APPLIED MOLECULAR TRANSPORT INC. You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 . This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section titled "Special Note Regarding Forward-Looking Statements." Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled "Risk Factors" included elsewhere in this report.
Overview
We are a clinical-stage biopharmaceutical company leveraging our proprietary technology platform to design and develop a pipeline of novel oral and respiratory biologic product candidates to treat autoimmune, inflammatory, metabolic, and other diseases. Our proprietary technology platform allows us to exploit existing natural cellular trafficking pathways to facilitate the active transport of diverse therapeutic payloads across epithelial barriers, such as the intestinal epithelium (IE) and the respiratory epithelium (RE). Active transport is an efficient mechanism that uses the cell's own machinery to transport materials across epithelial barriers. We are developing oral and respiratory biologic product candidates in patient-friendly dosage forms that are designed for either targeting local GI tissue or entering systemic circulation to precisely address the relevant pathophysiology of disease. We are building a portfolio of oral and respiratory product candidates based on our technology platform including our most advanced product candidate, AMT-101, a gastrointestinal (GI)-selective oral fusion of interleukin-10 (IL-10) and our proprietary carrier molecule. We announced top-line Phase 2 results from the MARKET combination trial for AMT-101 in biologic-naïve patients with moderate-to-severe ulcerative colitis (UC) onJuly 6, 2022 . In the MARKET trial, patients received either once-daily oral AMT-101 3mg in combination with adalimumab (sub-cutaneous administration per the approved UC label), or adalimumab alone (with placebo). The objectives of the MARKET trial were to assess the safety and efficacy of AMT-101 in combination with anti-TNF? therapy (adalimumab) in patients with moderate-to-severe UC. The key efficacy endpoint of clinical remission was measured at 8 weeks. The clinical remission rate in the adalimumab alone arm was higher than historical anti-TNF? monotherapy benchmarks, and although the overall data from the MARKET trial did not demonstrate added clinical benefit in the combination arm compared to the adalimumab alone arm at week 8, a sub-group analysis revealed that patients with a shorter duration of UC (< 5 years) had meaningfully higher clinical remission rates in the combination arm versus the adalimumab alone arm. AMT-101 appeared safe and well-tolerated. Treatment emergent adverse events (TEAEs) were mostly mild to moderate, with one serious adverse event (SAE) observed, worsening of UC, which was determined to be unrelated to study treatment. Further evaluation and analyses of the data are ongoing. We continue to conduct Phase 2 clinical trials of AMT-101 in UC and other inflammatory indications following the completion of a Phase 1b clinical trial in patients with UC. OnApril 25, 2022 , we announced positive Phase 2 top-line results from our FILLMORE monotherapy trial for AMT-101 in patients with chronic pouchitis. We submitted our Phase 2 chronic pouchitis data to the FDA and held an End of Phase 2 (EOP2) meeting inAugust 2022 . We are continuing discussions with the FDA to finalize next steps for advancing AMT-101 in chronic pouchitis. OnSeptember 20, 2022 , we announced completion of enrollment of our Phase 2 LOMBARD trial for AMT-101. LOMBARD is a double-blinded, placebo-controlled trial evaluating the safety and efficacy of orally administered AMT-101 over 12 weeks in patients with moderate-to-severe UC. Our second product candidate, AMT-126, is a GI-selective oral fusion of interleukin-22 (IL-22) and our proprietary carrier molecule currently in development for diseases related to intestinal epithelial (IE) barrier function defects. We concluded a Phase 1a clinical trial for AMT-126 which was well tolerated in healthy volunteers. We are evaluating next steps for the AMT-126 clinical program. Our technology platform enables us to design and develop various oral and respiratory biologic therapeutic modalities, such as peptides, proteins, full-length antibodies, antibody fragments, and RNA therapeutics, with potentially significant advantages over existing marketed and development-stage drugs. Since the date of our incorporation inDelaware onNovember 21, 2016 , we have devoted substantial resources to research and development activities, including research activities such as drug discovery, preclinical studies, and clinical trials as well as development activities such as the manufacturing of clinical and research material, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. We do not currently have any products approved for sale, and we have not generated any revenue from product sales. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend on the successful development of one or more of our product candidates which we expect will take a number of years. Given our stage of development, we have not yet established a commercial organization or distribution capabilities. We intend to build a commercial infrastructure to support sales of our product candidates. We expect to manage sales, marketing and distribution through internal resources and third-party relationships. While we may commit significant financial and management resources to commercial activities, we may also consider collaborating with one or more pharmaceutical companies to enhance our commercial capabilities. 21
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Manufacturing of protein therapeutics is a complex process and represents a critical path to creating biologic therapeutics and a key component of our long-term success. We manufacture clinical supply at a facility located in South San Francisco. While we have successfully manufactured clinical supply at our internal facility, we may need to scale our manufacturing operations to manufacture sufficient quantity needed to advance any of our product candidates in preclinical studies and clinical trials. We have spent significant resources and plan to continue to spend significant resources to develop our current manufacturing capabilities, processes and know-how to produce sufficient supply of our product candidates and optimize functionality. Our efforts to scale our internal manufacturing capabilities are subject to risks. In addition, although we have developed internal manufacturing capabilities, we expect to continue to rely on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture if any of our product candidates obtain marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute our product candidates, as well as for our commercial products if marketing approval is obtained. We believe that this strategy allows us to maintain more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of our product candidates. Since the date of our incorporation, we have incurred significant losses and negative cash flows from operations. During the nine months endedSeptember 30, 2022 , we incurred a net loss of$103.7 million and used$79.1 million of cash in operations. As ofSeptember 30, 2022 , we had an accumulated deficit of$343.4 million and do not expect positive cash flows from operations in the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. To date, we have financed our operations primarily through the private placements of convertible preferred stock and the issuance of common stock upon the completion of our IPO. We completed our IPO inJune 2020 and received net proceeds of approximately$160.6 million after deducting underwriting discounts and commissions and offering costs, net of offering costs of$0.2 million paid in 2019. OnApril 6, 2021 , we completed a follow-on offering and received net proceeds of approximately$112.8 million after deducting underwriting discounts and commissions and offering costs. In addition, onJanuary 27, 2022 , we entered into a Sales Agreement withSVB Securities LLC andJMP Securities LLC , as our sales agents (Agents), pursuant to which we may offer and sell from time to time through the Agents up to$150.0 million in shares of our common stock through an "at-the-market" program (ATM facility). InMay 2022 , we implemented a strategic plan to focus our business on the clinical program for AMT-101 (Strategic Plan) as described in more detail in the section entitled, "Liquidity and Capital Resources." The Strategic Plan is intended to preserve capital, ensuring that we are appropriately resourced to advance AMT-101 through key development milestones. However, we expect our expenses will increase significantly in connection with our ongoing activities, as we: ? advance product candidates through preclinical studies and clinical trials;
? pursue regulatory approval of product candidates;
? continue to invest in our technology platform;
? seek marketing approvals for any product candidates that successfully complete
clinical trials;
? implement operational, financial and management information systems;
? hire additional personnel;
? buildout and expand our in-house manufacturing capabilities;
? continue to operate as a public company;
? expand our pipeline of product candidates;
? obtain, maintain, expand, and protect our intellectual property portfolio; and
? establish a sales, marketing, and distribution infrastructure to commercialize
any product candidate for which we may obtain marketing approval and related
commercial manufacturing build-out.
As a result, we will require substantial additional capital to develop our
product candidates and fund operations for the foreseeable future. Until such
time as we can generate sufficient revenue from product sales, if ever, we
expect to finance our operations through a combination of public or private
equity offerings, debt financings, licensing arrangements, collaboration
agreements or other arrangements with other companies, asset sales, or other
sources of financing. We may be unable to raise additional funds or enter into
such agreements or arrangements on favorable terms, or at all. Our failure to
obtain sufficient funds on acceptable terms when needed could have a material
adverse effect on our business, results of operations or financial condition,
and could force us to delay, reduce or
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eliminate our drug development or future commercialization efforts. We may also be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. The amount and timing of our future funding requirements will depend on many factors including the pace and results of our development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our planned operations through at least the next 12 months from the date that this Quarterly Report on Form 10-Q is filed with theU.S. Securities and Exchange Commission (SEC). We have based this projection on assumptions that may be inaccurate and as a result, we may utilize our capital resources sooner than we expect.
COVID-19 and Current Economic Conditions
Our financial results could be affected by the COVID-19 pandemic in various ways. As a result of the COVID-19 pandemic, we have experienced and could experience disruptions that could severely impact our business, current and planned clinical trials and preclinical studies. For example, the COVID-19 pandemic could result in delays to our clinical trials and preclinical studies for numerous reasons including difficulties in enrolling patients or healthy volunteers, diversion of healthcare resources away from the conduct of clinical trials, delays in receiving regulatory authorities to initiate clinical trials, and delays in receiving supplies to conduct clinical trials and preclinical studies. Moreover, there has been an increase in infections from COVID-19 variants which has impacted patient recruitment at certain of our clinical trial sites and could result in increased costs and delays. In addition, as a result of ongoing COVID-19 research and the current global supply chain issues, there is currently limited availability for certain resources required to conduct some of our preclinical studies and clinical trials, which may result in longer lead times, increased costs, and delays in completing preclinical studies and clinical trials. As a result, research and development expenses and general and administrative expenses may vary significantly if there is an increased impact from COVID-19 on the costs and timing associated with the conduct of the clinical trial and other related business activities. We are carefully monitoring the pandemic and the potential length and depth of the resulting economic impact on our financial condition, including our cash flows and results of operations. We intend to continue to execute on our strategic plans and operational initiatives during the COVID-19 pandemic. However, the extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted. Accordingly, management is carefully monitoring the impact of the COVID-19 pandemic on our business. As ofSeptember 30, 2022 , we were not aware of any significant contingencies and no estimates were recorded on our condensed financial statements related to COVID-19. The extent of the ongoing impact of macroeconomic events on our business and on global economic activity is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time, although the impacts are expected to continue and may significantly affect our business. We expect that the impacts on our business will continue through this period of economic uncertainty as supply chain issues, inflation and other factors continue to worsen or emerge. Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our suppliers and continuing to review our near-term operating expenses as the uncertainty related to these factors continues to unfold. The risks related to our business, including further discussion of the impact and possible future impacts of the COVID-19 pandemic and current economic conditions on our business, are further described in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Components of Results of Operations
Revenue
We have not generated any revenue from product sales or otherwise and do not expect to generate any revenue for the foreseeable future.
Operating Expenses
We classify operating expenses into two main categories: (i) research and development expenses and (ii) general and administrative expenses.
Research and Development Expenses
Our research and development expenses consist primarily of external and internal costs incurred in connection with our research activities and development programs. These expenses include, but are not limited to:
External expenses, consisting of: ? clinical trials-expenses associated with CROs for managing and conducting
clinical trials and sample analysis;
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? materials-expenses associated with laboratory supplies and other materials;
? preclinical studies-expenses associated with preclinical studies performed by
vendors;
? contract manufacturing-expenses associated with manufacturing clinical trial
materials including under agreements with contract development and manufacturing organizations (CDMOs) and other vendors; and
? other research and development-expenses associated with consulting and other
external expenses.
Internal expenses, consisting of: ? personnel-personnel expenses including salaries, bonuses, benefits, and stock-based compensation expense; and
? equipment, depreciation, and facility-expenses associated with service and
repair of equipment, equipment depreciation, and allocated facility costs for
research and development occupied space.
To date, the vast majority of these expenses have been incurred to advance our most advanced product candidate, AMT-101. We expect to incur significant additional spending to progress AMT-101 through the remainder of the clinical development phases. These expenses will primarily consist of expenses for the administration of clinical studies as well as manufacturing costs for clinical material supply. InMay 2022 , we implemented our Strategic Plan to focus the business on our clinical program for AMT-101. In addition, we have incurred minimal expenses in connection with our second product candidate, AMT-126, including expenses for internal animal studies and preclinical studies performed at CROs. We also concluded a Phase 1a clinical trial for AMT-126 which was well tolerated in healthy volunteers. We are evaluating next steps for the AMT-126 clinical program. We expect that significant additional spending will be required if we progress AMT-126 through additional clinical trials at some point in the future. We have also incurred minimal expenses to expand our development pipeline and for general discovery research. We expect that spending for these early-stage research and development activities may increase at some point in the future. We deploy our personnel, equipment, and facility resources across all our research and development activities. Research and development expenses are recognized as they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid assets and recognized as expense in the period when the goods are consumed or the services are performed. At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We expect our research and development expenses to increase significantly in the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, and incur expenses associated with hiring additional personnel to support our research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, the successful development of our product candidates is highly uncertain, and we may never succeed in achieving regulatory approval for any of our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development, and other administrative functions. General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, and facility costs not otherwise included in research and development expenses, and public company expenses such as costs associated with compliance with the rules and regulations of theSEC and those ofThe Nasdaq Stock Market LLC . Our general and administrative expenses are expected to only increase marginally in the near future as a result of the Strategic Plan. We expect that our general and administrative expenses could increase significantly in the future if additional financing is secured and additional administrative personnel and services are required to manage these functions of a public company and as our pipeline of product candidates expands.
Interest Income, Net and Other Income (expense), Net
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Interest income, net and other income (expense), net primarily consists of interest income earned on our cash, cash equivalents, investments, realized gain and loss on investments, interest expense from finance lease liabilities, and net losses on foreign currency transactions related to third-party contracts with foreign-based vendors. Results of Operations
Comparisons of the Three Months Ended
Three Months Ended September 30,
2022 2021 Change
(in thousands)
Operating expenses:
Research and development $ 18,238 $ 18,350 $ (112 )
General and administrative 7,288 7,641 (353 )
Total operating expenses 25,526 25,991 (465 )
Loss from operations (25,526 ) (25,991 ) 465
Interest income, net 321 $ 5 316
Other income (expense), net (1 ) (6 ) 5
Net loss $ (25,206 ) $ (25,992 ) $ 786 Research and Development Expenses
Research and development expenses of$18.2 million during the three months endedSeptember 30, 2022 were relatively flat overall when compared to$18.4 million for the three months endedSeptember 30, 2021 . The decrease in research and development expenses was primarily due to a decrease of$1.1 million in personnel-related costs as a result of our Strategic Plan implemented inMay 2022 as well as decreases associated with clinical trials and materials. The increase in other research and development expenses was primarily attributable to activation of our oral biologics GMP manufacturing facility. The following table sets forth the primary external and internal research and development expenses for the periods presented (in thousands): Three Months Ended September 30, 2022 2021 Change External expenses: Clinical trials $ 3,799 $ 4,674$ (875 ) Materials 1,294 1,967 (673 ) Preclinical studies 609 363 246 Contract manufacturing 451 278 173 Other research and development 2,927 462 2,465 Internal expenses: Personnel 6,545 7,675 (1,130 ) Equipment, depreciation, and facilities 2,613 2,931 (318 )
Total research and development expenses
18,350$ (112 )
General and Administrative Expenses
General and administrative expenses were$7.3 million during the three months endedSeptember 30, 2022 , compared to$7.6 million during the three months endedSeptember 30, 2021 . The decrease in general and administrative expenses was primarily due to a decrease of$2.2 million in professional service fees, partially offset by increases of$1.1 million in personnel-related costs and$0.7 million in facilities-related expenses. 25
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Interest income, net was
Other Income (expense), Net
Other income (expense), net was insignificant during each of the three months
ended
Results of Operations
Comparisons of the Nine Months Ended
Nine Months Ended September 30,
2022 2021 Change
(in thousands)
Operating expenses:
Research and development $ 75,386 $ 49,765 $ 25,621
General and administrative 28,738 20,333 8,405
Total operating expenses 104,124 70,098 34,026
Loss from operations (104,124 ) (70,098 ) (34,026 )
Interest income, net 393 104 289
Other income (expense), net 5 (90 ) 95
Net loss $ (103,726 ) $ (70,084 ) $ (33,642 ) Research and Development Expenses
Research and development expenses were$75.4 million during the nine months endedSeptember 30, 2022 , compared to$49.8 million during the nine months endedSeptember 30, 2021 . The overall increase in research and development expenses was primarily related to an increase in costs as we advance AMT-101 through ongoing Phase 2 clinical trials, materials and preclinical studies. In addition, the increase in other research and development expenses was primarily attributed to activation of our oral biologics GMP manufacturing facility. The increase in internal expenses was primarily due to an increase in personnel-related costs of$6.7 million , of which$3.0 million was related to stock-based compensation, and expansion of our facilities. Nonrecurring charges related to the Strategic Plan also contributed to the increase, which included$2.6 million in severance payments and other employee-related separation costs,$0.4 million in preclinical studies expenses and$0.3 million in facilities-related expenses, primarily related to a lease termination fee. The following table sets forth the primary external and internal research and development expenses for the periods presented (in thousands): Nine Months Ended September 30, 2022 2021 Change External expenses: Clinical trials$ 16,484 $ 11,979 $ 4,505 Materials 7,372 4,988 2,384 Preclinical studies 3,972 1,829 2,143 Contract manufacturing 1,128 1,434 (306 ) Other research and development 7,122 1,144 5,978 Internal expenses: Personnel 27,453 20,743 6,710 Equipment, depreciation, and facilities 11,855 7,648 4,207 Total research and development expenses$ 75,386 $
49,765
General and Administrative Expenses
General and administrative expenses were$28.7 million during the nine months endedSeptember 30, 2022 , compared to$20.3 million during the nine months endedSeptember 30, 2021 . The increase in general and administrative expenses was primarily due to an increase of$5.7 million in personnel-related costs, of which$4.0 million was related to stock-based compensation, and$0.7 million was related 26
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to nonrecurring charges under the Strategic Plan. The remaining increase was due to$1.8 million in facilities-related expenses and$0.9 million in professional service fees. Interest Income, Net Interest income, net was$0.4 million during the nine months endedSeptember 30, 2022 compared to$0.1 million during the nine months endedSeptember 30, 2021 . The increase was attributable to higher interest income earned on our cash and cash equivalents balances driven by an increase in interest rates.
Other Income (expense), Net
Other income (expense), net was insignificant during each of the nine months
ended
Liquidity and Capital Resources
We believe that our existing cash and cash equivalents as ofSeptember 30, 2022 will be sufficient to fund our current operating plan through at least the next 12 months. InMay 2022 , we implemented a Strategic Plan. Under the Strategic Plan, we reduced our workforce by approximately 40%. Impacted employees received notice that their positions were eliminated onMay 16, 2022 . Impacted employees were eligible to receive severance benefits and Company funded COBRA premiums, contingent upon an impacted employee's execution (and non-revocation) of a customary separation agreement, which included a general release of claims against us. For certain employees, we accelerated vesting of restricted stock units (RSUs) toMay 16, 2022 from the original vesting date ofJune 1, 2022 . In connection with the Strategic Plan, we recognized restructuring charges of approximately$3.8 million in the nine months endedSeptember 30, 2022 . These restructuring charges are primarily related to severance payments and other employee-related separation costs of$3.3 million , accrued contract termination fees of$0.5 million , a lease termination fee of$0.3 million , impairment of property and equipment of$0.1 million and insignificant legal expenses, partially offset by a$0.4 million reduction in stock-based compensation expense as a result of applying modification accounting for accelerated vesting of RSUs. As ofSeptember 30, 2022 , accrued contract termination fees of$0.4 million remained unpaid and is expected to be paid within one year. As ofSeptember 30, 2022 , we had an accumulated deficit of$343.4 million . As ofSeptember 30, 2022 , we had cash and cash equivalents of$76.0 million . Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. Our operations have been financed primarily by net proceeds from sales of our convertible preferred stock and common stock through our IPO and follow-on equity offering. In addition, onJanuary 27, 2022 , we entered into a Sales Agreement withSVB Securities LLC andJMP Securities LLC , as our sales agents (Agents), pursuant to which we may offer and sell from time to time through the Agents up to$150.0 million in shares of our common stock through the ATM facility. As ofSeptember 30, 2022 , the Company had not yet sold any shares of common stock under the ATM facility.
Future Funding Requirements
To date, we have not generated any revenue. We do not expect to generate any
meaningful revenue unless and until we obtain regulatory approval and
commercialize any of our product candidates, and we do not know when, or if,
that will occur. We will continue to require additional capital to develop our
product candidates and fund operations for the foreseeable future. Our primary
uses of cash are to fund our operations, which consist primarily of research and
development expenses related to our programs, and to a lesser extent, general
and administrative expenses. We expect our expenses to continue to increase in
connection with our ongoing activities as we continue to advance our product
candidates. In addition, we expect to incur additional costs associated with
operating as a public company.
We may seek to raise capital through public equity or debt financings, license
agreements, collaborative agreements or other arrangements with other companies,
asset sales, or through other sources of financing. Adequate additional funding
may not be available to us on acceptable terms or at all. Our failure to raise
capital as and when needed could have a negative impact on our financial
condition
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and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including: ? the progress, costs, trial design, results of and timing of our various
clinical trials of our product candidates;
? the progress, costs and results of our research pipeline;
? the willingness of the
candidates, as well as data from our completed and planned clinical trials and
preclinical studies and other work, as the basis for review and approval of
our product candidates for various indications;
? the outcome, costs and timing of seeking and obtaining FDA, EMA, and any other
regulatory approvals;
? the number and characteristics of product candidates that we pursue;
? our ability to manufacture sufficient quantities of our product candidates;
? our need to expand our research and development activities;
? the costs associated with manufacturing our product candidates, including
building-out and expanding our own manufacturing facilities, and establishing
commercial supplies and sales, marketing, and distribution capabilities;
? the costs associated with securing and establishing commercialization;
? the costs of acquiring, licensing, or investing in businesses, product
candidates, and technologies;
? our ability to maintain, expand, and defend the scope of our intellectual
property portfolio, including the amount and timing of any payments we may be
required to make, or that we may receive, in connection with the licensing,
filing, prosecution, defense, and enforcement of any patents or other intellectual property rights;
? our need and ability to retain key management and hire scientific, technical,
business, and medical personnel;
? the effect of competing drugs and product candidates and other market
developments;
? the timing, receipt, and amount of sales from our potential products;
? our need to implement additional internal systems and infrastructure,
including financial and reporting systems;
? the economic and other terms, timing of and success of any collaboration,
licensing or other arrangements which we may enter in the future;
? the potential effects of inflation on our business operations;
? the volatility of our share price and our ability to maintain our listing on
? the potential effects of the COVID-19 pandemic on our business operations.
If we raise additional funds by issuing equity securities, our stockholders will experience dilution, which could be significant given the recent trading prices for our common stock. If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments, and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others the rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. In addition, our ability to raise additional capital may be adversely impacted by worsening global macroeconomic conditions and the recent disruptions to and volatility in the credit and financial markets inthe United States and worldwide resulting from various factors, including the ongoing COVID-19 pandemic and the conflict betweenRussia andUkraine . 28
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