Future growth will
impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate
additional employees. In addition, to meet our obligations as a public company, we will need to increase our general and administrative
capabilities. Our management, personnel and systems currently in place may not be adequate to support this future growth. Our future
financial performance and our ability to commercialize our potential products and to compete effectively will depend, in part,
on our ability to manage any future growth effectively. To that end, we must be able to:
||manage our clinical trials and the regulatory process effectively;|
||manage the manufacturing of product candidates and potential products for clinical and commercial use;|
||integrate current and additional management, administrative, financial and sales and marketing personnel;|
||develop a marketing and sales infrastructure;|
||hire new personnel necessary to effectively commercialize vonapanitase and any additional product candidates;|
||develop our administrative, accounting and management information systems and controls; and|
||hire and train additional qualified personnel.|
that we may acquire or develop in the future may be intended for patient populations that are large. In order to continue development
and marketing of these product candidates, if approved, we would need to significantly expand our operations. Our staff, financial
resources, systems, procedures or controls may be inadequate to support our operations and our management may be unable to manage
successfully future market opportunities or our relationships with customers and other third parties.
Our disclosure controls and procedures
may not prevent or detect all errors or acts of fraud.
Upon completion of
our Initial Public Offering, or IPO, we became subject to the periodic reporting requirements of the Securities Exchange Act of
1934, as amended, or the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information
required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management,
and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe
that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met.
These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people
or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements
due to error or fraud may occur and not be detected.
If product liability lawsuits are
successfully brought against us, our insurance may be inadequate and we may incur substantial liability.
We face an inherent
risk of product liability claims as a result of the clinical testing of vonapanitase or any additional product candidates. We will
face an even greater risk if we commercially sell vonapanitase or any additional product candidate that we develop. We maintain
primary product liability insurance and excess product liability insurance that cover our clinical trials, and we plan to maintain
insurance against product liability lawsuits for commercial sale of our potential products. Historically, the potential liability
associated with product liability lawsuits for pharmaceutical products has been unpredictable. Although we believe that our current
insurance is a reasonable estimate of our potential liability and represents a commercially reasonable balancing of the level of
coverage as compared to the cost of the insurance, we may be subject to claims in connection with our clinical trials and, in the
future, commercial use of our potential products, for which our insurance coverage may not be adequate, and the cost of any product
liability litigation or other proceeding, even if resolved in our favor, could be substantial.
For example, we may
be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing,
marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a
failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Large judgments have
been awarded in class action lawsuits based on drugs or biologics that had unanticipated adverse effects. Claims could also be
asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we
may incur substantial liabilities or be required to limit commercialization of vonapanitase or any additional product candidates.
Regardless of the merits or eventual outcome, liability claims may result in:
||reduced resources of our management to pursue our business strategy;|
||decreased demand for our product candidates or products that we may develop;|