash lease expense of $1.6 million, partially offset by $7.1 million of non-cash gains on the change in fair value of our Class C Warrant liability.

… 15 more changes not shown on this page.

Other XFOR 10-K year-over-year comparisons