||injury to our reputation and significant negative media attention;|
||withdrawal of clinical trial participants;|
||termination of clinical trial sites or entire trial programs;|
||initiation of investigations by regulators;|
||product recalls, withdrawals or labeling, marketing or promotional restrictions;|
||significant costs to defend resulting litigation;|
||diversion of management and scientific resources from our business operations;|
||substantial monetary awards to trial participants or patients;|
||the inability to commercialize any products that we may develop. |
We currently have a
$5 million product liability insurance coverage in connection with our clinical trials and we will need to increase our insurance
coverage if and when we begin selling vonapanitase or any additional product candidates if and when they receive marketing approval.
However, the product liability insurance we will need to obtain in connection with the commercial sales of vonapanitase or any
additional product candidates if and when they receive regulatory approval may be unavailable in meaningful amounts or at a reasonable
cost. In addition, insurance coverage is becoming increasingly expensive. If we are unable to obtain or maintain sufficient insurance
coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit
the development and commercial production and sale of vonapanitase or any additional product candidates if and when they obtain
regulatory approval, which could materially adversely affect our business, financial condition, results of operations, cash flows
Additionally, we do
not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include
general liability, employment practices liability, property, auto, workers’ compensation, products liability and directors’
and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
Any significant uninsured liability may require us to pay substantial amounts, which would materially adversely affect our financial
position, cash flows and results of operations.
If we engage in acquisitions in the
future, we will incur a variety of costs and we may never realize the anticipated benefits of such acquisitions.
We may attempt to acquire
businesses, technologies, services, products or product candidates in the future that we believe are a strategic fit with our business.
We have no present agreement regarding any material acquisitions. If we do undertake any acquisitions, however, the process of
integrating an acquired business, technology, service, products or product candidates into our business may result in unforeseen
operating difficulties and expenditures, including diversion of resources and management’s attention from our core business.
In addition, we may fail to retain key executives and employees of the companies we acquire, which may reduce the value of the
acquisition or give rise to additional integration costs. Future acquisitions could result in additional issuances of equity securities
that would dilute the ownership of existing stockholders. Future acquisitions could also result in the incurrence of debt, actual
or contingent liabilities or the amortization of expenses related to other intangible assets, any of which could adversely affect
our operating results. In addition, we may fail to realize the anticipated benefits of any acquisition.
We currently have our API produced
for us by a contract manufacturer exclusively in one manufacturing facility and if this or any future facility, any facility we
use for storage of the finished product or our equipment were damaged or destroyed, our ability to continue to operate our business
would be materially harmed.
Our executive offices
are located in Waltham, Massachusetts, and our API is manufactured at Lonza’s facility located in Visp, Switzerland. We expect
that Lonza plans to utilize this facility in the future to support commercial production if our product candidate is approved.
We have manufactured our entire finished product for the ongoing Phase 3 clinical trial of vonapanitase and currently store the
finished product in only one location. Extended delays in our Phase 3 clinical trial causing us to need to manufacture new clinical
supply would cause a significant disruption in our operations and cause us to incur unexpected costs to manufacture new finished
product. We are vulnerable to natural disasters, such as severe storms and other events that could disrupt our operations. We do
not carry insurance for natural disasters and we may not carry sufficient business interruption insurance to compensate us for
losses that may occur. If the current manufacturing facility or any future facility, stored product or equipment were damaged or
destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continue to operate our
business would be materially harmed.
If supply is interrupted,
there could be a significant disruption in our clinical development and commercial supply. If the supply is interrupted after approval
of the BLA, an alternative manufacturer would need to be qualified through a BLA supplement which could result in further delay.
The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching
manufacturers may involve substantial costs and would likely result in a delay in our desired clinical and commercial timelines.