Aligos Therapeutics (ALGS) risk factors, FY2024 10-K

Risks related to our limited operating history, financial position and need for additional capital

1. 01We have never generated revenue from product sales and may never be profitable for a full fiscal year
2. 02attracting, hiring and retaining qualified personnel
3. 03We will require substantial additional financing to achieve our goals, which may not be available on acceptable terms, or at all. A failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts
4. 04any acquisitions or in-licensing of other programs or technologies
5. 05delay, limit, reduce or terminate our efforts to establish manufacturing and sales and marketing capabilities or other activities that may be necessary to commercialize any future approved products, or reduce our flexibility in developing or maintaining our sales and marketing strategy
6. 06Our operating results may fluctuate significantly, which will make our future results difficult to predict and could cause our results to fall below expectations
7. 07the timing and success or failure of nonclinical studies and clinical trials for our drug candidates or competing drug candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners
8. 08ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition in the future

Risks related to product development and regulatory process

1. 09Our use of clinically validated targets to pursue treatments of these indications and diseases does not guarantee efficacy or safety or necessarily reduce the risk that our current or future drug candidates will not achieve expected or functional levels of efficacy or achieve an acceptable safety profile
2. 10obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors
3. 11Nonclinical development is uncertain. Our nonclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize our drug candidates on a timely basis or at all, which would have an adverse effect on our business
4. 12of INDs, CTAs or similar applications will result in the FDA or other regulatory authorities allowing additional clinical trials to begin
5. 13delays due to other global-scale potentially catastrophic events, including other public health pandemics or epidemics, terrorism, war, and climate changes
6. 14The regulatory approval processes of the FDA, the EMA and comparable foreign authorities are lengthy, time-consuming, complex and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed
7. 15the approval policies or regulations of the FDA, the EMA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
8. 16we may experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions
9. 17outbreak, and, should they experience disruptions such as temporary closures or suspension of services, we would likely experience delays in advancing these trials
10. 18Our pursuit of potential treatments for CHB is at an early stage and we may be unable to produce a therapy that successfully treats CHB. Even if successful, we may be unable to obtain regulatory approval for and successfully commercialize our drug candidates
11. 19Our pursuit of potential treatments for MASH is at an early stage and we may be unable to produce a therapy that successfully treats MASH. Even if successful, we may be unable to obtain regulatory approval for and successfully commercialize our drug candidates
12. 20Our pursuit of potential therapies for COVID-19 is at an early stage
13. 21The results of nonclinical studies and early-stage clinical trials may not be predictive of future results
14. 22Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data
15. 23If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
16. 24disruption by man-made or natural disasters, or public health pandemics or epidemics or other business interruptions
17. 25Changes in methods of drug candidate manufacturing or formulation may result in additional costs or delay
18. 26our reputation may suffer
19. 27Even if a current or future drug candidate receives marketing approval, it 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
20. 28Adverse events in our therapeutic areas of focus, including hepatological indications and viral diseases, could damage public perception of our current or future drug candidates and negatively affect our business
21. 29Negative developments and negative public opinion of technologies on which we rely may damage public perception of our drug candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our drug candidates
22. 30injunctions or the imposition of civil or criminal penalties
23. 31Even if we obtain and maintain approval for our drug candidates from the FDA, we may never obtain approval outside the United States, which would limit our market opportunities
24. 32Risks associated with our international operations, including seeking and obtaining approval to commercialize our drug candidates in foreign jurisdictions, could harm our business
25. 33In addition, there are complex regulatory, tax, labor and other legal requirements imposed by many of the individual countries in which we may operate, with which we will need to comply
26. 34operations, any resurgence of the virus or emergence of new variants may lead to further inspectional or administrative delays
27. 35If the market opportunities for our drug candidates are smaller than we believe or any approval we obtain is based on a narrower definition of the patient population, our business may suffer
28. 36If the market opportunities for our drug candidates are smaller than we estimate, it could have an adverse effect on our business, financial condition, results of operations and prospects
29. 37We intend to develop our current drug candidates, and expect to develop other future drug candidates, in combination with other therapies, which exposes us to additional risks
30. 38We face significant competition, and if our competitors develop and market products that are more effective, safer or less expensive than the drug candidates we develop, our commercial opportunities will be negatively impacted
31. 39Smaller and other early stage companies may also prove to be significant competitors. In addition, academic research departments and public and private research institutions may be conducting research on compounds that could prove to be competitive
32. 40If any of our current or future drug candidates obtain regulatory approval, additional competitors could enter the market with generic versions of such products, which may result in a material decline in sales of our competing products
33. 41listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents or the outcome of any such suit
34. 42Even if we are able to commercialize any drug candidates, such products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business
35. 43We may not be successful in our efforts to identify or discover other drug candidates and may fail to capitalize on programs or drug candidates that may present a greater commercial opportunity or for which there is a greater likelihood of success
36. 44We may be required to make significant payments under our license agreements with Emory University, KU Leuven, and Luxna Biotech Co., Ltd
37. 45If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any approved products
38. 46Our inability to obtain sufficient product liability insurance at an acceptable cost or at all to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaboration partners
39. 47Healthcare legislative reform measures may have a material adverse effect on our business and results of operations
40. 48Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives
41. 49operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities
42. 50Our business and operations may suffer in the event that our information technology systems, or those used by our CROs or other contractors or consultants, fail or suffer security breaches
43. 51including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information

Risks related to reliance on third parties

1. 52if a current or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated
2. 53We may seek to establish additional collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans
3. 54In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators
4. 55If conflicts arise between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to implement our strategies
5. 56form relationships with other entities, some of which may be our competitors
6. 57We may be delayed if we need to change the manufacturing process used by a third party. Further, if we change an approved manufacturing process, then we may be delayed if the FDA or a comparable foreign authority needs to review the new manufacturing process before it may be used
7. 58the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us
8. 59Our future drug candidates and any products that we may develop may compete with other drug candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP requirements and that might be capable of manufacturing for us

Risks related to intellectual property

1. 60the effects of termination
2. 61If we are unable to obtain licenses from third parties on commercially reasonable terms or at all, our business could be harmed
3. 62We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might subject us to infringement claims or adversely affect our ability to develop and market our drug candidates
4. 63Patent terms may be inadequate to establish our competitive position on our drug candidates for an adequate amount of time
5. 64We may not be able to protect our intellectual property rights throughout the world
6. 65inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license, which could adversely affect our business, financial condition, results of operations and prospects
7. 66Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our drug candidates
8. 67We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful, and issued patents directed towards our technology and drug candidates could be found invalid or unenforceable if challenged
9. 68Furthermore, 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
10. 69Third 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 negatively impact the success of our business
11. 70We may be subject to claims by third parties asserting that we or our employees have infringed, misappropriated or otherwise violated their intellectual property rights, or claiming ownership of what we regard as our own intellectual property
12. 71We may be subject to claims challenging the inventorship of our patents and other intellectual property
13. 72Intellectual property rights do not necessarily address all potential threats

Risks related to employee matters, managing our growth and other risks related to our business

1. 73We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
2. 74We currently have no sales organization. If we are unable to establish sales capabilities on our own or through third parties, we may not be able to market and sell any products effectively, if approved, or generate product revenue
3. 75We will need to grow the size of our organization, and we may experience difficulties in managing this growth
4. 76expanding and enhancing our operational, financial and management controls, reporting systems and procedures
5. 77If we 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
6. 78We, or the third parties upon whom we depend, may be adversely affected by earthquakes or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
7. 79Our employees, independent contractors, vendors, principal investigators, CROs, consultants and collaborators may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading

Risks related to our common stock

1. 80The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for investors
2. 81investors’ general perception of us and our business
3. 82An active trading market for our shares may not be sustained. In the absence of an active trading market common stock, investors may not be able to sell their common stock at a price or at the time that they would like to sell
4. 83We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
5. 84We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors
6. 85Our executive officers, directors and their affiliates have significant influence over our company, which will limit an investor’s ability to influence corporate matters and could delay or prevent a change in corporate control
7. 86The dual class structure of our common stock may limit the ability to influence corporate matters and may limit the visibility with respect to certain transactions
8. 87If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline
9. 88Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
10. 89If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline
11. 90If we fail to implement and maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline
12. 91Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
13. 92Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law
14. 93we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents
15. 94Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies
16. 95Unfavorable global economic conditions could adversely affect our business, financial condition, stock price and results of operations
17. 96Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities
18. 97We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, violations of which can have serious negative consequences for our business
19. 98Obtaining 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 rights, if any, could be reduced or eliminated if we fail to comply with these requirements
20. 99Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities
21. 100If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
22. 101If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
23. 102From time to time, we may consider strategic transactions, such as acquisitions of companies, asset purchases and out-licensing or in-licensing of intellectual property, products or technologies
24. 103Public health pandemics or epidemics, political instability, terrorist attacks, other acts of violence or war, or other unexpected events could materially and adversely impact us
25. 104Current or future litigation or administrative proceedings could have a material adverse effect on our business, our financial condition and our results of operations
26. 105We incur significantly increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices
27. 106new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate
28. 107We may experience fluctuations in our tax obligations and effective tax rate, which could materially and adversely affect our results of operations