Acrivon Therapeutics (ACRV) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Capital Needs

1. 01We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability
2. 02incur additional legal, accounting and other expenses in operating as a public company
3. 03We have a limited operating history and no history of commercializing products, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability
4. 04We will need additional funding to meet our financial obligations and to pursue our business objectives. If we are unable to raise capital when needed, we could be forced to curtail our planned longer-term operations and the pursuit of our growth strategy
5. 05business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency (PHE) or geopolitical events, including the ongoing Russian invasion of Ukraine, related sanctions against Russia and conflicts in the Middle East
6. 06Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or drug candidates

Risks Related to the Design and Development of Our Drug Candidates

1. 07The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our drug candidates, on a timely basis or at all, our business will be substantially harmed
2. 08the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
3. 09We are highly dependent on the success of ACR-368 and/or ACR-2316, as these are our first drug candidates being developed for clinical development and regulatory approval. We may never obtain approval for ACR-368, ACR-2316 or any other drug candidate
4. 10maintaining a continued acceptable safety profile of any products following regulatory approval
5. 11Early clinical trials for ACR-2316 may not predict the success of later clinical trials. Furthermore, the results of clinical trials for ACR-2316 may not satisfy the requirements of the FDA or comparable foreign regulatory authorities
6. 12We may incur additional costs or experience delays in completing, or ultimately be unable to complete the development and/or commercialization of ACR-368, ACR-2316, or our other future drug candidates identified through the application of our AP3 platform and OncoSignature companion diagnostics
7. 13the supply or quality of ACR-368, ACR-2316, or our future drug candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate and result in delays or suspension of our clinical trials
8. 14we may not realize the full commercial potential of these drug candidates that receive marketing approval if, among other reasons, we are unable to appropriately identify patients or types of tumors targeted by these drug candidates
9. 15We may not be able to file INDs or IND amendments to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed
10. 16If we experience delays or difficulties in enrolling patients in our ongoing or planned clinical trials, our receipt of necessary regulatory approval could be delayed or prevented
11. 17proximity and availability of clinical trial sites for prospective patients
12. 18Preliminary, interim and topline data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and is subject to audit and verification procedures that could result in material changes in the final data
13. 19If the preliminary or topline data that we report differs from late, final or actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, ACR-368, ACR-2316, or any other future drug candidates may be harmed
14. 20We may expend our limited resources to pursue a particular drug candidate or indication and fail to capitalize on drug candidates or indications that may be more profitable or for which there is a greater likelihood of success
15. 21Our clinical development is focused on the development of precision oncology medicines utilizing our proprietary precision medicine platform, which is based on a novel scientific approach and may never lead to marketable products
16. 22Increasing demand for compassionate use of our drug candidates could negatively affect our reputation and harm our business

Risks Related to Government Regulation

1. 23Even if we obtain FDA approval of any of our drug candidates in the United States, we may never obtain approval for or commercialize any of them in any other jurisdiction, which would limit our ability to realize their full market potential
2. 24In order to market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy
3. 25The FDA’s policies, and the policies of foreign regulatory agencies, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates
4. 26Enacted and future healthcare legislation may increase the difficulty and cost for us to progress our clinical programs and obtain marketing approval of and commercialize our drug candidates and may affect the prices we may set
5. 27In 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
6. 28If we or our third-party manufacturers and suppliers fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business
7. 29Changes in funding for the FDA and other government agencies 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
8. 30If we obtain approval to commercialize any products outside of the United States, a variety of risks associated with international operations could adversely affect our business
9. 31production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad
10. 32We may develop our current and future drug candidates in combination with other therapies, and safety or supply issues with combination-use products may delay or prevent development and approval of our drug candidates
11. 33We may not be able to obtain or maintain orphan drug designation or exclusivity for our drug candidates
12. 34A Fast Track designation by the FDA, even if granted for our lead drug candidate, or any of our future drug candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our drug candidates will receive marketing approval
13. 35The biopharmaceutical industry is subject to extensive regulatory obligations and policies that may be subject to change, including due to judicial challenges, election cycles, and resulting regulatory updates and changes in policy priorities

Risks Related to Our Reliance on Third Parties

1. 36Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addition, some of our CROs have an ability to terminate their respective agreements with us if we make a general assignment for the benefit of our creditors or if we are liquidated
2. 37Our current and future partnerships will be important to our business. If we are unable to enter into new partnerships, or if these partnerships are not successful, our business could be adversely affected
3. 38If our partnerships do not result in the successful discovery, development and commercialization of drug candidates or if one of our partners terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under such partnership

Risks Related to Commercialization of Our Drug Candidates

1. 39Even if any of our current or drug candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success
2. 40If the market opportunities for our drug candidates are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, then our revenue potential and ability to achieve profitability will be adversely affected
3. 41We currently have no marketing and sales organization and may have to invest significant resources to develop these capabilities. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate revenue
4. 42unforeseen costs and expenses associated with creating an independent sales and marketing organization
5. 43The precision oncology space is competitive, which may result in others discovering, developing or commercializing products before or more successfully than we do
6. 44Even if we are able to commercialize any drug candidates, the products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business
7. 45Additionally, companion diagnostic tests will be required to obtain coverage and reimbursement separate and apart from the coverage and reimbursement we seek for our drug candidates, if approved
8. 46The market opportunities for any current or future drug candidate we develop, if and when approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small
9. 47Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop
10. 48the inability to commercialize any products that we may develop

Risks Related to Employee Matters and Our Operations

1. 49Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
2. 50We expect to expand our clinical development, manufacturing and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
3. 51Our employees, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers and vendors may be improperly classified and may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements
4. 52failures to report financial information or data accurately
5. 53Our business and operations would suffer in the event of system failures, cyberattacks or a deficiency in our or our CROs’, manufacturers’, contractors’, consultants’ or collaborators’ cybersecurity
6. 54Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
7. 55We are subject to a variety of privacy and data security laws, rules, regulations, policies, industry standards and contractual obligations, and our failure to comply with them could harm our business
8. 56State privacy laws in particular are evolving, with more than a dozen new state privacy laws passed in recent years, along with additional health privacy specific laws. These laws may further increase our compliance obligations, and potential legal privacy risks

Risks Related to Intellectual Property

1. 57we may not be able to detect breaches of confidentiality obligations to us before significant damage is done to our business; or
2. 58We rely in part on trade secrets to protect our technology, and our failure to obtain or maintain trade secret protection could harm our business
3. 59Patent terms may be inadequate to protect our competitive position on our drug candidates for an adequate amount of time
4. 60Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
5. 61We may be subject to claims challenging the inventorship or ownership of our future patents and other intellectual property
6. 62We may become involved in lawsuits to protect or enforce our patents or other intellectual property rights, which could be expensive, time consuming and unsuccessful
7. 63Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business
8. 64We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms
9. 65We depend on intellectual property licensed from a third party and termination of this license could result in the loss of significant rights, which would harm our business
10. 66If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current or future licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected drug candidates and technologies
11. 67We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property
12. 68Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our future drug candidates
13. 69We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business
14. 70Reliance on third parties requires us to share our proprietary information, which increases the possibility that such information will be misappropriated or disclosed
15. 71Trademarks we own, license or may obtain may be infringed or successfully challenged, resulting in harm to our business
16. 72If we are unable to protect the confidentiality of our proprietary information, our business and competitive position would be harmed
17. 73If we do not obtain patent term extension for patents covering our drug candidates, our business may be materially harmed, and in any case, the terms of our patents may not be sufficient to effectively protect our drug candidates and business

Risks Related to Ownership of our Common Stock and our Status as a Public Company

1. 74An active trading market for our common stock may not continue to be developed or sustained
2. 75The trading price of the shares of our common stock may be volatile, and purchasers of our common stock could incur substantial losses
3. 76other events or factors, many of which are beyond our control
4. 77A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well
5. 78If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline
6. 79Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions
7. 80We are an “emerging growth company” and a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our common stock may be less attractive to investors
8. 81an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on financial statements
9. 82We have broad discretion in the use of our cash, cash equivalents and investments and may invest or spend the cash, cash equivalents and investments in ways with which you do not agree and in ways that may not yield a return
10. 83any action asserting a claim against us that is governed by the internal-affairs doctrine
11. 84significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions
12. 85Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
13. 86authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors
14. 87We could be subject to securities class action litigation

General Risks

1. 88If we are unable to design and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline
2. 89We may not be able to utilize a significant portion of our net operating loss carryforwards and other tax attributes
3. 90New or future changes to tax laws could materially adversely affect our company
4. 91Unfavorable global political or economic conditions could adversely affect our business, financial condition or results of operations
5. 92We have incurred and will continue to incur increased costs and demands upon management as a result of being a public company
6. 93Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud