If any valid and enforceable
third-party patents were held by a court of competent jurisdiction to cover vonapanitase or any additional product candidates and/or
their use, manufacture, sale, and/or offer for sale, the holders of any of these patents may be able to block our ability to develop
and commercialize the applicable product candidate until the patent expired or unless we obtain a license. Licenses may not be
available on acceptable terms, if at all. Even if we were able to obtain a license, the rights may be nonexclusive, which could
result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing
a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement
claims, we are unable to enter into licenses on acceptable terms.
Some of our early research
of recombinant expression of vonapanitase, but not the corresponding development work, utilized some technology under license from
a third party. The third party may contend that we use the licensed technology for our commercial recombinant expression of vonapanitase.
Litigation may be necessary to defend against such a claim. Even if we are successful in defending against such a claim, litigation
could result in substantial costs and be a distraction to management. If we are not successful in defending against such a claim,
in addition to paying monetary damages, we may have to reconfigure the vonapanitase expression system, which would materially adversely
affect our commercial development efforts.
Parties making claims
against us may obtain injunctive or other equitable relief, which could effectively block our ability to commercialize vonapanitase
or any additional product candidates. We may face a claim of misappropriation if a third party believes that we inappropriately
obtained and used trade secrets of that third party. If we are found to have misappropriated a third party’s trade secrets,
we may be prevented from further using such trade secrets, limiting our ability to develop vonapanitase or any additional product
candidates, and we may be required to pay damages.
Defending against claims
of patent infringement or misappropriation of trade secrets could be costly and time consuming, regardless of the outcome. Thus,
even if we were to ultimately prevail, or to settle at an early stage, any litigation could burden us with substantial unanticipated
costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of our management
team, distracting them from the pursuit of other company business. In the event of a successful claim of infringement against us,
we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties,
redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial
time and monetary expenditure.
During the course of
any patent or other intellectual property litigation, there could be public announcements of the results of hearings, rulings on
motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative,
the perceived value of our products, programs, or intellectual property could be diminished. Accordingly, the market price of our
Common Stock may decline.
If we are unable to adequately protect
our proprietary technology, or obtain and maintain issued patents which are sufficient to protect our current product candidate,
vonapanitase, or any additional product candidates, others could compete against us more directly, which would have a material
adverse impact on our business, results of operations, financial condition and prospects.
We strive to protect
and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover
our products and compositions, their methods of use and any other inventions that are important to the development of our business.
We also rely on know-how to protect aspects of our business that are not amenable to, or that we do not consider appropriate for,
Our success will depend
significantly on our ability to obtain and maintain patent and other proprietary protection for commercially important technology,
inventions and know-how related to our business, defend and enforce our current patents and any future patents that may issue,
preserve the confidentiality of our know-how and operate without infringing the valid and enforceable patents and proprietary rights
of third parties. We also rely on know-how and in-licensing opportunities to develop, strengthen and maintain the proprietary position
of vonapanitase or any additional product candidates.
We cannot provide any
assurances that any of our pending patent applications will mature into issued patents and, if they do, that such patents or our
currently issued patents will include claims with a scope sufficient to protect vonapanitase or any additional product candidates
or otherwise provide any competitive advantage. For example, one of our patents that may provide coverage for vonapanitase only
covers particular formulations. As a result, this patent would not prevent third-party competitors from creating, making and marketing
alternative formulations that fall outside the scope of our patent claims. There can be no assurance that any such alternative
formulations will not be equally effective.