美國
證券交易委員會
華盛頓特區，郵編：20549
形式
(標記一)
根據1934年《證券交易法》第13或15(D)條規定的季度報告 |
截至本季度末
或
根據1934年證券交易法第13或15（d）條提交的過渡報告 |
過渡時期， 到
委員會文件號：
(註冊人的確切姓名載於其章程)
(述明或其他司法管轄權 公司或組織) |
(稅務局僱主 識別號碼) |
（主要行政辦公室地址）
(郵政編碼)
(
(註冊人的電話號碼，包括區號)
根據該法第12(B)條登記的證券：
每個班級的標題 |
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交易代碼 |
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註冊的每個交易所的名稱 |
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用複選標記表示註冊人(1)是否在過去12個月內(或註冊人被要求提交此類報告的較短時間內)提交了1934年《證券交易法》第13條或15(D)節要求提交的所有報告，以及(2)在過去90天內是否符合此類提交要求。
用複選標記表示註冊人是否在過去12個月內(或在註冊人被要求提交此類文件的較短時間內)以電子方式提交了根據S-T規則第405條(本章232.405節)要求提交的每個交互數據文件。
用複選標記表示註冊人是大型加速申報公司、加速申報公司、非加速申報公司、較小的報告公司或新興成長型公司。請參閱《交易法》第12b-2條規則中「大型加速申報公司」、「加速申報公司」、「較小申報公司」和「新興成長型公司」的定義。
大型加速文件服務器 |
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☐ |
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加速文件管理器 |
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☐ |
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☒ |
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規模較小的報告公司 |
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新興成長型公司 |
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如果是一家新興的成長型公司，用複選標記表示註冊人是否已選擇不使用延長的過渡期來遵守根據《交易所法》第13(A)節提供的任何新的或修訂的財務會計準則。☐
用複選標記表示註冊人是否是空殼公司(如《交易法》第12b-2條所定義)。是，☐不是
截至2024年11月4日，註冊人已
目錄表
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頁面 |
第一部分. |
1 |
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項目1. |
1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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項目2. |
23 |
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項目3. |
36 |
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項目4. |
36 |
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第二部分. |
37 |
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項目1. |
37 |
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項目1A. |
37 |
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項目5. |
94 |
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項目6. |
95 |
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96 |
i
關於前瞻性陳述和行業數據的特別說明
本季度10-Q表格報告包含涉及風險和不確定性的前瞻性陳述。本季度報告中包含的歷史事實陳述除外的所有陳述均為前瞻性陳述。在某些情況下，您可以通過「預期」、「相信」、「設想」、「繼續」、「可能」、「估計」、「預期」、「意圖」、「可能」、「計劃」、「潛力」、「預測」、「項目」、「尋求」、「應該」、「目標」、「將」或這些詞語的否定或其他類似術語。這些前瞻性陳述包括但不限於有關以下方面的陳述：
這些前瞻性陳述受到許多風險、不確定性和假設的影響，包括「風險因素」和本季度報告其他地方所描述的風險、不確定性和假設。此外，我們在競爭激烈且瞬息萬變的環境中運營，新的風險時有發生。我們的管理層不可能預測所有風險，也無法評估所有因素對我們業務的影響，或者任何因素或因素組合可能導致實際結果差異的程度
ii
與我們可能做出的任何前瞻性陳述中所包含的內容實質上無關。鑑於這些風險、不確定性和假設，本季度報告中討論的前瞻性事件和情況可能不會發生，實際結果可能與前瞻性陳述中預期或暗示的結果存在重大不利差異。
您不應依賴前瞻性陳述作為對未來事件的預測。儘管我們相信前瞻性陳述中反映的預期是合理的，但我們不能保證前瞻性陳述中反映的未來結果、活動水平、績效或事件和情況將會實現或發生。我們沒有義務在本季度報告之日後以任何原因公開更新任何前瞻性陳述，以使這些陳述符合新信息、實際結果或我們預期的變化，除非法律要求。
您應該閱讀本季度報告以及我們向美國證券交易委員會（SEC）提交的文件，作為本季度報告的附件，並了解我們的實際未來結果、活動水平、績效以及事件和情況可能與我們的預期存在重大差異。
本季度報告還包含來自我們自己的內部估計和研究以及由第三方進行的行業和一般出版物以及研究調查和研究的行業、市場和競爭地位數據。行業出版物、研究和調查一般聲明，它們是從被認為可靠的來源獲得的，儘管它們不保證此類資訊的準確性或完整性。我們的內部數據和估計基於從貿易和商業組織以及我們所在市場的其他聯繫人那裡獲得的資訊，以及我們管理層對行業狀況的瞭解。雖然我們相信這些研究和出版物中的每一個都是可靠的，但我們還沒有獨立核實來自第三方來源的市場和行業數據。雖然我們相信我們公司內部的研究是可靠的，市場定義是適當的，但這樣的研究或這些定義都沒有得到任何獨立消息來源的核實。由於各種因素，包括“風險因素”一節中描述的因素，我們經營的行業面臨著高度的不確定性和風險。
此外，「我們相信」的聲明和類似聲明反映了我們對相關主題的信念和觀點。這些聲明基於截至本季度報告之日我們可用的信息，雖然我們相信此類信息構成了此類聲明的合理基礎，但此類信息可能是有限的或不完整的，並且我們的聲明不應被解讀為表明我們已經對所有潛在可用的相關信息進行了詳盡的調查或審查。這些陳述本質上是不確定的，建議投資者不要過度依賴這些陳述。
iii
第一部分-財務AL信息
項目1.金融奇al報表（未經審計）。
ITERum THERAPETICS PLC
濃縮合併B警報表
(In除份額和每股數據外，數千）
（未經審計）
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9月30日， |
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十二月三十一日， |
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2024 |
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2023 |
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資產 |
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易變現資產： |
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現金及現金等價物 |
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$ |
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$ |
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短期投資 |
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應收所得稅 |
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預付費用和其他易變現資產 |
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易變現資產總額 |
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財產和設備，淨值 |
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受限制現金 |
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其他資產 |
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總資產 |
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$ |
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$ |
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負債和股東赤字 |
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流動負債： |
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應付帳款 |
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$ |
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$ |
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應計費用 |
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可兌換票據 |
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— |
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其他流動負債 |
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流動負債總額 |
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$ |
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$ |
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可兌換票據 |
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— |
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與版稅相關的票據 |
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其他負債 |
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— |
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總負債 |
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$ |
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$ |
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(Note 14） |
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股東虧絀 |
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未指定優先股，美金 |
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普通股，美金 |
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借記資本公積 |
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累計赤字 |
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( |
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( |
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累積其他全面收益 |
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股東赤字總額 |
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( |
) |
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( |
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負債總額和股東赤字 |
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$ |
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$ |
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隨附的附註是該等簡明綜合財務報表的組成部分。
1
ITERum THERAPETICS PLC
Oper的簡明合併報表狀況與綜合損失
(In數千，份額和每股數據除外）
（未經審計）
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止三個月 |
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止九個月 |
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9月30日， |
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9月30日， |
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2024 |
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2023 |
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2024 |
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2023 |
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運營費用： |
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研發 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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一般和行政 |
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( |
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( |
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( |
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( |
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總運營費用 |
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( |
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( |
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( |
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( |
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經營虧損 |
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( |
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( |
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( |
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( |
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利息開支淨額 |
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( |
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( |
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( |
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( |
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衍生品公允價值調整 |
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( |
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( |
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其他（費用）/收入，淨額 |
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( |
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( |
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其他（費用）/收入總額 |
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( |
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( |
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所得稅前損失 |
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( |
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( |
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( |
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( |
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所得稅開支 |
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( |
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( |
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( |
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( |
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淨虧損 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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每股淨虧損-基本和稀釋 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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加權平均已發行普通股-基本和稀釋 |
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綜合損失陳述 |
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淨虧損 |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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其他綜合收益： |
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有價證券未實現收益 |
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全面虧損 |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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隨附的附註是該等簡明綜合財務報表的組成部分。
2
ITERum THERAPETICS PLC
濃縮合併報表現金流數量
(In數千，份額和每股數據除外）
（未經審計）
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截至9月30日的九個月， |
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2024 |
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2023 |
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經營活動產生的現金流量： |
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淨虧損 |
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$ |
( |
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$ |
( |
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將淨虧損與經營活動中使用的現金進行調節的調整： |
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折舊 |
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無形資產攤銷 |
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— |
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以股份為基礎之補償開支 |
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短期投資利息 |
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租賃終止調整 |
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— |
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債務貼現和遞延融資成本攤銷 |
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可交換票據利息-非現金 |
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包含在融資活動中的融資交易成本 |
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— |
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衍生品公允價值調整 |
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( |
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其他 |
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經營資產和負債變化： |
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預付費用和其他易變現資產 |
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( |
) |
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( |
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應付帳款 |
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( |
) |
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應計費用 |
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( |
) |
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所得稅 |
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( |
) |
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其他負債 |
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( |
) |
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( |
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經營活動所用現金淨額 |
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( |
) |
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( |
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投資活動產生的現金流量： |
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購買不動產、廠房和設備 |
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( |
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( |
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購買短期投資 |
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( |
) |
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( |
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出售短期投資的收益 |
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投資活動提供的淨現金 |
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融資活動產生的現金流量： |
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發行普通股所得款項，扣除交易成本 |
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融資活動提供的淨現金 |
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價位對現金和現金等值物的影響 |
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( |
) |
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( |
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現金、現金等值物和限制性現金淨增加/（減少） |
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( |
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現金、現金等值物和限制現金，期末 |
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期末現金、現金等值物和受限制現金 |
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$ |
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$ |
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現金流信息補充披露： |
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繳納的所得稅-美國 |
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$ |
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$ |
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隨附的附註是該等簡明綜合財務報表的組成部分。
3
ITERum THERAPETICS PLC
簡明合併股東權益報表 /（赤字）
(In數千，份額和每股數據除外）
（未經審計）
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普通股 |
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額外 |
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累計其他 |
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股份 |
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量 |
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支付 |
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積累 赤字 |
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全面 收入（損失） |
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總 |
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2024年6月30日餘額 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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( |
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普通股發行，淨值 |
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— |
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— |
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發行普通股配股，淨值 |
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— |
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— |
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— |
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— |
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以股份為基礎之補償開支 |
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— |
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— |
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— |
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— |
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淨虧損 |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
可供出售證券的未實現收益 |
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— |
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— |
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— |
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— |
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2024年9月30日餘額 |
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積累 赤字 |
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2023年12月31日餘額 |
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發行普通股配股，淨值 |
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2024年9月30日餘額 |
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以股份為基礎之補償開支 |
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可供出售證券的未實現收益 |
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2023年9月30日餘額 |
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2022年12月31日餘額 |
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以股份為基礎之補償開支 |
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可供出售證券的未實現收益 |
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2023年9月30日餘額 |
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隨附的附註是該等簡明綜合財務報表的組成部分。
4
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
1.陳述依據
業務描述
Iterum治療公司(本公司)於2015年6月根據愛爾蘭共和國法律註冊為有限公司，並於2018年3月20日重新註冊為上市有限公司。本公司在Fitzwilliam Court保留註冊辦事處，1ST愛爾蘭，都柏林2，利森·克洛斯，Floor。該公司於2015年11月開始運營。該公司從輝瑞(輝瑞公司)那裡獲得了其新型抗感染化合物舒羅培南的全球授權。該公司專注於提供差異化的抗感染藥物，旨在應對多重耐藥病原體的全球危機，以顯著改善世界各地受嚴重和危及生命的疾病影響的人們的生活。該公司正在推進其第一種化合物舒羅培南的開發，舒羅培南是一種新型青黴烯類抗感染化合物，具有口服制劑和靜脈製劑。
流動性和持續經營
自成立以來，公司一直致力於研發、招聘管理和技術人員以及籌集資金，並通過發行普通股和可轉換優先股、根據與矽谷銀行(SVB)的融資安排籌集的債務(包括Paycheck保護計劃貸款(PPP貸款)、波士頓大學受託人根據對抗抗生素耐藥細菌生物藥物加速器(CARB-X)計劃提供的分獎勵)以及私募(私募)和後續配股(2020配股)的收益為其運營提供資金，根據該融資安排，其全資子公司特魯姆治療百慕大有限公司(TERUM百慕大)發行並出售了約$
即使獲得了FDA的批准，公司何時(如果有的話)將從產品銷售中獲得可觀的收入也是不確定的。
隨附的簡明綜合財務報表是根據美國公認的會計原則編制的，包括本公司及其子公司的賬目。
公司檔案D向美國證券交易委員會提交的S-3表格通用貨架登記聲明，該聲明於2022年10月17日宣佈生效(第333-267795號檔案)，根據該聲明，本公司登記待售的金額最高可達$
2024年8月9日，公司完成配股(2024年配股)，共出售
根據會計準則更新(ASU)2014-15，披露實體作為持續經營企業的能力的不確定性(小主題205-40)本公司已評估是否存在一些情況和事件(綜合考慮)，令人對本公司是否有能力在本季度簡明綜合財務報表發佈之日起一年內繼續經營下去產生重大懷疑。
到目前為止，該公司的運營資金主要來自出售優先股和普通股、認股權證、根據其與SVB的融資安排籌集的債務(包括PPP貸款(兩者均已償還))、根據CARB-X計劃收到的付款以及私募和2020年配股發行的收益。本公司自成立以來已出現經營虧損，包括淨虧損$
5
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
分別為2023年和淨虧損$
該公司計劃通過可能通過公共或私人股本融資出售公司的股權或債務來籌集資金，以解決這一問題。儘管管理層打算尋求獲得額外資金以資助其運營的計劃，而且公司過去曾成功籌集資本，但不能保證公司將成功地以公司可接受的條款獲得足夠的資金，為持續運營提供資金。此外，該公司正在評估其公司、戰略、財務和融資備選方案，目標是為其利益相關者實現價值最大化。這些替代方案可能包括許可、出售或剝離公司的資產或專有技術，或涉及公司的另一項戰略交易。對公司、戰略、財務和融資備選方案的評估可能不會導致任何特定的行動或任何交易被追求、達成或完成，也不能保證任何行動或交易或一系列行動或交易的時間、順序或結果。
如果該公司無法獲得資金，它可能被迫大幅推遲、縮減或停止其舒羅培南計劃的開發和商業化，或者以其他方式改變其戰略，這可能對其業務前景產生不利影響，或者該公司可能無法繼續運營。根據公司自成立以來的經營虧損、對可預見的未來持續經營虧損的預期以及籌集額外資本為其未來運營提供資金的需要，管理層得出結論，自這些簡明綜合財務報表發佈之日起一年內，公司作為一家持續經營的企業繼續經營的能力存在很大疑問。
隨附的簡明綜合財務報表不包括這種不確定性結果可能導致的任何調整。因此，簡明綜合財務報表乃根據假設本公司將繼續作為持續經營企業而編制，並考慮在正常業務過程中變現資產及清償負債及承擔。
中期財務資訊
截至2023年12月31日的簡明綜合資產負債表來自經審計的財務報表，但不包括GAAP要求的所有披露。隨附的截至2024年9月30日以及截至2024年和2023年9月30日的三個月和九個月的未經審計簡明綜合財務報表是由本公司根據美國證券交易委員會(美國證券交易委員會)中期財務報表的規則和規定編制的。按照“公認會計原則”編制的財務報表中通常包含的某些資訊和註腳披露已根據這些規則和條例予以精簡或省略。這些簡明綜合財務報表應與公司截至2023年12月31日的年度經審計的綜合財務報表及其附註一併閱讀，這些報表包括在公司於2024年3月28日提交給美國證券交易委員會的10-k表格年度報告中。管理層認為，本公司截至2024年9月30日的財務狀況、截至2024年9月30日和2023年9月30日的三個月和九個月的經營業績以及截至2024年9月30日和2023年9月30日的九個月的現金流量的公允陳述所需的正常經常性調整已全部完成。截至2024年9月30日的三個月和九個月的運營結果不一定表明截至2024年12月31日的年度的預期運營結果.
2.主要會計政策摘要
與公司截至2023年12月31日的10-k表格年度報告中描述的重大會計政策相比，公司的重大會計政策沒有發生重大變化。
使用估計
按照公認會計原則編制財務報表要求管理層作出估計和假設，以影響財務報表日期的資產和負債報告金額、或有資產和負債的披露、報告期內報告的費用金額以及對公司作為持續經營企業的能力的評估。該等簡明綜合財務報表所反映的重大估計及假設包括但不限於註冊資產的估值。本公司根據過往經驗、已知趨勢及其他其認為在當時情況下屬合理的特定市場因素或其他相關因素作出估計。在持續的基礎上，管理層根據情況、事實和經驗的變化評估其估計數。實際結果可能與這些估計大相徑庭。
6
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
具體地說，管理層有用於計算貼現現金流量分析(DCF)以評估RLN負債的估計變量(見附註3-金融資產和負債的公允價值)。
現金及現金等價物
該公司的現金和現金等價物包括現金餘額和在購買之日到期日不超過三個月的高流動性投資。在美國金融機構持有的賬戶由聯盟存款保險公司承保，最高可達$
任何類型限制的現金賬戶都被歸類為受限現金。如果預計在未來12個月內取消限制，受限制的現金賬戶將被歸類為往來賬戶。包括在公司簡明綜合資產負債表上的受限現金為$
集中信貸風險
可能使公司面臨集中信用風險的金融工具主要包括現金和現金等價物以及短期投資。該公司在美國和愛爾蘭的三家經認可的金融機構擁有大部分現金、現金等價物和短期投資，金額超過了聯盟保險的限額。本公司認為，除了與商業銀行關係相關的正常信用風險之外，它不會受到異常信用風險的影響。
每股普通股淨虧損
每股普通股基本和稀釋後淨虧損的計算方法為：根據會計準則匯編(ASC)260，將普通股股東應佔淨虧損除以期內已發行的加權平均普通股。每股收益.
|
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三個月和九個月結束 |
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2024年9月30日 |
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2023年9月30日 |
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購買普通股的選擇權 |
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未歸屬的限制性股份單位 |
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權證 |
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可兌換票據 |
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分部和其他信息
根據ASC 280，公司根據內部提供給執行長和財務長的信息確定並呈現經營分部，執行長和財務長共同被視為公司的首席運營決策者， 分部報告.該公司已確定其作為 業務部門，即耐藥細菌感染的創新治療方法的開發和商業化。
7
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
總運營費用的分配按地理區域分列如下：
|
|
截至9月30日的三個月， |
|
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截至9月30日的九個月， |
|
||||||||||
業務費用 |
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2024 |
|
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2023 |
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2024 |
|
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2023 |
|
||||
愛爾蘭 |
|
$ |
|
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$ |
|
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$ |
|
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$ |
|
||||
美國 |
|
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||||
百慕達 |
|
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— |
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— |
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總 |
|
$ |
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|
$ |
|
|
$ |
|
|
$ |
|
||||
長壽資產按地理區域的分佈情況如下：
長期資產 |
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
愛爾蘭 |
|
$ |
|
|
$ |
|
||
美國 |
|
|
|
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|
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總計 |
|
$ |
|
|
$ |
|
||
最近的會計聲明
FASb或其他準則制定機構不時發布新的會計公告，並由公司於指定生效日期採用。除非另有討論，否則公司相信最近發布的尚未生效的準則的影響不會對其採用後的財務狀況或經營運績產生重大影響。
2023年11月27日，FASB發佈了ASU編號2023-07，分部報告(主題280)：對可報告分部披露的改進，或ASU 2023-07，加強了分部披露，並要求額外披露分部費用。本ASU適用於2023年12月15日之後開始的財政年度的年度期間，以及2024年12月15日之後開始的過渡期。允許及早領養。預計ASU 2023-07不會對合並財務報表產生實質性影響。
2023年10月9日，財務會計準則委員會發布了ASU2023-06號，披露改進：編撰修正案，以回應美國證券交易委員會的披露更新和簡化倡議，或ASU2023-06，其中納入了目前駐留在美國證券交易委員會法規S-X和S-k中的幾項披露和陳述要求。對於受現有美國證券交易委員會資訊披露要求約束的實體，包括準備出售或發行證券的實體，每次修訂的生效日期將是美國證券交易委員會從S-X條例或S-k條例中取消相關披露的生效日期，禁止及早採用。對於所有其他實體，修正案將在兩年後生效，並允許及早通過。預計ASU 2023-06不會對合並財務報表產生實質性影響。
2023年12月，FASb發布了ASO 2023-09， 所得稅(專題740)：所得稅披露的改進，或ASO 2023-09，它增強了年度所得稅披露，以實現有效稅率對帳和繳納的所得稅。該修訂本對公共商業實體生效，自2024年12月15日之後開始的年度期間，對所有其他實體生效，自2025年12月15日之後開始的年度期間。尚未發布或尚未發布的年度財務報表允許提前採用。亞利桑那州立大學前瞻性地適用於生效日期後開始的年度財務報表。然而，允許在所有之前期間追溯應用。該公司正在評估ASO 2023-09將對簡明綜合財務報表產生的影響。
3.金融資產和負債的公允價值
下表列出了有關公司截至2011年在簡明綜合資產負債表上按經常性公平價值列帳的金融資產的信息 2024年9月30日和2023年12月31日，並指示用於確定該公允價值的估值輸入的公允價值等級。
8
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
2024年9月30日 |
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||||
資產 |
|
總計 |
|
|
1級 |
|
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2級 |
|
|
3級 |
|
||||
短期投資： |
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|
|
|
|
|
|
|
|
|
|
|
||||
美國國債 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
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||
|
|
$ |
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$ |
— |
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$ |
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$ |
— |
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||
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||||
2023年12月31日 |
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||||
資產 |
|
總 |
|
|
1級 |
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2級 |
|
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3級 |
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||||
短期投資： |
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|
|
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|
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|
||||
公司債券 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
商業票據 |
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|
|
|
— |
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|
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|
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— |
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||
美國國債 |
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— |
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|
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— |
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||
|
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$ |
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$ |
— |
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$ |
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$ |
— |
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||
短期投資詳情見注4。簡明綜合資產負債表中報告的預付費用和其他易變現資產、應付帳款、應計費用和其他流動負債的帳面值與其基於這些工具的短期到期日的公允價值接近。
下表列出了有關公司可交換票據和RLN的信息，並指出了用於確定大致公允價值的估值輸入的公允價值層次：
2024年9月30日 |
|
書 |
|
|
近似 |
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|||||
短期負債 |
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值 |
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公平值 |
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1級 |
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2級 |
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3級 |
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|||||
可兌換票據 |
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|||||
可兌換票據 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|||
短期負債總額 |
|
$ |
|
|
$ |
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|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|||
長期負債 |
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|||||
收入期貨 |
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|||||
與版稅相關的票據 |
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|
|
|
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|
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— |
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|
|
— |
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|
|
|
|||
長期負債總額 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
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|
$ |
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|||
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|||||
2023年12月31日 |
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書 |
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近似 |
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|||||
長期負債 |
|
值 |
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|
公平值 |
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1級 |
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2級 |
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3級 |
|
|||||
可兌換票據 |
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|||||
長期可交換票據 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|||
收入期貨 |
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|||||
與版稅相關的票據 |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
長期負債總額 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
可交換票據的公允價值是根據管理可交換票據的契約(可交換票據契約)中概述的固定利率通過貼現現金流分析確定的，而沒有考慮交易成本，這是公允價值計量的二級基礎。
截至2024年9月30日持有的3級負債包括一種獨立的金融工具，作為單位的一部分發行，即RLN(見附註10-與特許權使用費掛鉤的票據)。
在2021年1月21日或之後的任何時間，在符合指定限制的情況下，可交換票據可交換為公司的普通股、現金或普通股和現金的組合，匯率為
9
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
RLN負債於簡明綜合資產負債表按公允價值列賬(見附註10-與版稅掛鉤的附註)。公允價值總額$
曾經有過
4.短期投資
該公司將其短期投資歸類為可供出售。短期投資包括具有最低“A”評級證券的高流動性投資，在季度末包括購買之日到期日超過三個月的公司債券、商業票據和美國國債。截至2024年9月30日的短期投資加權平均到期日為
下表按主要證券類別列出本公司截至2024年9月30日和2023年12月31日：
2024年9月30日 |
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各期到期日 |
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|||||||||
|
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攤銷 |
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未實現 |
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|
未實現 |
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公平值 |
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|
小於1 |
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|
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|
||||||
可供出售 |
|
成本 |
|
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收益 |
|
|
(虧損) |
|
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總 |
|
|
年 |
|
|
1至5年 |
|
||||||
美國國債 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||
|
|
|
|
|
|
|
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|
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|
|
|
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|
||||||
2023年12月31日 |
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|
|
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|
|
按時期劃分的成熟度 |
|
|||||||||
|
|
攤銷 |
|
|
未實現 |
|
|
未實現 |
|
|
公平值 |
|
|
小於1 |
|
|
|
|
||||||
可供出售 |
|
成本 |
|
|
收益 |
|
|
（損失） |
|
|
總 |
|
|
年 |
|
|
1至5年 |
|
||||||
公司債券 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||
商業票據 |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
|||
美國國債 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
||||
總 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||
截至2024年9月30日和2023年9月30日的三個月和九個月內，
5.預付費用和其他易變現資產
預付費用和其他易變現資產包括以下內容：
|
|
9月30日， |
|
|
十二月三十一日， |
|
||
預付保險 |
|
$ |
|
|
$ |
|
||
使用權資產，淨值 |
|
|
|
|
|
— |
|
|
其他預付資產 |
|
|
|
|
|
|
||
應收研發稅收抵免 |
|
|
|
|
|
|
||
預付研發費用 |
|
|
|
|
|
|
||
總 |
|
$ |
|
|
$ |
|
||
10
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
6.財產和設備，淨值
物業和設備以及相關累計折舊如下：
|
|
9月30日， |
|
|
十二月三十一日， |
|
||
租賃物業裝修 |
|
$ |
|
|
$ |
|
||
家具及固定裝置 |
|
|
|
|
|
|
||
計算機設備 |
|
|
|
|
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|
||
|
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|
|
|
|
|
||
減：累計折舊 |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
截至2024年9月30日和2023年9月30日止九個月的折舊費用為美金
7.租賃
該公司已經簽訂了一些經營租賃，主要是辦公空間和商業物業。
於2021年11月，本公司訂立為期12個月並可滾動延期的寫字樓租約，而於2022年5月，本公司訂立為期6個月的寫字樓租約，租期延至2023年11月，並選擇不將ASC 842的計量及確認規定應用於該等短期租約，因為本公司已行使或被視為合理肯定行使的任何續期期限，自先前確定的租約期結束起計不得超過12個月。於2023年8月，本公司將租賃協定再延長9個月，並分別滾動延期12個月。雖然兩份續期協定自先前釐定的租賃期結束起計均未續期超過12個月，但可合理肯定此等租約安排將獲續期超過12個月。因此，本公司已將ASC 842的計量及確認要求應用於該等租賃安排。於2024年9月，本公司通知業主其有意於2024年11月30日終止十二個月租約，相關使用權資產及租賃負債已相應減少。
某些租賃包含可變的租賃付款，包括基於指數或費率的付款。基於指數或費率的可變租賃付款最初是使用租賃開始時有效的指數或費率計量的。某些協定同時包含租賃和非租賃部分。本公司已選擇在確定租賃負債和使用權資產時單獨核算這些組成部分。本公司的租賃協定一般不提供隱含借款利率；因此，內部遞增借款利率是根據租賃開始日可獲得的資訊確定的，以確定租賃付款的現值。本公司於2019年1月1日對該日之前開始的所有租約使用遞增借款利率。
所有經營租賃費用均按租賃期內的直線基礎確認。公司認識到$
與公司使用權資產及相關租賃負債相關的信息如下：
|
|
止三個月 |
|
|
止三個月 |
|
|
止九個月 |
|
|
止九個月 |
|
||||
|
|
2024年9月30日 |
|
|
2023年9月30日 |
|
|
2024年9月30日 |
|
|
2023年9月30日 |
|
||||
經營租賃負債支付的現金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
11
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
|
|
2024年9月30日 |
|
|
十二月三十一日， |
|
||
加權平均剩餘租期 |
|
|
|
|
||||
加權平均折扣率 |
|
|
% |
|
|
% |
||
公司經營租賃的使用權資產和租賃負債在簡明合併資產負債表中記錄如下，代表公司在租賃期內使用基礎資產的權利（「預付費用和其他易變現資產」和「其他資產」）以及公司支付租賃付款的義務（「其他流動負債」和「其他負債」）：
|
|
2024年9月30日 |
|
|
12月31日， |
|
||
|
$ |
|
|
$ |
— |
|
||
|
|
— |
|
|
|
|
||
租賃資產總額 |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
|
|
— |
|
|
|
|
||
租賃負債總額 |
|
$ |
|
|
$ |
|
||
未來租賃付款計入截至日期的簡明綜合資產負債表租賃負債計量 2024年9月30日以下五個財年及以後的情況如下：
截至9月30日的12個月期內到期， |
|
|
|
|
2025 |
|
$ |
|
|
2026 |
|
|
— |
|
2027 |
|
|
— |
|
2028 |
|
|
— |
|
2029 |
|
|
— |
|
此後 |
|
|
— |
|
|
|
$ |
|
|
扣除估算利息 |
|
|
( |
) |
租賃負債總額 |
|
$ |
|
|
8.應計費用
應計費用包括以下內容：
|
|
9月30日， |
|
|
12月31日， |
|
||
應計薪津和花紅費用 |
|
$ |
|
|
$ |
|
||
應計製造費用 |
|
|
|
|
|
|
||
應計其他費用 |
|
|
|
|
|
|
||
應計專業費用 |
|
|
|
|
|
|
||
應計臨床試驗費用 |
|
|
|
|
|
|
||
總 |
|
$ |
|
|
$ |
|
||
9.債務
擔保信貸安排
對
12
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
截止日期2019年10月31日。所有未償還本金，外加一筆
關於最初的$
關於私募，Iterum百慕大作為借款人加入了貸款和擔保協定，並於2020年1月16日修訂了貸款和擔保協定，其中包括修改次級債務的定義，以包括RLN和可交換票據。
2025年可交換票據
於2020年1月21日，本公司完成私募，據此，其全資附屬公司Iterum百慕大發行及出售美元
在2021年1月21日或之後的任何時間，在符合特定限制的情況下，可交換票據可交換為公司的普通股、現金或普通股和現金的組合，由公司選擇，匯率為
此外，可交換票據將在可交換票據契約中定義的基本變化發生時到期並由公司支付。
本公司評估其債務和股權發行，以確定這些合同或這些合同的嵌入部分是否符合ASC 815-15規定的衍生品資格，衍生品和對沖，要求在公司的財務報表中單獨確認。本公司對發行可交換票據的會計進行評估，並得出結論認為，嵌入的交換選擇權和控制權變更特徵被視為ASC 815-15下的衍生負債，需要與可交換票據分開，因為鑒於可交換票據的條款，其不符合實體自身權益合同的範圍例外。根據美國會計準則第815-15號，交換選擇權及控制權變更作為衍生工具負債入賬，並須分開作為單一負債記錄，而該單一負債於每個報告期重新估值，所產生的公允價值變動反映於簡明綜合經營報表及全面虧損衍生工具的公允價值調整中。
與定向增發有關的衍生負債於2020年1月21日的公允價值為
如果可轉換工具中的嵌入式交換期權需要分叉，並且可轉換工具中還有其他需要分叉的嵌入式衍生工具，則該衍生工具作為單一複合衍生工具核算。衍生工具的分類，包括此類工具是否應記錄為負債或股權，會在每個報告期末重新評估。衍生工具
13
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
負債於資產負債表內分類為流動或非流動，視乎衍生工具是否預期於資產負債表日起十二個月內清償而定。
本公司確定，可交換票據的所有其他特徵與債務主體明確而密切相關，不需要將其作為衍生負債進行分拆。可交換票據成立時的初始價值(扣除交易成本)為$
公司認識到$
|
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2024年9月30日 |
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||||
|
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主要 |
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應計利息 |
|
||
2020年1月$ |
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$ |
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$ |
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||
2020年9月$ |
|
|
|
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||
$的轉換 |
|
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( |
) |
|
( |
) |
2025年可兌換票據，淨 |
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|
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||
未攤銷折扣和債務發行成本 |
|
|
( |
) |
|
— |
|
2025年可兌換票據，淨 |
|
$ |
|
$ |
|
||
未償債務的計劃本金支付，包括欠RLN持有人的本金（見注釋10 -版稅掛鈎票據），截至 2024年9月30日，以下五個財年及以後的情況如下：
截至9月30日， |
|
|
|
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2025 |
|
$ |
|
|
2026 |
|
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— |
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2027 |
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— |
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2028 |
|
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— |
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2029 |
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— |
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此後 |
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總 |
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$ |
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|
10.與版稅掛鉤的注釋
與銷售未來特許權使用費有關的責任
2020年1月21日，作為定向增發的一部分，公司發行了
根據ASC 815-10允許的例外，衍生品和對沖，這筆交易最初是作為ASC 470下的債務負債入賬的，債務。RLN於2021年1月在百慕大證券交易所上市後，
14
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
RLN按衍生工具入賬，並於每個報告日期按公允價值重新計量。根據ASC 815，RLN的公允價值是使用折現現金流分析確定的，而不考慮交易成本，這是公允價值計量的第三級基礎。公允價值計量對投入的變化高度敏感，投入的重大變化可能導致公允價值大幅上升或下降。該公司定期評估特定舒羅培南產品的收入預測和相關付款。本公司無義務向票據持有人支付任何款項，直至賺取指定產品的淨收入為止。
在每個申報日期的流動資產餘額如下：
|
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9月30日， |
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與出售未來特許權使用費有關的總負債，在開始時 |
|
$ |
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|
與出售2020年配股產生的未來特許權使用費有關的責任 |
|
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攤銷貼現和債務發行成本 |
|
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|
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對公允價值的調整 |
|
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( |
) |
截至2024年6月30日與銷售未來特許權使用費有關的總負債 |
|
$ |
|
|
當前部分 |
|
|
— |
|
長期部分 |
|
$ |
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2023年12月31日 |
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與出售未來特許權使用費有關的總負債，在開始時 |
|
$ |
|
|
與出售2020年配股產生的未來特許權使用費有關的責任 |
|
|
|
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攤銷貼現和債務發行成本 |
|
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|
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對公允價值的調整 |
|
|
( |
) |
截至2023年12月31日與銷售未來特許權使用費有關的總負債 |
|
$ |
|
|
當前部分 |
|
|
— |
|
長期部分 |
|
$ |
|
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11.股東權益
公司的資本結構由普通股和非指定優先股組成。根據愛爾蘭法律，該公司不得在沒有對價的情況下分配股份。因此，任何認股權證、預籌資權證、受限股份獎勵、受限股份單位、業績獎勵、紅股或任何其他基於股份的授予所涉及的已發行股份的面值，必鬚根據2014年《愛爾蘭公司法》(愛爾蘭公司法)支付。
普通股
2024年8月9日，公司完成配股(2024年配股)，共出售
在The Company‘S年度股東大會於2023年5月3日，公司股東批准增持
該公司向美國證券交易委員會提交了表格S-3的通用貨架註冊聲明，該聲明於2022年10月17日宣布生效（文件編號333-267795），根據該聲明，該公司註冊銷售金額高達美金
2022年10月7日，公司與HC簽訂「市場發售」協議（銷售協議）溫賴特公司，有限責任公司（HC Wainwright）, 作為代理人，公司可以發行和出售普通股，名義股
15
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
值 $
自2021年1月21日至2024年9月30日，某些票據持有人$
購買普通股的授權書
關於貸款及保證協定下的初步提款，公司發行了SVB和LSF認股權證，以購買
關於於2020年6月5日完成的2020年6月3日發售，根據2020年6月3日的SPA，本公司同時以私募方式發行及出售認股權證予機構投資者，以購買最多
關於於2020年7月2日完成的2020年6月30日發行，根據2020年6月30日的SPA，本公司還同時以私募方式發行並出售給機構投資者最多可購買的認股權證
關於2020年10月的發行，公司發行和出售了認股權證，以購買最多
關於2021年2月的包銷發行，本公司向承銷商的指定人發出認股權證以購買
關於2021年2月的包銷發行，本公司授予承銷商為期30天的選擇權，以購買額外的
與2021年2月的註冊直接發售有關，該發售於
16
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
在 行權價為$
關於2024年8月9日結束的2024年配股發行，該公司ISS使用和出售1年期認股權證，購買最多
本公司已根據ASC 815將認股權證分類為股權。因此，所得款項按個別組成部分的相對公平價值在普通股、1年期認股權證及5年期認股權證之間分配。認股權證的公允價值按Black-Scholes期權定價模式釐定，普通股則根據截止日期股價釐定，並在簡明綜合資產負債表的股東虧損內記入額外實收資本。
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2024年8月9日 |
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|||||
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1年期認股權證 |
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5年期認股權證 |
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波動 |
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% |
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% |
||
預計任期年數 |
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||
股息率 |
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% |
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% |
||
無風險利率 |
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% |
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% |
||
股價 |
|
$ |
|
|
$ |
|
||
執行價格 |
|
$ |
|
|
$ |
|
||
已發行認購證的公允價值 |
|
$ |
|
|
$ |
|
||
非指定優先股
公司已授權
12.股份薪酬
2015年11月18日，公司董事會通過並通過了《2015年股權激勵計劃》(《2015計劃》)，授權公司給予最多
2018年3月14日，公司董事會通過並通過了《2018年度股權激勵計劃》(《2018年度計劃》)，自2018年5月本公司IPO相關承銷協定簽署交付之日起生效。自通過2018年計劃以來，2015年計劃將不再提供進一步的贈款。本公司根據2015年計劃沒收、註銷、回購或以其他方式終止的任何購股權所涉及的普通股，將不會重新加入可供發行的普通股。
2018年計劃最初授權該公司授予最多
2018年12月5日，根據公司董事會授予的權力，薪酬委員會批准將根據2018年計劃可授予的普通股數量增加
17
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
2020年2月14日，根據公司董事會授予的權力，薪酬委員會通過書面決議，批准將
2020年6月10日，在公司年度股東大會上，股東批准並通過了經修訂和重述的2018年計劃，其中包括增加
2021年6月23日，在公司年度股東大會上，股東批准了修訂後重述2018年計劃的修正案，以增加修訂後重述2018年計劃下預留發行的普通股數量
2021年11月24日，公司董事會通過並通過了《2021年激勵股權激勵計劃》(2021年激勵計劃)預留
股票期權
除非個別期權協定另有規定，否則根據2015年計劃、2018年計劃和2021年激勵計劃授予的股票期權通常具有
授予的期權的公允價值是使用布萊克-斯科爾斯期權定價模型估計的。布萊克-斯科爾斯模型的投入需要大量的管理假設。無風險利率是基於對
的 公司做到了
公司用於確定所授予員工和董事期權的授予日期公允價值的假設範圍如下：
|
|
止九個月 |
|
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2023年9月30日 |
波動 |
|
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預計任期年數 |
|
|
股息率 |
|
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無風險利率 |
|
|
股價 |
|
$ |
授予日期期權的公允價值 |
|
$ |
18
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
下表總結了所有公司計劃的總股票期權活動：
|
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公平計劃 |
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誘導計劃 |
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總 |
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未執行期權2023年12月31日 |
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授予 |
|
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— |
|
|
|
— |
|
|
|
— |
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行使 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
沒收 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
未執行期權2024年9月30日 |
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|
|
|
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|
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|
|||
下表總結了截至2024年9月30日的未行使期權數量和加權平均行使價：
|
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數量 |
|
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加權 |
|
|
加權 |
|
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骨料 |
|
||||
未執行期權2023年12月31日 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
授予 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
行使 |
|
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( |
) |
|
$ |
|
|
|
|
|
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|
|||
沒收 |
|
|
( |
) |
|
$ |
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|
|
|
|
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|
|||
未執行期權2024年9月30日 |
|
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|
$ |
|
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|
$ |
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||||
可於2024年9月30日取消 |
|
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$ |
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$ |
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||||
限制性股份單位（RSU）
本公司
下表總結了所有公司計劃中授予的涵蓋同等數量公司普通股的受限制股份單位數量：
|
|
公平計劃 |
|
|
誘導計劃 |
|
|
總 |
|
|||
未償RSU 2023年12月31日 |
|
|
— |
|
|
|
|
|
|
|
||
授予 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
歸屬股份 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
沒收 |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
未償RSU 2024年9月30日 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
下表顯示了截至2024年9月30日尚未發行的受限制股份單位數量，涵蓋同等數量的公司普通股以及未發行的受限制股份單位的加權平均授予日期公允價值：
|
|
數量 |
|
|
加權平均 |
|
||
未償RSU 2023年12月31日 |
|
|
|
|
$ |
|
||
授予 |
|
|
— |
|
|
|
|
|
歸屬股份 |
|
|
— |
|
|
|
|
|
沒收 |
|
|
( |
) |
|
$ |
|
|
未償RSU 2024年9月30日 |
|
|
— |
|
|
|
|
|
受限制股份單位的公允價值於授予日期根據該日公司普通股的市場價格確定。RSU的公允價值在歸屬期內按比例計為費用，這是通用的盟友
19
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
公司的股份報酬費用在簡明綜合經營報表和全面虧損中分類如下：
|
|
截至9月30日的三個月， |
|
|
截至9月30日的九個月， |
|
||||||||||
|
|
2024 |
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2023 |
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2024 |
|
|
2023 |
|
||||
研發費用 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
一般及行政開支 |
|
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|
||||
一共有 $
13.所得稅
根據ASC 270， 中期報告， 和ASC 740，所得稅，在每箇中期期末，公司必須確定其年度有效稅率的最佳估計，然後應用該稅率為當前年初至今（中期）的所得稅撥備。該公司記錄的所得稅費用為 $
14.承諾和意外情況
許可協議
2015年11月18日，本公司與本公司的全資子公司Iterum Treateutics International Limited(ITIL)與輝瑞簽訂了一項許可協定，獲得舒羅培南的全球獨家研究、開發、製造和商業化(輝瑞許可)。
根據輝瑞的許可，ITIL同意支付某些監管和銷售里程碑付款，包括監管里程碑付款$
本公司有義務支付超過一定門檻的與再許可收入相關的潛在一次性付款。該公司還有義務在實現淨銷售額時向輝瑞支付銷售里程碑，淨銷售額從1美元到1美元不等
20
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
與版稅掛鉤的附註
2020年1月21日，作為定向增發的一部分，公司發行了
其他或有事項
因索賠、評估、訴訟、罰款、罰款和其他來源產生的或有損失的負債，在很可能已經發生負債且金額可以合理估計的情況下記錄。於每個報告日期，本公司會評估潛在損失金額或潛在損失範圍是否根據權威性指引中有關或有事項的會計規定而可能及合理地評估。本公司支出與該等法律程序有關的費用。對於在正常業務過程中產生的法律索賠，本公司並無或有負債。
根據各自的僱傭協定條款，每位獲提名的行政人員於無“因由”(死亡或傷殘除外)或“有充分理由辭職”時，均有資格領取遣散費及福利，視乎獲提名的行政人員持續在本公司的表現而定。根據薪酬委員會於2022年1月批准的僱員離職計劃的條款，非本公司行政人員的僱員有權在“合資格解僱”時獲得遣散費和福利，“合資格解僱”是指在根據僱員的水準/薪級在無“因由”(死亡或傷殘除外)的情況下發生控制權變更後12個月內的任何時間終止解僱。
15.簡明合併財務報表
於2020年1月21日，本公司完成私募，據此，其全資附屬公司Iterum百慕大發行及出售美元
這些單位由Iterum百慕大公司發行，該公司成立於2019年11月6日，是
16.後續事件
監管里程碑付款
對 2015年11月18日，公司與公司全資子公司Iterum Therapeutics International Limited（ATL）與輝瑞簽署了一項許可協議，授予舒洛培南的全球獨家研究、開發、生產和商業化權（輝瑞許可）。根據輝瑞許可證，ATL同意建立某些監管和銷售里程碑
21
ITERum THERAPETICS PLC
未經審計簡明合併財務報表附註
(In數千，份額和每股數據除外）
付款，包括一筆監管里程碑付款$
該批債券的年利率為8%(
2024年10月25日，該公司獲得美國食品和藥物管理局批准的ORLYNVAH™(舒羅培南、依扎曲辛和丙磺舒)用於治療由指定微生物引起的無併發症尿路感染大腸埃希菌、肺炎克雷伯菌、或奇異變形桿菌對於有有限或沒有替代口服抗菌治療選擇的成年女性。2024年10月28日，該公司通知輝瑞，它決定推遲支付
股權發行
從2024年9月30日至2024年11月4日，公司出售
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項目2.管理層的討論與分析 財務狀況和經營運績。
您應該閱讀以下對我們財務狀況和運營運績的討論和分析，以及我們的簡明合併財務報表和相關注釋以及本季度報告中其他部分包含的其他財務信息。本討論和分析中包含的部分信息或本10-Q表格季度報告中其他地方列出的部分信息，包括有關我們的業務計劃和戰略以及相關融資的信息，包括涉及風險和不確定性的前瞻性陳述。由於許多因素，包括本10-Q表格季度報告「風險因素」部分中列出的因素，我們的實際結果可能與以下討論和分析中包含的前瞻性陳述中描述或暗示的結果存在重大差異。
概述
我們專注於提供差異化的抗感染藥物，旨在應對多重耐藥病原體的全球危機，以顯著改善世界各地受嚴重和危及生命的疾病影響的人們的生活。我們正在推進我們的第一種化合物舒羅培南的開發，這是一種新型青黴烯類抗感染化合物，有口服制劑和靜脈製劑。青黴烯類，包括硫培南和碳青黴烯類，屬於一類抗生素，更廣泛地定義為伯內酰胺類抗生素，最初的例子是青黴素，但現在也包括頭孢菌素。舒羅培南是一種靜脈注射的有效的硫培南抗生素，對屬於革蘭氏陰性菌組的細菌具有活性，並導致尿路和腹內感染。我們還開發了舒羅培南口服片劑，舒羅培南etzadroxil-probenecid，我們在此稱為ORLYNVAH™。我們認為靜脈注射舒羅培南和奧立瓦™有可能成為重要的新治療替代品，以解決與抗菌素耐藥性有關的日益增長的擔憂，而不會出現一些最廣泛使用的抗生素的已知毒性。
在2018年第三季度，我們在第三階段開發計劃中啟動了三項臨床試驗，其中包括：第三階段尿路感染(UUTI)臨床試驗，稱為舒羅培南(SURE)耐藥腸桿菌科(SURE)1，比較ORLYNVAH™口服環丙沙星治療女性UUTI，一項名為SURE 2的3期合併尿路感染(CUTI)臨床試驗，比較靜脈注射舒羅培南和ORLYNVAH™靜脈注射厄他培南後口服環丙沙星治療成人尿路感染，以及名為SURE 3的3期合併腹內感染(CIAI)臨床試驗，比較靜脈注射舒羅培南和口服環丙沙星™靜脈注射厄他培南，然後聯合口服環丙沙星和甲硝唑治療成人CIAI。我們根據與美國食品和藥物管理局(FDA)的第二階段會議結束以及歐洲藥品管理局(EMA)的反饋，為每個適應症設計了一項第三階段臨床試驗。我們根據FDA的特殊方案評估(SPA)協定進行了3期臨床試驗。2019年12月，我們宣佈，與CIAI試驗的對照療法相比，舒羅培南沒有達到統計學上非劣勢的主要終點。在2020年第二季度，我們宣佈了我們在cUTI和uUTI的第三階段臨床試驗結果。在cUTI試驗中，與對照治療相比，舒羅培南沒有達到統計學上非劣化的主要終點，應答率的差異幾乎完全是由於舒羅培南IV和ORLYNVAH的更高的無癥狀性菌尿率所致™手臂相對於厄他培南IV要口服環丙沙星手臂，只有在試驗中才能明顯治癒訪視。在不同的治療方法中，接受額外抗生素治療或出現殘餘cUTI癥狀的患者的比率相似。同樣，在UUTI試驗中，與環丙沙星相比，在基礎病原體對環丙沙星敏感的患者群體中，舒羅培南沒有達到統計上非劣勢的主要終點，這在很大程度上是由於與接受環丙沙星治療的患者相比，舒羅培南治療患者在治療訪問測試中出現了更多的無癥狀菌尿。然而，在UUTI試驗中，在基線病原體對喹諾酮類藥物耐藥的患者群體中，舒羅培南實現了相關的主要終點，因為在對環丙沙星耐藥的人群中，治療組的總體應答率具有統計學意義，這為UUTI患者的治療效果提供了證據。根據2020年9月新藥申請前會議(NDA)與FDA的討論以及之前與FDA的通信，我們提交了ORLYNVAH的NDA™2020年第四季度用於治療喹諾酮類非敏感病原體患者的尿路感染，FDA於2021年1月接受了審查申請。2021年7月23日，我們收到了FDA關於我們NDA的完整回復信(CRL)。CRL規定，FDA已完成對NDA的審查，並已確定不能批准目前形式的NDA。CRL還規定，需要額外數據來支持ORLYNVAH的批准™用於治療由已證實或強烈懷疑對喹諾酮類藥物不敏感的指定敏感微生物引起的成年女性尿路感染，並建議我們至少再進行一項充分和良好控制的臨床試驗，可能使用不同的對照藥物。2022年7月，我們在SPA流程下與FDA就ORLYNVAH的3期臨床試驗的設計、終點和統計分析達成協定™我們於2022年10月開始參加這項臨床試驗，名為舒羅培南在耐藥腸桿菌引起的uUTI中的更新評估(REASURE)。這項研究被設計為一項非劣勢試驗，比較ORLYNVAH™和Augentin®(阿莫西林/克拉維酸)在Augentin®易感人群中。2023年10月，我們完成了REASURE臨床試驗的登記，招募了2222名患者。2024年1月，我們宣佈，在Augentin®易感人群中，舒羅培南達到了統計學上不遜於Augentin®的主要終點，並在安心臨床試驗中顯示出在統計上顯著優於Augentin®易感人群。此外，儘管不是批准問題，FDA在其CRL中建議我們進行額外的非臨床PK/PD研究，以支持建議的治療適應症的劑量選擇(S)。我們還按照FDA的建議完成了額外的非臨床PK/PD調查，我們認為這支持為ORLYNVAH選擇的劑量方案™。我們重新向FDA提交了關於ORLYNVAH的保密協定™ 2024年4月用於治療u尿路感染。2024年5月，我們收到FDA的通知，承認
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收到NDA的重新提交，並表明FDA認為我們的NDA重新提交是《處方藥用戶費用法案》（PDUFA）下的II類完整回復，該法案自重新提交之日起有六個月的審查期。2024年10月25日，我們獲得FDA對ORLY NVAH ™的NDA批准，用於治療由指定微生物引起的簡單尿路感染 大腸桿菌, 肺炎克雷伯菌，或者 奇異變形桿菌 適用於FDA規定的有限或沒有替代口腔抗菌治療選擇的成年女性。
持續經營
自成立以來，我們遭受了重大的運營虧損。我們能否產生足夠的產品收入來實現盈利，將在很大程度上取決於奧立雅™和舒羅培南的成功開發和最終商業化。截至2024年9月30日，我們的累計赤字為47950美元萬。如果我們出售、許可或以其他方式處置我們的舒羅培南權利的戰略過程沒有導致任何類型的交易，並且取決於我們籌集足夠資本為運營提供資金的能力，我們可能會尋找商業合作夥伴和/或在美國直接將ORLYNVAH™商業化，並在社區環境中配備有針對性的銷售隊伍，我們預計這將導致公司未來產生巨額費用。此外，未償還可交換票據的本金和利息將於2025年1月31日到期。我們還可能產生與進一步臨床開發IV舒羅培南和臨床開發其他適應症的ORLYNVAH™和舒羅培南有關的費用，建立用於生產舒羅培南片劑的其他來源，以及IV小瓶(如果相關)或獲得許可或獲得更多候選產品的費用。此外，我們已經並預計將產生與上市公司運營相關的巨額成本，包括法律、會計、投資者關係和其他費用。
因此，我們將需要額外的資本來資助我們的運營，繼續開發我們的舒洛培南計劃並執行我們的戰略。在我們獲得ORLY NVAH的營銷批准之前™、舒洛培南或任何未來候選產品並從產品銷售中產生大量收入，如果有的話，我們預計通過股權發行、債務融資、合作協議、其他第三方融資、戰略聯盟、許可安排、營銷和分銷安排或政府資助的組合為我們的運營提供資金。然而，我們可能無法在需要時或以可接受的條款獲得此類融資。
由於與藥品商業化相關的眾多風險和不確定性，我們無法預測費用增加的時間或金額，或者何時或是否能夠實現或維持盈利能力。即使我們能夠產生產品銷售，我們也可能無法盈利。如果我們未能實現盈利或無法持續維持盈利能力，那麼我們可能無法繼續按計劃水平運營，並被迫減少或終止運營。
我們已經確定了一些條件和事件，這些情況和事件使人對我們作為一家持續經營的企業繼續下去的能力產生了極大的懷疑。為了繼續經營下去，我們必須獲得額外的資金來支持我們目前的運營計劃，或者顯著推遲、縮減或停止我們的舒羅培南計劃的開發和ORLYNVAH™的商業化，以治療由指定微生物引起的無併發症的尿路感染。肺炎克雷伯氏菌，或者 奇異變形桿菌FDA限制或沒有替代口服抗菌治療選擇的成年女性。截至2024年9月30日，我們擁有1,450美元的現金、現金等價物和短期投資萬。根據我們現有的現金資源，我們不相信我們現有的現金、現金等價物和短期投資，包括從行使某些權證和 期末後根據以HC Wainwright為代理的“市場交易”協定籌集的款項(見附註16– 這將使我們能夠在提交本10-Q表季度報告之日起的未來12個月內為我們的運營費用提供資金。這種情況使人對我們作為一家持續經營的企業繼續下去的能力產生了極大的懷疑。我們預計，為了獲得更多資金，我們將需要完成更多的債務或股權的公共或私人融資。儘管管理層打算尋求獲得額外資金以資助其運營的計劃，我們過去也成功地籌集了資本，但不能保證我們將成功地以我們可以接受的條件獲得足夠的資金，為持續運營提供資金。
我們還可能尋求通過與合作者、被許可者或其他第三方的未來安排來獲取額外資金，這些安排通常要求我們放棄或擔保我們的一些候選產品的權利。如果有的話，我們可能無法完成融資或以可接受的條款達成第三方安排。如果我們未能在需要時籌集資金或達成此類協議，我們可能會被迫大幅推遲、縮減或停止舒洛培南計劃的開發和商業化，或者以其他方式改變我們的戰略，這可能會對我們的業務前景產生不利影響，或者我們可能無法繼續運營。
此外，我們目前正在專注於銷售、許可或以其他方式處置我們對舒洛培南的權利的戰略流程，目標是為我們的利益相關者實現價值最大化，並聘請了財務顧問來協助管理層和董事會評估戰略替代方案。無法保證任何此類流程將導致任何特定行動或任何交易被追求、簽訂或完成，並且無法保證任何行動或交易或一系列行動或交易的時間、順序或結果。欲了解更多信息，請參閱下文「流動性和資本資源-流動性和持續經營」以及本季度報告10-Q表格其他地方包含的簡明綜合財務報表注釋的注釋1「-流動性和持續經營」。
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我們運營運績的組成部分
業務費用
研發費用
研究和開發費用主要包括與開發舒洛培南計劃相關的成本，其中包括：
我們將研究和開發費用按發生時支付。我們為未來收到用於研發活動的商品或服務支付的預付款被記錄為預付費用。我們根據使用服務提供商向我們提供的信息對特定任務完成進度的評估來確認外部開發成本。
口服舒洛培南和/或舒洛培南的成功開發和商業化存在高度不確定性。目前，我們無法合理估計或了解完成舒洛培南計劃臨床開發所需的工作的性質、時間和成本，或者何時（如果有的話）我們的任何候選產品可能開始大量淨現金流入。這種不確定性是由於與產品開發和商業化相關的眾多風險和不確定性，包括以下方面的不確定性：
一般及行政開支
一般和行政費用主要包括高管、財務、市場研究和行政職能人員的薪津、相關福利和股份薪酬費用。一般和行政費用還包括董事薪酬、差旅費、保險、法律、專利、諮詢、會計和審計服務的專業費用、商業化前活動和市場準備費用。
如果我們的戰略流程沒有導致任何類型的交易，並且根據我們籌集足夠資本為運營提供資金的能力，我們可能會尋找商業合作夥伴和/或在美國直接商業化ORLY NVAH ™，並在社區環境中建立有針對性的銷售團隊。這將導致支持商業運營的薪津和其他費用大幅增加。
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利息開支淨額
淨利息費用包括2025年到期的6.500%可交換優先次級票據（可交換票據）的應計利息和債務成本攤銷、我們短期投資的已實現損益、我們的現金和現金等值項目（通常投資於貨幣市場帳戶）賺取的利息以及我們投資有價證券的利息。可交換票據的利息在工具到期之前不得支付，除非在到期前根據管理可交換票據的契約（可交換票據契約）的條款進行交換，此時任何應計和未付利息到期並應支付。
衍生品公允價值調整
衍生負債（包括2020年發行的有限追索權使用費掛鈎次級票據（RLN）在每個資產負債表日重新估值，並將報告期內公允價值的變化記錄在簡明綜合經營報表中，作為對衍生品公允價值的調整。
其他（√）/收入，淨
其他（費用）/收入，淨額包括正常業務過程中根據適用價位變動產生的已實現和未實現外幣損益以及商業單位（於2023年8月終止）的分包協議的分包收入。
所得稅撥備
我們在資產負債法下確認所得稅。遞延所得稅是就資產及負債的財務報告及課稅基準之間的差額，按現行法定稅率確認，預期差額將於該等差額撥回的年度生效。稅率變動對遞延稅項的影響在包括頒佈日期在內的期間的收入中確認。在評估我們收回遞延稅項資產的能力時，我們考慮了所有可用的積極和消極證據，包括過去的經營業績、最近一個會計年度是否存在累計收入、我們經營的業務的變化以及我們對未來應納稅收入的預測。在確定未來的應稅收入時，我們有責任對所採用的假設負責，包括愛爾蘭、美國和其他外國稅前營業收入的數額、暫時差異的逆轉以及可行和謹慎的稅務規劃戰略的實施。這些假設需要對未來應稅收入的預測做出重大判斷，並與我們用來管理基礎業務的計劃和估計一致。
如果部分或全部遞延所得稅資產更有可能無法實現，則提供估值津貼。我們使用更有可能的閾值來識別和解決不確定的稅收狀況，來考慮不確定的稅收狀況。不確定稅務狀況的評估基於以下因素：但不限於稅法的變化、課徵申報表中已採取或預期將採取的稅務狀況的衡量、受審計事項的有效解決、新的審計活動以及與稅務狀況相關的事實或情況的變化。我們每季度評估我們的稅務狀況。我們還應計與所得稅費用中未確認的稅收優惠相關的潛在利息和罰款。
關鍵會計政策以及重大判斷和估計
我們的簡明綜合財務報表是根據美國公認的會計原則編制的。在編制簡明綜合財務報表和相關披露時，我們需要作出估計和判斷，以影響我們財務報表中資產、負債、收入、成本和支出的報告金額以及或有資產和負債的披露。我們認為，在我們於2024年3月28日提交給美國證券交易委員會的10-k表格年度報告中，以“管理層對財務狀況和經營成果的討論與分析--關鍵會計政策及重大判斷和估計”為標題所描述的關鍵會計政策，涉及的判斷和複雜性最高。因此，我們相信，這份10-k表格年度報告中提出的政策對於全面瞭解和評估我們的財務狀況和經營成果至關重要。如果實際結果或事件與我們在應用這些政策時使用的估計、判斷和假設存在重大差異，我們報告的財務狀況和運營結果可能會受到重大影響。與我們於2024年3月28日提交給美國證券交易委員會的Form 10-k年度報告中描述的那些相比，我們的關鍵會計估計沒有重大變化。
26
經營運績
截至2024年9月30日及2023年9月30日止三個月的比較
下表總結了截至2024年和2023年9月30日的三個月的營運虧損和所得稅前虧損（單位：千）：
|
|
止三個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
運營費用： |
|
|
|
|
|
|
|
|
|
|||
研發 |
|
$ |
(3,107 |
) |
|
$ |
(14,852 |
) |
|
$ |
11,745 |
|
一般和行政 |
|
|
(1,780 |
) |
|
|
(1,833 |
) |
|
|
53 |
|
總運營費用 |
|
|
(4,887 |
) |
|
|
(16,685 |
) |
|
|
11,798 |
|
經營虧損 |
|
|
(4,887 |
) |
|
|
(16,685 |
) |
|
|
11,798 |
|
其他費用總額，淨額 |
|
|
(1,071 |
) |
|
|
12,969 |
|
|
|
(14,040 |
) |
所得稅前損失 |
|
$ |
(5,958 |
) |
|
$ |
(3,716 |
) |
|
$ |
(2,242 |
) |
研發費用（千）
|
|
止三個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
CTO和其他臨床前和臨床試驗費用 |
|
$ |
464 |
|
|
$ |
12,427 |
|
|
$ |
(11,963 |
) |
人員相關（包括股份薪酬） |
|
|
425 |
|
|
|
983 |
|
|
|
(558 |
) |
化學、製造和控制（SMC）相關費用 |
|
|
1,516 |
|
|
|
1,051 |
|
|
|
465 |
|
諮詢費 |
|
|
702 |
|
|
|
391 |
|
|
|
311 |
|
研發費用總額 |
|
$ |
3,107 |
|
|
$ |
14,852 |
|
|
$ |
(11,745 |
) |
CDO和其他臨床前和臨床試驗費用減少了1200美金，主要是由於2023年支持我們的REASSURE試驗的成本增加，該試驗於2022年10月開始入組，並於2023年10月完成入組。人員相關成本減少了60加元，主要是由於人員減少、研發稅收抵免的確認以及股份薪酬費用的減少。截至2024年9月30日和2023年9月30日止三個月的人員相關成本包括股份薪酬費用，分別為0加元和10加元。主要由於原料藥的製造，CMA相關費用增加了50美金，部分被設施租金下降所抵消。諮詢費增加30美金是由於與重新提交ORLynNVAH NDA相關的顧問使用量增加™。
一般和行政費用（單位：千）
|
|
止三個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
人員相關（包括股份薪酬） |
|
$ |
814 |
|
|
$ |
958 |
|
|
$ |
(144 |
) |
設施相關和其他 |
|
|
487 |
|
|
|
555 |
|
|
|
(68 |
) |
專業和諮詢費 |
|
|
479 |
|
|
|
320 |
|
|
|
159 |
|
一般和行政費用總額 |
|
$ |
1,780 |
|
|
$ |
1,833 |
|
|
$ |
(53 |
) |
由於應計花紅減少，人員相關成本減少了10加元。截至2024年9月30日和2023年9月30日止三個月的人員相關成本包括股票薪酬費用分別為0和0。設施相關成本和其他成本減少了10加元，主要是由於保險成本下降。 專業和諮詢費用增加了20加元，主要是由於與上市公司運營相關的法律費用以及股東會議、印刷和行政成本增加。
其他應收帳款總額，淨額
下表總結了截至2024年9月30日和2023年9月30日止三個月的其他費用總額（以千計）：
|
|
止三個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
利息開支淨額 |
|
$ |
(590 |
) |
|
$ |
(300 |
) |
|
$ |
(290 |
) |
衍生品公允價值調整 |
|
|
(433 |
) |
|
|
13,199 |
|
|
|
(13,632 |
) |
其他（費用）/收入，淨額 |
|
|
(48 |
) |
|
|
70 |
|
|
|
(118 |
) |
其他（費用）/收入總額，淨額 |
|
$ |
(1,071 |
) |
|
$ |
12,969 |
|
|
$ |
(14,040 |
) |
27
利息開支淨額
截至2024年9月30日的三個月，利息費用淨增加30加元，主要是由於短期投資和貨幣市場基金的利息收入減少。
衍生品公允價值調整
截至2024年9月30日的三個月，衍生負債公允價值的調整為40加元。這項非現金調整主要與RLN公允價值因時間的推移而增加有關。
截至2023年9月30日的三個月，衍生負債公允價值的調整為1320加元。這項非現金調整主要與由於管理層下調美國口服舒洛培南銷售收入預測而導致RLN公允價值下降有關。
其他（√）/收入，淨
其他（費用）/收入，淨額包括正常業務過程中根據適用價位變動產生的已實現和未實現外幣損益以及商業單位的分包協議（於2023年8月終止）的分包收入。減少10美金主要與分包收入減少有關。
截至2024年9月30日及2023年9月30日止九個月的比較
下表總結了截至2024年和2023年9月30日止九個月的營運虧損和所得稅前虧損（單位：千）：
|
|
止九個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
運營費用： |
|
|
|
|
|
|
|
|
|
|||
研發 |
|
$ |
(9,159 |
) |
|
$ |
(30,248 |
) |
|
$ |
21,089 |
|
一般和行政 |
|
|
(5,867 |
) |
|
|
(5,789 |
) |
|
|
(78 |
) |
總運營費用 |
|
|
(15,026 |
) |
|
|
(36,037 |
) |
|
|
21,011 |
|
經營虧損 |
|
|
(15,026 |
) |
|
|
(36,037 |
) |
|
|
21,011 |
|
其他費用總額，淨額 |
|
|
(2,951 |
) |
|
|
10,499 |
|
|
|
(13,450 |
) |
所得稅前損失 |
|
$ |
(17,977 |
) |
|
$ |
(25,538 |
) |
|
$ |
7,561 |
|
研究與開發費用（單位：千）：
|
|
止九個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
CTO和其他臨床前和臨床試驗費用 |
|
$ |
3,124 |
|
|
$ |
24,010 |
|
|
$ |
(20,886 |
) |
人員相關（包括股份薪酬） |
|
|
1,953 |
|
|
|
2,884 |
|
|
|
(931 |
) |
化學、製造和控制（SMC）相關費用 |
|
|
2,535 |
|
|
|
2,408 |
|
|
|
127 |
|
諮詢費 |
|
|
1,547 |
|
|
|
946 |
|
|
|
601 |
|
研發費用總額 |
|
$ |
9,159 |
|
|
$ |
30,248 |
|
|
$ |
(21,089 |
) |
CDO和其他臨床前和臨床試驗費用減少2090美金，主要是由於2023年支持我們的REASSURE試驗的成本增加，該試驗於2022年10月開始入組，並於2023年10月完成入組。人員相關成本減少了90美金，主要是由於人員減少、研發稅收抵免的確認以及股份薪酬費用的減少。截至2024年9月30日和2023年9月30日止九個月的人員相關成本包括股票薪酬費用，分別為10加元和30加元。主要由於原料藥的製造，CMA相關費用增加了10加元，部分被設施租金下降所抵消。諮詢費為150美金，增加了60美金，主要是由於與重新提交ORLynNVAH NDA相關的顧問使用量增加™.
一般和行政費用（單位：千）：
|
|
止九個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
人員相關（包括股份薪酬） |
|
$ |
2,474 |
|
|
$ |
2,741 |
|
|
$ |
(267 |
) |
設施相關和其他 |
|
|
1,640 |
|
|
|
1,970 |
|
|
|
(330 |
) |
專業和諮詢費 |
|
|
1,753 |
|
|
|
1,078 |
|
|
|
675 |
|
一般和行政費用總額 |
|
$ |
5,867 |
|
|
$ |
5,789 |
|
|
$ |
78 |
|
人員相關成本減少了30加元，主要是由於應計花紅減少和股票薪酬費用減少。截至2024年9月30日和2023年9月30日止九個月的人員相關成本包括
28
基於股份的薪酬費用分別為10加元和20加元。設施相關成本和其他成本減少了30加元，主要是由於董事的股份薪酬費用和保險成本減少。截至2024年9月30日和2023年9月30日止九個月的融資相關成本和其他成本包括董事的股份薪酬費用分別為0加元和10加元。專業和諮詢費用增加了70美金，主要是由於法律費用增加以及用於支持商業前活動的顧問增加.
其他（NPS）/收入總額，淨
下表總結了截至2024年和2023年9月30日止九個月的其他（費用）/收入總額（淨額）（以千計）：
|
|
止九個月 |
|
|||||||||
|
|
9月30日， |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
|||
利息開支淨額 |
|
$ |
(1,648 |
) |
|
$ |
(1,023 |
) |
|
$ |
(625 |
) |
衍生品公允價值調整 |
|
|
(1,226 |
) |
|
|
11,361 |
|
|
|
(12,587 |
) |
其他（費用）/收入，淨額 |
|
|
(77 |
) |
|
|
161 |
|
|
|
(238 |
) |
其他（費用）/收入總額，淨額 |
|
$ |
(2,951 |
) |
|
$ |
10,499 |
|
|
$ |
(13,450 |
) |
利息開支淨額
截至2024年9月30日的九個月，利息費用淨增加60加元，主要是由於短期投資和貨幣市場基金的利息收入減少。
衍生品公允價值調整
截至2024年9月30日的九個月內，衍生負債公允價值的調整為120加元。這項非現金調整主要與RLN公允價值因時間的推移而增加有關。
截至2023年9月30日的九個月，衍生負債公允價值的調整為1140日元。這項非現金調整主要與由於管理層下調美國口服舒洛培南銷售收入預測而導致RLN公允價值下降有關。
其他（√）/收入，淨
其他（費用）/收入，淨額包括正常業務過程中根據適用價位變動產生的已實現和未實現外幣損益以及商業單位的分包協議（於2023年8月終止）的分包收入。減少20美金主要與分包收入減少有關。
流動資金及資本資源
自成立以來，我們的運營出現了嚴重的運營虧損和負現金流。到目前為止，我們從與波士頓大學受託人的抗擊抗生素耐藥細菌生物製藥加速器(CARB-X)計劃下的資金安排中獲得的收入有限。到目前為止，我們的業務資金主要來自發行普通股和可轉換優先股、認股權證、根據與SVB的融資安排籌集的債務，包括購買力平價貸款、波士頓大學受託人根據CARB-X計劃授予的子獎勵，以及於2020年1月完成的私募(私募)和隨後的配股(2020年配股)的收益，據此，我們的全資子公司特魯姆治療百慕大有限公司(百慕大)發行並出售了5,180美元萬本金總額的可交換票據和10美元的萬本金總額的RLN。截至2024年9月30日，我們從出售我們的A系列和B系列優先股和普通股獲得的現金收益為19830美元萬，第一次提取我們的SVB貸款的現金收益為1,500美元萬，私募和2020年配股的淨收益為4,500美元萬，提取我們的購買力平價貸款的淨收益為70美元，2020年6月登記的直接發售(2020年6月3日發售)和2020年6月的登記直接發售(2020年6月30日發售)的合併淨收益為860美元萬，以及行使2020年6月30日發行的認股權證的淨萬為180美元。於2020年10月進行的包銷發售(2020年10月發售)所得款項淨額為1,550萬及行使於2020年10月發行的認股權證所得款項淨額為1,390萬；於2021年2月進行的包銷發售(2021年2月)所得款項淨額為4,210萬及行使於2021年2月發行的認股權證所得款項淨額為50萬；於2021年2月進行的登記直接發售(2021年2月登記直接發售)所得款項淨額為3,220萬；以及2024年供股發行所得款項淨額為540萬。
2022年10月7日，我們向美國證券交易委員會提交了S-3表格的通用貨架登記聲明，該聲明於2022年10月17日宣佈生效(第333-267795號檔案)，據此，我們登記出售高達10000美元的債務證券、普通股、優先股、認購權、購買合同、單位和/或認股權證的任何組合，價格和條款由我們決定。於2022年10月7日，吾等與H.C.Wainwright&Co.，LLC(HC Wainwright)作為代理訂立了一項“按市場發售”協定(“銷售協定”)，根據該協定，吾等可不時透過HC Wainwright以經修訂的19證券法頒佈的第415(A)(4)條規則所界定的“按市場發售”的任何方式，發售每股面值0.01美元的普通股，總銷售收益最高可達1600萬(視乎普通股的供應情況而定)。在截至2024年9月30日的九個月內，我們
29
根據銷售協議以每股2.49美金的平均價格出售了3，055，882股普通股，扣除向HC Wainwright收取的20美金佣金後，淨收益為740美金。有關期末後籌集的金額的詳細信息，請參閱附註16 -後續事項。
截至2024年9月30日，我們擁有現金、現金等值物和短期投資為1450日元。
2025年可兌換票據和版稅掛鈎票據
2020年1月21日，我們完成了私募，據此，我們的全資子公司百慕大公司向一群認可投資者發行並出售了5,160美元萬本金總額的可交換票據和10美元的萬本金總額RLN。於2020年9月8日，我們完成供股，據此，百慕大集團向現有股東發行及出售本金總額為20美元的萬可交換票據及本金總額為4美元的萬RLN。可交換票據及RLN以單位出售，每個單位包括一張原始本金為1,000元的可交換票據及50張RLN。這些單位以每單位1,000元的價格出售。在2021年1月21日或之後的任何時間，在符合指定限制的情況下，可交換票據可交換為我們的普通股、現金或普通股和現金的組合，匯率為截至2024年9月30日的可交換票據的本金和利息每1,000美元175.2191股(相當於每股普通股約5.7071美元的交換價)，該匯率從可交換票據的初始匯率每1,000美元本金和利息66.666股(相當於每股普通股約15美元)的初始匯率調整。並鬚根據可交換票據契約的條款作進一步調整。該批可交換債券將於二零二五年一月三十一日到期。自2021年1月21日至2024年9月30日，持有本金總額為40,691美元的可交換票據的某些票據持有人已將其票據兌換為總計3,760,155股我們的普通股，其中包括與該等票據相關的應計和未付利息。截至2024年9月30日，未償還的可交換票據本金總額為11,117美元。RLN使持有者有權根據我們在美國潛在銷售特定舒羅培南產品的淨收入的百分比獲得付款，但須遵守RLN的契約(RLN Indenture)的條款和條件。根據RLN Indenture，根據FDA批准的適應症，RLN的付款將高達此類產品在美國銷售的淨收入的15%或20%。每筆貸款的總金額上限為160.00元(或本金的4,000倍)。在扣除配售代理費和發售費用後，Iterum百慕大從出售這些單位獲得淨收益4,500美元萬。
註冊直接產品
於2020年6月3日，吾等與若干機構投資者訂立證券購買協定(SPA於2020年6月3日)，據此，吾等於2020年6月3日發行及出售合共198,118股普通股，每股面值0.01美元，每股購買價25.2375美元，扣除應付配售代理的費用及吾等應付的其他發售費用後，吾等的總收益為500萬，淨收益為430萬。我們根據我們於2019年7月16日宣佈生效的通用貨架登記表S-3(文件編號333-232569)(2019年貨架登記表)，於2020年6月3日發售普通股。根據2020年6月3日的SPA，在一次同時的私募中，我們向6月3日的購買者發行並出售了認股權證，以購買最多99,057股普通股。交易完成後，認股權證立即可按每股普通股24.30美元的行使價行使，在某些情況下可予調整，並將於2025年12月5日屆滿。2020年6月3日的發行截止日期為2020年6月5日。交易完成後，向該等指定人士發出的認股權證可即時按每股普通股31.5465美元的行使價行使，並將於2025年6月3日屆滿。
於2020年6月30日，吾等與若干機構投資者訂立證券購買協定(SPA於2020年6月30日)，據此，吾等於2020年6月30日發行及出售合共224,845股普通股，每股面值0.01美元，每股收購價22.2375美元，扣除應付配售代理的費用及吾等應付的其他發售費用後，吾等的總收益為500萬，淨收益為420萬。我們根據2019年貨架登記聲明在2020年6月30日發行普通股。根據2020年6月30日的SPA，在同時進行的私募中，我們向6月30日的購買者發行並出售了認股權證，以購買最多112,422股普通股。於交易完成時，認股權證可立即按每股普通股21.30美元的行使價行使，並於2026年1月2日屆滿，在某些情況下可予調整。2020年6月30日的IPO於2020年7月2日結束。交易完成後，向該等指定人士發出的認股權證可即時按每股普通股27.7965美元的行使價行使，並將於2025年6月30日屆滿。
我們根據《2019年貨架登記聲明》於2021年2月登記直接發售普通股。2021年2月註冊的直接發售於2021年2月12日結束。認購81,666股普通股的認股權證，相當於根據二月份SPA發行的普通股總數的7.0%，於二零二一年二月登記直接發售結束時發行予配售代理的指定人士。交易完成後，向該等指定人士發行的認股權證可立即按每股普通股37.50美元的行使價行使，並將於2026年2月9日到期。
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2020年10月發售
於二零二零年十月二十七日，吾等完成於二零二零年十月的發售，出售合共(I)1,034,102股普通股，每股面值0.01美元，(Ii)可行使的預籌資權證，合共760,769股普通股及(Iii)可行使的認股權證，合共1,346,153股普通股。預籌資權證已發行及出售予若干購買者，而該等購買者於二零二零年十月發售時購買普通股，將會導致該購買者連同其聯屬公司及若干關聯方於緊接2020年十月發售完成後實益擁有超過4.99%(或經購買者選擇，9.99%)的已發行普通股(或於購買者選擇時，9.99%)，前提是該購買者選擇以普通股代替原本會導致該超額擁有的普通股。普通股和預籌資權證分別與認股權證一起發售，但普通股和預籌資權證與認股權證分開發行。合併發行價為每股普通股和權證9.75美元，以及每份預籌資權證和權證9.60美元。在扣除配售代理費和我們應付的其他發售費用後，我們從2020年10月發行的淨收益約為1,550萬美元。認股權證在發行時可按每股普通股9.75美元的價格行使，在某些情況下可予調整，並於2025年10月27日到期。預籌資權證在發行時可按每股普通股0.15美元的價格行使，在某些情況下可能會進行調整，並在完全行使時到期，但須受某些條件的限制。所有預先出資的認股權證都已行使，淨收益為11美元萬。關於2020年10月的發行，我們於2020年10月22日與若干機構投資者簽訂了購買協定。採購協定包含我方的慣例陳述和保證、雙方的解約權以及我方的某些賠償義務。認購125,1股普通股的認股權證，相當於2020年10月發售的普通股及預籌資權證總數的7.0%，已於2020年10月發售結束時向配售代理的指定人士發行。於交易完成時，向該等指定人士發出的認股權證可即時按每股普通股12.1875美元的行使價行使，並將於2025年10月22日屆滿。
2021年2月承銷發行
2021年2月3日，我們簽訂了一項承銷協定(承銷協定)，根據該協定，我們以每股17.25美元的公開發行價發行和出售了2,318,840股普通股，每股面值0.01美元。根據2019年貨架登記聲明，我們在2021年2月的包銷發行中提供了普通股。2021年2月的承銷發行於2021年2月8日結束。根據包銷協定，吾等授予承銷商為期30天的選擇權，可按相同條款及條件額外購買最多347,826股普通股，承銷商於2021年2月10日全面行使該選擇權。這使我們在2021年2月的承銷發行中出售的普通股總數增加到2,666,666股，扣除承銷折扣和佣金以及發行費用後，淨收益總額為4,210美元萬。此外，根據包銷協定，吾等同意向承銷商的指定人發行認股權證，以購買186,665股普通股，相當於2021年2月包銷發售的普通股總數的7.0%，包括承銷商購買額外347,826股普通股的選擇權。向承銷商的此類指定人發行的認股權證的行使價為每股普通股21.5625美元，可在發行時行使，將於2026年2月3日到期。
2024年配股
2024年8月9日，我們完成了2024年的配股發行，我們以每整單位1.21美元的認購價出售了總計6,121,965個單位(單位)，其中包括(A)一股普通股，(B)一份購買0.50股普通股的權證，自發行之日起至其到期一年(一年期權證)為止的行使價為每股1.21美元的普通股，以及(C)一股普通股的權證。行使價為每股普通股每股1.21美元，由發行日期起計五年內到期(5年期認股權證及連同1年期認股權證)。扣除配售代理費和我們應支付的其他發售費用後，我們從2024年配股發行中獲得的淨收益約為540萬美元。認股權證於發行時可按每股普通股1.21美元的價格行使，1年權證將於2025年8月9日到期，5年期權證將於2029年8月9日到期。
現金流量
下表總結了我們所列每個期間的現金流（以千計）：
|
|
截至9月30日的九個月， |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
經營活動所用現金淨額 |
|
|
(22,514 |
) |
|
|
(26,487 |
) |
投資活動提供的淨現金 |
|
|
17,108 |
|
|
|
9,813 |
|
融資活動提供的淨現金 |
|
|
12,814 |
|
|
|
445 |
|
價位對現金和現金等值物的影響 |
|
|
(73 |
) |
|
|
(47 |
) |
現金、現金等值物和限制性現金淨增加/（減少） |
|
$ |
7,335 |
|
|
$ |
(16,276 |
) |
31
經營活動
截至2024年9月30日的九個月內，經營活動使用了2250加元現金，原因是我們的淨虧損為1820加元，以及我們的經營資產和負債變化使用的淨現金為1130加元，主要包括應付帳款和應計費用的減少，部分被700加元的非現金費用淨抵消。
截至2023年9月30日的九個月內，經營活動使用了2650加元現金，原因是我們的淨虧損2600加元和淨非現金費用550加元，部分被我們的運營資產和負債變化提供的淨現金抵消510加元，主要包括應付帳款和應計費用的增加。
投資活動
截至2024年9月30日的九個月內，投資活動提供的淨現金為1710加元，與出售短期投資2950加元的收益有關，部分被購買短期投資1240加元的收益所抵消。
截至2023年9月30日的九個月內，投資活動提供的淨現金為980加元，與出售短期投資4580加元的收益有關，部分被購買短期投資3600加元的收益所抵消。
融資活動
截至2024年9月30日的九個月內，融資活動提供的淨現金為1280加元，主要與根據銷售協議出售普通股的淨收益740加元以及2024年供股出售普通股的淨收益540加元有關。
截至2023年9月30日的九個月內，融資活動提供的淨現金為40加元，與根據銷售協議出售普通股40加元的淨收益有關。
資金需求
在2024年1月收到REASSURE試驗的積極數據後，我們的董事會決定，我們應該專注於銷售、許可或以其他方式處置我們對舒洛培南的權利的戰略流程，目標是實現股東價值最大化。結合這一戰略流程，我們聘請了一名財務顧問來協助管理層和董事會評估戰略替代方案。2024年10月收到FDA對ORLY NVAH ™的批准後，重新努力實現戰略交易。如果我們的戰略流程沒有導致任何類型的交易，並且取決於我們籌集足夠資本為運營提供資金的能力，我們預計在我們準備將ORlyNVAH™商業化時將繼續產生巨額費用並增加運營損失。
截至2024年9月30日，我們擁有1,450美元的現金、現金等價物和短期投資萬。我們未來12個月的預期現金使用假設計劃的計劃和支出仍在繼續，我們不會減少或取消部分或全部研發計劃或商業化努力。我們未來的生存能力取決於我們籌集額外資本為我們的運營提供資金的能力。如果沒有額外的外部資金，我們不相信我們現有的現金、現金等價物和短期投資，包括在截至2024年11月4日的期間結束後根據與HC Wainwright的“按市價”協定出售我們的普通股所收到的淨收益，將不能使我們能夠為自本季度報告10-Q表格日期起的未來12個月的運營費用提供資金。因此，我們認為，這種情況會引發人們對我們是否有能力在自本10-Q表格季度報告提交給美國證券交易委員會之日起至少一年內繼續經營的能力產生極大的懷疑。
通貨膨脹通常通過增加勞動力和某些服務的成本來影響我們。我們認為通貨膨脹對我們10-Q表格季度報告中其他部分的財務報表沒有產生重大影響。然而，美國最近經歷了歷史高位的通貨膨脹。如果通貨膨脹率繼續上升，可能會影響我們的費用，例如由於勞動力和用品成本增加而導致的員工薪酬和研發費用。此外，美國正在經歷勞動力短缺，這反過來創造了一個有競爭力的薪津環境，這也可能增加我們未來的運營成本。
如果我們：
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由於與候選藥品的研究、開發和商業化相關的眾多風險和不確定性，我們無法估計運營資金需求的確切金額。我們未來的短期和長期資金需求將取決於許多因素，包括：
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在我們能夠產生足以實現盈利的產品收入之前，我們預計將通過公開或私募股權發行、債務融資、合作協定、其他第三方資金、戰略聯盟、許可安排、營銷和分銷安排或政府資金來滿足我們的現金需求。通脹加劇、資本市場波動、利率和貨幣匯率波動、任何潛在的經濟放緩或衰退，包括貿易戰或國內或政治動亂(如烏克蘭與俄羅斯、以色列與哈馬斯之間持續的衝突)導致的全球和國內資本市場的混亂和波動，可能會增加資本成本，限制我們獲得資本的能力。如果我們通過出售股權或可轉換債務證券籌集額外資本，我們股東的所有權權益將被稀釋，這些證券的條款可能包括清算或其他對我們普通股東權利產生不利影響的優惠。債務融資和優先股融資可能涉及的協定包括限制或限制我們採取具體行動的能力的契約，例如招致額外債務、進行資本支出或宣佈股息。RLN、可交換票據及吾等就私募而訂立的投資者權利協定均對吾等施加營運及其他限制。這些限制影響並在許多情況下限制或禁止我們處置某些資產、支付股息、產生額外債務、變更控制權以及達成某些合作、戰略聯盟或其他類似夥伴關係等的能力。如果我們通過其他第三方資金、合作協定、戰略聯盟、許可安排或營銷和分銷安排籌集額外資金，我們可能不得不放棄對我們的技術、未來收入來源、研究計劃或候選產品的寶貴權利，或者以可能對我們不利的條款授予許可證。如果我們無法在需要時通過股權或債務融資籌集更多資金，我們可能會被要求推遲、限制、減少或終止我們的產品開發或未來的商業化努力，或者授予我們開發和營銷我們本來更願意開發和營銷的產品或候選產品的權利。此外，如上所述，我們正在評估我們的公司、戰略、財務和融資備選方案，目標是為我們的股東實現價值最大化，同時謹慎地管理我們的剩餘資源。
合同義務和承諾
根據輝瑞許可證，我們同意支付某些監管和銷售里程碑付款，包括在FDA批准口服舒洛培南後支付2000美金的監管里程碑付款。2024年10月25日，公司獲得FDA批准ORLY NVAH ™，用於治療指定微生物引起的簡單尿路感染 大腸埃希菌、肺炎克雷伯菌、或奇異變形桿菌適用於具有有限或沒有替代口腔抗菌治療選擇的成年女性。2024年10月28日，該公司通知輝瑞公司，其選擇將里程碑付款推遲兩年或推遲至2026年10月25日（推遲期），並根據輝瑞許可條款的允許，向輝瑞交付了一份由ATL發行的金額相當於里程碑付款的商業本票（「票據」）。
該票據的利息按每日複利基準計算，年利率為8%(8%)，直至全數支付，並於2026年10月25日到期。ITIL有權隨時預付票據的未付本金餘額以及應計和未付利息，而無需支付溢價或罰款。根據該票據的條款，國際信託投資公司可(I)將該票據轉讓予國際信託公司的一間聯營公司；(Ii)指定其一名聯屬公司履行其在該票據下的責任；或(Iii)在控制權發生變更的情況下轉讓該票據，惟在第(I)及(Ii)條的情況下，國際信託投資公司並不獲解除該票據項下的任何責任。根據輝瑞許可證的條款，如果ITIL或本公司的控制權在延期期間發生變更，輝瑞可憑其唯一酌情權和唯一選擇權宣佈里程碑付款立即到期並與票據下的所有應計利息一起支付。根據ITIL、本公司和輝瑞於2015年11月18日就輝瑞許可證達成的擔保，本公司已擔保ITIL根據輝瑞許可證條款應支付的所有金額，包括票據項下的欠款。
我們仍然有義務支付與超過一定閾值的子許可收入相關的潛在一次性付款。我們還有義務在每種產品類型實現淨銷售額從25000加元到10加元不等時支付輝瑞銷售里程碑，並根據每種許可產品的邊際淨銷售額支付個位數到十幾分百分比的特許權使用費。
根據RLN Indenture，RLN的持有者將有權僅根據我們在美國銷售指定的舒羅培南產品的淨收入的百分比(指定的淨收入)獲得付款。付款將在每個六個月的付款測量期(付款測量期)結束後75天內到期，自2020年6月30日結束的付款測量期開始，直至(I)已就RLN支付“最大回報”(如下所述)，或(Ii)“結束日期”發生，即2045年12月31日，或(Iii)2025年12月31日，如果我們尚未收到FDA對一個或多個指定舒羅培南產品的批准。在每個支付測算期內，所有RLN的支付總額將等於在該期間賺取的指定淨收入總額與適用的支付率(支付率)的乘積，該支付率(支付率)是根據哪些指定的舒羅培南產品獲得FDA批准而確定的。付款率將基於RLN的最大本金金額，並將等於(I)高達15%，如果我們或我們的一家附屬公司
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獲得FDA批准使用指定舒洛培南產品治療uUTI，以及（ii）如果我們或我們的一家附屬公司已獲得FDA批准使用指定舒洛培南產品治療cUTI，但尚未獲得FDA批准治療uUTI，則最高可達20%。截至2024年6月30日的付款計量期，每個付款計量期均沒有到期付款。在結束日期之前，我們有義務從指定淨收入中對RLN付款，直到每個RLN收到相當於160.00美金（或該RLN本金額的4，000倍）的付款（最大回報）。
我們的經營租賃義務主要包括辦公空間付款，這在本10-Q表格季度報告中包含的簡明綜合財務報表注釋7中進一步描述。2024年9月30日起一年內到期的經營租賃義務的未來合同付款為20加元，並且自2024年9月30日起不存在超過一年到期的經營租賃義務的未來合同付款。
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項目3.定量和定性披露有關市場風險的信息。
截至2024年9月30日，我們擁有1450日元的現金、現金等值物和短期投資，包括現金、貨幣市場基金和美國國債。我們投資活動的主要目標是在不顯著增加風險的情況下保留本金、提供流動性和最大化收入。我們因對有價證券的投資而面臨利率風險。隨著利率變化，與這些證券相關的未實現損益將相應波動。利率立即上升100個基點將導致截至2024年9月30日我們投資組合的公平市值減少1加元。只有當我們在到期前出售投資時，此類損失才會實現。
我們與全球的CROs和CMO簽訂合同。我們可能會受到與某些此類協議相關的外幣價位波動的影響。以功能貨幣以外的貨幣計價的交易根據交易發生時的價位記錄。截至2024年9月30日和2023年12月31日，我們幾乎所有負債均以美金計價。已實現的淨外幣損益並未對我們截至2024年9月30日和2023年9月30日或截至2023年12月31日止年度的經營運績產生重大影響。我們目前沒有針對外幣價位風險進行任何對沖活動。
通貨膨脹通常通過增加勞動力成本以及研究、製造和開發成本來影響我們。我們認為，通貨膨脹並未對我們10-Q表格季度報告中其他部分的財務報表產生重大影響。然而，我們的運營未來可能會受到通貨膨脹的不利影響。
項目4.控制 和程式
披露控制和程式的評估
我們的管理層在我們的首席執行官和首席財務官(分別是我們的首席執行官和首席財務官)的參與下，評估了截至2024年9月30日我們的披露控制和程式的有效性。1934年修訂後的《證券交易法》或《交易法》下的第13a-15(E)和15d-15(E)條規則中定義的“披露控制和程式”一詞，是指公司的控制和其他程式，旨在確保公司在根據交易法提交或提交的報告中要求披露的資訊在美國證券交易委員會規則和表格指定的時間段內得到記錄、處理、匯總和報告。披露控制和程式包括但不限於控制和程式，旨在確保公司根據《交易所法》提交或提交的報告中要求披露的資訊得到積累，並酌情傳達給公司管理層，包括其主要高管和主要財務官，以便及時做出關於要求披露的決定。管理層認識到，任何控制和程式，無論設計和操作得多麼好，都只能為實現其目標提供合理的保證，管理部門在評估可能的控制和程式的成本-效益關係時必須運用其判斷。根據對我們截至2024年9月30日的披露控制和程式的評估，我們的首席執行官和首席財務官得出結論，截至該日期，我們的披露控制和程式在合理的保證水準下是有效的。
財務報告內部控制的變化
截至2024年9月30日的三個月內，我們對財務報告的內部控制（定義見《交易法》第13 a-15（f）條和第15 d-15（f）條）沒有發生對我們對財務報告的內部控制產生重大影響或合理可能產生重大影響的變化。
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第二部分-其他信息
項目1.法律訴訟
在正常業務過程中，公司不時受到各種索賠、指控和訴訟。我們目前不是任何重大法律訴訟的一方，我們也不知道有任何針對我們的未決或威脅訴訟，我們認為這些訴訟可能會對我們的業務、經營運績或財務狀況產生重大不利影響。
項目1A.危險因素.
在評估我們的公司和業務時，除了本10-Q表格季度報告和我們向美國證券交易委員會（SEC）提交的其他文件中列出的其他信息外，還應仔細考慮以下風險因素。投資我們的普通股涉及很高的風險。如果以下風險因素中描述的任何事件以及本季度報告中其他地方描述的風險實際發生，我們的業務、財務狀況、運營運績和未來增長前景可能會受到重大不利影響。在這種情況下，我們普通股的市場價格可能會下跌，您可能會失去全部或部分投資。
與我們戰略選擇評估相關的風險
我們對戰略替代方案的探索和追求可能不會成功。
我們的董事會在2024年1月收到REASSURE臨床試驗的積極數據後，決定我們應該專注於銷售、許可或以其他方式處置我們對舒洛培南的權利的戰略流程，目標是最大化利益相關者價值。結合這一戰略流程，我們聘請了一名財務顧問來協助管理層和董事會評估戰略替代方案。2024年10月收到FDA對ORLY NVAH ™的批准後，重新努力實現戰略交易。
儘管我們計劃投入大量精力來識別和評估潛在的戰略選擇，但該過程可能不會導致任何最終報價來完成此類交易，或者，如果我們收到此類最終報價，條款可能不如預期那麼有利，或者可能不會導致最終協議的執行或批准。即使我們達成最終協議，我們也可能無法成功完成交易，或者如果我們完成此類交易，可能無法增強股東價值或帶來預期利益。如果我們無法籌集足夠的資本來資助我們的運營，同時我們評估我們的戰略選擇，並在可能的情況下完成交易，或確定可行的戰略選擇，我們的董事會可能會確定，清算和解散我們的業務得到股東批准是尋求股東價值最大化的最佳方法。
如果我們未能成功確定戰略選擇，或者如果確定了此類戰略選擇，完成此類交易，我們的董事會可能會決定尋求清算和解散我們的業務。在這種情況下，可分配給股東的現金數量（如果有的話）將在很大程度上取決於清算的時間以及需要為承諾和或有負債保留的現金數量。
無法保證為我們的業務確定戰略替代方案的過程將導致交易成功完成。如果我們無法確定可行的戰略選擇，或者此類交易沒有及時完成，或者我們無法籌集足夠的資本來資助運營並將ORLY NVAH ™商業化，我們的董事會可能會確定，清算和解散我們的業務是股東批准的最佳方法。在這種情況下，可供分配給股東的現金數量（如果有的話）將在很大程度上取決於此類決定以及最終清算的時間，因為隨著我們在評估戰略選擇的同時為我們的運營提供資金，可供分配的現金數量將繼續減少。
此外，如果我們的董事會批准並建議，而且我們的股東也批准解散和清算我們的業務，那麼根據愛爾蘭公司法，我們將被要求進行（除了支付清算費用外）支付我們的未償義務，包括我們的可交換票據項下的義務和欠輝瑞的金額，以及為或有和未知義務做出合理準備，在向我們的股東進行任何清算分配之前。由於這一要求，我們可能需要保留一部分資產，以等待履行此類義務。此外，我們可能會面臨與業務清算和解散相關的訴訟或其他索賠。如果進行清算和解散，我們的董事會將需要與其法律和財務顧問協商，評估這些事項並確定合理的儲備金額。
因此，如果我們公司清算和解散，我們普通股和其他證券的持有人可能會失去全部或大部分投資。
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與我們的財務狀況和資本要求相關的風險
我們已經確定了一些條件和事件，這些情況和事件使人對我們作為一家持續經營的企業繼續下去的能力產生了極大的懷疑。
如果我們無法獲得額外的資金來支持我們目前的運營計劃，我們可能會被迫推遲或縮小我們的開發計劃的範圍和/或限制或停止我們的運營。我們已經確定了一些條件和事件，這些情況和事件使人對我們作為一家持續經營的企業繼續下去的能力產生了極大的懷疑。截至2024年9月30日，我們擁有1,450美元的現金、現金等價物和短期投資萬。根據我們的可用現金資源，包括根據2022年10月7日與H.C.Wainwright&Co.，LLC(HC Wainwright)簽訂的一項“按市場發售”協定(銷售協定)在期末後籌集的金額，根據該協定，我們可以發售普通股，根據該協定，我們可以發售普通股，每股面值0.01美元，總銷售收入最高可達1600萬美元(取決於普通股的可用性)，吾等不時透過HC Wainwright，以任何被視為根據19證券法(經修訂)頒佈的第415(A)(4)條所界定的“在市場發售”的方法，使吾等不相信吾等現有的現金、現金等價物及短期投資將使吾等能夠自提交本10-Q表格季度報告之日起，為未來12個月的營運開支提供資金。
這種情況對我們在本季度報告中其他部分包含的財務報表發布之日起一年內繼續經營的能力產生了重大懷疑。管理層在這方面的計劃在本季度報告10-Q表格其他地方包含的簡明財務報表的注釋1中進行了描述。然而，儘管管理層打算尋求獲得額外資金為其運營提供資金的計劃，而且該公司過去曾成功籌集資金，但無法保證我們將以我們可以接受的條款成功獲得足夠的資金來資助持續運營（如果有的話）。如果這些計劃無法有效實現，我們無法保證我們能夠繼續經營。
自成立以來，我們每年都出現淨虧損，預計除非我們成功將舒洛培南計劃商業化，否則我們將繼續出現重大虧損。
我們的運營歷史有限，沒有產生任何產品收入，並且自2015年成立以來每年都出現淨虧損。截至2024年9月30日，我們的累計赤字為47950日元，現金及現金等值物為1340日元，短期投資為110日元。2024年10月25日，我們收到了ORLY NVAH ™（舒洛培南依查羅辛和丙西尼）的新藥申請（NDA）批准，用於治療指定微生物引起的無併發症尿路感染（uUTI） 肺炎克雷伯氏菌，或者 奇異變形桿菌 對於美國食品和藥物管理局（FDA）提供有限或沒有替代口腔抗菌治療選擇的成年女性.
到目前為止，我們主要通過發行普通股和可轉換優先股、預先融資的認股權證和認股權證、根據與矽谷銀行(SVB)的融資安排籌集的債務、波士頓大學受託人根據打擊抗生素耐藥細菌生物藥物加速器(CARB-X)計劃獲得的次級獎勵以及於2020年1月結束的私募收益(私募)和隨後的配股發行(2020配股)為我們的運營提供資金，根據該配股，我們的全資子公司Iterum治療百慕大有限公司(Iterum百慕大)出售了由(I)可交換票據組成的單位(Units)；及(Ii)向若干現有及新投資者發行有限追索權使用費掛鉤附屬債券(RLN及連同可交換債券，該證券)。於2018年4月，我們與SVB簽訂了一項擔保信貸安排，並根據一項貸款和擔保協定初步提取了1,500美元萬。2020年4月，我們與SVB簽訂了一份70美元的Paycheck保護計劃下的票據(購買力平價貸款)萬。於2020年6月初，我們以登記直接發售(2020年6月3日發售)的方式發行及出售普通股，總收益為500萬，扣除應付予配售代理的費用及本公司應付的其他發售費用後，淨收益為430美元萬。於2020年6月下旬，本公司以登記直接發售(2020年6月30日發售)的方式發行及出售普通股，總收益為500萬，扣除應付配售代理的費用及本公司應付的其他發售費用後，淨收益為420美元萬。於2020年10月，吾等於登記公開發售(2020年10月發售)發行及出售普通股及可行使普通股的預籌資權證，每份連同可行使普通股的認股權證，在扣除應付予配售代理的費用及吾等應付的其他發售費用後，向吾等發行的總收益為1,740萬，淨收益為1,550萬。於2021年2月8日及2月10日，吾等根據一項承銷協定幷包括承銷商全面行使其購買額外普通股的選擇權(2021年2月承銷發售)，發行及出售普通股，扣除應付承銷商的費用及吾等應付的其他發售費用後，吾等的總收益為4,600萬，淨收益為4,210美元萬。2021年2月12日，我們在登記公開發售(2021年2月登記直接發售)中發行和出售普通股，總收益為3,500萬，扣除應支付給配售代理的費用和我們應支付的其他發售費用後的淨收益為3,220美元萬。於2022年10月7日，吾等與HC Wainwright作為代理訂立銷售協定，據此，吾等可不時透過HC Wainwright以任何經修訂的證券法下頒佈的第415(A)(4)條規則所界定的“按市場發售”的方式，不時透過HC Wainwright發售及出售每股面值0.01美元的普通股，總銷售收益最高可達1600萬(視乎普通股是否可用)。於截至2024年9月30日止期間，吾等根據出售協定按每股平均價2.49美元出售3,055,882股普通股，所得款項淨額為740美元萬。自.起
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2024年9月30日，已從行使作為2020年6月30日發行、2020年10月發行和2021年2月承銷發行的某些認購證中收到1620美金的淨收益。我們已將所有的財政資源和精力投入到舒洛Penem項目的研究和開發，包括臨床前和臨床開發。
在2021年7月收到FDA關於口服舒羅培南的NDA(CRL)的完整回復函後，為了減少運營費用和節省現金資源，我們停止了任何剩餘的口服舒羅培南的商業前活動，並限制了與重新提交NDA相關的必要費用的支出。在我們的臨床試驗中收到了積極的數據，即對耐藥腸桿菌引起的UUTI中舒羅培南的重新評估(放心)，比較了口服舒羅培南和Augentin®(阿莫西林/克拉維酸鹽)在Augentin®易感人群中的作用後，我們的董事會決定，我們應該專注於出售、許可或以其他方式處置我們的舒羅培南權利的戰略過程，目標是最大化股東價值。在這一戰略過程中，我們聘請了一名財務顧問來協助管理層和董事會評估戰略選擇。在2024年10月收到食品和藥物管理局對ORLYNVAH™的批准後，實現戰略交易的努力已經重新開始。然而，我們不能就這一戰略進程何時或是否會導致任何類型的交易做出任何承諾，也不能保證我們將尋求潛在的出售、許可安排或其他處置我們對舒羅培南的權利。如果我們的戰略流程沒有導致任何類型的交易，並取決於我們籌集足夠資本為運營提供資金的能力，我們預計將繼續招致巨額費用和不斷增加的運營虧損，因為我們準備將ORLYNVAH™商業化，如果臨床試驗成功，尋求其他候選產品的上市批准，並參與並繼續開發我們的舒羅培南計劃的更多適應症，包括臨床前和臨床開發。我們的支出也將大幅增加，如果我們：
我們將需要額外的資本來資助我們的運營。如果我們未能在需要時或以可接受的條款獲得融資，我們可能會被迫推遲、減少或取消我們的產品開發計劃或商業化工作。
開發醫藥產品是一個耗時、昂貴和不確定的過程，需要數年時間才能完成。我們現在專注於出售、許可或以其他方式處置我們對ORLYNVAH™的權利的戰略過程，目標是最大化利益相關者價值，並聘請了一名財務顧問來協助管理層和董事會評估戰略選擇。然而，我們不能就這一戰略進程何時或是否會導致任何類型的交易做出任何承諾，也不能保證我們將決定進行潛在的出售、許可安排或其他處置我們對舒羅培南的權利。如果我們的戰略進程沒有導致任何類型的交易，並且取決於我們籌集足夠資本為運營提供資金的能力，我們預計將繼續產生與我們正在進行的活動相關的巨額費用和不斷增加的運營虧損，包括為ORLYNVAH™的商業推出做準備可能產生的任何費用。此外，未償還可交換票據的本金和利息將於2025年1月31日到期。
我們將被要求通過公開或私募股權發行、債務融資、合作和許可安排或其他來源獲得進一步的資金。我們可能無法以可接受的條款或根本無法獲得足夠的額外融資。
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Although we have successfully raised capital in the past, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
In the event our strategic process does not result in any type of transaction, we expect that additional capital will be required as we incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution for ORLYNVAH™. Our failure to raise capital as and when needed would have a negative effect on our financial condition and our ability to develop and commercialize our sulopenem program and otherwise pursue our business strategy. If we fail to obtain financing when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts, which would have a negative effect on our financial condition and our ability to develop and commercialize our sulopenem program and otherwise pursue our business strategy and we may be unable to continue as a going concern.
Changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. Our future funding requirements, both short-term and long-term, will depend on many factors, including:
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Our financial statements include substantial non-operating gains or losses resulting from required quarterly revaluation under generally accepted accounting principles of our outstanding derivative instruments.
Generally accepted accounting principles in the United States require that we report the value of certain derivatives in instruments we have issued as liabilities on our balance sheet and report changes in the value of these derivatives as non-operating gains or losses on our statement of operations. The value of the derivatives is required to be recalculated (and resulting non-operating gains or losses reflected in our statement of operations and resulting adjustments to the associated liability amounts reflected on our balance sheet) on a quarterly basis. The valuations are based upon a number of factors and estimates, including estimates based upon management’s judgment. Certain of the derivative values are directly correlated to the value of our ordinary shares. Due to the nature of the required calculations and the large number of ordinary shares involved in such calculations, changes in our share price and/or changes in management’s assumptions may result in significant changes in the value of the derivatives and resulting gains and losses on our statement of operations.
Provisions in the EN Indenture and RLN Indenture may deter or prevent us from raising additional capital to fund our operations or entering into a strategic transaction to sell, license, or otherwise dispose of our rights to sulopenem.
Provisions in the agreements we entered into in connection with our financings may deter or prevent us from raising additional capital to fund our operations as and when needed. For example, the indenture governing the Exchangeable Notes (the EN Indenture) contains negative covenants prohibiting our wholly owned subsidiary, Iterum Therapeutics Bermuda Limited (Iterum Bermuda), as well as us and our wholly owned subsidiaries and their subsidiaries (the Guarantors), who guaranteed Iterum Bermuda’s obligations under the Exchangeable Notes, from, among other things, incurring any indebtedness that is not permitted by the EN Indenture and entering into transactions with significant shareholders (as defined in the EN Indenture). In addition, the indenture governing the RLNs (the RLN Indenture) contains negative covenants prohibiting Iterum Bermuda and the Guarantors from, among other things, selling, transferring or assigning certain assets and taking other actions outside the ordinary course of business that would reasonably be expected to reduce the amount of payments under the RLNs.
These provisions could deter or prevent us from raising additional capital or entering into a strategic transaction to sell, license, or otherwise dispose of our rights to sulopenem. Our failure to raise capital as and when needed would have a negative effect on our financial condition and our ability to develop and commercialize our sulopenem program and otherwise pursue our business strategy. Furthermore, our inability to consummate a strategic transaction to sell, license, or otherwise dispose of our rights to sulopenem could impact our ability to maximize shareholder value.
We are heavily dependent on the success of our sulopenem program, and our ability to successfully commercialize ORLYNVAH™ and to develop, obtain marketing approval for and successfully commercialize sulopenem. If we are unable to achieve and sustain profitability, the market value of our ordinary shares will likely decline.
Our ability to become and remain profitable depends on our ability to generate revenue. To date, we have invested substantially all of our efforts and financial resources in the development of ORLYNVAH™ and Isulopenem. Our prospects, including our ability to finance our operations and generate revenue from product sales, currently depend entirely on the development and commercialization of ORLYNVAH™. After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of our rights to sulopenem.
We do not expect to generate significant revenue unless and until we commercialize ORLYNVAH™ and obtain marketing approval for, and commercialize, sulopenem. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. Our ability to generate future revenue from product sales will require us to be successful in a range of challenging clinical and commercial activities, including:
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Because of the numerous risks and uncertainties associated with developing and commercializing pharmaceutical products, we are unable to predict the extent of any future losses or when, or if, we will become profitable. We may never succeed in any or all of these activities and, even if we do, we may never generate revenue that is significant or large enough to achieve profitability. Our expenses could increase if we are required by the FDA, the European Medicines Agency (EMA), or any comparable foreign regulatory authority, to perform different studies or studies in addition to those currently expected or if there are any delays in completing such studies or with the development of our sulopenem program or any future product candidates. We anticipate that significant costs will be associated with the commercial launch of ORLYNVAH™ and/or sulopenem in additional indications, if approved for commercial sale. Where we enter into collaboration arrangements with third-party collaborators for commercialization of ORLYNVAH™ or other product candidates, our product revenues or the profitability of these product revenues to us would likely be lower than if we were to directly market and sell products in those markets.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company could cause our shareholders to lose all or part of their investment.
Our indebtedness imposes certain operating and other restrictions on us and could adversely affect our ability to raise additional capital.
The EN Indenture and the RLN Indenture each contain affirmative and negative covenants which impose operating and other restrictions on us, including, among other things, incurring any indebtedness that is not permitted by the EN Indenture or amending the terms of any subordinated indebtedness, entering into strategic transactions or transferring any material assets and undergoing a change of control transaction (subject to certain exceptions, including in the case of a change of control transaction, a transaction in which each holder of an outstanding Exchangeable Note receives cash consideration of at least 300% of the outstanding principal amount of such Exchangeable Notes). For example, pursuant to the EN Indenture, we are required to obtain the consent of a portion of the holders of the Exchangeable Notes prior to entering into collaboration agreements, exclusive selling arrangements or similar partnerships including a definitive agreement for commercialization services in the United States. Failure to comply with these terms could result in an event of default which could lead, among other things, to an acceleration of amounts due under the EN Indenture and the obligation to pay default interest. Moreover, obtaining a consent to a waiver of these terms is subject to a veto right of the holders of 30% of the outstanding Exchangeable Notes, in the case of the EN Indenture, and 30% of the outstanding RLNs, in the case of the RLN Indenture, and must include Sarissa Capital Offshore Master Fund LP, Sarissa Capital Catapult Fund LLC and Sarissa Capital Hawkeye Fund LP (collectively with their affiliates, Sarissa) so long as Sarissa and its affiliates own at least 10% of the outstanding RLNs. This veto right could make it more difficult for us to obtain a waiver than would otherwise be the case. In addition, the rate at which the Exchangeable Notes are exchangeable for our ordinary shares is subject to adjustment, including pursuant to anti-dilution protections. For example, following the closing of the 2024 Rights Offering on August 9, 2024, the exchange rate of the Exchangeable Notes increased and, effective as of August 15, 2024, the exchange price of the Exchangeable Notes was $5.7071 per ordinary share (at an adjusted exchange rate of 175.2191 shares per $1,000 of principal and interest on the Exchangeable Notes). As of August 9, 2024, $11.1 million aggregate principal amount of Exchangeable Notes remained outstanding.
Depending on the public offering prices, the number of shares that we sell pursuant to our Sales Agreement with HC Wainwright as agent and any potential increase to the exchange rate of the Exchangeable Notes, we may not have sufficient authorized share capital or share issuance authorities to convert all of the Exchangeable Notes into ordinary shares following any sales of shares pursuant to the Sales Agreement and could be required to settle any exchanges with cash to the extent we do not have available authorized shares. If we elect to settle any exchanges in cash, or we do not have authorized and available ordinary shares needed to satisfy physical exchange of the Exchangeable Notes, our liquidity could be adversely affected and/or we may not have sufficient cash available at that time to satisfy such cash settlement. In addition, in the event we elect to settle exchanges of Exchangeable Notes with ordinary shares, we would be limited in our ability to issue equity for other purposes which could adversely affect our shareholders and our ability to raise additional capital. During the nine months ended September 30, 2024, the Company sold 3,055,882 ordinary shares under the “at the market” agreement at an average price of $2.49 per share for net proceeds of $7.4 million.
In addition, the exercise price and the number of shares issuable under our outstanding warrants are subject to adjustment pursuant to the terms of the applicable warrant. This indebtedness could make it more difficult for us to raise additional capital to fund our operations.
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Servicing our indebtedness will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.
Our ability to make payments of the principal of, to pay interest and special interest on the Exchangeable Notes, or to make cash payments, if we so elect, in connection with any exchange of Exchangeable Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow sufficient to service the Exchangeable Notes or other indebtedness and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Additionally, we may not be able to efficiently and cost effectively engage in equity-capital raising prior to January 31, 2025, when principal and interest on the outstanding Exchangeable Notes become due.
We may incur substantially more debt or take other actions that would intensify the risks discussed above.
We and our subsidiaries may be able to incur substantial additional debt in the future, subject to the restrictions contained in our current and future debt instruments, some of which may be secured debt. While the EN Indenture restricts our ability to incur additional indebtedness, it allows for certain additional indebtedness and any such restrictions may be waived. If new debt is added to our current debt levels, the related risks that we now face could intensify.
We may not have the ability to raise the funds necessary to settle exchanges of the Exchangeable Notes in cash or to repurchase the Exchangeable Notes upon a fundamental change, and our future debt may limit our ability to pay cash upon exchange or repurchase of the Exchangeable Notes.
Holders of the Exchangeable Notes will have the right to require us to repurchase all or a portion of their Exchangeable Notes upon the occurrence of a fundamental change at specified repurchase prices. In addition, upon exchange of the Exchangeable Notes, unless we elect to deliver solely ordinary shares to settle such exchange (other than paying cash in lieu of delivering any fractional share), we would be required to make specified cash payments in respect of the Exchangeable Notes being exchanged. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Exchangeable Notes surrendered therefor or to pay cash with respect to Exchangeable Notes being exchanged. For example, while we expect that our current cash, cash equivalents and short-term investments, including amounts raised subsequent to the period-end under the Sales Agreement, will be sufficient to fund our operations into 2025, including through the repayment date of the Exchangeable Notes, we cannot guarantee the accuracy of our expectations regarding how far into the future our cash on hand will fund our ongoing operations. Our ability to repurchase or to pay cash upon exchange of the Exchangeable Notes may also be limited by law, regulatory authority, and future indebtedness.
Our failure to repurchase Exchangeable Notes at a time when the repurchase is required by the EN Indenture or to pay cash upon exchange of the Exchangeable Notes as required by the EN Indenture would constitute a default under the EN Indenture. A default under the EN Indenture or a fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and any accrued and unpaid interest and repurchase the Exchangeable Notes or to pay cash upon exchange of the Exchangeable Notes. As of September 30, 2024, $11.1 million aggregate principal amount of Exchangeable Notes remained outstanding.
The exchange feature of the Exchangeable Notes may adversely affect our financial condition and operating results.
Beginning January 21, 2021 and prior to the earlier of (i) the close of business on the scheduled trading day immediately preceding a mandatory exchange notice for the Exchangeable Notes, which would be triggered by the occurrence of any of certain mandatory exchange trigger events specified in the EN Indenture, and (ii) the close of business on the second scheduled trading day immediately preceding the interest record date, holders of Exchangeable Notes are entitled to exchange the Exchangeable Notes at any time at their option. If holders continue to elect to exchange their Exchangeable Notes, unless we elect to satisfy our exchange obligation by delivering solely ordinary shares (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our exchange obligation in cash, which could adversely affect our liquidity. The relevant accounting rules require that we recognize liabilities which appropriately reflect our obligations specified in the EN Indenture. Therefore, even if holders do not elect to exchange their Exchangeable Notes, our liabilities and statement of operations could be significantly impacted.
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Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Unless and until we can generate a substantial amount of revenue from our sulopenem program or future product candidates, we expect to finance our future cash needs through equity offerings, debt financings, collaboration agreements, other third-party funding, strategic alliances, licensing arrangements, marketing and distribution arrangements or government funding.
We may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.
On October 7, 2022, we filed a universal shelf registration statement on Form S-3 with the SEC, which was declared effective on October 17, 2022 (File No. 333-267795), and pursuant to which we registered for sale up to $100.0 million of any combination of our debt securities, ordinary shares, preferred shares, subscription rights, purchase contracts, units and/or warrants from time to time and at prices and on terms that we may determine. The extent to which we are able to utilize a shelf registration statement as a source of funding will depend on a number of factors, including the prevailing market price of our ordinary shares, general market conditions and applicability of restrictions on our ability to utilize the shelf registration statement to sell more than one-third of the market value of our public float, meaning the aggregate market value of voting and non-voting ordinary shares held by non-affiliates, in any trailing 12-month period.
On October 7, 2022, we entered into the Sales Agreement with HC Wainwright, as agent, pursuant to which we may offer and sell ordinary shares, nominal value $0.01 per share for aggregate gross sales proceeds of up to $16.0 million (not to exceed 4,478,180), from time to time through HC Wainwright, by any method permitted that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended.
Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our ordinary shares to decline, and our shareholders may not agree with our financing plans or the terms of such financings. To the extent that we raise additional capital through the sale of ordinary shares, convertible securities or other equity securities, the ownership interests of our then existing shareholders may be materially diluted, and the terms of these securities could include liquidation or other preferences and antidilution protections that could adversely affect the rights of our then existing shareholders. Further debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely affect our ability to conduct our business. In addition, securing additional financing would require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
While we received approval for ORLYNVAH™ for the treatment of uUTIs caused by the designated microorganisms Escherichia coli, Klebsiella pneumoniae, or Proteus mirabilis in adult women who have limited or no alternative oral antibacterial treatment options, due to a variety of factors, including those described in this “Risk Factors” section, we may nonetheless be delayed in obtaining or ultimately be unable to obtain FDA approval for sulopenem in additional indications or for any other product or to successfully commercialize ORLYNVAH™.
Because we have limited financial resources, we initially focused our sulopenem development program on the specific indications of uUTI, complicated urinary tract infections (cUTI) and complicated intra-abdominal infections (cIAI), all of which are focused on what we believe to be the most pressing near-term medical needs, in terms of both their potential for marketing approval and commercialization. As a result, we may forego or delay pursuit of opportunities with other potential product candidates or developing our sulopenem program in other indications that may prove to have greater commercial potential. For example, while we believe that sulopenem has the potential to treat cIAIs and cUTIs in humans based on the results of prior preclinical studies and clinical trials, sulopenem did not meet the primary endpoint of statistical non-inferiority compared to the control therapy in our Phase 3 cIAI and cUTI clinical trials. While we believe the secondary supporting analyses and safety data in all three prior Phase 3 clinical trials support the potential of sulopenem in the treatment of multi-drug resistant infections, we cannot guarantee that these supporting analyses are indicative of efficacy of sulopenem in treating cIAIs or cUTIs.
Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other
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royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.
We have broad discretion in the use of our funds and may not use them effectively.
We have broad discretion in the application of our available funds and could spend the funds in ways that do not improve our results of operations or enhance the value of our ordinary shares. Our failure to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our ordinary shares to decline and delay the development of our product candidates. Pending their use, we may invest funds in a manner that does not produce income or that loses value.
We hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.
We hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in these accounts typically exceeds the Federal Deposit Insurance Corporation (FDIC), standard deposit insurance limit or similar government guarantee schemes. If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds. Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations.
For example, on March 10, 2023, Silicon Valley Bank (SVB), and Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank. The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States Department of the Treasury, the Federal Reserve and the FDIC. If financial institutions in which we hold funds for working capital and operating expenses were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our uninsured deposits in a similar manner.
We also maintain investment accounts with other financial institutions in which we hold our investments and, if access to the funds we use for working capital and operating expenses is impaired, we may not be able to open new operating accounts or to sell investments or transfer funds from our investment accounts to new operating accounts on a timely basis sufficient to meet our operating expense obligations.
Risks Related to Product Development and Commercialization
In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Should we seek to commercialize ORLYNVAH™, we are heavily dependent on the success of ORLYNVAH™, which the FDA has approved for the treatment of uncomplicated urinary tract infections (uUTIs) caused by certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options. Any failure to successfully commercialize ORLYNVAH™ or inability to obtain marketing approval for any other product candidates, or significant delays in doing so, will materially harm our business.
We have invested a significant portion of our efforts and financial resources in the development of ORLYNVAH™. After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of our rights to sulopenem. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. There remains a significant risk that we may fail to successfully commercialize ORLYNVAH™.
Our ability to generate meaningful product revenues depends heavily on the successful commercialization of ORLYNVAH™ and our obtaining marketing approval for sulopenem in additional indications and other product candidates. The success of ORLYNVAH™ and, any other approved products, will depend on a number of factors, including the following:
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Successful development of ORLYNVAH™ and sulopenem for the treatment of additional indications, if any, or for use in other patient populations and our ability to broaden the label for ORLYNVAH™ will depend on similar factors. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize ORLYNVAH™ for uUTI or for any other indication, which would materially harm our business.
If clinical trials of sulopenem or any other product candidate that we may advance to clinical trials fail to demonstrate safety and efficacy to the satisfaction of the FDA or comparable foreign regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of sulopenem or any other product candidate.
While we received marketing approval from the FDA for ORLYNVAH™ for the treatment of uUTIs caused by the certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment option, we may not commercialize, market, promote, or sell ORLYNVAH™ for any additional indications or any other product candidate in the United States without obtaining marketing approval from the FDA or in other countries without obtaining approvals from comparable foreign regulatory authorities, such as the EMA, and we may never receive such approvals. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. While we received an approval for ORLYNVAH™ from the FDA in October 2024, we have not submitted an NDA to the FDA for any of our other product candidates or any similar applications to comparable foreign regulatory authorities for ORLYNVAH™ or any of our product candidates.
Our business currently heavily depends on the successful development, regulatory approval and commercialization of our sulopenem program. The continued clinical development of our sulopenem program, or any future product candidates, is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of severe adverse events, failure to comply with protocols or applicable regulatory requirements, and determination by the FDA or any comparable foreign regulatory authority that a drug product is not approvable. A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in clinical trials, even after promising results in earlier non-clinical studies or clinical trials. The results of preclinical and other non-clinical studies and/or early clinical trials of our product candidates or future product candidates may not be predictive of the results of later-stage clinical trials and interim results of a clinical trial do not necessarily predict final results. Notwithstanding any promising results in early non-clinical studies or clinical trials, we cannot be certain that we will not face similar setbacks.
Preclinical and clinical data are often susceptible to varying interpretations and analyses. Although data from clinical trials of oral sulopenem and sulopenem provides support for the overall safety profile of the product candidates, many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for the product candidates. Even if we believe that the results of our clinical trials warrant marketing approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of our product candidates. For example, while we ultimately received approval for ORLYNVAH™ (oral sulopenem) for the treatment of uUTIs caused by certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options, we received a CRL from the FDA on July 23, 2021 for our NDA for oral sulopenem for the treatment of uUTIs in patients with a quinolone non-susceptible pathogen. The CRL provided that additional data are necessary to support approval of oral sulopenem for the treatment of adult women with uUTIs caused by designated susceptible microorganisms proven or strongly suspected to be non-susceptible to a quinolone and recommended that we conduct at least one additional adequate and well-controlled clinical trial, potentially using a different comparator drug. In July 2022 we reached an agreement with the FDA under the SPA process on the design, endpoints and statistical analysis of a Phase 3 clinical trial for oral sulopenem for the treatment of uUTIs and we commenced enrollment in that clinical trial, known as REASSURE, in October 2022. The study is designed as a non-inferiority trial comparing oral sulopenem and
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Augmentin® (amoxicillin/clavulanate) in the Augmentin® susceptible population. In October 2023 we completed enrollment in the REASSURE clinical trial, enrolling 2,222 patients. In January 2024, we announced that sulopenem met the primary endpoint of statistical non-inferiority to Augmentin® in the Augmentin®-susceptible population, and demonstrated statistically significant superiority versus Augmentin® in the Augmentin® susceptible population, in the REASSURE clinical trial. Additionally, though not an approvability issue, the FDA recommended in its CRL that we conduct additional non-clinical PK/PD studies to support dose selection for the proposed treatment indication(s). We have also completed the additional non-clinical PK/PD investigations, as recommended by the FDA, which we believe support the dosing regimen selected for oral sulopenem. We resubmitted our NDA to the FDA in April 2024 and received approval for ORLYNVAH™ for the treatment of uncomplicated uUTIs caused by certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options from the FDA in October 2024.
In some instances, there can be significant variability in safety and/or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants, among others. It is possible that even if one or more of our product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one of the factors listed or otherwise. Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any. Similarly, in our clinical trials, we may fail to detect toxicity of or intolerability of our product candidates or may determine that our product candidates are toxic or not well tolerated when that is not in fact the case. In the case of our clinical trials, results may differ on the basis of the type of bacteria with which patients are infected. We cannot assure our shareholders that any clinical trials that we are conducting or other clinical trials that we may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidates.
We may encounter unforeseen events prior to, during, or as a result of, clinical trials that could delay or prevent us from obtaining regulatory approval for sulopenem in additional indications or any of our other product candidates, including:
If we are required to conduct additional clinical trials or other testing of any product candidate beyond the clinical trials and testing that we contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, if the results of these clinical trials or tests are unfavorable or are only modestly favorable or if there are safety concerns associated with any product candidate, we may:
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In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. For example, in December 2022, with the passage of the Food and Drug Omnibus Reform Act (FDORA), Congress required sponsors to develop and submit a diversity action plan for each phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, action plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them. In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.
In addition, the regulatory landscape related to clinical trials in the European Union recently evolved. The EU Clinical Trials Regulation (CTR) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. While the Clinical Trials Directive required a separate clinical trial application (CTA) to be submitted in each member state, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application to all member states concerned. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development may proceed.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.
Our failure to successfully initiate and complete clinical trials of our product candidates and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any of our product candidates would significantly harm our business. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of oral sulopenem, sulopenem or any other product candidate.
If we experience delays or difficulties in the enrollment of patients in clinical trials, clinical development activities could be delayed or otherwise adversely affected.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. While we successfully completed the REASSURE clinical trial, we may not be able to initiate and/or continue or complete other clinical trials for any other product candidate that we develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in clinical trials as required by the FDA or comparable foreign regulatory authorities, such as the EMA. Patient enrollment is a significant factor in the timing of clinical trials, and is affected by many factors, including:
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The inclusion and exclusion criteria for any clinical trials of oral sulopenem and sulopenem may adversely affect our enrollment rates for patients in those clinical trials. In addition, we may face competition in enrolling suitable patients as a result of other companies conducting clinical trials for antibiotic product candidates that are intended to treat similar infections, resulting in slower than anticipated enrollment in our clinical trials. Enrollment delays in our clinical trials may result in increased development costs for oral sulopenem and/or sulopenem, or slow down or halt our product development for oral sulopenem and/or sulopenem.
Accordingly, our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, slow down or halt our product candidate development and approval process and jeopardize our ability to seek and obtain the marketing approval required to commence product sales and generate revenue, which would cause the value of our company to decline and limit our ability to obtain additional financing if needed. Furthermore, we rely on and expect to continue to rely on contract research organizations (CROs) and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and we have limited influence over their performance.
Success in non-clinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot assure our shareholders that any clinical trials that we may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our sulopenem program in any additional indications.
Although we obtained approval from the FDA for ORLYNVAH™ for the treatment of uncomplicated urinary tract infections (uUTIs) caused by the designated microorganisms Escherichia coli, Klebsiella pneumoniae, or Proteus mirabilis in adult women who have limited or no alternative oral antibacterial treatment options on October 25, 2024, we believe that oral sulopenem and sulopenem also have the potential to treat cUTI and cIAI in humans based on the results of prior preclinical studies and clinical trials. However, we cannot guarantee that oral sulopenem and/or sulopenem will demonstrate the expected efficacy in clinical trial patients to the satisfaction of the FDA and/or other regulators in those additional indications. We also cannot guarantee that the projections made from the pharmacokinetic and pharmacodynamic models that we developed from non-clinical and clinical oral sulopenem and sulopenem studies will be validated in these clinical trials. For example, while we believe that sulopenem has the potential to treat cIAIs and cUTIs in humans based on the results of prior preclinical studies and clinical trials, sulopenem did not meet the primary endpoint of statistical non-inferiority compared to the control therapy in our Phase 3 cIAI and cUTI clinical trials. While we believe the secondary supporting analyses and safety data in all three Phase 3 clinical trials support the potential of sulopenem in the treatment of multi-drug resistant infections, we cannot guarantee that these supporting analyses are indicative of efficacy of sulopenem in treating cIAI or cUTI.
Other companies in the pharmaceutical industry have frequently suffered significant setbacks in later clinical trials, even after achieving promising results in earlier non-clinical studies or clinical trials.
Serious adverse events or undesirable side effects or other unexpected properties of ORLYNVAH™, sulopenem or any other product candidate may be identified during development or after approval that could delay, prevent or cause the withdrawal of regulatory approval, limit the commercial potential, or result in significant negative consequences following marketing approval.
Serious adverse events or undesirable side effects caused by, or other unexpected properties of, our product candidates could cause us, an institutional review board (IRB), or regulatory authorities to interrupt, delay or halt our clinical trials and could result in a more restrictive label, the imposition of distribution or use restrictions or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. If ORLYNVAH™ or any product candidate is associated with serious or unexpected adverse events or undesirable side effects, the FDA or the IRBs at the institutions in which our studies are conducted, could suspend or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.
To date, sulopenem and sulopenem etzadroxil have generally been well tolerated in clinical trials conducted in healthy subjects and patients and there were no safety issues found in any patients treated with sulopenem in our prior Phase 3 clinical trials. During the development of oral sulopenem and sulopenem, patients have experienced drug-related side effects including diarrhea, temporary increases in hepatic enzymes, allergic reactions, and rash.
While the active pharmaceutical ingredient in the bilayer tablet is sulopenem etzadroxil, the combination product with probenecid has not yet been tested extensively in patients. In the cIAI trial, patients received either sulopenem IV followed by sulopenem etzadroxil or ertapenem followed by ciprofloxacin/metronidazole or amoxicillin-clavulanate. Among 668 treated patients, treatment-related adverse events were observed in 6.0% and 5.1% of patients on sulopenem and ertapenem, respectively, with the most commonly reported drug-related adverse event being diarrhea, which was observed in 4.5% and 2.4% of patients on sulopenem and ertapenem, respectively. Discontinuations from treatment were uncommon for both regimens, occurring in 1.5% of patients on
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sulopenem and 2.1% of patients on ertapenem. Serious adverse events unrelated to study treatment were seen in 7.5% of patients on sulopenem and 3.6% of patients on ertapenem. In the cUTI trial, patients received either sulopenem IV followed by sulopenem etzadroxil, if eligible for oral therapy, or ertapenem IV followed by ciprofloxacin or amoxicillin-clavulanate, if eligible for oral therapy. Among 1,392 treated patients, treatment-related adverse events were observed in 6.0% and 9.2% of patients on sulopenem and ertapenem, respectively, with the most commonly reported adverse events being headache (3.0% and 2.2%), diarrhea (2.7% and 3.0%) and nausea (1.3% and 1.6%), on sulopenem and ertapenem, respectively. Discontinuations from treatment were uncommon for both regimens, occurring in 0.4% of patients on sulopenem and 0.6% of patients on ertapenem. Serious adverse events unrelated to study treatment were seen in 2.0% of patients on sulopenem and 0.9% of patients on ertapenem. In the uUTI trial known as known as Sulopenem for Resistant Enterobacteriaceae (SURE) 1, patients received either oral sulopenem or ciprofloxacin. Among 1,660 treated patients, treatment related adverse events were observed in 17.0% and 6.2% of patients on sulopenem and ciprofloxacin, respectively. The most commonly reported adverse events were diarrhea (12.4% and 2.5%), nausea (3.7% and 3.6%), and headache (2.2% and 2.2%), for sulopenem and ciprofloxacin patients, respectively. The difference in adverse events was driven by diarrhea which, in the majority of patients, was mild and self-limited. Overall discontinuations due to adverse events were uncommon on both regimens and were seen in 1.6% of patients on sulopenem and 1.0% of patients on ciprofloxacin. Serious adverse events were seen in 0.7% of patients on sulopenem with one drug-related serious adverse event due to transient angioedema and 0.2% of patients on ciprofloxacin with no drug-related serious adverse event. In the recently completed uUTI trial, REASSURE, patients received either oral sulopenem or Augmentin®. Among 2,214 treated patients, treatment related adverse events were observed in 18.9% and 12.3% of patients on sulopenem and Augmentin®, respectively. The most commonly reported adverse events were diarrhea (8.1% and 4.1%), nausea (4.3% and 2.9%), and headache (2.2% and 1.5%), for sulopenem and Augmentin® patients, respectively. The difference in adverse events was driven by diarrhea which, in the majority of patients, was mild and self-limited. Overall discontinuations due to adverse events were uncommon on both regimens and were seen in 0.7% of patients on sulopenem and 0.4% of patients on Augmentin®. Serious adverse events were seen in 0.0% of patients on sulopenem and 0.5% of patients on Augmentin® with no drug-related serious adverse event.
While we believe these results support a positive safety and tolerability profile for sulopenem and there were no safety issues identified by the FDA in its review of ORLYNVAH™ prior to approval, in future trials there may be unforeseen serious adverse events or side effects that differ from those seen in our prior Phase 3 program, in Phase 1 normal healthy volunteers with oral sulopenem or the prior post-marketing experience with probenecid. There may also be unexpected adverse events associated with probenecid that have not been seen to date. Following approval of ORLYNVAH™, we are required to report certain adverse reactions, if any, to the FDA as part of the post-marketing requirements.
If unexpected adverse events occur in any of our clinical trials, we may need to abandon development of our product candidates, or limit development to lower doses or to certain uses or subpopulations in which the undesirable side effects or other unfavorable characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in clinical or earlier stage testing are later found to cause undesirable or unexpected side effects that prevent further development of the compound.
Undesirable side effects or other unexpected adverse events or properties of sulopenem or any of our other future product candidates could arise or become known either during clinical development or, if approved, and in the case of ORLYNVAH™, after the approved product has been marketed. If such an event occurs during development, our clinical trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of, or could deny approval of sulopenem or other product candidates. If such an event occurs after such product candidates are approved, a number of potentially significant negative consequences may result, including:
Additionally, if the safety warnings in our product labels are not followed, adverse medical situations in patients may arise, resulting in negative publicity and potential lawsuits, even if our products worked as we described. Any of these events could prevent
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us from achieving or maintaining market acceptance of the affected product candidate, if approved, or could substantially increase commercialization costs and expenses, which could delay or prevent us from generating revenue from the sale of our products and harm our business and results of operations.
Even though ORLYNVAH™ has obtained regulatory approval and we may obtain regulatory approval for other product candidates, they may never achieve the market acceptance by physicians, patients, hospitals, third-party payors and others in the medical community that is necessary for commercial success, and the market opportunity may be smaller than we estimate.
Even though we have obtained FDA approval for ORLYNVAH™ and may obtain FDA or other regulatory approvals for sulopenem or any other product candidate and are able to launch ORLYNVAH™, sulopenem or any other product candidate commercially, they may not achieve market acceptance among physicians, patients, hospitals (including pharmacy directors) and third-party payors and, ultimately, may not be commercially successful. For example, physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Moreover, many antibiotics currently exist for the pathogens underlying uUTI, cUTI and cIAI. While many of those pathogens are resistant to certain drugs in the market, the selection is broad, and individual physicians’ prescribing patterns vary widely and are affected by resistance rates in their geographies, whether their patients are at elevated risk, the ability of patients to afford branded drugs and concerns regarding generating resistance with specific classes of antibiotics.
Efforts to educate the medical community and third-party payors on the benefits of ORLYNVAH™ and any other product candidates that obtain approval may require significant resources and may not be successful. If ORLYNVAH™, sulopenem or any other product candidate that we develop does not achieve an adequate level of market acceptance, we may not generate significant product revenues and, therefore, we may not become profitable. Market acceptance of ORLYNVAH™ and any product candidate for which we receive approval depends on a number of factors, including:
In addition, the potential market opportunity for ORLYNVAH™ and additional sulopenem indications is difficult to estimate. Our estimates of the potential market opportunity are predicated on several key assumptions such as industry knowledge and publications, third-party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If any of the assumptions prove to be inaccurate,
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then the actual market for ORLYNVAH™ and/or additional sulopenem indications could be smaller than our estimates of the potential market opportunity. If the actual market for ORLYNVAH™ and/or additional sulopenem indications is smaller than we expect, or if the product fails to achieve an adequate level of acceptance by physicians, health care payors, patients, hospitals and others in the medical community, our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.
We have a limited operating history and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability.
We began operations in November 2015. Since our inception, we have devoted substantially all of our financial resources and efforts to organizing and staffing our company, business planning, raising capital, planning for potential commercialization, and research and development, including preclinical and clinical development, for our sulopenem program. While the members of our development team have successfully developed and registered other antibiotics in past roles at different companies, our company has limited experience and has not yet demonstrated an ability to successfully manufacture a commercial scale product (or arrange for a third party to do so on our behalf), or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of our rights to sulopenem. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate options to maximize the value of our sulopenem program. In such circumstances, we will need to transition from a company with a research and development focus to a company capable of supporting commercial activities whether we choose to commercialize ORLYNVAH™ and/or other product candidates directly ourselves or seek to commercialize them through third-party collaboration arrangements. We may encounter unforeseen expenses, difficulties, complications and delays, and may not be successful in such a transition.
We currently have no commercial organization. If we are unable to establish and maintain sales, marketing and distribution capabilities, enter into sales, marketing and distribution agreements with third parties, or enter into a strategic transaction with a partner that has established commercial capabilities in the U.S., ORLYNVAH™ may not be successfully commercialized, if it is approved.
After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of our rights to sulopenem. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. If we are unable to establish and maintain sales, marketing and distribution capabilities, enter into sales, marketing and distribution agreements with third parties or enter into a strategic transaction with a partner that has established commercial capabilities in the U.S., ORLYNVAH™ may not be successfully commercialized.
The development of sales, marketing and distribution capabilities will require substantial resources, will be time-consuming and could delay any product launch. If the commercial launch of a product candidate for which we, recruit a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization costs. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. In addition, we may not be able to hire a sales force in the United States that is sufficient in size or has adequate expertise in the medical markets that we intend to target. If we are unable to establish a sales force and marketing and distribution capabilities, our operating results may be adversely affected. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of our product candidates.
Other factors that may inhibit our efforts to commercialize any product directly include:
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For those countries in which we choose not to commercialize directly ourselves, we may use collaborators that have direct sales forces and established distribution systems to assist with the commercialization of ORLYNVAH™. As a result of entering into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these product revenues to us would likely be lower than if we were to directly market and sell products in those markets.
Furthermore, while we are focusing on third party arrangements, we may be unsuccessful in entering into the necessary arrangements with third parties including strategic partners, or in obtaining all necessary approvals that may be required to enter into such arrangements or transactions, or may be unable to do so on terms that are favorable to us. In addition, we likely would have little control over such third parties, and any of them might fail to devote the necessary resources and attention to sell and market our products effectively.
If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, or we are not successful in completing a strategic transaction that has established commercial capabilities in the U.S., or at all, ORLYNVAH™ and any other product candidates will not be successfully commercialized.
We face substantial competition from other pharmaceutical and biotechnology companies and our business may suffer if we fail to compete effectively.
The development and commercialization of new drug products is highly competitive. We face competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to oral sulopenem, sulopenem and other product candidates that we may seek to develop and commercialize in the future. There are a number of pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of multi-drug resistant infections. Potential competitors also include academic institutions, government agencies and other public and private research organizations. Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than oral sulopenem, sulopenem or any other product candidates that we may develop, which could render our product candidates obsolete and noncompetitive.
There are a variety of available oral therapies marketed for the treatment of multi-drug resistant infections that we expect to compete with ORLYNVAH™ and would compete with sulopenem in additional indications, such as levofloxacin, ciprofloxacin, nitrofurantoin, fosfomycin, amoxicillin-clavulanate, cephalexin, trimethoprim-sulfamethoxazole and pivmecillinam. ORLYNVAH™ could also compete with a few oral antibiotics currently in late-stage clinical development to treat uUTIs, including gepotidacin from GlaxoSmithKline. Many of the available therapies are well established and widely accepted by physicians, patients and third-party payors. Insurers and other third-party payors may also encourage the use of generic products, for example in the fluoroquinolone class. Pricing of ORLYNVAH™, or sulopenem, if approved in additional indications, may be at a significant premium over other competitive products that are generic. This may make it difficult for ORLYNVAH™, or sulopenem, if approved in additional indications, to compete with these products.
There are several IV-administered products marketed for the treatment of infections resistant to first-line therapy for gram-negative infections, including Avycaz from AbbVie Inc and Pfizer, Vabomere from Melinta Therapeutics, Inc., Zerbaxa from Merck & Co., Zemdri from Cipla, Xerava from Innovia, Recarbrio from Merck & Co, and Fetroja from Shionogi & Co., Ltd.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors,
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particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management and sales and marketing personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
In July 2012, the Food and Drug Administration Safety and Innovation Act was passed, which included the Generating Antibiotics Incentives Now Act (the GAIN Act). The GAIN Act is intended to provide incentives for the development of new, qualified infectious disease products (QIDP). One such incentive is that, once a product receives QIDP designation and completes the necessary clinical trials and is approved by the FDA, it will be given an additional five years of exclusivity regardless of whether it is protected by a patent, provided that it is already eligible for another type of regulatory exclusivity. The FDA has designated sulopenem and oral sulopenem as QIDPs for the indications of uUTI, cUTI, cIAI, community-acquired bacterial pneumonia, acute bacterial prostatitis, gonococcal urethritis, and pelvic inflammatory disease. Fast track designation for these seven indications in both the oral and intravenous formulations has also been granted. In October, 2024, the FDA confirmed that an additional five years marketing exclusivity under the GAIN Act will be added to the regulatory exclusivity granted on approval of ORLYNVAH™, giving a total of ten years marketing exclusivity. In December 2016, the Cures Act was passed, providing additional support for the development of new infectious disease products. These incentives may result in more competition in the market for new antibiotics, and may cause pharmaceutical and biotechnology companies with more resources than we have to shift their efforts towards the development of product candidates that could be competitive with oral sulopenem, sulopenem and our other product candidates.
Even if we are able to commercialize ORLYNVAH™, sulopenem in additional indications or any other product candidate, the product may become subject to unfavorable pricing regulations, or third-party payor coverage and reimbursement policies that could harm our business.
Marketing approvals, pricing, coverage and reimbursement for new drug products vary widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, which may negatively affect the revenues that we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
The commercial success of ORLYNVAH™, and any future product candidates, if approved, will depend substantially, both in the United States and outside the United States, on the extent to which coverage and adequate reimbursement for the product and related treatments are available from government health programs, private health insurers and other third-party payors. If coverage is not available, or reimbursement is limited, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investments. Government authorities and third-party payors, such as health insurers and managed care organizations, publish formularies that identify the medications they will cover and the related payment levels. The healthcare industry is focused on cost containment, both in the United States and elsewhere. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably.
In the United States, sales of ORLYNVAH™, sulopenem in additional indications and any future product candidates will depend, in part, on the availability and extent of coverage and reimbursement by third-party payors, such as government health programs, including Medicare and Medicaid, commercial insurance and managed healthcare organizations. There is no uniform coverage and reimbursement policy among third-party payors; however, private third-party payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Obtaining coverage and reimbursement approval for a product candidate from third-party payors is a time-consuming and costly process that may require the provision of supporting scientific, clinical and cost effectiveness data for the use of such product candidate to the third-party payor. There may be significant delays in obtaining such coverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product candidate is approved by the FDA. Moreover, eligibility for coverage and reimbursement does not imply that a product candidate will be paid for in all cases or at a rate that covers operating costs, including research, development, intellectual property, manufacture, sales and distribution expenses. Reimbursement rates may vary according to the use of the product candidate and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services. It is difficult to predict what third-party payors will decide with respect to coverage and reimbursement for our product candidates.
We currently expect that sulopenem IV, if approved, will be administered in a hospital setting, and that ORLYNVAH™ will be used in a community setting and possibly be administered in a hospital inpatient setting as well. In the United States, third-party payors generally reimburse hospitals a single bundled payment established on a prospective basis intended to cover all items and services provided to the patient during a single hospitalization. Hospitals bill third-party payors for all or a portion of the fees associated with the patient’s hospitalization and bill patients for any deductibles or co-payments. Because there is typically no separate
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reimbursement for drugs administered in a hospital inpatient setting, some of our target customers may be unwilling to adopt our product candidates in light of the additional associated cost. If we are forced to lower the price we charge for ORLYNVAH™ and any other approved product candidates, our gross margins may decrease, which would adversely affect our ability to invest in and grow our business. Centers for Medicare and Medicaid Services (CMS) recently revised its reimbursement system for certain antibiotics in order to address challenges associated with antimicrobial resistance. Based on the final rule published on August 2, 2019, CMS is finalizing an alternative new technology add-on payment pathway (NTAP) for certain breakthrough devices, and under this policy, a QIDP product will be considered new and will not need to demonstrate that it meets the substantial clinical improvement criterion. Instead, it will only need to meet the cost criterion. CMS has also increased the NTAP percentage to 75 percent for an antimicrobial designated by the FDA as a QIDP. The potential impact of this rule on sulopenem has not yet been assessed.
On April 18, 2022, CMS released the Fiscal Year (FY) 2023 Inpatient Prospective Payment System (IPPS) proposed rule. Within each IPPS proposed rule, CMS assesses technologies that have been submitted for potential NTAP status and reconsiders the eligibility for technologies already so designated. In connection with this proposed rule, CMS assessed 13 technologies that were submitted for FY 2023 NTAP consideration through alternative application pathways. These pathways streamline the NTAP application process for (1) devices with FDA breakthrough designation, (2) drugs designated as qualified infectious disease products, and (3) technologies approved through the FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs. CMS has once again proposed to approve these 13 technologies applying through the alternative pathway depending on FDA approval or clearance.
An inability to promptly obtain coverage and adequate payment rates from third-party payors for ORLYNVAH™ and any other approved product candidates that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
We cannot predict whether bacteria may develop resistance to ORLYNVAH™ or sulopenem, which could affect their revenue potential.
We have developed ORLYNVAH™, and are developing sulopenem, to treat drug-resistant bacterial infections. The bacteria responsible for these infections evolve quickly and readily transfer their resistance mechanisms within and between species. We cannot predict whether or when bacterial resistance to ORLYNVAH™ and sulopenem may develop.
As with some commercially available carbapenems, oral sulopenem and sulopenem are not active against organisms expressing a resistance mechanism mediated by enzymes known as carbapenemases. Although occurrence of this resistance mechanism is currently uncommon, we cannot predict whether carbapenemase-mediated resistance will become widespread in regions where we intend to market sulopenem if it is approved. The use of carbapenems or penems in areas with drug-resistant infections or in countries with poor public health infrastructures, or the potentially extensive use of ORLYNVAH™ or sulopenem outside of controlled hospital settings or in the community, could contribute to the rise of resistance. In addition, prescribers may be less likely to prescribe ORLYNVAH™ and sulopenem if they are concerned about contributing to the rise of antibiotic resistance. If resistance to ORLYNVAH™ or sulopenem becomes prevalent, or concerns about such resistance are strong, our ability to generate revenue from ORLYNVAH™ and sulopenem could suffer.
We may be subject to costly product liability claims related to our clinical trials and product candidates and, if we are unable to obtain adequate insurance or are required to pay for liabilities resulting from a claim excluded from, or beyond the limits of our insurance coverage, a material liability claim could adversely affect our financial condition.
Because we conduct clinical trials with human patients, we face the risk that the use of our product candidates may result in adverse side effects to patients in our clinical trials. We face even greater risks upon any commercialization of our product candidates. Although we have product liability insurance, which covers our clinical trials for up to $10.0 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. We will need to increase our insurance coverage if we begin selling ORLYNVAH™ , sulopenem or any other product candidate. We do not know whether we will be able to continue to obtain product liability coverage and obtain expanded coverage if we require it, on acceptable terms, if at all.
We may not have sufficient resources to pay for any liabilities resulting from a claim excluded from, or beyond the limits of, our insurance coverage. Where we have provided indemnities in favor of third parties under our agreements with them, there is also a risk that these third parties could incur a liability and bring a claim under such indemnities. An individual may bring a product liability claim against us alleging that one of our product candidates or products causes, or is claimed to have caused, an injury or is found to be unsuitable for consumer use. Any product liability claim brought against us, with or without merit, could result in:
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Our operations, including our use of hazardous materials, chemicals, bacteria and viruses, require us to comply with regulatory requirements and expose us to significant potential liabilities.
Our operations involve the use of hazardous materials, including chemicals, and may produce dangerous waste products. Accordingly, we, along with the third parties that conduct clinical trials and manufacture our products and product candidates on our behalf, are subject to federal, state, local and foreign laws and regulations that govern the use, manufacture, distribution, storage, handling, exposure, disposal and recordkeeping with respect to these materials. We are also subject to a variety of environmental and occupational health and safety laws. Compliance with current or future laws and regulations can require significant costs and we could be subject to substantial fines and penalties in the event of non-compliance. In addition, the risk of contamination or injury from these materials cannot be completely eliminated. In such event, we could be held liable for substantial civil damages or costs associated with the cleanup of hazardous materials.
If we experience a significant disruption in our information technology systems, or breaches of data security, or become the target of a cyberattack, our business could be adversely affected.
We rely on information technology systems to keep financial records, capture laboratory data, maintain clinical trial data and corporate records, communicate with staff and external parties and operate other critical functions. Our information technology systems are potentially vulnerable to disruption due to breakdown, malicious intrusion and computer viruses or other disruptive events including, but not limited to, natural disaster. If we were to experience a prolonged system disruption in our information technology systems or those of certain of our vendors, it could delay or negatively impact the development and commercialization of our sulopenem program and any future product candidates or technology, which could adversely impact our business. Although we maintain offsite back-ups of our data, if operations at our facilities were disrupted, it may cause a material disruption in our business if we are not capable of restoring function on an acceptable timeframe. In addition, our information technology systems are potentially vulnerable to data security breaches, whether by employees or others, which may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the public exposure of personal information (including sensitive personal information) of our employees and others, any of which could have a material adverse effect on our business, financial condition and results of operations.
Our technologies, systems, networks, or other proprietary information, and those of our vendors, suppliers, and other business partners, may become the target of cyberattacks or information security compromises or breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss, or destruction of private, proprietary, and other information, or could otherwise lead to the disruption of our business operations. Cyberattacks are becoming more sophisticated and certain cyber incidents, such as surveillance, may remain undetected for an extended period and could lead to disruptions in critical systems or the unauthorized release of confidential or otherwise protected information. These events could lead to financial loss due to remedial actions, loss of business, disruption of operations, damage to our reputation, or potential liability, including litigation and regulatory investigations and enforcement actions. Our systems and insurance coverage for protecting against cybersecurity risks may not be sufficient. Furthermore, as cyberattacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyberattacks.
Moreover, a security breach, cyberattack or privacy violation that leads to disclosure or modification of, personally identifiable information, could harm our reputation, compel us to comply with applicable European, and United States federal and/or state, breach notification laws, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to litigation and liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue. In addition, a data security breach or cyber attack could result in loss of clinical trial data or damage to the integrity of that data. If we are unable to prevent such security breaches, attacks or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer reputational damage, financial loss and other negative consequences because of lost or misappropriated information. In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.
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If we are unable to establish sales, marketing and distribution capabilities or enter into sales, marketing and distribution arrangements with third parties, we may not be successful in commercializing ORLYNVAH™ or sulopenem in additional indications and/or any future products, if approved.
After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program.
We currently do not have sales, marketing or distribution infrastructure and have limited experience as an organization in the sales, marketing, and distribution of pharmaceutical products. To achieve commercial success for ORLYNVAH™ and any approved product, we must either develop a sales and marketing organization or outsource these functions to third parties. The development of sales, marketing and distribution capabilities will require substantial resources, will be time consuming and, as this process has not been initiated for ORLYNVAH™, will delay any commercial launch. Conversely, if the commercial launch of ORLYNVAH™ or a product candidate for which we ultimately recruit a sales force and establish marketing and distribution capabilities is delayed, or does not occur for any reason, we could incur substantial costs and our investment could be lost if we cannot retain or reposition our sales and marketing personnel. In addition, we may not be able to hire or retain a sales force in the United States that is sufficient in size or has adequate expertise in the medical markets that we plan to target. If we are unable to establish or retain a sales force and marketing and distribution capabilities, our operating results may be adversely affected.
If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these products may be substantially lower than if we were to directly market and sell products in those markets. Furthermore, we may be unsuccessful in entering into the necessary arrangements with third parties or may be unable to do so on terms that are favorable to us. In addition, we may have little or no control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
We may seek to enter into collaborations that we believe may contribute to our ability to commercialize ORLYNVAH™ or to advance development and ultimately commercialize sulopenem in additional indications and/or any future product candidates. We may also seek to enter into collaborations where we believe that realizing the full commercial value of our development programs will require access to broader geographic markets or the pursuit of broader patient populations or indications. If a potential partner has development or commercialization expertise that we believe is particularly relevant to one of our products, then we may seek to collaborate with that potential partner even if we believe we could otherwise develop and commercialize the product independently.
If we do not establish sales, marketing and distribution capabilities, either on our own or in collaboration with third parties, we will not be successful in commercializing ORLYNVAH™ or sulopenem in additional indications and/or any future product candidates that receive marketing approval.
Risks Related to Our Dependence on Third Parties
If we fail to comply with our obligations in our agreement with Pfizer, we could lose such rights that are important to our business.
We rely heavily on the Pfizer License pursuant to which we exclusively in-license certain patent rights and know-how related to sulopenem etzadroxil and certain know-how related to the IV formulation of sulopenem. The Pfizer License imposes diligence, development and commercialization timelines, milestone payments, royalties, insurance and other obligations on us, and we may enter into additional agreements, including license agreements, with other parties in the future which impose similar obligations.
The Pfizer License gives us exclusive worldwide rights to develop, manufacture, and commercialize sulopenem etzadroxil and sulopenem, or any other prodrug of sulopenem previously identified by Pfizer as well as the right to use relevant information and regulatory documentation developed by Pfizer to support any regulatory filing worldwide. In exchange for those rights, we are obligated to satisfy diligence requirements, including using commercially reasonable efforts to develop, obtain regulatory approval for and commercialize sulopenem etzadroxil and sulopenem by implementing a specified development plan and providing an update on progress on an annual basis. Under the Pfizer License, we paid Pfizer a one-time non-refundable upfront fee of $5.0 million, clinical milestone payments totaling $15.0 million, upon first patient dosing of oral sulopenem and sulopenem in a Phase 3 clinical trial, and are obligated to pay Pfizer milestone payments upon the achievement of other specified regulatory and sales milestones, including a regulatory milestone payment of $20 million which became due upon approval of oral sulopenem for commercial sale in the United States by the FDA. We deferred this payment for a two-year period, at an annual rate of eight percent on a daily compounded basis until paid in full, as permitted pursuant to the terms of the Pfizer License. We are also obligated to pay Pfizer royalties ranging from a single-digit to mid-teens percentage based on the amount of marginal net sales of each licensed product. Pfizer also received 381,922
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of our Series A preferred shares (which converted to 25,461 ordinary shares in connection with our initial public offering (IPO)) as additional payment for the licensed rights.
If we fail to comply with our obligations to Pfizer under the Pfizer License, Pfizer may have the right to terminate the Pfizer License, in which event we would not be able to develop, obtain regulatory approval for, manufacture or market any product or product candidate that is covered by the Pfizer License, including ORLYNVAH™ and sulopenem, which would materially harm our business, financial condition, results of operations and growth prospects. Any termination of the Pfizer License or reduction or elimination of our rights thereunder may result in our having to negotiate new or reinstated agreements with less favorable terms. Any termination of the Pfizer License would cause us to lose our rights to important intellectual property or technology.
We expect to depend on collaborations with third parties for the commercialization of products, including ORLYNVAH™, and the development and commercialization of product candidates in certain territories. Our prospects with respect to those product candidates will depend in part on the success of those collaborations.
After receiving positive data from our REASSURE clinical trial in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing shareholder value. In connection with this strategic process, we have engaged a financial advisor to assist management and the board in evaluating strategic alternatives. Following receipt of FDA approval for ORLYNVAH™ in October 2024, efforts to achieve a strategic transaction have been renewed. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of our rights to sulopenem. In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting.
Although we would focus our initial commercial efforts on the United States market, which we believe represents the largest market opportunity for our sulopenem program, we are also evaluating our commercialization strategy both within and outside the United States. We currently do not have a sales, marketing or distribution infrastructure and we have no experience in the sales, marketing or distribution of pharmaceutical products. To achieve commercial success for ORLYNVAH™ and any approved product, we must either build our marketing, sales, distribution, managerial and other non-technical capabilities, or make arrangements to outsource those functions to third parties. For those countries in which we choose not to commercialize directly ourselves, we intend to seek to commercialize oral sulopenem and/or sulopenem through collaboration arrangements. In addition, we may seek third-party collaborators for development and commercialization of other product candidates in the United States and other territories. Our likely collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements include service providers to the pharmaceutical industry, large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. We are not currently party to any such arrangements but engaged a potential commercial partner to provide pre-commercial activities and we commenced negotiations on a definitive agreement for commercialization services. Following receipt of the CRL, in order to reduce operating expenses and conserve cash resources, we halted any remaining pre-commercial activities for oral sulopenem and limited spending to essential costs required in connection with the resubmission of the NDA. There is no assurance that we will seek or be able to reach a definitive agreement for commercialization services in the future.
We may derive revenue from research and development fees, license fees, milestone payments and royalties under any collaborative arrangement into which we enter. Our ability to generate revenue from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. In addition, our collaborators may have the right to abandon research or development projects and terminate applicable agreements, including funding obligations, prior to or upon the expiration of the agreed upon terms. As a result, we can expect to relinquish some or all of the control over the future success of any product or product candidate that we license to a third party.
We face significant competition in seeking and obtaining appropriate collaborators. Collaborations involving our products and product candidates may pose a number of risks, including the following:
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Collaboration agreements may not lead to development or commercialization of products and product candidates in the most efficient manner or at all. If a collaborator of ours is involved in a business combination, it could decide to delay, diminish or terminate the development or commercialization of any product or product candidate licensed to it by us.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay a product or product candidates potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake development or commercialization activities on our own, we will need to obtain additional expertise and significant additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring any products to market including ORLYNVAH™ or continue to develop our product platform.
We may rely on third parties to perform many essential services for any products that we commercialize, including services related to warehousing and inventory control, distribution, government price reporting, customer service, accounts receivable management, cash collection, and pharmacovigilance and adverse event reporting. If these third parties fail to perform as expected or to comply with legal and regulatory requirements, our ability to commercialize our products will be significantly impacted and we may be subject to regulatory sanctions.
In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. We may retain third-party service providers to perform a variety of functions related to the sale and distribution of our products, key aspects of which will be out of our direct control. These service providers may provide key services related to warehousing and inventory control, distribution, customer service, accounts receivable management, and cash collection. If we retain a service provider, we would substantially rely on it as well as other third-party providers that perform services for us, including entrusting our inventories of products to their care and handling. If these third-party service providers fail to comply with applicable laws and regulations, fail to meet expected deadlines, or otherwise do not carry out their contractual duties to us, or encounter physical or natural damage at their facilities, our ability to deliver product to meet commercial demand would be significantly impaired and we may be subject to regulatory enforcement action. In addition, we may engage third parties to perform various other services for us relating to pharmacovigilance and adverse event reporting, safety database management, fulfillment of requests for medical information regarding our products and related services. If the quality or accuracy of the data maintained by these service providers is insufficient, or these third parties otherwise fail to comply with regulatory requirements, we could be subject to regulatory sanctions. Additionally, we may contract with a third party to calculate and report pricing information mandated by various government programs. If a third party fails to timely report or adjust prices as required, or errors in calculating government pricing information from transactional data in our financial records, it could impact our discount and rebate liability, and potentially subject us to regulatory sanctions or False Claims Act lawsuits.
We rely on third parties to conduct our preclinical studies and our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for our product candidates or
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commercialize any of our products or product candidates. If they do not perform satisfactorily, our business may be materially harmed.
We do not independently conduct non-clinical studies that comply with good laboratory practice (GLP) requirements. We also do not have the ability to independently conduct clinical trials of any of our product candidates. We rely on third parties, such as CROs, clinical data management organizations, medical institutions, and clinical investigators to conduct our clinical trials of oral sulopenem and sulopenem and expect to rely on these third parties to conduct clinical trials of any potential product candidates. Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities.
Our reliance on these third parties for clinical development activities limits our control over these activities but we remain responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards. For example, notwithstanding the obligations of a CRO for a clinical trial of one of our product candidates, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the clinical trial. While we will have agreements governing their activities, we control only certain aspects of their activities and have limited influence over their actual performance. The third parties with whom we contract for execution of our GLP studies and our clinical trials play a significant role in the conduct of these studies and clinical trials and the subsequent collection and analysis of data.
Although we rely on these third parties to conduct our GLP-compliant non-clinical studies and clinical trials, we remain responsible for ensuring that each of our non-clinical studies and clinical trials are conducted in accordance with applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities. The FDA and regulatory authorities in other jurisdictions also require us to comply with standards, commonly referred to as good clinical practices (GCPs), for conducting, monitoring, recording and reporting the results of clinical trials to assure that data and reported results are accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials. The FDA enforces these GCPs through periodic inspections of trial sponsors, principal investigators, clinical trial sites and institutional review boards. If we or our third-party contractors fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our product candidates, which would delay the regulatory approval process. We cannot assure our shareholders that, upon inspection, the FDA will determine that any of our clinical trials comply with GCPs. We are also required to register clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
Furthermore, the third parties conducting clinical trials on our behalf are not our employees, and except for remedies available to us under our agreements with such contractors, we cannot control whether or not they devote sufficient time and resources to our development programs. These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates. If that occurs, we may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates. In such an event, our financial results and the commercial prospects for oral sulopenem, sulopenem or other product candidates could be harmed, our costs could increase and our ability to generate revenue could be delayed, impaired or foreclosed.
We also rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of any resulting products, producing additional losses and depriving us of potential product revenue.
We contract with third parties for the manufacture of preclinical and clinical supplies of oral sulopenem and sulopenem and expect to continue to do so in connection with any future clinical trials and future commercialization of our products and product candidates. This reliance on third parties increases the risk that we will not have sufficient quantities of our products and/or product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
We do not have the internal infrastructure or capability to manufacture sulopenem for use in the conduct of our preclinical research or clinical trials or to manufacture ORLYNVAH™ for commercialization. We rely on third-party contract manufacturers to manufacture supplies of sulopenem, and we rely/expect to rely on third-party contract manufacturers to manufacture commercial quantities of ORLYNVAH™, and any product candidate that we commercialize following approval for marketing by applicable regulatory authorities, if any. Reliance on third-party manufacturers entails risks, including:
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We currently rely on a small number of third-party contract manufacturers for all of our required raw materials, drug substance and finished product for our preclinical research and clinical trials. We do not have long-term agreements with any of these third parties. We also do not have any current contractual relationships for the manufacture of commercial supplies of ORLYNVAH™ or any of our product candidates. If any of our existing manufacturers should become unavailable to us for any reason, we may incur delays in identifying or qualifying replacements.
We are in the process of negotiating agreements with third-party contract manufacturers for the commercial production of ORLYNVAH™ . This process is difficult and time consuming and we may face competition for access to manufacturing facilities as there are a limited number of contract manufacturers operating under current Good Manufacturing Practices, or cGMPs, that are capable of manufacturing our ORLYNVAH™ . Consequently, we may not be able to reach agreement with third-party manufacturers on satisfactory terms, which could delay commercialization.
Third-party manufacturers are required to comply with cGMPs and similar regulatory requirements outside the United States. Facilities used by our third-party manufacturers must be approved by the FDA after we submit an NDA(s) and before potential approval of the product candidate. Similar regulations apply to manufacturers of our product candidates for use or sale in countries outside of the United States. We have no direct control over the ability of our third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel, and are completely dependent on our third-party manufacturers for compliance with the applicable regulatory requirements for the manufacture of our product candidates. If our manufacturers cannot successfully manufacture material that conforms to the strict regulatory requirements of the FDA and any applicable regulatory authority, they will not be able to secure the applicable approval for their manufacturing facilities. If these facilities are not approved for commercial manufacture, we may need to find alternative manufacturing facilities, which could result in delays in obtaining approval for the applicable product candidate. In addition, our manufacturers are subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements. Failure by any of our manufacturers to comply with applicable cGMPs or other regulatory requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions, interruptions in supply and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates and have a material adverse effect on our business, financial condition and results of operations.
We and our third-party suppliers also continue to refine and improve the manufacturing process, certain aspects of which are complex and unique, and we may encounter difficulties with new or existing processes, particularly as we seek to significantly increase our capacity to commercialize ORLYNVAH™ and/or sulopenem. Our reliance on contract manufacturers also exposes us to the possibility that they, or third parties with access to their facilities, will have access to and may appropriate our trade secrets or other proprietary information.
As drug candidates are developed through non-clinical studies to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, methods of making drug formulations, and drug formulations, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our drug candidates to perform differently and affect the results of clinical trials or other future clinical trials conducted with the altered materials. Such changes may also require additional testing, FDA notification or FDA approval. This could delay completion of clinical trials, require us to conduct bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our drug candidates and jeopardize our ability to commence sales and generate revenue.
While no issues with regard to third-party manufacturers or the manufacturing process were identified as part of the FDA review prior to approval of ORLYNVAH™ , there can be no assurance that issues will not be identified in the future or that our third-party manufacturers will continue to maintain adequate quality control, quality assurance and qualified personnel and/or will continue to comply with the applicable regulatory requirements for the manufacture of our products and product candidates.
Our current and anticipated future dependence upon others for the manufacture of ORLYNVAH™ and sulopenem and any future product candidates may adversely affect our future profit margins and our ability to commercialize ORLYNVAH™ and any products for which we receive marketing approval on a timely and competitive basis.
Risks Related to Our Intellectual Property
We rely heavily on the Pfizer License for the patent rights and know-how required to commercialize ORLYNVAH™ and the know-how required to develop the IV formulation of sulopenem.
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We rely heavily on the Pfizer License for intellectual property rights that are important or necessary for the development of sulopenem and to commercialize ORLYNVAH™ . We do not own or license any patent rights that cover the IV formulation of sulopenem. In addition, all patents directed to the compound sulopenem expired prior to us entering into the Pfizer License. Licenses to additional third-party intellectual property, technology and materials that may be required for the development and commercialization of our sulopenem program or any other product candidates or technology may not be available at all or on commercially reasonable terms. In that event, we may be required to expend significant time and resources to redesign our sulopenem program and any other product candidates or technology we may obtain in the future or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize ORLYNVAH™ or sulopenem or other future product candidates or technologies, which could materially harm our business, financial condition, results of operations and growth prospects.
Under the Pfizer License, and we expect under certain of our future license agreements, we are responsible for prosecution and maintenance of the licensed patents and for bringing any actions against any third party for infringing on such patents. In addition, the Pfizer License requires, and we expect certain of our future license agreements would also require, us to meet certain development thresholds to maintain the license, including establishing a set timeline for developing and commercializing products. In addition, such license agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Disputes may arise regarding intellectual property subject to the Pfizer License or any of our future license agreements, including:
In spite of our best efforts, Pfizer and any potential future licensors might conclude that we have materially breached our license agreements and might therefore terminate the relevant license agreements, thereby removing our ability to develop and commercialize products and technology covered by such license agreements. If any of our inbound license agreements are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, products identical to ours. This could have a material adverse effect on our competitive position, business, financial condition, results of operations and growth prospects.
If we are unable to obtain and maintain patent protection or other intellectual property rights for ORLYNVAH™ or our other technology and product candidates, or if the scope of the patent protection or intellectual property rights we obtain is not sufficiently broad, we may not be able to successfully commercialize ORLYNVAH™ or develop and commercialize any other product candidates or technology or otherwise compete effectively in our markets.
We rely upon a combination of patents, trademarks, trade secret protection, confidentiality agreements and other proprietary rights to protect the intellectual property related to our development programs and product candidates. Our success depends, in part, on obtaining and maintaining patent protection and successfully enforcing these patents and defending them against third-party challenges in the United States and other countries. If we or our licensors are unable to obtain or maintain patent protection with respect to ORLYNVAH™ or any other product candidates or technology we develop, our business, financial condition, results of operations and growth prospects could be materially harmed.
We have sought to protect our proprietary position by in-licensing patents in the United States and abroad related to oral sulopenem. We own three U.S. patents, one Japanese patent, one Korean patent and one Australian patent, with one US patent, the Japanese patent, the Korean patent and the Australian patent directed to the composition of the bilayer tablet of oral sulopenem and its related preparations and/or uses, one U.S. patent directed to the method of use of oral sulopenem in treating multiple diseases, including uUTIs and one U.S. patent directed to the method of use of sulopenem etzadroxil, probenecid, and valproic acid in treating multiple diseases. We also own two pending U.S. patent applications, and 24 pending foreign patent applications, which collectively cover uses of sulopenem and probenecid and bilayer tablets of sulopenem etzadroxil and probenecid. One pending U.S. patent application and one pending Canadian patent application were recently allowed, with the allowed U.S. patent application directed to
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the method of use of oral sulopenem in treating uUTI, and with the allowed Canadian patent application directed to the bilayer tablet of oral sulopenem and its related preparations and/or uses.
Moreover, although we control prosecution of the patents we have licensed from Pfizer related to our sulopenem program, we may not always have the right to control the preparation, filing and prosecution of patent applications, or to maintain, enforce or defend the patents, covering technology that we may license from third parties. Therefore, these patents and patent applications may not be prosecuted, maintained, enforced or defended in a manner consistent with the best interests of our business.
If any patent applications we own or may own or in-license in the future with respect to our development programs or product candidates fail to issue, if their breadth or strength of protection is threatened or if they fail to provide meaningful exclusivity for our current and future product candidates, it could dissuade companies from collaborating with us to develop product candidates and threaten our ability to commercialize products. Any such outcome could materially harm our competitive position, business, financial condition, results of operations and growth prospects.
The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of countries outside the United States may not protect our rights to the same extent as the laws of the United States. For example, European Union (EU) patent law restricts the patentability of methods of treatment of the human body more than U.S. law does. In addition, publications of discoveries in scientific literature often lag behind the actual discoveries, patent applications in the United States and other jurisdictions remain confidential for a period after filing, and some remain so until issued. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in the patents or pending patent applications we currently own, license or may own or license in the future, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. There is no assurance that all potentially relevant prior art relating to our patent rights has been found, and such prior art could potentially invalidate one or more of the patents we currently license or may own or license in the future or prevent a patent from issuing from one or more pending patent applications we own or may own or license in the future. There is also no assurance that prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim in our patent rights, may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. Even if patents do successfully issue and even if such patents cover our current and future products and product candidates, third parties may challenge their ownership, validity, enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable, which could allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Any successful opposition to these patents or any other patents owned by us in the future or licensed to us could deprive us of rights necessary for the successful commercialization of any products and product candidates that we may develop. Furthermore, even if they are unchallenged, our patents rights may not adequately protect our products, product candidates and technology, provide exclusivity for our products and product candidates, prevent others from designing around our claims or provide us with a competitive advantage. Any of these outcomes could impair our ability to prevent competition from third parties. Changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our patent rights or narrow the scope of our patent protection.
We cannot offer any assurances about whether any issued patents will be found invalid and unenforceable or will be challenged by third parties. Any successful challenge or opposition to patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any products or product candidates that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.
Furthermore, our patent rights may be subject to a reservation of rights by one or more third parties. For example, certain research we conducted was funded in part by the U.S. government. As a result, the U.S. government may have certain march-in rights to patents and technology arising out of such research, if any. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention. These rights may permit the government to disclose our confidential information to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business, financial condition, results of operations and growth prospects.
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent which might adversely affect our ability to develop and market our products and product candidates.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or
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necessary for the commercialization of our products and product candidates in any jurisdiction. For example, U.S. applications filed before November 29, 2000 and certain U.S. applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our products and product candidates could have been filed by others without our knowledge. Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our products and product candidates or the use of our products and product candidates. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our products and product candidates. We may incorrectly determine that our products and product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our products and product candidates. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products and product candidates.
The patent protection for our products and product candidates may expire before we are able to maximize their commercial value which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue.
Patents have a limited lifespan. In the United States, if all maintenance fees are paid timely, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. The patents for ORLYNVAH™ have varying expiration dates and, if these patents expire, we may be subject to increased competition and we may not be able to recover our development costs. For example, our licensed U.S. patent claim for a composition of matter patent for oral sulopenem is due to expire in 2029, subject to potential extension to 2034 under the Drug Price Competition and Patent Term Restoration Act of 1984 (referred to as the Hatch-Waxman Act) and our patent directed to the composition of the bilayer tablet of sulopenem etzadroxil and probenecid is due to expire no earlier than 2039, absent any extensions. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, our patent rights may not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours.
The FDA designated sulopenem and oral sulopenem as QIDPs for the indications of uUTI, cUTI, cIAI, community-acquired bacterial pneumonia, acute bacterial prostatitis, gonococcal urethritis, and pelvic inflammatory disease. Fast track designation for these seven indications in both the oral and intravenous formulations has also been granted. QIDP status provides the potential for a more rapid review cycle for an NDA and could add five years to any regulatory exclusivity period that we may be granted. While the FDA confirmed that an additional five years marketing exclusivity was granted on approval of ORLYNVAH™, giving a total of ten years marketing exclusivity, that does not guarantee that we will receive any regulatory exclusivity for any other product candidates or that any such exclusivity will be for a period sufficient to provide us with any commercial advantage. Moreover, we do not own or license any patent directed to the compound sulopenem.
Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of the U.S. patents we currently license and/or own may be eligible for limited patent term extension under the Hatch-Waxman Act, and similar legislation in the European Union. The Hatch-Waxman Act permits a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. We may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of the relevant patents or otherwise fail to satisfy applicable requirements and the length of the extension could be less than we request. To the extent we wish to pursue patent term extension based on a patent that we in-license from Pfizer or another third party, we would need the cooperation of Pfizer or the third party. Moreover, similar extensions may be available in some of the larger economic territories but may not be available in all of our markets of interest.
If we are unable to obtain patent term extension/restoration or some other exclusivity, or the term of any such extension is less than we request, the period during which we can enforce our exclusive rights for that product will be shortened and our competitors may obtain approval to market competing products sooner. As a result, we could be subject to increased competition and our opportunity to establish or maintain product revenue could be substantially reduced or eliminated. Furthermore, we may not have sufficient time to recover our development costs prior to the expiration of our U.S. and non-U.S. patent rights. If this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case. Any of the foregoing would materially harm our business, financial condition, results of operations and growth prospects.
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Intellectual property rights do not necessarily address all potential threats to our business.
Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims altogether. In addition, the degree of future protection afforded by our intellectual property rights is uncertain because even granted intellectual property rights have limitations, and may not adequately protect our business. The following examples are illustrative:
Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products and product candidates.
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the pharmaceutical industry involves both technological complexity and legal complexity. Therefore, obtaining and enforcing pharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, the America Invents Act (the AIA) was signed into law on September 16, 2011, and many of its substantive changes became effective on March 16, 2013.
An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the U.S. Patent and Trademark Office (USPTO) after that date but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application, but circumstances could prevent us from promptly filing patent applications on our inventions.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO, including through post-issuance patent review procedures such as inter partes review, post-grant review and covered business methods. This applies to all U.S. patents, including those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a
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district court action. The AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
The USPTO has developed regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent law associated with the AIA. Accordingly, it is not clear what, if any, impact the AIA will have on the operation of our business and this may not be known until such time as we, or our licensors or collaboration partners, are filing patent applications for an invention or seeking to defend issued patents. However, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our or our licensors’ or collaboration partners’ patent applications and the enforcement or defense of our or our licensors’ or collaboration partners’ issued patents, all of which could have an adverse effect on our business and financial condition.
Moreover, the standards that the USPTO and foreign patent office’s use to grant patents are not always applied predictably or uniformly and can change. Consequently, any patents we currently license or may own or license in the future may have a shorter patent term than expected or may not contain claims that will permit us to stop competitors from using our technology or similar technology or from copying our products. Similarly, the standards that courts use to interpret patents are not always applied predictably or uniformly and may evolve, particularly as new technologies develop. In addition, changes to patent laws in the United States or other countries may be applied retroactively to affect the ownership, validity, enforceability or term of patents we currently license or may own or license in the future.
For example, the U.S. Supreme Court’s rulings on several patent cases, such as Association for Molecular Pathology v. Myriad Genetics, Inc., Mayo Collaborative Services v. Prometheus Laboratories, Inc., and Alice Corporation Pty. Ltd. v. CLS Bank International, either narrow the scope of patent protection available in certain circumstances or weaken the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Similarly, the complexity and uncertainty of European patent laws has also increased in recent years. In addition, the European patent system is relatively stringent in the type of amendments that are allowed during prosecution. These changes could limit our ability to obtain new patents in the future that may be important for our business.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.
Competitors may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property or those of our licensors. To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. We may not be able to prevent, alone or with our licensors, infringement, misappropriation or other violations of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention. An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.
In any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially valuable. 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 litigation. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of
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such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.
Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.
Our commercial success depends, in part, upon our ability, and the ability of our future collaborators, to develop, manufacture, market and sell ORLYNVAH™, sulopenem and any future product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and other intellectual property rights of third parties. There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and reexamination proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our products and product candidates may be subject to claims of infringement of the intellectual property rights of third parties.
We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to ORLYNVAH™ , sulopenem or any future product candidates and technology, including interference or derivation proceedings, post grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in other jurisdictions. Similarly, we or our licensors or collaborators may initiate such proceedings or litigation against third parties, e.g., to challenge the validity or scope of intellectual property rights controlled by third parties. In order to successfully challenge the validity of any U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court would invalidate the claims of any such U.S. patent. Moreover, third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of their merit. There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize such products and/or product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations, or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product and/or product candidate unless we obtained a license or until such patent expires or is finally determined to be invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms, or at all. Even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors access to the same technologies licensed to us. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In such an event, we would be unable to further practice our technologies or develop and commercialize any of our products and/or product candidates at issue, which could harm our business significantly.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to commercialize ORLYNVAH™, or further develop and commercialize one or more of our future product candidates, if approved. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business. Third parties making such claims may have the ability to dedicate substantially greater resources to these legal actions than we or our licensors or collaborators can. In the event of a successful claim of infringement, misappropriation or other violation 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.
There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. In addition to infringement claims against us, we may become a party to other patent litigation and other adversarial proceedings such as proceedings before the Patent Trial and Appeal Board and opposition proceedings in the European Patent Office regarding intellectual property rights with respect to our products and technology.
Patent litigation and other proceedings may also absorb significant management time. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. During the course of any patent or other intellectual property litigation or other proceeding, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings or developments and if securities analysts or investors regard these announcements as negative, the perceived value of our products, product candidates or intellectual property could be diminished. Accordingly, the market price of our ordinary shares may
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decline. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our business, ability to compete in the marketplace, financial condition, results of operations and growth prospects.
We may not be able to protect our intellectual property rights globally, which could negatively impact our business.
Filing, prosecuting and defending patents covering ORLYNVAH™, sulopenem and any future product candidates globally would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our ORLYNVAH™ and other product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and any current or future patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our ORLYNVAH™ or other product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize ORLYNVAH™ or any other product candidates in all of our expected significant foreign markets.
In Europe, a new unitary patent system took effect on June 1, 2023, which will significantly impact European patents, including those granted before the introduction of the system. Under the unitary patent system, European applications have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court (UPC). This will be a significant change in European patent practice. As the UPC is a new court system, there is no precedent for the court, thereby increasing the uncertainty of any potential litigation. It is our initial belief that the UPC, while offering a cheaper streamlined process, has potential disadvantages to patent holders, such as making a single European patent vulnerable to challenges in all participating jurisdictions when challenged in a single participating jurisdiction. Given the present uncertainty, we plan to opt out of the UPC where we are able.
Additionally, the requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug. In India, unlike the United States, there is no link between regulatory approval of a drug and its patent status. Furthermore, generic or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of our or our licensors’ patents, requiring us or our licensors to engage in complex, lengthy and costly litigation or other proceedings. Generic or biosimilar drug manufacturers may develop, seek approval for, and launch biosimilar versions of our products. In addition, certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our and our licensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license.
We may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.
Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees do not use the intellectual property and other proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or
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these employees have used or disclosed such intellectual property or other proprietary information. Litigation may be necessary to defend against these claims.
In addition, we may in the future be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. While we typically require our employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. To the extent that we fail to obtain such assignments, such assignments do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or a patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents covering our products, our competitors might be able to enter the market, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects.
If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.
In addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, in seeking to develop and maintain a competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, corporate collaborators, outside scientific collaborators, contract manufacturers, suppliers and other third parties. We, as well as our licensors, also enter into confidentiality and invention or patent assignment agreements with employees and certain consultants. We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. We cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors will not otherwise gain access to our trade secrets. Any party with whom we have executed such an agreement may breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time consuming and the outcome is unpredictable. In addition, some courts both within and outside the United States may be less willing or unwilling to protect trade secrets. Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our business and competitive position could be harmed.
Trade secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or academic to industry scientific positions. If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition. Even if we are able to adequately protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered by our competitors. For example, competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights. If any of our trade
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secrets were to be lawfully obtained or independently developed by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us.
We may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States. 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.
We have not yet registered our trademarks in certain jurisdictions. Failure to secure those registrations could adversely affect our business.
We have registered trademarks for “Iterum” as well as trademarks for oral sulopenem and other potential product candidates in various jurisdictions including the United States, European Union, Japan, Switzerland and Canada. If we are unable to secure registrations for our trademarks in other countries, we may encounter more difficulty in enforcing them against third parties than we otherwise would, which could adversely affect our business. Any trademark applications we have filed for our products or product candidates or may file in the future are not guaranteed to be allowed for registration, and even if they are, we may fail to maintain or enforce such registered trademarks. During trademark registration proceedings in any jurisdiction, we may receive rejections. We are given an opportunity to respond to those rejections, but we may not be able to overcome such rejections. In addition, in the USPTO and in comparable agencies in many other jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.
Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.
In addition, any proprietary name we propose to use with product candidates in the United States must be approved by the FDA, and in Europe by the EMA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA and the EMA each typically conduct a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA or EMA objects to any proposed proprietary product name for any future product candidates, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe, misappropriate or otherwise violate the existing rights of third parties and be acceptable to the FDA.
Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our business, financial condition, results of operations and growth prospects.
Risks Related to Regulatory Approval and Other Legal Compliance Matters
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize future product candidates, and our ability to generate revenue will be materially impaired.
ORLYNVAH™, sulopenem and future product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable foreign regulatory authorities, with regulations differing from country to country. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. ORLYNVAH™ is currently our only product approved for sale in the United States.
Although we have QIDP status and fast track designation for sulopenem and oral sulopenem for the indications of uUTI, cUTI and cIAI (and for the indications of community-acquired bacterial pneumonia, acute bacterial prostatitis, gonococcal urethritis, and pelvic inflammatory disease) which may provide for a more rapid NDA review cycle, the time required to obtain approval, if any, by the FDA and comparable foreign authorities is unpredictable and typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. Approval policies, regulations, or the type and amount of clinical data necessary to gain approval may also change during the course of a product candidate’s clinical development and may vary among jurisdictions. While we have obtained regulatory approval for ORLYNVAH™ for the treatment of uUTIs caused certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options, it is possible that we will not be able to obtain regulatory approval for sulopenem or any other product candidates or other indications that we may seek to develop in the future will ever obtain regulatory approval. Neither we nor any future collaborator is permitted to market any of our product candidates in the United States until we or they receive regulatory approval of an NDA(s) from the FDA.
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In order to obtain approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses. Results from non-clinical studies and clinical trials can be interpreted in different ways. Even if we believe that the non-clinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities.
An NDA must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety and efficacy for each desired indication. The NDA must also include significant information regarding the CMC for the product candidate. Obtaining approval of an NDA is a lengthy, expensive and uncertain process. The FDA has substantial discretion in the review and approval process and may refuse to accept for filing any application or may decide that our data is insufficient for approval and require additional non-clinical, clinical or other studies. Foreign regulatory authorities have differing requirements for approval of drugs with which we must comply prior to marketing. Obtaining marketing approval for marketing of a product candidate in one country does not ensure that we will be able to obtain marketing approval in other countries, but the failure to obtain marketing approval in one jurisdiction could negatively affect our ability to obtain marketing approval in other jurisdictions. The FDA or any foreign regulatory body can delay, limit or deny approval of our product candidates or require us to conduct additional non-clinical or clinical testing or abandon a program for many reasons, including:
Of the large number of drugs in development, only a small percentage complete the FDA or foreign regulatory approval processes and are successfully commercialized. The lengthy review process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval, which would significantly harm our business, financial condition, results of operations and growth prospects.
Further, under the Pediatric Research Equity Act, or PREA, a Biologics License Application, or BLA, or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA. A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin. The applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the European Medicines Agency, or EMA, or to obtain a waiver or deferral from the conduct of these studies by this Committee. For any of our product candidates for which we are seeking regulatory approval in the U.S. or the EU, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.
While we received approval of ORLYNVAH™ for the treatment of uUTIs caused certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options without such contingencies, if we receive approval of an NDA or foreign marketing application for our future product candidates, the FDA or the applicable foreign regulatory agency may
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grant approval contingent on the performance of costly additional clinical trials, often referred to as Phase 4 clinical trials, and the FDA may require the implementation of a REMS, which may be required to ensure safe use of the drug after approval. The FDA or the applicable regulatory agency also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and could materially adversely impact our business and prospects.
Disruptions in the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Disruptions at the FDA, EMA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, in recent years, including in 2018 and 2019, the U.S. government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities. In addition, disruptions may result also events similar to the COVID-19 pandemic. During the COVID-19 pandemic, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications. In the event of a similar public health emergency in the future, the FDA may not be able to continue its current pace and review timelines could be extended. Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their regulatory activities.
If a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Future shutdowns or other disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.
If we are unable to obtain marketing approval in jurisdictions outside the United States, we will not be able to market any product or product candidates outside of the United States.
In order to market and sell ORLYNVAH™, sulopenem or our other future product candidates in the European Union and many other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. While we received approval by the FDA for ORLYNVAH™ for the treatment of uUTIs caused certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options, approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. The approval procedure varies among countries and can involve additional testing. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis or at all.
For example, we obtained scientific advice from the EMA for each of the prior Phase 3 clinical trials in the uUTI, cUTI and cIAI indications, as well as to gain alignment on non-clinical supportive information required for EMA submission. We are not in alignment with regard to the comparator agent selected for the cUTI clinical trial and would need to consider other options to accommodate a European filing for this indication. The EMA may request that we conduct one or more additional clinical trials or non-clinical studies to support potential approval for oral sulopenem and sulopenem for the cUTI indication. We cannot predict how the EMA will interpret the data and results from our Phase 3 clinical trial and other elements of our development program, or whether oral sulopenem or sulopenem will receive any regulatory approvals in the European Union.
In the event our strategic process does not result in any type of transaction, and subject to our ability to raise sufficient capital to fund operations, we may seek a commercial partner and/or directly commercialize ORLYNVAH™ in the United States with a targeted sales force in the community setting. Outside of the United States, we continue to evaluate the options to maximize the value of our sulopenem program. We believe that in addition to the United States, Europe represents a significant market opportunity because of rising rates of extended spectrum ß-lactamases (ESBL) resistance.
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Additionally, we could face heightened risks with respect to obtaining marketing authorization in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit. The UK is no longer part of the European Single Market and EU Customs Union. As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, became responsible for supervising medicines and medical devices in Great Britain, or GB, comprising England, Scotland and Wales under domestic law, whereas under the terms of the Northern Ireland Protocol, Northern Ireland is currently subject to EU rules. The UK and EU have however agreed to the Windsor Framework which fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK Once implemented, the changes introduced by the Windsor Framework will see the MHRA be responsible for approving all medicinal products destined for the UK market (i.e., GB and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland. Any delay in obtaining, or an inability to obtain, any marketing authorizations, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the UK for our products or product candidates, which could significantly and materially harm our business.
In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted. For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020. The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023. The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026. The revisions may, however, have a significant impact on the pharmaceutical industry and our business in the long term.
While we have received regulatory approval from the FDA for ORLYNVAH™ for the treatment of uUTIs caused certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options, we will be subject to ongoing obligations and continuing regulatory review, which may result in significant additional expense. Additionally, ORLYNVAH™ and any other product candidates, including sulopenem, if approved, could be subject to 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 ORLYNVAH™ or any of our product candidates, when and if approved.
ORLYNVAH™ and any other product candidate, including sulopenem, for which we obtain marketing approval will also be subject to ongoing regulatory requirements for labeling, packaging, storage, distribution, advertising, promotion, record-keeping and submission of safety and other post marketing information. For example, approved products, manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs. As such, we and our contract manufacturers will be subject to continual review and periodic inspections to assess compliance with cGMPs. Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. We will also be required to report certain adverse reactions and production problems, if any, to the FDA and to comply with requirements concerning advertising and promotion for our products. For example, in addition to reporting of adverse reactions to ORLYNVAH™, post marketing requirements for ORLYNVAH™ also include conducting a U.S. surveillance study over a five-year period after the introduction of ORLYNVAH™ to the market to determine if resistance is resistance or decreased susceptibility to ORLYNVAH™ is occurring in the target population of bacteria identified in the approved label for ORLYNVAH™.
In addition, 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, may be subject to significant conditions of approval or may impose requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. The FDA may also require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, it may impose restrictions on that product or us. In addition, if any product fails to comply with applicable regulatory requirements, a regulatory agency may:
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Finally, our ability to develop and market new drug products including ORLYNVAH™ may be impacted by ongoing litigation challenging the FDA’s approval of mifepristone. Specifically, on April 7, 2023, the U.S. District Court for the Northern District of Texas stayed the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various conditions adopted under a REMS. In reaching that decision, the district court made a number of findings that may negatively impact the development, approval and distribution of drug products in the U.S. Among other determinations, the district court held that plaintiffs were likely to prevail in their claim that FDA had acted arbitrarily and capriciously in approving mifepristone without sufficiently considering evidence bearing on whether the drug was safe to use under the conditions identified in its labeling. Further, the district court read the standing requirements governing litigation in federal court as permitting a plaintiff to bring a lawsuit against the FDA in connection with its decision to approve an NDA or establish requirements under a REMS based on a showing that the plaintiff or its members would be harmed to the extent that FDA’s drug approval decision effectively compelled the plaintiffs to provide care for patients suffering adverse events caused by a given drug.
On April 12, 2023, the district court decision was stayed, in part, by the U.S. Court of Appeals for the Fifth Circuit. Thereafter, on April 21, 2023, the U.S. Supreme Court entered a stay of the district court’s decision, in its entirety, pending disposition of the appeal of the district court decision in the Court of Appeals for the Fifth Circuit and the disposition of any petition for a writ of certiorari to or the Supreme Court. The Court of Appeals for the Fifth Circuit held oral argument in the case on May 17, 2023 and, on August 16, 2023, issued its decision. The court declined to order the removal of mifepristone from the market, finding that a challenge to the FDA’s initial approval in 2000 is barred by the statute of limitations. But the Appeals Court did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone that FDA authorized in 2016 and 2021 were arbitrary and capricious. On September 8, 2023, the Justice Department and a manufacturer of mifepristone filed petitions for a writ of certiorari, requesting that asked the U.S. Supreme Court to review the Appeals Court decision. On December 13, 2023, the Supreme Court granted these petitions for writ of certiorari for the appeals court decision.
Similar restrictions apply to the approval of our products in the European Union. The holder of a marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. These include compliance with the European Union’s stringent pharmacovigilance or safety reporting rules, which can impose post-authorization studies and additional monitoring obligations; the manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory; and the marketing and promotion of authorized drugs, which are strictly regulated in the European Union and are also subject to EU Member State laws.
Accordingly, in connection with our currently approved product and assuming we, or our collaborators, receive marketing approval for one or more other product candidates, we, and our collaborators, and our and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control. If we, and our collaborators, are not able to comply with post-approval regulatory requirements, our or our collaborators’ ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.
Any regulatory approval to market our products will be limited by indication. If we fail to comply or are found to be in violation of FDA regulations restricting the promotion of our products for unapproved uses, we could be subject to criminal penalties, substantial fines or other sanctions and damage awards.
The regulations relating to the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA, EMA, MHRA and other government agencies. In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a drug product. Physicians may nevertheless
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prescribe our products off-label to their patients in a manner that is inconsistent with the approved label. We intend to implement compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations. Notwithstanding these programs, the FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our products for unapproved uses. We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses.
Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances. For example, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies governing the distribution of scientific information on unapproved uses to healthcare providers. This draft guidance calls for such communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use. In addition, under some relatively recent guidance from the FDA and the Pre-Approval Information Exchange Act (PIE Act) signed into law as part of the Consolidated Appropriations Act of 2023, companies may also promote information that is consistent with the prescribing information and proactively speak to formulary committee members of payors regarding data for an unapproved drug or unapproved uses of an approved drug. We may engage in these discussions and communicate with healthcare providers, payors and other constituencies in compliance with all applicable laws, regulatory guidance and industry best practices. We will need to carefully navigate the FDA’s various regulations, guidance and policies, along with recently enacted legislation, to ensure compliance with restrictions governing promotion of our products.
In recent years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses and other sales practices, including the Department of Justice and various U.S. Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices. These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the FDCA, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement. Many of these investigations originate as “qui tam” actions under the False Claims Act. Under the False Claims Act, any individual can bring a claim on behalf of the government alleging that a person or entity has presented a false claim or caused a false claim to be submitted to the government for payment. The person bringing a qui tam suit is entitled to a share of any recovery or settlement. Qui tam suits, also commonly referred to as “whistleblower suits,” are often brought by current or former employees. In a qui tam suit, the government must decide whether to intervene and prosecute the case. If it declines, the individual may pursue the case alone.
If the FDA or any other governmental agency initiates an enforcement action against us or if we are the subject of a qui tam suit and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations. Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects and reputation.
Any relationships we may have with customers, healthcare providers and professionals and third-party payors, among others, will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to penalties, including criminal sanctions, civil penalties, contractual damages, reputational harm, fines, disgorgement, exclusion from participation in government healthcare programs, curtailment or restricting of our operations and diminished profits and future earnings.
Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any products for which we are able to obtain marketing approval. Any arrangements we have with healthcare providers, third-party payors and customers will subject us to broadly applicable fraud and abuse and other healthcare laws and regulations. The laws and regulations may constrain the business or financial arrangements and relationships through which we conduct clinical research, market, sell and distribute any products for which we obtain marketing approval. These include the following:
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Efforts to ensure that any business arrangements we have with third parties and our business generally, will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, individual imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm and the curtailment or restructuring of our operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union. The provision of benefits or advantages to physicians is governed by the national anti-bribery laws of EU Member States. In addition, payments made to physicians in certain EU Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States. These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
In the United States, there have been and continue to be a number of legislative and regulatory changes, and proposed changes, that could affect the future results of our business and operations. In particular, there have been and continue to be a number of initiatives at the federal and state levels that seek to reduce healthcare costs. For example, in March 2010 the Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act) (ACA) was enacted, which has substantially changed the way health care is financed by both governmental and private insurers, and significantly impacted the U.S. pharmaceutical industry.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable
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to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013.
The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
Under current legislation, the actual reductions in Medicare payments may vary up to 4%. The Consolidated Appropriations Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare program. Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010, or PAYGO, sequester for two years, through the end of calendar year 2024. Triggered by enactment of the American Rescue Plan Act of 2021, the 4% cut to the Medicare program would have taken effect in January 2023. The Consolidated Appropriation Act’s health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and lowers the payment reduction percentages in fiscal years 2030 and 2031.
Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017, or the TCJA, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the PPACA brought by several states without specifically ruling on the constitutionality of the ACA. Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.
The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. On January 28, 2021, however, President Biden issued a new executive order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access. Under this executive order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19; demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and the ACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.
In addition, the CMS has proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. On November 30, 2018, CMS announced a proposed rule that would amend the Medicare Advantage and Medicare Part D prescription drug benefit regulations to reduce out of pocket costs for plan enrollees and allow Medicare plans to negotiate lower rates for certain drugs. Among other things, the proposed rule changes would allow Medicare Advantage plans to use pre authorization (PA) and step therapy (ST) for six protected classes of drugs, with certain exceptions, permit plans to implement PA and ST in Medicare Part B drugs; and change the definition of “negotiated prices” while adding a definition of “price concession” in the regulations. It is unclear whether these proposed changes will be accepted, and if so, what effect such changes will have on our business.
In the EU, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted. While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once applicable, it will have a phased implementation depending on the concerned products. The Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas. It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement.
We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product we might bring to market. Reductions in reimbursement levels may negatively impact
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the prices we receive or the frequency with which our products are prescribed or administered. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop or commercialize product candidates.
In addition, several significant administrative law cases were decided by the U.S. Supreme Court in 2024, most notably Loper Bright Enterprises v. Raimondo, which overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. Since 1984, Chevron had required that courts defer to reasonable agency interpretations of statutes and agency action. In Loper Bright, the Supreme Court held that the U.S. Administrative Procedure Act requires courts to exercise their independent judgment when deciding whether an agency has acted within its statutory authority, and that courts may not defer to an agency interpretation solely because a statute is ambiguous. These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies, including the FDA and CMS, that we have relied on and intend to rely on in the future. Any such challenges, if successful, could have an impact on our business, and any such impact could be material. In addition to potential changes to regulations and agency guidance as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays in and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations.
The prices of prescription pharmaceuticals in the United States and foreign jurisdictions are subject to considerable legislative and executive actions and could impact the prices we obtain for our products, if and when approved.
The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the United States. There have been several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States. That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America (PhRMA) but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS. Nine states (Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Texas, Vermont and Wisconsin) have passed laws allowing for the importation of drugs from Canada. Certain of these states have submitted Section 804 Importation Program proposals and are awaiting FDA approval. On January 5, 2023, the FDA approved Florida’s plan for Canadian drug importation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which has been delayed until January 1, 2032 by the Inflation Reduction Act, or IRA.
On July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals. To address these costs, the executive order directs HHS to create a plan within 45 days to combat “excessive pricing of prescription drugs and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such drugs, and to address the recurrent problem of price gouging.” Thereafter, on September 9, 2021, HHS released its plan to reduce drug prices. The key features of that plan are to: (a) make drug prices more affordable and equitable for all consumers and throughout the health care system by supporting drug price negotiations with manufacturers; (b) improve and promote competition throughout the prescription drug industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency; and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.
More recently, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law by President Biden. The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products that have been approved for at least nine years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition. Nonetheless, since CMS may establish a maximum price for these products in price negotiations, we would be fully at risk of government action if our products are the subject of Medicare price
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negotiations. Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.
Further, the new legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year. In addition, the IRA potentially raises legal risks with respect to individuals participating in a Medicare Part D prescription drug plan who may experience a gap in coverage if they required coverage above their initial annual coverage limit before they reached the higher threshold, or “catastrophic period” of the plan. Individuals requiring services exceeding the initial annual coverage limit and below the catastrophic period, must pay 100% of the cost of their prescriptions until they reach the catastrophic period. Among other things, the IRA contains many provisions aimed at reducing this financial burden on individuals by reducing the co-insurance and co-payment costs, expanding eligibility for lower income subsidy plans, and price caps on annual out-of-pocket expenses, each of which could have potential pricing and reporting implications.
On June 6, 2023, Merck & Co. filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, a number of other parties, including the U.S. Chamber of Commerce (Chamber), Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS. We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results. Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.
Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
Finally, in the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing European Union and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize our product candidates, if approved.
In markets outside of the United States and the European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States, the European Union or any other jurisdiction. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain
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regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.
Reporting and payment obligations under the Medicaid Drug Rebate Program and other governmental drug pricing programs are complex and may involve subjective decisions. Any failure to comply with those obligations could subject us to penalties and sanctions.
As a condition of reimbursement by various federal and state health insurance programs, pharmaceutical companies are required to calculate and report certain pricing information to federal and state agencies. The regulations governing the calculations, price reporting and payment obligations are complex and subject to interpretation by various government and regulatory agencies, as well as the courts. Reasonable assumptions have been made where there is lack of regulations or clear guidance and such assumptions involve subjective decisions and estimates. Pharmaceutical companies are required to report any revisions to our calculation, price reporting and payment obligations previously reported or paid. Such revisions could affect liability to federal and state payers and also adversely impact reported financial results of operations in the period of such restatement.
Uncertainty exists as new laws, regulations, judicial decisions, or new interpretations of existing laws, or regulations related to our calculations, price reporting or payments obligations increases the chances of a legal challenge, restatement or investigation. If a company becomes subject to investigations, restatements, or other inquiries concerning compliance with price reporting laws and regulations, it could be required to pay or be subject to additional reimbursements, penalties, sanctions or fines, which could have a material adverse effect on the business, financial condition and results of operations. In addition, it is possible that future healthcare reform measures could be adopted, which could result in increased pressure on pricing and reimbursement of products and thus have an adverse impact on financial position or business operations.
Further, state Medicaid programs may be slow to invoice pharmaceutical companies for calculated rebates resulting in a lag between the time a sale is recorded and the time the rebate is paid. This results in a company having to carry a liability on its consolidated balance sheets for the estimate of rebate claims expected for Medicaid patients. If actual claims are higher than current estimates, the company’s financial position and results of operations could be adversely affected.
In addition to retroactive rebates and the potential for 340B Program refunds, if a pharmaceutical firm is found to have knowingly submitted any false price information related to the Medicaid Drug Rebate Program to CMS, it may be liable for civil monetary penalties. Such failure could also be grounds for CMS to terminate the Medicaid drug rebate agreement, pursuant to which companies participate in the Medicaid program. In the event that CMS terminates a rebate agreement, federal payments may not be available under government programs, including Medicaid or Medicare Part B, for covered outpatient drugs.
Additionally, if a pharmaceutical company overcharges the government in connection with the Family Self-Sufficiency Program or Tricare Retail Pharmacy Program, whether due to a misstated Federal Ceiling Price or otherwise, it is required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against a company under the False Claims Act and other laws and regulations. Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could adversely affect our business, results of operations and financial condition.
Our operations are subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (FCPA), the Irish Criminal Justice (Corruption Offenses) Act 2018, and other anti-corruption laws that apply in countries where we do business and may do business in the future. The FCPA and these other laws generally prohibit us, our officers, and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We may in the future operate in jurisdictions that pose a high risk of potential FCPA violations, and we may participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under the FCPA or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in that existing laws might be administered or interpreted.
Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.
We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United States, and authorities in the European Union, including applicable export control regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations, collectively referred to as the trade control laws. Further, the provision of benefits or advantages to physicians to induce or encourage the prescription,
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recommendation, endorsement, purchase, supply, order, or use of medicinal products is prohibited in the European Union. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of European Union member states, such as the UK Bribery Act 2010. Infringement of these laws could result in substantial fines and imprisonment. Payments made to physicians in certain European Union member states must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization, and/or the regulatory authorities of the individual European Union member states. These requirements are provided in the national laws, industry codes, or professional codes of conduct applicable in the European Union member states. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines, or imprisonment.
There is no assurance that we will be effective in ensuring our compliance with all applicable anti-corruption laws, including the FCPA or other legal requirements, including trade control laws. If we are not in compliance with the FCPA and other anti-corruption laws or trade control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or trade control laws by U.S. or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition.
We are subject to various laws protecting the confidentiality of certain patient health information, and our failure to comply could result in penalties and reputational damage. Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, virtually every jurisdiction in which we operate has established its own data security and privacy frameworks with which we must comply. For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the EU General Data Protection Regulation (GDPR), which took effect across all member states of the European Economic Area (EEA), in May 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data (including health and other sensitive data), including the following: to provide information to individuals regarding data processing activities; to implement safeguards to protect the security and confidentiality of personal data; to make a mandatory breach notification in certain circumstances; and to take certain measures when engaging third-party processors. The GDPR increases our obligations with respect to clinical trials conducted in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States. The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater. The GDPR also confers a private right of action on data subjects to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In addition, the GDPR provides that EU member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data adding to the complexity of processing personal data in the European Union.
In July 2020, the Court of Justice of the European Union (CJEU) invalidated the EU-U.S. Privacy Shield framework, one of the mechanisms used to legitimize the transfer of personal data from the EEA to the United States. The CJEU decision also drew into question the long-term viability of an alternative means of data transfer, the standard contractual clauses, for transfers of personal data from the EEA to the United States. Additionally, in October 2022, President Biden signed an executive order to implement the EU-U.S. Data Privacy Framework, which would serve as a replacement to the EU-US Privacy Shield. The European Union initiated the process to adopt an adequacy decision for the EU-U.S. Data Privacy Framework in December 2022 and the European Commission adopted the adequacy decision on July 10, 2023. The adequacy decision will permit U.S. companies who self-certify to the EU-U.S. Data Privacy Framework to rely on it as a valid data transfer mechanism for data transfers from the EU to the U.S. However, some privacy advocacy groups have already suggested that they will be challenging the EU-U.S. Data Privacy Framework. If these challenges are successful, they may not only impact the EU-U.S. Data Privacy Framework, but also further limit the viability of the standard contractual clauses and other data transfer mechanisms. The uncertainty around this issue has the potential to impact our business at the international level.
Similar actions are either in place or under way in the United States. There are a broad variety of data protection laws that are applicable to our activities, and a wide range of enforcement agencies at both the state and federal levels that can review companies for privacy and data security concerns based on general consumer protection laws. The Federal Trade Commission and state Attorneys General all are aggressive in reviewing privacy and data security protections for consumers. New laws also are being considered at both the state and federal levels. For example, the California Consumer Privacy Act—which went into effect on January 1, 2020—is
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creating similar risks and obligations as those created by GDPR, though the Act does exempt certain information collected as part of a clinical trial subject to the Federal Policy for the Protection of Human Subjects (the Common Rule). Many other states are considering similar legislation. A broad range of legislative measures also have been introduced at the federal level. Accordingly, failure to comply with federal and state laws (both those currently in effect and future legislation) regarding privacy and security of personal information could expose us to fines and penalties under such laws. There also is the threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.
Given the breadth and depth of changes in data protection obligations, complying with the GDPR’s requirements is rigorous and time intensive and requires significant resources and a review of our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the European Union. The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities, and could lead to government enforcement actions, private litigation and significant fines and penalties against us, all of which could increase our cost of doing business and have a material adverse effect on our business, financial condition or results of operations. Similarly, failure to comply with federal and state laws regarding privacy and security of personal information could expose us to fines and penalties under such laws. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.
Further, we cannot assure you that our third-party service providers with access to our or our customers’, suppliers’, trial patients’ and employees’ personally identifiable and other sensitive or confidential information in relation to which we are responsible will not breach contractual obligations imposed by us, or that they will not experience data security breaches or attempts thereof, which could have a corresponding effect on our business, including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, results of operations and financial condition. We cannot assure you that our contractual measures and our own privacy and security-related safeguards will protect us from the risks associated with the third-party processing, storage and transmission of such information.
Our employees, independent contractors, principal investigators, CROs, consultants or vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants or vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA; manufacturing standards; federal and state healthcare fraud and abuse laws and regulations; or laws that require the true, complete and accurate reporting of financial information or data. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, curtailment of our operations, contractual damages, reputational harm, and diminished potential profits and future earnings, any of which could adversely affect our business, financial condition, results of operations or growth prospects.
Risks Related to Employee Matters and Managing Growth
Our future success depends on our ability to retain our Chief Executive Officer and other key executives and to attract, retain and motivate qualified personnel.
Our industry has experienced a high rate of turnover of management personnel in recent years. We are highly dependent on the development, regulatory, commercialization and business development expertise of Corey N. Fishman, our Chief Executive Officer,
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as well as the other principal members of our management team. Although we have formal employment agreements with our executive officers, these agreements do not prevent them from terminating their employment with us at any time. We do not maintain “key man” insurance with respect to any of our executive officers or key employees.
If we lose one or more of our executive officers or key employees, our ability to implement our business strategy successfully could be seriously harmed. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize product candidates successfully. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we have in the past, and may continue to do so in the future, relied on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be engaged by entities other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to develop and commercialize product candidates will be limited.
We may encounter difficulties in managing growth, which could disrupt our operations.
We could experience growth in the number of our employees and the scope of our operations or in the event we are successful in obtaining regulatory approval particularly in the areas of manufacturing, regulatory affairs, sales, marketing and health resources. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities to devote time to managing these growth activities. To manage these growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. Our inability to effectively manage any expansion of our operations may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Any growth experienced could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage such growth, our expenses may increase more than expected, our potential ability to generate revenue could be reduced and we may not be able to implement our business strategy.
In addition, we have and may continue to need to adjust the size of our workforce as a result of changes to our expectations for our business, which can result in diversion of management attention, disruptions to our business, and related expenses.
If approvals are obtained outside of the United States, we will be subject to additional risks in conducting business in those markets.
Even if we are able to obtain approval for commercialization of a product candidate in a country outside of the United States, we will be subject to additional risks related to international business operations, including:
These and other risks may materially adversely affect our ability to attain or sustain revenue from markets outside of the United States.
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We may engage in acquisitions that could disrupt our business, cause dilution to our shareholders or reduce our financial resources.
In the future, we may enter into transactions to acquire other businesses, products or technologies. Any such proposed acquisitions may be subject to the consent of certain holders of the Securities in accordance with the terms and conditions of the EN Indenture and RLN Indenture. If we do identify suitable candidates for acquisition, we may not be able to make such acquisitions on favorable terms, or at all, and we may not be able to obtain approval of or consent to such acquisitions from holders of the Securities. Any acquisitions we make may not strengthen our competitive position, and these transactions may be viewed negatively by customers or investors. We may decide to incur debt in connection with an acquisition or issue our ordinary shares or other equity securities to the shareholders of the acquired company, which would reduce the percentage ownership of our then current shareholders. We could incur losses resulting from undiscovered liabilities of the acquired business that are not covered by the indemnification we may obtain from the seller. In addition, we may not be able to successfully integrate the acquired personnel, technologies and operations into our existing business in an effective, timely and non-disruptive manner. Acquisitions may also divert management attention from day-to-day responsibilities, increase our expenses and reduce our cash available for operations and other uses. We cannot predict the number, timing or size of future acquisitions or the effect that any such transactions might have on our operating results.
Risks Related to Taxation
As used in this section, Risks Related to Taxation, the term “U.S. Holder” means a beneficial owner of our ordinary shares that is, for U.S. federal income tax purposes, (1) an individual who is a citizen or resident of the United States, (2) a corporation (or entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia or otherwise treated as a “domestic corporation” for such purposes, (3) an estate the income of which is subject to U.S. federal income tax regardless of its source or (4) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions or (y) that has elected under applicable U.S. Treasury regulations to be treated as a domestic trust. If a partnership or other pass-through entity holds our ordinary shares, the U.S. federal income tax treatment of a partner in that partnership or entity generally will depend upon the status of that partner and the activities of that partnership or entity.
We have been a passive foreign investment company for U.S. federal income tax purposes in the past and we could be a passive foreign investment company in the future, which could subject U.S. Holders to adverse U.S. federal income tax consequences.
We were a passive foreign investment company (PFIC) for U.S. federal income tax purposes for our taxable year ended December 31, 2017. Based on our gross income and average value of our gross assets, we do not believe we (or our wholly owned non-U.S. subsidiaries) were a PFIC for the taxable year ended December 31, 2018 or for any subsequent completed taxable year. We do not expect to be a PFIC for the taxable year ending December 31, 2024; however, our status, and the status of our non-U.S. subsidiaries, in any taxable year will depend on our assets and activities as determined at various times throughout that taxable year. As our PFIC status is a factual determination made annually after the end of each taxable year, there can be no assurances as to that status for the current taxable year or any future taxable year.
We will be a PFIC in any taxable year if at least (i) 75% of our gross income is “passive income” or (ii) 50% of the average gross value of our assets, determined on a quarterly basis, is attributable to assets that produce, or are held for the production of, passive income. We refer to the passive income test as the “PFIC Income Test” and the asset test as the “PFIC Asset Test”.
If we are a PFIC in any taxable year in which a U.S. Holder holds the shares of our stock, subject to the next sentence, we always will be a PFIC with respect to those shares, regardless of the results of the PFIC Income Test or the PFIC Asset Test as applied to us in subsequent taxable years. However, under applicable Treasury regulations, if the preceding sentence applies to a U.S. Holder we will cease to be treated as a PFIC with respect to that U.S. Holder if, in the manner and at the time required by those regulations, the U.S. Holder elects to recognize (and pay tax on, in the manner described in the next paragraph) any unrealized gain in the shares of our stock owned by that U.S. Holder.
If we are a PFIC and a U.S. Holder does not make a mark-to-market election (discussed below) with respect to our ordinary shares, under the so-called “excess distribution” regime that U.S. Holder may be subject to adverse tax consequences, including deferred tax and interest charges, with respect to certain distributions on our ordinary shares, any gain realized on a disposition of our ordinary shares and certain other events. The effect of these tax consequences could be materially adverse to the shareholder. If, in any taxable year during which a U.S. Holder holds our ordinary shares and any of our non-U.S. subsidiaries is a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be taxed under the excess distribution regime on distributions by the lower-tier PFIC and on gain from the disposition of shares of the lower-tier PFIC even though such U.S. Holder would not receive the proceeds of those distributions or dispositions.
If a U.S. Holder makes a valid and timely mark-to-market election with respect to our ordinary shares, that U.S. Holder will recognize as ordinary income or loss in each taxable year that we meet the PFIC Income Test or PFIC Asset Test an amount equal to the difference between that U.S. Holder’s adjusted basis in our ordinary shares and the fair market value of the ordinary shares, thus
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also possibly giving rise to phantom income and a potential out-of-pocket tax liability. Ordinary loss generally is recognized only to the extent of net mark-to-market gains previously included in income. The mark-to-market election generally will not be available with respect to any of our subsidiaries that is a PFIC and gain recognized on the sale of our ordinary shares that is attributable to a subsidiary that is a PFIC may result in such gain being subject to deferred tax and interest charges.
In certain circumstances a U.S. Holder may make a qualified electing fund, or “QEF election,” under the U.S. federal income tax laws with respect to that holder’s interest in a PFIC. Such an election may mitigate some of the adverse U.S. federal income tax consequences that could otherwise apply to a U.S. Holder under the excess distribution regime. However, we do not expect to provide U.S. Holders with the information necessary to make a valid QEF election, and U.S. Holders should therefore assume that a QEF election will not be available.
If the IRS determines that we are not a PFIC, and a U.S. Holder previously paid taxes pursuant to a mark-to-market election, that holder may have paid more taxes than the holder legally owed.
If the U.S. Internal Revenue Service (IRS) makes a determination that we were not a PFIC in a prior taxable year and a U.S. Holder previously paid taxes pursuant to a mark-to-market election, that U.S. Holder may have paid more taxes than were legally owed due to such election. If such U.S. Holder does not, or is not able to, file a refund claim before the expiration of the applicable statute of limitations, that U.S. Holder will not be able to claim a refund for those taxes.
Changes to U.S. federal income tax laws could have material consequences for us and U.S. Holders of our ordinary shares.
Future U.S. legislation, U.S. Treasury regulations, judicial decisions and IRS rulings could affect the U.S. federal income tax treatment of us and U.S. Holders of our ordinary shares, possibly with retroactive effect.
A future transfer of a shareholder’s ordinary shares, other than one effected by means of the transfer of book entry interests in DTC, may be subject to Irish stamp duty.
Transfers of our ordinary shares effected by means of the transfer of book entry interests in the Depository Trust Company (DTC) should not be subject to Irish stamp duty. Where the ordinary shares are traded through DTC through brokers who hold such ordinary shares on behalf of customers an exemption should be available because our ordinary shares are traded on a recognized stock exchange in the U.S. However, if a shareholder holds their ordinary shares directly rather than beneficially through DTC through a broker, any transfer of their ordinary shares could be subject to Irish stamp duty (currently at the rate of 1% of the higher of the price paid or the market value of the shares acquired). Payment of Irish stamp duty is generally a legal obligation of the transferee. The potential for stamp duty to arise could adversely affect the price of our ordinary shares.
Dividends paid by us may be subject to Irish dividend withholding tax.
We have never declared or paid cash dividends on our ordinary shares and we do not expect to pay dividends for the foreseeable future. To the extent that we do make dividend payments (or other returns to shareholders that are treated as “distributions” for Irish tax purposes), it should be noted that, in certain limited circumstances, dividend withholding tax (currently at a rate of 25%) may arise in respect of dividends paid on our ordinary shares. A number of exemptions from dividend withholding tax exist, such that shareholders resident in EU member states (other than Ireland) or other countries with which Ireland has signed a double tax treaty, which includes the United States, should generally be entitled to exemptions from dividend withholding tax provided that the appropriate documentation is in place. The ability of a U.S. Holder to credit any Irish dividend withholding tax against that U.S. Holder’s tentative U.S. federal tax liability may be subject to limitations.
Dividends received by Irish residents and certain other shareholders may be subject to Irish income tax.
We have never declared or paid cash dividends on our ordinary shares and we do not expect to pay dividends for the foreseeable future. To the extent that we do make dividend payments (or other returns to shareholders that are treated as “distributions” for Irish tax purposes), it should be noted that shareholders who are entitled to an exemption from Irish dividend withholding tax on dividends received from us will not be subject to Irish income tax in respect of those dividends, unless they have some connection with Ireland other than their shareholding in Iterum Therapeutics plc (for example, they are resident in Ireland) or they hold their ordinary shares through a branch or agency in Ireland which carries out a trade of their behalf. Shareholders who are not resident nor ordinarily resident in Ireland, but who are not entitled to an exemption from Irish dividend withholding tax, will generally have no further liability to Irish income tax on those dividends which suffer dividend withholding tax.
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Our ordinary shares received by means of a gift or inheritance could be subject to Irish capital acquisitions tax.
Irish capital acquisitions tax (CAT) could apply to a gift or inheritance of our ordinary shares irrespective of the place of residence, ordinary residence or domicile of the parties. This is because our ordinary shares will be regarded as property situated in Ireland. The person who receives the gift or inheritance has primary liability for CAT.
Risks Related to Our Ordinary Shares
An active trading market for our ordinary shares may not be sustained.
Our ordinary shares began trading on the Nasdaq Global Market on May 25, 2018 and on December 23, 2020, we transferred the listing of our ordinary shares to The Nasdaq Capital Market. Given the relatively limited trading history of our ordinary shares and the intermittent volume of trading of our ordinary shares during that time, there is a risk that an active trading market for our shares may not be sustained, which could put downward pressure on the market price of our ordinary shares and thereby affect the ability of shareholders to sell their shares. An inactive trading market for our ordinary shares may also impair our ability to raise capital to continue to fund our operations by issuing shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.
The price of our ordinary shares has been volatile and could be subject to volatility related or unrelated to our operations and our shareholders’ investment in us could suffer a decline in value.
Our share price has been and may continue to be volatile. The daily closing market price for our ordinary shares has varied between a high price of $2.30 on November 24, 2023, and a low price of $0.7699 on November 13, 2023, in the twelve-month period ending on November 12, 2024. During this time, the price per ordinary share has ranged from an intra-day low of $0.705 per share to an intra-day high of $2.50 per share. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their ordinary shares at or above the price paid for the shares.
We may continue to incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our ordinary shares may fluctuate dramatically, and may decline rapidly, regardless of any developments in our business.
The trading price of our ordinary shares could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The market price for our ordinary shares may be influenced by those factors discussed elsewhere in this “Risk Factors” section of this document and others, such as:
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In addition, the stock market in general, or the market for equity securities in our industry, may experience extreme volatility unrelated to our operating performance. In recent years, the market for pharmaceutical and biotechnology companies in particular has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose shares are experiencing those price and volume fluctuations. These broad market fluctuations may adversely affect the trading price or liquidity of our ordinary shares regardless of our actual operating performance. Any sudden decline in the market price of our ordinary shares could trigger securities class-action lawsuits against us. If any of our shareholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the time and attention of our management would be diverted from our business and operations. We also could be subject to damages claims if we are found to be at fault in connection with a decline in our share price.
The volatility of our shares and shareholder base may hinder or prevent us from engaging in beneficial corporate initiatives.
Our shareholder base is comprised of a large number of retail (or non-institutional) investors, which creates more volatility since shares change hands frequently. In accordance with our governing documents and applicable laws, there are a number of initiatives that require the approval of shareholders at an annual or extraordinary general meeting of shareholders. To hold a valid meeting, a quorum comprised of one or more Members (as defined in our Amended and Restated Constitution) whose name is entered in our register of members as a registered holder of our ordinary shares, present in person or by proxy (whether or not such Member actually exercises his voting rights in whole, in part or at all), holding not less than a majority of our issued and outstanding ordinary shares entitled to vote at a meeting of shareholders, is required. A record date is established to determine which shareholders are eligible to vote at the meeting, which record date must not be more than 60 days prior to the date of the meeting. Since our shares change hands frequently, there can be a significant turnover of shareholders between the record date and the meeting date which makes it harder to get shareholders to vote. While we make every effort to engage retail investors, such efforts can be expensive and the frequent turnover creates logistical issues for obtaining shareholder approval. Further, retail investors tend to be less likely to vote in comparison to institutional investors. Failure to secure sufficient votes may impede our ability to move forward with initiatives that are intended to grow the business and create shareholder value or prevent us from engaging in such initiatives at all. If we find it necessary to delay or adjourn meetings or to seek approval again, it will be time consuming and we will incur additional costs.
If we fail to comply or regain compliance with the listing requirements of the Nasdaq Capital Market, we may be delisted and the price of our ordinary shares, our ability to access the capital markets and our financial condition could be negatively impacted and the delisting of our ordinary shares would result in an event of default and/or fundamental change under our debt instruments.
Our ordinary shares are currently listed for quotation on the Nasdaq Capital Market. To maintain the listing of our ordinary shares on the Nasdaq Capital Market, we are required to meet certain listing requirements, including, among others:
In addition to the above requirements, we must meet at least one of the following requirements:
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On April 3, 2024, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market, LLC, (Nasdaq) indicating that we were not in compliance with Nasdaq Listing Rule 5550(b) because (i) the stockholders’ equity (deficit) of the Company of ($6,403,000) as of December 31, 2023, as reported in our Annual Report on Form 10-K for the year ended December 31, 2023, was below the minimum stockholders’ equity requirement of $2,500,000 and (ii) we did not, as of April 3, 2024, meet the alternative standards of market value of listed securities or net income from continuing operations for compliance with Nasdaq Listing Rule 5550(b)(1). The letter indicated that we had a period of 45 calendar days from the date of the letter to submit a plan to regain compliance. We submitted our plan to regain compliance to Nasdaq on May 20, 2024.
On May 29, 2024, we received a letter from Nasdaq notifying us that Nasdaq had reviewed our plan for regaining compliance with Nasdaq Listing Rule 5550(b)(1) and granted us a 180-calendar day extension from April 3, 2024 (or until September 30, 2024) to evidence compliance with Nasdaq Listing Rule 5550(b)(1).
On October 1, 2024, we received a delisting determination letter from Nasdaq advising us that Nasdaq had determined that we did not meet the terms of the extension. We submitted a hearing request to the Nasdaq Hearings Panel (the Panel), and on October 9, 2024, we received formal notice from Nasdaq that the Panel will consider our appeal at an oral hearing on November 21, 2024. At the Panel hearing, we intend to present a plan to regain compliance with the minimum stockholders' equity requirement. Pursuant to the Nasdaq Listing Rules, the hearing request has stayed the suspension of trading and delisting of our ordinary shares pending the conclusion of the hearing process. Consequently, our ordinary shares will continue to trade on the Nasdaq Capital Market under the symbol "ITRM", at least until the Panel renders a decision following the hearing.
Pursuant to the Nasdaq Listing Rules, the Panel has discretion to grant us an additional extension period not to exceed March 31, 2025.
We intend to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq. However, there can be no assurance that the Panel will grant us an additional extension period or that we will ultimately regain compliance with all applicable requirements for continued listing on The Nasdaq Capital Market.
Although we have been able to regain compliance with Nasdaq listing requirements within the manner and time periods prescribed by Nasdaq in the past, there can be no assurance that we will be able to regain compliance with respect to the current deficiency or be able to maintain compliance with the Nasdaq Capital Market continued listing requirements in the future or regain compliance with respect to any future deficiencies. This could impair the liquidity and market price of our ordinary shares. In addition, the delisting of our ordinary shares from a national exchange could have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of our ordinary shares as a result of that delisting could adversely affect our ability to raise capital on terms acceptable to us, or at all. The delisting of our ordinary shares from The Nasdaq Stock Market could also negatively impact our financial condition as it would constitute a fundamental change under the EN Indenture, which could trigger an obligation for us to repurchase the Exchangeable Notes at a repurchase price of 300% of the principal amount of the outstanding Exchangeable Notes.
Through the RLNs, we transferred to the holders thereof rights to receive certain payments in connection with commercial sales of sulopenem, which may reduce our ability to realize potential future revenue from such sales.
As part of a private placement which closed in January 2020 (the Private Placement) and subsequent rights offering (the 2020 Rights Offering), Iterum Bermuda issued RLNs which entitle the holders thereof to certain payments in connection with commercial sales of sulopenem. Holders of RLNs are entitled to payments based solely on a percentage of our net revenues from U.S. sales of specified sulopenem products (Specified Net Revenues). Payments will be due within 75 days of the end of each six-month payment measuring period (each, a Payment Measuring Period), beginning with the Payment Measuring Period ending June 30, 2020 until (i) the “Maximum Return” (as defined below) has been paid in respect of the RLNs, or (ii) December 31, 2045 (the End Date), or (iii) December 31, 2025, in the event that we have not yet received FDA approval with respect to one or more specified sulopenem products by such date. The aggregate amount of payments in respect of all RLNs during each Payment Measuring Period will be equal to the product of total Specified Net Revenues earned during such period and the applicable payment rate which, following approval by the FDA of ORLYNVAH™ for the the treatment of uUTIs caused by certain designated microorganisms in adult women who have limited or no alternative oral antibacterial treatment options, will equal up to 15%.
Prior to the End Date, Iterum Bermuda will be obligated to make payments on the RLNs from Specified Net Revenues until each RLN has received payments equal to $160.00 (or 4,000 times the principal amount of such RLN) (the Maximum Return). The principal amount of the RLNs, equal to $0.04 per RLN, is the last portion of the Maximum Return amount to which payments from Specified Net Revenue are applied. If any portion of the principal amount of the outstanding RLNs has not been paid as of the End
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Date, Iterum Bermuda must pay the unpaid portion of the principal amount. If Iterum Bermuda fails to pay any amounts on the RLNs that are due and payable, such defaulted amounts will accrue default interest at a rate per annum equal to the prime rate plus three percent (3.00%). Default interest will also accrue on the Principal Amount Multiple (as defined in the RLN Indenture) as a result of certain other defaults under the RLN Indenture at a rate per annum equal to four percent (4.00%).
Iterum Bermuda may at any time redeem for cash all, but not less than all, of the RLNs, at its option. The redemption price per RLN will be equal to the Maximum Return for each RLN, less payments made through and including the redemption date, plus certain accrued but unpaid default interest (if any). Upon a change of control of our company, we will require the ultimate beneficial owner or owners controlling the acquiring person or persons to guarantee the obligations of Iterum Bermuda under the RLN Indenture. In the event that a change of control occurs before we receive FDA approval with respect to one or more specified sulopenem products, the redemption price per RLN will be reduced to 50% of the Maximum Return for each RLN, less payments made through and including the redemption date, plus certain accrued but unpaid default interest (if any).
The payment obligations under the RLNs may reduce the revenue we are able to derive from commercial sales of sulopenem and a redemption of the RLNs would require us to use our cash resources, which could adversely affect the value of our company and the prices that investors are willing to pay for our ordinary shares and could adversely affect our business, financial condition and results of operations.
If securities or industry analysts do not publish research or reports about our company, or if they issue adverse or misleading opinions regarding us or our ordinary shares, our share price and trading volume could decline.
The trading market for our ordinary shares relies, in part, on the research and reports that industry or financial analysts publish about our company. If no, or only a few, analysts publish research or reports about our company, the market price for our ordinary shares may be adversely affected. Our share price also may decline if any analyst who covers us issues an adverse or misleading opinion regarding us, our business model, our intellectual property or our share performance, or if our pivotal safety and efficacy studies and operating results fail to meet analysts’ expectations. If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline and possibly adversely affect our ability to engage in future financings.
The issuance of additional ordinary shares may dilute our existing shareholders’ level of ownership in our Company or require us to relinquish rights.
Any issuance of securities we may undertake, whether in the future to raise additional capital or upon exchange or exercise of outstanding convertible securities, could cause the price of our ordinary shares to decline, or require us to issue shares at a price that is lower than that paid by holders of our ordinary shares in the past, which would result in those newly issued shares being dilutive.
In addition, the Exchangeable Notes are exchangeable for ordinary shares, cash or a combination of ordinary shares and cash, at our election, upon the terms and conditions specified therein. If we elect for physical settlement, the issuance of ordinary shares for the Exchangeable Notes may dilute the ownership percentage or voting power of our shareholders. As of September 30, 2024, $11.1 million aggregate principal amount of Exchangeable Notes remained outstanding. The outstanding warrants that we issued the purchasers and/or the designees of the placement agent and underwriter, as applicable, in connection with the June 3, 2020 Offering, the June 30, 2020 Offering, the October 2020 Offering, the February 2021 Underwritten Offering, the February 2021 Registered Direct Offering and the 2024 Rights Offering, are exercisable at any time until a specified expiration date, and any exercise of outstanding warrants will increase the number of shares outstanding, which may dilute the ownership percentage or voting power of our shareholders.
Similarly, the outstanding warrants that we issued SVB and Life Sciences Fund II LLC in connection with the secured credit facility we had in place with SVB are exercisable at any time until April 27, 2028, and any exercise of such warrants will increase the number of shares outstanding, which may dilute the ownership percentage or voting power of our shareholders. Additionally, the exercise of outstanding options and vesting of restricted share units under our equity incentive plans or equity inducement incentive plan or exercise of other outstanding warrants for ordinary shares may also dilute the ownership percentage or voting power of our shareholders.
Further, if we obtain funds through the sale of equity or a debt financing or through the issuance of convertible debt or preference securities, these securities would likely have rights senior to the rights of our ordinary shareholder, which could impair the value of our ordinary shares. Any debt financing we enter into may include covenants that limit our flexibility in conducting our
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business. We also could be required to seek funds through arrangements with collaborators or others, which might require us to relinquish valuable rights to our intellectual property or product candidates that we would have otherwise retained.
Sales of a substantial number of our ordinary shares in the public market, or the perception that these sales could occur, could cause our share price to fall.
A substantial portion of our outstanding ordinary shares can be traded without restriction at any time. If our current shareholders sell, or indicate an intention to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could decline.
A portion of our outstanding ordinary shares is currently restricted as a result of federal securities laws but can be sold at any time subject to applicable volume limitations.
In addition, the Exchangeable Notes are exchangeable for our ordinary shares upon the terms and conditions specified therein and a substantial portion have been exchanged for our ordinary shares. Pursuant to the investor rights agreement we entered into in connection with the Private Placement, we have filed a registration statement covering the resale of the ordinary shares issuable in connection with the exchange of the Exchangeable Notes issued as part of the Private Placement, among other securities, and the resale of the ordinary shares issuable in connection with the exchange of the Exchangeable Notes issued in connection with the 2020 Rights Offering are also covered by a registration statement.
In addition, on October 7, 2022, we entered into the Sales Agreement with HC Wainwright as agent, pursuant to which we may offer and sell ordinary shares, nominal value $0.01 per share for aggregate gross sales proceeds of up to $16.0 million, from time to time through HC Wainwright by any method permitted that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. We cannot predict if and when shares sold pursuant to the Sales Agreement, if any, will be resold in the public markets. Any of our outstanding shares that are not restricted as a result of securities laws may be resold in the public market without restriction unless purchased by our affiliates.
Furthermore, ordinary shares that are issuable upon exercise of outstanding options or reserved for future issuance under our equity incentive plans and equity inducement plan or are issuable upon exercise of our outstanding warrants will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules or performance criteria, and applicable securities laws. If any of these additional ordinary shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our ordinary shares could decline.
Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.
Shareholders may have difficulties enforcing, in actions brought in courts in jurisdictions located outside the United States, judgments obtained in the U.S. courts under the U.S. securities laws. In particular, if a shareholder sought to bring proceedings in Ireland based on U.S. securities laws, the Irish court might consider:
It may not be possible to enforce court judgments obtained in the United States against us in Ireland based on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the U.S. federal or state securities laws. We have been advised that the United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Ireland.
A judgment obtained against us will be enforced by the courts of Ireland only if the following general requirements are met:
A judgment can be final and conclusive even if it is subject to appeal or even if an appeal is pending. But where the effect of lodging an appeal under the applicable law is to stay execution of the judgment, it is possible that in the meantime the judgment may not be actionable in Ireland. It remains to be determined whether final judgment given in default of appearance is final and conclusive.
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Irish courts may also refuse to enforce a judgment of the U.S. courts which meets the above requirements for one of the following reasons:
As an Irish company, we are governed by the Irish Companies Act 2014 (the Irish Companies Act), which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States.
Our shareholders should also be aware that Irish law does not allow for any form of legal proceedings directly equivalent to the class action available in the United States.
We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time and attention to our public reporting obligations.
As a publicly traded company, we have incurred and will continue to incur significant additional legal, accounting and other expenses compared to historical levels. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated and to be promulgated thereunder, as well as under the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), the Jumpstart Our Business Startups Act of 2012 (the JOBS Act) and the rules and regulations of the SEC and the Nasdaq Capital Market, have created uncertainty for public companies and increased our costs and time that our board of directors and management must devote to complying with these rules and regulations. We expect these rules and regulations to continue to increase our legal and financial compliance costs substantially and lead to diversion of management time and attention from revenue-generating activities.
We are an “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our ordinary shares less attractive to investors.
We are a “smaller reporting company” as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). We may remain a smaller reporting company until we have a non-affiliate public float of at least $250 million and annual revenues of at least $100 million or a non-affiliate public float of at least $700 million, each as determined on an annual basis. For so long as we remain a smaller reporting company, we are permitted to take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:
Investors may find our ordinary shares less attractive if we rely on certain or all of these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may decline or become more volatile.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the Nasdaq Capital Market. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our consolidated financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect
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the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our ordinary shares. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Capital Market.
Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to furnish a report by our management on our internal control over financial reporting. However, while we remain a smaller reporting company with less than $100 million in revenue, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404, we engaged and continue to engage in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. Additionally, we will be unable to issue securities in the public markets through the use of a shelf registration if we are not in compliance with Section 404.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of our ordinary shares.
We have never paid cash dividends, do not anticipate paying any cash dividends and our ability to pay dividends, or repurchase or redeem our ordinary shares, is limited by law.
We have never declared or paid cash dividends on our ordinary shares and do not anticipate paying any dividends on our ordinary shares in the foreseeable future. Any determination to pay dividends in the future will be at the sole discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors our board of directors deems relevant, and subject to compliance with applicable laws, including the Irish Companies Act which requires Irish companies to have distributable reserves available for distribution equal to or greater than the amount of the proposed dividend. Distributable reserves are the accumulated realized profits of the company that have not previously been utilized in a distribution or capitalization less accumulated realized losses that have not previously been written off in a reduction or reorganization of capital. Unless the company creates sufficient distributable reserves from its business activities, the creation of such distributable reserves would involve a reduction of the company’s share premium account, which would require the approval of (i) 75% of our shareholders present and voting at a shareholder meeting, and (ii) the Irish High Court. In the event that we do not undertake a reduction of capital to create distributable reserves, no distributions by way of dividends, share repurchases or otherwise will be permitted under Irish law until such time as the company has created sufficient distributable reserves from its business activities.
Accordingly, the only opportunity for a shareholder to achieve a return on their investment in our company is expected to be if the market price of our ordinary shares appreciates and they sell their ordinary shares at a profit.
Anti-takeover provisions in our Articles of Association and under Irish law could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current directors and management team, and limit the market price of our ordinary shares.
Our Articles of Association contain provisions that may delay or prevent a change of control, discourage bids at a premium over the market price of our ordinary shares, and adversely affect the market price of our ordinary shares and the voting and other rights of the holders of our ordinary shares. These provisions include:
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These provisions would apply even if the offer may be considered beneficial by some shareholders. In addition, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management team by making it more difficult for shareholders to replace members of our board of directors, which is responsible for appointing the members of our management.
Provisions in the EN Indenture and RLN Indenture may deter or prevent a business combination that may be favorable to the holders of our ordinary shares.
If a fundamental change occurs prior to the interest record date of the Exchangeable Notes, holders of the Exchangeable Notes will have the right, at their option, to require us to repurchase for cash all or a portion of their Exchangeable Notes for the greater of (i) 300% of the principal amount thereof, and (ii) the consideration that would be received by the holder of such note in connection with a transaction if the holder had exchanged the note for Ordinary Shares immediately prior to the consummation of such transaction. The negative covenants in the EN Indenture also prohibit us from undergoing a change of control transaction, other than a transaction in which each Exchangeable Note holder receives cash consideration of at least 300% of the outstanding principal amount of its notes. Furthermore, the EN Indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Exchangeable Notes, the EN Indenture and the guarantees. In addition, the RLN Indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the RLNs, the RLN Indenture and the guarantees and the RLN Indenture prohibits us from selling, transferring or assigning certain assets and prohibits Iterum Bermuda, the Guarantors or any of our significant subsidiaries from undergoing a change of control, other than in connection with a change of control of us. These and other provisions in the EN Indenture and the RLN Indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to the holders of our ordinary shares.
Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give our board of directors less ability to control negotiations with hostile offerors.
Following the authorization for trading of our ordinary shares on the Nasdaq Global Market on May 25, 2018, we became subject to the Irish Takeover Panel Act, 1997, Irish Takeover Rules 2022 (Irish Takeover Rules). Under the Irish Takeover Rules, our board of directors is not permitted to take any action that might frustrate an offer for our ordinary shares once our board of directors has received an approach that may lead to an offer or has reason to believe that such an offer is or may be imminent, subject to certain exceptions. Potentially frustrating actions such as (i) the issue of shares, options, restricted share units or convertible securities, (ii) the redemption or repurchase of securities by the Company (save in certain circumstances), (iii) material acquisitions or disposals, (iv) entering into contracts other than in the ordinary course of business, or (v) any action, other than seeking alternative offers, which may result in frustration of an offer, are prohibited during the course of an offer or at any earlier time during which our board of directors has reason to believe an offer is or may be imminent. These provisions may give our board of directors less ability to control negotiations with hostile offerors than would be the case for a corporation incorporated in a jurisdiction of the United States.
The operation of the Irish Takeover Rules may affect the ability of certain parties to acquire our ordinary shares.
Under the Irish Takeover Rules, if an acquisition of ordinary shares were to increase the aggregate holding of the acquirer and its concert parties to ordinary shares that represent 30% or more of the voting rights of the company, then the acquirer and/or, in certain circumstances, its concert parties would be required (except with the consent of the Irish Takeover Panel) to make an offer for all of the outstanding ordinary shares at a price not less than the highest price paid for the ordinary shares by the acquirer or its concert parties during the previous 12 months (known as a mandatory cash offer). This requirement would also be triggered by an acquisition of ordinary shares by a person holding (together with its concert parties) ordinary shares that represent between 30% and 50% of the voting rights in the company, if the effect of such acquisition was to increase that person’s percentage of the voting rights by 0.05% within any 12 month period. The EN Indenture provides that if a holder of Exchangeable Notes notifies us that they would be subject to this mandatory offer requirement, we will only issue to such holder such number of ordinary shares that can be issued without triggering a mandatory cash offer on an exchange with the remaining ordinary shares to be delivered as promptly as practicable after the holder notifies us that they would no longer be subject to a mandatory cash offer request.
Under the Irish Takeover Rules, certain separate concert parties are presumed to be acting in concert. Our board of directors and their relevant family members, related trusts and “controlled companies” are presumed to be acting in concert with any corporate shareholder who holds 20% or more of our shares. The application of these presumptions may result in restrictions upon the ability of any such concert parties and/or members of our board of directors and the other holders of the Exchangeable Notes to acquire more of our securities, including under the terms of the Exchangeable Notes and any executive incentive arrangements. We, or any such holders, may consult with the Irish Takeover Panel from time to time with respect to the application of this presumption and the restrictions on the ability to acquire further securities, although we are unable to provide any assurance as to whether the Irish
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Takeover Panel would overrule this presumption. Accordingly, the application of the Irish Takeover Rules may restrict the ability of certain of our shareholders and directors to acquire our ordinary shares.
As an Irish public limited company, certain capital structure decisions require shareholder approval, which may limit our flexibility to manage our capital structure.
Under Irish law, our authorized share capital can be increased by an ordinary resolution of our shareholders and the directors may issue new ordinary or preferred shares up to a maximum amount equal to the authorized but unissued share capital, without shareholder approval, once authorized to do so by our Articles of Association or by a resolution approved by not less than 50% of the votes cast at a general meeting of our shareholders. Additionally, subject to specified exceptions, Irish law grants statutory pre-emption rights to existing shareholders where shares are being issued for cash consideration but allows shareholders to disapply such statutory pre-emption rights either in our Articles of Association or by way of a resolution approved by not less than 75% of the votes cast at a general meeting of our shareholders. Such disapplication can either be generally applicable or be in respect of a particular allotment of shares. Accordingly, at an extraordinary meeting of our shareholders on October 8, 2024, our shareholders authorized the board to issue new shares, and to disapply statutory pre-emption rights for such issuances up to the amount of our authorized but unissued share capital until May 3, 2028. The authorization of the directors to issue shares and the disapplication of statutory pre-emption rights must both be renewed by the shareholders at least every five years, and we cannot provide any assurance that these authorizations will always be approved, or be approved without limitations, which could limit our ability to issue equity and thereby adversely affect the holders of our securities.
We could be subject to securities class action litigation that could divert management’s attention and harm our business.
In the past, securities class action litigation has often been brought against a company following a significant business transaction, such as the announcement of a financing or a strategic transaction, or the announcement of a negative event, such as a negative regulatory decision. These events may also result in investigations by the Securities and Exchange Commission. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect our cash resources and/or our ability to consummate a potential strategic transaction.
Item 5. Other Information
Securities Trading Plans of Directors and Executive Officers
During the three months ended September 30, 2024,
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Item 6. Exhibits.
The following is a list of exhibits filed or furnished as part of this Quarterly Report on Form 10-Q:
Exhibit No. |
Description of Document |
Filed with this report |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File Number |
4.1 |
|
Form S1/A (Exhibit 4.15) |
July 17, 2024 |
333-280045 |
|
4.2 |
|
Form S1/A (Exhibit 4.16) |
July 17, 2024 |
333-280045 |
|
4.3 |
|
Form S1/A (Exhibit 4.17) |
July 17, 2024 |
333-280045 |
|
4.4 |
|
Form S1/A (Exhibit 4.18) |
July 17, 2024 |
333-280045 |
|
4.5 |
|
Form S1/A (Exhibit 4.19) |
July 17, 2024 |
333-280045 |
|
10.1 |
X |
|
|
|
|
31.1 |
X |
|
|
|
|
31.2 |
X |
|
|
|
|
32.1 |
X |
|
|
|
|
32.2 |
X |
|
|
|
|
101.INS |
Inline XBRL Instance Document |
X |
|
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
X |
|
|
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
X |
|
|
|
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
ITERUM THERAPEUTICS PLC |
|
|
|
|
Date: November 14, 2024 |
By: |
/s/ Corey Fishman |
|
|
Corey Fishman |
|
|
President and Chief Executive Officer |
|
|
|
Date: November 14, 2024 |
By: |
/s/ Judith Matthews |
|
|
Judith Matthews |
|
|
Chief Financial Officer |
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